Today’s edition of the New Jersey Law Journal has an interesting article (subscrip. req’d) on an appellate decision upholding an attorneys’ fees award. In In re AT&T Corp. Sec. Litig., 2006 WL 2021033 (3d Cir. July 20, 2006), the Third Circuit found that the upward sliding fee scale (i.e., the fee percentage increased as the size of the settlement increased) agreed to by the lead plaintiff was permissible. Notably, the total fee of $21.25 million was only 1.28 times the lodestar calculation of the reasonable attorney hours expended times their hourly rates.
Quote of note: “St. John’s University Law Professor Michael Perino says, ‘It is a matter of dispute among academics as to whether an upward sliding scale or a downward sliding scale creates the best set of incentives for plaintiffs. Downward is more common.'”
Disclosure: The author of The 10b-5 Daily is quoted in the article.