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Class Counsel Seek Recommended Fees in Chipotle Data Breach Case

November 8, 2019

A recent Law 360 story by Joyce Hanson, “Chipotle Customers Want $1.2M Atty Fees in Data Breach Suit,” reports that customers in a class action suit over a 2017 Chipotle data breach that exposed their names and payment card numbers to hackers asked a Colorado federal judge for $1.2 million in attorney fees, saying a mediator proposed that figure as the parties were settling.

The Chipotle Mexican Grill Inc. customers' unopposed motion calls for fees of $1,165,782 after about $34,000 in expenses are deducted, based on class counsel's 2,406 hours of investigation, prosecution and litigation settlement, according to a brief filed.  Also under the fee proposal, six class representatives led by Todd Gordon and five other plaintiffs will each receive an incentive award of $2,500.

Settlement class members would be eligible for out-of-pocket reimbursement of up to $250, including an automatic payment for each affected card, payment for customers' time spent dealing with fraud issues and reimbursement for credit monitoring and identity theft insurance, the brief said.  In addition, class members who suffered other "extraordinary" unreimbursed monetary losses because of compromised information can make a claim for reimbursement of up to $10,000, according to the proposed settlement.

"Without these individuals' investment of time, and their courage to step forward and vindicate the class' rights against a large institution, the class would not have obtained the substantial relief offered by the settlement," the customers said.

Chipotle revealed in April 2017 that it had detected a data security breach in its electronic processing and transmission of confidential customer and employee information.  The burrito chain acknowledged at the time that it may be subject to lawsuits because of the breach that reportedly affected transactions from March 24 through April 18 of that year.

Financial institutions that sued over the breach told the court in March that the parties had reached a confidential settlement agreement.  On June 19, U.S. District Judge Christine M. Arguello granted the customers' June 13 unopposed motion for preliminary approval of the settlement, conditionally certifying the class.

Bennett G. Picker of Stradley Ronon Stevens & Young LLP served as a private mediator after the customers sent their settlement demand to Chipotle in November 2018, according to the brief.  The parties first held several phone calls with Picker before sitting down with him in a full-day mediation session in Florida, the customers said.

After agreeing on the data breach settlement's material terms, the parties turned to the question of attorney fees and costs, according to the brief.  When they reached an impasse and couldn't agree despite significant negotiation, Picker submitted a mediator's proposal that both sides finally accepted, the brief said.

The customers said the requested fee award is consistent with attorney fees approved in the court and in other data breach settlements.  Class counsel's lodestar of $1.44 million through Oct. 31 represents a 0.83 negative multiplier, which "supports the reasonableness of the fee requested," the customers said.

An Exception to the American Rule: Attorney Fees Under ERISA §502(G)(1)

November 7, 2019

A recent New York Law Journal article by Michael C. Rakower and Melissa Yang of Rakower PLLC in New York, “Attorney Fees Under ERISA §502(G)(1): An Exception to the American Rule,” report on ERISA §502(g)(1).  This federal statute vests courts with discretion to award attorney fees and costs in an action brought by a plan participant, beneficiary or fiduciary.  This article examines the standards courts apply when assessing motions for these discretionary awards.  This article was posted with permission.  The article reads:

The Employee Retirement Income Security Act (ERISA) marks one of those rare instances where Congress chose to depart from the American Rule to grant litigants an opportunity to seek attorney fees. ERISA §502(g)(1) vests courts with discretion to award attorney fees and costs in an action brought by a plan participant, beneficiary or fiduciary.  This article examines the standards courts apply when assessing motions for these discretionary awards.

‘Some Degree of Success on the Merits’

In 2010, the U.S. Supreme Court issued an opinion in Hardt v. Reliance Standard Life Ins. Co., clarifying the standard under ERISA §502(g)(1). 560 U.S. 242 (2010).  A litigant need not be a “prevailing party” to be eligible for a fee award; rather, the litigant must establish “some degree of success on the merits.” Id. at 254-55.  According to the Second Circuit, this is “the sole factor that a court must consider in exercising its discretion.” Donachie v. Liberty Life Assurance Co. of Boston, 745 F.3d 41, 46 (2d Cir. 2014) (emphasis in original).

