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Class Counsel Seek $13M in Attorney Fees in Dairy Settlement

January 2, 2019

A recent Law 360 story by Christopher Cole, “Class Attys Look to Milk $13M From Dairy Settlement,” reports that lawyers who secured a $40 million deal ending a suit by a proposed class of farmers alleging DairyAmerica Inc. and an affiliate lowballed milk prices paid to the class members are asking a California federal judge for a $13.3 million slice of the settlement and $824,000 in costs.  The attorneys said their decade-long work on the litigation — stemming from allegations that the milk giant and California Dairies Inc. lowballed nonfat dry milk rates to run up their profits — warranted a share totaling about a third of the settlement.

The $40 million deal was reached after a lengthy legal fight that included reviving the litigation in the Ninth Circuit after all the claims had been dismissed at the trial court level, the lawyers said in court papers filed Dec. 28.  “To achieve this exceptional result, class counsel have worked on an entirely contingent basis for approximately 10 years without compensation of any kind,” they said.  “The settlement was obtained as a direct result of class counsel’s relentless and creative advocacy, substantial investment, and continual risk-taking throughout the last decade.”  Separately, attorneys for the milk farmers want litigation expenses amounting to almost $824,000 and service awards to each named plaintiff of $90,000 and to each former plaintiff of $10,000.

The litigation dates to 2009, when a series of class actions were consolidated in California federal court.  The farmers accused the dairy buyers of providing lowball rates for nonfat dry milk in a survey by the National Agricultural Statistics Service, leading to federal milk marketing orders that allegedly disadvantaged farmers and beefed up the buyers’ profits.  The case almost died the following year when U.S. District Judge Anthony W. Ishii dismissed the claims, citing the filed rate doctrine, which holds generally that state law claims can’t be brought against federally set rates.  However, the Ninth Circuit disagreed, saying the doctrine wasn’t applicable to the legal issues in the suit, and revived the case in August 2012.

The farmers and dairy companies reached a settlement with the proposed class and asked the judge for approval in August. Judge Ishii gave the deal a green light on Sept. 14.  Attorneys for the milk farmers said that even though the Ninth Circuit has observed that 25 percent may serve as a fee award benchmark in such cases, that can be adjusted based on circumstances, and the settlement amount is “unusually high” relative to the alleged damages to the farmers.  They said the requested fees are “especially warranted considering the quality and depth” of their work, including defeating multiple motions to dismiss and amending the complaint twice to materially expand the claims.

“Yet, in addition to aggressively pursuing these traditional litigation avenues, class counsel also took multiple creative, unusual and ultimately successful steps at critical junctures of this litigation that were crucial to securing the $40 million settlement,” they said.

The case is Gerald Carlin et al. v. DairyAmerica Inc. et al., case number 1:09-cv-00430, in the U.S. District Court for the Eastern District of California

$96M Fee Award in $480M Well Fargo Investor Settlement

December 19, 2018

A recent Law 360 story by Lauren Berg, “$480M Wells Fargo Investor Deal OK’d, Attys Get $96M,” reports that a California federal judge granted final approval to a $480 million settlement resolving investor claims that Wells Fargo & Co. artificially inflated its stock value by opening millions of unauthorized customer accounts and awarded the investors' attorneys nearly $96 million for their efforts.  U.S. District Judge Jon Tigar said that the settlement “achieves a good result for the class,” finding that the maximum potential damages it could have won at trial ranged from $353 million to more than $3 billion.

“This recovery is higher than recoveries achieved in other securities fraud class actions of similar size (over $1 billion in estimated damages), which settled for median recoveries of 2.5 percent between 2008 and 2016, and 3 percent in 2017,” Judge Tigar wrote.  The settlement represents an average recovery of about $0.35 per share, once attorneys' fees and other costs are deducted from the fund, according to the order.

The lawsuit, led by Union Asset Management Holding AG, alleged Wells Fargo executives adopted an aggressive cross-selling business model that emphasized pushing multiple products on existing customers rather than attracting new customers.  To meet lofty sales targets, the bank’s employees opened millions of accounts for customers without their consent.

