In re First Peoples Bank Shareholders Litigation

121 F.R.D. 219, 1988 U.S. Dist. LEXIS 17194, 1988 WL 64333
CourtDistrict Court, D. New Jersey
DecidedMay 25, 1988
DocketCiv. A. Nos. 83-2713(B), 83-3055 and 83-3578
StatusPublished
Cited by4 cases

This text of 121 F.R.D. 219 (In re First Peoples Bank Shareholders Litigation) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re First Peoples Bank Shareholders Litigation, 121 F.R.D. 219, 1988 U.S. Dist. LEXIS 17194, 1988 WL 64333 (D.N.J. 1988).

Opinion

AMENDED OPINION

Jerome b. simandle, United States Magistrate:

The issue before this court concerns the extent to which discovery should be allowed in connection with the petition by plaintiffs’ counsel for an award of attorneys fees and costs upon the settlement of this shareholders derivative litigation.

I. Procedural History

The joint fee petition of plaintiffs’ counsel [“Petitioning Counsel”] was submitted as part of a negotiated settlement of derivative claims on behalf of the shareholders of First Peoples Bank of New Jersey [221]*221against defendant William G. Rohrer, the bank’s former chairman.1

This settlement of the remaining derivative claims would have certain defendants and an insurance carrier pay approximately $6 million to the Settlement Fund. This common fund, less attorneys fees, costs and reimbursement of the settling defendants under the Bank’s indemnity resolution, will be paid to the Bank for the benefit of the Bank’s shareholders. Plaintiffs’ counsel herein also participated in a declaratory judgment action brought by First Peoples Bank against INA Underwriters Insurance Company; that action was filed in the Superior Court of New Jersey seeking a judgment that INA was obligated to defend the Bank and its directors and pay any judgments that might be rendered against them in the instant matter. Henry, et al. v. Insurance Company of North America, No. C-290-84 (Ch.Div.N.J., Camden County) [“INA litigation”]. INA joined the present plaintiffs as third-party defendants in that suit on the ground that these plaintiffs had received an assignment of certain rights of the Bank’s directors and officers pursuant to the prior partial settlement, and that plaintiffs should thus be joined to be bound by any adjudication upon the policy. The INA litigation was ultimately settled, with a sum being paid by INA to the Settlement Fund of this case. Plaintiffs’ counsel thus also seek an award of fees in connection with the INA litigation.

The present fee petition seeks an award of $1,475,811 in fees2 and $70,934.28 in costs. The proposed settlement, other than the petition for counsel fees, has been approved by the Honorable Stanley S. Brotman, and the fee petition has been referred to the undersigned Magistrate for approprb ate hearings and a report pursuant to 28 U.S.C. § 636(b), by Order entered April 5, 1988.

The plaintiffs’ attorneys have submitted various information in support of this petition. The Affidavit of C. Oliver Burt, III, presents the charges and expenses which counsel seek. The information is in the form of summaries of the records of Greenfield & Chimicles, plaintiffs’ lead counsel, and affidavits of other plaintiffs’ counsel, as to time spent and hourly rates charged. The exhibits attached to Burt’s Affidavit include:

1. Charts Re: Lodestar
2. Greenfield & Chimicles Firm Biography
3. Aff. of Jeffrey M. Keiser
4. Aff. of Arnold Levin, including Biography
5. Aff. of Philip B. Seaton
6. Letter of Stephen M. Hiltebrand.

These submissions express the hours expended by each attorney and paralegal who worked on the case. These hours are broken down into nine broad categories regarding type of work, such as (1) Pre-complaint Proceedings, (2) Research/Briefs, (3) Discovery/Analysis, (4) ■ Court Hearings/Conferences, (5) Appellate Work, (6) Letters/Telephone/Meetings, (7) Settlement/Notice/Administration, (8) Inter-firm/Co-counsel, and (9) Other/Travel/Organization. There is no information which provides data for the specific attorney activity and dates when services were rendered.

Regarding hourly rates of pay, the information given includes the “current rate” for each attorney, and a brief discussion of these rates, noting that all work has been made subject to the current, rather than historical, rate for each attorney. There is also an exhibit attached to the Plaintiffs’ Response in this matter, filed April 5, 1988, setting forth the names of various other securities cases in which plaintiffs’ lead counsel have received awards of counsel [222]*222fees in the past few years, but without giving information as to the fee approved in each case, nor with respect to the fee experiences of other counsel.

Objections to requests of plaintiffs’ counsel have been timely filed by two parties— First Peoples Bank of New Jersey itself (represented by the firm of Jubanyik, Varbalow, Tedesco, Shaw & Shaffer) and Steven Shapiro, a substantial Bank shareholder (represented by Carl Poplar, Esquire) [hereinafter the objectors.] These objections are based on wide-ranging grounds, and there is no specific or detailed objection made. The grounds for objection include:

(a) The requested fees are excessive and contrary to law.
(b) The times claimed to have been devoted to the matter were overstated.
(c) Counsel for plaintiff did not in any substantial way contribute to the settlement of the derivative phase of the litigation.
(d) Less experienced counsel could have performed much of the work.
(e) The joint petition does not break down the services rendered by the various counsel to identifiable events which would enable the court to determine the time allocated per “identifiable event” and to check for duplication by counsel.
(f) The hourly billing rates for various attorneys are unreasonable.

The objectors have placed no factual materials before the court by which to contest counsel’s fees. Instead, the objecting parties seek discovery in preparation for a hearing at which the fee requests would be adjudicated.

The discovery sought from plaintiffs’ counsel would include production of time sheets and billing records, hourly rates of compensation (historical time charges), discovery of allegedly unproductive time expended, including inefficient, wasteful and duplicative legal services rendered, review of precise services and hours of each attorney for each identifiable event or activity, review of invoices and bills for costs including expert witnesses, and “for each day time is claimed to have been spent, the records reflecting hours billed by them to other clients, records of billing rates for non-contingent fee clients, including paralegal rates from 1984 to date.” The objecting parties also seek to take the depositions of almost every attorney who has performed services for the plaintiff. No particular reason has been advanced for obtaining testimony under oath from these counsel.

Petitioners have strenuously opposed such discovery, and they seek an order denying discovery or, alternatively, directing First Peoples Bank to comply with discovery. The cross-discovery sought includes documents and fee records concerning fees paid by the Bank to counsel in the INA litigation and to counsel who represented the individual officers and directors who were defendants in this case.

Furthermore, petitioners seek a protective order under which any discovery that they supply would be provided only to the court in camera,

Free access — add to your briefcase to read the full text and ask questions with AI

Related

CORDERO v. EMRICH
D. New Jersey, 2024
Babcock v. Superior Court of Ventura Cty.
29 Cal. App. 4th 721 (California Court of Appeal, 1994)
Murray v. Stuckey's Inc.
153 F.R.D. 151 (N.D. Iowa, 1993)

Cite This Page — Counsel Stack

Bluebook (online)
121 F.R.D. 219, 1988 U.S. Dist. LEXIS 17194, 1988 WL 64333, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-first-peoples-bank-shareholders-litigation-njd-1988.