Amara v. Cigna Corp.

          RULING ON MOTION FOR ATTORNEYS' FEES, INCENTIVE AWARDS, AND EXPENSES

          Janet Bond Arterton, U.S.D.J.

         Plaintiffs have moved ([Doc. # 410]) for approval of their attorneys' fees, proposed incentive awards, and expenses in this class action brought under the Employee Retirement Income Security Act ("ERISA"). Having previously ruled on the methodology for calculating attorneys' fees, ([Doc. # 550]), and having considered Defendants' response to the Motion, ([Doc. # 421]), Plaintiffs' Reply, ([Doc. # 424]), and Defendants' Updated Present Value Calculation, ([Doc. #551]), the Court now rules on Plaintiffs' Motion for Attorneys' Fees.

         Plaintiffs seek attorneys' fees based on the "percentage of the fund" or the lodestar method in class actions that produce common fund recoveries. See Goldberger v. Integrated Resources, 209 F.3d 43, 47 (2d Cir. 2000). In this case, an award of attorneys' fees based on the percentage of the fund method "directly aligns the interests of the class and its counsel." Wal-Mart v. Visa U.S.A. Inc., 396 F.3d 96, 122 (2d Cir. 2005).

         In applying the percentage of the fund method, it is appropriate to award attorneys' fees as a percentage of "the total funds made available," not "on the basis of claims made against the fund." Masters v. Wilhelmina Model Agency, Inc., 473 F.3d 423, 437 (2d Cir. 2007). In Masters, the Second Circuit recognized that "[t]he entire Fund, and not some portion thereof, is created through the efforts of counsel at the instigation of the entire class." Id.

         The parties' calculations of actual individual relief reflecting a value of the "A" recovery is significantly disputed. Plaintiffs calculate the recovery at $280.6 million; Defendants' updated present value calculation reflects a total value of $184, 456, 124 in relief to the class. ([Doc. # 551].)

         In addition to the monetary common fund recovery under the "qualified" portion of Cigna's Pension Fund, class members received additional non-monetary relief in the form of the August 2017 ERISA Section 204(h) notice disclosing the "true effect on their retirement benefits" resulting from the cash balance conversion. Moreover, Plaintiffs represent that almost 400 class members will be entitled to additional benefits from Cigna's Supplemental Pension Plan.

         Under Goldberger v. Integrated Resources, 209 F.3d 43, 47 (2d Cir. 2000), "the traditional criteria in determining a reasonable common fund fee, includ[e]: (1) the time and labor expended by counsel; (2) the magnitude and complexities of the litigation; (3) the risk of the litigation; (4) the quality of representation; (5) the requested fee in relation to the settlement; and (6) public policy considerations." Id. at 50.

         All of the relevant Goldberger factors weigh in favor of the requested 17.5% fee award. With respect to the first and fourth factors, Plaintiffs' counsel have vigorously litigated this case for seventeen years before the district court, the Second Circuit, and the Supreme Court, expending over 12, 000 hours. With respect to the second factor, the case raised novel questions of law and directly affected tens of thousands of class members. Significantly, the Supreme Court held that that the remedies ordered by the district court-including (1) "reformation of the terms of the plan in order to remedy the false or misleading information CIGNA provided[, ]" (2) equitable estoppel, and (3) surcharge all "f[e]ll within the scope of the term 'appropriate equitable relief in [ERISA] § 502(a)(3)." CIGNA Corp. v. Amara, 563 U.S. 421, 440-42 (2011). As two observers noted, while the "the U.S. Department of Labor (DOL)" had long "taken the position that a much broader interpretation of section 502(a)(3) is warranted .... [l]ower courts ... were unwilling to adopt the DOL's position, believing that the Supreme Court's jurisprudence had conclusively narrowed the scope of section 502(a)(3)." Peter K. Stris & Victor O'Connell, ERISA & Equity, 29 ABA J. Lab. & Emp. L. 125, 128 (2013). But "[i]n a surprise to many, the Supreme Court did what no lower court had been willing to do: it made clear in CIGNA Corp. v. Amara that the DOL's position [wa]s correct." Id. As a result, they concluded, "in many areas, Amara now permits plaintiffs to seek meaningful relief." Id.

