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Ninth Circuit Removes Judge Who Cut Attorney Fees from Barbri Antitrust Class Action

May 13, 2016 | Posted in : Fee Award, Fee Issues on Appeal, Fee Reduction

A recent NLJ story, “Calif. Judge, Often Reversed, is Removed From Barbri Antitrust Class Action,” reports that a federal appeals court ordered the removal of a California judge who is overseeing an antitrust class action against the publishers of the Barbri bar review course after his rulings have been repeatedly reversed.

The U.S. Court of Appeals for the Ninth Circuit vacated U.S. District Judge Manuel Real’s ruling on attorney fees in a case that alleges West Publishing Corp. and Kaplan Inc. conspired to monopolize the market for the Barbri bar review course.  In remanding the dispute, the panel ordered the assignment of a new judge.  Real’s rulings, particularly on fees, the court noted, have been reversed three times in a separate case involving antitrust claims against Barbri.

“In light of the history of this case and related litigation, it is clear to us that the district judge would have ‘substantial difficulty in putting out of his … mind’ his previously expressed, erroneous findings and conclusions, and that ‘reassignment is advisable to preserve the appearance of justice,’ ” Ninth Circuit Judge Milan Smith wrote for the appeals panel.

The ruling comes nearly a decade after a $49 million settlement in a related case spurred numerous appeals to the Ninth Circuit.  That settlement involved thousands of law students who claimed to have overpaid for the Barbri course during the nine years after Aug. 1, 1997.

In 2009, the Ninth Circuit reversed Real’s approval of the deal, noting a “disturbing appearance of impropriety” in the way incentive awards were tied to the settlement amount.  On March 12, 2015, the Ninth Circuit reversed Real’s ruling granting $236,000 to a law firm whose objector clients claimed credit for unraveling the deal.  The panel found the firm, Kendrick & Nutley, should have been entitled to more than $315,000.

The ruling came in a class action brought on behalf of people who bought the Barbri course materials from Aug. 1, 2006, through March 21, 2011.  After Real dismissed the case in 2008, the Ninth Circuit sent the matter to mediation.  Both sides reached a settlement, which Real rejected.  A new settlement in 2013 provided $9.5 million to class members and $1.9 million in legal fees.  Objectors challenged the fees, and Real reduced the amount to $585,000.

Harris & Ruble and the Law Offices of Perrin F. Disner, class counsel in the case, appealed Real’s fee award.

“There are a number of areas in which the district court here should have been more specific as to its reasoning,” Smith of the Ninth Circuit wrote.  Real’s reduction of costs was “based on clearly erroneous findings of fact,” Smith wrote.

Alan Harris, founder of Los Angeles-based Harris & Ruble, who represented class counsel, said in an email: “Class counsel are gratified by the Ninth Circuit decision.  After nearly eight years of litigation, the Stetson case has achieved its principal goal: today, in each of the fifty states, Kaplan offers law school graduates bar exam preparation courses in competition with BarBri.