A New Look at Judicial Impact: Attorneys\u27 Fees in Securities Class Actions After Goldberger v. Integrated Resources, Inc.

Judicial impact studies have generally found widespread compliance by lower courts. Often, however, these studies employ relatively insensitive measures of compliance, limit their focus to compliance with Supreme Court precedent, and only occasionally examine the impact of judicial decisions on the ultimate consumers of those rulings - the members of society who are subject to them. Significant questions thus remain, such as whether and to what extent lower courts in fact comply with precedent and what if any role fear of reversal plays in compliance. To address these gaps, we use regression analysis to examine how the district courts in the Second Circuit responded to the decision of the Court of Appeals in Goldberger v. Integrated Resources, Inc., a case that mandated strict scrutiny by trial court judges of attorneys\u27 fee applications in class actions. Contrary to what might be expected, Goldberger is not correlated with a general decline in fee awards or fee requests or increased judicial scrutiny of requests. Instead, we find that as settlement size increases, both fee requests and fee awards rise at a slower rate in the cases subject to Goldberger while judicial scrutiny increases. As large settlements are the most likely to be appealed, this finding supports the proposition that compliance is tied to the probability of appeal and reversal