HOUSTON — A Texas federal judge has awarded $24 million in fees and costs and approved a $175 million settlement for investors who reached a deal with BP PLC.
According to a news release, lead counsel also accused BP of downplaying the scope of the Deepwater Horizon oil spill, in which 11 workers were killed and an estimated 4.9 billion barrels of crude oil spilled into the Gulf of Mexico.
When asked if $24 million in attorney fees seemed excessive, Melissa Landry, executive director of Louisiana Lawsuit Abuse Watch, told the Louisiana Record, “Unfortunately, excessive attorneys’ fees in class action cases are not new. When our courts award excessive attorneys’ fees, public confidence in our legal system is undermined and the integrity of the bar is jeopardized.”
The breakdown was $20.25 million was awarded in attorney fees and $4 million in legal costs.
U.S. District Judge Keith P. Ellison included in the order that, upon considering the lead counsel’s January application, he decided to award the full amount and determined that the request was “fair and reasonable”.
Per settlement-fund court reports on BPSecuritiesLitigation.com, “If the settlement is approved by the court, court-appointed lead counsel will file a motion for an award of attorneys’ fees and expenses that will be considered at the final approval hearing. Lead counsel will apply for an award of up to 11.57 percent of the settlement fund, or up to $20,250,000, plus payment of expenses incurred in connection with litigating the Action in an amount not to exceed $5 million, to be paid from the settlement fund. These amounts will be paid out of the settlement fund; settlement class members are not personally liable for any such fees or expenses.”
Ellison also made two other awards — $9,587 to the comptroller of the state of New York and $1,627 to the Ohio attorney general’s office for costs in representing the class.
A motion was filed with the court in January asking the court for $24 million.
Attorneys involved in the reimbursement include Cohen Milstein Sellers & Toll PLLC, Berman DeValerio, Block & Leviton LLP and Yetter Coleman LLP. They said the fee request aligns with what they had determined at the beginning of litigation and “fairly compensates them for 'almost seven years of hard-fought litigation.'”
“Our courts routinely overpay class counsel by relying on a percentage method to calculate fees, rather than considering the value of the legal services the attorneys actually provided in the case,” Landry said.
The attorneys argued that the $24 million payout was justified in light of making numerous motions for dismissal and class certification, review of more than 1.4 million pages of documents, defense of depositions and an appeal, and briefing of Daubert challenges pertaining to expert testimony.
Ellison granted the deal preliminary approval in November and rejected a proposal by 135 institutional investors to alter settlement opt out motions.
In response to the settlement, Landry said, “This often results in exorbitant legal fees that have no basis in reality, and it is particularly offensive since the attorneys’ fees come at the expense of the very class members they are supposed to represent. This egregious practice should be stopped.”
According to the news release, the settlement class was represented by lead counsel Cohen Milstein Sellers & Toll PLLC and Berman DeValerio, while BP was represented by Sullivan & Cromwell LLP and Kirkland & Ellis LLP.