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Category: Practice Area: Class Action / Mass Tort / MDL

Class Counsel Earn $10M in Fees in $31M Keurig Antitrust Settlement

June 23, 2021

A recent Law 360 story by Bryan Koenig, “Class Counsel Awarded $10M in Fees From $31M Keurig Deal, reports that a New York federal judge signed off on a $10.3 million attorney fees award, plus $2.3 million in litigation costs, for plaintiff firms that negotiated a $31 million antitrust settlement with Keurig Green Mountain Inc. resolving claims the coffee giant monopolized the market for single-serve coffee packs.  U.S. District Judge Vernon S. Broderick also granted final approval to the deal itself covering indirect buyers who purchased Keurig K-Cup Portion Packs through middlemen between September 2010 and August 2020.  Taking the lead on negotiating that settlement were attorneys from Kaplan Fox & Kilsheimer LLP, Wolf Haldenstein Adler Freeman & Herz LLP and Pearson Simon & Warshaw LLP.

The firms, backed by others, had sought approval for their one-third cut last month on arguments that the request was fair and reasonable in light of the length, complexity and risks involved in pursuing the litigation.  Judge Broderick agreed, signing off on legal costs that also include up to $911,286.43 in administrative and notice costs for JND Legal Administration, along with a $3,000 award for each of 11 class representatives who submitted to depositions and another $1,500 for the remaining 20 named plaintiffs.

The settlement, which does not affect ongoing claims from Keurig competitors like TreeHouse Foods Inc., came out of suits brought against Keurig that were consolidated into multidistrict litigation in 2014 over allegations of anti-competitive practices in the marketing of the company's single-serve packs of roasted and ground coffee for use in its coffee machines.

Buyers and coffee companies, including TreeHouse, alleged Keurig's anti-competitive actions included forcing distributors to enter exclusive agreements, filing baseless patent infringement lawsuits against competitors and attempting to dissuade retailers from selling competitors' products.  They also alleged Keurig misled consumers into believing that rival pods wouldn't work with "Keurig 2.0" coffee machines and modified the machines purely to make them incompatible with competitor pods.

In April, the court allowed the attorneys general of Illinois and Florida to object to the method of distributing the $31 million settlement to residents of their states.  Neither Keurig nor the indirect buyers who reached the deal opposed the intervention bid, though the judge said the settlement class has "made clear" it will not willingly change the allocation plan and sought to reserve the right to argue that the objections should have come sooner.

The indirect buyer class cut a deal with the Illinois and Florida enforcers last week that recognized the ability of residents of those states to recover antitrust damages as indirect buyers.  The revised plan treats Florida and Illinois as "repealer states," putting them among those that have acted at the state level to counter the U.S. Supreme Court's Illinois Brick doctrine, which generally blocks indirect buyers from securing monetary damages under the Sherman Act.  The indirect plaintiffs filed the revision, which does not change the Keurig settlement itself, the same day as a special master's report that recommended adopting the changes.

Boies Cites ‘Trench Warfare’ in $627M BCBS Fee Request

June 21, 2021

A recent Bloomberg Law story by Roy Strom, “Boies Cites ‘Trench Warfare’ in $627 Million BCBS Legal Fee Bid,” reports that David Boies and Michael Hausfeld are requesting nearly $627 million in fees and another $40 million in expenses for the work a horde of lawyers did over eight years to secure a $2.7 billion antitrust settlement with Blue Cross Blue Shield.  The fee could provide a much-needed boost for Boies’ law firm, Boies Schiller Flexner, which has suffered an exodus of lawyers and saw its revenue in 2020 fall nearly 40% to $250 million, according to AmLaw data.

It’s unclear how the fee would be split between the myriad lawyers who worked on the case, but Boies and Hausfeld stand to gain most having served as co-lead counsel.  The fee application follows a preliminary approval in November of a settlement between the health insurer and plaintiff’s counsel. The judge in the case, R. David Procter of the Northern District of Alabama, said at the time the fees would be subject to his approval and would “receive intense scrutiny.”  He also said the proposed fee, which is roughly 25% of the settlement value, is “in line with benchmarks” for the Eleventh Circuit.

“This case has been the litigation equivalent of trench warfare, engaging scores of lawyers on both sides,” wrote Boies and Hausfeld, who are co-lead counsel.  The lawyers noted that from 2013 to August last year, a total of more than 434,000 hours had been spent litigating the case.

Filed in February 2012, the case alleged Blue Cross Blue Shield health plans divided up insurance markets across the country and agreed not to compete with one another across those markets.  The settlement agreement includes changes to the Blue Cross business model designed to enhance the market for health insurance, including eliminating a cap on revenue that BCBS affiliates could earn selling other health insurance plans.

The motion for legal fees compared the scope of the litigation to some of the most well-known antitrust cases, including those brought against Standard Oil, American Tobacco Co., and AT&T. Those cases were investigated and brought by the U.S. government.  Boies and Hausfeld noted there was no government investigation in the Blue Cross case.  “This was a purely private effort to enforce the antitrust laws,” the lawyers wrote.  The parties briefed over 150 discovery motions that led to 91 discovery orders, Judge Procter noted in an earlier filing.  He wrote that lawyers conducted over 120 depositions and defended over 20 depositions of class representatives and experts.