The “some degree of success on the merits” standard is met when a claimant obtains a “favorable judicial action on the merits.” Scarangella v. Grp. Health, 731 F.3d 146, 152 (2d Cir. 2013).  A summary judgment or trial verdict can, of course, meet this standard, see, e.g., Buckley v. Slocum Dickson Med. Grp., PLLC, 585 Fed. App’x 789, 794 (2d Cir. 2014) (stating employee entitled to seek attorney fees under ERISA §502(g)(1) after prevailing on summary judgment); Toussaint v. JJ Weiser, 648 F.3d 108, 110 (2d Cir. 2011) (acknowledging some degree of success requirement was met when summary judgment was affirmed in favor of the directors of ERISA plan sponsor), as can a favorable out-of-court settlement if it is triggered by court action, see, e.g., Scarangella, 731 F.3d at 154 (citing to Perez v. Westchester Cnty. Dep’t of Corr., 587 F.3d 143, 150-51 (2d Cir. 2009)).  Even a remand to the plan administrator can qualify where it is premised upon a determination that the administrator’s prior assessment of a claim was deficient or rendered in an arbitrary or capricious manner.  See, e.g., Gross v. Sun Life Assurance Co. of Canada, 763 F.3d 73, 79 (1st Cir. 2014); McKay v. Reliance Standard Life Ins. Co., 428 F. App’x 537, 546-47 (6th Cir. 2011); Valentine v. Aetna Life Ins. Co., 2016 WL 4544036, at *4 (E.D.N.Y. Aug. 31, 2016); Delprado v. Sedgwick Claims Mgmt. Servs., No. 1:12-CV-00673 BKS, 2015 WL 1780883, at *41 (N.D.N.Y. April 20, 2015) (concluding plaintiff obtained “some degree of success on the merits” when plaintiff’s claim was remanded back to plan administrator because prior denial of disability benefits was arbitrary and capricious).

In contrast, “trivial success on the merits” or a “purely procedural victory” is insufficient to merit an award of attorney fees. Hardt, 560 U.S. at 255.  Accordingly, obtaining “relief due to the voluntary conduct of another party after minimal litigation” will not warrant a discretionary award. Scarangella, 731 F.3d at 155.

Favorable Slant Toward Plaintiffs

Case law shows that a court’s discretion is guided by Congress’ intent to encourage participants and beneficiaries to enforce their statutory rights under ERISA. Salovaara v. Eckert, 222 F.3d 19, 28 (2d Cir. 2000).  As a result, even though ERISA §502(g)(1) contemplates that an award may be imposed against “either party,” courts have construed attorney fee motions with a “favorable slant towards ERISA plaintiffs … to prevent the chilling of suits brought in good faith … .” Id. (internal citation omitted); see, e.g., Critelli v. Fidelity Nat’l Title Ins. Co. of New York, 554 F. Supp. 2d. 360 (E.D.N.Y. 2008) (declining to award attorney fees to employer because plaintiff did not act in bad faith and a fee award to employer could act as a disincentive to potentially meritorious ERISA actions).  Rarely does a court award attorney fees against a participant or beneficiary; such instances tend to arise when a court not only rules against the claimant, but also deems the action to be frivolous.  See, e.g., Garlock v. Nelson, No. 96-CV-1096(FJS), 1998 WL 315089, at *1 (N.D.N.Y. June 9, 1998) (considering defendant’s application for fees after concluding defendant is entitled to a fee award because participant’s claims under ERISA are frivolous).

(Discretionary) ‘Chambless’ Factors

Upon a finding of “some degree of success on the merits,” a court in New York may (but is not required to) consider five additional factors to determine whether to grant a fee award.  Hardt, 560 U.S. at 255 n.8 (“[A] court may consider the five factors adopted by the Court of Appeals … in deciding whether to award attorney fees.”); Donachie, 745 F.3d at 46 (“Although a court may, without further inquiry, award attorney fees to a plaintiff who has had ‘some degree of success on the merits,’ Hardt also made clear that courts retain discretion to ‘consider [] five [additional] factors … in deciding whether to award attorney’s [sic] fees.”).  These factors, known as the “Chambless Factors,” are set forth in Chambless v. Masters, Mates & Pilots Pension Plan, 815 F.2d 869, 871 (2d Cir. 1987) as follows:

(1) the degree of the offending party’s culpability or bad faith, (2) the ability of the offending party to satisfy an award of attorney’s fees, (3) whether an award of fees would deter other persons from acting similarly under like circumstances, (4) the relative merits of the parties’ positions, and (5) whether the action conferred a common benefit on a group of pension plan participants.

