Full opinion text
ORDER ON PETITIONS FOR AN AWARD OF ATTORNEYS’ FEES, COSTS, AND REIMBURSABLE EXPENSES AND FOR INCENTIVE AWARDS TO NAMED PLAINTIFFS GOLD, District Judge. I. INTRODUCTION THIS MATTER is before the Court on the Attorneys’ Fee Petition by McKenna, Long & Aldridge LLP [DE # 2108]; Ap-plieation/Motion by Rylyns Enterprises, Inc. for an Incentive Award [DE # 2109]; Attorneys’ Fee Petition by the Grutman Firm [DE # 2112]; Petition of Class Representatives Allapattah Services, Inc., Alberto Gonzalez, Robert Lewis, Inc. and John Pinder (the “Florida Representatives”) for an Incentive Award [DE #2116]; Motion by Certain Class Representatives [Paul Bove, Martin Cook, George Dalton, R. William McGillicuddy and David Wise] For A Common Benefit Award [DE # 2118]; Petition by Stearns, Weaver, Miller, Weissler, Alhadeff & Sitterson, PA. [hereinafter “Stearns, Weaver”] for Attorneys’ Fees in Three Fee-Shifting States [DE #2124]; Petition by Stearns, Weaver for Attorneys’ Fees, Costs and Reimbursable Expenses [DE #2126]; Motion by Pertnoy, Solowsky & Allen [hereinafter “Pertnoy & Solowsky”] for Attorneys’ Fees Against Exxon Under Court’s Fee Shifting Order of September 23, 2004 [DE # 2129]; Motion by Pertnoy & Solowsky for Attorneys’ Fees and Reimbursable Expenses [DE #2131]; Motion by Gerald M. Bowen to Accept Fee Petition and Deem It Filed Nunc Pro Tunc [DE #2174]; Verified Petition of Attorneys Farrell & La Mantia For An Award Of Attorneys’ Fees [DE #2626, 2627 & 2630]; Supplement by Grutman Firm To Motion For Attorneys’ Fees and Costs [DE # 2628 & 2629]; Superseding Motion By Pertnoy & Solowsky for Attorneys’ Fees and Reimbursement of Expenses [DE #2635]; Stearns Weaver’s Revised and Supplemental Petition For An Award Of Attorneys’ Fees, Costs and Reimbursable Expenses [DE #2637 & 2638], and Supplement to Application of Class Representatives Paul Bove, Martin Cook, George Dalton, R. William McGillicuddy and David Wise For A Common Benefit Fund Award [DE #2634], and an Emergency Motion by Stearns Weaver for Alteration of Attorneys’ Fees and Incentive Award Procedures [DE # 2864], By my Amended Order on Attorneys’ Fees and Incentive Awards Procedures, dated February 7, 2006 [DE #2613], I bifurcated the hearings on attorneys’ fees and incentive awards. Oral argument on the percentage of attorneys’ fees and incentive awards to be awarded to Class Representatives was held on Thursday, April 27, 2006. The evidentiary hearing addressing the allocation of attorneys’ fees among Class Counsel was held on Wednesday, May 3, 2006, Thursday, May 25, 2006, and Friday, May 26, 2006. The evidentia-ry hearing concerning the allocation of incentive awards among the Class Representatives was held on Wednesday, June 5, 2006. Final oral argument was held on Monday, June 26, 2006. In this Order, I first address the percentage award of attorneys’ fees to be approved for Class Counsel and the entitlement to, and percentage of, incentive awards to be awarded to the Class Representatives. I next address the allocation of the fees and awards. Finally, I determine the manner of payment of both attorneys’ and incentive awards. For reasons which I address at length in this Order, I hereby establish the percentage to be awarded. I conclude that Class Counsel should be awarded an attorneys’ fee of thirty-one and one-third percent (31 and 1/3%), and that the Class Representatives should be awarded an incentive award of 1.3% (as corrected) to be divided equally among the eight Class Representatives. Class Representative McGillieud-dy’s reduced incentive award will be paid by Gerald Bowen whose attorneys’ fee will be partially forfeited. Without doubt, this Order deals with a lot of money for attorneys’ fees and incentive awards. A casual observer, not familiar with the case, may readily conclude that the attorneys’ fees and incentive awards are too high. This case, however, is unique. This is not a situation where a class action is brought, soon settled, and Class Members receive an insignificant award and the lawyers get millions. This is a case that has lasted fifteen years, resulted in two trials, extensive appeals including before the United States Supreme Court, a hotly contested Claims Administration Process, and a settlement whereby Class Members will receive their full compensatory damages and nearly all of their prejudgment interest. It is an unprecedented case where over ninety-two percent of the Class Members will receive a recovery and where, through settlement, twenty-one States will be permitted to participate in any remaining distribution in favor of currently unknown Class Members. I now articulate, in summary form, the essential rationale behind the award of attorneys’ fees in this case. Class Counsel refers to it as the “Gold Standard”. Any similarity to this Judge’s name is merely coincidental. The essence is straight-forward. The amount of attorney’s fees awarded should directly correlate to the number of Class Members benefitted; the amount of money received by each class member; and the risk borne by Class Counsel, over time, in achieving the benefits obtained. Attorneys’ fees should be structured as an incentive for lawyers to risk achieving the highest possible benefits for the greatest number of Class Members. This is what happened in this case. It was not only the size of the verdict achieved that was significant, but the staggering number of over 11,000 Class Members who were identified to share in the award. During all this time, the attorneys have received no fees and litigated at substantial risk to themselves and in the best interest of the Class. It is time for their contributions, and that of the Class Representatives, to be recognized. The Class itself has recognized the contributions involved by their lack of any significant objection to the awards requested. II. Background 1. Current Requests For Attorneys’ Fees and Class Awards; Summary of Objections Filed, and Historical Background Concerning Fee and Incentive Petitions. The above listed petitions for attorneys’ fees and class awards were filed prior to the parties’ announcement of a proposed settlement which was negotiated during the Claims Administration Process. Since then, I have received supplemental petitions from Stearns Weaver; Pertnoy & Solowsky; the Grutman Law Firm, and from several of the Class Representatives. In their initial petitions for attorneys’ fees, Class Counsel filed requests for an award of attorneys’ fees not to exceed one-third of the recovery and an award of litigation costs and expenses (not to exceed 5% of any recovery). The Class Representatives also filed petitions seeking incentive awards of 1.5% (in the aggregate to be divided among them) of any recovery. Following the original class notification regarding a proposed hearing on the award of attorneys’ fees and incentive fees, and the subsequent re-notification in conjunction with the Fairness Hearing, six Class Members filed objections to the petitions for attorneys’ fees and costs. Only three Class Members objected to the petitions by Class Representatives for incentive awards. Of the Class Members who filed objections, three—Thomas Lee, Josephine Choi and Larry Freeland—are represented by an attorney. These three Class Members also filed objections to the proposed incentive awards. All three of these Class Members are represented by Russell A. Cline who has filed an affidavit claiming that he