1

IN THE UNITED STATES DISTRICT COURT FOR THE

EASTERN DISTRICT OF PENNSYLVANIA

__________________________________________

)

SHARYN STAGI and WINIFRED LADD, ) Civ. Action No. 03-5702

Individually and on behalf of all others )

similarly situated, )

 )

Plaintiffs, )

)

v. )

)

NATIONAL RAILROAD PASSENGER )

CORPORATION, )

 )

 Defendants. )

__________________________________________)

July ___, 2012 Anita B. Brody, J.

MEMORANDUM

Following nine years of class action litigation between named Plaintiffs Sharyn Stagi and 

Winifred Ladd and Defendant National Railroad Passenger Corporation (“Amtrak”), class 

counsel have brought before me a motion for final approval of proposed class action settlement 

(Doc. No. 139) and a petition for award of attorneys’ fees, reimbursement of expenses, and for 

special payments to named plaintiffs (Doc. No. 140).1 After holding a final fairness hearing on 

June 25, 2012, I will now approve the final settlement agreement. I will also grant the request 

for attorneys’ fees, reimbursement of expenses and incentive awards for class representatives. 

The related Order Granting Final Approval of Class Action Settlement and Entering Final 

Judgment provides an overview of the approved agreement. Here, I will only address my 

approval of attorneys’ fees. 

 

 

1 On June 6, 2012, Plaintiffs filed a Supplement to Class Counsel’s Fee Petition (Doc. No. 141) to correct two errors 

related to the reimbursement of litigation expenses.

Case 2:03-cv-05702-AB Document 144 Filed 07/03/12 Page 1 of 10
2

I. Background

Plaintiffs Sharyn Stagi and Winifred Ladd brought this civil action against Amtrak asserting 

that a company policy (“One Year Rule”) that requires all union employees to have one year of 

service in their current position before they will be considered for promotion has a disparate 

impact on female union employees in violation of Title VII of the Civil Rights Act of 1964, 42 

U.S.C. § 2000e. The approved settlement agreement resolves all claims asserted by Plaintiffs 

and the members of the settlement class against Amtrak and will result in Amtrak’s permanent 

elimination of the One Year Rule as applied to union employees and a cash payment to the class 

of $1,990,000, less amounts for attorneys’ fees, expenses of litigation and settlement 

administration. 

II. Attorneys’ Fees & Expenses 

Class counsel request attorneys’ fees in the amount of $1,219,467.79, which represents 

twenty-seven percent of the minimum projected value of the settlement.

2

 Class counsel also seek

reimbursement of litigation and settlement administration expenses in the amount of 

$180,532.08. The combined value of the requested fee award and reimbursement of expenses is 

$1,399,999.87. The mailed Notice of Certification of Settlement Class and Proposed Class 

Action Settlement informed the settlement class members that class counsel would seek an 

award of attorneys’ fees and expenses “in an amount that [would] not exceed $1,400,000.” No 

class member objected to any aspect of the proposed settlement agreement. 

 

2 The minimum projected value includes the proposed cash settlement and Dr. Crawford’s calculation of injunctive 

relief. See Crawford Decl. (Doc. No. 140-3). Dr. Crawford provides an estimate of the financial value of the 

provision of the Settlement Agreement in which Amtrak agrees to eliminate the One Year Rule. He “define[s] that 

value as the damages that would likely have been suffered by female employees who would not have been 

promoted, but for the agreement to abolish the One Year Rule.” Crawford Decl. Although less than half of the

settlement is in cash, the elimination of the One Year Rule provides prospective financial value. Nonetheless, I 

recognize that injunctive relief can be difficult to approximate, so I rely upon Dr. Crawford’s more conservative 

estimates. 

Case 2:03-cv-05702-AB Document 144 Filed 07/03/12 Page 2 of 10
3

Federal Rule of Civil Procedure 23(h) states: “In a certified class action, the court may award 

reasonable attorneys’ fees and nontaxable costs that are authorized by law or by the parties’ 

agreement.” The proposed settlement agreement provides for the award of attorneys’ fees and 

expenses. Nonetheless, “a thorough judicial review of fee applications is required in all class 

action settlements.” In re Prudential Ins. Co. of Amer. Sales Practice Litig., 148 F.3d 283, 333 

(3d Cir. 1998) (quoting In re Gen. Motors Corp. Pick-Up Truck Fuel Tank Prods. Liab. Litig., 55 

F.3d 768, 819 (3d Cir. 1995)). 

Courts generally use one of two methods for assessing requests for attorneys’ fees: the 

lodestar method or the percentage-of-recovery method. In re Prudential, 148 F.3d at 333. The 

former is “more commonly applied in statutory fee-shifting cases, and is designed to reward 

counsel for undertaking socially beneficial litigation in cases where the expected relief has a 

small enough monetary value that a percentage-of-recovery method would provide inadequate 

compensation.” Id. The latter method is “generally favored in cases involving a common fund . 

