Declaration of Richard M. Pearl - LCD Class Action

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Case3:07-md-01827-SI Document6662-6 Filed09/07/12 Page1 of 19 

Francis O. Scarpulla (41059) 

Craig C. Corbitt (83251) 

Judith A. Zahid (215418) 

Patrick B. Clayton (240191) 

Qianwei Fu (242669) 

Heather T. Rankie (268002) 

ZELLE HOFMANN VOELBEL & MASON LLP 

44 Montgomery Street, Suite 3400 

San Francisco, CA 94104 

Telephone: (415) 693-0700 

Facsimile: (415) 693-0770 

fscarpulla@zelle.com 

ccorbitt@zelle.com 

Joseph M Alioto (42980) 

Theresa D. Moore (99978) 

Thomas P. Pier (235740) 

Jamie L. Miller (271452) 

Angelina Alioto-Grace (206899) 

THE ALIOTO FIRM 

225 Bush Street, 16th Floor 

San Francisco, CA 94111 

Telephone: (415) 434-8900 

Facsimile: (415) 434-9200 

jmalioto@aliotolaw.com 

Co-Lead Class Counsel for Indirect-Purchaser Plaintiffs 

IN RE TFT-LCD (FLAT PANEL) 

ANTITRUST LITIGATION 

This Document Relates to: 

All Indirect Purchaser Actions 

State of Missouri, et al. v. AU Optronics 

Corporation, et al., 

Case No. 10-cv-03619 SI; 

State of Florida v. AU Optronics 


Case No. 10-cv-3517 SI; and 

State of New York v. AU Optronics 


Case No. 11-cv-0711 SI. 

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

SAN FRANCISCO DIVISION 

Case No. 3:07-md-1827 SI 

CLASS ACTION 

DECLARATION OF RICHARD M. PEARL 

Hearing Date: November 29, 2012 

Time: 3:30 p.m. 

Courtroom: 10, 19th Floor 

Judge: Honorable Susan Illston 


MDL 3:07-md-1827 SI



I, Richard M. Pearl, declare: 

1. I am a member in good standing of the California State Bar. I am in 

private practice as the principal of my own law firm, the Law Offices of Richard M. 

Pearl, in Berkeley, California. I specialize in issues relating to court-awarded attorneys’ 

fees, including the representation of parties in fee litigation and appeals, serving as an 

expert witness, and serving as a mediator and arbitrator in disputes concerning attorneys’ 

fees and related issues. In this case, I have been asked by Class Counsel for the Indirect 

Purchaser Plaintiffs (“IPP Class Counsel” ) to render my opinion on the reasonableness 

of the lodestar-multiplier they have submitted to the Court as a cross-check against the 

percentage-based fee they are requesting from the common fund generated by the 

settlements in this matter. 

2. Briefly summarized, my background is as follows: I am a 1969 graduate 

of Boalt Hall School of Law, University of California, Berkeley, California. I took the 

California Bar Examination in August 1969 and passed it in November of that year, but 

because I was working as an attorney in Atlanta, Georgia for the Legal Aid Society of 

Atlanta (LASA), I was not admitted to the California Bar until January 1970. I worked 

for LASA until summer of 1971, when I then went to work in California’s Central Valley 

for California Rural Legal Assistance, Inc., (CRLA), a statewide legal services program. 

From 1977 to 1982, I was CRLA’s Director of Litigation, supervising more than fifty 

attorneys. In 1982, I went into private practice, first in a small law firm, then as a sole 

practitioner. Martindale Hubbell rates my law firm “AV.” I also have been selected as a 

Northern California “Super Lawyer” in Appellate Law for 2005, 2006, 2007, 2008, 2010, 

2011, and 2012. A copy of my Resume is attached hereto as Exhibit A. 

3. Since 1982, my practice has been a general civil litigation and appellate 

practice, with an emphasis on cases and appeals involving court-awarded attorneys’ fees. 

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I have lectured and written extensively on court-awarded attorneys’ fees. I have been a 

member of the California State Bar’s Attorneys Fees Task Force and have testified before 

the State Bar Board of Governors and the California Legislature on attorneys’ fee issues. 

I am the author of California Attorney Fee Awards (3d ed Cal. CEB 2010) and its 

February 2011 and 2012 Supplements. I also was the author of California Attorney Fee 

Awards, 2d Ed. (Calif. Cont. Ed. of Bar 1994), and its 1995, 1996, 1997, 1998, 1999, 

2000, 2001, 2002, 2003, 2004, 2005, 2006, 2007, and 2008 Supplements. This treatise 

has been cited by the California appellate courts on more than 35 occasions. See, e.g., 

Lolley v. Campbell (2002) 28 Cal.4 th 367, 373; Chacon v. Litke (2010) 181 Cal.App.4 th 

1234, 1259. I also authored the 1984, 1985, 1987, 1988, 1990, 1991, 1992, and 1993 

Supplements to its predecessor, CEB’s California Attorney’s Fees Award Practice. In 

addition, I authored a federal manual on attorneys’ fees entitled Attorneys’ Fees: A 

Legal Services Practice Manual, published by the Legal Services Corporation. I also co- 

authored the chapter on “Attorney Fees” in Volume 2 of CEB’s Wrongful Employment 

Termination Practice, 2d Ed. (1997). 

