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Category: Class Incentive Awards

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.

Ninth Circuit Affirms $98M Fee Award in Facebook Class Action

March 17, 2022

A recent Law 360 story by Dorothy Atkins, “9th Circ. Oks Facebook Class’s $98M Fee Win in Privacy Fight” reports that the Ninth Circuit affirmed class counsel's $97.5 million fee award for striking a $650 million deal that resolves claims Facebook's facial recognition technology violated Illinois users' biometric privacy rights, rejecting objectors' arguments that the award is "outrageous" and the trial judge abused his discretion in awarding it.  In a five-page unpublished opinion, a unanimous three-judge panel held that U.S. District Judge James Donato did not breach his fiduciary duty to the class by awarding class counsel 15% of the total $650 million settlement in fees.

Objectors' counsel had argued that the fees were too high and inappropriate because class counsel told Judge Donato they would not seek fees for an additional $100 million added to the settlement fund after the judge had rejected an initially proposed $550 million deal, which forced Facebook and class counsel back to the negotiating table.  Instead, Judge Donato should have awarded class counsel 10% of the initial $550 million proposed settlement, or $55 million, which would have been reasonable and in line with case law on other mega settlements, according to objectors' counsel, Kendrick Jan.

But the Ninth Circuit panel concluded that the 15% award is in line with 11 similarly sized settlements, which ranged between $400 million and $800 million and averaged around 16% in fees, and Judge Donato adequately explained why this was a reasonable fee based on the facts of this case.  Additionally, the panel said the trial judge appropriately cross-checked the fee award based on the 4.71 lodestar multiplier, which is the number of times the hourly rate would be multiplied to get the total fee award.  Although lodestar multipliers tend to average between 2.39 and 4.50, the Ninth Circuit said the multipliers tend to increase as the size of the class' recovery increases and the 4.71 multiplier in this case is reasonable based on the risks trial would have presented.

The Ninth Circuit also rejected the objectors' arguments that the fee lodestar was based on hours that included attorneys' lobbying activities, which cannot be included in contingency fees under both California and Illinois statutes.  The panel said the objectors waived their arguments on the matter because they didn't raise them before the trial judge.  But even if they had not done so, the fee award still would be affirmed, the panel added.

"To the extent that appellants did not waive the general argument that lobbying fees should not be included in the lodestar calculation, the district court did not abuse its discretion because its primary calculation tool was the percentage-of-recovery method," the opinion says.

The objectors' appeal challenged multiple aspects of Facebook's revised $650 million deal resolving claims the social media giant breached the Illinois Biometric Information Privacy Act by using facial recognition technology without users' consent to fuel its photo tag suggestion feature.  After years of hotly contested litigation, the case was headed to a jury trial, but the parties struck an initial $550 million settlement in 2020, which class counsel hailed as the largest amount ever doled out to resolve a privacy-related lawsuit.

But Judge Donato tore into the initial proposal, which he noted gave users just 1.25%, or $300 at most, of what they could be entitled to under BIPA, even though the state statute comes with a $1,000-per-violation fine and a $5,000 enhancement for intentional or reckless violations.  At the time, Judge Donato told the parties that the enhancement appeared to be a potentially viable claim in light of the $5 billion fine Facebook agreed to pay the Federal Trade Commission in 2019 for violations of a 2012 consent decree over its privacy practices.

Roughly a month later, the parties filed a motion asking the judge to preliminarily approve a revised $650 million deal, which attempted to address Judge Donato's concerns by narrowing the release provision and increasing class members' potential recoveries to up to $400.  At the time, class counsel said it would seek up to $110 million in fees plus expenses based on the initial settlement amount.

In February 2021, Judge Donato signed off on the revised deal, calling it a "landmark result," but trimmed the $110 million requested attorney fees to $97.5 million, which reflected a 15% portion of the settlement.  He also slashed the requested incentive awards to three class representatives from $7,500 each to $5,000 each.

Apple Wants Judge to Mull $27M Fee Request in App Case

March 2, 2022

A recent Law 360 story by Gina Kim, “Apple Wants Judge to Mull $27M Atty Fee Bid in App Case” reports that Apple has told a California federal judge that although it won't oppose $27 million in attorney fees requested by software app makers who secured a $100 million settlement in a proposed antitrust class action, it wants the judge to use her discretion when deeming the appropriate amount.  Apple said in its response brief that the requested fee amount from attorneys representing app developer plaintiffs from the $100 million non-reversionary cash settlement is rather high and more than 200% of their lodestar investment.

"While Apple takes no issue with the expenses or service awards sought by plaintiffs, the fee request is high by the standards applied in this circuit and district," Apple wrote in its response.  The Ninth Circuit has advised that class counsel should typically receive about 25% of the ascertainable value of the settlement in attorney fees, Apple said.

Attorneys who represented 6,700 software app developers in the United States asked U.S. District Judge Yvonne Gonzalez Rogers last month to award them $27 million in fees after securing a $100 million settlement — which includes nonmonetary relief — to resolve claims that Apple held a monopoly over its App Store.

