UNITED STATES DISTRICT COURT DISTRICT OF CONNECTICUTikrlaw.com/wp-content/uploads/2016/06/160916-BRIEF... · C. The Court Should Grant Class Counsel’s Request For Reimbursement

UNITED STATES DISTRICT COURT

DISTRICT OF CONNECTICUT

Carol Kemp-DeLisser, on behalf of herself and all

others similarly situated,

Plaintiff,

vs.

Saint Francis Hospital and Medical Center, Saint

Francis Hospital and Medical Center Finance

Committee, Saint Francis Hospital and Medical

Center Retirement Committee, and John Does 1-20,

Defendants.

Civil Action No. 3:15-cv-01113

MEMORANDUM OF LAW IN SUPPORT OF CLASS COUNSEL’S MOTION FOR

APPROVAL OF ATTORNEYS’ FEES, REIMBURSEMENT OF EXPENSES AND CASE

CONTRIBUTION AWARD

Case 3:15-cv-01113-VAB Document 56-1 Filed 09/16/16 Page 1 of 26

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TABLE OF CONTENTS

I. INTRODUCTION .............................................................................................................. 1

II. FACTUAL BACKGROUND ............................................................................................. 3

III. ARGUMENT ...................................................................................................................... 5

A. The Proposed Fee Request Is Fair and Reasonable ................................................ 5

1. The Time and Labor Expended By Counsel ............................................... 7

2. The Magnitude and Complexities of the Litigation .................................... 8

3. The Risk of the Litigation ........................................................................... 9

4. The Quality of Representation .................................................................. 11

5. The Requested Fee in Relation to the Settlement ..................................... 12

6. Reaction of the Class ................................................................................ 14

7. Public Policy Considerations .................................................................... 15

B. The Fee Request Is Reasonable When “Cross Checked” Against Class

Counsel’s Lodestar................................................................................................ 16

C. The Court Should Grant Class Counsel’s Request For Reimbursement Of

Expenses ............................................................................................................... 18

D. The Court Should Approve The Requested Case Contribution Award To

Lead Plaintiff ........................................................................................................ 19

IV. CONCLUSION ................................................................................................................. 20


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TABLE OF AUTHORITIES

Cases

Amchem Prod., Inc. v. Windsor, 521 U.S. 591 (1997) ..................................................................... 6

Asare v. Change Grp. N.Y., Inc., 2013 U.S. Dist. LEXIS 165935

(S.D.N.Y. Nov. 15, 2013) .......................................................................................................... 9

Becher v. Long Island Lighting Co., 64 F. Supp. 2d 174 (E.D.N.Y. 1999) ................................... 13

Blessing v. Sirius XM Radio Inc., 507 F. App'x 1 (2d Cir. 2012) .................................................... 7

Bredthauer v. Lundstrom, No. 4:10-cv-3132, 2012 WL 4904422

(D. Neb. Mar. 4, 2013) ............................................................................................................. 19

Chronister v. Baptist Health, 442 F.3d 648 (8th Cir. 2006) .......................................................... 10

CourAcevedo v. Workfit Med. LLC, No. 6:14-CV-06221 EAW,

2016 U.S. Dist. LEXIS 66828 (W.D.N.Y. May 20, 2016) ...................................................... 13

Davis v. J.P. Morgan Chase & Co., 827 F. Supp. 2d 172 (W.D.N.Y. 2011) ................................ 17

deMunecas v. Bold Food, LLC, 2010 U.S. Dist. LEXIS 87644

(S.D.N.Y. Aug. 23, 2010) .............................................................................................. 8, 13, 15

Dornberger v. Metropolitan Life Insurance Co., 203 F.R.D. 118 (S.D.N.Y. 2001)...................... 19

Ellman v. Grandma Lee’s Inc., No. 82-1912, 1986 WL 53400

(E.D.N.Y. May 28, 1986) ......................................................................................................... 16

Fleisher v. Phoenix Life Ins. Co., No. 11-CV-8405 (CM), 2015 WL 10847814

(S.D.N.Y. Sept. 9, 2015) .......................................................................................................... 17

Fox v. Vice, 563 U.S. 826 (2011) ..................................................................................................... 6

Frank v. Eastman Kodak Co., 228 F.R.D. 174 (W.D.N.Y. 2005) ................................................. 13

Friend v. Ancilla Sys. Inc., 68 F. Supp. 2d 969 (N.D. Ill. 1999) .................................................... 11

Gisbrecht v. Barnhart, 535 U.S. 789 (2002) .................................................................................... 6

Goldberger v. Integrated Resources, Inc., 209 F.3d 43 (2d Cir. 2000) .................... 7-12, 14, 15, 18

Health Cost Control v. Fuxan, No. CIV. A. 95-4243, 1997 WL 725440

(E.D. La. Nov. 17, 1997) .......................................................................................................... 10

Hensley v. Eckherhard, 461 U.S. 424 (1983) .................................................................................. 6


iii

In re Dynegy, Inc. ERISA Litig., 309 F. Supp. 2d 861 (S.D. Tex. 2004) ....................................... 19

In re EVCI Career Colleges Holding Corp. Sec. Litig., No. 05 Civ. 10240 (CM),

2007 WL 2230177 (S.D.N.Y. July 27, 2007) .......................................................................... 17

In re Fine Paper Antitrust Litig., 751 F.2d 562 (3d Cir. 1984) ..................................................... 16

In re Glob. Crossing Sec. & ERISA Litig., 225 F.R.D. 436 (S.D.N.Y. 2004) ............................... 12

In re Hi–Crush Partners L.P. Sec. Litig., No. 12 Civ. 8557(CM),

2014 WL 7323417 (S.D.N.Y. Dec. 19, 2014) ......................................................................... 17

In re Lloyd's Am. Trust Fund Litig., No. 96-cv-1262, 2002 WL 31663577

(S.D.N.Y. Nov. 26, 2002) ........................................................................................................ 17

In re Marsh ERISA Litig., 265 F.R.D. 128 (S.D.N.Y. 2010) ................................................... 15, 19

In re Medical X-Ray Film Antitrust Litig., 1998 U.S. Dist. LEXIS 14888

(E.D.N.Y. Aug. 7, 1998) .......................................................................................................... 13

In re NASDAQ Market- Makers Antitrust Litig., 187 F.R.D. 465 (S.D.N.Y. 1998) ...................... 18