4. More than 90% of my practice is devoted to issues involving court- 

awarded attorney’s fees. I have been counsel in over 180 attorneys’ fee applications in 

state and federal courts, primarily representing other attorneys. I also have briefed and 

argued more than 40 appeals, at least 25 of which have involved attorneys’ fees issues. 

In the past dozen or so years, I have successfully handled four cases in the California 

Supreme Court involving court-awarded attorneys’ fees: 1) Delaney v. Baker (1999) 20 

Cal.4th 23, which held that heightened remedies, including attorneys’ fees, are available 

in suits against nursing homes under California’s Elder Abuse Act; 2) Ketchum v. Moses 

(2001) 24 Cal.4th 1122, which held, inter alia, that contingent risk multipliers remain 

available under California attorney fee law, despite the United States Supreme Court’s 

contrary ruling on federal law (note that in Ketchum, I was primary appellate counsel in 

the Court of Appeal and “second chair” in the Supreme Court); 3) Flannery v. Prentice 

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(2001) 26 Cal.4th 572, which held that in the absence of an agreement to the contrary, 

statutory attorneys’ fees belong to the attorney whose services they are based upon; and 

4) Graham v. DaimlerChrysler Corp. (2004) 34 Cal.4th 553, which I handled, along with 

trial counsel, in both the Court of Appeal and Supreme Court. I also successfully 

represented the plaintiffs in a previous attorneys’ fee decision in the Supreme Court, 

Maria P. v. Riles (1987) 43 Cal.3d 1281, and represented amicus curiae, along with 

Richard Rothschild, in Vasquez v. State of California (2009) 45 Cal.4th 243. I also have 

handled numerous other appeals, including: Davis v. City & County of San Francisco 

(9th Cir. 1992) 976 F.2d 1536, Mangold v. CPUC (9th Cir. 1995) 67 F.3d 1470, Velez v. 

Wynne (9th Cir. 2007) 2007 U.S.App.LEXIS 2194; Camacho v. Bridgeport Financial, 

Inc. (9th Cir. 2008) 523 F.3d 973; Center for Biological Diversity v. County of San 

Bernardino (2010) 185 Cal.App.4 th 866; and Environmental Protection Information 

Center v. California Dept. of Forestry & Fire Protection et al (2010) 190 Cal.App.4 th 

217. For an expanded list of my reported decisions, see Exhibit A. 

5. I have been retained as an expert witness on attorneys’ fee issues on 

numerous occasions and have frequently been qualified as an expert on attorneys’ fees in 

judicial proceedings and arbitrations. My declarations on attorneys’ fee issues have 

been cited favorably by numerous courts, including: Prison Legal News v. 

Schwarzenegger, 608 F.3d 446, 455 (9 th Cir. 2010), in which the expert declaration 

referred to in that opinion is mine); Armstrong v. Brown (N.D. Cal. 2011) 2011 

U.S.Dist.LEXIS 87428; Californians for Disability Rights, Inc. v. California Dept. of 

Transportation (N.D. Cal. 2010) 2010 U.S.Dist.LEXIS 141030; Prison Legal News v. 

Schwarzenegger, 561 F.Supp.2d 1095 (N.D. Cal. 2008) (an earlier motion); Oberfelder v. 

City of Petaluma, 2002 U.S.Dist. LEXIS 8635 (N.D. Cal. 2002), aff’d 2003 

U.S.App.LEXIS 11371 (9 th Cir. 2003); Bancroft v. Trizechahn Corp., C.D. Cal. No. CV 

02-2373 SVW (FMOx), Order Granting Reasonable Attorneys’ Fees etc., filed Aug. 14, 

2006; Willoughby v. DT Credit Corp., C.D. Cal. No. CV 05-05907 MMM (Cwx), Order 

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Awarding Reasonable Attorneys’ Fees After Remand, filed July 17, 2006; A.D. v. 

California Highway Patrol, 2009 U.S.Dist.LEXIS 110743 (N.D.Cal. 2009) appeal 

pending; National Federation of the Blind v. Target Corp., 2009 U.S.Dist.LEXIS 67139 

(N.D.Cal. 2009); Church of Scientology v. Wollersheim, 42 Cal.App.4 th 628 (1996); 

Children’s Hospital & Medical Center v. Bonta, 97 Cal.App.4 th 740 (2002); Wilkinson v. 

South City Ford, 2010 Cal.App.Unpub. LEXIS 8680 (2010). 

