Isaacson/Weaver Family Trust v. Fresno County Employees' Retirement Association, et al.

This Court’s decisions hold that whenever Congress has authorized the award of “a reasonable attorney’s fee,” this means “a fee sufficient to induce capable counsel to take a meritorious ... case,” and that “the lodestar method yields a fee that is presumptively sufficient to achieve this objective,” with enhancements of an attorney’s lodestar fee permitted only in “rare” and “exceptional” circumstances. Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 552 (2010). The federal securities laws contain several such fee provisions. See, e.g., 15 U.S.C. §§77k(e), 77z1(c), 78i(f), 78r(a), 78u-4(a)(8), 78u-4(c). Upon the settlement of this federal securities class action, however, the district court awarded plaintiffs’ counsel 25% of the settlement fund, amounting to nearly 40% more than the attorneys’ claimed lodestar. The Second Circuit affirmed, holding that because they involve fee-shifting statutes, this Court’s decisions defining “a reasonable attorney’s fee,” cannot constrain the award of an attorney’s fee assessed against a class-action common-fund settlement. The questions presented are:

1. Do this Court’s decisions defining “a reasonable attorney’s fee” in fee-shifting cases also constrain a district court’s discretion in awarding “reasonable attorneys’ fees” under Federal Rule of Civil Procedure 23(h) from a common-fund settlement?

2. Are the securities laws’ provisions relating to the award of “a reasonable attorney’s fee” subject to the rule of Perdue that a reasonable attorney’s fee ordinarily will be limited to the lawyers’ unenhanced lodestar?