ORDER RE ATTORNEYS' FEES REQUEST

YVONNE GONZALEZ ROGERS, District Judge.

Two related shareholder derivative actions were brought on behalf of Wells Fargo and Wachovia and against Directors of Wells Fargo and former Officers and Directors of Wachovia for corporate mismanagement, breach of fiduciary duty, waste of corporate assets, indemnification, and unjust enrichment. The parties negotiated a non-monetary settlement in which Wells Fargo will implement certain corporate governance reforms. The Court approved the settlement but reserved ruling on Plaintiffs' Motion for Award of Fees and Expenses.

Plaintiffs' counsel seek $1.8 million in attorneys' fees and expenses for prosecuting and settling both actions. Having considered the relevant factors, including the benefit conferred by the settlement, the time and effort expended by counsel, the contingent nature of counsel's representation, the difficulty and complexity of the litigation, and counsel's standing and ability, the Court finds that an award of attorneys' fees and expenses in the amount of $500,000 is reasonable. Therefore, the motion is GRANTED IN PART and DENIED IN PART.

I. BACKGROUND

Both Feuer v. Thompson et al., Case No. 10-CV-00279 ("Feuer Action"), and Rogers v. Thompson et al., Case No. 12-CV-00203 ("Rogers Action"), filled on Januarry 20, 2010 and January 12, 2012, respectively, allege that former officers and directors of Wachoviia disregarded their fundamental fiduciary responsibilities, including in the purchase of Golden West Bank, and disregarded the risks undertaken by Wachovia with respect to the packaging of subprime mortgages into collateralized debt obligations and other securities. The claims against the Wells Fargo directors arise out of their failure to pursue these claims against the former oofficers and directors of Wachovia, and for approving a no-consideration settlement in Arace v. Thompson et al., Case No. 08-7905 (S.D.N.Y.) ("Arace Action"), which purpoorted to release virtually any and all claims against the former officers and directors of Wachovia (including many of the claims brought in the Feuer and Rogers Actions). The Feuer Action and the Rogers Action asserted virtually indistinguishable claims arising out of the same conduct. Plaintiffs in both Actions are represented by the same counsel.

Approximately one month after filing the Feuer Action, counsel forr Plaintiffs were informed by Wachovia's counsel that many of the claims brought by Mr. Feuer had been released in the settlement of the Arace Action. On November 24, 2010, Mr. Feuer filed a motion in the Arace Action to set aside the judgment. On August 17, 2011, the Court in the Arace Action denied Mr. Feuere's motion, and on September 16, 2011, Mr. Feuer appealed to the United States Court of Appeals for the Second Circuit.

While the motion collaterally attacking the judgment in the Arace Action was under submission, the Feuer Action was stayed from February 10, 20111 through December 14, 2011. Approximately one month after the stay was lifted in the Feuer Action, on January 12, 2012, Plaintiffs' counsel filed the Rogers Action.

Beginning in early February 2012, the parties began informal discussions in an effort to resolve both the Feuer and Rogers Actions, which culminated in a global resolution of both Actions. Owing to a ten-month stay of the proceedings (while Mr. Feuerr collaterally attacked the judgment in the Arace Action) followed by settlement negotiations, aside from settlement negotiations themselves, very little substantive work was done in either the Feuer or Rogers Action. The only substantive work in the Feuer Action was the pre-suit demand, drafting two complaints, and drafting an opposition to the Defendants' motions to dismiss. The only substantive activity in the Rogers Action was the filing of the initial Complaint.1

As a result of Plaintiffs' counsel's efforts in the prosecuuttion and settlement of the Feuer and Rogers Actions, Wells Fargo has agreed that its Board will adopt an Acquisition Oversight Policy and the Risk Committee of the Wells Fargo Board will retain an outside consultant each year for three years to advise the Risk Committee on risk concerns. For this modest, non-monetary, "therapeutic" achievement, Plaintiffs' counsel seek the sum of $1.8 million.