In re Prudential Sec. Inc. Ltd. Partnerships. Litig., 985 F. Supp. 410

(S.D.N.Y. 1997) ....................................................................................................................... 14

In re Sony SXRD Rear Projection Television Class Action Litig.,

No. 06 CIV. 5173 (RPP), 2008 WL 1956267 (S.D.N.Y. May 1, 2008) .......................... 6, 7, 16

In re Sumitomo Copper Litig., 74 F. Supp. 2d 393 (S.D.N.Y. 1999) ............................................ 18

In re Telik, Inc. Sec. Litig., 576 F. Supp. 2d 570 (S.D.N.Y. 2008) ................................................ 17

In re Warner Communications Sec. Litig., 618 F. Supp. 735 (S.D.N.Y. 1985),

aff’d, 798 F.2d 35 (2d Cir. 1986) ............................................................................................. 13

Jermyn v. Best Buy Stores, L.P., No. 08 CIV. 214 CM, 2012 WL 2505644

(S.D.N.Y. June 27, 2012) ........................................................................................... 6, 7, 16, 18

Kaplan v. St. Peter’s Healthcare System, No. 13–2941, 2014 WL 1284854 (D.N.J.

March 31, 2014) ....................................................................................................................... 10

Lown v. Continental Casualty Co., 238 F.3d 543 (4th Cir. 2001) ................................................. 10

Malchman v. Davis, 761 F.2d 893 (2d Cir. 1985)........................................................................ 6, 7

Maley v. Del Global Techs. Corp., 186 F. Supp. 2d 358 (S.D.N.Y. 2002) ....................... 13, 15, 17

McBean v. City of New York, 233 F.R.D. 377 (S.D.N.Y. 2006) ...................................................... 7


iv

McLellan v. E.I. Dupont de Nemours & Co., Inc., 2006 U.S. Dist. LEXIS 94233

(W.D.N.Y. Sep. 22, 2006) .......................................................................................................... 9

Medina v. Catholic Health Initiatives, No. 13–cv–01249, 2014 WL 4244012

(D. Colo. Aug. 26, 2014) ......................................................................................................... 10

Miltland Releigh–Durham v. Myers, 840 F. Supp. 235 (S.D.N.Y 1993) ....................................... 18

Morris v. Affinity Health Plan, Inc., 859 F. Supp. 2d 611 (S.D.N.Y. 2012) ................................. 17

Nat. Res. Def. Council, Inc. v. Fox, No. 94 CIV. 8424 (PKL), 2001 WL 815531

(S.D.N.Y. July 19, 2001) ........................................................................................................... 6

Overall v. Ascension, 23 F. Supp. 3d 816 (E.D. Mich. 2014) ........................................................ 10

Rodriguez v. City of New York, 721 F. Supp. 2d 148 (E.D.N.Y. 2010) ........................................... 6

Rollins v. Dignity Health, 19 F. Supp. 3d 909 (N.D. Cal. 2013) ................................................... 10

Spann v. AOL Time Warner, No. 02-8238, 2005 U.S. Dist. LEXIS 10848

(S.D.N.Y. June 7, 2005) ........................................................................................................... 16

Spence v. Ellis, No. CV 07-5249 TCP ARL, 2012 WL 7660124

(E.D.N.Y. Dec. 19, 2012), report and recommendation adopted,

No. 07-CV-5249 TCP, 2013 WL 867533 (E.D.N.Y. Mar. 7, 2013) ........................................ 16

Stapleton v. Advocate Health Care Network, No. 14 C 01873, 2014 WL 7525481

(N.D. Ill. Dec. 31, 2014) .......................................................................................................... 10

Steinberg v. Nationwide Mut. Ins. Co., 612 F. Supp. 2d 219 (E.D.N.Y. 2009) ............................... 7

Strougo ex rel. Brazilian Equity Fund, Inc. v. Bassini, 258 F. Supp. 2d 254

(S.D.N.Y. 2003) ....................................................................................................................... 13

Thompson v. Metro. Life Ins. Co., 216 F.R.D. 55 (S.D.N.Y. 2003) ............................................ 6, 7

Wal-Mart Store Inc. v. Visa U.S.A. Inc., 396 F.3d 96 (2d Cir. 2005) ............................................ 17

Warren v. Xerox Corp., 2008 U.S. Dist. LEXIS 73951 (E.D.N.Y. Sept. 19, 2008) ...................... 13

Welsh v. Ascension Health, No. 08CV348/ MCR/EMT, 2009 WL 1444431

(N.D. Fla. May 21, 2009) ......................................................................................................... 11

Yuzary v. HSBC Bank USA, N.A., No. 12-cv-3603, 2013 WL 5492998

(S.D.N.Y. Oct. 2, 2013 ............................................................................................................. 17

Other Authorities

Fed.R. Civ. P. 23(h) ................................................................................................................... 5, 18


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Class Counsel respectfully submit this memorandum in support of their motion pursuant

to Rule 23(h) of the Federal Rules of Civil Procedure, for an award of attorneys’ fees in the

amount of $800,000; for reimbursement of $ 19,711.71 in unreimbursed litigation expenses that

were reasonably and necessarily incurred in prosecuting and resolving the Action; and for $2,000

to be awarded to the Class Representative in this action in recognition of her contribution to the

successful prosecution of this case.

I. INTRODUCTION

The proposed Settlement represents a very favorable result for the Class. The Settlement

provides for the payment of Plan funding over a ten-year period of one hundred and seven

million dollars ($107,000,000) for the benefit of the Saint Francis Hospital and Medical Center

Pension Plan (the “Plan”) and its participants and beneficiaries. The Settlement also includes

equitable provisions concerning future benefits and continuing obligations for Defendants

regarding the Plan. Critically, the Settlement includes a guarantee that Saint Francis will pay

accrued benefits for fifteen (15) years provided the Plan remains in existence and, in the event

that Saint Francis is unable to make those payments itself, it agrees to borrow, and its corporate

parent, Trinity Health Corporation (“Trinity”), agrees to lend, sufficient funds to make up any

shortfall. This significant recovery was obtained without the years of motions practice typical of

such complex class action litigation, through the skill and effective advocacy of Class Counsel.

The Settlement has been preliminarily approved, and a final fairness hearing has been scheduled

by the Court for October 19, 2016.