If the court looks to the Chambless Factors, then it must consider all of the factors; it cannot selectively weigh certain factors and disregard others. Donachie, 745 F.3d at 47.  However, a court may grant a fee award after considering all of the Chambless Factors even if all factors do not weigh in favor of the award. Locher v. Unum Life Ins. Co. of Am., 389 F.3d 288, 299 (2d Cir. 2004) (concluding that failure to satisfy fifth Chambless factor does not preclude an award of fees).

Interim Awards

While the majority of litigants seek attorney fees and costs at the conclusion of a litigation, parties who face financial adversity during the course of the litigation may seek an interim award so long as they can satisfy the “some success on the merits” standard.  See, e.g., Pagovich v. Moskowitz, 865 F. Supp. 130, 139 (S.D.N.Y. 1994) (granting interim attorney fees to plaintiff after defendant admitted to liability for some benefits owed to plaintiff under the plan); Aronoff v. Serv. Employees Local 32-BJ AFL-CIO, No. 02-CIV-5386, 2003 WL 1900832, at *2 (S.D.N.Y. April 16, 2003) (acknowledging court’s authority under ERISA to award interim attorney fees but declining to do so under the facts of the case).  However, practically speaking, any litigant contemplating a motion for interim relief should recognize that establishing sufficient success to warrant discretionary relief will likely be more difficult in the middle of the case than at the end.

Recoverable Costs

Under ERISA §502(g)(1), litigants can recover attorney fees and other reasonable out-of-pocket expenses incurred by their attorneys, such as filing fees, service of process fees, courier charges and printing costs.  Algie v. RCA Glob. Commc’ns, 891 F. Supp. 875, 898 n.13 (S.D.N.Y. 1994) (“Section 502(g)(1) of ERISA refers to an award of ‘costs’, but that term apparently covers not only taxable costs under 28 U.S.C. §1920, but also other disbursements that are customarily charged to the client.”); Severstal Wheeling v. WPN, No. 10CIV954LTSGWG, 2016 WL 1611501, at *4 (S.D.N.Y. April 21, 2016); Cohen v. Metro. Life Ins. Co., No. 00 CIV 6112 LTS FM, 2007 WL 4208979, at *2 (S.D.N.Y. Nov. 21, 2007), aff’d in part, 334 F. App’x 375 (2d Cir. 2009); Taaffe v. Life Ins. Co. of N. Am., 769 F. Supp. 2d 530, 544-45 (S.D.N.Y. 2011).  These costs must have been incurred in connection with the prosecution or defense of a lawsuit in court.  Peterson v. Cont’l Cas. Co., 282 F.3d 112, 119 (2d Cir. 2002).  Thus, pre-litigation costs incurred by litigants to exhaust their administrative remedies or to attempt a negotiated settlement are not recoverable.  See Aminoff v. Ally & Gargano, No. 95 CIV. 10535 (MGC), 1996 WL 675789, at *4 (S.D.N.Y. Nov. 21, 1996) (disallowing fee award to plaintiffs who expended resources to settle retirement plan dispute because no litigation was commenced).  However, “fees incurred during an administrative remand ordered by the district court and over which the court retains jurisdiction are authorized by the statute.” Id. at 122.  (“The fact that a court orders additional fact finding or proceedings to occur at the administrative level does not alter the fact that those proceedings are part of the ‘action’ as defined by ERISA.”)

Factors Affecting the Size of the Award

Any fee award under ERISA §502(g)(1) must be reasonable.  In New York, courts generally apply the lodestar method, which multiplies the number of hours reasonably expended in the action by attorneys and paralegals against a reasonable hourly rate for each such timekeeper.  Conners v. Connecticut General Life Ins. Co., No. 98-CV-8522(JSM), 2003 WL 1888726, at *1 (S.D.N.Y. April 15, 2003).  After determining the lodestar, the court may in its discretion deduct from that amount the cost of legal services rendered in connection with unsuccessful aspects of the case. Id. at *2.  In this way, hours expended on failed claims wholly unrelated to the successful ones may be excluded from the fee award. Grant v. Martinez, 973 F.2d 96, (2d Cir. 1992). See also Conners, 2003 WL 1888726, at *2 (defining claims as unrelated if they are based on “‘different claims for relief that are based on different facts and legal theories’”) (quoting Hensley v. Eckerhart, 461 U.S. 424, 434 (1983)).  But if all of the claims are interrelated (i.e., the claims involve a “common core of facts” or are “based on related legal theories”), then the court should “focus on the significance of the overall relief obtained” to determine whether any reduction to the lodestar is warranted.  Conners, 2003 WL 1888726, at *2 (internal quotation marks and citation omitted).  Of course, courts are always free to adjust a lodestar award by comparing it to the size of the plaintiff’s recovery, even if no reduction for unsuccessful claims is warranted.  In doing so, courts discharge their obligation to consider whether “[t]he amount of fees awarded [are] reasonable in relation to the results obtained.” Id.