6. I also have been retained by various governmental entities to consult with 

them regarding their affirmative attorney fee claims. 

7. I have been asked by IPP Class Counsel to express my opinion as to the 

reasonableness of the hourly rates and lodestar multiplier they have presented as a cross- 

check against their percentage-based fee. To form this opinion, I have reviewed 

numerous documents in the case, including the draft declarations of numerous IPP Class 

counsel, the declaration of Professor Brian T. Fitzpatrick, and the memorandum in 

support of IPP Class Plaintiffs’ Motion for Attorneys’ Fees and Incentive Awards. I also 

have discussed the case with several of Plaintiffs’ counsel, including Francis Scarpulla, 

Joe Alioto, Craig Corbitt, Alan Steyer, Josef Cooper, Tracy Kirkham, Patrick Clayton, 

Jack Lee, Derek Howard, and Theresa Moore. 

8. It is my understanding that Class Counsel request a common fund 

attorneys’ fee award, based on the percentage-of-fund method, of 28.5% of the 

$1,082,055,647 fund provided by the Settling Defendants pursuant to the Settlement in 

this matter. I also have been informed that IPP Class Counsel’s lodestar, using historical 

rates, is approximately $148 million; the fee requested equates to a multiplier of 2.08 on 

this lodestar. I also have been informed that IPP Class counsel have offered an alternative 

lodestar for cross-check purposes, following the example of the DPPs, in which they have 

assumed a hypothetical 20% reduction of the reported lodestar to account for any 

arguably non-compensable time. This results in a lodestar of approximately $118 million, 

meaning that the requested fee equates to a multiplier of approximately 2.6. As a third 

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alternative, counsel have used current hourly rates instead of historical rates, as is 

commonly done in class action common fund cases, (and again following the example of 

the DPPs). With current rates, the corresponding lodestar is approximately $159.4 

million, and the multipliers would be 1.93 as reported and 2.42 with an assumed 20% 

lodestar reduction. 

IPP CLASS COUNSEL’S LODESTAR/MULTIPLIER CROSS-CHECK 

9. In my opinion, based on my extensive experience with attorneys’ fee 

matters and the legal marketplace, the reasonableness of counsel’s percentage-based fee 

is confirmed by cross-checking it against a lodestar-based fee: (1) The hourly rates 

utilized in the lodestar cross-check are in line with those charged by comparably qualified 

attorneys for comparable work in the legal marketplace; and (2) the lodestar multipliers 

applied under any of the four scenarios set forth above are consistent with the legal 

marketplace and therefore reasonable. I base that opinion on the following: 

CLASS COUNSEL’S HOURLY RATES ARE REASONABLE 

10. I have been informed of the hourly rates utilized by several of IPP Class 

Counsel in their lodestar cross-check. These include: Cooper & Kirkham, P.C.; Gary D. 

McAllister & Associates, LLC; Gray Plant Mooty; Green & Noblin; Gustafson Gluek, 

PLLC; Messina Law Firm, P.C.; The Saunders Law Firm and Thomas Doyle; Steyer 

Lowenthal Boodrookas Alvarez & Smith LLP; Straus & Boies, LLP; Zelle Hofmann 

Voelbel & Mason LLP; MinamiTamaki LLP. In formulating my opinion, I have 

reviewed the qualifications, background, and experience of those attorneys. While I have 

not reviewed the rates and qualifications of the other attorneys, to the extent those rates 

are consistent with the rates I have reviewed, it is my opinion they are in line with the 

rates charged by comparably qualified attorneys for comparably complex work. 

11. Through my writing and practice, I have become familiar with the non- 

contingent market rates charged by attorneys in California and elsewhere. This 

familiarity has been obtained in several ways: (1) by handling attorneys’ fee litigation; 

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(2) by discussing fees with other attorneys; (3) by obtaining declarations regarding 

prevailing market rates in cases in which I represent attorneys seeking fees; and (4) by 

reviewing attorneys’ fee applications and awards in other cases, as well as surveys and 

articles on attorney’s fees in the legal newspapers and treatises. The information I have 

gathered shows that the rates requested by IPP Class Counsel are in line with the non- 

contingent market rates charged by attorneys of reasonably comparable experience, skill, 

and reputation for reasonably comparable services. In fact, comparable hourly rates have 

been found reasonable by various courts for reasonably comparable services. These 

include 


Holloway et. al. v. Best Buy Co., Inc. (N.D. Cal. 2011) No. 05-5056 

PJH (Order dated November 9, 2011), a class action alleging that Best 

Buy discriminated against female, African American and Latino 

employees by denying them promotions and lucrative sales positions, 

in which the court approved a lodestar award based rates of up to $825 

per hour; 

Californians for Disability Rights, Inc., et al. v. California Department 

of Transportation, et al. (N.D.Cal. 2010) 2010 U.S.Dist.LEXIS 

141030, adopted by Order Accepting Report and Recommendation 

filed February 2, 2011, a class action in which the court found 

reasonable 2010 hourly rates of up to $835 per hour; 