II. DISCUSSION

Because Delaware law governs the claims, iit also governs the fee award. Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1047 (9th Cir. 20002) (citing Mangold v. Calif. Pub. Utils. Comm'n, 67 F.3d 1470, 1478 (9th Cir. 1995)).

A. APPROPRIATENESS OF AN AWARD OF ATTORNEYS' FEES AND EXPENSES

Attorneys' fees may be awarded in a derivative action onnly where the settlement confers a "specific and substantial benefit" on the corporation. See San Antonio Fire & Police Pension Fund v. Bradbury, 2010 WL 4273171, at *8 (Del. Ch. Occt. 28, 2010) (citing Chrysler Corp. v. Dann, 223 A.2d 384, 386 (Del. 1966)).2 The benefit conferred need not be monetary; however, it must "be `substantial' in the sense that its value to the interested class [or the corporation] is immediately discernible rather than speculative in character." Riichman v. DeVal Aerodynamics, Inc., 185 A.2d 884, 885 (Del. Ch. 1962) (cited in McDonnell Douglas Corp. v. Palley, 310 A.2d 635, 636 (Del. 1973)); see also Chicago Milwaukee Corp. v. Eisenberg, 560 A.2d 489 (Del. 1989) ("where shareholder litigation confers a substantial benefit on a corporation and no fund is available to pay for the fees and expenses of plaintiff's counsel, it is appropriate for the corporation to absorb the costs of plaintifff's attorneys' fees and expenses."). The settlement has resulted in the implementation of corporate governance reforms. "`Courts have recognizedd that corporate governance reforms provide valuable benefits' to corporations and their shareholders." Wixon v. Wyndham Resort Dev. Corp., Case No. 07-CV-02361 JSW, 2010 WL 3630124 (N.D. Cal. Sep. 14, 2010) (quoting In re NVIDIA Corp. Derivative Litig., Case No. 06-CV-06110 SBA, 2009 U.S. Dist. LEXIS 24973, at *11 (N.D. Cal. Mar. 18, 2009)). The Court finds that an award of attorneys' fees is warranted under the substantial benefit theory. Having concluded that Plaintiffs' counsel are entitled to an award of attorneys' fees and expensess, the Court must now determine an appropriate award.

B. REASONABLE AWARD OF ATTORNEYS' FEES AND EXPENSES

In determining an appropriate fee award, a court applying Delaware law consideers the "Sugarland" factors: (1) the benefits achieved in the action; (2) the efforts of counsel and the time spent in connection with the case; (3) the complexity of the litigation; (4) the contingent nature of the case; and (5) the standing and ability of counsel. In re Cox Commc'ns, Inc. Shareholders Litig., 879 A.2d 604, 640 (Del. Ch. 2005) (citing Sugarland Indus., Incc. v. Thomas, 420 A.2d 142, 147-50 (Del. 1980)). Courts place the greatest weight on the benefit conferred by the litigation. Americas Mining Corp. v. Theriault, 51 A.3d 1213, 1254 (Dell. 2012), rearg. den. (Sep. 21, 2012). "The time expended by counsel is considered as a cross-check to guard aggainst windfalls, particularly in therapeutic benefit cases" such as this. In re Sauer-Danfoss Inc. Shareholders Litig., "A.3d", 2011 WL 2519210, at *17 (Del. Ch. Apr. 29, 2011) (citing Brinckerhoff v. Tex. E. Prods. Pipeline Co., 986 A.2d 370 (Del. Ch. 2010)). "The party petitioning for attorneys' fees necessarily bears the burden of persuasion on the elements of that claim." Wininger v. SI Mgmt. L.P., 301 F.3d 1115, 1125 (9th Cir. 2002).

Counsel portray the case as highly complex and extremely difficult, their labors as extensive, and the results achieved by the settlement as outstanding. Despite this portrayal, they have provided scant support for their assertions and inapposite casees to show that the requested fee award is reasonable. While the benefits conferred upon Wells Fargo and its shareholders from these remedial measures form an adequate basis to warrant an award of attorneys' fees, the fees requested are way out of proportion to the benefit conferred upon Wells Fargo and its shareholders.

