A recent Law 360 story, “Nobel Tells 9th Circ. To Nix $2.3M Fee Award in Implant Deal,” reports that Nobel Biocare Holding AG urged the Ninth Circuit to vacate a $2.3 million fee award to plaintiffs’ attorneys in its settlement of a class action alleging Nobel sold defective dental implants, arguing the presiding judge improperly looked at “secret evidence” to determine the award.
During oral arguments in Pasadena, California, Eric Kizirian of Lewis Brisbois Bisgaard & Smith LLP, representing Nobel, urged a three-judge panel to vacate the $2.3 million in attorneys' fees awarded by U.S. District Judge Michael Fitzgerald to plaintiffs' counsel in a settlement of the claims of a class of more than 2,900 dentists alleging bone and gum problems caused by Nobel's dental implants.
Kizirian argued that the fee award must fall because Judge Fitzgerald reached it by reviewing plaintiffs' attorneys' time sheets in chambers in a “secret evidence” process that violated Nobel's due process rights.
“Virtually all aspects of the fee order that's on appeal, centers on the district court's decision to award $2.3M in attorneys fees based on its in camera review evidence that Nobel Biocare was denied access to, was not able to analyze and had no ability to meaningfully contest,” he said.
Circuit Judge Marsha Berzon, however, told Kizirian that assuming the panel agrees that the time sheet review was a due process violation, vacating the fee award seems appropriate. But Judge Berzon added that it appears likely Judge Fitzgerald “probably did a pretty good job” of reviewing the evidence, and wouldn't have reduced the fee award any further even if Nobel got to see the time sheets.
“Assuming you're right on this legal question, is it really going to make a difference?” she said.
Kizirian answered that this was yet more reason for the panel to weigh in not just on the due process violation, but also on what Nobel contends are myriad other problems with the fee award, such as billing irregularities by plaintiffs' counsel, or that Judge Fitzgerald overvalued the settlement by calculating the maximum payout if every implant in the class failed and was refunded. Kizirian said that Judge Fitzgerald had indicated Nobel, and Kizirian in particular, was unlikely to change his mind during a hearing on the fee award, and thus guidance from the appellate court is needed.
“He already expressed I'd overstated the efficacy of my advocacy, that's a gross point of concern to me your honor,” he said.
The suit, filed by dentist Jason Yamada in July 2010, sought indemnification for alleged defects in Nobel’s NobelDirect dental implants, which the company introduced in January 2004. The complaint, which initially asserted five class claims, estimated from $112 million to $450 million in damages, according to Nobel's appellate briefing.
The plaintiffs, however, lost on four of their five class claims except the one for alleged violations of California's Unfair Competition Law. No longer having a chance at the compensatory class damages that made up the vast majority of the damages estimate, the plaintiffs settled, according to the briefing. A win on that UCL claim would have been worth from $2 million to $8 million per Yamada's calculations, according to the briefing.
The settlement that was approved in May 2013 provides a lifetime warranty for the class members, who can obtain a replacement implant or a $450 refund should an implant they installed fail. Nobel contends the deal is worth only $590,000, and that only $5,000 had been paid out under the settlement in January 2014, when the fee award was issued, according to the company's appellate briefing.
Yamada argued to Judge Fitzgerald that the settlement is worth $21 million in originally asking for $4.3 million in fees, while the judge's calculation reached a value of $12 million for the deal, according to Yamada's appellate briefing.
Myron Moskovitz, representing Yamada, urged the panel to affirm the fee award, arguing that although he would “normally” “totally agree” with the panel that Nobel should have gotten to review the time records, with the context that Judge Fitzgerald slashed the requested fee award from $4.3 million to $2.3 million, it was not an abuse of discretion to review the records in chambers.
The case is Jason Yamada v. Nobel Biocare Holding AG et al., case number 14-55263, in the U.S. Court of Appeals for the Ninth Circuit.