. . .” Id. Either way, “it is sensible for a court to use a second method of fee approval to crosscheck its initial fee calculation.” In re Rite Aid Corp. Sec. Litig., 396 F.3d 294, 300 (3d Cir. 

2005). This case involves a common fund, and therefore the percentage-of-recovery method is 

appropriate. 

1. Common Fund

“[I]n the traditional common fund situation . . . the district court . . . should attempt to 

establish a percentage fee arrangement agreeable to the Bench and plaintiff’s counsel.” Report 

of the Third Circuit Task Force on Court Awarded Attorney Fees, 108 F.R.D. 237, 255 (1985). 

In order to make that determination, the Third Circuit has identified ten factors for the Bench to 

consider. These include:

Case 2:03-cv-05702-AB Document 144 Filed 07/03/12 Page 3 of 10
4

(1) the size of the fund created and the number of beneficiaries, (2) the presence or 

absence of substantial objections by members of the class to the settlement terms and/or 

fees requested by counsel, (3) the skill and efficiency of the attorneys involved, (4) the 

complexity and duration of the litigation, (5) the risk of nonpayment, (6) the amount of 

time devoted to the case by plaintiffs’ counsel, (7) the awards in similar cases, (8) the 

value of benefits attributable to the efforts of class counsel relative to the efforts of other 

groups, such as government agencies conducting investigations, (9) the percentage fee 

that would have been negotiated had the case been subject to a private contingent fee 

arrangement at the time counsel was retained, and (10) any innovative terms of 

settlement.

In re Diet Drugs Prod. Liab. Litig., 582 F.3d 524, 541 (3d Cir. 2009) (citing Gunter v. 

Ridgewood Energy Corp., 223 F.3d 190, 195 (3d Cir. 2000); In re Prudential, 148 F.3d at 336-

40). These Gunter/Prudential factors are not exhaustive, and a district court should consider 

‘“any other factors that are useful and relevant with respect to the particular facts of the case.”’ 

In re Diet Drugs, 582 F.3d at 541 n.34 (quoting In re AT&T Corp. Sec. Litig., 455 F.3d 160, 166 

(3d Cir. 2006)). 

a. The Size of the Fund Created and the Number of Persons Benefitted 

The settlement is for $1.99 million and injunctive relief worth a minimum estimated value of 

$2.5 million over the next four years.3 See Crawford Decl. (Doc. No. 140-3). The settlement 

class is estimated to have 5,383 current members. The elimination of the One Year Rule will 

also benefit future, unionized Amtrak employees. 

In general, as the size of the settlement fund increases the percentage of the award decreases. 

See In re Prudential, 148 F.3d at 339. “The basis for this inverse relationship is the belief that 

‘[i]n many instances the increase [in recovery] is merely a factor of the size of the class and has 

no direct relationship to the efforts of counsel.”’ Id. (citing In re First Fid. Bancorporation Sec. 

Litig., 750 F. Supp. 160, 164 n.1 (D.N.J. 1990)). But this case does not involve a settlement 

award that is so large as to necessitate an automatic reduction in the percentage award. The 

 

3 The $1.99 million includes settlement administration expense reimbursements of up to $40,000, subject to 

reversion to Amtrak of any unspent balance of the $40,000.

Case 2:03-cv-05702-AB Document 144 Filed 07/03/12 Page 4 of 10
5

Prudential recovery was in excess of $1 billion, and the Third Circuit cited to the trial court’s 

analysis of settlements above $100 million for establishing the inverse relationship principle. 

See In re Prudential, 148 F.3d at 339 (referencing In re Prudential, 962 F. Supp. 572, 585 

(D.N.J. 1997)). None of Plaintiffs’ expert calculations qualify this proposed settlement fund for 

a mega-fund reduction in fees. See Crawford Decl. Therefore, the size of the fund and the 

number of people who will receive the maximum damages militate in favor of approving this fee 

petition. 

b. The Presence or Absence of Substantial Objections by Members of the Class to 

the Settlement Terms and/or Fees Requested by Counsel 

All objections had to be postmarked on or before June 11, 2012. As of the afternoon of June 

18, 2012, no objections were filed. See Lempert Decl. (Doc. No. 142). The absence of 

objections counsels in favor of approval. 

c. The Skill and Efficiency of the Attorneys Involved

Sandals & Associates, P.C., along with Kolman Ely, P.C., served as counsel for the named 

Plaintiffs and class since the inception of the action in 2003. Sandals & Associates did the vast 

majority of the legal work. The firm’s attorneys Scott Lempert and Alan Sandals have 

approximately forty-six years of combined experience in complex ERISA and class action 

litigation. Both attorneys have spearheaded a number of class action lawsuits and are leading 

members of the national ERISA plaintiffs’ bar. See, e.g., In re Unisys Corp. Retiree Med. 