1. The benefit conferred by the litigation

The value of a therapeutic benefit such as the corporate governance reforms provided in this case is not easily translated into monetary terms. Unite Nat. Ret. Fund v. Watts, 2005 WL 2877899, at *5 (D.N.J. Oct. 28, 2005); see Rosen v. Smith, 11 Del. J. Corp. L. 989, 993, 1985 WL 21143 (Del. Ch. Sep. 23, 1985) ("Obviously it is much more difficult to ascertain the reasonablenesss of an award of attorney fees where no fund has been created and where the value of the benefit is unclear."). In therapeutic benefits cases, courts applying Delaware law will compare fees awarded in lawsuits that achieved similar results. In re Golden State Bancorp Inc. Shareholders Litig., 2000 WL 62964 (Del. Ch. Jan. 7, 2000) ("In cases generating nonquantifiable, nonmonetary benefits, this Court has juxtaposed the case before it with cases in which attorneys have achieved approximately the same benefits."); In re Dunkin' Donuts Shareholders Litig., 16 Del. JJ. Corp. L. 1443, 1457, 1990 WL 189120 (Del. Ch. Nov. 27, 1990) ("When an unquantifiable benefit is invollved, the quantum meruit approach gives the Court a more equitable means of determining a reasonable fee").3 "In the context of a therapeutic benefit case, fee awards are minimized where the benefit is intangible or limited in duration." In re Golden State Bancorp Inc. Shareholders Litig., supra, 2000 WL 62964, at *3.

"As proponents of the fee application, plaintiffs have the burden of establishing the value of the claimed benefit." In re Am. Real Estate Partners, 1997 WL 770718 (Del. Ch. Dec. 3, 1997) (citing In re Diamond Shamrock Corp., 14 Del. J. Corp. L. 652, 659 (Sep. 14, 1988) ("The parties' inability to quantify the benefit leaves the Court without any yardstick against which to measure the reasonableness of the $1,075,000 fee request, other than on a quantum meruit basis")). Counsel for Plaintiffs seem to conflate their burden to show that an award of fees is appropriate under a substantial benefit theory with their burden to demonstrate that the substantial benefit achieved by the litigation entitles them to the fee award requested. Plaintiffs argue that the former justifies the latter.

Plaintiffs cite to a series of inapposite cases for the misguided proposition that "courts have not hesitated to approve substantial attorneys' fees." Unlike the settlement in this action, the referenced settlements involved "substantial,"4 "significant"5 and/or "sweeping"6 corporate governance reforms that justified "substantial attorneys' fees" awarded. In contrast, the benefit achieved by the litigation here was modest and of limited duration. Thus, the referenced cases do not support Plaintiffs' counsel's substantial fee request.

To justify their fee request, Plaintiffs' counsel also provide a string cite to orders approving prior settlements, each with a fee number in parentheses. A string cite of this nature provides no information about the terms of the prior settlement, the benefits achieved, the efforts that merited the fee, or any of the other pertinent factors. The Court notes, however, that each of the five string-cited cases involved a negotiated fee agreement, which generally is not subjected to the same level of judicial scrutiny as a disputed fee request, and hence, should be accorded less precedential weight. See In re Sauer-Danfoss Inc. Shareholders Litig., supra, 2011 WL 2519210, at *18 ("de-emphasizing the precedential value of uncontested fee awards" where justification for fee was lengthy string-cite without meaningful analysis of the relationship between the benefit and the fee). In four of the cases the district court entered a form of order.7 Only one order, In re Rambus Inc. Derivative Litig., provides the information underlying the fee award. Unlike the present settlement, Rambus involved significant and far-reaching corporate governance reforms.8 2009 WL 166689 (N.D. Cal. Jan. 20, 2009) ("the reforms provide substantial benefits to Rambus and its shareholders by not only changing Rambus' options granting practices, thereby preventing any backdating of Rambus stock options in the future, but also several of the reforms go beyond such practices and require the implementation of broader corporate governance reforms which will have positive long-lasting effects on Rambus and its shareholders."). For the corporate governance reforms achieved in Rambus, counsel was awarded $2 million, which is approximately 10% more than what Plaintiffs' counsel request here. Rather than supporting counssel's fee request, the case confirms that counsel's fee request is out of proportion to the beenefit conferred upon Wells Fargo and its shareholders.

