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Category: Fee Award Factors

Class Counsel to Judge: Trust Us, Our $89M Fee Request is Reasonable

September 27, 2019

A recent Law 360 story by Jack Queen, “Consumer Seek $89M in Atty Fees for Robocall Class Action, reports that attorneys who won a class action against a robocalling debt collector asked a California federal court to grant them $89 million in fees, citing the size of the trial judgment and lengthy appeal fight ahead.  Bursor & Fisher PA told the court that one-third of the $267 million judgment was an appropriate fee given the risks of the first-of-its-kind case and intransigence of defendant Rash Curtis & Associates, whose "sandbagging, discovery abuse, and false testimony" bogged down the case.  A jury found earlier this year that the debt collector made more than 500,000 illicit robocalls to consumers.

"Defendant repeatedly withheld information and provided false testimony regarding important issues to be decided at trial," Bursor & Fisher said.  "To overcome these abuses, class counsel had to file, and win, seven motions to compel discovery, just to obtain the evidence needed to present the claims at trial."  Bursor & Fisher said it should get more than the standard 25% benchmark fee for class actions set by the Ninth Circuit because of the novelty and risk of the case, which the firm said was the largest per-class-member judgment ever awarded under the Telephone Consumer Protection Act, a federal law limiting the use of automatic dialers.

Bursor & Fisher said the litigation is still far from over, and the firm expects to rack up expenses as it seeks to collect from Rash Curtis' insurer and fend off appeals from the California debt collector, which vowed to "tie the case up in righteous appeals for years."  The firm also said that it expects Rash Curtis to file for bankruptcy, further complicating efforts to recover the $500 awarded for each call.

The class action was originally filed in June 2016 and alleged that Rash Curtis used "repeated robocalls, prerecorded voice messages and autodialed calls to threaten and harass consumers in an attempt to collect" debts.  The firm collected numbers using "skip tracing," a method of analyzing personal information on public and private databases that often dredges up numbers unconnected to any debt, according to the class complaint.

Discovery in the case was fraught, riven with late additions to the evidence and last-second turnabouts by the defense, Bursor & Fisher said.  In a September 2017 ruling granting class certification, U.S. District Judge Yvonne Gonzalez Rogers chided Rash Curtis for its "blatant delaying and sandbagging tactics" and warned that she would impose sanctions if the debt collector kept it up.

$3.4M Fee Request in $42M GM Oil Guzzling Settlement

September 25, 2019

A recent Law 360 story by Linda Chiem, “Attys Seek $3.4M in Fees From $42M GM Oil-Guzzling Deal,” reports that attorneys have asked a Florida federal judge to sign off on nearly $3.4 million in fees for their work negotiating an approximately $42 million deal with General Motors LLC to end consumers' proposed class claims that certain Chevrolet Equinox and GMC Terrain SUVs had defective oil-guzzling engines.

Plaintiffs' attorneys at Greg Coleman Law PC, Ahdoot & Wolfson PC and Whitfield Bryson & Mason LLP sought court approval for $3.39 million in attorney fees, $109,649 in litigation expenses and $4,500 apiece in service payments for each of the 12 named plaintiffs in three proposed class actions covered by the GM deal.  The attorneys said GM has already agreed to cover those costs, so they would not come out of the settlement pot, according to court documents.

The parties first told the court in April that they had reached a deal valued between $40 million and $45 million to end claims in the three suits alleging the 2.4-liter Ecotec engines in 2010-2013 Equinox and Terrain SUVs had defective piston rings that wore out too quickly and excessively guzzled oil.  In the filing, the plaintiffs' attorneys said the minimum value of the settlement is closer to $42.4 million, so their $3.39 million fees request works out to a "modest" 8% of the total settlement pot that's well within the parameters for "appropriate" fee awards in the Eleventh Circuit.

"Class counsel collectively devoted more than 3,200 attorney hours to the prosecution of this case," they said in their filing. "Accordingly, the amount of time and labor devoted to this case weighs in favor of finding class counsel's requested fee award reasonable."  The class counsel added: "The difficult and contingent nature of this case further demonstrates its undesirability.  There are few lawyers willing to invest significant time and resources prosecuting a lawsuit that involves complicated and uncertain legal questions and a substantial risk of receiving no compensation, which is evidenced by the fact that, to class counsel's knowledge, no other related class actions were filed elsewhere in the country."

Attorneys Earn $25M in Attorney Fees in JPMorgan 401K Settlement

September 24, 2019

A recent Law 360 story by Danielle Nichole Smith, “Workers’ Attys Get $25M in Fees From JPMorgan 401K Deal,” reports that a New York federal judge has given the final green light to a $75 million settlement resolving an Employee Retirement Income Security Act (ERISA) class action over JPMorgan Chase & Co.’s management of investments from participants in third-party 401(k) plans, signing off on the participants' bid for $25 million in attorney fees.

In his two orders, U.S. District Judge Vernon S. Broderick granted his final approval to the deal struck between JPMorgan and the class of third-party 401(k) plan participants and awarded the class counsel $25 million in attorney fees and nearly $1.5 million in costs.  The settlement was “fair, reasonable and adequate,” the judge found, dismissing with prejudice objections from three individuals.

