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Category: Class Fee Fund

Judge to Award $1.5M in Fees in Walgreens Wage Settlement

November 26, 2020

A recent Law 360 story by Lauren Berg, “Calif. Walgreens Workers Bag $4.5M Wage Deal,” reports that Walgreens and a class of workers have received a California federal judge's approval for their $4.5 million settlement to resolve claims that the pharmacy chain broke Golden State labor law by not paying all wages to employees at its distribution centers.  U.S. District Judge William B. Shubb granted preliminary approval to the class action settlement that will see about 2,600 workers split $2.8 million, finding that the deal is fair and gives the workers a good recovery that might have been at risk had the case gone to trial.

Lucas Mejia, who worked as an hourly stocker for about seven years at a Walgreens distribution center in California, launched the class action in November 2018 in the Superior Court for the County of Yolo, alleging that the company failed to pay employees for all of the compensable time they worked.  Mejia said Walgreens rounded down employees' hours on their timecards, required employees to pass through security checks before and after their shift without paying them for that time and didn't pay premium wages to workers who were denied meal breaks.

The suit also included a claim for civil penalties under the Private Attorneys General Act based on Walgreens' alleged violations of California labor law.  The case was eventually removed to federal court in Sacramento.  In December, the parties started talking with a mediator, which produced the current settlement.

In exchange for releasing all of the claims, Walgreens has agreed to pay up to $4.5 million to create a common fund, from which $2.8 million will be distributed to the estimated 2,648 class members, according to the order filed.  Each class member who does not opt out is estimated to receive about $1,200, the judge noted.

Also out of the pot, $1.5 million, or 33% of the fund, will be set aside for attorney fees, while $150,000 will go to pay PAGA penalties and $7,500 will be used as an incentive award for Mejia.  Another $50,000 will be used to pay litigation costs incurred by class counsel and settlement administration costs, according to the order.  Judge Shubb gave preliminary approval to the deal, finding that it is in the best interest of the class.

While Mejia's counsel said the labor claims could be worth up to $20.2 million and the PAGA claim up to $16 million, they said Walgreens had legitimate defenses that risked reducing the amount Mejia and the class could recover at trial, according to the order.  With that in mind, the settlement is a strong result for the class, the attorneys said, with the $4.5 million representing 22% of the potential damages.

The judge also noted that, while the deal sets aside 33% of the fund for attorney fees, Mejia's counsel said they will seek 25% of the fund in a separate motion for fees.  "The court will defer consideration of the reasonableness of counsel's fees until the fee motion is filed," the judge wrote.  "Class counsel is cautioned that the reasons for the attorney's fees should be explained further in that motion."

$2B in Attorney Fees Offered in $26B Opioid MDL Settlement

November 5, 2020

A recent Law 360 story by Emily Field, “$26B Opioid Deal Offer to Include $2B in Atty Fees,” reports that the $26 billion settlement proposal from Johnson & Johnson and McKesson Corp., Cardinal Health Inc. and AmerisourceBergen Corp. will include a separate $2 billion fund to pay attorney fees and costs for the local governments that have sued over the opioid epidemic in multidistrict litigation, a source confirmed.

A source with knowledge of the settlement negotiations confirmed that the fund will be $2 billion and will be used to pay the plaintiffs' attorney fees, including the private counsel hired by the state attorneys general who have claimed that the companies fueled the opioid crisis.  The fund will be administered by an arbitration panel, the details of which have yet to be worked out with U.S. District Judge Dan Polster, who is overseeing the multidistrict litigation over the crisis in Ohio federal court, the source said.

The source also noted that the $2 billion was less than the $3 billion that had initially been reported.  In February, drug companies told Judge Polster that a proposal for 7% fee against a global settlement could be more than $3.3 billion, potentially jeopardizing negotiations.  The plaintiffs' executive committee in the MDL said in a statement that they supported the deal, which includes $4 billion more than an initial offer of $22 billion in cash in the fall of 2019.