In September 2016, the Los Angeles Times raised questions about the practice, and the bank was soon hit with $185 million in civil penalties by regulators on Sept. 8, 2016.  Its stock price fell 9 percent over the next week, closing at $45.43 per share on Sept. 16, 2016.  The securities suit was filed 10 days later.  The settlement between the bank and anyone who bought its common stock between Feb. 26, 2014, and Sept. 20, 2016, was reached in May.  Wells Fargo has denied the suit’s claims, but said it reached a settlement "to avoid the cost and disruption of further litigation."

After approving the settlement amount Tuesday, Judge Tigar also approved $95.9 million in attorneys’ fees — 20 percent of the settlement amount — finding that that requested amount is reasonable and below the “benchmark” 25 percent.  “Plaintiff’s counsel obtained an excellent result for the class when compared to similar cases, despite comparable risks,” Judge Tigar wrote.

The case is Gary Hefler et al. v. Wells Fargo & Company et al., case number 3:16-cv-05479, in the U.S. District Court for the Northern District of California.

Attorneys Seek $8.6M in Fees in $29M Och-Ziff Securities Settlement

December 18, 2018

A recent Law 360 story by Rachel Graf, “Attys in $29M Och-Ziff Securities Settlement Seek $8.6M Fees,” reports that attorneys who reached a preliminary $28.75 million settlement resolving investors’ allegations that hedge fund Och-Ziff Capital Management Group LLC downplayed investigations into an African bribery scheme asked a New York federal court for $8.63 million in fees.  The investors’ attorneys said the amount, representing 30 percent of the total settlement, is reasonable since they worked for four years to achieve a “significant” settlement that was worth as much as roughly 28 percent of the estimated class-wide damages.  The attorneys are asking to be reimbursed for $401,240 in expenses as well.  “Considering the extensive investigations, motion practice, and discovery completed at the time of the settlement, the time and labor expended by class counsel here amply supports the requested fee,” the filing said.

In October, Och-Ziff and its former CEO Daniel S. Och and former CFO Joel M. Frank agreed to pay almost $29 million to resolve allegations they concealed an African bribery scheme and subsequent investigations by U.S. regulators that ultimately cost the company about $412 million and caused its stock price to fall, allegedly harming investors.  The investors’ attorneys said their requested award is justified by the risks and complexity of the case, the time and effort they put into it, the quality of their legal work and the expenses they incurred.

Each of the two class representatives is requesting $5,000.  “Class representatives and class counsel undertook the risky task of pursuing this litigation, with no guarantee of the positive outcome they achieved,” the filing said.  The investors' suit claimed Och-Ziff touted its "reputation for integrity," "transparency" and "strong financial, operational and compliance-related controls" even though the company was allegedly engaged in a years-long bribery scheme.  The company and executives bribed foreign officials in exchange for "hundreds of millions" of dollars' worth of business in Africa, violating the Foreign Corrupt Practices Act, an amended complaint said.

The U.S. Securities and Exchange Commission and the U.S. Department of Justice began an investigation in 2011, but Och-Ziff hid the probes from investors until The Wall Street Journal published an article in 2014 about deals in Libya, the investors said.  At that point, the company simply said the investigations involved the FCPA and "related laws," according to the amended complaint.  Two years later, the WSJ published another article that stated the DOJ was pursuing a criminal guilty plea and the SEC wanted to fine Och-Ziff as much as $400 million, sending shares of the company down more than 13 percent, the investors said.