Judge Broderick was also unpersuaded by two objections lodged against the attorney fees in the settlement.  The judge found one objection taking issue with certain costs being imposed on the class to be unavailing because courts weren’t allowed to “pick and choose the terms of the settlement they may desire to have modified.”

And another objection regarding the size of the award failed to take into account the 26,952 hours the firms spent working on the case, the judge said.  While the objector looked at the class counsel’s out-of-pocket costs to conclude that the $25 million represented a 1429% profit, the firms’ $17.6 million lodestar showed they only sought a “modest multiplier” of 1.4, the judge held.

The dispute stems from a proposed class action filed against JPMorgan and affiliates in April 2012 that received certification in March 2017.  In their case, the participants alleged that JPMorgan wrongly had its stable value funds invest heavily in funds that themselves were invested in “excessively risky, highly-leveraged assets.”

Class Counsel Seek $15M in Fees in $74M SunEdison Settlement

September 23, 2019

A recent Law 360 story by Mike Curley, “Attys Seek $15M in Fees From $74M SunEdison Settlement,” reports that the lead counsel in a class action claiming SunEdison Inc. misled shareholders about its financial health before filing for bankruptcy is asking a New York federal court to approve more than $15 million in attorney fees for its work in reaching a $74 million settlement with the company. 

In a memorandum filed, attorneys with Bernstein Litowitz Berger & Grossmann LLP, representing plaintiffs the Municipal Employees’ Retirement System of Michigan and Arkansas Teacher Retirement System, said the fee, which amounts to 21% of the $74 million pot, is reasonable and under the amount suggested by lodestar guidelines.

The request also includes $1.5 million in expenses, and 21% of any additional recovery, according to the memorandum.  The attorneys are also requesting an award of $13,598 to the Municipal Employees’ Retirement System of Michigan and $1,819 to Arkansas Teacher Retirement System for their costs and expenses.

The fees reflect that the settlement was achieved through the “skill, tenacity and effective advocacy” of the lead attorneys, according to the memorandum, including an extensive investigation into SunEdison’s alleged fraud, drafting the complaints, defeating motions for dismissal and summary judgment and nationwide and international discovery efforts.  In addition, the fee is based on a written agreement that lead counsel signed with the Municipal Employees’ Retirement System of Michigan at the start of the case and should therefore be presumed to be reasonable, the attorneys argued.

Circuit courts have approved attorney fees in settlements of this type of more than 30% of the total fund, according to the memorandum, which added that the lodestar payment, based on the amount of hours the attorneys put in, would be $18 million, making the $15 million request only 86% of the lead counsel’s time.

The 2015 class action alleges false and misleading statements and omissions in violation of the Exchange Act and liability and negligence claims under the Securities Act.  The suit is one of a multitude that SunEdison is facing in multidistrict litigation following business decisions that ultimately led to its filing for bankruptcy in April 2016.

In their bid for initial settlement approval filed in July, shareholders in the company also asked the court to allow their counsel to request attorney fees of up to 22% of the settlement fund and another $2 million in litigation expenses incurred over the three and a half years since the suit was filed.  Under the settlement, a $74 million fund will be divided between the two subclasses, with $19.5 million and any of the supplemental insurance money going to the Exchange Act subclass, and $54.5 million going to the Securities Act subclass, the investors said.

Texas Court Rejects $14M Fee Request After $21M IP Verdict

September 19, 2019

A recent Law 360 story by Michael Phillis, “Texas Court Rejects $14M Fee Bid After $21M IP Verdict,” reports that a Texas federal judge said that both sides were off-base in a fight over attorney fees after a jury found an EchoStar Corp. unit liable for $21 million for infringing on a defense contractor's satellite network patent.  The court rejected both Israel-based contractor Elbit Systems' request for nearly $14 million in fees and EchoStar unit Hughes Network Systems' calculation that it should owe only about $300,000.  Elbit said the high fee award was merited because of an alleged pattern of Hughes' misconduct, while Hughes said it should only have to pay fees for litigation misconduct specifically cited in a prior court order, including allegations it ignored discovery orders.

"To avoid becoming 'a green-eyeshade accountant,' the court orders the parties to meet and confer and file a joint notice consistent with the parameters set forth in this order," U.S. District Judge Robert W. Schroeder III said.  The order knocked arguments made by both sides in their joint motion to quantify attorney fees, which was filed in July.  The judge said the diverging amounts took into account either too little or too much of the case.

Judge Schroeder said Hughes' request for a smaller fee award — based on its argument that it should only be responsible for the four "specific acts" mentioned in a prior court order — didn't consider the full extent of the litigation misconduct.  "Elbit is entitled to fees that 'bear some relation to the extent of Hughes' misconduct,'" the court said.  "And, as the court found, that misconduct was extensive — affecting more than the four specific acts of misconduct or even the 22 acts Elbit listed as examples of misconduct."

Judge Schroeder also said Elbit's request was effectively for a "full fee award," with few exceptions.  But Elbit did not demonstrate a proper connection between "its fee request and Hughes' misconduct," and that link was needed, the judge found.  "Because Elbit's conduct does not justify a full-fee award, the court would need to go through Elbit's bills line-by-line to identify the fees Hughes' misconduct caused," the order said.  And since the judge has no interest in taking on that task, he told both sides to get together and within two weeks' time file a notice explaining the fees that Hughes' misconduct caused.