NY Pension Fund Objects to Fee Request in US Steel Stock Case

US Steel Corp.'s $40 million settlement of contentious class litigation over alleged securities fraud shouldn’t include a “shockingly high” 33.3% attorneys’ fee award, the trustee of the New York State Common Retirement Fund says.

In light of the settlement’s relatively large size, lead counsel should receive an amount adjusted downward from about 17%, counsel for the trustee, New York State Comptroller Thomas P. DiNapoli, says in a letter to the US District Court for the Western District of Pennsylvania that was entered in the electronic docket Thursday. That percentage would be consistent with the market rate and prevailing case law, the letter says.

The public pension fund is a major stockholder of US Steel, and the comptroller “seeks to maximize recoveries for NYSCRF when it incurs investment losses due to securities fraud or other wrongdoing,” according to the letter. The pension fund’s maximum fee grid for its own attorneys tops out at 14%, Denapoli says.

• The investors allege US Steel misled them about its capacity to meet demand and about implementing a “reliability-centered maintenance” program for its facilities
• Attorneys on both sides were focus of court’s attention in April 2021 for “‘gotcha’ litigation tactics” and “guerrilla warfare”
• Judge Cathy Bissoon granted preliminary approval to the proposed settlement in November 2022
• Plaintiffs’ lead counsel Levi & Korsinsky LLP said it planned to seek up to one third of the settlement fund—about $13.33 million—as attorneys’ fees
• That request would be consistent with fees approved in similar securities class suits, the law firm said

Jones Day represents US Steel.

The case is In re U.S. Steel Consolidated Cases, W.D. Pa., No. 2:17-cv-00579, entered 2/23/23.