Opinion ID: 1223840
Heading Depth: 4
Heading Rank: 1

Heading: Fees due class counsel

Text: The class retained counsel under an agreement obliging it to pay $5,000 for the initial consultation and analysis, up to $25,000 in hourly fees at a rate of $75 per hour, and not more than 10% of any common fund recovered. If the total of the Rule 82 award and common fund fees was less than 10% of the common fund, counsel would receive that total. If the total was more than 10% of the common fund, the class would receive the excess. The agreement did not squarely specify counsel's fees if there was a Rule 82 award but no common fund; it appears the parties assumed counsel would receive any Rule 82 fees awarded to the class, and up to $30,000 from the class members whether or not the class prevailed. When they asked the superior court to approve fees for counsel, the class and its attorneys reasoned that a common fund had been achieved, and that the agreement consequently governed counsel's fees. We have recently discussed the common fund doctrine. Gentile, 922 P.2d at 265; Edwards v. Alaska Pulp Corp., 920 P.2d 751 (Alaska 1996). The doctrine is implicated any time one litigant's success releases well-defined benefits for a limited and identifiable group of others. Edwards, 920 P.2d at 755. Because Plans I and II are defined benefit plans, and because the enabling ordinance did not require that any surplus be paid out to members as increased benefits, members had no vested right to receive increased distributions funded by the surplus. As noted previously, the constitutional flaw in AO 94-95 is not that it takes some particular amount from the surplus for Plans I and II, but that it fails to respect the vested right of members of Plans I and II to have the actuarial soundness of those plans evaluated and maintained separately, without being affected by the soundness of any other plan. The quantitative value of this impairment cannot be directly measured by the amount of the restored surplus, because the value of the impairment is contingent. The record before us does not address the likelihood of those contingencies and does not permit quantitative valuation of the litigation benefit achieved. Further, the common fund doctrine is based on the principle of equitably spreading counsel's fees among the benefitted class members. Gentile, 922 P.2d at 267. It is impossible to calculate from the appellate record how the restored surplus financially benefits individual members. The contingent benefit may be more valuable to some members than others. (The value might turn, for example, on the projected duration and value of a member's benefits.) Absent any present right to share directly in the surplus, valuing the benefit achieved for each class member is difficult, if not impossible. Calculating the amount of litigation expense each member should bear is equally difficult. To be distinguished is Gentile, where the class successfully challenged a reduction of post-retirement medical benefits and the superior court restored the benefits to their previous level. Gentile, 922 P.2d at 252. Success in the instant case did not alter the benefits which MOA must pay per the plans. We conclude that counsel's success did not release well-defined benefits constituting a common fund. The superior court did not err in implicitly declining to award class counsel any part of the surplus restored to the plans. Citing Grein v. Cavano, 61 Wash.2d 498, 379 P.2d 209 (1963), the class appears to argue that the common benefit doctrine would justify a fees award funded by restored plan assets. It thus implicitly argues that references in the fee agreement to a common fund also encompass a common benefit. The superior court's findings dispose of this argument. In declining to follow a common fund approach, the superior court noted the lack of a money judgment and the difficulty in determining the value of the judgment. It also found that it would be inappropriate to significantly diminish the plans' assets to fund a fee award. The superior court's observation about the difficulty of determining the value of the judgment remains relevant and valid; its conclusion that it would be inappropriate to diminish plan assets to fund an award is not erroneous. That conclusion controls, and dooms, a common benefit award funded by plan assets.