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Category: Lodestar / Multiplier

Attorneys Get Fraction of Fees Sought in USAA Bad Faith Trail

June 16, 2020

A recent Law 360 story by Cara Salvatore, “Attys Score Fraction of Fees Sought in USAA Bad Faith Trial” reports that an Oregon federal judge has ruled that lawyers who helped a driver win claims in a two-phase trial against her insurer will be paid only $179,000 for the second phase, or a quarter of the $715,000 they'd requested.  The suit concerned USAA Casualty Insurance Co.'s alleged refusal to pay out an uninsured motorist policy to plaintiff Peggy Foraker, who was hurt when a suspect fleeing from police crashed into her.  After a two-day, two-phase bench trial, U.S. District Judge Michael Simon found in April that USAA acted in bad faith and awarded Foraker $323,000.

But Judge Simon said that Foraker's lawyers deserved much less in legal fees than the $715,000 lodestar they requested, because their wins in the second phase were limited — unlike the first phase, where they got more than $1 million in fees.  "Based on plaintiff's pretrial filings and the time spent at trial, it appears to the court that approximately 75 percent of plaintiff's efforts were directed toward plaintiff's unsuccessful claims and arguments.  This is also consistent with the results obtained.  Thus, the court will award plaintiff an attorney fee award at Phase II equal to 25 percent of plaintiff's Phase II lodestar figure," the judge said.

In the first phase, a different judge awarded Foraker the full $1 million USAA uninsured motorist policy limit, but rejected her claim that the insurer breached its contract because USAA hadn't denied her claim in full before she sued.  "Much of the legal and factual work spent by plaintiff at Phase II related to plaintiff's claim for non-economic damages, plaintiff's claim for economic damages based on the lost gains that she would have earned in her investment portfolio, and other legal issues on which plaintiff did not prevail," the judge said.  Judge Simon also called the attorneys' 340-page sheaf of submitted bills "massive but poorly organized."  In the first phase, Foraker was awarded legal fees of $1.31 million.

$88M Cut From $157M Fee Request in Namenda Class Settlement

June 15, 2020

A recent Law 360 story by Pete Brush, “$88M Cut From Requested $157.5M Atty Fee in Namenda Deal” reports that a Manhattan federal judge slashed nearly $88 million from a $157.5 million fee award requested by Garwin Gerstein & Fisher LLP and five other firms for guiding wholesalers of the Alzheimer's drug Namenda to a $750 million antitrust settlement with a unit of Allergan PLC.

After hinting she would reduce the payout, U.S. District Judge Colleen McMahon held Monday that six law firms that alleged Forest Laboratories Inc., a unit of Ireland-based Allergan, thwarted generic competition through unlawful "pay-for-delay" tactics are entitled to $69.538 million.  "It is still a handsome payday for counsel," Judge McMahon wrote, after cutting the request for about 21% of the settlement proceeds for plaintiffs' counsel down to about 9.3%.

The judge approved the lawyers' request for $5.8 million of expenses in the nearly five-year-old litigation, but slashed proposed $150,000 payouts for the two Namenda wholesalers that represented the class — Smith Drug Co. and Rochester Drug Co-Operative Inc. — by 50% to $75,000 each.  "Frankly, this was attorney-driven litigation.  All the class representatives really did was sit for a deposition," she wrote, calling the class reps' contributions "minimal."

Reasoning why she slashed the award, Judge McMahon said that the firms engaged in "duplicative work" — "or, in some cases triplicative or quadruplicative work" — and "inflated" their total number of hours worked.  "Class counsel's time sheets lack sufficient granularity to separate the productive hours from the wasted ones," she wrote.

The wholesalers had claimed Forest deployed a two-pronged strategy for keeping generic rivals to Namenda off the market, including unlawful "pay-for-delay" arrangements and "product-hopping" tactics that shielded its profits long after generic rivals should have developed robust sales.  A not-uncommon effort to settle ahead of trial led to the uncommonly large payout — one of the largest in the history of Hatch-Waxman Act generic-drug approval cases. Allergan admitted no wrongdoing in the deal.

"I fully understand why Forest settled this case for a large number.  Its downside was huge; this was a 'bet the company' case," Judge McMahon observed — awarding the plaintiffs' firms "twice the lodestar" but not "anything like the 4.5 times lodestar requested."

Judge McMahon also didn't like what she characterized as a suggestion that the six plaintiffs' firms should get an outsized payday to make up for the times they don't win.  "I am absolutely unmoved — indeed, I am offended — by the argument that class counsel deserves a humongous fee award in this case because 'the winning cases must help pay for the losing ones,'" she wrote.