represents in excess of 400 claimants in the Claims Administration Process. Mr. Cline is currently in a dispute with Class Counsel in the Claims Administration Process to determine who actually represents the claimants at issue. This matter remains unresolved at the present time. Nonetheless, I have reviewed Mr. Cline’s objections and find them to be without merit. Mr. Cline essentially argues that, under the Camden I method of calculating attorneys’ fees, the benchmark range in this ease should be between six and ten percent. As to the incentive awards, Mr. Cline objects to the absence of specific monetary declarations by Named Class Representatives Paul Bove, George Dalton and David Wise, and further argues that there should not be an aggregate percentage amount awarded to the Named Class Representatives as a whole. All of these matters are discussed at length in this Order. At the time the petitions for attorneys’ fees and incentive awards were originally filed, it was not possible to determine the magnitude of the total recovery to the Class because the total could only be derived after completion of the Claims Administration Process. A percentage of an uncertain number would not allow calculation of the request for attorneys’ fees or incentive awards in dollars or as a percentage of each claim. These circumstances have changed radically as a result of the negotiated settlement reached by the parties during the Claims Administration Process and approved by the Court on April 7, 2005 following a Fairness Hearing [DE #2773]. Of considerable significance to the consideration of appropriate attorneys’ fees and incentive awards, I note that more than 11,000 individual notices were sent to members of the Class which detailed the terms of the settlement and the proposed award of attorneys’ fees and incentive awards. The notices were specific that the amount of attorneys’ fees requested could be as high as $353,333 million and the incentive awards could reach $15.9 million. Examples were provided in the notice as to how the requested attorneys’ fees and incentive awards could reduce individual claims. Accordingly, I conclude that each Class Member clearly received notice of the magnitude of the requested fees and awards. In terms of the settlement agreement, only one objection was filed which has been subsequently withdrawn. It dramatically understates the obvious that the near totality of the Class has no objection to the proposed award of attorneys’ fees and incentive awards, as were detailed at length in the notice to the Class. Going back historically, on December 22, 2005, Plaintiffs filed a “Motion to (1) Preliminarily Approve the Terms of the Settlement of this Action, (2) Approve the Form of Notice to the Class of the Settlement, (3) Establish the Means of Communication of the Notice to the Class, (4) Schedule the Time for Objections to be Made to the Proposed Class, (5) Schedule the Time for Objections to be Made to the Proposed Settlement and to Petitions for Attorneys’ Fees and Class Representatives’ Incentive Awards, and (6) Schedule a Final Fairness Hearing on the Proposed Settlement” [DE #2561]. The proposed settlement [discussed more fully below] contemplated that Exxon was to deposit $1,075 billion into a Settlement Common Fund. As I mentioned, the effect of reaching a settlement amount eliminates uncertainty as to the amount sought by Class Counsel and the Class Representatives in both percentages and dollars. Of the $1,075 billion payment Exxon paid in settlement of the case, $15 million will be allocated to offset the fee obligation of claimants with stations in Texas, Arizona, and Arkansas. Accordingly, Class Counsel now seeks to recover their percentage award against $1,060 billion of the amount Exxon has paid. Although there are disagreements among the law firms as to their respective entitlements to recover attorneys’ fees, they do agree that in no event should the total legal fees exceed one-third of the total recovery in the case, or one-third of every claim (including the claims of the states). That is, if a one-third recovery was granted, the total of attorneys’ fees to be divided among the five law firms would be $353.33 million. At the April 27, 2006 hearing, all of the law firms, except for Mr. Gerald Bowen, have agreed to limit their claim of recovery to 31 and 1/3 % of the Settlement Common Fund. Mr. Bowen does suggests that a cap should not exceed twenty (20) percent. In addition, the five law firms request reimbursement of expenses in the amount of $4.2 million, and further request the Court to permit an estimated $1.5 million in expenses for continuing the Claims Administration Process. The nine Class Representatives also filed petitions seeking recovery of incentive awards to be shared among them of 1.5% of the total Settlement Fund. The sum total of the requested incentive awards totals $15.9 million. The Class Representatives include their claim for out-of-pocket costs and expenses in the 1.5% incentive award they seek. Thus, the total of all attorneys’ fees, expense reimbursements, and incentive awards is 35.37% (expressed as a percentage of the $1,060 billion) and $374.88 million (expressed in dollars). By Order dated January 31, 2006 [DE # 2607]. I preliminarily approved the settlement upon recommendation of the parties and the Special Master. Notice was provided and a fairness hearing was scheduled for April 5, 2006. The notice provided that Class Members could both object to the settlement, and they could, once again, raise any objection to the proposed award of attorneys’ fees and incentive awards now that the actual dollars involved could be calculated against the Settlement Fund. Only one objection (later withdrawn) was filed to the settlement, and, as I mentioned, only six objections were filed regarding attorneys’ fees and incentive awards. The issues associated with these petitions, as amended, are varied and complex. In this portion of the Order, I begin by briefly discussing the case history and the settlement. I next discuss the method of awarding attorneys’ fees to Class Counsel, the proper percentage to be awarded, and, the award of incentive fees to the Class Representatives. I then discuss and resolve issues of allocation and payment. 2. Case History This is a unique class action suit with a long history. As suggested by Stearns, Weaver, it is fair to say that nearly all federal class actions end by dismissal, summary judgement, or settlement. New are resolved by trial. Fewer still are decided by an appellate court. Almost none reach the Nation’s highest court. None that I can find have involved a comprehensive claims administration process that has been so highly contentious. None has resulted in a settlement after trial and appeal whereby, at the end of the day, over 11,000 Class Members will receive full compensation of their claims, including nearly all of their prejudgment interest. This class action is the exception to every one of these particulars. a. The Complaint and Exxon’s Defenses This class action was brought by several Exxon dealers (the “Plaintiffs”) on behalf of themselves and on behalf of all Exxon direct served dealers who purchased motor fuel from Exxon during the period March 1, 1983 until August 28, 1994. The Plaintiffs alleged that Exxon was contractually obligated to reduce the wholesale price of motor fuel by an amount that, on average, offset the credit cost