15-1306-cv
Munter v. Hickey
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED
BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY
MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE
NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY
OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated Term of the United States Court of Appeals for the Second Circuit, held at the
Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York on the
22nd day of February, two thousand sixteen.
Present: AMALYA L. KEARSE,
ROSEMARY S. POOLER,
ROBERT D. SACK,
Circuit Judges.
_____________________________________________________
IN RE CRM HOLDINGS, LTD SECURITIES LITIGATION
BEVERLY L. MUNTER, individually and on behalf of all others
similarly situated, BRETT BRANDES, BB INVESTORS, LP,
Plaintiffs-Appellants,
v. 15-1306-cv
DANIEL G. HICKEY, JR., MARTIN D. RAKOFF, JAMES J.
SCARDINO, DANIEL G. HICKEY, SR.,
Defendants-Appellees,
CRM HOLDINGS, LTD.,
Defendant.1
_____________________________________________________
Appearing for Appellant: Ex Kano S. Sams II (Leonel Z. Glancy, Robert V. Prongay on the
brief), Glancy Prongay & Murray LLP, Los Angeles, CA.
1
The Clerk of Court is directed to amend the official caption to conform with the caption above.
Appearing for Appellees: Arthur H. Aufses III, Kramer Levin Naftalis & Frankel, New York,
NY.
Appeal from the United States District Court for the Southern District of New York
(Preska, C.J.).
ON CONSIDERATION WHEREOF, IT IS HEREBY ORDERED, ADJUDGED,
AND DECREED that the judgment of said District Court be and it hereby is VACATED and
the case is REMANDED.
Plaintiffs appeal from the March 30, 2015 judgment of the United States District Court
for the Southern District of New York (Preska, C.J.), awarding plaintiffs’ attorneys 20.3% of the
settlement fund in fees and $30,000.00 in expenses, and the district court’s April 8, 2015 order
adhering to its prior decision on reconsideration.2 We assume the parties’ familiarity with the
underlying facts, procedural history, and specification of issues for review.
“We review a district court’s award of attorney’s fees for abuse of discretion, which
occurs when (1) the court’s decision rests on an error of law (such as application of the wrong
legal principle) or clearly erroneous factual finding, or (2) its decision—though not necessarily
the product of a legal error or a clearly erroneous factual finding—cannot be located within the
range of permissible decisions.” McDaniel v. County of Schenectady, 595 F.3d 411, 416 (2d Cir.
2010) (citation, alteration, and internal quotation marks omitted).
In common fund cases, such as this one, there are two accepted methods for calculating
appropriate attorneys’ fees: the lodestar method and the percentage method. Under either
method, the ultimate question is whether the fees awarded “exceed what is ‘reasonable’ under
the circumstances.” Goldberger v. Integrated Res., Inc., 209 F.3d 43, 47-48 (2d Cir. 2000); see
also McDaniel, 595 F.3d at 417-18. Whichever method it applies, the district court must consider
the Goldberger factors in determining a reasonable fee award. See In re Nortel Networks Corp.
Sec. Litig., 539 F.3d 129, 134 (2d Cir. 2008); Wal-Mart Stores, Inc. v. Visa U.S.A., Inc., 396 F.3d
96, 121 (2d Cir. 2005). “The Goldberger factors include: (1) counsel’s time and labor; (2) the
litigation’s magnitude and complexity; (3) the risk of the litigation; (4) the quality of
representation; (5) the requested fee in relation to the settlement; and (6) public policy
considerations.” McDaniel, 595 F.3d at 423.
Here, plaintiffs’ attorneys requested 33% of the settlement fund in fees. The district court
crossed that out and wrote in 20.3%, giving no explanation for this reduction, and merely stating
that “[t]he Court finds that the amount of fees awarded is fair and reasonable in light of the time
and labor required, the novelty and difficulty of the case, the skill required to prosecute the case,
the experience and ability of the attorneys, awards in similar cases, the contingent nature of the
representation and the result obtained for the Class.” Special App’x at 7. Further, the district
court gave no explanation in response to plaintiffs’ motion for reconsideration, merely stating
that it had “reconsidered its order of March 30, 2015, and, upon reconsideration, adheres to its
prior holding.” Special App’x at 8.
2
Defendants do not take a position on this appeal.
2
We cannot assess whether this fee award is reasonable in the absence of any explanation
by the district court. On remand, the district court must conduct a thorough analysis of the
Goldberger factors, explain how it weighed the factors, and state the grounds on which it relied.
See Hensley v. Eckerhart, 461 U.S. 424, 437 (1983); Stanger v. China Elec. Motor, Inc., — F.3d
—, 2016 WL 191986, at *2 (9th Cir. Jan. 15, 2016); Orchano v. Advanced Recovery, Inc., 107
F.3d 94, 99 (2d Cir. 1997); Steele v. Offshore Shipbuilding, Inc., 867 F.2d 1311, 1318 (11th Cir.
1989); Chalmers v. City of Los Angeles, 796 F.2d 1205, 1213 (9th Cir. 1986). On remand, the
district court may find it useful to conduct a hearing, although it is not required to do so.
Next, plaintiffs’ counsel requested $48,696.69 in unreimbursed expenses. The district
court instead awarded $30,000.00, with no explanation for the disparity between the amount
requested and awarded. With respect to costs in common fund cases, “[c]ounsel are entitled to
reimbursement only for those expenses incurred in the course of work that benefitted the class.”
In re “Agent Orange” Prod. Liab. Litig., 818 F.2d 226, 238 (2d Cir. 1987). We cannot assess
whether the cost award was reasonable without further explanation from the district court. On
remand, the district court should permit plaintiffs’ counsel to submit additional financial records
demonstrating how the $48,696.69 amount was derived, and explain why those expenses
benefitted the class. Further, the district court shall explain the basis for its award of costs, if the
amount awarded is less than that requested by plaintiffs’ counsel.
Accordingly, the judgment of the district court hereby is VACATED, and we REMAND
for reconsideration of the fee and cost award.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk
3