March 10, 2021
A recent Law.com story by Amanda Bronstad, “Plaintiffs Counsel in Flint Water Settlement Seek $200M in Attorney Fees,” reports that plaintiffs lawyers who obtained a settlement in the Flint, Michigan, water crisis litigation are asking for more than $200 million in attorney fees. The request, outlined in the filing in the U.S. District Court for the Eastern District of Michigan, is part of a $641.25 million settlement with the state of Michigan, former Michigan Gov. Rick Snyder, the city of Flint and several individual government defendants.
The fee request would include an estimated $40.6 million in common benefit fees to lead counsel and others who spent five years litigating both a class action and individual cases. The fees also would provide a fee award to class counsel and cap contingency rates of individually retained counsel at 27%. In all, the fees could total nearly $203 million, according to the motion.
“Plaintiffs’ counsel have worked on a contingency basis for more than five years now, without compensation of any kind, to achieve this remarkable result,” the fee motion says. “The fee proposal is designed to provide reasonable and fair compensation to plaintiffs’ counsel and to ensure equitable treatment for all who make claims under the settlement.” U.S. District Judge Judith Levy has scheduled a fairness hearing, including potential approval of the fees, for July 12.
In April 2014, state officials decided to shift Flint’s water supply from Lake Huron to the Flint River despite studies warning the corrosive nature of the river water could send lead into the drinking water. Early on in the litigation, co-lead counsel Ted Leopold, a partner at Cohen Milstein Sellers & Toll in Palm Beach Gardens, Florida, and Michael Pitt, of Pitt, McGehee, Palmer, Bonanni & Rivers in Royal Oak, Michigan, had a protracted fight with co-liaison counsel Hunter Shkolnik, of New York-based Napoli Shkolnik, over potential fees. Meanwhile, the Flint water cases dragged through several procedural hurdles, with the U.S. Court of Appeals for the Sixth Circuit reversing some key rulings.
The partial settlement, filed in court Nov. 17, excludes two engineering firm defendants and the U.S. Environmental Protection Agency. On Jan. 21, Levy preliminarily approved the settlement, 79.5% of which provides a compensation fund for minors. The settlement also includes subclasses of adult residents, businesses and property owners. Signing the fee motion were lawyers at 20 law firms, including Leopold, Pitt, Shkolnik and co-liaison counsel Corey Stern, of New York’s Levy Konigsberg.
The motion requests a 6.33% common benefit assessment, divided equally between co-lead counsel and co-liaison counsel, with higher percentages imposed on lawyers retained after July 16, 2020. Lead counsel said they provided $7 million upfront expenses and invested 182,571 hours of work—about $84 million in an estimated lodestar, which is the billing amount multiplied by the hourly rate. The requested fees, which are more than double the lodestar, are justified given the length and risks of the case, the number of defendants, the complexity of the issues and litigation that involved more than a dozen appeals, Leopold said. “The work speaks for itself,” he said.
The fee motion says lawyers with individual cases would have a 27% cap on their contingency fees. Michigan law caps contingency fees at one-third of a recovery amount. “For the vast majority of the cases and the lawyers who did not work on the common benefit, we didn’t think it would be fair to the clients to take 33%,” Leopold said.
The fee request also takes into account the fact that the work isn’t over. Levy has scheduled the first bellwether trials to occur in October. Many of the settlement’s beneficiaries also are minors who do not have lawyers and will need help from lead counsel during the claims process, Shkolnik said. “There’s going to be a whole new round of work that’s going to be done for individual cases to process them as if we represent them,” he said.