recovery fees charged by Exxon in connection with its Discount for Cash program. They further alleged that Exxon had breached that obligation, causing its dealers damages in an amount equal to the credit cost recovery fees collected during the Class period. Plaintiffs also sought the recovery of prejudgment interest based on the laws of the 35 states in which Exxon marketed motor fuel through direct served dealer service stations. Exxon vigorously defended the claims, asserting that it had no legal obligation to offset credit fees with wholesale price reductions but it had done so in any event by virtue of the competitive nature of the marketplace. Exxon also sought to limit or bar individual class member claims through the application of statutes of limitation, thousands of form releases signed by terminated dealers, and by the su-perceding contract clause of the standard form sales agreement. Exxon opposed class certification although it was later granted. It then sought review of class certification by the United States Court of Appeals for the Eleventh Circuit Court which was rejected. The most apparent feature distinguishing this class action from virtually every other class action in the reported federal decisions is obviously that it did not settle before .trial. Prior to trial, there were extensive discovery battles, extensive class certification briefings, at least six motions to dismiss, another ten summary judgment motions on different issues, an extraordinary number of motions in limine, and a week-long D.aubert hearing. In addition, the Court required the parties to extensively brief the manner and method by which the case would be tried, with particular attention to the form of verdict the jury would consider. To say the least, the pretrial work in the case was substantial. b. The Jury Finds Liability and Breach and Awards Damages on a Cents Per Gallon Basis. The case was first tried in 1999 but the jury deadlocked and was unable to reach a verdict. At the second trial in 2001, the jury found for the Class on each disputed issue. The jury found that Exxon had a contractual obligation to offset credit fees with wholesale price reductions, that Exxon breached that obligation, and that the Class of dealers suffered money damages measured on a cents per gallon basis (on average, 1.3 cents per gallon). The jury found that Exxon could not enforce the statutes of limitation because it had fraudulently concealed its breach. This Court rejected Exxon’s attempt to limit or deny claims through the superceding contracts clause or releases. This Court also found that Exxon was liable for prejudgment interest based on the laws in each of the 35 states in which Exxon direct served dealer stores were located. Following the jury’s verdict, the Class requested entry of an aggregate final judgment for the full amount of money owed to the Class. This Court denied the request, finding instead that each class member would be required to establish individual damages, based on gallons purchased by filing a claim establishing ownership of a particular station during a particular time period. By virtue of this ruling, Exxon was only obligated to pay Class Members who filed a timely claim in the Claims Administration Process. c. The Jury’s Verdict and District Court Rulings are Affirmed on Appeal Exxon appealed to the Eleventh Circuit, challenging the jury’s verdict and this Court’s orders certifying the Class, rejecting the releases and superceding contract defenses, awarding prejudgment interest, and exercising jurisdiction over claims less than $50,000.00. The Class appealed this Court’s order denying entry of an aggregate judgment for the Class. The Eleventh Circuit rejected both sides’ appeals, thereby affirming the jury verdict and the entitlement of each class member to damages in the Claims Administration Process. Exxon’s and the Class’ requests for rehearing before the Eleventh Circuit were denied. The United States Supreme Court heard oral argument on March 1, 2005, and on June 23, 2005, rendered its decision affirming this Court’s exercise of jurisdiction over the claims of all members of the Class. The Eleventh Circuit’s opinion was upheld on the merits. d.The Claims Administration Process and Notice of Request for Attorneys’ Fees and Incentive Awards After trial and while the appeals were still pending, this Court implemented a Claims Administration Process for the purpose of processing individual class member claims for their respective share of the Class recovery. The Court approved a form of notice to the Class requiring each eligible class member to file a formal claim with the Claims Administrator by December 1, 2004. The notice advised that each claimant was required to pursue that claim in an adversary damages proceeding against Exxon. Exxon was entitled to participate in the Claims Administration Process, file objections to the payment of individual claims and, where appropriate, file claims for set-offs against damages. The notice further advised that Class Counsel was seeking an award of attorneys’ fees not to exceed thirty-three and one-third percent of each damage award, and that the Class Representatives were seeking incentive awards. Objections to the proposed fees and incentive awards were to be filed by August 31, 2005. During the Claims Administration Pror cess, Class Counsel has, on behalf of the Class, participated in three distinct phases, the first being collection, digitizing and coding of all dealer records from Exxon’s files, the second being the location of Class Members or their beneficiaries wherever they might be to advise Class Members of their right to collect these funds and assist Class Members in filing claims, and the third being the advancement of individual claims on a claim by claim basis to final judgment. To manage the process of receiving, reviewing and approving these claims for payment, this Court appointed former United States District Judge Thomas Scott as Special Master and the Garden City Group, Inc. as Claims Administrator. e. Exxon Objects to All the Claims Filed, Asserts Set-Offs and Threatens More Appeals More than 11,000 claims were filed with the Claims Administrator by the claim filing deadline of December 1, 2004. In response, Exxon filed an objection to every claim, asserting that each class member’s entitlement to recovery of damages and interest had yet to be resolved through the trial and appeals. Exxon announced its intention to appeal any judgment entered in the Claims Administration Process and challenge, again, the damages and interest determined at trial and in this Court’s prior orders. Moreover, Exxon filed thousands of “set-off’ claims in which it alleged that the DFC claim should be either reduced or eliminated altogether because of monies owed by former dealers to Exxon for such things as money paid upon signing releases, fuel, accessories, rent or advances for station improvements. Class Counsel moved to sanction Exxon for these objections and sought an order prohibiting Exxon from taking further appeals of any issues previously decided at trial and later affirmed on appeal. This Court granted the motion and entered an order which (1) sanctioned Exxon, (2) restricted the objections Exxon could assert in the Claims Administration Process, and (3) narrowed the scope of Exxon’s set-off claims. I ruled that, if Exxon filed appeals on matters previously decided, I would