Credit/Debit Card Tying Cases, San Francisco County Superior Court, 

JCCP No. 4335, Order Granting Plaintiffs’ Motion for Attorneys’ 

Fees, Expenses, and Incentive Awards, filed August 23, 2010, an 

antitrust class action, in which the court, before applying a 2.0 lodestar 

multiplier, found reasonable 2010 hourly rates of $975 for a 43-year 

attorney, $950 for a 46-year attorney, $850 for 32 and 38 year 

attorneys, $825 for a 35-year attorney, $740 for a 26-year attorney, 

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following: 

$610 for a 13-year attorney, and $600 for a 9-year attorney, and $485 

for a 5-year attorney; 

Savaglio, et al. v. WalMart, Alameda County Superior Court No. C- 

835687-7, Order Granting Class Counsel’s Motion for Attorneys’ 

Fees, filed September 10, 2010, a wage and hour class action, in which 

the court found reasonable, before applying a 2.36 multiplier, rates of 

up to $875 per hour for a 51-year attorney, $750 for a 39-year 

attorney, and $775 for a 33-year attorney. 

Qualcomm, Inc. v. Broadcom, Inc. Case No. 05-CV-1958-B, 2008 WL 

2705161 (S.D. Cal. 2008), in which the court found the 2007 hourly 

rates requested by Wilmer Cutler, Pickering, Hale & Dorr LLP 

reasonable; those rates ranged from $45 to $300 for staff and 

paralegals, from $275 to $505 for associates and counsel, and from 

$435 to $850 for partners. 

12. I also base my opinion on several surveys of legal rates, including the 

In an article published April 16, 2012, the Am Law Daily described 

the 2012 Real Rate Report, an analysis of $7.6 billion in legal bills 

paid by corporations over a five-year period ending in December 2011. 

A true and correct copy of that article is attached hereto as Exhibit B. 

That article confirms that the rates charged by experienced and well- 

qualified attorneys have continued to rise over this five-year period, 

particularly in large urban areas like San Francisco. It also shows, for 

example, that the top quartile of lawyer bill at an average of “just 

under $900 per hour.” 

Similarly, on February 25, 2011, the Wall Street Journal published an 

on-line article entitled “Top Billers.” A true and correct copy of that 

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article is attached hereto as Exhibit C. That article listed the 2010 

and/or 2009 hourly rates for more than 125 attorneys, in a variety of 

practice areas and cases, who charged $1,000 per hour or more. 

On February 22, 2011, the ALM’s Daily Report listed the 2006-2009 

hourly rates of numerous San Francisco attorneys. A true and correct 

copy of that article is attached hereto as Exhibit D. Even though rates 

have increased significantly since that time (see Exhibit B), IPP Class 

Counsel’s rates are well within the range of rates shown in this survey. 

The Westlaw CourtExpress Legal Billing Reports for May, August, 

and December 2009 (attached hereto as Exhibit E) show that attorneys 

with as little as 19 years’ experience are charging $800 per hour or 

more, and that the rates requested here are well within the range of 

those reported. Again, current rates are significantly higher. 

The National Law Journal’s December 2010, nationwide sampling of 

law firm billing rates (Exhibit F) lists 32 firms whose highest rate was 

$800 per hour or more, eleven firms whose highest rate was $900 per 

hour or more, and three firms whose highest rate was $1,000 per hour 

or more. 

On December 16, 2009, The American Lawyer published an online 

article entitled “Bankruptcy Rates Top $1,000 in 2008-2009. That 

article is attached hereto as Exhibit G. In addition to reporting that 

several attorneys had charged rates of $1,000 or more in bankruptcy 

filings in Delaware and the Southern District of New York, the article 

also listed 18 firms that charged median partner rates of from $625 to 

$980 per hour. Since by law, bankruptcy rates must be no higher than 

the rates charged for other types of similar work, these rates are 

probative here. 

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13. Lastly, the standard hourly rates for litigation stated in court filings, 

depositions, surveys, or other sources by numerous law firms or law firms with offices or 

practices in California also support counsel’s rates. For example, numerous firms with 

offices in San Francisco, including Altshuler Berzon LLP, Bingham McCutchen, Epstein 

Becker & Green LLP, Howard, Rice, Nemerovski, Canady, Falk & Rabkin, Manatt, 

Phelps & Philips Rosen, Bien & Galvan, LLP, and Sheppard, Mullin, Richter & 

Hampton, had senior attorneys charging rates over $800 per hour in the 2009-2011 

period. A number of other California and San Francisco firms, some of whom 

represented defendants in this litigation, including Gibson, Dunn & Crutcher LLP, 

Pillsbury Winthrop Shaw Puttman LLP, O’Melveny & Myers, Loeb & Loeb, Keker & 

Van Nest, LLP, Sidley Austin, Wilson Sonsini Goodrich & Rosati PC and Winston & 

Strawn, billed senior partners at rates in excess of $900 per hour during this period. 

