Free Motion for Attorney Fees - District Court of Colorado - Colorado

Case 1:01-cv-01451-REB-KLM

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Filed 11/15/2006

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IN THE UNITED STATED DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No.: 01-cv-1451-REB-CBS (Consolidated with Civil Action Nos. 01-cv-1472-REB-CBS, 01-cv-1527-REB-CBs, 01cv-1616-REB-CBS, 01-cv-1799, REB-CBS, 01-cv-1930-REB-CBS, 01-cv-2083-REBCBS, 02-cv-0333-REB-CBS, 02-cv-0374-REB-CBS, 02-cv-0507-REB-CBS, 02-cv-0658REB-CBS, 02-cv-755-REB-CBS, 02-cv-798-REB-CBS and 04-cv-0238-REB-CBS) In re QWEST COMMUNICATIONS INTERNATIONAL, INC. SECURITIES LITIGATION

MOTION BY INTERVENORS/OBJECTORS REINER and FLANAGAN FOR AWARD OF FEES and COSTS

INTERVENORS/OBJECTORS Charles B. Reiner and Margaret Flanagan (hereinafter "Reiner Objectors"), by and through their counsel, Edward F. Siegel, hereby move for an award of attorney's fees and reimbursement of expenses. Submitted herewith in support of this motion is the Declaration of Edward F. Siegel (Exhibit 1). 1. On September 29, 2006, this Court entered several rulings, giving final approval

for partial settlement of this matter, awarding Lead Plaintiffs' Counsel attorney's fees and partially sustaining objections made by Reiner Objectors and others. On the same day, this Court entered a judgment for the Class and entered an order administratively closing the case, pursuant to Local Rule 42.2 (Docket 1054). The Court stated that any party might seek to lift the administrative closure upon a showing of good cause. On October 12, 2006, Reiner Objectors filed their motion to have this case reopened (Docket 1060). 2. Statement Pursuant to Local Rule 7.1: On October 04, 2006, the undersigned

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counsel wrote to Class Counsel informing them that the undersigned would seek to reopen the case in order to request attorneys fees. The response from Class Counsel was that they would have no opposition to reopening of the case but reserved their rights to object to a fee request. 3. Reiner Objectors contend that the contribution their counsel made by providing

written evidence in an adversarial context in which this Court could evaluate the fairness of attorneys' fees was substantial. Their objections were partially sustained, as witnessed by the fact that the $96 million fee request was reduced to $60 million and there was a reduction in the requested expenses, thereby increasing the Class Settlement Fund and benefiting the Class. Therefore, the Court should consider an award of attorney's fees and reimbursement of related costs to Reiner Objectors' counsel. This issue ought to be timely resolved before final distribution of the Class Settlement Fund. ARGUMENT 4. The adversarial process is often "diluted" or entirely "suspended" during fee

proceedings, and fee requests often go unchallenged. Goldberger v. Integrated Res. Inc., 209 F. 3d 43, 52 (2nd Cir. 2000). Lead Plaintiffs, having previously negotiated a fee arrangement with Lead Counsel, did not oppose the $96 million fee request. And none of the numerous Defendants in this action had any incentive to oppose the $96 million fee request, since Defendants are not the least impacted by the way in which the Settlement Fund is carved up and distributed. Thus, it was desirable for this Court to have Class members participate in the fairness hearing and the debate over attorney's fees to be charged to the Settlement Fund. In In re Prudential Ins. Co. Am. Sales, 278 F. 3d 175, 202 (3d Cir. 2002) the court observed that "a