The lawyers wrote in their fee application that the defendants produced more than 75 million pages that were reviewed by a team of 178 attorneys for the plaintiffs.  The settlement negotiations began in 2015 and included 158 in-person and virtual meetings with mediators and 282 telephone conferences, they wrote.  The lawyers also noted they went up against “a who’s who of the nation’s most experienced antitrust litigators” at a number of major law firms, including Kirkland & Ellis, Hogan Lovells, Crowell & Moring, Foley & Lardner, Shearman & Sterling, and Cravath, Swaine & Moore.

10 Largest Class Action Attorney Fee Awards in U.S. History

June 20, 2021

A recent Bloomberg Law story by Roy Strom, “Meet the Professor Big Law Hires to Collect Nine-Figure Fees,” reports on attorney fee awards in the 10 largest class action recoveries in the U.S. have paid class counsel a range of fee when measured as a percentage of the settlement amount:

As stated in the article, there is no central authority to track class action settlements and attorney fee award data.  We at NALFA, would like to to be this authority.  As a non-profit group, we can worked with outside groups and individuals to promote and promulgate empirical research and data on attorney fee awards in a range of underlying litigation practice areas.

Class Counsel Seek $6.9M in Fees for ‘Trailblazing’ Litigation

June 18, 2021

A recent Law 360 story by Rose Krebs, “Attys Seek $6.9M For ‘Trailblazing’ Work on Fresh Market Suit,” reports that Friedlander & Gorris and Robbins Geller are seeking roughly $6.9 million for what they say was "trailblazing" work as part of a proposed $27.5 million settlement to a Delaware Chancery Court suit over the $1.4 billion take-private sale of specialty grocery chain Fresh Market.  In a brief, Friedlander & Gorris PA and Robbins Geller Rudman & Dowd LLP assert they should be awarded $6.875 million for attorney fees and expenses for brokering the $27.5 million payout for a proposed class of former Fresh Market stockholders. 

The fee award sought is 25 percent of the settlement fund, an amount the firms argued has been granted under other similar investor suit deals.  "Plaintiff and plaintiff's counsel were well-positioned to conclude that the settlement is fair and reasonable," the brief said. "Plaintiff's counsel fought for and reviewed 1.5 million pages of documents."  The firms said "the benefits of the $27.5 million settlement are substantial in comparison to the strength of the claims and the risks of further litigation."

Also, Friedlander & Gorris and Robbins Geller said the proposed settlement "resulted from a trailblazing litigation strategy" since the transaction at issue came in the wake of Corwin v. KKR Financial Holdings LLC .  That key 2015 Delaware Supreme Court ruling laid out when deference should be given to the business judgment of the board rather than enhanced court scrutiny being applied under the First State's cornerstone "Revlon" standard.

The state Supreme Court's landmark 1986 Revlon v. MacAndrews & Forbes Holdings decision established an intermediate deal-review standard between deference to director business judgment and the more plaintiff-friendly "entire fairness" assessment, which requires a close look at the fairness of the process and transaction price.  In their brief, the firms said they "conceived a novel litigation plan" by obtaining company records under Section 220 of Delaware's General Corporation Law "to plead around Corwin" and defeat a defense under Corwin that deference be given to the board's business judgment.

Robbins Geller Gets $19.5M in Fees in MetLife Investor Action

June 16, 2021

A recent Bloomberg Law story by Jennifer Bennett, “Robbins Geller Gets $19.5 Million Fees for MetLife Investor Suit,” reports that Robbins Geller Rudman & Dowd LLP will get about $19.5 million in fees for representing investors in a class suit against MetLife Inc. and securing an $84 million settlement, a federal judge in New York said.

Investors accused the life insurance company of overstating net income, understating liabilities, and misrepresenting the adequacy of reserves. Robbins Geller sought $21 million in attorneys’ fees, but its calculations included some hours that should have been left out, the U.S. District Court for the Southern District of New York said.

The firm didn’t show that it was “appropriate” to include hourly rates for 35 nonlegal support staff in its lodestar calculation, Judge Lewis A. Kaplan’s opinion said. That group “billed approximately 3,098.6 hours at blended historic hourly rates ranging sharply from $60 to $518 per hour, which, at the higher end, is more than many of the firm’s associates were billed out at.”

Kaplan won’t “include the total amount billed for these personnel in the lodestar calculation,” but the judge said he would “take their contribution into account when determining the multiplier that is applied to the fees.”

There were also problems with the hourly rates for Robbins Geller’s “paralegals, litigation support personnel, law clerk, and project attorneys.” An appropriate cap for the hourly rate of the first three groups is $200, Kaplan said. And the hourly amounts for project attorneys “were neither reasonable nor efficient,” so their total charge requires a 50% reduction.

The firm said it spent almost 2,200 hours on discovery and more than 3,700 hours on document review, but that’s “excessive and redundant,” the opinion said.

Robbins Geller also included nearly 2,300 hours for litigation strategy and analysis, with nearly 80% of those hours “recorded by just one associate.” The attorneys “provide no explanation for this, leaving the Court to guess regarding what ‘strategy & analysis’ an associate attorney engaged in for many hundreds of hours,” Kaplan said.

After applying the necessary reductions, the appropriate fee amount is more than $19.5 million, the opinion said. Kaplan also approved the firm’s request for reimbursement of more than $1.8 million in litigation expenses.

The lead plaintiff asked for nearly $11,000 as recognition of the time and resources it committed to the suit. But that’s “unnecessary,” the Tuesday opinion said.