14. In addition, the rates charged by counsel in Apple Inc. v. Samsung 

Electronics Co. Ltd., N.D. Cal. No. 11-cv—01846-LKK (PSG), support the rates 

requested here. In that case, according to the declaration filed by Diane C. Hutnyan on 

July 22, 2012 (Dkt. No. 1275), Quinn Emanuel Urquhart & Sullivan LLP, counsel for 

defendant Samsumg, charged median partner rates of $821 per hour and median 

associate rates of $448 per hour. 

15. Moreover, the hourly rates set forth above are those charged where full 

payment is expected promptly upon the rendition of the billing and without consideration 

of factors other than hours and rates. If any substantial part of the payment were to be 

contingent or deferred for any substantial period of time, for example, the fee 

arrangement would be adjusted accordingly to compensate the attorneys for those factors. 

THE LODESTAR/MULTIPLIER IS REASONABLE 

16. In my opinion, the lodestar-multiplier reflected in a 28.5% percentage- 

based fee also is consistent with the legal marketplace and eminently reasonable, 

especially considering, inter alia, the exceptional results obtained for the class, the high 

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risk and complex nature of this litigation, the difficulties and obstacles overcome, the 

delay in payment (when historical rates are used), a comparison to the lodestar multipliers 

applied in comparable cases, and the fees charged in the private marketplace. My 

opinion is based on the following factors: 

17. The Exceptional Results Obtained. In the legal marketplace, law firms 

that obtain excellent or exceptional results for their clients can and do expect that those 

exceptional results will be reflected in their fees. Here, the results obtained are 

exceptional: after six years of intensive litigation, counsel have achieved $1.1 billion in 

settlements, which, according to counsel, constitutes the largest indirect purchaser cash 

settlement recovery on record. These funds are non-reversionary and represent 

approximately half of the total of all class members potential damages. Since it can be 

reasonably predicted that not all class members will submit claims, even after the 

payment of attorneys’ fees, it appears extremely likely that those who submit claims will 

be highly compensated for their losses. In addition, class counsel have obtained 

injunctive relief that goes beyond the relief obtained by the government and provides 

significant protection for future purchasers. In my view, this factor provides strong 

support for the modest lodestar enhancements reflected in the lodestar cross-check. 

18. The Extraordinary Risk Taken by Class Counsel. In the legal 

marketplace, lawyers who assume a significant financial risk on behalf of their clients 

rightfully expect that their compensation will be significantly greater than it would be if 

no risk or delay was involved, i.e., under the traditional arrangement where the client is 

obligated to pay for costs and fees incurred on a monthly basis. In my experience, 

attorneys are willing to enter into such contingency fee arrangements only if they can 

expect to receive significantly higher effective hourly rates in successful cases, 

particularly in cases that are expected to be hard fought and where the result is uncertain. 

As the courts have recognized, such arrangements do not result in any “windfall” or 

undue “bonus” for the attorney; rather, they are earned compensation, reflecting the need 

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for the legal services market to compensate for the risk of non-payment for what can be 

thousands of hours of time spent and many thousands of dollars in costs and expenses 

advanced. Court-awarded fees that reflect that risk of loss simply make such 

representation competitive in the legal marketplace. 

19. Several factors made this case especially high risk: 

a) Over a six-year period, IPP Class Counsel have expended more than 

312,000 hours, all on a contingent fee basis. This is a tremendous commitment, much 

higher than most cases, and consequently, one that imposes an exceptionally high risk: 

assuming attorneys bill approximately 1800 hours a year, this is more than 172 years of 

uncompensated work if this case had not been successful. Plaintiffs’ counsel also are 

out-of-pocket more than $8 million for costs and expenses; these funds also would have 

been unrecovered if the case had not been successfully resolved. 

b) The legal obstacles were formidable. As explained in IPP Class 

Counsel’s memoranda and declarations, the difficulties and uncertainties of 

winning cases like this, both in terms of unsettled antitrust law and unsettled class 

certification law, were significant. 

c) The Defendants had far more resources to resist suits of this nature than 

Class Counsel. Accordingly, they were able to employ highly competent lawyers from 

preeminent law firms to mount an aggressive defense. 

d) Settlement of the case came only after extensive, hard-fought 

litigation, including preparation for a lengthy trial. Contingent cases that must be 

tried or prepared for trial are always far riskier than cases that settle earlier in the 

process. That is why contingent fee agreements call for higher percentages in 

cases that must be tried or prepared for trial; the same principle applies here. 

All of these facts show the extraordinary risk taken by IPP Class Counsel, 

justifying the lodestar multiplier reflected in their percentage-based fee. 

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20. The Exceptional Novelty, Difficulty and Complexity of the Litigation. 