impose upon Exxon, as a sanction, a post-judgment interest rate equal to Exxon’s internal rate of return, which was 23.8% at the time the sanctions order was entered. See Allapattah Servs., Inc. v. Exxon Corp., 372 F.Supp.2d 1344 (S.D.Fla.2005). Exxon announced that it intended to appeal the sanctions order limiting its right to take further appeals. In addition, Exxon continued to object to almost every claim filed in the Claims Administration Process, requiring Class Counsel to assist every claimant in establishing the bona fides of their claim. Exxon also continued to assert approximately 650 set-off claims for damages totaling in excess of $40 million dollars exclusive of interest. Class Counsel moved for judgment against Exxon on all of the set-of claims. The Special Master recommended allowing these claims, and Class Counsel’s appeal of that order to this Court was pending when settlement was proposed. f. Class Counsel’s Effort to Categorize Claims to Facilitate Claims Administration Up Through the Date of the Settlement Proposal Up through the date of the settlement proposal, Class Counsel sought to advance the approximately 11,000 claims in an order that was based on the nature of the objection that had been asserted. The first claims to be considered were those few hundred claims to which Exxon asserted minimal objections. Those claims to which Exxon’s objections could be resolved through moderate revision to the claim were to be processed next, followed by those for which Exxon’s objections raised significant legal or factual issues involving ownership (e.g. dissolutions, bankruptcies, heir issues, and assignments). g.State Governments Claim on Behalf of Claimants Who Did Not File Claims Relying on state abandoned property statutes, twenty-one of the thirty-five states in which Exxon dealerships were operated filed claims against Exxon asserting entitlement to recover the unfiled claims on behalf of the claimants who did not timely appear. At least one state that did not file directly in the Claims Administration Process advised Exxon and this Court that it intended to exercise the right to bring claims against Exxon on behalf of dealers who did not do so outside of this action. If state claims were allowed and the states recovered payment on behalf of absent Class Members, the states would hold the recovered money in trust for the true owner. Exxon objected to the states’ assertion of claims on behalf of Class Members who failed to timely do so. The Special Master and this Court had not resolved, by the date of the announced settlement, the issue of whether the states were entitled to assert claims for absent Class Members. h. Motions for Entry of Individual Judgments and Potential Further Appeals Since July 5, 2005, Class counsel weekly filed motions seeking summary judgment on claims to which there is alleged to be no remaining evidentiary dispute with Exxon. The process was in its early stages when settlement was announced. As of December 19, 2005, twenty-two motions for summary judgment were filed with respect to approximately 1,300 claims for a total of approximately $330 million dollars. Of these, the Special Master already adjudicated 20 motions for summary judgment, thereby posturing some $276 million in class member claims for immediate distribution [DE # 2757 at 2], i. The Court’s Rulings on Class Members’ Obligation for Payment of Attorneys’ Fees. To facilitate the award of attorneys’ fees, I ruled (prior to the announced settlement) that with respect to Class Members whose stations were located in states other than Texas, Arizona, and Arkansas, Class Counsels’ attorneys’ fees were to be paid by deducting from each Class Member’s payment a fixed percentage to be later determined. With respect to Class Members whose stores were located in Texas, Arizona or Arkansas, I further ruled that the laws of those states entitle those Class Members to require Exxon to pay at least a portion of their attorneys’ fees in addition to its obligations to pay damages and prejudgment interest. Exxon announced that it intended to appeal that order. It argued that any liability for these attorneys’ fees should be measured by a different criterion than that applicable to the percentage awarded for attorneys’ fees in the other thirty-two states. j. Terms of the Settlement The following is a summary of the terms of the settlement: 1. Settlement Fund and Exxon’s Waiver of Objections and Appeals Exxon will wire funds in the amount of $1,075,000,000 (the “Total Settlement Proceeds”) to an account at a banking institution approved by the Court (hereinafter, the “Exxon DFC Class Action Account” maintained at the “Exxon DFC Depository Institution”). Of this amount, $1,060,000,000 will be designated for payment of claims (the “Settlement Fund”) and $15,000,000 will be designated for partial payment of the attorneys’ fees owed by Exxon for Class Members whose stores were located in the states of Arkansas, Arizona, and Texas (the “Three State Fund”). Upon final approval of the agreement, Exxon waived and relinquished all objections and appeals to all claims. Exxon will no longer participate in the claims adjudication process, except that Exxon will be available to respond to inquiries by Class Counsel regarding the need for additional documentation. 2. Release to Exxon Exxon will be released and discharged from any and all further liability for any and all causes of action, judgments, liens, indebtedness, costs, damages, obligations, attorneys’ fees, losses, claims, liabilities and demands of whatever kind or character that are related to the cause of action that was adjudicated in this lawsuit. 3. Claims Administration Process The Claims Administration Process will go forward before the Special Master to adjudicate each Proof of Claim that was postmarked on or before December 19, 2005, including those claims that were filed after the claims filing deadline of December 1, 2004 and including those claims that were filed by members of the Class who previously had opted out (if they filed claims prior to December 19, 2005). Throughout the duration of the Claims Administration Process, Class Counsel will remain responsible for designating and presenting all claims for adjudication before the Special Master on a rolling basis, marshaling the supporting documentation that may be available for each claim, and identifying those gallons as to which there are competing claims requiring adjudication. 4. Two Percent (2%) Reduction and Five Percent (5%) Reserve from Claims Each claim filed by a claimant by December 19, 2005 will be reduced by two percent (2%) as a reserve for contingent circumstances. In addition, when a claim is ordered to be paid, a five percent (5%) reserve will be taken from each claim to ensure that sufficient funds will exist at the end of the Claims Administration Process to fund all claims timely filed by December 19, 2005 and determined to be valid. Payment of that reserve will be made only if sufficient funds exist at the end of the Claims Administration Process to allow it to be paid and only in the amount of the funds then available. The funds reserved and not paid will not bear interest. Thus, until the end of the Claims Administration Process, claimants will be paid 93% of their awarded recovery less deductions for attorneys’ fees, costs, expenses and incentive awards. Class Member’s actual recovery would depend on this Court’s award of attorneys’ fees to Class Counsel. 