         The third Goldberger factor here is inapplicable as it relates to settled claims. With respect to the fifth factor, the requested fee here is reasonable in relation to the value of the total monetary recovery and in line with or below earlier fee awards.

         Class counsel's requested fee award of 17.5% of the increased benefits is lower than percentage awards in other ERISA class actions in this Circuit. In Haddock v. Nationwide Financial Services, Inc., No. 01-cv-1552 (SRU) (D. Conn. Apr. 10, 2015), Judge Underhill approved a 35% award of $49 million from a $140 million recovery, a lower financial recovery than here. See also In re Colgate-Palmolive Co. ERISA Litig., 36 F.Supp.3d 344, 353 (S.D.N.Y. 2014) (25% award from a $45.9 million common fund); Board of Trustees of the AFTRA Ret. Fund v. JPMorgan Chase Bank, 2012 WL 2064907, *3 (S.D.N.Y. June 7, 2012) (25% of $150 million common fund); Tedesco v. Bank of America, No. 3:07 CV 1640 (JCH) (D. Conn. June 2, 2011) (19% of a $21 million settlement); Richards v. Fleet Boston, No. 3:04CV1638 (JCH) (D. Conn. Oct. 15, 2008) (21% of a $83.5 million settlement); In re AOL Time Warner, Inc. ERISA Litig., 2007 WL 3145111, at *1 (S.D.N.Y. Oct. 26, 2007) (17.9% of $100 million recovery).

         It is also consistent with percentage-of-fund fee awards in other jurisdictions. See, e.g., Cooper v. IBM Personal Pension Plan, 2005 WL 1981501, at *2 (S.D. 111. Aug. 16, 2005) (awarding 29% of first $250 million recovery; plus 25% of next $64 million); Berger v. Xerox Corp. Ret. Income Guar. Plan, 2004 U.S. Dist. LEXIS 1819, at *5-7 (S.D. 111. Jan. 22, 2004) (29% of $240 million recovery).

         When a percentage-of-the-fund method is used, a lodestar "cross-check" based on a summary of hours tests the reasonableness of the percentage. Wal-Mart, 396 F.3d at 123. While not required, using the lodestar method as a discretionary cross-check further demonstrates that the fee that Class counsel seeks is reasonable. A 17.5% award from a $184, 456, 124 common fund- the lower of the two numbers put forth by the parties in valuing the remedy payments to class members for the purposes of calculating attorneys' fees-would be $32, 279, 821.70. Based on the number of Class counsel's hours in the original fee motion, which results in a $6, 794 million lodestar, the 17.5% requested award equates to a multiplier of 4.75. With a 14% increment for additional hours over the past two and one-half years and a 10% increment for higher hourly rates over the same period, the adjusted lodestar is $8, 513 million, (Bruce Suppl. Decl. ¶ 2 [Doc. #518-2]), which equates to an implied multiplier of 3.79 on the adjusted lodestar.

         These implied multipliers are in line with other comparable complex ERISA cases. See, e.g., In re Colgate-Palmolive, 36 F.Supp.3d 344, 353 (S.D.N.Y. 2014) (multiplier of "five ... is on the high end" but "not unreasonable," observing that in fifty-three ERISA cases cited by the plaintiffs, "the implied multiplier ranged from less than one to eight times the lodestar, and nine cases had multipliers greater than four"); Williams v. Rohm & Haas Pension Plan, 658 F.3d 629, 635 (7th Cir. 2011) (29% award implied multiplier of 5.85); Kifafi v. Hilton Hotels Retirement Plan, 999 F.Supp.2d 88, 104 (D.D.C. 2013) (15% award implied multiplier of eight).

         Finally, with respect to the sixth Goldberger factor, public policy weighs in favor of recognizing the risk and heretofore uncompensated labor expended by Plaintiffs' ...