Aside from the lodestar, courts may use their discretion to award an appropriate sum to further the goals of ERISA.  This seems most apt in the case of fee award to a defendant who successfully defends against a frivolous action. Weighing the deterrent value of a fee award against a plaintiff for filing frivolous claims with the chilling effect that award would have on potential plaintiffs, courts have discretion to grant a defendant an award lower than the lodestar would support.  See, e.g., Christian v. Honeywell Retirement Ben. Plan, No. 13-CV-4144, 2014 WL 1652222, *8 (E.D. Penn. April 24, 2014) (concluding that an award of $10,000 to defendant serves the purpose of protecting pension benefits and deterring conduct at odds with ERISA’s purpose even though defendant incurred approximately $76,779.18 in succeeding on its motion to dismiss).  Courts are also free to adjust the lodestar upward if, for example, a party’s counsel exhibits superior work product and exceeds the expectation of the party and normal levels of competence.  Feinstein v. Saint Luke’s Hosp., No. 10-CV-4050, 2012 WL 4364641, at *6 (E.D. Penn. Sept. 25, 2012) (citing Rode v. Dellarciprete, 892 F.2d 1177, 1184 (3d Cir. 1990).)

Conclusion

ERISA §502(g)(1) offers an exception to the American Rule to encourage participants, beneficiaries and fiduciaries of ERISA-governed plans to vindicate their rights in court.  A court’s discretionary right to grant a fee award under this provision arises when a party achieves “some degree of success on the merits.”  Courts apply a plaintiff-friendly slant to motions for attorney fees in recognition of ERISA’s fundamental purpose, which is to protect employees’ rights.  This approach generally insulates plaintiffs unsuccessful in litigation from the pain of an adverse fee award, but offers a valuable incentive to a party who may have been wrongly denied an applicable benefit.

Michael C. Rakower and Melissa Yang are partners at Rakower Law PLLC in New York.

Third Circuit Declines Hearing NFL’s Fee Allocation Dispute

November 6, 2019

A recent Legal Intelligencer story by Max Mitchell, “Fed. Appeals Court Declines Jurisdiction Over Law Firms’ Fee Dispute in NFL Concussion Case,” reports that the U.S. Court of Appeals for the Third Circuit has determined that the district court overseeing the NFL concussion settlement did not have jurisdiction to wade into a dispute over a firm’s $4.6 million fee awarded for shepherding the class action through the litigation.

A unanimous three-judge Third Circuit panel ruled that the U.S. District Court for the Eastern District of Pennsylvania did not have jurisdiction to rule on Minnesota attorney John Lorentz’s efforts to obtain a third of the multimillion-dollar common benefit fee that Philadelphia law firm Anapol Weiss received for playing a leading role in the class action.

Citing the lower court’s decision in rejecting the dispute, Third Circuit Judge Joseph Greenaway said the matter should not have been filed as a motion to intervene in the class action docket itself but instead should have been brought as an attorney’s lien.

“Here, as a practical matter, Lorentz’s breach of contract claim was not factually interdependent with the underlying claims in In re NFL,” Greenaway said.  “Accordingly, although district courts can have ancillary jurisdiction over attorney fee disputes, because this was a ‘simple’ and separate contract dispute, such jurisdiction does not exist here.”  Judges David Porter and Morton Greenberg joined Greenaway.

Lorentz, who initially represented two-time Super Bowl champion Jim McMahon, argued in a brief filed earlier this year to the appellate court that McMahon was a vocal supporter of the concussion litigation and that he was one of the few players named as a class representative.  Those facts, attorneys for Lorentz contended, helped the Anapol firm win a leadership role in the concussion litigation, which is expected to top $1 billion in recoveries for ex-players.  Anapol Weiss, however, pushed back, contending that the referral agreement did not include sharing the common benefit funds.

Parties Seeking PTAB Attorney Fees Face High Bar in Courts

November 5, 2019

A recent Law 360 article by Lionel Lavenue, R. Benjamin Cassady, Bradford Schulz, and Regan Rundio of Finnegan Henderson LLP, “Parties Seeking PTAB Attorney Fees Face High Bar in Courts,” report on seeking attorney fee award in Patent Trial and Appeal Board (PTAB) proceedings.  This article was posted with permission.  The article reads:

Since the U.S. Supreme Court lowered the standard for prevailing parties to recover attorney fees in patent cases in the 2014 Octane Fitness LLC v. ICON Health & Fitness Inc. decision, district courts have been weighing the proper interaction between Title 35 U.S. Code Section 285 and Patent Trial and Appeal Board proceedings.  Under Section 285, prevailing patent litigants may recover attorney fees in “exceptional cases.”

