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Category: Class Incentive Awards

Apple Urges Judge to Cut Fees in iPhone Class Settlement

August 26, 2022

A recent Law 360 story by Piper Hudspeth Blackburn, “Apple Urges Judge To Trim IPhone Class Atty Fees” reports that Apple Inc. has asked a New York federal judge to lower a $6.6 million fee request from attorneys who helped secure a $20 million class settlement for iPhone users over device updates, insisting that there is a lack of documentation supporting the price tag.  While attorneys from Pomerantz LLP and Bronstein Gewirtz & Grossman LLC have asked for one-third of the payout for their services, Apple wants the award shaved by $666,000 to 30% of the total settlement, or exactly $6 million. The reduction, Apple argued in a brief, would provide an additional $600,000 to the class and give each member a payment of $68.56, up from $62.94 at the current number of claims.

Apple also took aim at the plaintiff's counsel's billable hours, calling their submission "insufficient."  According to Apple's memorandum, the class's counsel failed to submit any documentation that "substantiates" the over 10,000 hours they billed for the suit that lasted more than six years.  "Class Counsel merely provide a chart listing the names of billers, their requested hourly rate, and an aggregate number of hours each worked, with no elucidation as to whom did what," the motion said.

In an Aug. 12 motion for attorney fees, the plaintiff's attorneys said the fee is warranted given the number of hours they spent working on the suit and the expenses they incurred in the process – as well as the favorable outcome they achieved.  "From the outset, class counsel understood they were embarking on a complex, expensive, and likely lengthy litigation with no guarantee of ever being compensated for the substantial investment of time and money the case would require," the attorneys wrote.

Apple also asked the court to reduce the requested $2.8 million in litigation expenses and service awards of $15,000 for each named plaintiff.  Apple contends that a reduction of the amount of the plaintiff's service award is warranted because the plaintiffs would receive an award one hundred times greater than the maximum recovery afforded to class members.  Apple also took issue with the reported costs for meals, taxis and online research, which they said were not recoverable.

Attorneys Seek $13M in Fees in Pork Antitrust Settlement

August 22, 2022

A recent Law 360 story by PJ D'’Annunzio, “Attys Seek $13M Payout For Pork Antitrust Deal With Eateries reports that attorneys representing commercial pork buyers asked for $13.2 million in fees for their role in negotiating a $42 million settlement between a group of restaurants and Smithfield Foods in multidistrict litigation over an alleged meat industry scheme to inflate prices.  In a memorandum, a class of commercial and institutional indirect pork purchasers urged the court to award fees using a "percentage of the funds" calculation, in this case, 31% of the gross settlement proceeds.

"The $42 million settlement before the court is the result of extensive work done by counsel for the CIIPPs on a contingent basis," the memorandum said.  "Counsel has worked for over four years and have invested thousands of hours to pursue the CIIPP claims.  Counsel for the CIIPPs request an interim award of attorneys' fees for the work done to achieve this settlement."  Minnesota U.S. District Judge John R. Tunheim preliminarily approved the $42 million settlement between Smithfield and the pork purchasers in an April order.

In addition to the money, Smithfield agreed to cooperate in prosecuting claims against the remaining defendants, which include big names like Tyson Foods and Hormel Foods Corp., in the large-scale litigation.  The purchasers' memorandum said four years of litigation resulted in roughly 16,800 attorney hours and 2,560 hours for legal assistants and other professionals.

"Given the excellent results achieved, the complexity of the claims and defenses, the real risk of nonrecovery, the formidable defense teams, the delay in receipt of payment, and the substantial experience and skill of counsel, the requested multiplier on the lodestar and the resulting fee is reasonable compensation for the work done by counsel for the CIIPPs," the purchasers said.  Additionally, the purchasers asked for an award of $7,500 to each plaintiff representative.

$7M Cut From Attorney Fee Award in John Hancock Case

May 25, 2022

A recent Law 360 story by Josh Liberatore, “$7M Cut From Atty Award in John Hancock Overcharging Suit” reports that attorneys who helped a class of John Hancock life insurance policyholders score a $123 million settlement will now take home $27 million for their work, after a New York federal judge trimmed about $7 million from Susman Godfrey LLP's initial award to reflect settlement opt-outs.  According to an amended order signed by U.S. District Judge Alvin K. Hellerstein, the class attorneys will receive $27 million in fees, down from $34.4 million the judge awarded to Susman Godfrey in March.  The fee reduction comes after it was revealed at a fairness hearing on May 17 that policyholder opt-outs have reduced the total settlement fund by around $30 million.

