reasonable attorney's fee in a contingent fee class action litigation particularly in a case such as this where the claims are subject to a fee shifting regime there being multiple fee shifting provisions in the federal securit ten b five claims there's nobody shifting arrangement to be five you have to you have to convince us that for some reason either through the private stres litigation reform act or some other provision well be five suzi the time be five years a fee shifting provision and you seem to assume that it does and i'm telling you i don't have that assumption section ten b five has no provision in writing or a private cause of action of any kind the supreme court in a series of cases has said that when there is a question about what an express provision for a few shifting section eighteen has expressed provision for fifteen congress knows how to do that congress knows how to do that and i want it to be five claims been around since blue chip right since blue chip in the one nine hundred forty s that's quite a while your hon it's more than fifty years your honor fifty years congress has had to insert the ship there and they know how to do it and they haven't done it don't you think we ought to take notice of this well i think the court had forty five in the private securities litigation reform act congress expressly provided in section twenty one d eight of the thirty four ad quote in any private action to raising under this chapter that is certified as a class action the court may require an undertaking for the payment of fees and expenses that may be awarded under this subsection so clearly indicates that fees and expenses may be awarded under this subsection sub that is  the supreme court has held in purdue most recently in two thousand and ten that the supreme court held that a reasonable attorneys fees sufficient to compensate counsel sufficient to attract counsel to prosecute cases is their reasonable hourly rate now know that's something that is this court's opinions have not addressed or of logic how could that attract counsel if there is a risk of getting nothing at all well there's no the only way you could compensate people for getting nothing at all is if you added something on top of the reasonable ordinary commercially recognized fees to reflect the risk of getting nothing i think professor silver has made that argument to say the producer is wrong and if you want to hold the supreme court is wrong i hope your opinion will make that clear because the supreme court's holdings you don't have to talk like that i'm sorry your honor it i apologize intends to have counsel compensated for bringing cases that are almost certain losers i mean you could say the case was almost a certain loser therefore council should have a tremendously or in between there including almost every case i ever had also as this court pointed out in goldberger the risk is minimal in federal securities class actions over ninety percent of them settle and the risk of non recovery of attorneys  completely avoided when these cases settle people don't take them to trial and when you see cases go to trial the european antitrust case which are subject to a securities are subject to a fee shifting provision  believe that the compensation is unreasonable given producer yes the holding produce giant of the way it's calculated right yes i think it's excessive and i want to say that in this court in grinnell five sixty f second and eleven zero one address the question of sharing the risk of kept lost in the other cases in this court said and i quote at page eleven zero one we reject apple his arguments the compensation should be generously granted for successful class action settlements in order to offset the costs of attorney time and effort expended on unsuccessful cases at the fees coming out of what the what the plaintiffs and so it's coming out of the parties funds which did share in the appreciation of the need for a contingency that there might be success or failure why does it make sense that you adhere to the parties agreement for a contingency arrangement as opposed to the situation where the bend should they have to be placed under that or that's the rationale there's no agreement should control i have a question before you yes your honor yeah even if the shifting is allowed is that an abuse of discretion for the district court to rely on the common fund instead  whites don't think it's an abuse of discretion to use a common on the ward this court held in goldberger that a common fund award has to be determined on the facts of the case and goldberger securities class action the court said risk of non recovery is low there was a governmental action as need to cross check it you need to cross check it against lodestar and the supreme court and produce says lodestar is a reasonable attorney's fee that adequately compensates counsel and it tracks them to do the case i know t wrong but that's what the supreme court holds your honor and it sends perverse incentives to tell lawyers you can get a multiple of your reasonable hourly rate if you compromise clams as compared to winning them  good morning your honour's and ross on behalf of the plaintiffs fresno county your honors the supreme court this circuit and every other regional circuit have all held percentage fees or load stone multipliers are appropriate in common fund settlements and securities and other class actions the supreme court had that ruling in boeing vs gammer in bluhm vs denson this court ruled that way in goldberg reasonable percentage of the amount of any damages and prejudgment interest actually paid to the club your honor congress knows how to draft the shifting provisions of congress wanted that to be a fee shifting provision congress could have i'm not sure that's talking about a fee shifting it could apply as well to work more hours get from common fund could well the reasonable percentage or honor gives the court flexibility to on a case by case basis determine what is appropriate on the facts and circumstances of that case but it is based upon which actually paid to the class consents what it says in words yes that's how common fund cases work  are do do we do we know what's going to be actually paid to the club members in this instance your honor the settlement fund was ten point nine million dollars how much of that is going to go to the class t class will get our attorneys fees were one point three nine multiplier and so the class will get that amount unless you're saying that what happens if money is left over in that circumstance your honor that money we would distribute it as many times is it can be effectively distributed when there is a remainder amount that does get donated to a charitable cause we do not take which is not in the class could there be a remainder amount doesn't that all go to the plaintiff everything we do in our power goes to the plaintiffs your honor but at some point if people do not cash checks check worth the effort your honor we do have usually a cut off because we do try to make sure that everyone does get a worthwhile check to cash usually it's an amount that the district court approves or in this class your honor the notice went out to three thirty three thousand six hundred potential claimants there's no objection to your post it doesn't object to the amount of if he