Authorizes attorneys' fees to be awarded to any person that the court finds has acted to benefit the class

1 Co-sponsor

• Kevin S. Parker

BILL NUMBER:S4577A

Title of bill

An act to amend the civil practice law and rules, in relation to the award of attorneys' fees in class actions

This is one in a series of measures being introduced at the request of the Chief Administrative Judge upon the recommendation of her Advisory Committee on Civil Practice.

A recent decision of the New York Court of Appeals, Flemming v Barnwell Nursing Home and Health Facilities, Inc., _ N.Y.3d _,2010 WL 4116615 (Oct. 21, 2010) highlights what our Advisory Committee believes to be a deficiency in the scope of CPLR Rule 909, which relates to the award of attorneys' fees in class actions. That rule gives a court discretion to award attorneys' fees to representatives of the class based upon the reasonable value of the services rendered. In Flemming, the issue was whether an attorney for an objecting member of the class, whose actions actually benefitted the class, could also receive an award of attorneys' fees. The majority held that the attorney could not receive fees because of the strict wording of rule 909 which limits an award of fees to "representatives of the class." Two judges dissented, arguing that rule 909 was not intended to restrict the well-established common fund doctrine, which, under the common law, allowed those whose actions benefitted a common fund to receive reimbursement for their efforts.

We believe that it is appropriate for a court to award fees, in appropriate actions, to a party whose attorney benefits the class in some tangible way, other than as counsel to the named class members. In many class action cases, objecting parties successfully argue that the proposed settlement is inadequate, that the class should be expanded or, as in Flemming, that the fees proposed for the class representatives are too high. The court should also have the discretion to compensate counsel for those efforts.

We therefore propose an amendment to CPLR rule 909 to specifically provide that the court may award attorneys' fees to not only representatives of the class, but also to any person that the court finds has acted to benefit the class.

This measure would have no fiscal impact on the State. It would take effect immediately and apply to all actions commenced on or after the date on which it shall have become a law and all actions pending on the date on which it shall have become a law.

Legislative history

None. New proposal.