MEMORANDUM
DALZELL, District Judge.
Nearly two years ago, we awarded to class counsel for plaintiffs attorneys fees equal to twenty-five percent of the $126,641,315.00 Settlement Fund that their “extraordinarily deft and efficient” representation made possible.
See In re Rite Aid Sec. Litig.,
269 F.Supp.2d 603, 611 (E.D.Pa.2003) [hereinafter
Rite Aid II].
Although we recognized that the award was indeed “handsome,” we nevertheless found that it was “in all respects reasonable under the
Gunter-Prudential
factors.”
Id.
at 611;
see also Gunter v. Ridgewood Energy Corp.,
223 F.3d 190, 195 n. 1 (3d Cir.2000);
In re Prudential Ins. Co. Sales Practices Litig.,
148 F.3d 283, 336-40 (3d Cir.1998).
To confirm the reasonableness of the twenty-five percent award, we performed a lodestar cross-check.
See generally In re Cendant Corp. PRIDES Litig.,
243 F.3d 722, 742 (3d Cir.2001) (exemplifying the cross-check analysis) [hereinafter
Cendant PRIDES],
Consistent with our reading of
Cendant PRIDES,
we used a “top hourly rate that blends the rates of the senior-most lawyers at the firms of co-lead counsel” to arrive at a lodestar multiplier of 4.07.
Rite Aid II,
269 F.Supp.2d at 611 n. 10. Similar multipliers appeared to be “fairly common,” so the multiplier did not affect our conclusion that a twenty-five percent award was reasonable.
See id.
at 611. Walter Kaufmann, one of the two objectors to the motion of plaintiffs’ coun
sel for attorneys’ fees, took issue with our decision and appealed.
“In all respects but one,” the Court of Appeals held that
Rite Aid II’s
analysis was “exemplary.”
In re Rite Aid Sec. Litig.,
396 F.3d 294, 296 (3d Cir.2005) [hereinafter
Rite Aid III
]. The court recognized that the “percentage-of-recovery method is generally favored in common fund cases” and noted that district courts should place “primary reliance on the percentage of common fund method.”
Id.
at 300, 307. Moreover, it held that we did not abuse our discretion in applying the
Gunter-Pmdential
factors.
Id.
at 302-305.
The only error that the Court of Appeals found in
Rite Aid II
was our use of “the billing rates of only the most senior partners of plaintiffs’ co-lead counsel” in calculating the lodestar multiplier.
Id.
at 306. Notably, the court did not hold that we erred in approving a fee award with a multiplier of 4.07. In fact, it carefully emphasized that multipliers “need not fall within any pre-defined range, provided that the District Court’s analysis justifies the award.”
Id.
at 307. Suggesting that “[cjonsideration of multipliers used in comparable cases may be appropriate,”
id.
at 307 n. 17, the Court of Appeals vacated our decision and remanded the case for further proceedings consistent with its opinion,
id.
at 308. In short, we understand
Rite Aid III
to require us to reconsider the reasonableness of a twenty-five percent fee award after performing a lodestar crosscheck consistent with its refinement of
Cendant PRIDES. Id.
at 306-07.
The lodestar multiplier equals the proposed fee award divided by the product of the total hours worked by class counsel and “blended billing rates that approximate the fee structure of all the attorneys who worked on the matter.”
Id.
at 306. Here, plaintiffs’ counsel has proposed a fee award of twenty-five percent of the $126,641,315.00 Settlement Fund, or $31,660,328.75. Although the Court of Appeals generally permits the use of blended rates to approximate the mathematical precision of a traditional lodestar calculation,
see supra
note 1, plaintiffs’ counsel already has undertaken that burdensome task and computed the loadstar as $4,549,824.75.
See
Pis.’ Compendium of Law Firm Affs. Because we have at our disposal this relatively precise lodestar calculus, we find it unnecessary to attempt another calculus that could only yield a less precise approximation. Based on the $31,660,328.75 proposed fee award and the $4,549,824.75 lodestar, we conclude that plaintiffs’ counsel requests approval of a fee award with a 6.96 multiplier.
Having computed the multiplier, we must now consider whether the twenty-five percent award is unreasonably large and must be reduced. Plaintiffs’ counsel and
the objectors
cite a bevy of allegedly “comparable” cases, but the facts of
this
case, where counsel obtained a nine-figure settlement of a securities class action mostly from an auditor, are undeniably unique. As plaintiffs’ counsel stated at the hearing, auditors are rarely defendants in securities class actions; no more than six percent of the securities class actions filed in 2003 and 2004 even named auditors as defendants.