As the Court is aware, the legal issues here were quite novel, difficult, and complex. 

They are amply described in Class Counsel’s supporting memorandum, and will not be 

repeated here. Suffice it to say that they go beyond the complexities found in the vast 

majority of cases, a factor that in the legal marketplace justifies an enhanced lodestar. 

21. Encouraging Settlement. By settling this case prior to trial rather than 

continuing to litigate issues that remain somewhat unsettled, counsel have obtained 

exceptional results for the class at far less expense to the parties, their counsel, and the 

court. They also have obtained those results more quickly and surely than if the matter 

had been litigated to final resolution through the appellate process. This factor also 

supports the lodestar enhancement used in the cross-check. Cf. Lealao v. Beneficial 

California, Inc. (2000) 82 Cal.App.4 th 19, 51. 

22. The Public Service Performed by IPP Class Counsel. As Professor 

Fitzpatrick notes, the public interest served by Plaintiffs’ lawsuit also supports the fee 

sought. See also State v. Meyer (1985) 174 Cal.App.3d 1061, 1073 (the “public service 

element ... and motivation to represent consumers and enforce laws” may justify lodestar 

enhancement). In this case, IPP Class Counsel have enforced our nation’s antitrust and 

consumer protection laws against some of the world’s largest corporations. The 

fundamental importance of these laws has been repeatedly recognized. An award of the 

requested fee will encourage other attorneys to take on similar cases and deter the 

Defendants and other manufacturers from engaging in similar practices. 

23. The Continuing Obligations of Counsel to the Class. The 

enhancement also is reasonable in light of the continuing obligations counsel will have to 

the class members, both in terms of overseeing the claims payment process and in terms 

of ensuring that the injunctive relief is properly implemented. In addition, since it is safe 

to predict that one or more of the objectors whose objections the court has overruled will 

12


appeal, Class Counsel will likely be required to protect the classes’ interets before the 

Ninth Circuit Court of Appeals. 

24. The Lodestar Multipliers Applied in Other Cases. A comparison to the 

lodestar multipliers applied in other cases also shows that a 1.9 – 2.6 lodestar 

enhancement is well within the range of multipliers applied in comparable cases. See, 

e.g., Vizcaino v. Microsoft Corp. (9th Cir. 2002) 290 F.3d 1043, 1050 (looking to 

multipliers awarded in comparable cases as evidence of reasonableness). Indeed, it is 

quite modest: significantly greater multipliers -- 4.0 and above -- are commonly applied 

in fee awards from common funds. See, e.g., In re Rite Aid Corp. Secs. Litig. (3d Cir. 

2005) 396 F.3d 294, 298-99 (“Performing a lodestar cross-check to confirm the fees’ 

reasonableness, the court found a ‘handsome,’ yet ‘fairly common’ lodestar multiplier of 

4.07 based upon 12,906 hours billed since the fee application in Rite Aid I at an hourly 

rate of $605.”); Vizcaino v. Microsoft Corp. (9th Cir. 2002) 290 F.3d 1043, 1051 & n.6 & 

Appendix (index of common fund cases between 1996 and 2001, showing lodestar 

multipliers ranging from 0.6 to 19.6); In re WorldCom, Inc. Litig. (S.D.N.Y. 2005) 388 

F.Supp.2d 319 (common fund award equivalent to 4.0 multiplier); Maley v. Del Global 

Technologies Corp. (S.D.N.Y. 2002) 186 F.Supp.2d 358, 371 (“modest” multiplier of 

4.65 “fair and reasonable”); In re Linerboard Antitrust Lit., 2004 WL 1221350 (E.D. Pa. 

June 2, 2004) at * 16 (noting that “during 2001-2003, the average multiplier approved in 

common fund class actions was 4.35 and during 30 year period from 1973-2003, average 

multiplier approved in common fund class actions was 3.89. Stuart J. Logan, et al., 

Attorney Fee Awards in Common Fund Class Actions, 24 Class Action Reports 167 

(2003).”). As the court observed in In re Nasdaq Market-Makers Antitrust Litig. 

(S.D.N.Y. 1998) 187 F.R.D. 465, 489: 

The percentage fee award in this case represents a multiplier of 

approximately 3.97 times Class Counsel's lodestar of $36,191,751. A 

multiplier of 3.97 is not unreasonable in this type of case. Indeed, as noted 

by the Honorable Leonard B. Sand, “In recent years multipliers of 

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between 3 and 4.5 have become common.” Rabin v. Concord Assets 

Group, Inc., [1991-92 Transfer Binder] Fed. Sec. L. Rep. (CCH) 96,471 

(S.D.N.Y.1991) (applying a 4.4 multiplier), quoting O'Brien v. National 

Property Analysts, 88 Civ. 4153, Tr. p. 72 (S.D.N.Y. July 27, 1989). The 

fee award is well supported by precedent within this Circuit. See e.g., 

Roberts v. Texaco, 979 F.Supp. 185 (1997) (5.5 multiplier); In re RJR 

Nabisco, Inc. Securities Litigation, [1992 Transfer Binder] Fed. Sec. L. 

