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

Meta Class Counsel Lowers Fee Request Amid Judicial Criticism

November 6, 2023

A recent Law 360 story by Bonnie Eslinger, “Meta Tracking Class Lowers Atty Fee Bid After Judge Criticism”, reports that counsel for Facebook users took another shot at getting approval for the fees they'll receive from Meta's $37.5 million deal settling class claims that it tracked 70 million users' locations, dropping the request by $500,000 since the judge said their $9.3 million request is "not going to happen."  In a renewed motion for attorney fees and expenses filed, class counsel noted that while they initially asked for a 25% cut of the settlement, at the court's urging, they've reduced their request to 23.5%.

The request argues, however, that in light of class counsel's "tremendous effort" and "tremendous recovery" compared to similar class settlements, they shouldn't have to deviate from the one-quarter award that's usually considered a benchmark for such cases.  "But, to demonstrate their unflagging commitment to the interests of the class and their respect for the court, class counsel now request only 23.5% of the common fund," the motion states, later adding that the percentage calculates out to $8.8 million.  The five-year case was not easy to litigate, the plaintiffs' lawyers told the court.

Beyond the briefing to fight Meta's motions to dismiss in the case, "counsel faced a formidable opponent that resisted discovery at every turn," the motion states.  The lawyers for the class invested considerable time and effort to get the evidence they sought from Meta, which was represented by "two of the top defense firms in the world," Gibson Dunn & Crutcher LLP and previously Munger Tolles & Olson LLP, the motion underscores.  Last month, the judge overseeing the case held off giving final approval to the deal, criticizing the 1.3% claims rate as too low and saying the $9.3 million attorney fee request is "just not going to happen."

In the revised attorney fee request, the lawyers for the class also addressed the court's concerns about the fact that time spent on a related case that was dismissed was included in the attorney fee calculation, that the fees of too many lawyers were included in the request, and that additional support was needed to justify counsel's hourly rates.

As to the first concern, class counsel said the two cases "were inextricably intertwined" as of December 2019, when the lawyers who filed each complaint agreed to work together and the cases were related for purposes of coordination.  A significant portion of the discovery requests were done by the lawyers in the dismissed case, the filing adds.  In addition, "numerous factual and legal theories developed" in the dismissed case were used in the case that settled, now before the court, the motion states.

However, in light of the court's comments at the hearing, class counsel told the court that it removed some of the hours specifically associated with the now-dismissed complaint, although it kept some of the time associated with the discovery.  With regard to the court's second concern about the billing including too many lawyers, the motion states that it removed all hours from the tab for attorneys who billed for under 40 hours of work.  The cuts resulted in 1,307 fewer hours and removed from the original fee motion, class counsel told the court.

In their motion, class counsel also argues that the $37.5 million deal is "substantial" and compares to similar data privacy settlements, for which the lawyers were given at least 25% of the fund.  The attorney fee request also highlights the fact that class counsel worked on a contingent basis.  "With no guarantee of recovering anything for their efforts, plaintiffs' counsel advanced 9,839.5 hours and $309,524.79 in expenses, while facing unusually heightened risks of no recovery, for over four years," the motion states.

The filing also argues to the court that class counsel's hourly rates are consistent with market rates.  Documents submitted to the court showed hourly rates for the highest paid lawyers at each class counsel firm that included $997 per hour for Sabita Soneji, a partner with Tycko & Zavareei LLP; $1,050 for Barrett Vahle, a partner with Stueve Siegel Hanson LLP; $1,000 for Franklin Azar of Azar Firm; and $940 for Ivy Ngo of the Law Office of Ivy T. Ngo.

Flint Class Firms Say Fee Dispute Already Decided

October 26, 2023

A recent Law 360 story by Chart Riggall, “Flint Class Firms Say Atty Fee Dispute Already Decided”, reports that two law firms that helped negotiate a $626 million settlement over the Flint, Michigan, water crisis urged a Michigan federal judge to dismiss a suit from their former co-counsel claiming the firm had its rightful proceeds from the litigation arbitrarily slashed.  Cohen Milstein Sellers & Toll PLLC and Pitt McGehee Palmer Bonanni & Rivers PC told the court that their former ally in McAlpine PC had ample opportunities to take issue with the fee split, but the firm instead "sat on its hands for years" before bringing a claim.

"McAlpine had a full and fair opportunity to litigate the amount of any attorneys fee award in the appropriate place to do so — the federal Flint class action," the defendants said, arguing McAlpine's claims are barred under the doctrine of collateral estoppel.  A construction firm based in suburban Detroit, McAlpine filed suit — initially in state court — earlier this month claiming it had been paid a paltry sum for its contributions to the litigation.

The class action itself was settled in 2021 when U.S. District Judge Judith Levy gave final approval to a $626 million settlement, a deal expected to provide payments to more than 100,000 people affected by water contaminated by lead.  Government officials were accused of switching the city's water supply to the Flint River despite information cautioning them against doing so, and working to cover up the ensuing public health crisis.

McAlpine argued its work was instrumental to the litigation, contributing about $16 million worth of labor, or about 24% of the total lodestar figure of $84.5 million. But Cohen Milstein and Pitt McGehee offered to pay just $500,000, McAlpine said.  "Defendants breached the co-counsel agreement by failing to distribute an attorney fee award reflecting McAlpine's respective lodestar, in favor of distributing a greater share to themselves," the firm alleged.

The defendant firms, however, said McAlpine should have raised any issues with the fee split first during the negotiations before Judge Levy, which entailed "extensive additional briefing and argument" for nearly a year.  McAlpine could have also raised the issue when a group of objectors appealed Judge Levy's fee order to the Sixth Circuit, where it was later upheld, but failed to do so.

