O:\joan\hillvkaiserfrancismotioncostsfees.wpd

Case 5:09-cv-00007-R Document 513 Filed 07/30/13 Page 1 of 7 IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
J.C. and ALICE HILL, individually
and on behalf of others similarly
situated,
Plaintiffs,
Case No. CIV-09-07-R
KAISER-FRANCIS OIL COMPANY,
Defendant.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
This matter comes before the Court on the Plaintiffs' Motion for Fees and Costs, wherein they seek attorneys fees equal to forty percent of the total cash settlement in this action of $35,000,000.00 plus the amount refunded by Kaiser-Francis to royalty owners for TSW and Senex administrative fees during the pendency of this action, an incentive award for the class representative, Alice Hill totaling one percent of the settlement, and litigation expenses not to exceed $994,081.13. In response to the motion the Court received two objections to the amount of fees sought by Plaintiff and a third objector, Mr. Don Williams, sent his objection to counsel and appeared at the July 30, 2013 fairness hearing and was heard by the Court. Following that hearing, and in accordance with Rules 23(h) and 52(a) of the Federal Rules of Civil Procedure, the Court finds as follows.
1. In 2004 Mr. and Mrs. Hill contacted the law firm of Durbin, Larimore and Bialick, P.C., regarding perceived inconsistencies in their gas well meter readings and the royalty Case 5:09-cv-00007-R Document 513 Filed 07/30/13 Page 2 of 7 payments they were receiving from Defendant Kaiser-Francis with regard to interests they 2. The Hills decided to seek resolution of the issue with Kaiser-Francis, and to that end, they signed a contingency contract with the firm, granting a forty-percent fee if the case was settled after filing, fees to be paid only after costs were paid from any settlement 3. This initial meeting led to the filing of an action against Defendant and Marathon in the District Court of Washita County, Oklahoma. The action was ultimately converted to a putative class action, to cover wells throughout the state of Oklahoma. 4. Mr. and Mrs. Hill decided to pursue the action on a class basis in an effort to assist their neighbors and friends who they believed had been underpaid by Kaiser-Francis, although pursuit of the litigation on an individual basis would have shortened the litigation 5. The class action for underpayment of royalties was removed to this Court in 2008 and the claims were severed from those against Marathon Oil Company in 2009. 6. Upon motion of the Plaintiffs, the Court certified a class in 2010. 7. The action ultimately settled in 2013 resulting in the filing of this motion as part 8. Pursuant to the terms of the settlement, the Defendant agreed to pay $35,000,000.00 in cash to a fund to be distributed to the royalty owners in Oklahoma wells from which Kaiser-Francis sold production during the relevant time frame. Additionally, Case 5:09-cv-00007-R Document 513 Filed 07/30/13 Page 3 of 7 during the course of this litigation Kaiser-Francis ceased charging royalty owners for administrative fees on behalf of TSW and Senex, and refunded $2,761,391 to members of the class. Between the time of refund and the date of settlement, this policy change resulted in an additional $330,000.00 of benefit to the class members.
9. The case was litigated effectively and efficiently by the attorneys of the firm, who 10. There were only two objections to the settlement received by the Court, and only one objector, whose objection was apparently received by class counsel, appeared at the hearing. After considering Mr. Williams' concerns, the Court concludes that it is impossible to discern whether royalty owners are receiving 100% of what Plaintiffs alleged was due and owing plus the statutory interest of 12%, but despite this inability, the settlement in this 11. "The settlement in this case created a 'common fund' from which the plaintiff class obtained benefit." Attorneys' fees are appropriately awarded from that fund, on the theory 'that persons who obtain the benefit of a lawsuit without contributing to its costs are unjustly enriched at the successful litigant's expense.'" Gottlieb v. Barry, 43 F.3d 474, 482 (10th Cir. 1994)(quoting Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (1980)). The Court has a fiduciary duty to the class to ensure that attorneys' fees and costs are reasonable.
12. "When there is a common fund created by a settlement, courts have applied one of two methods of determining reasonable attorney's fee awards: by a percentage of the fund, or by the lodestar method developed in statutory fee shifting cases. See Uselton v. Case 5:09-cv-00007-R Document 513 Filed 07/30/13 Page 4 of 7 Commercial Lovelace Motor Freight, Inc., 9 F.3d 849, 853 (10th Cir. 1993). The Tenth Circuit has expressed "a preference for the percentage of the fund method" in common fund cases. Gottlieb v. Barry, 43 F.3d at 483." Rosenbaum v. MacAllister, 64 F.3d 1439, 1445 13. "In all cases, whichever method is used, the court must consider the twelve The Johnson factors include: “the time and labor required, the novelty anddifficulty of the question presented by the case, the skill requisite to performthe legal service properly, the preclusion of other employment by the attorneysdue to acceptance of the case, the customary fee, whether the fee is fixed orcontingent, any time limitations imposed by the client or the circumstances, theamount involved and the results obtained, the experience, reputation andability of the attorneys, the ‘undesirability’ of the case, the nature and lengthof the professional relationship with the client, and awards in similar cases.”Gottlieb v. Barry, 43 F.3d at 482 n. 4 (citing Johnson v. Georgia HighwayExpress, Inc., 488 F.2d 714, 717-19 (5th Cir.1974)).
