Fee Dispute Hotline
(312) 907-7275

Assisting with High-Stakes Attorney Fee Disputes

The NALFA

News Blog

Category: Expenses / Costs

$22.5M Fee Award in Mushroom Antitrust Settlement

January 10, 2020

A recent Legal Intelligencer story by Max Mitchell, “US Judge Awards $18M in Attorney Fees After Settlement in Mushroom Antitrust Suit,” reports that the judge handling the litigation over allegations that mushroom farmers conspired to fix prices has agreed to award class counsel more than $18 million for their work in the case.  U.S. District Judge Berle Schiller of the Eastern District of Pennsylvania agreed to award $18.23 million in attorney fees, plus $4.25 million in expenses to the 11 firms that served as class counsel in the litigation.

In August, the court granted preliminary approval of an agreement to settle seven claims for $33.7 million, after having previously approved settlements with three other defendants for nearly $12 million.  The order should finalize the litigation.

“In prosecuting this action, class counsel have expended more than 42,000 hours of uncompensated time, and incurred substantial out of pocket expenses, with no guarantee of recovery,” Schiller said in the order.  “Class counsel’s hours were reasonably expended in this highly complex case that was vigorously litigated for more than 13 years, and their time was expended at a significant risk of non-payment.”  Schiller’s class counsel award was the same amount that the parties had requested in the motion filed in November seeking attorney fees.

Though Schiller’s 11-page order did not outline exactly how much should be allocated to each firm, the motion requesting attorney fees allocated the lion’s share to New York-based Garwin Gerstein & Fisher.  According to the filing, the firm worked more than 11,000 hours on the case, with Odom & Des Roches working the second largest number of hours at nearly 9,000.  The firm that spent the third largest amount of time on the litigation, according to the filing, was Philadelphia-based Hangley Aronchick Segal Pudlin & Schiller, with nearly 6,500 hours.

Schiller’s motion directed Garwin Gerstein to allocate attorney fees and costs among the other firms serving as class counsel.  Several entities that directly purchased mushrooms originally filed the antitrust class action in 2006 against the members of the former Eastern Mushroom Marketing Cooperative.

$8M in Fees Sought from $42.5M Pilgrim’s Pride Settlement

January 6, 2020

A recent Law 360 story by Rose Krebs, “3 Law Firms Seek $8M Fees for $42.5M Pilgrim’s Pride Settlement,” reports that Heyman Enerio Gattuso & Hirzel, Block & Leviton and Bernstein Litowitz Berger & Grossmann are seeking $7.95 million as part of a proposed $42.5 million settlement that would end a Delaware Chancery Court suit over chicken producer Pilgrim’s Pride Corp.’s $1.3 billion acquisition of an affiliated company.  In a court filing the three firms argued the award request, which amounts to about 18.7% of the total settlement amount, is appropriate “given the excellent results achieved.”

“Plaintiffs are pleased to present the proposed settlement: a cash recovery of $42.5 million, plus corporate therapeutics that will help address issues that arose in the challenged transaction and ensure that Pilgrim’s Pride Corporation enjoys the full benefit of the cash recovery,” the filing said.

In October, a stipulated settlement was filed with the court that would end a minority stockholder derivative suit against Pilgrim’s Pride's director and the company’s controlling shareholder JBS SA over Pilgrim’s Pride's $1.3 billion acquisition of the U.K. poultry farm Moy Park from JBS.

In January 2018, shareholder Matthew Sciabacucchi filed suit targeting JBS, its founder and CEO José Batista, and Pilgrim’s Pride’s board over the acquisition.  The suit said the transaction had been vetted by a special committee that wasn’t independent and went through a process that “did not seek or obtain approval of the company’s minority shareholders.”  A subsequent suit by the Employees’ Retirement System of the City of St. Louis was consolidated with the Sciabacucchi suit, with Block & Leviton LLP, Heyman Enerio Gattuso & Hirzel LLP and Bernstein Litowitz Berger & Grossmann LLP appointed co-lead counsel.

