Fee Dispute Hotline
(312) 907-7275

Assisting with High-Stakes Attorney Fee Disputes


News Blog

Category: Fees & Claims Rate

Class Counsel Earn $75M in $300M Securities Settlement

August 21, 2023

A recent Law 360 story by Bonnie Eslinger, “Wells Fargo Investors’ Attys Get $75M As Insurance Deal OK’d”, reports that a California federal judge granted final approval at a hearing to a $300 million settlement resolving investor claims that they were harmed when Wells Fargo allegedly hid misconduct in its auto insurance practices, including $75 million in fees for the plaintiffs' attorneys.  At the start of the hearing, a lawyer for the investors called the deal "a tremendous settlement for the class." Scott Saham of Robbins Geller Rudman & Dowd LLP also noted there was "not a single objection": not to the settlement and not to the fee request.

U.S. District Judge James Donato asked if anyone had opted out of the deal.  The plaintiffs' lawyer said about 1.1 million notices were sent out to potential class members and nominees, and there were only 76 opt-outs representing about 600 shares, a "tiny fraction" of the overall total.  The judge also wanted to know what percentage of shareholders had filed claims so far.

Saham noted the deadline for claims to be filed was still four days away, and that typically a large majority of claims, including those from institutional investors, come in on the last day. Saham told the judge he was "confident" the claims rate "will be in excess of 80%."

Before signing off on the deal, Judge Donato said he had been "concerned" about the one-quarter cut of the settlement that the lawyers for the class were seeking, but said he also recalled there were significant challenges for the plaintiffs, including a big fight over documents the bank said were protected by attorney-client privilege.  "So 25% it is," Judge Donato said.

The motion for the fee award states that counsel's lodestar — derived by multiplying the hours spent on the action by each attorney and litigation professional at their hourly rates — added up to $29,516,213.  "The requested fee of 25% represents a multiplier of 2.5 on the lodestar," the motion says, adding, "which is comfortably within the range of lodestar multipliers courts in this Circuit regularly approve."

Ninth Circuit Affirms Fee Reduction in Class Settlement

August 15, 2023

A recent Law 360 story by Rachel Riley, “9th Circ. Oks Fee Cut In Progressive Deal Over Totaled Cars”, reports that a Ninth Circuit panel ruled that a lower court had the discretion to decide a $5 million fee request was unreasonable in a class action in which Progressive Direct Insurance Co. was accused of shortchanging Washington state policyholders for totaled vehicles, upholding the revised $1.1 million award.  Rejecting the lead plaintiff's argument that the fees should have been calculated as a percentage of the entire $19.2 million settlement fund, the three-judge panel said the lower court didn't overstep its authority by basing the fees on the amount expected to go to the class after just one-fifth of members filed claims.

In a four-page unpublished memorandum, the panel pointed to the trial judge's "broad discretion to determine the reasonableness of attorney fees" under Washington law.  Ameenjohn Stanikzy sued Progressive in January 2020, claiming the company had paid him and other automobile policyholders less for total vehicle losses than their policies entitled them to under Washington law.

Represented by Stephen M. Hansen of the Law Offices of Stephen M. Hansen PS and Scott P. Nealey of the Law Office of Scott P. Nealey, Stanikzy contended the class and Progressive had negotiated the nearly $20 million fund size as the maximum amount that could be claimed under the deal and agreed up to 26%, or about $5 million, would be paid in attorney fees.

U.S. District Judge Barbara Rothstein denied that request in June last year, explaining only about 5,600 of 28,500 identified class members filed a claim before the deadline.  She reasoned the settlement should be 26% of $4.26 million, her estimation of the "actual benefit conferred on the class" based on the number of claims filed.  The $19.2 million total is a theoretical maximum, Judge Rothstein added, because the agreement clearly states that any portion not claimed by class members or spent on class costs will remain in Progressives' possession.

Progressive took no position on the appeal, according to a brief it filed in the Ninth Circuit, and said the attorney fee challenge does not affect the terms of the deal.  The appellate panel said Judge Rothstein had adequately explained how she weighed competing factors in her calculation. 

The panel noted the judge "observed that the requested fee would dwarf the class recovery; that a comparison to the lodestar amount of $390,000 showed that class counsel's requested award of $5 million was unreasonable; and that class counsel achieved 'good' but not 'exceptional' results for the class in litigation that was active for scarcely over a year and never even reached the class certification stage."

According to Judge Rothstein's ruling, Hansen reported spending nearly 140 hours on the litigation at a $300 hourly rate for himself and a $100 hourly rate for a paralegal.  Nealey's time records showed he spent about 330 hours on the case at hourly rates of up to $1,000, Judge Rothstein noted.

Class Counsel Tout Claims Rate in $185M Fee Request

July 19, 2023

A recent Law 360 story by Lauren Berg, “Facebook Users Laud 6% Claims Rate in $725M Privacy Deal”, reports that a class of more than 200 million Facebook users asked a California federal judge to grant final approval to their landmark $725 million deal resolving privacy claims against Meta Platforms Inc. over the Cambridge Analytica data harvesting scandal, touting the nearly 6% claims rate as "well above claims rates approved in other large settlements."

In a 35-page motion, the preliminarily certified class said that after attorney fees, costs and service awards are subtracted from the $725 million settlement fund, "allocation points" will be used to divide the remaining money among authorized claimants, allowing class members to recover an average of about $35 per person.

Under this allocation plan, for every calendar month at any time during the class period — running from May 24, 2007, through Dec. 22, 2022 — that the authorized claimant was a Facebook user with an activated account, one "allocation point" will be assigned, the motion says.  The net settlement fund is then allocated to each claimant pro rata based on each claimant's share of allocation points.

In addition to those monetary benefits, Facebook must also provide discovery and declarations attesting that the data sharing practices at issue have either stopped or are monitored under a 2019 consent decree between the social media platform and the Federal Trade Commission, according to the motion.

The users said the "extensive and successful" notice program — which included individual in-app notices to 685 million Facebook accounts, digital advertisements, a settlement website and public notices in USA Today and People magazine — has led to the submission of more than 15.8 million claims as of July 10.  The settlement administrator did clear out 960,313 as duplicative claims and will assess the remaining 14.9 million to make sure they are valid, the motion says.

"Based on an estimated class of 250 million, the claims rate is already almost 6% — a rate that is well above claims rates approved in other large settlements," the users said, noting that this is the largest-ever data privacy class action settlement.  After the parties unveiled the details of the proposed deal in February, U.S. District Judge Vince Chhabria ruled that Facebook and Gibson Dunn must pay $925,000 to the users, citing the defense's "unusually egregious and persistent" misconduct delaying discovery and gaslighting of opponents in seeking to extract a lower-priced settlement.

After Judge Chhabria in March tentatively signed off on the proposed settlement, class counsel in June requested $181.25 million in fees and $4.1 million in costs, representing 25% of the total settlement.  The attorneys said the amount represents a 1.99 lodestar multiplier for roughly 150,000 hours of attorney work done over the past five years.  The motion for attorney fees noted that nearly every aspect of the case demanded "an extraordinary investment of resources" and class counsel faced "aggressive opposition," making progress "exceedingly difficult."