5. Termination of prejudgment interest and funding of costs of Claims Administration Process Effective October 31, 2005, prejudgment interest will cease to accrue on all claims. Instead, the interest that accrues on the money held in the Exxon DFC Class Action Depository Account will be utilized to fund the costs of the Claims Administration Process, including the payment of fees of the Special Master, the fees of the Claims Administrator, the fees of the attorney(s) appointed on behalf of the state governments as discussed below, and all bank and transaction fees (collectively, the “Claims Adjudication Costs”). 6. Exxon’s Set-Off Claims Abandoned All of the thousands of set-off claims raised by Exxon in the Claims Administration Process will be dismissed with prejudice. 7. Appointment of States’ Counsel; Residual Funds Go to the States as Abandoned Property (i)Exxon’s departure from the Claims Administration Process will eliminate a role that it has previously filled—screening claims to challenge invalid claims in the Claims Administration Process. Class Counsel cannot fulfill this role because it cannot take a position adverse to claiming Class Members. The Claims Administrator, Garden City Group, also cannot fulfill this role because it is acting in a neutral capacity as an arm of the Court, as is the Special Master. The state governments of the 35 states who have an unresolved claim to any monies not claimed by Class Members in the Claims Administration Process, however, have a sufficient interest and the proper incentives to fulfill this role. In particular, under the various states’ abandoned property laws, the states will hold any unpaid funds they recover for the benefit of the true owner and thus have no incentive to needlessly oppose or unduly delay payment of valid claims. (ii) To fill the role, the state governments collectively retained attorneys who will fully participate in the Claims Administration Process, have standing to object to claims, assist in the resolution of conflicting claims, and facilitate the settlement of disputed claims (which settlements will resolve with finality the right to claim the gallons at issue). In the event the states cannot agree on counsel to serve in this capacity, states’ counsel will be appointed for all states by the District Court States’ counsels’ attorneys’ fees and expenses, as approved by the Special Master and District Court, shall be paid from the interest income earned on the Exxon DFC Class Action Depository Account. (iii) Any money remaining in the Settlement Fund or the Three State Fund after adjudication and payment of all claims (including payment in full of the 5% reserve from adjudicated claims, litigation expenses, and Claims Adjudication Costs) will be disbursed pro rata to the 35 state governments in which the Class member stations were located. This money will be held in perpetuity by the state governments pursuant to their abandoned property statutes or law for the benefit of the rightful owner. Any class member who did not submit a Proof of Claim on or before December 19, 2005 will be able to make a claim directly to the appropriate state government pursuant to the applicable abandoned property statute or law. The value of the claim will be derived from the difference between the amount of the residual fund and the total of all claims that were not timely asserted. 8. No Interpleader; Sole Venue for Claims The settlement provides that all claims, including disputes between competing claimants, must be adjudicated under the jurisdiction of the United States District Court for the Southern District of Florida pursuant to the authority and supervision of the Court and cannot be interplead to other courts. Moreover, any and all third-party liens, garnishments, attachments, and other claims against Exxon must be brought as part of this litigation and cannot be brought against Exxon in any other court of law or jurisdiction. 9. Appeals From Claims Decisions Limited Any party seeking to recover monies in the Claims Administration Process will be entitled to due process before a Special Master and review of any decisions following that process by appeal to the District Court. There will be no appellate review of decisions of the District Court with respect to claims decisions. 10. Authority of the States’ Counsel to Recommend Discounts of Claims Where Disputed Legal or Factual Issues Exist To facilitate the Claims Administration Process, the States’ counsel will be empowered to recommend to the Special Master agreed-upon discounts of claims in recognition of the risk of litigation of those disputes in the Claims Administration Process. The amount of any negotiated and approved discount will remain in the Settlement Fund to enhance the probability of excess funds in the Settlement Fund upon the adjudication of all claims. 11.Mediation Where requested by the parties or ordered by the Special Master, parties to contested claims will be directed to mediation to attempt to resolve disputes. III. CLASS ACTION ATTORNEYS’ FEE AWARDS A. Under United States Supreme Court And Eleventh Circuit Precedent, Class Counsel are Entitled to an Award of Fees Pursuant to the “Common Fund” Doctrine The approved settlement has clearly established a “common fund” for the benefit of the Class. Pursuant to the settlement, Exxon has contributed a sum certain to an account at a federal banking institution to be distributed in accordance with the terms of the settlement and pursuant to the further orders of this Court. Exxon is no longer responsible for the payment of any attorneys’ fees (other than in three fee-shifting states). Here, the settlement provides all the attributes of a “common fund,” namely, (1) the class of beneficiaries is sufficiently identifiable, (2) the benefits can be accurately traced to them, and (3) the fee can be shifted with some exactitude to those benefiting from the settlement. It is axiomatic that “attorneys in a class action in which a common fund is created are entitled to compensation for their services from the common fund, but the amount is subject to court approval. Fed. R.Civ.P. 23(e).” Camden I Condo. Ass’n, Inc. v. Dunkle, 946 F.2d 768, 771 (11th Cir.1991). The district court presiding over a diversity-based class action pursuant to Fed.R.Civ.P. 23 has equitable power to apply federal common law in determining fee awards irrespective of state law. In addition, all of the states, with the possible exception of Florida, either recognize or have no contrary authority against the use of the percentage of the recovery method for the determination of a reasonable fee in such circumstances. See Attachment “1” to this Order (specifying the law of the applicable states). Under such circumstances, even Florida law does not trump under an Eñe analysis. See, e.g., Weinberger v. Great Northern Nekoosa Corp., 925 F.2d 518, 522 n. 5 (1st Cir.1991)(recognizing that district court presiding over diversity-based class action has equitable power to apply federal common law in determining fee award irrespective of state law); Mathewson Corp. v. Allied Marine Indus. Inc., 827 F.2d 850, 853 n. 3 (1st Cir.1987)(federal court settlement implicating matters of considerable federal concern requires resolution by federal common law principles as opposed to state law); Perfect Fit Indus. v. Acme Quilting Co., Inc., 646 F.2d 800, 806 (2d