Continental Illinois Securities Litigation, Matter of, 92-4088
| Decision Date | 21 January 1993 |
| Docket Number | No. 92-4088,92-4088 |
| Citation | 985 F.2d 867 |
| Parties | In the Matter of CONTINENTAL ILLINOIS SECURITIES LITIGATION. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Lowell E. Sachnoff, Jeffrey A. Schumacher, Gary S. Caplan, Sachnoff & Weaver, Chicago, IL, for petitioners.
Fred Foreman, U.S. Atty., Crim. Div., Chicago, IL, for respondents.
Before POSNER, RIPPLE, and MANION, Circuit Judges.
On May 15, 1989, having settled this class action for $45 million, the lawyers for the class submitted their petition for fees and expenses to Judge Grady. The total amount requested was $9 million. After considering the petition for more than a year, the judge awarded approximately one half the amount requested. The lawyers appealed, and in April 1992 we reversed, finding a number of errors in the judge's fee order. In re Continental Illinois Securities Litigation, 962 F.2d 566 (7th Cir.1992). In recognition of the considerable time that the judge had already spent on the matter, we suggested that he compare the contingent-fee percentage sought by the class lawyers, 20 percent, with contingent fees set by arms-length contracts between lawyers and their clients in comparable commercial litigation. Id. at 572-73. These contracts would provide a market estimate of the value of the class lawyers' service to the class, in accordance with the principle that a judge in setting a fee award should be trying to give the lawyers what they would have got in a voluntary transaction in the market for legal services.
Taking up this suggestion, the lawyers for the class submitted to the district judge a mass of affidavits concerning contingent fees charged in comparable multimillion dollar commercial suits in which, however, unlike the situation here, there was a negotiated fee between lawyer and client. These affidavits appear to establish that the 20 percent fee that the lawyers for the class are seeking in this case is at the low end of the range found in the market. Without commenting on this evidence the judge on December 1, 1992, more than eight months after our decision, issued a brief order in which he said that he would base the fee award on "the 'sampling' technique approved in Evans v. City of Evanston, 941 F.2d 473, 476-477 (7th Cir.1991), and recommended by the Court of Appeals as a possibility in this case." We had said in Evans and repeated in our decision in the present case that rather than scrutinize all the time sheets kept by the lawyers--time sheets that in the present case cover more than 40,000 hours--in order to determine whether the lawyers had put in an excessive amount of time on the case, the judge could take a sample of the time sheets and extrapolate from the sample to the total population, that is, the total number of hours.
The order of December 1 precipitated this petition for mandamus. The petition points out that Judge Grady had reviewed all the time sheets before he made his first fee order, that even if he again disallows the time for research and conferences that we said he should not have disallowed without giving reasons it is most unlikely that he could justify an award of less...
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