After reviewing the pertinent case law,9 inclluding the many decisions cited by the parties, the Court concludes that a therapeutic benefit provided in a case succh as this warrants a $500,000 fee award.

2. The efforts of counsel and the time spent in connection with the case

This factor has two components: (a) time and (b) effort. See In re Sauer-Danfoss Inc. Shareholders Litig., supra, 2011 WL 2519210, at *20. "The more important aspect is effort, as in what plaintiffs' counsel actually did." Id. Although the effort component is the primary consideration, the Court will consider the time/hours claimed by counsel first.

a) Time

Attorneys' fees in shareholder actions must be calculated so as to "fairly compensate successful attorneys and encourage continued vigilance by the bar." Goodrich v. E.F. Hutton Grp., Inc., 681 A.2d 1039, 1050 (Del. 1996); Cooperstock v. Pennwalt Corp., 820 F.Supp. 921, 926-27 & n.7 (E.D. Pa. 1993) ("Allowances should be sufficiently liberal to compensate lawyers adequately so that use of the derivative action to police corporate management will be encouraged, but awards should not be so generous as to foster strike suits.").10 Equally important to the incentive to bring meritorious lawsuits is the incentive to litigate these suits efficiently. Seinfeld v. Coker, 847 A.2d 330, 339 (Del. Ch. 2000) ("the Court does not want to be in a position of encouraging the churning of wheels and devoting unnecessary hours to litigation in order to be able to present larger numbers to the Court.") (quoting In re Pullman Co. Shareholders Litig., Consol. C.A. No. 10013, Berger, V.C. (Del. Ch. Nov. 29, 1988)). Here, two considerations steer the Court's analysis.

First, the records show excessive billing. Two law firms participated as counsel for plaintiffs, Greenfield & Goodman, LLC ("G&G") and Shepherd, Finkelman, Miller, and Shah, LLP ("SFMS"). Counsel have provided the Court with summary tables of the fee request broken down by name, hourly rate, hours, and total. They have provided no information from which the Court may gauge the reasonableness of the hours expended or the reasonableness of the hourly rate requested.11 Counsel claim billable amounts totaling $1,468,553.20 based upon 2206.35 hours worked in the Feuer and Rogers Actions, and also seek to be reimbursed for work done in the separate Arace Action, an average billable rate of $665.60 per hour (the full fee request of $1.8 million yields a billable rate of $815.83 per hour). Even the cursory information provided in the "summary tables" reveals that the hours expended (and hence, the fees requested) are excessive.

The law firm of G&G claims to have expended 1046.05 hours for a "lodestar"12 amount of $818,428.75, which averages to $782.40 per hour. Nearly half of the hours (49.4%) were billed by Richard D. Greenfield, who claims a $985 per hour billing rate. Nothing in the record reflects that Mr. Greenfield's experience, standing or ability merits on hourly rate of nearly $1000 per hour.13 Nor does the record reflect any justification for allocating such a high proportion of work to an attorney with the highest billing rate.

The SFMS law firm claims to have worked 1160.30 hours for a "lodestar" amount of $650,124.50, which averages to $560.31 per hour (this hourly rate includes the work of eight legal assistants/paralegals). SFMS's summary table also reflects inefficient use of staff, billing for the use of seventeen individuals, five of whom billed less than ten hours, including a legal assistant/paralegal who worked on the case for six minutes.

