Americas Mining Corp. v. Theriault

Michael Theriault was trustee of a trust that owned a minority interest in mining company Southern Copper Corporation (Southern Peru) (plaintiff). Theriault brought a derivative action on behalf of Southern Peru against its directors; controlling shareholder Grupo México, S.A.B. de C.V.; and its subsidiary Americas Mining Corporation (AMC) (defendants), alleging they breached their duty of loyalty to Southern Peru and minority shareholders by making Southern Peru buy AMC’s 99.15 percent interest in a Mexican mining company at an unfairly inflated price. Theriault’s attorneys worked on a contingent-fee basis and advanced over $1 million in expenses, reviewed more than 282,000 pages of documents during discovery, traveled overseas for depositions, and conducted vigorously contested pretrial-motion practice. Most significantly, Theriault’s attorneys took the case to trial and won. The court awarded damages of $1.347 billion plus interest, for a total judgment of $2.0316 billion. The court also awarded Theriault’s attorneys fees and expenses in the amount of 15 percent of the judgment—more than $304 million. Given that Theriault’s attorneys spent 8,597 hours on the case, they recouped $35,000 per hour. However, the court did not use an hourly-rate approach and awarded 15 percent as reasonable given the size of the common fund recovered. The opponents appealed.