The firms contend that given the results achieved, the complexity of the case and the work they put in, a $7.95 million fee and expense award is justified.  The defendants and company have agreed not to oppose the request, according to the filing.

The firms also assert that the $42.5 million cash amount and corporate governance reforms that will be instituted per the settlement are “substantial,” and that the “get” under the deal “readily exceeds the ‘give’ of the release.”  Among governance reforms will be a requirement that “truly independent advisors” will evaluate “significant related-party transactions” in the future, the filing said.

$1.2M Fee Award in Chipotle Data Breach Class Action

December 31, 2019

A recent Law 360 story by Joyce Hanson, “Up to $1.6M Deal Over Chipotle Data Breach Gets Judge’s OK,” reports that a Colorado federal judge approved a class action settlement that will result in a payout that could total up to $1.6 million over a 2017 Chipotle data breach that exposed customer names and payment card numbers to hackers, saying the terms are fair and reasonable.  U.S. District Judge Christine M. Arguello said in her order granting the plaintiffs' unopposed motion for final approval that the settlement making class members eligible for out-of-pocket reimbursement of up to $250 is adequate and that the value of immediate recovery in the case outweighs "the mere possibility" of future relief after long and expensive litigation.  As of Nov. 19, class members have timely submitted 6,429 claim forms, according to the plaintiffs.

"The parties judge the settlement to be fair and reasonable, and no class member has objected to the settlement," the judge wrote.  "Class counsel are experienced class action litigators who are very knowledgeable about the claims, remedies and defenses at issue in this litigation."  In addition, class members who suffered other "extraordinary" unreimbursed monetary losses because of compromised information can make a claim for reimbursement of up to $10,000, according to the order.  The out-of-pocket reimbursement of up to $250 covers an automatic payment for each affected card, payment for customers' time spent dealing with fraud issues, and reimbursement for credit monitoring and identity theft insurance.

Judge Arguello also agreed to the customers' Nov. 1 unopposed motion for $1.2 million for their attorneys, comprised of $1,165,782 in fees and $34,000 in expenses, based on class counsel's 2,406 hours spent on investigation, prosecution and litigation settlement.  The judge also approved an incentive award of $2,500 for each of six class representatives in the suit led by plaintiff Todd Gordon.

Chipotle revealed in April 2017 that it had detected a data security breach in its electronic processing and transmission of confidential customer and employee information.  The burrito chain acknowledged at the time that it may be subject to lawsuits because of the breach that reportedly affected transactions from March 24 through April 18 of that year.  Financial institutions that sued over the breach told the court in March that the parties had reached a confidential settlement agreement.  On June 19, Judge Arguello granted the customers' June 13 unopposed motion for preliminary approval of the settlement, conditionally certifying the class.

The customers said the requested fee award is consistent with attorney fees approved in the court and in other data breach settlements.  Class counsel's lodestar of $1.44 million through Oct. 31 represents a 0.83 negative multiplier, which "supports the reasonableness of the fee requested," the customers said

FTC Ordered to Pay Attorney Fees and Costs Under EAJA

December 27, 2019

A recent NLJ story by Mike Scarcella, “FTC Ordered to Pay $843K in Legal Fees, Costs After Losing Privacy Case,” reports that the Federal Trade Commission must pay more than $843,000 in attorney fees and costs to the law firms that represented a now-defunct medical diagnostic testing company that had long argued the agency was misguided in an enforcement action alleging inadequate data-privacy protections.

Atlanta-based LabMD, which has claimed the FTC’s enforcement action put it out of business, was represented by such firms as Ropes & Gray, Dinsmore & Shohl, and Wilson Elser Moskowitz Edelman & Dicker.  A team from Ropes & Gray served pro bono as lead counsel for LabMD in the U.S. Court of Appeals for the Eleventh Circuit, which last year ruled against the FTC.

The appeals court this week upheld a special master’s report that said the law firms were entitled to fees and costs for their successful advocacy on behalf of LabMD.  The report said the FTC’s litigation position was not “substantially justified,” a threshold test for disputes involving whether a federal agency is on the hook for legal fees.  Ropes & Gray was awarded nearly $300,000 in fees.  Dinsmore was granted about $346,000, and Wilson Elser was awarded $83,200.