In undertaking this litigation, Plaintiff’s Counsel, who possess significant experience in

ERISA-based class actions, faced substantial challenges in proving liability and damages. Due

to the nature of this litigation and the ever-evolving case law, Plaintiff’s Counsel faced the


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very real risk that the substantial time and expense they dedicated to this case would result in no

recovery for the Class. At the time that suit was filed, several courts in other circuits had reached

conflicting results with respect to whether an employee benefits plan such as the St. Francis Plan

qualifies for the “church plan” exemption under ERISA, such that the federal statute’s numerous

and substantial protections for the participants of such plans do not apply, and even decisions

favorable to Plaintiff’s position rested upon sometimes conflicting rationales. No court in the

Second Circuit, including the Court of Appeals itself, had addressed the question.

In light of the recovery obtained, the time and effort devoted to this case by Plaintiff’s

Counsel, the skill and expertise required, and the risks that counsel undertook, Plaintiff’s fee

request is eminently appropriate. As discussed below, the $800,000 fee resulted from a

mediator’s proposal after the other material terms of the settlement had been agreed upon by the

parties, and will not reduce the amount that Defendants must pay into the Fund. It is well within

the range fees that courts in this Circuit and others have awarded in ERISA class actions. The

requested fee represents a reasonable multiplier of 2.77 compared to Class Counsel’s lodestar.

This request is fundamentally supported by the case law in this Circuit and analogous ERISA

class actions.

In addition, Plaintiff requests reimbursement of Plaintiff’s Counsel’s out-of-pocket

expenses, which were reasonable and necessary to protect the interests of the Class in this

litigation. Finally, Plaintiff requests a Case Contribution Award for Lead Plaintiff Carol Kemp-

DeLisser for her time and effort devoted to this action on behalf of the Class. As with Plaintiff’s

other requests, this request is also supported by applicable case law. Importantly, to date, no

objections to any of these requests have been filed even though the Notice approved by the Court

indicated that Plaintiff would be seeking approval of these requests from the Court.


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II. FACTUAL BACKGROUND

The Class Action Complaint (the “Complaint”) was filed by Carol Kemp-DeLisser on

July 21, 2015 against Saint Francis and other defendants for violations of ERISA. ECF No. 1.

The case was filed by Izard, Kindall & Raabe, LLP and McCarthy, Coombes & Costello LLP

(“Class Counsel”) who conducted a factual investigation of the case and evaluated all pertinent

legal issues prior to filing the Complaint. Declaration of Robert A. Izard in Support of Plaintiff’s

Motion for Final Approval of Class Action Settlement and Motion for an Award of Attorneys’

Fees, Reimbursement of Expenses, and Case Contribution Award for Lead Plaintiff (“Izard

Decl.”), at ¶ 2. The Complaint alleged that Defendants improperly characterized the Plan as a

“church plan” in order to avoid their obligations under ERISA. As a result, Plaintiff alleged that

the Plan is underfunded by nearly $140 million or approximately 34%. Plaintiff further alleged

that Saint Francis Hospital and Medical Center (“SFH”) is a hospital, not a church or a

convention or association of churches. Moreover, because SFH’s principal business is

healthcare, it is not an organization with the principal purpose or function of providing

retirement or welfare benefits. Thus, Plaintiff alleges that the Plan is not a church plan and is not

exempt from the requirements of ERISA. Id.

Defendants moved to dismiss the Complaint on October 19, 2015. ECF No. 32.

Defendants argued that statutory text, court opinions and administrative agency interpretation all

support the conclusion that the Plan should be considered a church plan and be exempt from

ERISA. After Defendants filed their motion to dismiss, the parties conferred and agreed to

mediation. Izard Decl. ¶ 3. These discussions were prompted by the Settling Parties’ desire to

avoid the burden, expense, and uncertainty of continued litigation and to settle any and all claims

that have been or could have been asserted against the Defendants arising out of the conduct

described in the Complaint. The Settling Parties agreed to Robert A. Meyer as a mediator. Mr.


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Meyer is a highly skilled and experienced mediator who has mediated many complex cases and

class actions. Id.

As part of the mediation process, Defendant produced an actuarial report, pension plan

and numerous other documents to Plaintiff. Plaintiff obtained and produced to Defendant its

own expert actuarial report on liability and damages. Izard Decl. ¶ 4. The Settling Parties also

submitted letter briefs to the mediator, Robert A. Meyer and met with him in New York on

December 9, 2015, and in Los Angeles on February 18, 2016. Id. During mediation the Parties

exchanged their respective views with Mr. Meyer regarding the merits of the case and the

various issues with respect to liability, causation, and damages. The Parties successfully reached

an agreement-in-principle to settle the case and signed a term sheet reflecting the material terms

at the conclusion of the second mediation session on February 18, 2016. Id. The term sheet

indicated that Defendant would be responsible for paying Plaintiff’s attorneys’ fees and

expenses, in an amount to be negotiated between the Parties. Id. The term sheet further

provided that the Mediator would act as the final arbiter with respect to any disagreement

concerning plaintiff’s reasonable fees and expenses. Id.

Following the second mediation, the Parties attempted in good faith to reach agreement

with respect to Plaintiff’s attorneys’ fees and expenses, but ultimately the parties submitted the

issue to the Mediator. Izard Decl. ¶ 5. After both sides had the opportunity to argue their

positions, the Mediator determined that the amount should be $800,000, plus expenses actually

incurred (not to exceed $50,000). Id.

The Parties finalized all of the terms and conditions of the Settlement, which was

executed on May 20, 2016 and submitted to Court along with a Motion for Preliminary

Approval. ECF No. 45. The Court granted Preliminary Approval by Order dated July 12, 2016.


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ECF No. 53. The Order gave preliminary approval to the settlement, preliminarily certified the

Class, appointed Plaintiff as Class Representative and her counsel as Class Counsel, approved

the form and method of providing notice to the Class, and set a date for the Final Approval

Hearing.

