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A federal judge in Manhattan has awarded $1 million in attorney fees in a class action in which the class itself will split $1.3 million of a $2.9 million settlement, or around $100 per class member. In her decision in Spann v. AOL Time Warner, 02 Civ. 8238, Southern District Judge Denise Cote said she had considered “whether an award of fees of this magnitude is justified given the limited recovery by the individual class members.” The 2002 suit had charged that the company then known as AOL Time Warner failed to annualize partial years of compensation in calculating pension benefits, thereby underpaying the company’s retirees. Though it argued that such annualization was only required under specific circumstances, the company agreed to settle the case for $2.9 million last year. Under the settlement, one-third was to go to the plaintiff’s lawyers, with another $250,000 going to costs and expenses and $300,000 for post-settlement administration. The two name plaintiffs would receive $10,000 apiece. The remainder would be divided among a class of around 10,000 members. The chief plaintiff’s lawyers were Ronald Kravitz and Kim Zeldin of Los Angeles’ Liner Yankelevitz Sunshine & Regenstreif. Judge Cote concluded that the attorney fees were warranted because, given the small individual amounts involved, the issues would not have been addressed if the plaintiff’s lawyers had not brought the class action. She also said the attorneys and plaintiffs had run a considerable risk that there would have been no award, given Time Warner’s defense that it had interpreted its annualization policy consistently for decades. Noting that the company had revised its pension plans to avoid similar litigation in the future, Cote said the lawyers had “bestowed a benefit on the plans by removing an arguable ambiguity from the governing documents.” Though the fee award represented a large percentage of the settlement, the judge pointed out that the lawyers could have claimed even more under an hourly calculation. Plaintiff’s counsel said its lawyers and paralegals billed almost 4,000 hours on the cases, time the judge said could have reasonably been billed for around $1.3 million in fees.

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