COLUMBUS, Ohio (Legal Newsline) – An Ohio federal judge has given final approval to a $180 million settlement over scandal at FirstEnergy, but lawyers won’t be taking home quite as much as they hoped.
Judge Algenon Marbley on Aug. 23 issued final settlement approval, partly granting a call for a slashing of the $48.6 million sought by lead counsel Bernstein Litowitz and Saxena White. A committee formed by the company argued they should only make 13% of the settlement – not the 27% requested.
Marbley split the two and arrived at a 20% fee - $36 million. It represents a lodestar multiplier on hourly fees of 2.6.
“In the Court’s assessment, this fee award appropriately accounts for counsel’s labor, risks, and results,” Marbley wrote.
“Factors that tethered the percentage are: (1) application of the ‘declining percentage Principle’; (2) lack of depositions, which would have demanded more intensive labor and, thus, greater risks under the contingent fee arrangement; (3) recognition of the advantages to ‘coattailing’ a major government investigation; and (4) a sober appraisal of the lasting harms to FirstEnergy that this settlement could not remediate.”
Insurers will pay the $180 million, and six defendants will be required to leave the board of directors.
Shareholders like the Employees Retirement System of the City of St. Louis sued after allegations FirstEnergy sent $60 million to then-Ohio House Speaker Larry Householder came out. The money was allegedly in exchange for legislation that would bail out the company’s failing nuclear power plants.
Litigation followed the FBI’s complaint against Householder and two FirstEnergy lobbyists.
Householder has pleaded not guilty to the alleged bribery scheme. It started in 2016, when FirstEnergy told investors it was seeking “legislative solutions” to the financial problems at two of its aging nuclear plants in Northern Ohio.
Householder was running for a House seat he previously held. He resigned in 2004 after bribery allegations arose. But his district’s voters picked him to retake the seat and he took office in 2017.
FirstEnergy flew Householder to D.C. for the presidential inauguration and allegedly began making quarterly payments of $250,000 to Householder’s PAC, Generation Now.
FirstEnergy and its subsidiaries put tens of millions of dollars into entities controlled by Generation Now as Householder mounted a campaign to be named House Speaker, it is alleged.
Once speaker, Householder helped HB6 get passed, which charged ratepayers a monthly surcharge. It was essentially a $1.3 billion bailout.
The FBI called it a “sophisticated criminal conspiracy to enact legislation.” Voters were given a ballot initiative to overturn the bailout, and First Energy spent $38 million to defeat it.