In accordance with the Preliminary Approval Order, the approved Class Notice was sent

to each person within the Settlement Class who could be identified by the Plan’s recordkeeper by

first-class mail on August 5, 2016. Declaration of Abigail Schwartz, ¶ 10 (attached to the Izard

Declaration as Exh. D). In addition, the Settlement and all of its attachments (including the

Notice), as well as the Motion for Preliminary Approval and supporting materials, were

published on a dedicated page on the Izard, Kindall & Raabe website (http://ikrlaw.com/file/

kemp-delisser-v-st-francis-hospital-medical-center/). Izard Decl. at ¶ 8. The Notice to Class

specifically described the provisions of the Settlement related to this motion:

Defendants have . . . agreed to pay $800,000 to be used to fund Class

Counsel’s requested attorneys’ fees and $50,000 for expenses actually

incurred and/or an Incentive Fee to the Named Plaintiff. The Court has the

sole discretion as to whether, and/or in what amounts up to a total of

4850,000, to award attorney’s fees, expenses, and/or an Incentive Fee.

Notice, ECF 46, at 35. The date for filing objections was set for October 5, 2016, to give class

members the opportunity to review this motion, as well as the Motion for Final Approval, before

deciding whether to object. At least as of the date of this filing, however, no Class Member has

objected to the proposed award of attorneys’ fees, expenses, or incentive payment for Lead

Plaintiff as set forth in the Class Notice. Izard Decl. ¶ 8.

III. ARGUMENT

A. The Proposed Fee Request Is Fair and Reasonable

Federal Rule of Civil Procedure 23(h) specifically provides that a court may award

reasonable attorney's fees and nontaxable costs in a class action that are authorized by law or by


6

the parties' agreement. Rodriguez v. City of New York, 721 F. Supp. 2d 148, 151 (E.D.N.Y.

2010). As the Supreme Court has repeatedly emphasized, the determination of fees “should not

result in a second major litigation.” Fox v. Vice, 563 U.S. 826, 838 (2011) (quoting Hensley v.

Eckherhard, 461 U.S. 424, 437 (1983)). To avoid this result, the parties themselves are

encouraged to reach agreement on the amount of a fee. See, e.g., Hensley, 461 U.S., at 437

(“Ideally, . . . litigants will settle the amount of a fee.”); Gisbrecht v. Barnhart, 535 U.S. 789,

801–02 (2002) (same); see also Nat. Res. Def. Council, Inc. v. Fox, No. 94 CIV. 8424 (PKL),

2001 WL 815531, at *4 (S.D.N.Y. July 19, 2001) (citing Hensely and stating, “[n]eedless to say,

such an approach has been encouraged by and met with the approval of the courts.”). As the

Second Circuit has noted, “with the increasingly heavy burden upon the courts, settlements of

disputes must be encouraged. Absent special circumstances . . . the negotiation of attorneys' fees

cannot be excluded from this principle.” Malchman v. Davis, 761 F.2d 893, 905 (2d Cir. 1985)

abrogated on other grounds by Amchem Prod., Inc. v. Windsor, 521 U.S. 591 (1997)).

Where an agreed award of attorneys’ fees comes in the context of a class action, a court

still must assess the reasonableness of the fee award. See, e.g., Jermyn v. Best Buy Stores, L.P.,

No. 08 CIV. 214 CM, 2012 WL 2505644, at *9 (S.D.N.Y. June 27, 2012); In re Sony SXRD

Rear Projection Television Class Action Litig., No. 06 CIV. 5173 (RPP), 2008 WL 1956267, at

*15–16 (S.D.N.Y. May 1, 2008); Thompson v. Metro. Life Ins. Co., 216 F.R.D. 55, 71 (S.D.N.Y.

2003). However, where, as here, the agreed fee is to be paid by the defendant rather than from a

common settlement fund, and will not reduce the benefit of the Settlement to Class Members, the

“the Court's fiduciary role in overseeing the award is greatly reduced” because “the danger of

conflicts of interest between attorneys and class members is diminished.” Jermyn, 2012 WL

2505644, at *9 (internal quotations omitted) (citing Sony SXRD, 2008 WL 1956267, at *16, and


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McBean v. City of New York, 233 F.R.D. 377, 392 (S.D.N.Y. 2006)). This is especially true

where attorneys’ fees were not negotiated until after the material terms of the settlement were

already agreed, as also happened here. Blessing v. Sirius XM Radio Inc., 507 F. App'x 1, 4 (2d

Cir. 2012) (that fee was negotiated only after settlement terms had been decided and did not

reduce what the class ultimately received were factors that favored respecting the negotiated fee)

(citing Malchman, 761 F.2d at 905 & n. 5, and Thompson v. Metro. Life Ins. Co., 216 F.R.D. 55,

71 (S.D.N.Y. 2003)). Furthermore, the fees were ultimately determined by the independent,

third-party mediator, providing additional support for a finding that the requested fees are

reasonable. Sony SXRD, 2008 WL 1956267, at *16; McBean, 233 F.R.D. at 392.

In assessing the reasonableness of agreed fees, courts in this Circuit have looked to the

factors laid out in Goldberger v. Integrated Resources, Inc., 209 F.3d 43 (2d Cir. 2000). See,

e.g., Steinberg v. Nationwide Mut. Ins. Co., 612 F. Supp. 2d 219, 223 (E.D.N.Y. 2009); Jermyn,

2012 WL 2505644, at *9; Sony SXRD, 2008 WL 1956267, at *16; Thompson, 216 F.R.D. at 71.

These factors are: (1) The time and labor expended by counsel; (2) the magnitude and

complexities of the litigation; (3) the risk of litigation; (4) the quality of representation; (5) the

requested fee in relation to the settlement; and (6) public policy considerations. Goldberger, 209

F. 3d at 50. A review of those factors clearly demonstrates that the requested award of $800,000

in attorneys’ fees is fair and reasonable.

1. The Time and Labor Expended By Counsel

The first Goldberger factor requires consideration of the time and labor expended by

Class Counsel in this case. Goldberger, 209 F.3d at 50. Given the significant time and resources

expended by Plaintiff’s Counsel in litigating this matter, this factor strongly supports approval of

the fee request.


8

As described above and in the Declarations of Robert Izard and Kevin Coombes, Class

Counsel dedicated considerable time and effort into investigating the claims at issue in the case,

crafting the Complaint, analyzing the arguments presented in the Motion to Dismiss, reviewing

numerous relevant documents, retaining and working with an actuarial expert concerning

liability and damages, and negotiating the Settlement Agreement. While Class Counsel worked

efficiently and resolved the case at an early stage, this extremely favorable resolution would not

have been possible without the careful work that went into the case at the outset. In total, Class

Counsel have devoted over 450 hours to this case through September 16, 2016.

