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

January 2, 2019 | Posted in : Class Action, Contingency Fees / POF, Expenses / Costs, Fee Award Factors, Fee Request, Lawyering

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