Fees for attorneys who represented thrift depositors in a class action lawsuit against the state have been reduced from $5.8 million to $4.25 million.
In an order issued Tuesday, 3rd District Judge David S. Young reconsidered his ruling made last December, and, in addition to knocking off $1.5 million in legal fees, he reduced from $443,850 to $375,000 the amount billed by the depositors' hired political lobbyists.While the latest ruling will undoubtedly anger the legal counsel and lobbyists, Young's ordered payments were higher than those recommended by a court-appointed official, who advised slashing attorney fees to $3.9 million.
Depositors had hired a small army of lawyers, accountants and consultants - charging a variety of fees - to get back more than $100 million in savings lost in the 1986 collapse of Utah's thrift and loan industry. A class-action suit was filed against the state and professionals involved in operating the failed thrifts.
The state settled with depositors a year ago, but not before the depositors racked up almost $1 million in costs and fees - excluding a contract to pay their lead counsel a minimum of $7.25 million. The depositors have paid $3.9 million to their attorneys and about $300,000 in other costs to date.
The fees angered lawmakers, who couldn't accept the fact that a share of the $60 million settlement would go to lawyers and lobbyists, and they handled the politically sensitive issue by recommending the court award attorneys no more than $1.25 million.
Young's initial order of $5.8 million reignited the fire, and reports circulated that certain legislators would block a proposed judicial pay raise unless the legal and lobbying fees were reduced. The reports were detailed in a draft letter to the Utah State Bar by the depositors' lobbyists David Irvine and Georgia Peterson. The letter was filed in court, but not with the Bar.
Lawmakers deny the charges, and Young said in his order that his decision was based on research by a local attorney, James U. Jensen. Shortly after his initial decision, Young appointed Jensen as special master to review all the depositors' costs.
When Jensen recommended the depositors' attorneys' receive no more than $3.9 million last May, the lawyers lashed out at Young during an unusual hearing last summer, when lead attorney Malcolm A. Misuraca criticized the judge for choosing an unqualified lawyer to be special master.
In his order issued Tuesday, Young said he rejected Misuraca's arguments and then praised Jensen's work, including a lengthy footnote on Jensen's "achievements."
Although Young's decision will save depositors about $1.44 million from their original fees, it may not be acceptable - but not because the savings were not adequate. Surprisingly, depositors representatives rejected the special master's recommendations, saying they had signed contracts and believed the original bills were reasonable.
Attorneys for depositors were unavailable for comment early Wednesday, but they have said they would not rule out appealing a reduction in their fees to the Utah Supreme Court.
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(Additional information)
Depositors' fees
Depositors have paid: $4.2 million
Balance owed: $2.54 million
Special Master's recommended balance: $444,210
Judge's final ordered balance: $1.1 million
Net savings to depositors: $1.44 million