The developers' counsel from Hagens Berman Sobol Shapiro LLP and other plaintiffs' firms wrote in their motion for attorney fees last month that the requested fee award is justified, as they spent millions of dollars upfront to work on the case, and tens of thousands of hours facing off against one of the biggest tech names in the world on a contingency basis.

The developers' counsel argued there was added risk to settlement talks, given that the same federal judge overseeing the developer case concluded Apple wasn't a monopoly at the end of another closely watched antitrust case, the Epic Games v. Apple bench trial.  The developers signed their settlement deal with Apple just before Judge Gonzalez Rogers issued her decision in the Epic Games v. Apple case.

But Apple argued that the developers' counsel are entitled to 25% of the $100 million settlement, or $25 million, instead of the requested $27 million, which is nearly two-and-a-half times the lodestar amount of $11 million.  The requested amount is high both in terms of the percentage of the settlement fund and lodestar multiple, the company said.  Furthermore, the Epic v. Apple outcome would have jeopardized any chance for developers to recover anything, the company said in its response brief.  "Counsel did not risk it all here.  A $25 million award, all in, would still be 175% of their investment — a healthy return in any environment, particularly generous in light of Epic," Apple wrote.

"These are real benefits, and they are the product of extensive settlement negotiations between the parties in order to resolve contentious litigation and preserve judicial resources," Apple wrote in its response.  "Class counsel are entitled to be paid for their efforts in litigating this action. The question is how much."

Apple further said that the Ninth Circuit's guidance, that class counsel should typically receive about 25% of the ascertainable value of the settlement in attorney fees, "protects absent class members by ensuring that the majority of the cash achieved in settlement — 75% or more — is available to the class members rather than the lawyers."

"These values would be jeopardized if courts were routinely to examine uncertain non-monetary terms to increase the fee award," Apple wrote.  Ultimately, Apple said it is not opposing an entry of a fee award requested by the developers. Instead, the company is reminding the judge that she can use her discretion to award a different fee amount to the developers' counsel, Apple wrote in its response.

Ninth Circuit Considers Class Counsel’s $98M Attorney Fee Win

February 17, 2022

A recent Law 360 story by Dorothy Atkins, “Facebook Class’s $98M Fee Win ‘Outrageous,’ 9th Circ. Told” reports that objectors' counsel urged the Ninth Circuit to throw out class counsel's $97.5 million fee award for striking a $650 million deal that resolves claims Facebook's facial recognition technology violated Illinois users' biometric privacy rights, arguing that the judge abused his discretion in awarding the "outrageous" fee award.  During a virtual hearing, the objectors' counsel, Kendrick Jan, told a three-judge panel that the case has a "cornucopia of issues" that should be reversed on appeal.

For one, Jan said, U.S. District Judge James Donato breached his fiduciary duty to the class by awarding class counsel 15% of the total $650 million settlement in fees, even though class counsel told him they wouldn't seek fees for an additional $100 million added to the settlement fund after Judge Donato rejected an initially proposed $550 million deal, which forced Facebook and class counsel back to the negotiating table.  Instead, Judge Donato should have awarded class counsel 10% of the initial $550 million proposed settlement, or $55 million, which would've been reasonable and in line with case law on other mega-settlements, Jan said.

Jan's co-counsel John Jacob Pentz III also noted that class counsel's initial fee request reflected a 5.3 lodestar multiplier, which is the number of times the hourly rate would be multiplied to get the total fee award.  Judge Donato ended up awarding fees that came out to a 4.7 multiplier, "which is still outrageous," Pentz said, because 4.7 is well above the 1-4 multiplier ranges approved by the Ninth Circuit, and it translates to $3,750 per hour.

"That's beyond the pale in our opinion," Pentz said.  The objectors' comments came during a hearing on an appeal of multiple aspects of Facebook's revised $650 million deal resolving claims the social media giant breached the Illinois Biometric Information Privacy Act by using facial recognition technology without users' consent to fuel its photo tag suggestion feature.  After years of hotly contested litigation, the case was headed to a jury trial, but the parties struck an initial $550 million settlement in 2020, which class counsel hailed as the largest amount ever doled out to resolve a privacy-related lawsuit.

But Judge Donato tore into the initial proposal, which he noted gave users just 1.25%, or $300 at most, of what they could be entitled to under BIPA, even though the state statute comes with a $1,000-per-violation fine and a $5,000 enhancement for intentional or reckless violations.  At the time, Judge Donato told the parties that the enhancement appeared to be a potentially viable claim in light of the $5 billion fine Facebook agreed to pay the Federal Trade Commission in 2019 for violations of a 2012 consent decree over its privacy practices.

Roughly a month later, the parties filed a motion asking the judge to preliminarily approve a revised $650 million deal, which attempted to address Judge Donato's concerns by narrowing the release provision and increasing class members' potential recoveries to up to $400.  At the time, class counsel said it would seek up to $110 million in fees plus expenses based on the initial settlement amount.