On May 17, Judge Hellerstein also gave full approval to the class settlement, which had called for $123 million in cash to go to around 1,300 John Hancock Life Insurance Co. of New York universal life insurance policyholders who were subject to "cost of insurance" increases in 2018 and 2019.  However, two groups of policyholders opted out of the settlement, dropping the cash total to around $93 million, Judge Hellerstein said at the fairness hearing.

In March, Judge Hellerstein granted in full Susman Godfrey's proposed order for $34.4 million in fees, plus a pro rata share of interest earned on the settlement fund as well as $1.4 million in expenses.  Each of the seven named plaintiffs in the class action will receive $25,000 in incentive awards, according to the March order.  Following the opt-outs, the judge sought to trim Susman Godfrey's award to $25 million.  The firm had argued for just under $30 million, but Judge Hellerstein thought that was "excessive" and could be considered a "windfall."  The firm and judge eventually agreed on $27 million.

Other than the fee reduction, Judge Hellerstein's order from March will stay largely the same.  The only other change was a provision stating that as class counsel, the Susman Godfrey attorneys "shall not receive attorney fees or be reimbursed expenses until after the settlement administrator sends for delivery a settlement check to each settlement class member," which must come "within 44 days after the final settlement date."

The settlement itself was given full approval following its preliminary approval in January.  In addition to $123 million in total available cash, it provides class members with nonmonetary benefits, including a five-year freeze on COI increases for class members, that Susman Godfrey has said are worth an additional $67.8 million.  The original $123 million settlement amount as well as the new $93 million figure equal 91.25% of the COI overcharges that John Hancock collected from class members through August 2021, Susman Godfrey said.  That ratio is well above previous COI overcharge cases in New York federal court, the firm has said.

The $34.4 million that the Susman Godfrey attorneys were set to take home had represented 28% of the cash settlement and 18% of the overall settlement benefits when nonmonetary benefits are included, the firm said. The new $27 million award represents around 29% of the cash settlement when adjusted for opt-outs.

Judge Cuts ‘Unreasonable’ $24M Fee Request in Mattel Settlement

May 23, 2022

A recent Law 360 story by Katryna Perera, “Judge Cuts ‘Unreasonable’ Atty Fee Bid in $98M Mattel Deal” reports that a California federal judge has granted final approval to a $98 million settlement between investors and toymaker Mattel Inc. and PwC, but slashed the requested $24.5 million in attorney fees, saying it was too high.  U.S. District Judge Mark C. Scarsi said in his order that while the Ninth Circuit typically considers 25% of a settlement fund the "benchmark," that figure is still only a "helpful starting point," and courts should depart from it when a benchmark award would "yield windfall profits for class counsel in light of the hours spent on the case."

Instead of granting the requested $24.5 million in attorney fees, the judge reduced it to approximately $13.6 million, which represents about 14% of the $98 million settlement.  A 25% award would provide an "unreasonable windfall" to the class counsel, the judge added.  "The Court finds persuasive class counsel's arguments and evidence concerning the excellent value of the results achieved through settlement, the riskiness and complexity of the litigation, the skill and quality of counsel's work, the contingent nature of the fee, and the significant financial burdens counsel carried during the course of litigation," the order states.  "While these factors merit a significant fee award, an award of 25% of the settlement fund is unreasonable given the magnitude of the fund."

John Rizio-Hamilton, who represents the class and lead investor plaintiffs DeKalb County Employees Retirement System and New Orleans Employees Retirement System, had previously urged Judge Scarsi to approve the fee bid and maintained that the reasonableness of the fee request is backed by a lodestar cross-check, which he said yields a multiplier of 2.7.  Judge Scarsi agreed with Rizio-Hamilton's calculations and stated that the multiplier is within range of other resolved class actions with common fund settlements.  But the judge found that the requested multiplier in this case was "excessive … relative to counsel's performance."