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lawyer with objector status plays a highly important role for the class and the court because he or she raises challenges free from the burden of conflicting baggage that Class Counsel carries. Consider the comments by the Hon. Stanley R. Chesler addressed to the undersigned counsel at a Fairness Hearing on May 11, 2006, in Trenton, New Jersey, in In re Bristol-Myers Securities Litigation, Civil Action 00-1990 (SRC), directed at counsel for an objector: [W]hether or not plaintiffs' counsel or even these defendant's counsel welcomes you, the Court does. . . . Indeed, the role of objectors is an important and significant one. You're absolutely right. At this stage of the proceedings, it is only a party such as you who in fact bring[s] an adversarial approach to an important decision which the Court has to make and your reviewing this material and bringing your observations is a useful and, indeed, an important function which is served. . . . You are right. The Court does function in a fiduciary capacity but the Court needs independent observations to help it fulfill that role and, indeed, it's important that the Court make sure, both in approving settlements and in approving attorneys' fees, that the Court never lose sight of the fiduciary role which it indeed is obligated to perform.1 For many years courts have recognized the importance of filing objections, and paying objectors' counsel to join the class-action process. "It is desirable to have as broad a range of participants in the fairness hearing as possible because of the risk of collusion over attorneys' fees and the terms of settlement generally . . . . It is impossible for a class to select, retain or monitor its lawyers as an individual client would." Great Neck Capital Appreciation Inv. Pship, L.P. v. PricewaterhouseCoopers, L.L.P., 212 F.R.D. 400, 412 (E.D. Wis. 2002). "Class counsel and defendants counsel may reach a point where they are cooperating in an effort to consummate the settlement." Id. "Courts, too, are often inclined toward favoring the settlement, and the general atmosphere may become largely cooperative." Id.

1

Hearing transcript at pp. 33-34.

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"Thus, objectors serve as a highly useful vehicle for class members, for the court and for the public generally." Great Neck, 212 F.R.D. at 412. 5. Objectors' counsel who contributed materially to the Fairness Hearing

proceedings should be provided a fee charged to the Settlement Fund. Gottleib v. Barry, 43 F. 3d 474,490-91 (10th Cir. 1994); Uselton v. Commercial Lovelace Motor Fright, Inc., 9 F. 3d 849, 854 (10th Cir. 1980); White v. Auerbach, 500 F. 2d 822, 828 (2nd Cir. 1974). 6. Generally speaking, there is no question that objectors are entitled to

compensation for improvement to a settlement resulting from their objections. See, e.g., In re Cendant PRIDES Corp. Litig., 243 F. 3d 722, 743-44 (3rd Cir. 2001). While there were other Objectors in this case including the Graham Objectors represented by Mr. Curtis Kennedy, the Reiner Objectors were the only ones to offer detailed and substantive grounds, along with evidence in support of their position that the fees and expenses should not exceed 15.10% of the Settlement Fund. The Settlement Fund was $400 million and the Court awarded fees of $60 million (15.0%) and expenses of $2 million (.05 %). The total award was 15.05 % is virtually indistinguishable from the amount for which the Reiner Objectors argued. 7. Assessment of attorney's fees in this class action is discretionary with the

district court. There can be no question that the Reiner Objectors played a useful and constructive role and worked to benefit the Settlement Fund and the Class of shareholders. Should the Court not award attorney's fee and expenses to Reiner Objectors' counsel, there will be less incentive for objectors to make legitimate and

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substantive legal arguments in opposition to excessive attorney's fees requested to be charge against a class action settlement fund. 8. None of the time spent by Reiner Objector's counsel was irrelevant and,

certainly, there is no attempt to gouge the Settlement Fund. The requested hourly rates are reasonable; the detailed time expended was necessary; and the modest expenses were necessary. There is no evidence of excessiveness or redundancy in the time sheets of the three co-counsel. CONCLUSION For the aforesaid reasons and those reasons set forth in the Declaration of Edward Siegel attached hereto, the undersigned moves this Honorable Court to award attorney fees of $41,612.50 and expenses of $285 to Objector's counsel for a total award of Forty One Thousand Eight Hundred Ninety-Seven Dollars and fifty cents ($41,897.50).

Respectfully submitted, ___/s/ Edward F. Siegel_______________ EDWARD F. SIEGEL (Ohio Bar No. 0012912) 27600 Chagrin Blvd. #340 Cleveland, Ohio 44122 Voice (216) 831-3424 Facsimile (216) 831-6584 E-mail [email protected] Counsel for Objectors/Intervenors

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CERTIFICATE OF SERVICE I certify that on November 15, 2006, the forgoing Motion for Award of Fees and Costs was filed electronically with the Clerk of the Court using the CM/ECF system and was by such system served on all other parties on the Electronic Mail Notice List.

_____/s/ Edward F. Siegel____ Edward F. Siegel