The Octane Fitness decision clarified that district court judges maintain broad discretion for determining what makes a case “exceptional.”  It did not divulge whether that discretion permits a judge to review the losing party’s conduct in a related administrative proceeding or whether the court may award attorney fees for work done before that administrative body.  These questions were abandoned to the lower courts, which tackle them with increasing frequency given the PTAB’s popularity.

In American Vehicular Sciences LLC v. Autoliv Inc., the U.S. District Court for the Eastern District of Michigan attempted to unwind these issues.  Magistrate Judge Anthony Patti did not break ground by adopting standards for the awarding of attorney fees accumulated at the PTAB.  But he entered rarified air in concluding that a losing party’s misconduct before the board could not, by itself, render a case “exceptional” if the board abstained from sanctioning it.  The court denied an award, reaffirming the maxim that “exceptional cases” are indeed the exception, not the rule.

AVS v. Autoliv

In September 2015, American Vehicular Sciences sued Autoliv and 20 others for allegedly infringing U.S. Patent No. 9,043,093, directed to a single-curtain airbag capable of protecting passengers in a vehicle’s front and rear seats.  Three months later, Unified Patents — independently of Autoliv — petitioned for inter partes review of a subset of the ’093 patent’s claims.  The PTAB granted that petition in June 2016, prompting a stay of district court litigation pending resolution of the IPR.

By September, Autoliv had filed two of its own IPR petitions against the ’093 patent.  One challenged all claims as obvious over a combination of references “substantially similar” to that asserted by Unified; the other attacked the ’093 patent’s priority claim.  Both were instituted in March of 2017.

Two months later, the PTAB invalidated 10 of the claims challenged by Unified, sparing eight others.  AVS appealed to the U.S. Court of Appeals for the Federal Circuit.  The following spring, Autoliv’s IPRs invalidated the ’093 patent’s remaining claims.  AVS again appealed.  But, in June 2018, the Federal Circuit summarily affirmed the board’s decision in Unified’s IPR, leading AVS to dismiss its federal case.  Autoliv moved for fees, asserting that AVS’ arguments before the board drove the case into exceptional territory.

The Threshold Inquiry to Recovery

Proving exceptionality, however, was only one barrier to Autoliv’s recovery.  Autoliv first had to persuade Judge Patti of the court’s authority under Section 285 to award those attorney fees accumulated at the PTAB.  The handful of courts that have addressed the issue of awarding PTAB-related fees are split.

Judge Patti identified the two most popular standards.[8] Namely, a prevailing party can recover PTAB-related attorney fees when: (1) the PTAB’s proceedings “played a central role in determining the outcome of the federal court case ” or (2) “there was a stay of the related district court case, such that the [PTAB] proceedings effectively took the place of the of the federal court litigation.”  The court recognized that Autoliv cleared the latter standard, thereby hurdling one obstacle to recovery.  Yet the burden of showing exceptionality proved too weighty.

The Exceptionality Determination

Judge Patti was unenthusiastic about Autoliv’s exceptionality arguments for two principal reasons.  First, the court was unconvinced that AVS made its arguments in bad faith (although bad faith is not a prerequisite to exceptionality under Octane Fitness).  Asserting the opposite, Autoliv posited that the PTAB’s institution of Unified’s IPR put AVS on notice that it was “reasonabl[y] likel[y]” that the challenged claims would fall.

Unmoved, the court recognized that AVS’ validity arguments, though ultimately unsuccessful before the PTAB, had once persuaded the U.S. Patent and Trademark Office examining corps — during prosecution of the ’093 patent, the examiner considered the same references that Unified and Autoliv would put forward in their IPRs and AVS overcame the same concerns about priority that ultimately doomed the ’093 patent.  For the court, the examining corps’ surrender under the weight of AVS’ arguments justified AVS’ continued reliance on them.  AVS’ validity position was, therefore, not baseless.

Second, and more notably, the court was reluctant to review the PTAB’s decision to not sanction AVS.  AVS asserted that if Autoliv wanted to recover PTAB fees off the back of alleged misconduct before the PTAB, its remedy rested, quite naturally, with the PTAB.