Rep. (CCH) 96,984 (S.D.N.Y.1992) (awarding a percentage-based fee 

representing 6 times lodestar). 

See also Van Vranken v. Atlantic Richfield Co. (N.D. Cal. 1995) 901 F.Supp. 294, 298 

(“multipliers in the 3 – 4 range are common lodestar awards in lengthy and complex class 

action litigation”). 

25. The California federal courts have reached the same conclusion: common 

fund awards that result in lodestar multipliers of 4.0 or above are reasonable. As the 

Central District of California held in Craft v. County of San Bernardino (C.D. Cal. 2008) 

624 F.Supp.2d 1113, 1125: 

A 25% of the fund award will result in a multiplier of approximately 5.2. 

While this is a high end multiplier, there is ample authority for such 

awards resulting in multipliers in this range or higher. See, e.g., In Re 

Merry-Go-Round Enterprise, Inc. (Bankr.D.Md.2000) 244 B.R. 327 (40% 

award for $71 million fund awarded, resulting in a cross-check multiplier 

of 19.6); Stop & Shop Supermarket Co. v. SmithKline Beecham Corp., 

2005 WL 1213926 (E.D.Pa.) ($100 Million class fund in antitrust case, 

with an award of 20% of the fund, which amounted to a multiplier of 

15.6); In re Rite Aid Corp. Sec. Litig., 146 F.Supp.2d 706 (E.D.Pa.2001) 

(in $193 Million fund, class counsel awarded fee of 25% of fund, which 

amounted to $48 Million and represented a multiplier of 4.5-8.5, which the 

court described as “handsome but “unquestionably reasonable”); In re 

Cendant Corp. PRIDES Litigation, 243 F.3d 722, 732 (3rd Cir.2001) 

(5.7% of $341,500,000 settlement awarded, resulting in multiplier of 7); In 

re Rite Aid Corp. Sec. Litig, 362 F.Supp.2d 587 (E.D.Pa.2005) (25% of 

$126,800,000 fund awarded; multiplier of 6.96); In Re IDB 

Communication Group, Inc., Sec. Litig., No. 94-3618 (C.D.Cal. Jan. 17, 

1997) (Hupp, J.), cited at 19 Class Action Reports 472-73 (1996) (16.5% 

of $83 Million fund awarded; multiplier of 6.2); In re RJR Nabisco, 1992 

WL 210138 (25% of $72.5 Million fee awarded; multiplier of 6); In re 

Charter Communications, Inc., Securities Litigation, 2005 WL 4045741, 

18 (E.D.Mo.2005) (20% of fund awarded in recovery of $146,250,000, 

multiplier of 5.61); Roberts v. Texaco, Inc., 979 F.Supp. 185, 197 

(S.D.N.Y.1997) (fee award of approximately 16.7% of the fund, multiplier 

14


of 5.5, plus fund set aside to compensate for post-settlement work); Di 

Giacomo v. Plains All Am. Pipeline, Nos. H-99-4137, H-99-4212, 2001 

U.S. Dist. LEXIS 25532, at 31, 2001 WL 3463337 at 10 (S.D.Tex. Dec. 

18, 2001) (awarding 30% of $29.5 Million fund; multiplier of 5.3); In re 

Beverly Hills Fire Litigation, 639 F.Supp. 915 (E.D.Ky.1986) (fee of 

$4,121,926 in settlement of $14 Million; multiplier of 5 for lead counsel); 

Kuhnlein v. Department of Revenue, 662 So.2d 309, 315 (Fla.1995) (class 

fund award of 10% of $188,100,000, resulting in multiplier of 

approximately 15, reduced by Fla. Supreme Court to multiplier of 5 times 

lodestar, because lodestar was proper method under Florida law); In re 

Xcel Energy, Inc. Sec., Derivative & ERISA Litig., 364 F.Supp.2d 980 

(D.Minn.2005) (25% of $80M settlement; multiplier of 4.7); Wilson v. 

Bank of Am. Natl. Trust & Savs. Assn., No. 643872 (Cal.Sup.Ct.9/16/82) 

(multiplier of 10 times then hourly rate of $150), cited in Newberg, 14:6, 

p. 578, F3d 373, 378-379. The 25% is substantially below the average 

class fund fee fn.87; Cosgrove v. Sullivan, 759 F.Supp. 166, 167 n. 1 

(S.D.N.Y.1991) (1% of $100 Million right to Medicare reimbursement 

awarded, resulting in multiplier of 8.74). 

(Emphasis added.) 

