The Second Circuit just held that a district court abused its discretion by awarding inadequate fees to class counsel. The entire "Settlement Fund" totaled $21.9 million, but class members made only $9.4 million in claims. The district court ordered distribution of the $12.5 million balance under the cy pres doctrine to several charitable institutions and awarded class counsel 40 percent of the $9.4 million in "claims made". Vacating and remanding, the Court held:
"The entire Fund, and not some portion thereof, is created through the efforts of counsel at the instigation of the entire class. An allocation of fees by percentage should therefore be awarded on the basis of the total funds made available, whether claimed or not."
Fears v. Wilhemina Model Agency, Inc., slip op. at 22 (2d Cir. Jan. 4, 2007) (available at http://www.ca2.uscourts.gov/).