Yet Autoliv never appealed to that tribunal for attorney fees; it resorted to the district court — a body much less acquainted with the alleged misconduct, which was all alleged to have occurred before the PTAB.  These considerations persuaded Judge Patti to defer to the “PTAB’s experience with exceptional cases and its composition of specialized administrative law judges”; if the PTAB didn’t sua sponte sanction AVS’ conduct, the court wouldn’t find an exceptional case.

Analysis and Implications

American Vehicular needles the tension between Section 285 and the PTAB regime, providing insight into Section 285 motions.  Judge Patti affirmed the court’s authority to grant attorney fees for work done before the PTAB.  But only where the PTAB proceedings either substituted for the court’s work or played a central role in the case’s outcome.

By holding so, the Eastern District of Michigan aligned itself with several district courts that have addressed the issue.  Accordingly, securing a litigation stay pending resolution of an IPR is important to setting the groundwork for seeking a Section 285 award for PTAB-related fees.  This consideration implicates venue as some courts are more willing to stay cases in favor of the PTAB than others.

But more notably, Judge Patti highlighted the issue of circumvention: Does a prevailing party make an end-run around the PTAB by requesting relief from a federal court for PTAB-related work?  The PTAB only shifts fees when sanctioning misconduct.  Yet district courts may invoke Section 285 even where misconduct falls short of a sanctionable level.  Cognizant of this imbalance, U.S. Circuit Judge Alan Lourie of the Federal Circuit recently asked a prevailing party if it was “trying to piggyback” off Section 285 in order to recover PTAB-related attorney fees.

It is unclear how many other judges, apart from Judge Patti, share Judge Lourie’s skepticism for this method of recovering attorney fees from an IPR.  For example, at least one court has considered the reasonableness of arguments made before the USPTO in finding a case exceptional.  Nevertheless, when seeking such fees under Section 285, prevailing parties may do well to seek sanctions from the board, especially if conduct before the board is the sole basis for exceptionality.

Lionel M. Lavenue is a partner, R. Benjamin Cassady and Bradford C. Schulz are associates, and Regan Rundio is a law clerk at Finnegan Henderson Farabow Garrett & Dunner LLP.

5 Law Firms Seek Fees in GNC ‘Phantom Markdown’ Settlement

November 4, 2019

A recent Law 360 story by Matthew Santoni, “5 Law Firms Seek $1.5M in Fees in GNC ‘Phantom Markdown’ Deal,” reports that five law firms representing customers in a $6 million settlement with General Nutrition Centers over the company’s alleged “phantom markdowns” online have asked a Pittsburgh federal judge for $1.5 million in fees and costs.

Attorneys from Ahdoot & Wolfson, Carlson Lynch, Finkelstein & Krinsk, Barbat Mansour & Suciu and Nathan & Associates represented an estimated 3.6 million GNC customers who can get their choice of cash refunds or vouchers for goods on GNC’s website that it claimed were marked down from an inflated “regular” price.

“Despite the risk and uncertainty of class certification and continued litigation, the settlement provides the very remedies that plaintiffs sought in their first amended complaint: monetary relief for the alleged represented discounts and an actual discount of GNC’s everyday pricing that they advertised,” their motion for attorney fees said.  GNC had agreed not to object to the fee request when the parties submitted the proposed settlement in August; U.S. District Judge Mark R. Hornak gave the deal his preliminary approval in September.

In the fee motion, the consumers’ attorneys said they had collectively spent more than 1,800 hours over three years working on the case.  They had attempted mediation in 2017 and could not reach an agreement, but kept working on the potential settlement, the motion said.

“Even though class counsel were experienced in false-discount class actions such as this, navigating through the issues raised required exhaustive investigation of the facts and underlying events relating to the claims, as well as the applicable legal principles bearing on this litigation,” the motion said.  “Class counsel spent significant time reviewing and analyzing thousands of pages of documents and data produced by GNC, which included extensive records regarding thousands of pages relating to the alleged false-pricing scheme during the class period, competitor pricing, pricing history, transactional history, pricing calendars, and advertisements.”

The firms asked for about $1.45 million in fees and $50,000 in costs, which they attributed mostly to hiring the mediator and experts.  The outcome of the settlement compared favorably to numerous other “phantom markdown” suits that had recently been settled, the motion said, including a $4.9 million deal with Michael Kors LLC in 2015.  At rates of $300 to $950 per hour for each attorney’s time, the proposed fee award also compared favorably to the $1.05 million “lodestar” the firms would get if they had charged by the hour, the motion said.