Indeed, it is important to note that even if the Court grants final approval of the

Settlement, Class Counsel will continue to expend time and resources overseeing the Settlement

administration, assisting Class Members, and tending to any other issues that may arise related to

the Settlement. See deMunecas v. Bold Food, LLC, 2010 U.S. Dist. LEXIS 87644, at *25

(S.D.N.Y. Aug. 23, 2010) (recognizing that “Class Counsel's fee award will not only compensate

them for time and effort already expended, but for time that they will be required to spend

administering the settlement going forward”).

In view of the time and labor expended on this case by Class Counsel to date, and the

additional time that will be spent shepherding the administration of the Settlement in the future,

the requested fee is fair and reasonable.

2. The Magnitude and Complexities of the Litigation

The second Goldberger factor requires consideration of the magnitude and complexities

Class Counsel faced in litigating this case. Goldberger, 209 F.3d at 50. This factor also supports

the approval of Plaintiff’s fee request.

By its very nature, ERISA litigation presents complex factual and legal issues which must

be navigated by the parties, often with little in the way of judicial guidance to assist them. See


9

e.g. McLellan v. E.I. Dupont de Nemours & Co., Inc., 2006 U.S. Dist. LEXIS 94233, at *24

(W.D.N.Y. Sep. 22, 2006)(commenting on “ERISA's complex nature”). As discussed further

below, the governing law is often in flux, and litigating within this ever changing legal landscape

presents undeniable complexity, and the real risk that in such cases spanning several years the

law may change significantly before judgment.

In this case, the complex legal and factual issues faced by Class Counsel were many, and

arose at every stage of the litigation. Because subject matter jurisdiction in this case is derived

from the claim “arising under” ERISA, it was important for Plaintiff to anticipate primary

defenses, such as the “church plan” exception, in the Complaint itself by properly pleading its

inapplicability. Moreover, while certain elements of the church plan exception are relatively

straightforward, others require a more fact-intensive inquiry. Thus, the litigation involved

important and contentious questions of statutory construction as well as potentially fact-bound

inquiries into which organization could be said to be “maintaining” the Plan, the “purpose” of

that organization, and whether it could be said to be controlled by or affiliated with a church.

These issues could have tied the case up in motions practice for a very long period of time,

between the pending motion to dismiss, the necessary motion for class certification, motions to

compel production, dispositive motions and Daubert motions involving the parties’ experts.

Thus, this factor supports the requested fee.

3. The Risk of the Litigation

Goldberger factor number three analyzes the risk of litigation, and is “perhaps the

foremost factor to be considered in determining the award of appropriate attorneys’ fees.” Asare

v. Change Grp. N.Y., Inc., 2013 U.S. Dist. LEXIS 165935, at *53 (S.D.N.Y. Nov. 15, 2013)

(internal quotation omitted). In considering this factor, “litigation risk must be measured as of


10

when the case is filed.” Goldberger, 209 F.3d at 55. A review of the significant risk taken on by

Class Counsel in this matter clearly satisfies this factor.

ERISA class actions are inherently risky, in large part due to the lack of jurisprudential

guidance. Unlike the antitrust laws and the federal securities laws, the ERISA statute is

relatively new, having only been enacted in 1974. The “church plan” exception, in its present

form, is younger still, having come about as a result of amendments to the statute passed in 1980.

See, e.g., Rollins v. Dignity Health, 19 F. Supp. 3d 909, at 914 (N.D. Cal. 2013). At the outset of

this litigation, the central question involved in the case – whether the Plan qualified as a “church

plan” under ERISA – had been the subject of relatively few cases, which had reached different

results and, even when favorable to Plaintiff’s position here, relied upon conflicting rationales.

Compare Lown v. Continental Casualty Co., 238 F.3d 543 (4th Cir. 2001) (benefit plan that was

not maintained by entity controlled by or affiliated with a church did not qualify for the “church

plan” exception); Chronister v. Baptist Health, 442 F.3d 648 (8th Cir. 2006) (same); Stapleton v.

Advocate Health Care Network, No. 14 C 01873, 2014 WL 7525481 (N.D. Ill. Dec. 31, 2014)

(finding that the church plan exemption did not apply to plan that was not established by a

church in the first instance); Kaplan v. St. Peter’s Healthcare System, No. 13–2941, 2014 WL

1284854 (D.N.J. March 31, 2014) (same); Rollins v. Dignity Health, 19 F. Supp. 3d 909 (N.D.

Cal. 2013) (same); and Health Cost Control v. Fuxan, No. CIV. A. 95-4243, 1997 WL 725440,

at *1 (E.D. La. Nov. 17, 1997) (benefits plan ceased to be a “church plan” when the church hired

a third-party administrator that was not controlled by a church); with Medina v. Catholic Health

Initiatives, No. 13–cv–01249, 2014 WL 4244012 (D. Colo. Aug. 26, 2014) (finding that the

church plan exception did apply); Overall v. Ascension, 23 F. Supp. 3d 816 (E.D. Mich. 2014)

(same); Welsh v. Ascension Health, No. 08CV348/ MCR/EMT, 2009 WL 1444431 (N.D. Fla.


11

May 21, 2009) (same); Friend v. Ancilla Sys. Inc., 68 F. Supp. 2d 969 (N.D. Ill. 1999) (same).

Neither the Second Circuit, nor any of the District Courts within the Circuit, had addressed the

issue. And, longstanding agency interpretations by the I.R.S. were favorable to Defendant’s

position.

Thus, the legal landscape governing the central issue in this litigation – whether or not the

Plan was exempt from ERISA – was extremely uncertain at the time that the case was filed.

And, while there have been several favorable appellate court rulings since the case was filed by

the Third, Seventh and Ninth Circuits, the core issue remains a matter of first impression in the

Second Circuit.

It was with full knowledge of this unsettled legal landscape and its inherent risks that

Plaintiff’s Counsel accepted this case on a contingent basis and chose to file and litigate this

matter. In addition to the uncertainties relating to the substantive ERISA jurisprudence discussed

above, Plaintiff’s Counsel also accepted the risks of litigating against formidable, and well-

funded, defense counsel. Because Class Counsel accepted all of the significant risks inherent in

this case, this factor is satisfied and supports approval of Class Counsel’s fee request.