"McAlpine is precluded from asserting this separate action for increased attorneys fees for its work in the federal Flint class action," the firms said.  "McAlpine's [complaint] is, in essence, a collateral attack on the federal Flint class action's fee award order."

Two Law Firms Split $22M in Attorney Fees in Libor Case

October 25, 2023

A recent Law 360 story by Emillie Ruscoe, “Susman Godfrey, Hausfeld Split $22M Fee in Libor Case”, reports that Susman Godfrey LLP and Hausfeld LLP will receive a nearly $22 million fee for brokering a $90 million settlement deal with MUFG Bank Ltd., the Norinchukin Bank and Société Générale in sprawling multidistrict litigation against numerous financial services giants over their alleged manipulation of the London interbank offered rate.  In an order, U.S. District Judge Naomi Reice Buchwald granted the two-firm legal team's requested fee and said they could also have more than $2.5 million to reimburse litigation expenses and that their five lead plaintiffs could each have a $100,000 service award.

The order comes after the plaintiffs' counsel in September requested a fee that would be a quarter of the $90 million settlement deal they had recently negotiated, minus litigation costs.  The latest settlement brings the action's "tremendous" recovery total to $781 million, according to the proposed class of those who had purchased Libor-based instruments from the allegedly involved banks during the period of the alleged rate manipulation.

Over the course of the litigation, which now dates back nearly 12 years, Barclays has settled the proposed class' claims for $120 million, Citibank for $130 million, HSBC for $100 million and Deutsche Bank for $240 million.  And, after the latest deal was reached, the plaintiff class reached a separate $101 million settlement that ends claims against Lloyds, Rabobank, RBC and Portigon, the plaintiffs said in their September fee bid.

The plaintiffs also said their requested interim fee award was comparable to awards in other multi-defendant antitrust class actions, and the percentage is the same as attorneys representing a separate plaintiff class received in other settlements.  The plaintiffs' counsel also said the requested fee would "fairly compensate class counsel for the excellent result they have obtained" on behalf of the proposed class.  The order awarding attorney fees was entered alongside a final judgment against the three settling banks.

Judge Rips Fee Request, Claims Rate in Meta Class Settlement

October 23, 2023

A recent Law 360 story by Bonnie Eslinger, “Judge Rips Claims Rate, Fee Bid in $37.5 Meta Tracking Deal”, reports that a California federal judge held off giving final approval to Meta Platforms Inc.'s $37.5 million deal to resolve claims it tracked 70 million users' locations, calling the 1.3% claims rate "overall a poor result" and saying the $9.3 million attorney fee request is "just not going to happen."  During the hearing in San Francisco, U.S. District Judge James Donato was told payouts are going to roughly 907,600 people out of an estimated 70 million possible claimants. He called the number "paltry."

The judge also took aim at the proposal to hand a 25% cut of the settlement — more than $9.3 million — to the plaintiffs' attorneys, saying the bill includes hours for too many attorneys.  "Right now, you want a $9 million chunk out of an already miniscule settlement, and that just strikes me as unfair to the class," the judge said.  He noted the plaintiffs are asking for fees for 66 people who worked on the case.

"I can't approve this," the judge said.  "I have had many, much larger cases, including my multidistrict litigation cases, which resulted in settlements that dwarf this one by hundreds of millions of dollars, and they had 12 people."  The plaintiffs also didn't provide enough support for their billable hour rates, $900 to $1,200 per hour, the judge said.  "The rates are at the high end where most of the work here was done," Judge Donato remarked.  "For some reason, [instead of] the less-expensive associate level."

The judge also said he needed more details about the reimbursement request for $322,464 in expenses.  He asked for more information about the administration fees, which, according to the plaintiffs, were now about $900,000, with another $300,000 bill expected to cover the cost of providing payments to the claimants.  The judge said the costs seemed high.  "I'm going to withhold approval until I see that," Judge Donato said. "I want a complete accounting."

$101M in Fees in $307M AXA Life Insurance Settlement

October 20, 2023

A recent Law 360 story by Tracey Read, “Susman Godfrey Attys To Get $101M From Life Insurance Co.”, reports that a New York federal judge has granted $101 million in attorney fees to Susman Godfrey LLP following a $307.5 million class action settlement resolving claims that AXA Equitable Life Insurance Co. targeted policyholders with unlawful and excessive "cost of insurance" increases.  According to Judge Jesse M. Furman's order, Susman Godfrey will receive attorney fees of $101.08 million and must be reimbursed $4.1 million in costs and expenses.  "Class counsel may in its sole discretion allocate and distribute the fees and expenses it receives pursuant to this order among other counsel," Judge Furman wrote.

The settlement stems from a 2016 class action filed by the nonprofit Brach Family Foundation Inc. against AXA on behalf of nearly 1,700 policyholders who had flexible-premium, universal life policies issued between 2004 and 2007.  "Despite the fact that UL policies are marketed and sold to enable policyholders to minimize their premium payments and keep policy account values as low as possible, AXA has unlawfully sought to punish policyholders for doing exactly that," the foundation said in the original complaint.

AXA's cost-of-insurance increases were directed only at those with issue ages above 70 and current face value above $1 million. The increases ranged from 25% to 70% and up, the lawsuit alleged.  "AXA cannot reasonably expect that the insured on a policy that issued at age 70 with $1,000,000 in face value is likely to die materially sooner than the insured on a policy that issued at age 70 with $900,000 in face value," the foundation said in the suit.

By increasing cost-of-insurance rates, AXA sought to force AXA policyholders to either "pay exorbitant premiums that AXA knows would no longer justify the ultimate death benefits" or lapse or surrender their policies and forfeit the premiums the policyholders previously paid, the suit stated.  The foundation noted that in its 2016 Securities and Exchange Commission filing, AXA said the increase would result in a $46 million jump in its net earnings.