"While no dollar figure can restore the lives and families already devastated by the crisis, these settlement dollars are desperately needed in areas that have been hardest hit by this man-made epidemic, particularly as they now grapple with COVID-19," said Paul T. Farrell Jr. of Farrell Law, Paul J. Hanly Jr. of Simmons Hanly Conroy and Joe Rice of Motley Rice LLC in a joint statement.  "Addiction prevention, education and treatment is critical to the recovery of our families and communities. We need to get these resources out to them as fast as we can — this settlement does that."  The committee also noted that the attorney fees fund is intended to replace the collection of contingency fees so that money can reach communities faster.

In a filing with the U.S. Securities and Exchange Commission McKesson said it would pay up to $8 billion over 18 years, and Cardinal and AmerisourceBergen would pay the rest over that time.  In October, J&J disclosed that it's offering up to $5 billion to end the litigation, a 25% increase from an earlier settlement proposal.

The MDL contains 3,000 cases filed mostly by cities and counties that want money for health care and law enforcement costs related to opioid abuse.  Some MDL attorneys also represent cities and counties with similar cases in state courts.  The attorneys general of virtually every state have also filed cases in state courts.

Law Firms Tussle Over Share of $8.3M in Attorney Fees

October 12, 2020

A recent Law 360 story by Emillie Ruscoe, “Fee Bid is ‘Unseemly Mudslinging.’ ICO Suit Co-Counsel Says,” reports that part of a co-lead counsel team accused their counterparts of "unseemly mudslinging" in a dispute over distribution of the $8.3 million counsel fee they earned in a settlement of allegations that Swiss blockchain company Tezos Stiftung's 2017 initial coin offering violated federal securities laws.

Lawyers from Block & Leviton LLP and Hagens Berman Sobol Shapiro LLP told U.S. Magistrate Judge Joseph C. Spero to deny a September motion for counsel fees filed by attorneys from Hung G. Ta Esq. PLLC, LTL Attorneys LLP, the Restis Law Firm PC and Lite DePalma Greenberg LLC, telling the magistrate judge that the fee request "is devoted to unseemly mudslinging, inaccurate accusations of deceit, and unfounded claims of violations of the rules of professional conduct."

The Hung G. Ta Esq. PLLC-helmed attorney group filed their counsel fee request in September, asking U.S. District Judge Richard Seeborg to order Block & Leviton to put funds back into the escrow account holding $8.3 million that the plaintiffs' counsel team was awarded for its work on the case.  In a memo accompanying the counsel fee motion, the HGT Law group told Judge Seeborg that "Block & Leviton has proceeded, without HGT Law's authority, to distribute attorneys' fees to itself and several other firms with which it is aligned," asking the judge not to permit "such brazen misconduct."

HGT Law said the Block group had "proceeded to unilaterally distribute fees" so that Block & Leviton and Hagens Berman received 25% of the total fee, and 50% of the fee went to Robbins Geller, which is not docketed in the matter but was also involved in the case, according to the co-lead counsel team.  "This proposal is irrational and unreasonable," the HGT group contended, suggesting that Block & Leviton was trying to "maintain good relations with Robbins Geller and ensure favorable treatment from Robbins Geller in other cases."

Two days after the counsel fee motion was filed, court records show, Judge Seeborg referred the case to Judge Spero for resolution of the attorney fees dispute.  "This development is unwelcome, and its disposition ought not involve the intervention of this court," Judge Seeborg said in the same order vacating the Oct. 29 hearing on the motion that HGT had requested.

The Block group apologized to the court "that counsel were unable to work things out among themselves" and promised to work with the magistrate judge to resolve the issue in good faith.  "The court should not have to deal with this dispute.  It is always unseemly for lawyers to be squabbling over a multimillion-dollar award of attorneys' fees," the Block group said.