21 Percent Fee Request in Doubt in Namenda Class Settlement

May 27, 2020

A recent Law 360 story by Frank Runyeon, “$750M Namenda Deal OK’d But 21% Atty Fee Request in Doubt” reports that a Manhattan federal judge approved a landmark $750 million settlement over allegations that an Allergan PLC subsidiary thwarted generic competition for its Alzheimer's drug Namenda, but cast doubt on awarding $157 million in attorney fees, calling the figure "astronomically large."  During a teleconference fairness hearing, U.S. District Judge Colleen McMahon swiftly approved the settlement, which compensates wholesalers that accused Allergan and its Forest Laboratories LLC unit of anti-competitive conduct to keep generic versions of Namenda off pharmacy shelves.  The deal is one of the largest ever by a single drugmaker in an antitrust case.

But the judge quickly pivoted to criticize the payout for attorneys representing the class.  "With no disrespect meant about the quality of the work that went into this prosecution, I am a little nonplussed at the notion of awarding 21% of this settlement in attorneys fees," Judge McMahon said.  "It is an astronomically large number," the judge added.  "It is over four times lodestar, and, at these numbers, bears little resemblance to the work that's been done."

Judge McMahon said she had "some concern about duplication because of some things that I have seen in the record, and so before I reach a final decision on attorneys fees I want to take a look at time records."

Class counsel Bruce Gerstein said he would send over the records "expeditiously," but asked the judge to consider that the class members are "sophisticated" corporations who had agreed to the fees.  Attorneys had initially sought a third of the $750 million settlement, but dialed down their requested share following objections from wholesalers.

Judge McMahon said she would deal with the motion for attorney fees quickly, as soon as she could review the documents.  She noted that the allocation plan for distributing the fees was approved, and that the attorneys' $5.8 million in expenses would likely be approved in the forthcoming decision.

Third Circuit Keeps $112M Fee Award Largely Intact in NFL Concussion Case

May 8, 2020

A recent Legal Intelligencer story by Max Mitchell, “Third Circuit Oks NFL Concussion Litigation Attorney Fees-With One Exception” reports that a federal appeals court has ruled to mostly affirm the allocation of $112 million in fees for attorneys who led the NFL concussion litigation, but remanded the fee petition filed by counsel for a flank of objectors, asking the district court for further explanation.  In a unanimous decision, the U.S. Court of Appeals for the Third Circuit affirmed U.S. District Judge Anita Brody of the Eastern District of Pennsylvania’s fee award allocation, which included $51 million to co-lead class counsel Christopher Seeger’s firm Seeger Weiss.

The nonprecedential ruling rejected arguments that Brody’s decision to have Seeger review the fees and make recommendations about how to divide up the fees was improper, finding that the district court did not merely act as a rubber stamp for Seeger’s recommendations, but rather thoroughly reviewed the requests.  “The court did not blindly accept a recommendation from a single interested counsel but rather considered that recommendation in light of its knowledge of the case, the work of all counsel, and how all counsel described their own work,” Judge Patty Shwartz said in the court’s 13-page opinion.  “Furthermore, at all times, the district court understood its role as the ultimate decision maker and fulfilled its obligation to make an independent assessment of each fee petition.”

In a statement to the press, Seeger said he was pleased with the decision.  “As the Third Circuit has repeatedly concluded, the district court carefully managed this litigation and showed extraordinary involvement in the stewardship of a complicated class action settlement,” Seeger said.  “We are proud of the fact that nearly 1,150 claims have been approved to date totaling more than $785 million, providing much needed care and support to former NFL players in need.”

The circuit court, however, also found that Brody failed to give a full explanation for why she awarded just $350,000 to counsel for a group of objectors, known as the Faneca objectors.  According to Shwartz, counsel for the objectors had initially requested $20 million, which Brody denied as “unreasonable,” since it was more than five times the $4.3 million lodestar.  However, Brody did not give further explanation for why the $350,000 was reasonable, and so the circuit remanded the petition from the Faneca objectors for further explanation from Brody.

New York-based MoloLamken attorney Steven F. Molo, who represented the Faneca objectors, said he was also pleased by the circuit’s decision.  “We fought hard to win important improvements to the settlement for a very deserving class of injured plaintiffs.”  Molo said in an emailed statement.

Along with awarding New York and New Jersey-based Seeger Weiss $51 million in 2018, Brody divided up $85.6 million between more than 20 firms that were involved in developing the class settlement, which is expected to compensate more than 20,000 former NFL players who suffered cognitive injuries during their time with the league.

Seeger had initially requested $70 million from the district court, but, despite the difference in Seeger’s award, Brody’s ultimate allocation of the fees tracked somewhat closely with the fee allocations that Seeger had pitched to the court last fall.  Seeger’s proposal had said Philadelphia firm Levin Sedran & Berman should have received the second-highest award, at $10.3 million for nearly 5,000 hours spent on the case. He also said Miami-based Podhurst Orseck should receive $6.7 million, and Anapol Weiss, which is home to Sol Weiss, Seeger’s co-lead class counsel, should get $4.6 million.  Brody allocated $8.4 million to Levin Sedran, $6 million to Podhurst and $4.6 million to Anapol Weiss.