Cir.1981)(federal court’s equitable powers not governed by state law even when state law provides the rule of decision); Clark Equip. Co. v. Armstrong Equip. Co., 431 F.2d 54, 57 (5th Cir.1970)(Nne doctrine does not deprive federal court in diversity-case from power to employ equitable remedies not available under state law). In fact, the United States Supreme Court has, since 1882, repeatedly recognized that, where counsel secures a “common fund” for the benefit of a class, counsel is entitled to be compensated from the funds recovered. See Trustees v. Greenough, 105 U.S. 527, 15 Otto 527, 26 L.Ed. 1157 (1882); Sprague v. Ticonic National Bank, 307 U.S. 161, 59 S.Ct. 777, 83 L.Ed. 1184 (1939); Mills v. Electric Auto-Lite Co., 396 U.S. 375, 392-94, 90 S.Ct. 616, 24 L.Ed.2d 593 (1970); Alyeska v. Pipeline Svc. Co. v. Wilderness Society, 421 U.S. 240, 257, 95 S.Ct. 1612, 44 L.Ed.2d 141 (1975); Boeing v. Van Gemert, 444 U.S. 472, 478, 100 S.Ct. 745, 62 L.Ed.2d 676 (1980). The “common fund” doctrine is based on the perception that those who benefit from the prosecution of a lawsuit will be unjustly enriched if they do not share the costs in direct proportion to the benefit each receives. See Boeing, 444 U.S. at 478, 100 S.Ct. 745; Camden, 946 F.2d at 771. An award of attorneys’ fees from a common fund necessitates a final judgment or settlement fixing the total amount of damages and ordering such amount to be placed in an escrow account from which Class Members would receive their share simply by proving their individual claims against the judgment fund. See Boeing, 100 S.Ct. at 749-50, 100 S.Ct. 745 (“... the criteria are satisfied when each member of a certified class has an undisputed and mathematically ascertainable'claim to part of a lump-sum judgment [or settlement] recovered on his behalf. Once the class representatives have established the defendant’s liability and the total amount of damages, members of the class can obtain their share of the recovery simply by proving their individual claims against the judgment [settlement] fund. This benefit devolves with certainty upon the identifiable persons whom the court has certified as members of the class. Although the full value of the benefit to each absentee member cannot be determined until he presents his claim, a fee awarded against the entire judgment fund will shift the costs of litigation to each absentee in the exact proportion that the value of the claim bears to the total recovery.”) (emphasis added). This key requirement has now been met in this case. A fee award against the entire judgment fund will shift the costs of litigation to each Class Member in the exact proportion that the value of the claim bears to the total recovery. In this manner, each individual recovery is to carry its proportionate share of the total amount allowed for attorneys’ fees, expenses and disbursements as such class member’s recovery bears to the total recovery afforded the class. See Boeing, 444 U.S. at 478, 100 S.Ct. 745 (emphasis added); see also Camden, 946 F.2d at 771 (“common fund” doctrine permits an award of fees where the court’s jurisdiction over the subject matter of the suit and the defendant “make[s] possible an award that will operate to spread costs proportionately among class members”)(quoting H. Newberg, Attorney Fee Awards, § 2.01 at 28-29 (1986)); In re Everglades Air Disaster, 549 F.2d 1006, 1017-18 (5th Cir.1977)(affirming then District Judge Fay’s order applying the “common fund” doctrine which provided for payment of fixed percentage of anticipated claim proceeds as fees). B. The Eleventh Circuit’s Decision in Camden Applying the Common Fund Doctrine Requires Attorneys’ Fees Awarded Thereunder To Be Established as a Percentage of the Recovery The Eleventh Circuit in Camden held that, in applying the “common fund” doctrine, class counsel’s attorneys’ fees are to be awarded as a percentage of the class’ recovery, as opposed to a complex hours-based lodestar approach. Camden, 946 F.2d at 773-74. The Camden Court specified that, “henceforth, in this circuit, attorneys’ fees awarded from a common fund shall be based upon a reasonable percentage of the fund established for the benefit of the class. The lodestar analysis shall continue to be the applicable method used for determining statutory fee-shifting awards.” 946 F.2d at 774. The Camden Court further specified that, in determining such awards, the “bench mark” percentage is 25%, “which may be adjusted up or down based on the circumstances of each case.” Id. at 775. This 25% “bench mark” arose in the context of a typical class action which had been settled prior to a trial for a fraction of the defendant’s potential liability, thus mitigating counsel’s risk of a negative outcome. The Court recognized that circumstances may be quite different in other cases and adopted a flexible approach to determining a percentage given all of the circumstances. Thus, for instance, in this case, contrary to Camden, Class Counsel bore the full risk of losing the case through trial, a direct appeal on the merits, a proceeding before the United States Supreme Court, and during the fluid circumstances of the Claims Administration Process. Consistent with this approach, the Court held that, in considering adjustments, district courts should evaluate the twelve “Johnson factors” (Johnson v. Georgia Highway Expr., Inc., 488 F.2d 714 (5th Cir.1974)), with particular emphasis on the “monetary results achieved” in the case. The twelve factors are: (1) the time and labor required; (2) the novelty and difficulty of the questions involved; (3) the skill requisite to perform the legal service properly; (4) the preclusion of other employment by the attorney due to acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the “undesirability of the case”; (11) the nature and the length of the professional relationship with the client, and (12) awards in similar cases. 946 F.2d at 772 n. 3. In addition to these factors, the Eleventh Circuit recognized that “[0]ther pertinent factors are the time required to reach a settlement, whether there are any substantial objections by class members or other parties to the settlement terms or the fees required by counsel, any non-monetary benefits conferred upon the class by the settlement, and the economics involved in prosecuting a class action.” Id. at 775. Furthermore, it stated that there “ ... will also be additional factors unique to a particular case which will be relevant to the district court’s consideration.” Id. But, the Court stated that, as a general rule, 50% may be established as an upper limit. See id. at 774. The Eleventh Circuit directed that, in order to facilitate appellate review, district courts should articulate the specific reasons for selecting the percentage awarded, including identification of the factors upon which it relied and how each factor affected the percentage awarded. Id. at 775. The Court recognized that there are no hard and fast rules mandating the weight to be given to each factor and the percentage to be awarded. The Court further recognized that the factors which will impact upon the appropriate percentage to be awarded as a fee in any particular case will vary. Id. In objections to the proposed award of attorneys’ fees, counsel for Objectors Thomas Lee, Josephine Choi and Larry Freeland relies on the Eleventh Circuit’s more recent decision in Waters v. Int’l Precious Metals Corp., 190 F.3d 1291, 1291 (11th Cir.1999). This case, however, supports, rather than detracts, from my analysis of the factors set forth below. In Waters, the Court affirmed the district court decision that Class Counsel was entitled to a small upward adjustment in the benchmark of 30%, and that the appropriate percent should be 33 1/3% or $13,333,333.00. 