Among this rare breed, this case appears to involve the largest class recovery on record against an auditor in a 10b-5 action, a fact no one at the hearing-contested. Moreover, plaintiffs’ counsel obtained these unprecedented results without relying on the fruits of any official investigation.
We have twice before discussed the uniqueness of this case at length,
see Rite Aid II; see also In re Rite Aid Sec. Litig.,
146 F.Supp.2d 706, 734-37 (E.D.Pa.2001) [hereinafter
Rite Aid I
], and we need not repeat that exposition again here. Suffice it to say that, through the exercise of then-considerable skill, plaintiffs’ counsel obtained a historic recovery for the class in a rare and complex kind of case where victory at trial would have been, at best, remote and uncertain.
In conclusion, our recalculation of the multiplier does not alter our original conclusion. Upon consideration of the entire record, including evidence that the class members recovered only a fraction of their losses, we conclude that it is reasonable to award attorneys’ fees equal to twenty-five percent of the Settlement Fund.
An appropriate Order follows.
ORDER
AND NOW, this 24th day of March, 2005, upon consideration of
In re Rite Aid Sec. Litig.,
396 F.3d 294
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MEMORANDUM
DALZELL, District Judge.
Nearly two years ago, we awarded to class counsel for plaintiffs attorneys fees equal to twenty-five percent of the $126,641,315.00 Settlement Fund that their “extraordinarily deft and efficient” representation made possible.
See In re Rite Aid Sec. Litig.,
269 F.Supp.2d 603, 611 (E.D.Pa.2003) [hereinafter
Rite Aid II].
Although we recognized that the award was indeed “handsome,” we nevertheless found that it was “in all respects reasonable under the
Gunter-Prudential
factors.”
Id.
at 611;
see also Gunter v. Ridgewood Energy Corp.,
223 F.3d 190, 195 n. 1 (3d Cir.2000);
In re Prudential Ins. Co. Sales Practices Litig.,
148 F.3d 283, 336-40 (3d Cir.1998).
To confirm the reasonableness of the twenty-five percent award, we performed a lodestar cross-check.
See generally In re Cendant Corp. PRIDES Litig.,
243 F.3d 722, 742 (3d Cir.2001) (exemplifying the cross-check analysis) [hereinafter
Cendant PRIDES],
Consistent with our reading of
Cendant PRIDES,
we used a “top hourly rate that blends the rates of the senior-most lawyers at the firms of co-lead counsel” to arrive at a lodestar multiplier of 4.07.
Rite Aid II,
269 F.Supp.2d at 611 n. 10. Similar multipliers appeared to be “fairly common,” so the multiplier did not affect our conclusion that a twenty-five percent award was reasonable.
See id.
at 611. Walter Kaufmann, one of the two objectors to the motion of plaintiffs’ coun
sel for attorneys’ fees, took issue with our decision and appealed.
“In all respects but one,” the Court of Appeals held that
Rite Aid II’s
analysis was “exemplary.”
In re Rite Aid Sec. Litig.,
396 F.3d 294, 296 (3d Cir.2005) [hereinafter
Rite Aid III
]. The court recognized that the “percentage-of-recovery method is generally favored in common fund cases” and noted that district courts should place “primary reliance on the percentage of common fund method.”
Id.
at 300, 307. Moreover, it held that we did not abuse our discretion in applying the
Gunter-Pmdential
factors.
Id.
at 302-305.
The only error that the Court of Appeals found in
Rite Aid II
was our use of “the billing rates of only the most senior partners of plaintiffs’ co-lead counsel” in calculating the lodestar multiplier.
Id.
at 306. Notably, the court did not hold that we erred in approving a fee award with a multiplier of 4.07. In fact, it carefully emphasized that multipliers “need not fall within any pre-defined range, provided that the District Court’s analysis justifies the award.”
Id.
at 307. Suggesting that “[cjonsideration of multipliers used in comparable cases may be appropriate,”
id.
at 307 n. 17, the Court of Appeals vacated our decision and remanded the case for further proceedings consistent with its opinion,
id.
at 308. In short, we understand
Rite Aid III
to require us to reconsider the reasonableness of a twenty-five percent fee award after performing a lodestar crosscheck consistent with its refinement of
Cendant PRIDES. Id.
at 306-07.
