A recent Law 360 story, “9^th Circ. Vacates $2.3M Fee Award in Nobel Implant Row,” reports that the Ninth Circuit on Wednesday vacated $2.3 million in fees awarded to the attorneys for a dentist in a settled class action alleging Nobel Biocare Holding AG sold defective dental implants, ruling the award was based on records that Nobel wasn’t allowed to see.

In a 20-page precedential ruling, the court found that U.S. District Judge Michael Fitzgerald had erred when he decided to issue the award based on an in camera review of the dentist’s attorneys’ billing records, over Nobel’s objections.  The three-judge appeals panel ordered the issue back to court, where Nobel will get a shot at seeing redacted versions of the records, according to the ruling.

Nobel had argued, in part, that its due process rights were violated when Judge Fitzgerald refused to allow it to review the records the judge used in determining the fee award, and the Ninth Circuit agreed, finding that, though Nobel didn’t have a chance to brief the issue, it had objected many times in court, according to the decision.

“A district court abuses its broad discretion in awarding attorneys’ fees when it makes an error of law,” the panel wrote.  “We find such error here: The district court’s use over defendants’ objection of ex parte, in camera submissions to support its fee order violated defendants’ due process rights.”

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, with one for alleged violations of California's Unfair Competition Law remaining.  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 the 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.

At oral argument in February, U.S. Circuit Judge Marsha Berzon questioned whether a remand of the fee award would really make a difference to Nobel, because it appears likely Judge Fitzgerald “probably did a pretty good job” of reviewing the evidence.

Nobel’s attorney Eric Kizirian of Lewis Brisbois Bisgaard & Smith LLP answered that it was all the more reason for the panel to weigh in on what Nobel contends are other problems with the fee award.

The Ninth Circuit said the ruling that there was no need for it to reach the merits of the rest of the argument, but “in the interest of efficient eventual resolution of this dispute” did hold that Judge Fitzgerald’s discount of the lodestar was not erroneous, and that his cross-checking on the valuation of the settlement was discretionary, in part because the class’ benefits in the settlement weren’t easily monetized.

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.