190 F.3d at 1295. In that case, the settlement amount was $40 million (as compared to $1,075 billion here). See id. The settlement in that case was reached after seven years of extremely contentious litigation and five months of trial. See id. Here, the settlement was reached following fourteen years of contentious litigation, two jury trials, extensive appeals, and in the middle of an extremely contentious Claims Administration Process. Accordingly, the facts of this case are quite different from those in Waters and the ultimate percentage to be awarded “... may be adjusted in accordance with the individual circumstances of each case.” Waters, 190 F.3d at 1294 (citations omitted). C. Consideration of the Johnson and Other Factors 1. Summary of Analysis and Conclusion I begin with the conclusion that the 25% “bench mark” should be considered a floor for a fee award in this case, and that the percentage should be adjusted upward in light of the application of the relevant Camden/Johnson factors. I do so with the confidence of presiding over this case in nearly all its significant details for over seven years. This was an “all or nothing” case for the Plaintiffs. Class Counsel, having worked on this case since 1992, faced a potential catastrophic risk in the event the ease was lost at trial or, thereafter, at each level of review. Given the length of this case, and the significant risks inherent in the litigation, I conclude that the most appropriate way to establish a bench mark is by reference to the market rate for a contingent fee in private commercial cases tried to judgment and reviewed on appeal. See Camden, 946 F.2d at 772 n. 5 (referencing fifth and sixth Johnson factors regarding the customary fee in a particular case and whether the fee is fixed or contingent, emphasizing that each case’s unique circumstances dictate relative importance of factors); In re Synthroid Marketing Litig., 264 F.3d 712, 718 (7th Cir.2001)(requiring that “common fund” percentage awards be determined by market rate for contingency fee agreements on a prospective basis at the outset of the representation). But, even this approach minimizes the risks involved for Class Counsel. After successfully defending the case at trial and on appeal, Class Counsel’s entitlement to an attorneys’ fee, including the total amount of the attorneys’ fee, was directly dependent upon the number of Class Members who actually filed claims pursuant to notice, and, further, upon the merit each of each claim, resulting in a final judgment for individual damages. I made this clear in my Order on Plaintiffs’ Motion for Determination of Legal Basis and Responsibility for Payment of Attorneys’ Fees [DE # 1721] which denied an “advancement” of attorneys’ fees by Exxon. Confronted with this reality, Class Counsel undertook an extraordinary effort to contact Class Members and encourage the filing of claims. The result is now self-evident with over 11,000 claims (over 92%) being filed in this case. Even with this success, Class Counsel was confronted with another major task. Given Exxon’s unflagging defenses, each claim potentially required a “mini-trial” before the Special Master. Exxon made it clear that each final judgment would be subject to further appeal, notwithstanding that it potentially faced severe sanctions for its “unwarranted” defenses. This presented a unique and challenging task for the most committed of counsel who potentially had to wait until the end of the day to be compensated for years of excellent service. Even after the settlement approval, Class Counsel remains responsible to pursue each claim to judgment. This will require Class Counsel (as later addressed) to place a large staff of attorneys, paralegals and other professionals to assist claimants in prosecuting their claims. They will stay in that role for the duration of the Claims Administration Process. No other attorneys’ fees will be charged by Class Counsel for these services. By fully aligning Class Counsel’s interest in attorneys’ fees with the maximum recovery for each Class member, the Class, as a whole receives a benefit, as compared to leaving each member on his or her own after the settlement. There is a price to the Class, however, for this full alignment of interest. In my view, the Class, and each Class Member, must be prepared to compensate Class Counsel at the full market rate for such past and present extraordinary services. Evidently, the Class itself recognized Class Counsel’s remarkable services in that so few objections were filed to a percentage fee. The lack of significant objection from the Class supports the reasonableness of the fee request. See Stoetzner v. United States Steel Corp., 897 F.2d 115, 118-19 (3d Cir.1990) (even when 29 members of a 281 person class (i.e. 10% of the class) objected, the court concluded that the response of the class as a whole “strongly favors [the] settlement”); In re Rite Aid, 396 F.3d 294, 305 (3d. Cir.2005) (stating that the fact that only two class members objected to the fee request supports approval of the fee); In re Rent-Way Sec. Litig., 305 F.Supp.2d 491, 514 (W.D.Pa.2003) (“[t]he absence of substantial objections by other class members to the fee application supports the reasonableness of Lead Counsel’s request”, thus indicating the strong support of the Class for the award of fees and expenses requested); see also Order of Final Approval of Class Settlement Agreement [DE # 2773 at 23-24 (citing cases on lack of objection) ]. As aptly stated by Professor Issacharoff, in his Declaration in Support of Attorneys’ Fees: [T]he resolution to date has resulted in the creation of a claims process whereby individual class members will press claims for compensation one at a time. In my view, the key task before the Court in setting attorneys’ fees is to create the incentives that will maximize the amount of recovery to the class. This is best accomplished by awarding class counsel a fee based upon a percentage of what the class recovers. Not only does that minimize any conflict between the class and class counsel, but it also rewards class counsel for recovering as much as possible for the class. ISSACHAROFF DEC. ¶ 3 [DE # 2638, Exhibit “B”]. For these reasons, and the reasons set forth below, I conclude that the appropriate percentage to be awarded to Class Counsel is 31 and 1/3 percent. In reaching this conclusion, I am mindful that two of the law firms serving as Class Counsel, Steams, Weaver and Pertnoy & Solowsky, have proposed that the fee award should be reduced in consideration of the lessened risk arising from the settlement agreement. They do so in order that the 2% reduction in claims would be fully offset with fee reductions. I concur with their position and conclude that the totality of the findings support an award of 31 and 1/3 percent to Class Counsel. 