Benefits ERISA Litig., 242 F.3d 497 (3d Cir. 2001); In re Campbell Soup Co. Retiree Med. 

Benefits ERISA Litig., 898 F. Supp. 1118 (D.N.J. 1995). The firm has brought its considerable 

experience to bear in reaching this settlement. Also, the fact that Plaintiffs’ counsel obtained this 

settlement in the face of formidable legal opposition further evidences the quality of their work. 

This factor weighs in favor of approval. 

Case 2:03-cv-05702-AB Document 144 Filed 07/03/12 Page 5 of 10
6

d. The Complexity and Duration of the Litigation

Class counsel devoted more than nine years to this highly complex litigation. In addition to 

conducting extensive discovery, counsel utilized statistical evidence to survive Amtrak’s 

dispositive motions. Counsel not only filed written briefs but also participated in oral arguments 

regarding Plaintiffs’ motion for class certification and Defendant’s motion for summary 

judgment. Class Counsel also appealed the summary judgment ruling in favor of Amtrak and 

won. The Third Circuit’s remand extended the duration of the litigation, weighing in favor of 

approval. Following the remand, class counsel worked diligently on reaching a settlement. 

e. The Risk of Nonpayment

In every class action in which class counsel bring a case on a contingency basis, there is

always some risk of nonpayment. However, the risk here is minimal. In Rite Aid, the Third 

Circuit dealt with this factor by considering the risk of the defendants going out of business. In 

re Rite Aid Corp., 396 F.3d 294, 304 (3d Cir. 2005). Amtrak is not in danger of going out of 

business, so this is a neutral factor. 

f. The Amount of Time Devoted to the Case by Plaintiffs’ Counsel

In their declarations, class counsel provide summaries of the amount of time spent on this 

matter. Sandals & Associated logged 2,920.6 hours. Attorney Scott Lempert accounted for 

2,556.1 of those hours. Kolman Ely, P.C. expended 174.4 hours on this litigation. See Lempert 

Decl.; Ely Decl. In total, class counsel devoted 3,095 hours to this matter. Such a large number 

of hours represents a substantial commitment to this litigation and weighs in favor of approving 

the fee request. The record of this litigation also indicates that the time spent by class counsel 

was necessary for the successful prosecution of this case considering both the complexity 

involved and the defense mounted by Amtrak. 

Case 2:03-cv-05702-AB Document 144 Filed 07/03/12 Page 6 of 10
7

g. The Awards in Similar Cases

As I noted in In re Corel, this District’s fee awards generally range between nineteen and 

forty-five percent of the common fund. See In re Corel Corp., Inc. Sec. Litig., 293 F. Supp. 2d 

484, 497 (E.D. Pa. 2003) (referencing In re Smithkline Beckman Corp. Sec. Litig., 751 F. Supp. 

525, 533 (E.D. Pa. 1990)); see also Bredbenner v. Liberty Travel, Inc., 2011 U.S. LEXIS 38663, 

at *59 (D.N.J. Apr. 8, 2011) (“In common fund cases, fee awards generally range anywhere from 

nineteen percent to forty-five percent of the settlement fund.”) (citing In re G.M., 55 F.3d at 

822). Therefore, the twenty-seven percent request in this case is reasonable. By itself, this factor 

neither supports nor undercuts the proposed fee award and is neutral. This factor in conjunction 

with the lodestar cross-check, however, weighs in favor of approval. 

h. The Value of Benefits Attributable to the Efforts of Class Counsel Relative to the 

Efforts of Other Groups

Class counsel was not assisted by a government investigation. In Prudential, the Third 

Circuit singled this factor out for important consideration by district courts. See In re Prudential, 

148 F.3d at 338. The appeals court remanded the trial court’s fee award for wrongly “credit[ing] 

class counsel with creating the entire value of the settlement” and overlooking the considerable 

contributions of a multi-state life insurance task force. Id. Yet this case is more similar to

AT&T, in which the Third Circuit found that “class counsel was not aided by the efforts of any 

governmental group, and the entire value of the benefits accruing to class members is properly 

attributable to the efforts of class counsel.” In re AT&T, 455 F.3d at 173. This factor supports 

approval of the fee request.

Case 2:03-cv-05702-AB Document 144 Filed 07/03/12 Page 7 of 10
8

i. The Percentage Fee that Would Have Been Negotiated Had the Case Been 

Subject to a Private Contingent Fee Arrangement at the Time Counsel was

Retained 

It is extremely difficult to determine what fee would have been negotiated at the outset of the 

litigation. I can only look to my colleagues who have attempted to apply this factor, even though 

I recognize that the contingent fee can only be “based on the particular facts and circumstances 

of the specific litigation under consideration.” In re U.S. Bioscience Sec. Litig., 155 F.R.D. 116, 

119 (E.D. Pa. 1994). After appointing a Special Master to study the award of attorneys’ fees in a 

class action securities suit, Judge Dalzell approved of the Special Master’s recommendation that 

a thirty percent fee award was an appropriate estimate of what would have been negotiated. See 

id. (citing Report and Recommendation of Special Master Judge Arlin M. Adams). 

