Attorneys for thrift depositors told a 3rd District judge Wednesday they "are proud" to ask for a $7.25 million fee and voiced support for a $450,000 lobbyist fee in helping settle their client's class-action lawsuit against the state.
Depositors' lead counsel and California attorney Malcolm Misuraca defended the request as within the guidelines of class-action contingency fees around the country and called it just compensation for taking on "a landmark case" that no one else would take.He said no one has considered the risk the attorneys took in taking on such a large and unpopular case and that "we are proud to ask the court to approve our fee of $7.25 million."
Misuraca also defended the bill depositors must pay to Research Associates, a local lobbying firm headed by David Irvine and Georgia Peterson. He praised the pair for not playing the typical "slap and tickle" game with lawmakers, but playing tough.
"They (Irvine and Peterson) are hot figures in a cool medium . . . . They got us into legislators' offices to hear us out," Misuraca said. "We couldn't have done it without them."
Officials from DOIT, an organization representing 15,000 thrift depositors that filed a lawsuit against the state, told the court they support the contract DOIT signed with their lawyers, Misuraca, Douglas Provencher, also from California, and local lawyers George Haley and Robert Stolebarger. The agreement calls for compensation of 20 to 40 percent of the state's $29 million cash contribution to the $103 million out-of-court settlement.
But officials representing legislators and the governor's office told Judge David S. Young to consider the Legislature's recommended $1.5 million cap on attorneys' fees. They called the lobbyist fees "excessive," and told Young that the settlement was a cooperative effort by the state and DOIT to get as much money as possible to depositors and "not to unjustly enrich the depositors' attorneys."
Misuraca strongly criticized comments by state officials that the settlement was a cooperative effort.
"This was like a street fight. We had to hit, fight and scratch for every inch," he said. "The governor deserves recognition, but he didn't come knocking on the door."
Misuraca also cited an affidavit filed by Sen. Fred Finlinson, R-Murray, who sponsored the settlement legislation passed in October, in which Finlinson said the $1.5 million cap was to save face politically during an election year and has no factual basis.
Young asked legislative counsel Gay Taylor if there was any evidence to support the recommended cap. She said attorneys in the Legislature came up with the figure based on their experience with DOIT's attorneys.
The Wednesday hearing was scheduled to hear comments on fees and the settlement itself, which 99 percent of depositors have officially approved. Young took the fees issue under advisement.
The settlement, hammered out between Gov. Norm Bangerter, lawmakers and depositors' attorneys, resolves the depositors' class-action lawsuit against the state and thrift owners to recover losses suffered in the 1986 collapse of Utah's thrift industry.
Under terms of the settlement, depositors would receive $103 million or about 98 percent of their deposit accounts through a combination of liquidation proceeds and a $29 million cash payment by the state.
But with the proposed attorneys' fees and other expenses of fighting their legal battle, depositors will net an estimated 90 percent of their money, Sheila Bohard, DOIT spokeswoman, told the Deseret News.
Other costs Young must rule on and for which DOIT requested the court set up a reserve include: reimbursing $300,000 in depositor contributions to DOIT's war chest; $650,000 in expenses, which includes a $455,000 lobbyists' bill; costs of administering the settlement by accounting firm Arthur Andersen & Co., whose hourly fee averages about $200; $1 million for future litigation against those not participating in the settlement; and $65,000 for a legal opinion on how the settlement affects depositors' income taxes.