2. Application of the Factors I do not consider the Johnson factors in the order they are listed in that opinion. Instead, I have rearranged the order of each Johnson factor in terms of the priority and weight I have assigned to it. — Amount Involved and Results Obtained- The eighth Johnson faetor-“[t]he amount involved and the results obtained”recognizes that a fee award should reflect the relief obtained. Johnson, 488 F.2d at 718. This corresponds to the United States Supreme Court’s directive that an enhancement of the fee award is appropriate in cases of “exceptional success.” Blum v. Stenson, 465 U.S. 886, 901, 104 S.Ct. 1541, 79 L.Ed.2d 891 (1984). Factors indicating “exceptional success” include success achieved under unusually difficult or risky circumstances and the size of plaintiffs’ recovery. See Yates, 719 F.2d at 1533 (enhancing fee in part because of the very favorable result for the plaintiff). Regarding the most important factor, Class Counsel’s performance establishes the highest level of achievement. See Silver Report at 51 (App.C)[DE #2638]. The gross settlement amount of $1,075 billion represents one of the largest settlements in class action history. See Silver Supplemental Report at 4-5 (App.-D)[DE # 2638]. Plaintiffs prevailed on every claim and overcame every defense at trial and on appeal. Full and complete recovery was achieved on behalf of the entire Class and every individual Class Member. In addition, by virtue of Class Counsel’s successful dealer outreach program, they have also achieved an unprecedented claim response rate of 92% of the total gallons sold during the Class period. See Affidavit of Eugene Stearns, ¶ 8 (App.G)[DE # 2638]. Class Counsel’s outreach effort contributed significantly to this accomplishment. Before the settlement was negotiated, Class Counsel contacted Class Members and encouraged them to file claims. The 92% claims rate is unprecedented. See Supplemental Report of Charles Silver at 6-7 (App.-D)[DE # 2638]. As noted by Professor Silver, “In the context of this case, where the class had already prevailed at trial, this outreach effort presented Exxon with the very real prospect of having to pay almost the full value of the trial judgment to the class via the claims process.” Id. As stated by Professor John Coffee of Columbia University (the foremost academic scholar on class action attorneys’ fees awards whose initial law review articles on the “common fund” doctrine provided the impetus for the conclusions of the Third Circuit Task Force and the Eleventh Circuit in adopting the percentage method), the result obtained in this case is truly extraordinary. “No other action that I have seen approaches this one in the degree of success obtained for the class, the effort expended by class counsel, or the risk assumed.” Coffee Declaration, ¶2 (App.A)[DE #2638]. In a supplemental affidavit filed after the settlement, Professor Coffee expanded upon his view of the accomplishments in this case, observing that the effect of Class Counsel’s efforts post-settlement will substantially enhance the recoveries by claimants in the Claims Administration Process. Supplemental Coffee Declaration at 3-4 (App.-B)[DE #2638]. I concur with this observation (and those of Professor Silver) and give this factor very significant weight. — Novelty and Difficulty- The second Johnson factor recognizes that attorneys should be appropriately compensated for accepting novel and difficult cases. Johnson, 488 F.2d at 718. Courts in this Circuit recognize that large class actions involving various legal theories are, by their nature, very difficult. See Yates v. Mobile County Personnel Bd., 719 F.2d 1530, 1535 (11th Cir.1983)(ex-tremely complicated litigation requires thorough and detailed research of almost every question involved); Behrens, 118 F.R.D. at 547 (observing that the size of the class, the difficult theories of liability, and the always-troublesome problems associated with damages demonstrated that the case was an awesome and complex matter masterfully handled by plaintiffs counsel); R.C. by Alabama Disabilities Advocacy Program v. Nachman, 992 F.Supp. 1328, 1334 (M.D.Ala.1997) (“The size of the class and the nature and scope of the relief are among the factors that contribute to complexity and difficulty of this case.”) The factual and legal framework out of which this case arose made it an extraordinarily difficult case, which required great legal skill to achieve the unprecedented outcome. Indeed, until the verdict obtained in this case, the oil companies had been universally successful in defeating dealer pricing claims generally, and discount for cash claims particularly. See, e.g., Ajir v. Exxon Corp., 1999 WL 393666, at *1 (9th Cir. May 26, 1999); Havird Oil Co. v. Marathon Oil Co., 149 F.3d 283 (4th Cir.1998); Remus v. Amoco Oil Co., 794 F.2d 1238 (7th Cir.1986); Au Rustproofing Ctr. v. Gulf Oil, 755 F.2d 1231 (6th Cir.1985); T.A.M. v. Gulf Oil, 553 F.Supp. 499 (E.D.Pa.1982); Abbott v. Amoco Oil Co., 249 Ill.App.3d 774, 189 Ill.Dec. 88, 619 N.E.2d 789 (1993). In addition, franchisors have typically been successful in avoiding liability in class claims brought by their franchisees because of the legal and factual difficulties inherent in attempting to establish duty, liability and damages on a uniform basis as to the class as a whole. See, e.g., Broussard v. Meineke Discount Muffler Shops, 155 F.3d 331 (4th Cir.1998); Hall v. Burger King Corp., 1992 WL 372354 (S.D.Fla. Oct.26, 1992) (denying class certification to putative class of franchisees). The legal difficulty of this case was further compounded by the application of state law to numerous issues which repeatedly required surveys and reconciliations on numerous legal issues across the laws of 36 states, including issues relating to the application of contract law, the Uniform Commercial Code, releases, statutes of limitation, fraudulent concealment and prejudgment interest. Class Counsel also prevailed on the issue of supplemental jurisdiction from this Court all the way to the United States Supreme Court, a complicated and contentious issue of law that has deeply divided the circuit courts of appeal and the Supreme Court since the supplemental jurisdiction statute was enacted in 1991. On top of the legal difficulties was the economic complexity of the downstream petroleum marketplace and the staggering volume and intricacies of Exxon’s wholesale, retail, and margin databases which tracked these data on a daily basis across 3 grades of gasoline in 70 to 80 markets in 36 states over a 12 year period. While Exxon had full mastery of its systems and these facts at the outset of the case, Plaintiffs did not. For example, Exxon’s wholesale pricing database was provided to Plaintiffs on IBM mainframe computer tape drives in an archaic computer language “APL”, that few modern day programmers have even heard of. After converting the data, at great expense and effort, to a modern computer language, and cabling together a series of desktop computers to load and query the database which was too large to run on a single computer, Class Counsel obtained access to Exxon’s pricing information and began to unravel the mysteries of Exxon’s pricing practices. At Class Counsel’s request, Exxon produced millions of documents in discovery, which its senior officer jokingly referred to at trial as having been written in a foreign tongue—Exxoneese. In order to decipher their meaning, Class Counsel repeatedly analyzed and synthesized these documents, ultimately enabling Plaintiffs to prove their case at trial with Exxon’s own words, which points up yet another difficulty in proving this case. Not only