Second, Plaintiffs' counsel seek reimbursement for work performed on another case, the Arace Action, during the ten months that this litigation was stayed. The time spent on the Arace Action is not compensable in this litigation. See Arbitrium (Cayman Islands) Handels AG v. Johnston, 705 A.2d 225, 237 (Del. Ch. 1997) aff'd, 720 A.2d 542 (Del. 1998) ("An award of attorneys' fees is limited to the fees reasonably incurred to prosecute this action."). Counsel have not explained how the motion to set aside the Arace judgment, which was denied, or the appeal of that order, which was voluntarily dismissed,14 contributed to the settlement or conferred a benefit on Wells Fargo. In re Infinity Broad. Corp. Shareholders Litig., 802 A.2d 285, 292 (Del. 2002) ("the New York litigation neither promoted or influenced the global settlement in any meaningful way nor resulted directly in any benefit to the shareholder class.").15 Although Plaintiffs argue that the settlement in this case releases claims alleged in the Arace Action and appeal, counsel for Plaintiffs have not justified an award of fees based upon work in connection with a separate lawsuit.

b) Effort

The effort expended in these Actions was minimal despite the time claimed.16 Aside from the complaints and confirmatory discovery, Plaintiffs actually litigated very little, apart from the settlement negotiations themselves. Furthermore, many of the hours were spent on matters unrelated to this case (e.g., attacking the Arace judgment) or that did not confer a benefit on Wells Fargo (e.g., drafting fee petition,17 attacking the Arace judgment). Nor have Plaintiffs explained the benefit conferred upon Wells Fargo through Plaintiffs' counsel filing the Rogers action, a second shareholder action, substantially similar to the Feuer action.

The Court cannot conclude that all the time wwas wisely spent or that the class benefitted from the majority of the effort expended. Nothing about this factor warrants departure (up or down) from the range of similar settlements identified in factor 11, above.

3. The relative complexity of the litigation

While shareholder lawsuits by their nature are complex, Plaintiffs have not shown these Actions to be notably difficult or complex. In re Cox Commc'ns, Inc. Shareholders Litig., supra, 879 A.2d at 641 ("[T]here was not much work to be done, except in negotiating and later conducting confirmatory discovery of a settlement. There is no special complexity to the case."). Aside from opposing a motion to dismiss filed in the Feuer Action, the litigation was not complex. In fact, the main complexity cited in the fees motion was work done in a different case, mounting a collateral attack on the judgment in the Arace Action.

Nothing about this factor warrants departure from the range of similar settlements identified in factor 1, above.

4. Contingency risk

The Court understands, based upon the affidavits accompanying the motion for attorneys' fees, that the cases were undertaken on a contingency basis. The Court recognizes that counsel undertook a risk of spending many hours and incurring expenses in this litigation without any assurance they would be paid for that time. However, this is a normal risk in shareholder litigation suits.

Nothing in this litigation justifies a risk-premium for taking the case on a contingency basis so as to depart from the range of similar settlements identified in factor 1, above.

5. The standing and ability of counsel

The attorneys who prosecuted the action represent that they have experience in shareholder and derivative litigation. Wells Fargo does not challenge the standing or ability of Plaintiffs' counsel.

Nothing about this factor warrants departure from the range of similar settlements identified in factor 1, above.

6. Conclusion regarding "Sugarland" factors

After considering the above factors, the Court finds thatt a reasonable attorneys' fee in this case is $500,000, which includes Plaintiffs' counsel's expenses in this litigation. The Court considers this award generous in the circumstances. "This is no condemnation of the services of counsel. Instead, this Court considers it a commendation for good work donne on a contingency with modest ... success." In re Northwestern Corp. Derivative Litig., 414 F.Supp.2d 914, 917 (D.S.D. 2005).

III. CONCLUSION

Accordingly, the Motion for Award of Attorneys' Fees and Expenses is GRANTTED IN PART and DENIED IN PART. The Court awards a total of $500,000 for attorneys' fees and litigation expenses.

This terminates Dkt. No. 132 in Case No. 10-CV-00279 and Dkt. No. 20 in Case No. 12-CV-00203.

IT IS SO ORDERED.