Attorney Irwin Levin figures his clients should be ecstatic over the nearly $60 million in settlements his legal team has
negotiated with providers of ready-mix concrete in the Indianapolis area.
Instead, one of the plaintiffs in the antitrust class-action lawsuit—and a big one at that—is grousing that the lawyers who have waged the five-year fight are poised to walk away with too large a windfall.
Locally based Duke Realty Corp. this month opposed a request to award an additional $9.7 million in attorney’s fees, calling the amount excessive. If federal Judge Sarah Evans Barker approves the new fees, legal fees awarded in the case will swell to nearly $18 million.
That’s based on a common formula in class action cases providing attorneys’ fees amounting to one-third of recoveries. The case has gone so well that the formula yields among the highest attorneys’ fees ever for an Indianapolis class action case.
Levin, managing partner of locally based Cohen & Malad, said he finds the opposition perplexing given that, even after attorneys’ fees, plaintiffs are recovering nearly the entire amounts they were overcharged as a result of the price-fixing scheme.
“I can tell you that in discussions with other class members, they are absolutely thrilled at the settlement,” he said.
“I just think there is something else going on here because no reasonable businessman would say to a lawyer, ‘I got all my money, and I still don’t want you to be paid.’”
Levin, 55, is co-lead counsel in the case with Stephen Susman, 67, of Susman Godfrey in Houston. Both are heavy hitters nationally who’ve won some big class action settlements over the years.
Such cases are fraught with risk, of course. Some fizzle, leading to no recovery, and attorneys don’t receive a penny for their efforts. Because of the uncertainties, class action attorneys are accustomed to collecting larger checks in successful cases than their by-the-hour brethren.
And even hourly attorneys have rung up some eye-popping fees in the tenaciously fought case. Levin said he understands that one of the six concrete firms named as defendants spent more than $10 million defending itself.
But Duke argues in court papers that in the latest fee request for plaintiffs’ attorneys, the risk/reward ratio is out of whack. The company says that by the time Levin and his colleagues struck their largest settlement—a $29 million deal with Greenfield-based Irving Materials Inc.—the danger of not getting paid was “virtually nonexistent.”
The fee request was tied to that settlement, which was negotiated last fall. By then, it was unlikely attorneys would end up empty-handed, Duke argued, given that concrete companies already had been found guilty of criminal charges related to the price-fixing, and some had cooperated and provided incriminating information. In addition, rival concrete firms had settled the class action, agreeing to pay more than $24 million.
Duke noted that attorneys’ initial fee request covered nearly 3-1/2 years. “Yet, now, less than a year later, class counsel seeks to recover an additional nearly $10 million—effectively doubling class counsel’s fee award in less than a third of the time.”
In a filing responding to Duke, Levin argued it’s nonsensical for attorneys to be penalized for the timing of settlements—receiving more if settlements are struck all at once than if they’re staggered. He called the large award justified, saying the nearly full recovery plaintiffs are getting is “virtually unheard of” in class action litigation.
Durham blames investors
Tim Durham is firing back at investors in Fair Finance Co. who charge he misled them when they bought investment certificates from the Akron, Ohio, firm.
The plaintiffs—Ohio residents who purchased more than $200 million in Fair certificates—charge in civil lawsuits that the offering circulars they relied on when deciding to invest contained misrepresentations and omissions.
But in a two-page filing this month, attorneys for Durham argue that, even if that’s the case, they included an abundance of information disclosing the potential risks of the investment.
“In light of the disclosures in the offering circular, any reliance on the alleged misrepresentations was unreasonable,” said the filing by Barnes & Thornburg attorney Corie Ann Marty.
“In light of the disclosures in the offering circular, plaintiffs’ contributory fault is greater than 50 percent of the total fault involved in their losses.”
Fair stopped redeeming certificates and paying interest after FBI agents raided its offices in November. In a court filing that month, the U.S. Attorney’s Office in Indianapolis alleged Durham operated the business as a Ponzi scheme, selling new certificates to pay off prior investors.•