The Block group contended that HGT Law knew since December 2019 that it could expect to receive a quarter of the counsel fee.  "The [HGT Law group] never proposed a different fee allocation until after fees were awarded and sat on its hands until B&L sought to distribute the money consistent with [co-lead plaintiff] Trigon's allocation," the Block group claimed.

The Block group also said that "The Ta Group's wild accusation that 'Block & Leviton (and the other firms in the Block group) have attempted to deceive HGT Law, and have violated numerous ethical duties and guidelines of this district' is absolutely false."  The Block group also said that it "reiterates its willingness — if the Ta Group would like to withdraw its motion without prejudice — to resolve this dispute either through further informal discussions or through more formal [alternative dispute resolution] mechanisms."

Records show the parties to the case reached a $25 million cash settlement agreement in March, ending claims that the Tezos defendants held an unregistered securities offering in July 2017.  The $8.3 million counsel fee comprised a third of the settlement fund, and the attorneys who worked on the case on behalf of the proposed investor class would also get $300,000 to cover their litigation costs, according to the settlement terms.

Bankruptcy Attorneys Seek Fees From GM Ignition MDL Fee Fund

September 28, 2020

A recent Law 360 story by Vince Sullivan, “Goodwin Seeks $1.5M for Work on GM Ignition Litigation,” reports that Goodwin Procter bankruptcy attorneys representing the co-lead plaintiffs in multidistrict litigation against General Motors over faulty ignition switches said that they should be paid $1.5 million from a counsel fee fund created in a proposed $120 million settlement with the carmaker in New York federal court.  Goodwin Procter LLP said in an application for payment of its fees that it represented three co-lead plaintiffs as bankruptcy counsel in the MDL over the ignition switches and created tens of millions of dollars in value in the litigation by successfully arguing on behalf of the claimants in the bankruptcy case of Old GM.

The carmaker filed for bankruptcy in 2009 and sold its assets that year to an entity called New GM, but issues with the faulty ignition switches — which could allow keys to slip out of the ignition and shut off the car while driving — didn't arise until five years after the sale.

Goodwin Procter said it worked to resolve issues allowing for claims to be made against both the bankruptcy estate of Old GM as well as New GM, including questions of successor liability for the restructured company.  The rulings in the bankruptcy court paved the way for claims in the MDL for personal injury and wrongful death as well as a class action lodged by economic loss plaintiffs to reach the $120 million settlement earlier this year.

That settlement created a $34.5 million fund to cover the fees of counsel working on behalf of the class, and Goodwin Procter said it is entitled to receive payment of its $1.5 million in fees from that fund despite not serving as class counsel.

"Goodwin comes forward at this time to seek payment because the co-leads have not provided guidance to Goodwin on the timing or procedures for payment of Goodwin's fees and expenses," the motion said.  "The settlement agreement is clearly a watershed event in the MDL and heralds the culmination of years of work performed by many lawyers and law firms, including both law firms that served the three co-leads as designated bankruptcy counsel."

The firm said its fee request is based on about 1,800 hours of work on the cases from August 2014 through January 2017 at a blended rate of $823 per hour.  This work provided a common benefit for all claimants in the MDL and the economic loss class action, the motion said.  One of the co-lead plaintiffs in the MDL — Robert Hilliard — began paying the firm's fees and expenses in February 2017, and Goodwin is not seeking recovery for any of those amounts.

Under the terms of the settlement agreement, GM will contribute up to $70 million into a common fund for the drivers, and the trust connected to the company's 2009 bankruptcy will contribute up to $50 million.  The deal ends claims from drivers who said their vehicles sank in value over recalls related to the ignition switch defects.

GM previously paid more than $1 billion to settle other civil and criminal cases arising from the ignition-switch defects.  More than 100 deaths have been attributed to the design flaw, and GM initiated an extensive recall of the affected cars in 2014.  The litigation, which was consolidated into an MDL in June 2014, alleges that many GM cars were outfitted with faulty ignition switches, which could cause keys to slip out of position and disable brakes and air bags.