Although a total of $112.5 million in legal fees were set aside under the settlement agreement, Brody said she had decided to hold $26.9 million in reserve to cover attorney fees as the settlement continues to be implemented over the next 65 years.

Law Firms Seek $17M in Attorney Fees in Railroad No-Poach Deals

May 6, 2020

A recent Law 360 story by Matthew Santoni, “2 Firms Seek $17M Fee Award for Railroad No-Poach Deals” reports that Lieff Cabraser Heimann & Bernstein LLP and Fine Kaplan and Black RPC asked a Pennsylvania federal court for $17.1 million from a $48.9 million fund established in an antitrust settlement over alleged arrangements between railroad suppliers Wabtec Corp. and Knorr-Bremse AG not to poach each others' employees.  Citing the quick resolution of the workers' case and the amount of work that went into divining which of thousands of jobs allegedly had their salaries suppressed by the deals not to compete, the firms asked for one-third of the total fund, plus $712,000 in costs, $105,000 for the settlement administrator and $15,000 each for the five lead plaintiffs.

"Class counsel have secured a $48.95 million settlement fund for the benefit of thousands of railway industry workers who, on average, will recover approximately $3,437 each, after deductions for the fees and costs requested herein," the brief accompanying the fee request said.  "Further, class members will receive this compensation in record time.  It has only been about 18 months since the court appointed the undersigned as interim co-lead class counsel."

Lieff Cabraser and Fine Kaplan submitted the fee request to the U.S. District Court in Pittsburgh, in anticipation of a final settlement approval hearing in August.  In mid-March, U.S. District Judge Joy Flowers Conti gave her preliminary approval to the proposed class certification and settlements with Knorr for $12 million and Wabtec for $37 million.  Knorr reached its settlement in August, and Wabtec followed in late February.

The underlying lawsuit claimed that Wabtec, Knorr and other railroad equipment manufacturer subsidiaries struck under-the-table deals not to hire each other's employees, which allegedly decreased competition for workers among them and let them artificially keep workers' salaries lower.  Judge Conti dropped several of the two companies' subsidiaries in June and July and trimmed out the class claims that had originally sought to represent all employees.  The workers filed their revised complaint, focusing only on certain "job families," on July 31.

In order to narrow down which workers were affected by the no-poach agreements for the amended complaint, the plaintiffs said they had to review hundreds of job families and thousands of job titles in order to exclude certain executive, human resources and legal jobs from the proposed class, along with those whose skills weren't specific to the railroad industry.

"Plaintiffs performed a careful, expert-led review of 1,471 job titles for Knorr falling under 253 job families, and 1,746 job titles for Wabtec in 444 job families," the brief said.  "For the remaining job families and job titles, the experts reviewed Knorr and Wabtec job descriptions and job postings where necessary to clarify the skills required, and were then able to identify additional job families for exclusion."  The firms said the size of the settlement fund was another argument justifying their fee request, calling it one of the largest ever for an antitrust case.

"As a proportion of class member income over the class period, this result is the second largest ever," the brief said.  "The only recovery that was larger, Nitsch v. Dreamworks Animation SKG, Inc., involved evidence of direct compensation fixing that does not exist here, and further was resolved only after the court granted class certification."  The firms also argued that their attorneys had demonstrated their expertise on the case, particularly in using the early settlement with Knorr to secure the company's cooperation in providing information that was later used in the settlement with Wabtec.

Despite hundreds of thousands of pages of discovery and the job analysis, the settlement agreements came relatively quickly after just one amended complaint and two rounds of motions to dismiss from the defendants, the firms said.  "Class counsel efficiently litigated this case, obtaining two substantial settlements after one round of motions to dismiss and substantial discovery —far earlier than other no-poach cases, where the parties also litigated class certification and summary judgment motions before settling," the brief said.  "Class counsel's efficiency not only guaranteed tangible and considerable benefits to the class more quickly, but also helped conserve judicial resources."

Additionally, the request for one-third of the settlement fund was reasonable compared to the actual hours of work the firms put in, the brief said. Attorneys put in more than 12,000 hours of work, which, at rates ranging from $275 to $1,100 per hour, would have created a total "lodestar" of $6.9 million in fees just for work between September 2018 and March 2020. With one-third of the settlement fund being slightly more than twice the firms' estimated hourly lodestar, the request fell in line with similar cases, the firms said.  Expenses incurred on the case included about $550,000 for experts' review of the job titles and potential damages and $16,000 for mediation sessions, the firms said.