A recent Law 360 story by Sarah Jarvis, “Home Depot Data Breach Attys Get $11.7M in Fees After Fight,” reports that an Eleventh Circuit panelordered a Georgia federal court to award $11.7 million in fees, plus interest, to attorneys representing banks and other financial institutions in litigation over Home Depot's 2014 data breach, ending a tumultuous, four-year fight over the attorney fees. In a per curiam opinion, the panel said the Northern District of Georgia erred in opting to use a percentage method to award $14.5 million in attorney fees, including interest, after the appellate panel had previously found that a $11.7 million lodestar amount was "fully supported by the record."
The panel remanded the case and instructed the district court to enter an order requiring Home Depot Inc. to pay class counsel for the financial institutions $11.7 million plus interest from the date of the amended fee award in January 2020. "The law of the case doctrine and Home Depot I's mandate precluded the district court from awarding class counsel an attorney's fee other than the $11.733 million lodestar plus interest," the panel said, referencing the previous appeal in the case.
Home Depot's 2014 data breach compromised 56 million credit and debit card numbers, and was one of the largest payment card data breaches in history, the trial judge had said. The 2017 settlement agreement provided $27.2 million in cash to the class and required the retailer to improve its data security. In addition, Home Depot gave money to the financial institutions affected by the breach, including an extra $14.5 million to obtain releases from putative class members of their claims in the litigation.
After settling, the class of financial institutions sought $18 million in attorney fees, comprising the $11.7 million lodestar and a multiplier of 1.55, which Home Depot opposed as excessive. The retailer had argued that $5.6 million in fees was appropriate. In September 2017, a Georgia federal judge set attorney fees at $15.3 million. But in July 2019, the Eleventh Circuit trimmed the award against Home Depot, saying U.S. District Judge Thomas W. Thrash Jr. improperly enhanced an $11.7 million lodestar amount by a multiplier of 1.3 to factor in attorney risk.
On remand, the trial judge sided with new arguments from the class of financial institutions and awarded in January 2020 $14.5 million in attorney fees, including interest, against Home Depot, plus about $730,000 in costs. Home Depot appealed again, arguing the settlement agreement clearly states the retailer should pay the amount of attorney fees that were reduced on appeal, plus interest.
Cari K. Dawson of Alston & Bird LLP, an attorney for Home Depot, argued in December 2020 that the trial judge didn't have the authority to reconsider an appropriate attorney fees amount using a different calculation method because the appellate court affirmed all but the multiplier in his previous decision, including the $11.7 million lodestar. She said that although the appellate panel did not explicitly state in its 2019 opinion that $11.7 million was the appropriate amount of attorney fees, that was implied by its affirmation of all but the risk multiplier.
But Kenneth S. Canfield of Doffermyre Shields Canfield & Knowles LLC, an attorney for the class, had argued that Judge Thrash did have discretion on remand to take a second look at what was appropriate, as long as he didn't use the 1.3 risk multiplier that appellate judges had rejected. Canfield said the trial judge could instead apply a percentage method to calculate fees rather than rely on the $11.7 million lodestar, which is what he did.