discretion and she observed the case we were in front of her for several years and at the hearing after everything she knew in the case you determine that a one point three nine multiplier was appropriate in this case and it was consistent with the law of the circuit the law of the supreme court as well as the p s l array it would certainly appear that if you send a check to somebody and they don't cash it that you've paid them you know if you pay for you for your for for a meal and the and the the restaurant never goes to american express to collect it you paid for it but my interest is what happens with the money that i do not have that i do not offer you the that only occurs if people don't cash their checks and you have a fund that's all and this happens a lot with class actions in that there's case the united states supreme court has just argued frankly  not and not everybody is a federal judge your honor i just feel like i would like to clarify this because i think that i might have or haven't you the wrong impression it's not that we just send a check once and it doesn't get cashed if there is a check that outstanding we and the claims administrators administrators make multiple and multiple efforts to make sure that every class member who has submitted a claim form is reimbursed as part of the process when we're working through claim forms we do hold back a very small amount in case there is some type of dispute that is ongoing and so at the end of the entire process if there is a tiny amount left under the are permitted to donate that money to charity and so you know what the average check was is thirty three thousand claimants is that those people to the thirty three thousand people file  your honor i do not believe that thirty three thousand people filed claims i believe i have the or are aren't many of them grouped by institutional investors so an institutional investor may make a claim on behalf of a thousand that out and follow that up i don't have that your honor because the issue that mr isaacson has raised is to the the attorney's fees that we were awarded the district judge nathan awarded us which is consistent with this court statute this longstanding precedent in this court that the securities laws are not she shifting laws this court has made that clear on numerous  your honor fee shifting is not available to the court and even if it was just for the sake of this or cumin say there was an arguable an argument made that field shifting was available it was it wouldn't be mandatory the district court could still rely on the common fund methodology to distribute to award fees is there correct that is correct it would be up to depend on how the statute was written and depend on you know what the court and the disk in the courts discretion decided to do but even if the securities laws were laws for argument's sake which we contend they are absolutely not if a fee shifting case if a case was initiated under fees shifting statute but settled and resolved under common fun principles that is a common fund case and it is not subject to the fee shifting requirements that it does date and and purdue cover what attorney fees calculations when there's a judge and where the defendant the defendant is going to pay the as this i mean that's really the issue yes and the answer to that your honor is no only one every circuit that has considered this has rejected the on the beyond the circuits i'm not certain a line of circuits six or seven circuits can statutes are it is charging the defendant for the attorneys fees that is against the american rule the only time the american rule from time immemorial i think to quote one of this court's decisions has been that litigants pay their own costs unless there are exceptions and that is because it's not fair to the defendant to have to pay those costs so there are specific enumerated circumstances when that happens in those cases the defendant has already paid damages to the class if it's an appropriate case to do that and so this is attorneys fees on top of it by contrast the principals in the common fund are equitable principles a plaintiff has a wrong that they wanted to to get rid dressed and so they make an agreement with a lawyer and they don't pay the ongoing fees they don't take on the risk of nonpayment but if the lawyer is successful the lawyer who bear the risk and who had the risk of no payment at that point is able to share and have the the beneficiaries pay a pro rata amount of that fee or your opponent correctly points out any contingency fee arrangement with you you when not with the lawyers that were representing the various pla could have brought his own action and individual action against you could have opted out you could have you know paid his own attorney's fees if he wanted to proceed against by a script but to address what he said the lead plaintiff is a sophisticated institutional investor as this court identified in nortel that signets institutional investors which is what congress wanted have significant financial stakes in the outcome they have a powerful incentive to make sure that the fee is reasonable and in the flannigan case the circuit did say that there is a deference that goes to what lead counsel and the lead plaintiffs decide  thank you very much your honor i just want to ask one question i know this case is only about fees but is there any intimation in your mind that counsel had a disincentive to try this case and settled for one of the reasons that i didn't even though i didn't consider objecting to it was the assertion that the company was in financial distress and might not be able to pay if there were a settlement i didn't want to block a settlement it was going to result no recovery at all but it was wise to i i never objected and i never i never i never investigated you know whether you did or you did i mean i'm not i'm not penalizing you for saying that but the fact is that in front of us the settlement is not objected to in turn i do not object to the settlement and do not contend it's a bad settlement now judge jacobs i believe you referenced section twenty one d a six of the exchange act added by the p reasonable percentage if congress had wanted a percentage few words it would have said shall be reasonable percentage or would have said shall be calculated as a reasonable percentage of the conference report shows that congress understood that few words would be calculated on the basis of lodestar which could be adjusted just as produce as lodestar few words in extraordinary cases can be adjusted and it intended to put a cap on lodestar words you would the word reasonable would seem to suggest  discretion absolute last question is never a fixed point it's always a range and and when that's used in terms i mean congress could have could have said twenty five percent thirty percent and twenty five percent would enough for us mall settlement and it might be grossly excessive for a billion dollar settlement so obviously it has to be reasonable and i'm not sure i know why you think this one is not reasonable well recovery substantially more than their lodestar when the supreme court says the lodestar is presumptively enough to attract class counsel and presumptively reasonable compensation for their work in a contingency class action thank you thank you thank you very much will reserve