LabMD’s lawyers sought to recoup attorney fees under the Equal Access to Justice Act, which can provide some relief to parties who prevail against federal agencies.  FTC lawyers had urged the federal appeals panel to reject any legal-fee award at all.  “LabMD is not entitled to recover any of its fees or costs because the commission’s position at every stage—when it opened the investigation, prosecuted an enforcement complaint, and defended its cease-and-desist order on appeal—had ‘a reasonable basis in both law and fact’ and therefore was ‘substantially justified,’” FTC attorney Theodore Metzler said in a court filing last month.

The special master, Walter Johnson, a U.S. magistrate judge in Rome, Georgia, concluded the FTC was not “substantially justified” in its investigation and prosecution of LabMD.  Johnson, like others before him, examined the FTC’s relationship with, and reliance on, a company that allegedly tried to get LabMD to buy its data-protection services after informing the company of an alleged information-security breach.  “Tragically, as this case was proceeding through the enforcement action stage, LabMD was forced to cease operations,” Johnson wrote in his report.

LabMD’s fee petition in the Eleventh Circuit revealed various rates for leading Ropes & Gray partners and associates as of October 2018.  The firm said it would reinvest any awarded compensation into further pro bono work.  Douglas Meal, the primary lawyer for LabMD in the Eleventh Circuit and formerly co-leader of the firm’s privacy and cybersecurity practice, reported an hourly rate of $1,500.  Appellate partner Douglas Hallward-Driemeier was charging $1,200, and then-partner Michelle Visser was billing at $1,060 hourly.  The firm’s fee application presented both current hourly rates and discounted figures that were used as the basis for the petition.

NCAA Ordered to Pay $33M in Fees and Costs in Antitrust Case

December 25, 2019

A recent Law 360 story by Dave Simpson, “NCAA Owes Student-Athletes’ Attys $33M in Fees and Costs,” reports that a California magistrate judge ordered the NCAA to pay $31.8 million to cover the attorneys who scored an injunction for student-athletes barring the NCAA from restricting their education-related compensation, but declined to provide the attorneys with the full $45 million they requested.  U.S. Magistrate Judge Nathanael Cousins applied minor reductions to the student-athletes’ baseline bid for fees and costs and declined to apply their ask for another $15 million based on a 1.5 multiplier, requested in light of "the exceptional nature of the outcome."

“Representation was of excellent quality on both sides of this litigation, and counsel for both sides expertly handled this exceedingly complex case,” Judge Cousins said.  “But the court finds that this quality and complexity are already reflected in plaintiffs’ counsels’ hourly rates and the number of hours billed.”

Further, he said, while the students’ victory was “historic,” they didn’t get everything they asked for.  “That both parties appealed the final judgment in the case indicates that neither wholly succeeded on their claims,” the magistrate judge said.  Finally, he said, the students’ attorneys have already recovered fees related to a damages portion of the case as a part of a settlement agreement.  In addition to the fees, the magistrate judge awarded the students’ attorneys nearly $1.4 million in costs.

Nearly $26 million of the fees will go to Winston & Strawn LLP, with about $3 million apiece heading to Hagens Berman Sobol Shapiro LLP and Pearson Simon & Warshaw LLP, while Pritzker Levine LLP will rake in $163,000.

The bid for fees and costs follows a landmark 10-day bench trial that kicked off in Oakland in September 2018 over allegations by Division I college football and basketball players that the NCAA's rules illegally restrict what they can receive to play.  The rules had limited athlete benefits to cost-of-attendance scholarships; Student Assistance Funds, which cover certain school-related expenses; some need-based grants, like Pell Grants; and bowl participation awards, which are typically capped around $450.

During the trial, sports economists, former athletes, university officials and NCAA administrators took turns testifying on the impacts of the NCAA's compensation rules.  Three former athletes, who didn't play professionally after college, recalled how they struggled as students to pay for meals, clothes and trips home, while they spent between 40 and 60 hours a week on their sports, which left little time for academics.