The lodestar multiplier equals the proposed fee award divided by the product of the total hours worked by class counsel and “blended billing rates that approximate the fee structure of all the attorneys who worked on the matter.”
Id.
at 306. Here, plaintiffs’ counsel has proposed a fee award of twenty-five percent of the $126,641,315.00 Settlement Fund, or $31,660,328.75. Although the Court of Appeals generally permits the use of blended rates to approximate the mathematical precision of a traditional lodestar calculation,
see supra
note 1, plaintiffs’ counsel already has undertaken that burdensome task and computed the loadstar as $4,549,824.75.
See
Pis.’ Compendium of Law Firm Affs. Because we have at our disposal this relatively precise lodestar calculus, we find it unnecessary to attempt another calculus that could only yield a less precise approximation. Based on the $31,660,328.75 proposed fee award and the $4,549,824.75 lodestar, we conclude that plaintiffs’ counsel requests approval of a fee award with a 6.96 multiplier.
Having computed the multiplier, we must now consider whether the twenty-five percent award is unreasonably large and must be reduced. Plaintiffs’ counsel and
the objectors
cite a bevy of allegedly “comparable” cases, but the facts of
this
case, where counsel obtained a nine-figure settlement of a securities class action mostly from an auditor, are undeniably unique. As plaintiffs’ counsel stated at the hearing, auditors are rarely defendants in securities class actions; no more than six percent of the securities class actions filed in 2003 and 2004 even named auditors as defendants.
Among this rare breed, this case appears to involve the largest class recovery on record against an auditor in a 10b-5 action, a fact no one at the hearing-contested. Moreover, plaintiffs’ counsel obtained these unprecedented results without relying on the fruits of any official investigation.
We have twice before discussed the uniqueness of this case at length,
see Rite Aid II; see also In re Rite Aid Sec. Litig.,
146 F.Supp.2d 706, 734-37 (E.D.Pa.2001) [hereinafter
Rite Aid I
], and we need not repeat that exposition again here. Suffice it to say that, through the exercise of then-considerable skill, plaintiffs’ counsel obtained a historic recovery for the class in a rare and complex kind of case where victory at trial would have been, at best, remote and uncertain.
In conclusion, our recalculation of the multiplier does not alter our original conclusion. Upon consideration of the entire record, including evidence that the class members recovered only a fraction of their losses, we conclude that it is reasonable to award attorneys’ fees equal to twenty-five percent of the Settlement Fund.
An appropriate Order follows.
ORDER
AND NOW, this 24th day of March, 2005, upon consideration of
In re Rite Aid Sec. Litig.,
396 F.3d 294 (3d Cir.2005), class counsel’s memorandum in support of renewed motion for award of attorneys’ fees, the declaration of Sherrie Savett and David Bershad in support of renewed motion for award of attorneys’ fees, objection Walter Kaufmann’s opposition to class counsel’s renewed motion for award of attorneys’ fees, the letter briefs of the Pennsylvania Public School Employees’ Retirement System and the New York State Teachers’ Retirement System, and plaintiffs’ counsel’s epistolary reply thereto, and for the reasons set forth in the accompanying Memorandum and
In re Rite Aid Sec. Litig.,
269 F.Supp.2d 603 (E.D.Pa.2003), it is hereby ORDERED as follows:
1. All objections are OVERRULED;
2. The renewed motion for award of attorneys’ fees is GRANTED;
3. Plaintiffs’ counsel are AWARDED attorneys’ fees in the amount of $31,660,328.75 (the “Fee Award”), which
constitutes twenty-five percent of the Settlement Fund of $126,641,315.00;
4. Plaintiffs’ counsel are AWARDED reimbursement for expenses incurred in the prosecution and settlement of this action in the amount of $290,086.00 (“Expense Award”);
5. Plaintiffs’ counsel are further AWARDED interest on the Fee Award and the Expense Award at the same rate as earned by the Settlement Fund from May 30, 2003 through the date of payment; and
6. There is no just reason for delay in the entry of judgment pursuant to Rule 54(b) of the Federal Rules of Civil Procedure, and the Clerk is hereby directed to enter judgment in accordance with this Order.