Federal judge gives lawyers $10 million

By Justin Anderson | Mar 11, 2009


CHARLESTON -– Even while decrying the award as "extremely high," a federal judge has given a group of lawyers about $10 million for their work in reaching an estimated $50 million settlement in a class-action case against Dominion Transmission.

Still, that's less than what the lawyers wanted.

The case involved a class of about 25,000 oil and gas well owners and lessors who alleged Dominion Transmission and two affiliates improperly deducted costs from royalty payments.

Lawyers in the case -- Marvin Masters, Michael Carey, Scott Segal, Thomas Pettit and David Romano -– had requested 25 percent of the overall settlement fund, which they called the "benchmark" award in such cases.

However, in an order entered March 6, Judge Joseph R. Goodwin shaved 5 percent off the lawyers' requested percentage, keeping in mind a lone objection filed by Ann Shreve Norris, one of the members of the class.

Norris had criticized the lawyers' request as "exorbitant."

"This again, points out the attitude of attorneys handling this type of class-action lawsuit," Norris wrote in her objection. "It is exhibited over and over in our court rooms. They are not doing this for the public good but only as a way to increase their wealth."

Goodwin, in his opinion, noted that Norris is not alone in her views.

"I share Ms. Norris' concerns about the trend towards excessive attorneys' fees in class actions," Goodwin wrote. "I can easily understand that fees deemed reasonable by the bar and the judiciary appear unseemly to the general public."

He said public perception about huge lawyer fees in these kinds of cases calls for a "heightened vigilance" by lawyers requesting the fees and judges approving them. But, Goodwin said, the notion of this perception has to be balanced with the need to make it worth lawyers' while to take on these cases.

"As to public policy, the fee remains high enough to encourage future class action representation and efficient and collegial conduct by attorneys," Goodwin wrote. "It is also likely that this fee, though reduced from the requested amount, will appear excessive to non-lawyers and encourage negative public perceptions about the legal profession. A 20 percent fee, though not ideal, strikes a closer balance between the public policies implicated by attorneys' fee awards in class actions."

Goodwin said there were factors in the litigation that weighed for and against the lawyers' request for 25 percent.

In favor, Goodwin noted, was the substantial benefit gained for the class, the skill of the lawyers, the proximity of the requested award to similar awards and the overall dearth of objections to the request by members of the class.

Goodwin said factors weighing against the reasonableness of the request included the relatively non-complex nature of the case and the low risk of non-payment.

In discussing the difficulty of the case, Goodwin said that while the lawyers for the class members may have reviewed 118,000 pages of documents, there was no evidence that they had to fight to get them. Lawyers also only briefed two motions during a year of litigation, Goodwin noted.

Overall, there wasn't much fighting going on in the courtroom in the case.

"Though oil and gas royalties law in West Virginia is complicated and unsettled, class counsel were not required to litigate these issues nor the difficult preliminary issues involved with class certification," Goodwin wrote.

However, the negotiations of the settlement were "hard-fought" and "time-intensive" and involved eight mediation sessions, Goodwin noted.

"Overall, I find that this case was less complex than other class actions but that class counsel performed their duties zealously and collegially," Goodwin wrote. "The cooperative spirit that pervaded this settlement process mitigates the lack of conflict and complexity in its proceedings."

Goodwin also noted that while the lawyers reported spending 4,694 hours on the case, about 1,000 of those hours was spent administering the settlement.

The relative lack of objection from the class members weighed the heaviest on Goodwin's decision, he said. He indicated he was reluctant to deviate too far from the requested percentage than what the class had largely approved.

"The rest of the factors alone, as relevant as they are to the determination of a reasonable attorneys' fee, are not enough to convince me that a fee of this magnitude is 'reasonable,'" Goodwin wrote. "Even reduced, the fee that I approve in this case remains extremely high."

The lawyers also requested $25,000 "incentive awards" for the three named plaintiffs in the case -- Gary P. and Shirley Jones; H. Dotson Cather, trustee of Dianna Goff Cather Trusts; and McDowell Pocahontas Coal Company.

Incentive awards are commonly given to named plaintiffs in order to encourage plaintiffs to come forward and bring these kinds of "socially beneficial" cases. The awards are used to compensate plaintiffs for travel and other expenses and also for any personal risk they may have taken.

Goodwin, however, shaved $10,000 of the requested incentive awards for the three named plaintiffs. He said there is no evidence that the plaintiffs participated in the reaching of the settlement.

The lawyers had also requested $91,833 for out-of-pocket expenses related to hiring experts and consultants. Goodwin approved this request without alteration.

The remainder of the settlement will be divided up amongst the class members.

Goodwin had initially granted approval of the settlement agreement on Jan. 30.

U.S. District Court case number: 2:06-cv-00671

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