14. Although the Court must address the Johnson factors, rarely will all of the factors be applicable, especially in a common fund case. Uselton, 9 F.3d at 854 (quoting Brown v. Phillips Petroleum Co., 838 F.2d 451, 456 (10th Cir. 1988)). 15. Class counsel's did not provide billing summaries to support the contention that 7200 hours were spent prosecuting this action, however, the Court is aware of the fact that counsel successfully pursued class certification, responded to numerous motions and and negotiated the settlement of this action. 16. The issues herein were difficult issues of Oklahoma law which are currently being litigated in numerous forums throughout Oklahoma. Case 5:09-cv-00007-R Document 513 Filed 07/30/13 Page 5 of 7 17. Class counsel were qualified to handle the issues, and indeed did an excellent and thorough job throughout the litigation resulting in settlement of this action. 18. The fee agreement with certain individual Plaintiffs, including the Hills called for a contingency, with fees being recovered only in the event of recovery for the Plaintiffs. 19. The Hills and the firm had a long-standing attorney-client relationship, and class counsel had experience in complex litigation, including for some of the attorneys, class 20. In Brown v. Phillips Petroleum Co., 838 F.2d 451, 455 n. 2 (10th Cir. 1988), the Tenth Circuit identified a fee range between 23.7 and 33.7 percent as reasonable based on the decisions of other courts. See also 4 Newberg On Class Actions § 14:6 (4th ed. 2002) (“Empirical studies show that, regardless whether the percentage method or the lodestar method is used, fee awards in class actions average around one-third of the recovery.”). 21. The Court finds, that the awarding of fees totaling thirty-five percent of the common fund is appropriate in this case, rather than the forty percent sought by Plaintiff's counsel. The Court finds an award of amount reasonably compensates Plaintiffs' counsel when considering the relevant "Johnson factors." 22. Plaintiff also requests an incentive award for the named class representative, Alice Hill amounting to one percent of the common fund, or $380,000.00.
25. “Incentive awards [to class representatives] are justified when necessary to induce individuals to become named representatives,” but there is no need for such an award “if at least one [class member] would have stepped forward without the lure of an ‘incentive Case 5:09-cv-00007-R Document 513 Filed 07/30/13 Page 6 of 7 award.’” In re Synthroid Mktg. Litig., 264 F.3d 712, 722–23 (7th Cir.2001) (quoted in UFCW Local 880-Retail Food Employers Joint Pension Fund v. Newmont Mining Corp., 352 Fed.Appx. 232, 235 (10th Cir. 2009)(construing objector's entitled to award)). 26. Furthermore, "a class representative may be entitled to an award for personal risk incurred or additional effort and expertise provided for the benefit of the class." Id. at 235-36 (citing Parker v. Time Warner Entm't Co., L.P., 631 F.Supp.2d 242, 279 (E.D.N.Y.2009) (“The amount of the incentive award is related to the personal risk incurred by the individual or any additional effort expended by the individual for the benefit of the lawsuit.” (quotation omitted)); Varacallo v. Mass. Mut. Life Ins. Co., 226 F.R.D. 207, 257 (D.N.J.2005) (same). 27. The Court finds Mrs. Hill is entitled to an incentive award, however, the one 28. Mrs. Hill and her deceased husband initiated this case after discovering inconsistencies in their gas well meter reading. The initiative they undertook and pursued ultimately inured to the benefit of the entire class and they should be rewarded for this.
However, they were never at any financial risk and their actual involvement did not require a great deal of time, although Ms. Hill did sit for deposition and answer questions from neighbors who are members of the class. The Court concludes Mrs. Hill should be awarded an incentive of $200,000.00 from the common fund. 29. Finally, the Court considers Plaintiffs request for an award of litigation expenses.
The Court hereby awards Plaintiffs costs not to exceed $994,000.00.
30. These expenses and the incentive award to the class representative are to be Case 5:09-cv-00007-R Document 513 Filed 07/30/13 Page 7 of 7 deducted from the common fund prior to calculation of the attorneys' fees.
THEREFORE, IT IS ORDERED that Plaintiffs' Motion for Costs and Fees is granted IT IS SO ORDERED this 30th day of July, 2013.

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