4. The Quality of Representation

Goldberger factor number four requires an analysis of the quality of the representation

provided by Class Counsel in this litigation. Goldberger, 209 F.3d at 50. “[T]he quality of the

representation is best measured by the results.” Id., at 55. In this case, the result is very

favorable for the Class, and, therefore, the quality of representation by Class Counsel more than

satisfies this factor.

As an initial matter, Class Counsel in this case is comprised of attorneys and law firms

that are national leaders in class action litigation generally, and ERISA matters in particular.

Izard, Kindall & Raabe, LLP has been appointed lead counsel or co-lead counsel in numerous


12

ERISA fiduciary breach cases, as well as other class action matters, both in the Second Circuit

and in courts nationwide. See Firm Resume, attached to the Declaration of Robert Izard as

Exhibit B. McCarthy, Coombes & Costello LLP is a litigation firm in Hartford, Connecticut

specializing in social security disability, workers’ compensation and personal injury law. See

Declaration of Kevin Coombes, ¶ 3.

The quality of Class Counsel’s representation is also evident when considering the

equally high quality defense attorneys against whom they successfully litigated this case. In re

Glob. Crossing Sec. & ERISA Litig., 225 F.R.D. 436, 467 (S.D.N.Y. 2004) (noting that “‘the

quality of opposing counsel is also important in evaluating the quality of plaintiff’s counsels’

work’”) (citation omitted). From the outset, Class Counsel engaged in hard fought litigation with

highly capable attorneys from Proskauer Rose LLP, a leading international firm with over 700

attorneys and a recognized leader in ERISA defense litigation, aided and assisted by the

attorneys at Verrill Dana LLP acting as local counsel.

Class Counsel both possesses and utilized the necessary skill to ably provide the legal

services which led to a favorable settlement. Class Counsel’s ability to obtain a favorable

settlement for the Class Members despite all the risks and complexity discussed above, and in the

face of formidable legal opposition speaks to the quality of Class Counsel. This Goldberger

factor is clearly satisfied.

5. The Requested Fee in Relation to the Settlement

This factor requires the Court to determine whether the fee requested is a fair percentage

of the settlement amount. Goldberger, 209 F.3d at 50. In the context of a “common fund”

settlement, this factor is used to assess the percentage of the fund that the class should be paid to

class counsel, as a matter of equity, to compensate for the benefit class counsel obtained for the

class as a whole. In this case, however, the proposed fee will not be paid by the Class, but rather


13

by Defendants, and will not reduce the benefits to the Class. Nonetheless, it is important to

consider this factor to assess whether the requested fee is disproportionate to the totality of

benefits the Settlement provides to the Class. By any measure, the fees requested by Class

Counsel here are extremely modest relative to the value the Settlement provides to the Class.

“Traditionally, courts in this Circuit and elsewhere have awarded fees in the 20%-50%

range in class actions.” In re Warner Communications Sec. Litig., 618 F. Supp. 735, 749

(S.D.N.Y. 1985), aff’d, 798 F.2d 35 (2d Cir. 1986). Indeed, common fund recoveries of one-

third or higher have been routinely approved in class action cases within the Second Circuit. See

CourAcevedo v. Workfit Med. LLC, No. 6:14-CV-06221 EAW, 2016 U.S. Dist. LEXIS 66828, at

*20 (W.D.N.Y. May 20, 2016) (approving fee request of one-third of total settlement fund);

deMunecas, at *19 (“Class Counsel’s request for 33 percent of the Fund is reasonable under the

circumstances of this case and is consistent with the norms of class litigation in this circuit.”);

(Warren v. Xerox Corp., 2008 U.S. Dist. LEXIS 73951, at *22 (E.D.N.Y. Sept. 19, 2008)

(awarding class counsel attorneys’ fees and expenses of $4 million, which “constitutes

approximately 33.33% of the total settlement, and is comparable to sums allowed in similar

cases”); Frank v. Eastman Kodak Co., 228 F.R.D. 174, 189 (W.D.N.Y. 2005) (awarding

38.26%); Strougo ex rel. Brazilian Equity Fund, Inc. v. Bassini, 258 F. Supp. 2d 254, 262

(S.D.N.Y. 2003) (awarding 33- 1/3% of common fund); Maley v. Del Global Techs. Corp., 186

F. Supp. 2d 358, 370 (S.D.N.Y. 2002) (awarding 33-1/3% and finding that a “modest multiplier

of 4.65 is fair and reasonable”); Becher v. Long Island Lighting Co., 64 F. Supp. 2d 174, 182

(E.D.N.Y. 1999) (awarding 33-1/3% of common fund); In re Medical X-Ray Film Antitrust

Litig., 1998 U.S. Dist. LEXIS 14888 at *20 (E.D.N.Y. Aug. 7, 1998) (determining that 33.33%

fee award was “reasonable and is well within the range accepted by courts in this circuit.”).


14

Class Counsel’s fee request here was not calculated as a share of the benefits – even just

the monetary benefits – of the Settlement. However, the monetary benefits alone are $107

million. Class Counsel’s requested $800,000 fee is approximately seven tenths of one percent

of this amount. In addition, the Settlement achieves a potentially even greater benefit for the

Class by ensuring benefits payments, backed not just by Defendant SFH, but by its corporate

parent Trinity Health, for a period of fifteen years. Thus, this Goldberger factor strongly

supports approval of Class Counsel’s request.

6. Reaction of the Class

It is too soon to assess the reaction of the Class in a definitive way. The deadline for

Class Members to object to the Settlement is October 5, 2016, to permit Class Members to

review this Motion, as well as Plaintiff’s Motion for Final Approval before taking a position on

the Settlement. Accordingly, it is too soon to make a definitive statement with respect to this

Goldberger factor. However, as of this point in the litigation, over five weeks after the

Settlement Class received notice of the Settlement, no objections to the Settlement have been

filed.1 To date, therefore, it appears that this factor should weigh in favor of the Settlement. See,

e.g., In re Prudential Sec. Inc. Ltd. Partnerships. Litig., 985 F. Supp. 410, 416 (S.D.N.Y. 1997)

(“In determining the reasonableness of a requested fee, numerous courts have recognized that

‘the lack of objection from members of the class is one of the most important reasons”’) (citation

omitted).

1 In the event that any objections are received by the October 5, 2016 deadline, Class Counsel

will address them in a subsequent filing in accordance with the Preliminary Approval Order.


15

7. Public Policy Considerations

The final Goldberger factor requires an analysis of all public policy considerations when

determining the fees to be awarded to Class Counsel. Goldberger, 209 F.3d at 50. Here, public

policy strongly supports approval of Class Counsel’s fee request.

