Goodwin slices lawyer fees to $6.8M

By Steve Korris | Nov 12, 2010

CHARLESTON – One among 9,000 plaintiffs in a class action objected to a 25 percent fee for lawyers, and U.S. District Judge Joseph Goodwin agreed with that lone voice.

Goodwin, who approved a settlement between Equitable Production and holders of oil and gas leases last year, sliced class counsel's fee request to 20 percent on Nov. 5.

"This fee, though less than the requested amount, may still appear excessive to non-lawyers and may perpetuate negative stereotypes about the legal profession," he wrote.

At the maximum settlement cost of $34 million, his order would shrink fees for five lawyers from $8.5 million to $6.8 million.

Marvin Masters, Michael Carey, and Scott Segal, all of Charleston, Thomas Pettit of Barboursville and David Romano of Clarksburg will divide the fees.

"I have long been troubled by the routine application of contingent fee principles, justified by the need for individuals with small or risky claims to obtain counsel, to class action lawsuits," Goodwin wrote. "It is not at all clear to me that the increased risk to class counsel of investing time and resources to prosecute class actions justifies the treatment of such cases as entirely analogous to individual claims for fee award purposes.

"Increasing the number of class action plaintiffs does not necessarily increase the amount of time class counsel spends on a case. ... Because of the damage caused by the perception of overcompensation of attorneys in class action suits, lawyers requesting attorneys' fees and judges reviewing those requests must exercise heightened vigilance to ensure the fees in fact are reasonable beyond reproach and worthy of our justice system."

Goodwin would have cut deeper if plaintiffs other than Glennis Waldeck had objected.

"I do not award this fee without reservations," he wrote. "Nevertheless, I am reluctant to deviate too greatly from a fee amount implicitly approved by class counsel's clients."

Goodwin noted that 25 percent would equal an hourly rate of $1,425.34 to $1,794.87, four times as much as the attorneys would earn on an hourly basis.

He wrote that such a multiplier is unreasonable in light of the lesser complexity and risk of the action.

"This case is a textbook example of a case in which a large settlement could result from the mere presence of a very large class; the liability issue would be the same regardless of whether there were 100 or 10,000 class members," he wrote.

He wrote that a task force of the Third Circuit appeals court found a perception among non-lawyers and lawyers that class action lawyers are overcompensated.

"Such perceptions are not only harmful to the legal profession, but undermine the integrity of the entire legal system," he wrote.

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