Judge Grants $2.7M Fee Award in $1M Class Settlement
April 19, 2023
A recent Law 360 story by Collin Krabbe, “Wis. Judge Awards Attys $2.7M in Fees Over $1M Settlement,” reports that a Wisconsin federal judge has awarded attorneys a dollar figure for fees and costs that is more than double the amount of a $1.05 million settlement negotiated to resolve claims by residents of the town of Superior who had to evacuate their homes following a 2018 explosion at a nearby refinery owned by Husky Energy Inc.
U.S. District Judge William M. Conley said in an opinion that Zimmerman Reed LLP will receive $2.7 million in fees and costs, reducing the fees requested by 25%, in the suit against Husky Oil Operations Ltd. and Superior Refining Company LLC. Still, the judge noted the defendants' perceived aggressive litigation tactics "at virtually every turn in this case."
"Taking into account theJu degree of counsel's success in achieving a class settlement, the time spent on unsuccessful claims and theories, and excessive fees driven by defendants' aggressive tactics, therefore, the court concludes that a reduction of 25% in fees is appropriate," the judge noted. Zimmerman Reed submitted billing records reflecting 6,251 hours of work with hourly rates ranging from $350 to $845 for attorneys and $200 to $315 for paralegals, for a grand total of $3,151,017 in attorney fees and $359,948 in costs, according to the order.
But the judge reduced the fee amount to $2.3 million, noting that the settlement award was "significantly less" than plaintiffs initially sought. Less than a third of the potential class ultimately submitted claims, and under the settlement, each class member got around $167.23 — not including "offsets for earlier, voluntary reimbursements by defendants," the order said. The $1.05 million settlement was given final approval last year in a suit that stems from an explosion at a refinery in Superior on April 26, 2018, which caused a fire that allegedly created a risk of hydrogen fluoride being released and potentially harming residents.
In ruling on fees and costs, Judge Conley took issue with compensation for time spent on unsuccessful claims and legal theories. "From the court's own review, plaintiffs appear to have billed at least several hundred hours relating to claims and theories that were unsuccessful, particularly in developing its unsuccessful classwide damages theory and in opposing defendants' successful motion for summary judgment," Judge Conley's order said. "However, it is not possible to determine precisely how many of plaintiffs' 6,251 hours were allocated to successful versus unsuccessful claims," according to Judge Conley.
Finally, the judge said a review of the fees incurred by defendants reflect total fees of about $4 million, which is roughly $1 million more than Zimmerman Reed was asking to be awarded. The judge added that "this substantially larger fee paid is certainly consistent with this court's perception of the aggressive litigation tactics by defendants at virtually every turn in this case."
The judge also disregarded the defendants' argument that Zimmerman Reed's rates were unreasonable. Zimmerman Reed Partner Gordon Rudd told Law360 that "this was an extremely hard-fought case. The litigation involved residents who were forced to evacuate their homes due to a refinery fire and explosion in Superior, Wisconsin. Both Husky Oil Operations and Superior Refining Company aggressively litigated the case and aggressively challenged the attorneys' fees being requested by the homeowners."
"We are pleased with the result that the homeowners achieved and with the Court's recognition that scorched earth litigation strategies by companies can result in the award of increased fees and costs incurred by plaintiffs in responding to these tactics," Rudd added. The judge also disregarded the contention that class counsel agreed in contingency fee contracts to accept only 33% of any recovery acquired in litigation, noting that Zimmerman Reed's retainer agreements with individually named plaintiffs had separate fee clauses for "individual and class recovery."