26. The Percentage Fees Charged In The Legal Marketplace For 

Comparable Litigation. My opinion that IPP Class Counsel’s lodestar cross-check 

supports their percentage-based fee also is based in part on the fact that a 28.5% fee from 

a $1.082 billion fund is entirely consistent with the legal marketplace for attorneys’ 

services in contingency fee cases like this one. One object of a common fund award is to 

set a fee that approximates the probable terms of a contingent fee contract negotiated by 

sophisticated lawyers and clients in comparable private litigation, as evidenced by the 

terms of such contingent fee contracts. See Silver, A Restitutionary Theory of Attorneys’ 

Fees in Class Actions (1991) 76 Cornell L.Rev. 656, 702-703 (goal “is to pay attorneys 

on terms they would probably accept in an ex ante bargain, before the outcome of 

litigation is known”). Here, it is beyond any reasonable dispute that that if Class Counsel 

had been able to negotiate a fee directly with the class members, the class would have 

found a 28.5% fee eminently reasonable for a case that would have to be prepared for a 

long trial. The particular risks and difficulties of this case have been previously discussed 

(19-20 ante). Given the prospective risks and difficulties of this case, as well as the 

15

legal obstacles this case encountered until it was finally settled, any class member would 

have been very grateful to obtain representation for his or her claim at no cost unless 

counsel was successful, and then at a cost of only 28.5% of the total fund recovered. This 

is especially true given IPP Class Counsel’s willingness to advance more than 312,000 

hours of time and $8 million in costs, with no hope of recovering those funds unless the 

case was successful. Private contingent fee agreements in personal injury and other types 

of cases usually provide for fees of 33-40%, with the higher percentages applied to cases 

resolved through litigation rather than early settlement. This case is well below that 

range. 


27. Likewise, I have reviewed extensive evidence of the contingency fee 

percentages charged by law firms to sophisticated institutional clients in large damage 

cases. In my experience, when corporate or government clients hire law firms to litigate 

large claims on a contingent fee basis, the contracts provide for fees in a range between 

10 and 50 percent of the recovery. See Fisk, Corporate Firms Try Contingency, National 

Law Journal (Oct. 27, 1997) p. Al. Based on that knowledge and my experience in the 

attorneys’ fees field generally, it is my opinion that if competent and experienced 

attorneys and a sophisticated client were to negotiate a contingency fee agreement under 

the circumstances of this case, a sophisticated client would be more than willing to enter 

into a retainer agreement for a contingent fee under which: a) the client would owe no 

fees unless the case was successful; b) the attorneys would pay all litigation expenses; 

and c) the attorneys would recover, if successful, 28.5% of the total fund recovered. 

28. Percentage-Fees Approved in Other Cases. A 28.5% fee also is 

squarely in line with the range of reasonable attorneys’ fees awarded in other cases 

involving similar funds in California and across the nation. Fitzpatrick Decl. 20-24. 

29. Surveys of class action recoveries nationwide also confirm that the fee 

requested by Plaintiffs’ counsel is reasonable. For example, a 1999 analysis of 1,349 

shareholder class actions conducted by National Economic Research Associates 

16


concluded that “[f]ee amounts average approximately 32 percent of the settlement 

award.” D. Martin, V. Juneja, T. Foster and F. Dunbar, Recent Trends IV: What 

Explains Filings and Settlements in Shareholder Class Actions, 5 Stan. J. L. Bus. & Fin. 

121. Likewise, a Federal Judicial Center report found a mean rate of 27% and a median 

rate of 29% for fee awards in class action settlements approved by the Northern District 

of California from 1992 to 1994. T. Willging, L. Hooper and R. Niemic, Emiprical Study 

of Class Actions in Four Federal District Courts: Final Report to the Advisory 

Committee on Civil Rules, 147 (1996). 

30. In summary, federal courts that have surveyed applicable reported fee 

decisions in California and throughout the United States, as well as studies of both 

reported and unreported decisions, have revealed that lodestar multipliers of 4.0 and 

above have become frequent if not commonplace. Placed within this broader context of 

awards in California and the United States, the range of multipliers (depending on the 

lodestar calculation employed) represented in a fee of 28.5% of the fund for this long, 

heavily contested but highly successful matter is undoubtedly within the range of 

marketplace compensation in California and in the United States more generally. 

31. Similarly, as discussed in paragraph 26 ante, the lodestar reported by 

Class Counsel is well below the percentage fees charged in the private marketplace. This 

factor also supports the lodestar enhancement represented in the percentage fee requested 

by Class Counsel. See Lealao; Fitzpatrick Decl. 25. Accordingly, the lodestar cross- 

check supports an upward adjustment of the Ninth Circuit’s 25% benchmark and the 

fairness and reasonableness of awarding IPP Class Counsel a fee of 28.5% of the 

settlement fund. 

17

Case3:07-md-01827-SI Document6662-6 Filed09/07/12 Page19 of 19

Declaration of Richard M. Pearl - LCD Class Action

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