Brytus v. Spang & Co., 203 F.3d 238 (3^rd Cir. 2000)-This case concerns an award of attorneys' fees provided for in ERISA's fee shifting statute (payable by the losing party according to the lodestar method) versus  "common fund" attorney's fees (payable often as percentage of recovery.)  This court affirmed the district court's denial of counsel's application for recovery of fees from the common fund. 

The attorneys were successful in their class action suit against Spang & Company. In that suit the court found that Spang violated ERISA by failing to distribute surplus pension plan assets to retired workers and violating the Labor Management Relations Act, 29 U.S.C. § 185, by breaching a labor agreement.  The employer/plan sponsor agreed to pay the $ 460,000 in attorney's fees and expenses, pursuant to ERISA's statutory fee provision.  The union representing the employees intervened, opposing payment of any additional fee from the participants' fund award.  Counsel had argued before the District Court that the district court should award it a fee of 20 to 30 percent of the then-$ 11,500,000 dollar common fund, or approximately $ 2,300,000 to $ 3,450,000. 

The common fund doctrine reflects the traditional practice in equity, and "'rests on the perception that persons who obtain the benefit of a lawsuit without contributing to its cost are unjustly enriched at the successful litigant's expense.'"  This court found there was "no inequity to redress," since Spang directly paid the fee not the plaintiffs who had assigned their right to a fee award to counsel in exchange for counsel's services. 

This court declined to find that courts may never apply the common fund doctrine in a case for which there is a statutory fee provision and which goes to judgment.  It simply held that the District Court did not abuse its discretion in declining to award additional fees where there was agreement that the statutory award was reasonable.