Fee Dispute Hotline
(312) 907-7275

Assisting with High-Stakes Attorney Fee Disputes

The NALFA

News Blog

Ninth Circuit: Big Variance Between Fee Proposal and Fee Request in MDL

May 19, 2020 | Posted in : Class Action / MDL, Fee Agreement / Fee Proposal, Fee Award, Fee Issues on Appeal, Fee Request

A recent Law 360 story by Anne Cullen, “9th Circ. Nixes Hagens Berman’s $48M Fees in Disk Drive MDLreports that a pair of Ninth Circuit panels on Friday dissolved $48 million worth of attorney fee awards that Hagens Berman Sobol Shapiro LLP snagged from a series of price-fixing settlements, finding the firm didn't explain why its fee requests differed significantly from estimates proposed in its bid to lead the case.  "District courts enjoy broad discretion to determine reasonable fee awards, but the size of the variance between the bid and the awards in this case requires more explanation," one of the panels said in a published decision that vacated the bulk of the purse.

A second panel threw out an additional $5 million in fees Hagens Berman won in the latest round of settlements, citing their colleagues' conclusion.  "We vacate and remand the third-round fee award for further findings consistent with the standard set forth in the concurrently filed opinion addressing the first- and second-round fee award," the second panel said in a brief, unpublished ruling.  Hagens Berman had secured $47.8 million in fees from three rounds of deals totaling about $205 million in a long-running case over the prices of optical disk drives.

At the outset of the decade-old litigation, the firm was tapped as lead counsel for indirect buyers, which accused Samsung, Toshiba, Panasonic and other computer parts makers of participating in an industrywide conspiracy to bump up the cost of the drives.

While Hagens Berman was jockeying with other firms for the top spot, it submitted a proposed fee arrangement that ultimately helped it secure the position.  However, when the firm later filed its fee requests in each settlement round, the amounts it asked for — and won — were substantially higher than the terms put forward in its lead counsel proposal.

"The variance was significant," the first panel said, highlighting that one of the objectors behind the challenge estimates the first fee award to be about $21 million over what Hagens Berman initially promised to seek.  "When class counsel secures appointment as interim lead counsel by proposing a fee structure in a competitive bidding process, that bid becomes the starting point for determining a reasonable fee," that panel added.  "The district court may adjust fees upward or downward depending on circumstances not contemplated at the time of the bid, but the court must provide an adequate explanation for any variance."  All three awards — plus the roughly $5 million Hagens Berman won in expenses — have been sent back to a San Francisco federal court for a second look.