Och-Ziff ultimately admitted to violating the FCPA in 2016 and agreed to pay about $213 million in a deferred prosecution agreement with the DOJ and $199 million in disgorgement to the SEC.  The case is Arthur Menaldi et al. v. Och-Ziff Capital Management Group LLC et al., case number 1:14-cv-03251, in the U.S. District Court for the Southern District of New York

$503M in Attorney Fees in Syngenta GMO Corn Settlement

December 10, 2018

A recent Law 360 story by Bonnie Eslinger, “Attys Get $503M in Fees for Syngenta GMO Corn Settlement,” reports that a Kansas federal judge gave final approval to Syngenta AG’s $1.5 billion deal to resolve claims filed on behalf of 650,000 corn producers over the agricultural giant's genetically modified corn seed, a deal that handed class counsel a $503 million cut.  The order from U.S. District Judge John W. Lungstrum noted that the case was "hotly contested," with the merits of the corn producer claims "thoroughly vetted through litigation" in multiple jurisdictions.  That litigation included one multiweek class action trial in his court and extensive preparation for other trials.

"This is not a situation in which the parties proceeded quickly to settlement without serious litigation of the claims on their merits, such that there might be reason to suspect that the settlement was not fairly negotiated," the judge wrote.  "Indeed, the protracted negotiation process and the vigor with which the parties litigated the merits of the claims provide additional assurance that this agreement was fairly and honestly negotiated."

The litigation winds back to 2014, when corn farmers and others in the corn industry began filing lawsuits, including class actions, against Syngenta over the company's marketing of two insect-resistant GMO corn seed products, Viptera and Duracade, without securing approval from China, according to the court's order.

"The plaintiffs alleged that Syngenta's commercialization of its products caused the genetically-modified corn to be commingled throughout the corn supply in the United States; that China rejected imports of all corn from the United States ... [and] that such rejection caused corn prices to drop in the United States; and that corn farmers and others in the industry were harmed by that market effect," the judge noted.

Hundreds of suits were brought together in the multidistrict litigation heard in Judge Lungstrum's courtroom.  The nationwide settlement class is generally divided into four subclasses: corn producers who did not purchase Viptera or Duracade; corn producers who did purchase one of those products; grain handling facilities; and ethanol producers.  Of the 650,000 class members, 52 percent have submitted claims and only 17 members properly exercised their right to opt out, and just nine objections by 15 members were submitted in the end, the judge said.

"The fact that the class members have reacted so overwhelmingly in favor of the settlement further supports a finding that the settlement is fair and reasonable and adequate," he said, adding that the court found the objections filed in opposition to the settlement to "lack merit."  The judge also said that the immediate payout that the settlement offers — even after the award of one-third of that amount for attorneys' fees — had more value than the "mere possibility of a more favorable outcome after further litigation."

The first trial in the MDL, which won class certification in September 2016, tested the negligence claims of four Kansas farmers representing 7,000 others who believed that Syngenta rushed Viptera seed to market in 2010, willfully ignoring the importance of Chinese regulatory approvals.

The Kansas farmers alleged that varieties of harvested corn were mixed together indiscriminately on their export journey.  When China discovered the rogue strain in November 2013, they alleged, it immediately rejected American corn cargo, shutting down the Chinese market for U.S. corn and costing the domestic U.S. industry more than $1 billion.  The jury sided with the farmers, finding Syngenta negligent and awarding the class of corn producers $217.7 million in compensatory damages. Syngenta said it planned to appeal.

In July, Judge Lungstrum further consolidated the seven remaining separate state class actions in Arkansas, Illinois, Iowa, Missouri, Nebraska, Ohio and South Dakota.  Syngenta then urged the court to certify the $217.7 million verdict as a final judgment, telling Judge Lungstrum in September that it was necessary to prevent needless delay of the company's appeal since it knew the farmers planned to dispute the finality of the verdict.  The farmers shot back in October by asking the judge not to sign off on the verdict because the outcomes of other classes could influence the appropriateness of the jury's decision.

The case is In re: Syngenta AG MIR162 Corn Litigation, case number 2:14-md-02591, in the U.S. District Court for the District of Kansas.

