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$31M in Fees After Ninth Circuit Tossed $48M Fee Award

July 6, 2021 | Posted in : Class Fee Objector, Fee Agreement, Fee Allocation / Fee Apportionment, Fee Award, Fee Award Factors, Fee Issues on Appeal, Fee Jurisprudence, Fee Request, Fees & Judicial Discretion, Fees by Tiers / Scale, Hours Billled, Practice Area: Class Action / Mass Tort / MDL, Settlement Data / Terms

A recent Law 360 story by Dave Simpson, “Hagens Berman Gets $31M After 9th Circ. Nixes $48M Fee,” reports that a California federal judge has awarded Hagens Berman Sobol Shapiro LLP $31 million in attorney fees for work securing $205 million in optical disk price-fixing settlements — about $17 million less than the firm sought following the Ninth Circuit's decision to throw out an earlier $47.8 million fee award.  U.S. District Judge Richard Seeborg found that the firm was entitled to a 20% premium on top of the $25.9 million it would be allotted under a fee grid the firm laid out when making its bid to lead the case more than a decade ago.

The judge also said that most of the case's issues that the firm pointed to as "not contemplated" when it laid out the fee grid before it was selected as lead counsel in the case were in fact commonplace, when taken individually.  Hagens Berman had argued that it deserved a greater fee award because, among other things, it put in hours of work to produce records it had to translate, and that it had to resolve discovery disputes and obtain depositions from dozens of witnesses.  It also cited having to overcome a hefty burden when seeking class certification, after its early attempts at certification were denied.

But Judge Seeborg said that "planning for such events, and taking the risk if the budgeting proves wrong, is the very point of fee proposals."  "That the court might issue unfavorable rulings — regardless of how strong Hagens Berman thought its positions were — is hardly unforeseeable, and therefore should not have been uncontemplated," the judge said.

Further, he said, when the Ninth Circuit rejected the district court's approval of the $47.8 million bid, the panel noted that, on remand, the firm would have to expand upon its reasoning for why it believes it is entitled to such a large deviation from the fee grid it originally laid out.  In several instances, the judge found the firm's new reasoning expanded only "slightly" on its previous explanations.  Still, the judge said Friday, taken cumulatively, the factors laid out by Hagens Berman did take the litigation beyond what could have been anticipated at the time of the firm's bid to lead the case.  And for that reason, he allotted the firm about $5 million more than the $25.9 million it would be entitled to under the fee grid.

"If there were reason to believe that the litigation dragged out for nearly a decade as the result of any lack of diligence or inefficiency on the part of Hagens Berman, the result might be different," Judge Seeborg said.  "But that is not the case.  This was long and hard-fought litigation involving a series of circumstances that, taken together, were never contemplated."

Hagens Berman had jockeyed with other firms for the top spot to represent indirect buyers accusing Samsung, Toshiba, Panasonic and other computer parts makers of participating in an industrywide conspiracy to bump up the cost of the drives.  It submitted a proposed fee arrangement, which helped it secure the position.  Hagens Berman was appointed lead counsel by then-U.S. District Court Judge Vaughn Walker in 2010.  Judge Walker retired the following year, and the case was assigned to Judge Seeborg.

Under that proposed fee arrangement, the firm would be entitled to $25.9 million. But the amount Hagens Berman initially obtained after three rounds of settlement fee requests was substantially higher than what it initially estimated in its proposed bid to lead the case.

In May 2020, a pair of Ninth Circuit panels vacated the $47.8 million in attorney fees Hagens Berman initially won in the decade-old litigation. They said trial courts do enjoy broad discretion in determining reasonable fee awards, but the size of the variance between the bid and the awards in this case required further explanation.  On remand, Hagens Berman requested the same $47.8 million in legal fees, calling the $25.9 million total a "starting point."  Nearly two dozen objectors fought to defeat or lower the attorney fee bid, making a variety of arguments. Some pointed to the fact that while some defendants did settle, resulting in the $205 million settlement sum, other defendants did not and they ultimately prevailed in motions for summary judgment.

"At heart, the objectors are contending Hagens Berman is getting overpaid for negotiating $205 million in settlements for a case that ultimately was found on summary judgment to have no merit," Judge Seeborg said.  "There is tension in the claim that the lawyers got somewhat too much money when, at the end of the day, the facts and law were that, but for the settlements, class members would have been entitled to nothing."

Ultimately, Judge Seeborg agreed to provide the firm with a 20% premium on the "starting point," in recognition of the uncontemplated work it took on.  "While the 20% figure is necessarily to some degree arbitrary, it is intended to represent reasonable compensation for the extra hours the firm expended, without producing a windfall or releasing it entirely from the consequences of its bid," he said.