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$1.2M Attorney Fee Award in Fiat Chrysler Class Action

September 12, 2019 | Posted in : Expenses / Costs, Fee Award, Fee Award Factors, Fee Jurisprudence, Fee Request, Hourly Rates, Lodestar, Practice Area: Class Action / Mass Tort / MDL

A recent Law 360 story by Jeannie O’Sullivan, “$1.2M Atty Fee Awarded in Fiat Chrysler Class Suit,” reports that Capstone Law APC and attorney Howard A. Gutman won a $1.2 million fee award for what a New Jersey federal judge called their "skill and experience" in representing a class of Fiat Chrysler customers who lodged now-settled claims that the car manufacturer produced vehicles with defective transmissions.

In her ruling approving the award, U.S. District Judge Freda L. Wolfson said Los Angeles-based Capstone and Gutman, a New Jersey attorney who served as co-class counsel, are “well-versed” in consumer class action litigation involving automobile defects.  The judge also granted their request for a $28,786 reimbursement for costs and expenses and a $5,000 incentive award for class representatives Dolores and Albert Granillo.  The parties struck a settlement deal in February in which eligible drivers can receive as much as $2,000 in cash or $4,000 in a trade-in voucher to be used toward the purchase of a new Fiat Chrysler vehicle, and would provide an extended warranty on affected cars.

“The settlement obtained for the class members would not have been achieved without the skill and experience of class counsel,” Judge Wolfson said.  Capstone has settled 13 automobile defect class actions in the past five years and Gutman’s track record includes 500 automobile warranty or consumer fraud claim settlements, the judge noted.  The firms reached the settlement in the instant matter in “the face of formidable legal opposition” of defense counsel McElroy Deutsch Mulvaney & Carpenter LLP, the decision said.

Counsel skill is one of the factors for evaluating counsel fees per the standard established in the Third Circuit’s decision in Gunter v. Ridgewood Energy Corp. in 2000, according to Judge Wolfson.  Turning to other Gunter factors, Judge Wolfson said there was a “substantial benefit” to the settling class members in the form of direct payments or vouchers.  Only .02% of the class lodged objections to the settlement, and only one objection mentioned fees, the ruling said.

The complexity of the case also justified the fee, the ruling said, as counsel dedicated over 2,000 hours to motion practice, discovery and multiple mediation sessions while facing a high risk of nonpayment.  Judge Wolfson went on to say the fee was comparable to those of other consumer class actions in the District of New Jersey, and that the “expenses were properly documented and reasonably and appropriately incurred in litigating this matter.”

The class counsel used the lodestar method of calculating its fees, in which the number of hours worked is multiplied by hourly rates, according to the ruling.  Judge Wolfson said the lodestar system was the appropriate method because the percentage-of-recovery system depends on a set pool of settlement funds, which wasn’t the way this settlement was structured.  The class counsel rates — $245 to $725 — “fall on the outer end of reasonableness for this geographic area,” the judge said.

The defendants objected to the class counsel’s request to be compensated for time supplementing its fee application, which prompted the judge to shave nearly $20,000 from the base lodestar, reducing it from $1,100,912.50 to $1,081,099.28.  “Although as a general matter counsel is typically entitled to recover the time spent in preparing and defending a fee application, here, the additional briefing was only necessary because counsel’s initial application was deficient,” Judge Wolfson wrote.