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Further, Fox & Fox factored into the settlement an amount for
their fee that was grossed up in the total, so that the total net
recovery was still $1.9 million, almost twice EEOC’s original
valuation of the claim.
All this supports my conclusions that Fox & Fox added
substantial value to the raw claim as it existed immediately
prior to execution of the contingent fee agreement(s) and that
Fox & Fox was responsible for much more than mere “details”.
At page 25, the majority opinion says: “The entire ADEA
award was ‘earned’ by and owed to petitioner, and his attorney
merely provided a service and assisted in realizing the value
already inherent in the cause of action.” Is the majority
opinion saying that, at the time immediately prior to
petitioner’s entry into the contingent fee agreement, the claim
had the same value as the amount ultimately recovered? Of course
not; the uncertain speculative front end value had to be
discounted to reflect the time value of money and the risks of
litigation. Fox & Fox added substantial value to the claims of
Mr. Kenseth and his colleagues. Under the terms of the
contingent fee agreement, Fox & Fox’s shares of the recovery
should be taxed to them directly and not run through petitioner
and the other members of the class who never even had the chance
to kiss goodbye what they never became entitled to receive.
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