U.S. District Judge Jesse Furman of New York, who is overseeing the MDL, granted preliminary approval of the settlement in April, but final approval has not yet been granted.  The preliminary approval set Monday as the deadline for fee and expense applications from counsel, prompting Goodwin to file its motion.

Attorneys Decry “Irrational’ Fee Request in ICO Class Settlement

September 24, 2020

A recent Law 360 story by Emilie Ruscoe, “Attys Decry Co-Counsel’s ‘Irrational’ Fee Bid in ICO Suit,” reports that half of a co-lead counsel team cried foul play over the allegedly "irrational" disbursement of an $8.3 million counsel fee following settlement of an investors' securities offering fraud suit against Swiss blockchain company Tezos Stiftung.  In the motion for distribution of attorney fees, attorneys from Hung G. Ta Esq. PLLC, LTL Attorneys LLP, the Restis Law Firm PC and Lite DePalma Greenberg LLC — who are part of the counsel team for co-lead plaintiffs Pumaro LLC, Artiom Frunze, Hayden Hsiung and Gijs Matser — asked U.S. District Judge Richard Seeborg to order attorneys from Block & Leviton, another firm that's part of the legal team for the plaintiffs, to put funds back into the escrow account holding the $8.3 million that the plaintiffs' counsel team was awarded for their work on the case.

The HGT law counsel group also asked Judge Seeborg to order Block & Leviton to give HGT Law access to the escrow agent and to let HGT law "conduct an accounting of the escrow trust account."  They also asked the judge to officially state that HGT Law and associated firms are entitled to 57% of the attorney fees and Block & Leviton, Hagens Berman Sobol Shapiro LLP, Robbins Geller Rudman & Dowd LLP and Taylor-Copeland Law can have 43% of the sum.

The HGT counsel group also said if the judge preferred, he could just disqualify Block & Leviton from handling fee allocations and put HGT Law in charge instead, so they could dole out the money "fairly, reasonably and in good faith based on the law firms' relative contributions and benefits provided to the class."

Court records show that Judge Seeborg approved the multimillion-dollar counsel fee in August.  But "despite its best efforts, co-Lead counsel HGT Law has been unable to secure the agreement of the other court-appointed co-lead counsel, Block & Leviton LLP, to a fair, rational and good faith allocation of the fee award," HGT law said in a memo accompanying the motion.

"In fact, in complete disregard of its duties to its co-lead counsel, Block & Leviton has proceeded, without HGT Law's authority, to distribute attorneys' fees to itself and several other firms with which it is aligned," HGT Law added, telling Judge Seeborg shouldn't permit "such brazen misconduct."

The HGT firm claimed that its proposed fee percentages were "extremely generous to the firms in the Block group" because the much of the Block group's work on the matter was on a state court case that was "essentially a tagalong case that was duplicative of, and significantly trailed" the federal action.  Nonetheless, according to HGT Law, the Block group has "proceeded to unilaterally distribute fees" so that Block & Leviton and Hagens Berman receive 25% of the total fee and 50% of the fee goes to Robbins Geller.

"This proposal is irrational and unreasonable," the HGT group contended, suggesting that Block & Leviton was trying to "maintain good relations with Robbins Geller and ensure favorable treatment from Robbins Geller in other cases.'  Indeed, HGT said, the proposal was so irrational that "the court can infer the existence of an undisclosed side agreement," which would mean the members of the Block group had "violated numerous ethical duties and guidelines" in connection with the arrangement.

Records show the parties to the case reached a $25 million cash settlement agreement in March, ending claims the Tezos defendants held an unregistered securities offering in July 2017.  Alongside Tezos, the suit also names other defendants including Dynamic Ledger Solutions Inc., which owns the Tezos source code and Dynamic's founders Arthur and Kathleen Breitman.

The $8.3 million counsel fee comprised a third of the settlement fund, and the attorneys who worked on the case on behalf of the proposed investor class would also get $300,000 to cover their litigation costs, according to the settlement terms.