Opinion ID: 755571
Heading Depth: 2
Heading Rank: 1

Heading: The Fee Agreement

Text: The settling parties addressed attorneys' fees in § K of the Stipulation of Settlement filed October 28, 1996. Under the settlement, Lead Counsel would request $90 million in attorneys' fees from the district court, a request Prudential agreed not to oppose. 94 The full amount, as well as certain administrative costs associated with the settlement plan, would be paid entirely by Prudential. 95 Stipulation of Settlement § K.4. The fee arrangement was designed so that payment of class counsel's fees and expenses would not directly or indirectly reduce, limit or modify the remedies provided in the ADR process or Basic Claim Relief. Id. The Stipulation of Settlement also created a timetable for payment. Prudential would pay $45 million of the attorneys' fees plus expenses within five days of the district court's approval of the settlement, the remaining fees payable after the final disposition of any appeals. 96 Id. at § K.2. On November 22, 1996, Lead Counsel submitted an application for attorneys' fees in conformity with § K. Several class members, among them Krell, filed objections to the award. As the district court noted, no state insurance commissioner opposed the fee petition. In re Prudential Ins. Co. of America Sales Practices Litigation, 962 F.Supp. 572, 575 (D.N.J.1997) (Fee Opinion). Advocating the propriety of the proposed fee, Lead Counsel contended the remedies established under the Proposed Settlement were analogous to a common fund and, consequently, the size of the fee award should be determined as a percentage of the class members' total recovery. In order to establish the value of the settlement, Lead Counsel submitted the affidavit of its expert Robert Hoyer, a Participating Principal with Arthur Andersen LLP, and managing partner of the firm's Life & Health Actuarial Service group. Hoyer estimated the total value of the settlement at $1.987 billion, $1.187 billion attributable to the ADR process, and $799.6 million to Basic Claim Relief. 97 Hoyer Aff. pp 6, 11, 15. According to Hoyer's calculations, $863.7 million of the settlement's total value was created under the Task Force plan, while the remaining $1.123 billion was the result of the enhancements created by class counsel. See Fee Opinion, 962 F.Supp. at 575. To assist with its fee determination, the district court appointed an independent fee examiner, Stephen Greenberg, on November 6, 1996. 98 Greenberg was charged with analyzing the fairness of Lead Counsel's fee request. The fee examiner submitted his Report and Recommendation on February 13, 1997, concluding the $90 million fee award was fair and reasonable. Krell was the only objector to the Fee Examiner's Report. Fee Opinion, 962 F.Supp. at 576. On March 10, 1997, the district court held a hearing dedicated to attorneys' fees, and provided an opportunity for all interested parties to address the fairness of the Fee Petition.