In this case, public interest is undeniable. In passing ERISA, Congress confirmed that the

protection of workers’ retirement funds from abuse was an important public interest that would

require private enforcement to be effective. In re Marsh ERISA Litig., 265 F.R.D. 128, 149-150

(S.D.N.Y. 2010) (Noting that “Congress passed ERISA to promote the important goals of

protecting and preserving the retirement savings of American workers” and that the statute “itself

specifically encourages private enforcement”). Much like this case, in Marsh, the Department of

Labor took no action to protect the plan participants, which the Marsh Court found highly

relevant in deciding the fee petition. The court concluded that “[w]ithout the efforts of Plaintiffs’

Counsel, the participants in [the] Plan would not have obtained any relief at all.” In re Marsh

ERISA Litig., 265 F.R.D. at 150. Accordingly, the court found that public policy supported the

fee award. Id.

Relatedly, regardless of the specific statute in question, courts in the Second Circuit have

routinely stressed the importance of reasonable fee awards in encouraging private attorneys to

bring contingency fee class actions representing the public interest. See, e.g. deMunecas, 2010

U.S. Dist. LEXIS 87644, at *21 (S.D.N.Y. Aug. 23, 2010)(“Where relatively small claims can

only be prosecuted through aggregate litigation, and the law relies on prosecution by ‘private

attorneys general,’ attorneys who fill the private attorney general role must be adequately

compensated for their efforts”) (internal citations omitted); Maley, 186 F. Supp. 2d at 373

(S.D.N.Y. 2002) (“Courts have recognized the importance that fair and reasonable fee awards

have in encouraging private attorneys to prosecute class actions on a contingent basis . . . on


16

behalf of those who otherwise could not afford to prosecute.”); Spann v. AOL Time Warner, No.

02-8238, 2005 U.S. Dist. LEXIS 10848 (S.D.N.Y. June 7, 2005), at *26 (awarding 33-1/3% fee

in an ERISA fiduciary breach case, noting that lawyers are unlikely to pursue this type of

litigation “without resort to the class action device.”); Ellman v. Grandma Lee’s Inc., No. 82-

1912, 1986 WL 53400, at *9 (E.D.N.Y. May 28, 1986)( “To make certain that the public

[interest] is represented by talented and experienced trial counsel, the remuneration should be

both fair and rewarding”).

Thus, public policy concerns support the fee award requested in this case.

B. The Fee Request Is Reasonable When “Cross Checked” Against Class

Counsel’s Lodestar

Where, as here, the Parties have negotiated the fee that Defendant shall pay and the

amount to be paid to the Class will not be in any way diminished, “trial courts need not, and

indeed should not, become green-eyeshade accountants.” Spence v. Ellis, No. CV 07-5249 TCP

ARL, 2012 WL 7660124, at *2 (E.D.N.Y. Dec. 19, 2012), report and recommendation adopted,

No. 07-CV-5249 TCP, 2013 WL 867533 (E.D.N.Y. Mar. 7, 2013). “In cases where settlements

of fee requests are made with the defendants after prior approval of damage claim settlements,

the court can, in most instances, assume that the defendants closely scrutinized the fee requests,

and agreed to pay no more than was reasonable.” In re Fine Paper Antitrust Litig., 751 F.2d

562, 582 (3d Cir. 1984). Rather, as in common fund case, it is appropriate to look to counsel’s

lodestar as a cross-check to ensure that the negotiated fee does not result in a windfall to class

counsel. See, e.g., Sony SXRD, 2008 WL 1956267, at *16 (“the reasonableness of the requested

fee award can be tested by using the lodestar method of calculating reasonable attorneys' fees in

common fund cases”); Jermyn, 2012 WL 2505644, at *9 (employing lodestar cross-check).


17

When courts employ the lodestar analysis to cross-check the reasonableness of the

percentage of recovery award, counsel may be entitled to a multiplier:

“Courts regularly award lodestar multipliers from 2 to 6 times

lodestar” in this Circuit, Morris v. Affinity Health Plan, Inc., 859 F. Supp.

2d 611, 623–24 (S.D.N.Y. 2012), and have been known to award lodestar

multipliers significantly greater than the 4.87 multiplier sought here. See

e.g., Maley [v. Del Global Tech. Corp.], 186 F. Supp. 2d [358,] at 369

[(S.D.N.Y. 2002)] (awarding percentage method with cross-check lodestar

multiplier of 4.65, which was “well within the range awarded by courts in

this Circuit and courts throughout the country,” and citing cases with a 7.7

multiplier and 5.5 multiplier); see also In re Telik, Inc. Sec. Litig., 576 F.

Supp. 2d 570, 590 (S.D.N.Y. 2008) (“In contingent litigation, lodestar

multiples of over 4 are routinely awarded by courts, including this Court”

(citing Maley)); In re EVCI Career Colleges Holding Corp. Sec. Litig.,

No. 05 Civ. 10240 (CM), 2007 WL 2230177, at *17 n.7 (S.D.N.Y. July

27, 2007) (“Lodestar multipliers of nearly 5 have been deemed 'common'

by courts in this District.”). The multiplier is on the higher end, but that is

entirely appropriate, given the fact that counsel were ready to go to trial

when they settled. Class Counsel's hourly rates are reasonable. The rates

for Class Counsel who billed meaningful time to this case (ranging from

$225 to $675 per hour) are comparable to peer plaintiffs and defense-side

law firms litigating matters of similar magnitude. See Sklaver Deck 18–20;

see In re Hi–Crush Partners L.P. Sec. Litig., No. 12 Civ. 8557(CM), 2014

WL 7323417, at *14 (S.D.N.Y. Dec. 19, 2014) (“The rates billed by Lead

Counsel (ranging from $425 to $825 per hour) for attorneys, are

comparable to peer plaintiffs and defense-side law firms litigating matters

of similar magnitude.”)

Fleisher v. Phoenix Life Ins. Co., No. 11-CV-8405 (CM), 2015 WL 10847814, at *18 (S.D.N.Y.