In the end, I do “not give great weight to this hypothetical exercise.” In re Prudential, 148 

F.3d at 340. Although this is not a proposed settlement in the range of Prudential’s $1 billion, 

this is still a significant sum of money that should not be subjected to such arbitrary calculations. 

Therefore, this factor is neutral and will not be considered to count for or against the proposed 

fee request. 

j. Any Innovative Terms of Settlement 

In addition to the monetary settlement, Amtrak also eliminated the One Year Rule, effective 

September 8, 2011. As a result, current and future unionized employees will not have to 

complete one year of service in their current positions before being considered for promotion. 

Female employees will no longer be subjected to the rule’s disparate impact. This factor 

counsels in favor of approval. 

Case 2:03-cv-05702-AB Document 144 Filed 07/03/12 Page 8 of 10
9

k. Summation 

I recognize that the Gunter/Prudential factors ‘“need not be applied in a formulaic way’ 

because each case is different, ‘and in certain cases, one factor may outweigh the rest.”’ In re 

AT&T, 455 F.3d at 166 (citing In re Rite Aid, 396 F.3d at 301). After reviewing all of the 

factors, I have determined that seven of the ten Gunter/Prudential factors counsel in favor, zero 

against, and three are neutral. Therefore, the majority support approval of the fee award. 

2. Lodestar 

The lodestar cross-check also favors approval of the fee request. “The lodestar award is 

calculated by multiplying the number of hours reasonably worked on a client’s case by a 

reasonable hourly billing rate for such services based on the given geographical area, the nature 

of the services provided, and the experience of the attorneys.” In re Rite Aid, 396 F.3d at 305. 

a. Number of Hours & Hourly Rate

As of May 17, 2012, class counsel and staff informed the Court that they had spent a total of 

3,095 hours working on this case. The nine years of litigation involved, amongst other work, 

preparing the complaint, responding to dispositive motions, winning on appeal, and participating 

in extensive settlement negotiations. The law firms charged different amounts based on their 

average billable rates and the individual attorney or staff member working on the assignment. 

Taking into account the varied rates, the lodestar requires multiplication of the hours reasonably 

worked by the reasonable billing rates. I found that the rates were reasonable and recognize that 

the equation results in a total lodestar of $1,373,601. 

b. Lodestar Multiplier 

“After a court determines the lodestar amount, it may increase or decrease that amount by 

applying a lodestar multiplier.” In re Diet Drugs, 582 F.3d 524, 539 (3d Cir. 2009) (citing In re 

Case 2:03-cv-05702-AB Document 144 Filed 07/03/12 Page 9 of 10
10

Rite Aid, 396 F.3d at 305-06). The Third Circuit explained that “multipliers may reflect the risks 

of non-recovery facing counsel, may serve as an incentive for counsel to undertake socially 

beneficial litigation, or may reward counsel for extraordinary result. By nature they are 

discretionary and not susceptible to objective calculation.” In re Prudential, 148 F.3d at 340. 

The lodestar multiplier is calculated by dividing the attorneys’ fees sought by class counsel 

($1,219,467.79) by the total amount of hours class counsel devoted to the litigation times class 

counsel’s hourly rates ($1,373,601). Here, that calculation comes to a multiplier of .888. 

Therefore, class counsel will only be receiving approximately 89% of what they would have 

received at their regular billing rates. I have previously approved a positive multiplier of 2.04, in 

which counsel received twice what they would have earned under their regular billing rates. See 

Cullen v. Whitman Med. Corp., 197 F.R.D. 136, 150 (E.D. Pa. 2000). The Third Circuit, 

moreover, has recognized that ‘“multiples ranging from one to four are frequently awarded in 

common fund cases when the lodestar method is applied.”’ In re Cendant Corp. Prides Litig., 

243 F.3d 722, 742 (3d Cir. 2001) (citing In re Prudential, 148 F.3d at 341). Therefore, a 

negative multiple of .888 is well under the generally acceptable range and provides strong 

additional support for approving the attorneys’ fee request. 

III.Conclusion

For the reasons set forth above, I will grant Plaintiffs’ Motion for Award of Attorneys’ Fees. 

__________________________

ANITA B. BRODY, J.

Copies VIA ECF on _________ to: Copies MAILED on _______ to:

Case 2:03-cv-05702-AB Document 144 Filed 07/03/12 Page 10 of 10