In February 2021, Judge Donato signed off on the revised deal, calling it a "landmark result," but he trimmed the $110 million requested attorney fees to $97.5 million which reflected a 15% portion of the settlement.  He also slashed the requested incentive awards to three class representatives from $7,500 each to $5,000 each.

The objectors' counsel argued that the incentive awards are too high, and the fee award is outrageous, particularly given that the settlement only reflects 5% of the total damages at stake.  Jan noted that in In re: Wash. Pub. Power Supply Sys. Secs. Litig., a 1994 case that involved a megasettlement, the Ninth Circuit awarded fees based on a 1.2 multiplier, which represented less than 5% of the total settlement fund.  In that case, the court also rejected a 3.1 multiplier class counsel requested, even though their settlement reflected 47% of the total damages at stake, which is significantly higher than the 5% recovery at issue in the instant suit, Jan said.

U.S. Circuit Court Judge Michael Daly Hawkins pressed the attorneys and asked the objectors' counsel how much they charge hourly. Pentz replied that he's charging $800 per hour for work on the case, which he noted is based on the Laffey Matrix, an hourly rate schedule set by the U.S. Attorney's Office based on a lawyer's years in practice.

Jan also argued that class counsel's hourly rate and lodestar calculation included hours the firm spent lobbying legislatures, even though both California and Illinois statutes preclude lobby efforts from being included in contingency fees. Without those hours, the lodestar multiplier jumps from 4.7 to 5.38, Jan said.

But counsel for the class, John Aaron Lawson of Edelson PC, defended the attorney fee award, arguing that the fact that Judge Donato rejected the initial settlement proves that he was honoring the class.  "The record is pretty clear that he was constantly aware of duty to the class," Lawson said.  Still, Judge Forrest remained skeptical and noted that it seemed, from the record, that if the court awarded fees based on the initial $550 million settlement, and not the revised $650 million settlement, nobody probably would have objected.

The attorney replied that it's the judge's discretion to award fees and 15% is the range of reasonableness, particularly since this case presented major risks and was tackling a novel legal issue with huge damages at stake.  He added that the objectors' complaints about the lodestar multiplier aren't relevant because Judge Donato only considered the lodestar to cross-check the reasonableness of the award, and the final basis for his decision was on a percentage of the settlement.  Additionally, the objectors waived their arguments about lobbying fees by failing to raise the issue before the lower court, Lawson said.

Law Firms Seek $3.5M in Fees in HomeFed Buyout Settlement

February 3, 2022

A recent Law 360 story by Rose Krebs, “Law Firms Seek $3.5M For $15M HomeFed Buyout Suit Deal,” reports that Andrews & Springer LLC, Friedman Oster & Tejtel PLLC, Labaton Sucharow LLP, Wolf Popper LLP and Kaskela Law LLC are seeking a roughly $3.5 million award in connection with a proposed $15 million settlement that would end a Delaware Chancery Court suit over Jefferies Financial Group Inc.'s acquisition of HomeFed Corp.  In a brief, the firms, representing investor plaintiffs Richard Rose and Dennis E. Murray Sr. on behalf of a proposed class of former HomeFed stockholders, said the settlement and attorney fees and expenses sought are reasonable and should be approved by the court.

"Plaintiffs and co-lead counsel respectfully submit that the fee and expense award fairly compensates plaintiffs' counsel in light of the size of the benefit conferred and the contingency risk and investment of time and resources undertaken by counsel in achieving that benefit," the brief said.  Andrews & Springer, Friedman Oster and Labaton Sucharow served as co-lead counsel in the consolidated stockholder action, while Wolf Popper served as additional counsel and Kaskela Law as other counsel for the investor plaintiffs, according to the brief.

The brief said the plaintiffs are seeking approval of an "all-in" $3.45 million award for attorney fees and expenses, representing 23% of the settlement fund. Vice Chancellor Lori W. Will is scheduled to consider the settlement and fee bid at a hearing later this month.  The proposed settlement would bring an end to the stockholder suit, which accuses HomeFed directors and Jefferies of unfair conduct in a $189 million, two-for-one stock deal that gave Jefferies all the HomeFed stock not already owned by the financial company.

Under a stipulated settlement filed with the court in October, the stockholders will drop their claims against Jefferies and the HomeFed directors in return for a $15 million payment to be made by the defendants or their insurers.  The defendants admit no wrongdoing under the proposed settlement.

In the brief, plaintiffs' counsel argued the roughly $3.5 million fee award sought "is reasonable and merited under the circumstances."  The brief said that "while the action did not reach trial, counsel undertook significant litigation activity over roughly two-and-a-half years."

Also, the proposed settlement "amounts to approximately $3.96 per class share, and a roughly 9.6% bump to the merger consideration" and "confers a significant benefit upon the class, particularly when considering the strengths of plaintiffs' claims weighed against the challenges, obstacles and risks of continued litigation," the brief asserted.  Co-lead plaintiffs Rose and Murray are each seeking incentive awards of $5,000 "to compensate them for their time and effort in diligently litigating the action," the brief said.