"Counsel would reap an extra $15 million windfall … while counsel should be commended and compensated for the risk they took, the work they did, and the result they achieved, that outsized windfall would not be fair to the other interests in this case," the judge said.  Alternatively, Judge Scarsi's approved $13.6 million attorney fee award represents a 1.5 multiplier of the lodestar, according to the order, which the judge called "appropriate in light of the hours counsel spent on the case, the magnitude of the settlement fund, the results achieved, and the risks and burdens borne by counsel."

In addition to granting final approval of the settlement for the same reasons outlined previously when he granted preliminary approval, Judge Scarsi awarded $5,515 to DeKalb County Employees Retirement System and $3,100 to New Orleans Employees Retirement System as lead plaintiff service awards, as well as $1.1 million in litigation reimbursement to class counsel.

Attorneys Seek $5M in Fees in Buccaneers Junk Fax Settlement

April 29, 2022

A recent Law 360 story by Max Jaeger, “Attys Seek $5M Cut of Buccaneers Junk Fax Settlement” reports that the legal team that got the Tampa Bay Buccaneers to settle a decade-old Telephone Consumer Protection Act class action for $19.75 million in March says it rolled the dice on the risky litigation and should be awarded fees and costs totaling more than $5 million.  The firms Siprut PC, Addison & Howard PA and Anderson + Wanca want to divvy up 25% of the settlement — which works out to $4,937,000 — plus $250,000 for costs for the 6,188.15 hours of combined attorney and professional time put into the case, according to the motion.

They say the 25% figure is apt because it conforms to the Eleventh Circuit's benchmark.  But even if the court applied so-called Johnson Factors for awards above 25%, the time they invested, the novelty of the case, the risk they incurred and the outcome they achieved would satisfy those and support the award, according to the motion.  "Few lawyers will take on a lawsuit that consumes significant attorney time, involves uncertain questions and requires the lawyers to advance large out-of-pocket costs, with no guarantee of payment," the filing says.  "Although class counsel were able to achieve an excellent result for the class, achieving this outcome was anything but certain when they agreed to take the case."

The TCPA does not provide for attorney fees to a prevailing plaintiff, so lawyers must rely on a large recovery to pay their own bills.  Class counsel advanced more than $250,000 to prosecute the Bucs case while they "risked receiving nothing in return," the filing says.  Their costs actually exceeded a quarter-million dollars, but the settlement agreement capped their request, they said. Driving up the costs were $20,000 for an expert witness and more than $110,000 for class counsel in other jurisdictions, mostly Canada, that the plaintiffs needed to obtain discovery, according to the filing.  They paid Teplitsky Colson LLP $88,593.42 and Koskie Minsky LLP $23,000 for the local representation, they said.

Class representatives Cin-Q Automobiles Inc. and Medical & Chiropractic Clinic Inc. sued the Buccaneers after the organization hired a Canadian "fax broadcaster" called FaxQom to send 343,011 faxes from July 2009 through June 2010 advertising tickets to team games, allegedly in violation of the TCPA.  The legal battle began in state court in 2009, but Cin-Q filed the instant federal action in 2013 after the U.S. Supreme Court ruled state and federal courts share jurisdiction over TCPA actions.

The motion also seeks to set aside $10,000 each for Cin-Q and M&W as incentive awards for acting as class representatives.  But that would only be payable if a 2020 Eleventh Circuit decision barring such incentives is vacated or otherwise reversed before the Bucs settlement is finally approved, the motion notes.  U.S. Magistrate Judge Anthony E. Porcelli gave his preliminary blessing to the agreement's top-line numbers on March 29, but the motion reveals how the lawyers agreed back in 2015 to divvy the spoils should they prevail.

Tampa Firm Addison & Howard PA, which initiated Cin-Q's lawsuit in 2009, would claim 28%; Chicago litigation firm Siprut PC would receive 16%; and Illinois class action litigators Anderson + Wanca, which joined forces with Addison for the case in 2013, would take the remaining 56%.  James M. Thomas of Tampa was to split the 16% chunk with Siprut PC, but he is no longer licensed to practice law in Florida, the motion says.  According to public records, the Supreme Court of the State of Florida suspended him from practicing there for one year in a December 2020 decision.