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

May 6, 2020 | Posted in : Class Action / MDL, Expenses / Costs, Fee Award Factors, Fee Jurisprudence, Fee Request, Hourly Rates / Hourly Billing, Lawyering, Lodestar / Multiplier

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.