Sept. 9, 2015). Similar lodestar multiples have been awarded in ERISA class action cases in this

circuit.2

2 See, e.g., Davis v. J.P. Morgan Chase & Co., 827 F. Supp. 2d 172, 185 (W.D.N.Y. 2011)

(finding a multiplier of 5.3 to be “not atypical for similar fee-award cases”); Yuzary v. HSBC

Bank USA, N.A., No. 12-cv-3603, 2013 WL 5492998 *11 (S.D.N.Y. Oct. 2, 2013 (finding 7.6

multiplier to “fall[] within the range granted by courts.”); Wal-Mart Store Inc. v. Visa U.S.A.

Inc., 396 F.3d 96, 123 (2d Cir. 2005) (“multiplier of 3.5, which has been deemed reasonable

under analogous circumstances.”); In re Lloyd's Am. Trust Fund Litig., No. 96-cv-1262, 2002

WL 31663577, at *27 (S.D.N.Y. Nov. 26, 2002) (citing fee awards of up to 12 times lodestar);

Maley, 186 F. Supp. 2d at 369, 371 (citing multipliers in S.D.N.Y. up to 7.7; awarding multiplier

of 4.65); In re EVCI Sec. Litig., 2007 WL 2230177, at *17 & n.6 (S.D.N.Y. July 27, 2007)

(noting that “multipliers of nearly 5 have been deemed ‘common’ by courts in this District” and


18

The lodestar analysis is simply a function of multiplying the number of hours Class

Counsel spent litigating this matter times the hourly billable rate. Goldberger, 209 F.3d at 47.

In this case, Class Counsel’s lodestar amount of $288,322.50 results from over 450 hours

devoted to prosecuting this matter. See Izard Decl., ¶ 10; Coombes Decl. ¶ 5. A fee award of

$800,000, therefore, yields at lodestar multiple of 2.77. Thus, the lodestar cross-check confirms

that Class Counsel’s fee request is fair and reasonable.

C. The Court Should Grant Class Counsel’s Request For Reimbursement Of

Expenses

It is axiomatic that counsel should be reimbursed for all expenses that are reasonable and

necessarily incurred. FED. R. CIV. P. 23(h); see also Jermyn, 2012 WL 2505644, at *9

(“Attorneys may be compensated for reasonable out-of-pocket expenses incurred and

customarily charged to their clients, as long as they were incidental and necessary to the

representation of those clients.”) (quoting Miltland Releigh–Durham v. Myers, 840 F. Supp. 235,

239 (S.D.N.Y 1993)).

In prosecuting this action, Class Counsel incurred $19,711.71 for which it respectfully

requests reimbursement from the Settlement Amount. All of the expenses were reasonable and

necessary to the prosecution of this matter, and represent standard litigation costs and expenses

such as expert, mediation and travel expenses, as well as court costs. The expenses are itemized

in further detail in the Izard Decl. at ¶ 11 and the Coombes Decl. at ¶ 6. All expenses for which

Class Counsel now seeks reimbursement were necessary to the successful outcome of this case.

Moreover, the total amount of expenses for which Class Counsel seeks reimbursement are

collecting cases with multipliers of up to 6.96); In re NASDAQ Market- Makers Antitrust Litig.,

187 F.R.D. 465, 489 (S.D.N.Y. 1998) (approving multiplier of 3.97, and noting that lodestar

multiples of between 3 and 4.5 are common); In re Sumitomo Copper Litig., 74 F. Supp. 2d 393,

399 (S.D.N.Y. 1999) (finding multipliers of 3 to 4.5 to be common).


19

approximately 39 percent of the $50,000 limit agreed to in Paragraph 8.1.3 of the Settlement and

included in the notice to the Class.

D. The Court Should Approve The Requested Case Contribution Award To

Lead Plaintiff

Plaintiff requests that the Court approve Case Contribution Award of $2,000.00 for Lead

Plaintiff and Class Representative Carol Kemp-DeLisser. Awards like the ones requested here,

promote the important public policy of encouraging individuals to undertake the responsibility of

representative lawsuits. The favorable result achieved by Class Counsel in this case would likely

not have been possible without the assistance of the Plaintiff. Plaintiff remained fully informed

of the details of the litigation, and provided invaluable input, information, and assistance at every

stage.

In this Circuit and others, incentive awards may be awarded by the court as compensation

to named plaintiffs for their efforts on behalf of a class which has benefitted from them. See

generally Dornberger v. Metropolitan Life Insurance Co., 203 F.R.D. 118, 124-25 (S.D.N.Y.

2001) (discusses cases supporting awards from $2,500.00 to $85,000.00). The $2,000.00 amount

sought in this case is at or below case contribution awards in other ERISA class actions. See

e.g., In re Marsh ERISA Litig., 265 F.R.D. at 151 (awarding case contribution awards in the

amount of $15,000 to each of the three Named Plaintiffs); Bredthauer v. Lundstrom, No. 4:10-

cv-3132, 2012 WL 4904422 (D. Neb. Mar. 4, 2013) (awarding case contribution award of $5,000

to each of seven named plaintiffs); In re Dynegy, Inc. ERISA Litig., 309 F. Supp. 2d 861 (S.D.

Tex. 2004) (awarding $10,000 to the named plaintiff).

The amount sought by the Plaintiff for her Case Contribution Award is modest given the

dollar amount of the Settlement and the instrumental role Plaintiff played in helping to achieve

that amount for the Class. Accordingly, Case Contribution Awards of $2,000.00 to the Lead


20

Plaintiff is entirely appropriate.

IV. CONCLUSION

For all of the aforementioned reasons, Plaintiff respectfully request the Court award (i)

attorneys’ fees in the amount of $800,000.00; (ii) reimbursement of expenses in the amount of

$19,711.71, and (iii) a Case Contribution Award in the amount of $2,000.00 to the Lead

Plaintiff.

Dated: September 16, 2016

Respectfully submitted,

/s/ Robert A. Izard

Robert A. Izard (CT 01601)

Mark P. Kindall (CT 13797)

IZARD, KINDALL & RAABE, LLP 29 South Main Street, Suite 305

West Hartford, CT 06107

Telephone: (860) 493-6292

Facsimile: (860) 493-6290

[email protected]

[email protected]

Attorneys for Plaintiff


CERTIFICATE OF SERVICE

The undersigned hereby certifies that on this 16th day of September, 2016, a true and

correct copy of the foregoing document was served via the Court’s CM/ECF system upon all

counsel of record.

IZARD, KINDALL & RAABE, LLP

By: /s/ Mark P. Kindall

Mark P. Kindall


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