Some Oppose 5 Percent Attorney Fee Set-Aside in Pelvic Mesh MDL

November 30, 2018

A recent Legal Intelligencer story by Max Mitchell, “Pelvic Mesh Trial Lawyer Slams MDL Settlements as ‘Puny’ Opposing Leadership’s Fee Petition,” reports that as the pelvic mesh MDL has begun to settle, attorneys on the leadership committee have asked the federal court overseeing the litigation’s massive inventory to set aside 5 percent of the awards for common benefit fees and expenses.  With the settlements already topping $7 billion, that means more than $360 million is set to distributed among the firms.

However, at least two firms are opposing the request, with one saying the hold-back amount is far too much.  Attorneys with Philadelphia-based Kline & Specter filed a response opposing the 5 percent set-aside request.  The highly critical filing contends that the federal cases have settled for “puny” amounts compared to the multimillion-dollar verdicts juries have been willing to award both in state and federal courts.  “The leaders in this litigation did the worst possible thing to the detriment of all plaintiff mesh victims and their attorneys: they settled their inventories way too cheaply, making it difficult for other attorneys to settle their cases reasonably,” attorney Shanin Specter said in the filing.

According to the filing, the average award for the tens of thousands of cases that have settled is about $40,000, while the average award for the cases that have gone to trial is about $9.8 million.  Specter’s firm took a leading role in several pelvic mesh cases that were tried in Philadelphia state court, including winning a $57 million verdict last year.  In the filing, Specter suggests that the set-aside amount be halved from the leadership committee’s request.

The firm’s filing also faults the leadership team with taking too many cases to effectively handle, saying the “discounted settlements were driven by the sheer enormity of the number of claims” and the “inability” of the lawyers to fully work up their inventories.  “It’s been an open secret in this litigation that the ‘leadership’ took too many cases to effectively litigate themselves.  By doing so and by not associating other lawyers to help discover and try their cases, they were forced to settle,” Specter said in the filing.  “This wasn’t bad for ‘leadership’ because a large number of small fees on small settlements is still a large number.  But it mistreated the women they represent. And it mistreated the other plaintiff’s counsel who were stuck behind this low bar set by the leadership.”

Andrus Wagstaff in Colorado also filed a notice of intent to oppose the petition for the 5 percent set aside.  The notice did not outline the crux of the firm’s objection, but the notice did say that it hired Blank Rome attorney Andrew Williamson to represent the firm in the dispute.  Georgia attorney Henry Garrard of Blasingame, Burch, Garrard & Ashley, who is chairman of the fee and compensation committee, said he plans to file a response, and declined to comment further, other than saying, “There is a lot to the story that’s not in their objection.”

The pelvic mesh MDL consists of seven separate consolidated litigations against some of the largest medical product manufacturers in the country.  According to federal records, the litigation topped out at nearly 107,000 claims, and, as of Nov. 15, the seven consolidated litigations have an inventory of 37,299.

On Nov. 12, Garrard filed the petition requesting the 5 percent award.  According to the petition, 94 law firms submitted more than 900,000 hours of time, and the committee has recognized nearly 680,000 of those hours as contributing toward the litigation’s common benefit.  The petition also noted that the current value of the settlements is roughly $7.25 billion, and the total amount for settlements is expected to be around $11 billion.  With the requested 5 percent set aside, that would make the total amount expected for the common benefit fund to reach $550 million.

The response from Kline & Specter, however, said the MDL leadership failed to secure a global settlement, and that the petition largely ignores the work done in the state court litigation that benefited the federal MDL, such as obtaining the verdicts, which, the filing said, weakened the defendants’ position and drove settlements.  “Given the paltry recoveries for the injured women in this successful-in-the-courtroom, surrender-at-the-settlement-table mass tort, it is more equitable for the common benefit fee to be half of the requested amount and to remit their proportionate share of these saved funds to the injured women,” Specter said in the filing.

Law 360 Covers NALFA CLE Program

October 25, 2018

A recent Law 360 story by Bonnie Eslinger, “Excessive Attys’ Fee Bids Can Backfire, Judges Say,” reported on a NALFA CLE program hosted today, “View From the Bench: Awarding Attorney Fees in...

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