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Category: Historic / Landmark Case

Attorneys Earn $71M in Fees in $1B Surfside Settlement

August 29, 2022

A recent Law 360 story by Carolina Bolado, “Attorneys Get $71M in Fees For $1B Surfside Settlement Work” reports that the judge overseeing the consolidated litigation over the collapse of the Champlain Towers South condominium in Surfside, Florida, approved about $71 million in attorney fees for class counsel who secured a global settlement of more than $1 billion for the victims.  In a hearing, Miami-Dade Circuit Judge Michael Hanzman said he would award $65 million in attorney fees for work by counsel in bringing the case to a close about a year after the collapse of the beachfront condominium tower on June 24, which killed 98 people.

He added $6.5 million in fees for work attorneys have performed in recent weeks guiding victims' families through the now-completed claims process.  Coupled with the $5.65 million Judge Hanzman awarded to court-appointed receiver Michael Goldberg and the three firms that represented him — Akerman LLP, Berger Singerman LLP and Boyle Leonard & Anderson PA — for their work handling the receivership of the condominium association, the total fees amount to about $77 million.

The judge noted that amount is between 6% and 7% of the total $1.2 billion recovery obtained for victims of the collapse, far less than what victims would have had to pay had they retained counsel and litigated claims on their own.  Judge Hanzman commended the attorneys, who worked the complicated case "in a glass house and under extreme pressure."  He said they signed on at the beginning of the case, when expected recovery was $200 million to $300 million and the court had warned them not to expect any fees.

"This case could've been a disaster for them," the judge said.  "There was so much potential to go off the rails.  They could've been stuck in a decade-long slog with no compensation."  Class counsel had requested a lodestar fee amount of about $22 million, multiplied by 4.5 to get to just over $100 million.  The judge agreed a multiplier was warranted, given the extraordinary result, but he was unwilling to go that high.

At the hearing, co-lead counsel Harley Tropin of Kozyak Tropin & Throckmorton, told Judge Hanzman that "whatever you award us is good with us."  "We had one goal: Recover as much money as we could," Tropin said.  "I hope you think we did a good job. Whatever you award us, we're good."

Following the hearing, Tropin and co-lead counsel Rachel Furst of Grossman Roth Yaffa Cohen PA said in a statement that they were "grateful to have had the opportunity to represent the victims and serve the court."  "We are grateful for the recognition of our work in the form of this fee award and for having this brought this case to a conclusion for the victims," they said.

The funds going out to the victims will come from the $1 billion from a global settlement with a number of parties, insurance proceeds from the condominium association's policies, and $120 million from the sale of the property to Dubai, United Arab Emirates-based buyer Damac Properties PJSC.

Court Cuts Attorney Fees in $180M First Energy Class Settlement

August 23, 2022

A recent Law 360 story by Hannah Albarazi, “FirstEnergy Investors Get $180M OK’d, But Atty Fees Cut” reports that an Ohio federal judge gave final approval to FirstEnergy Corp.'s $180 million settlement with investors who brought derivative suits over a bribery scandal embroiling the electric utility company and the state legislature, while reducing the attorney fees in the case by more than $12 million.  U.S. District Judge Algenon L. Marbley lowered the plaintiffs' attorney fees from the roughly $48.6 million they requested to $36 million and granted final approval to the $180 million settlement, ending shareholder derivative actions over the so-called HB6 scandal and clearing the path for a slate of corporate governance reforms to begin.

The granted attorney fees represent 20% of the settlement pot, as opposed to the 27% that plaintiffs' counsel requested.  The judge said he extensively deliberated about the factors that went into the fee award and said the figure he arrived at "appropriately accounts for counsel's labor, risks and results" in the case.  Among other things, he noted a lack of depositions that "would have demanded more intensive labor and, thus, greater risks under the contingent fee arrangement" and a "recognition of the advantages to 'coattailing' a major government investigation."

"If FirstEnergy cannot be made perfectly whole in monetary terms, then the next-best outcome is to repair its reputation with prompt, forward-looking reforms designed to prevent a recurrence of the alleged conduct.  The proposed settlement meets that mark," Judge Marbley further wrote in his order.  He noted that this settlement captures about 82% of the available insurance coverage, which is the main source of recoverable assets.

The lawsuits consolidated in the Southern District of Ohio revolved around a scheme by FirstEnergy to bribe then-Ohio House Speaker Larry Householder in order to receive a $1.3 billion bailout of its nuclear power plants.  The company admitted in July 2021 to paying the bribe and paid a $230 million penalty to escape prosecution.

U.S. District Judge John Adams, who is overseeing the case in the Northern District of Ohio, has spoken out against the settlement in the Southern District of Ohio, accusing the parties of forum shopping in order to find a court more favorable to the proposal than his.  Judge Adams has refused to dismiss the case before him and has called for the appointment of new lawyers to oversee that case.

But a special litigation committee composed of independent directors of FirstEnergy objected to the attorney fees, arguing that the plaintiffs weren't alone in working to improve the company. The committee told the court that it helped institute some of the corporate reforms that shareholders' attorneys were trying to take credit for as part of the settlement.

Plaintiffs' counsel have told the court that the settlement — which is funded by the company's insurers — is "among the largest derivative recoveries ever achieved" in the U.S. and is "three times greater than any prior derivative recovery in the history of the Sixth Circuit."

In his order, Judge Marbley didn't get distracted by the record-breaking settlement amount.  "Still, the monetary component of the settlement deserves some scrutiny," he wrote.  "While the recovery is substantial, so too were the harms resulting from the alleged bribery scandal."

$627M in Attorney Fees in BCBS MDL

August 9, 2022

A recent Law 360 story by Jack Karp, “Boies Schiller, Hausfeld Score $627M in Fees in BCBS MDL” reports that an Alabama federal judge awarded $626.6 million in attorney fees and another $40.9 million in costs on Tuesday to Boies Schiller Flexner LLP, Hausfeld LLP and other lawyers who scored a $2.67 billion class award for subscribers in multidistrict litigation against Blue Cross Blue Shield insurers.

The fees represent 23.47% of the $2.67 billion settlement fund, which U.S. District Judge R. David Proctor said falls within the lower half of the Eleventh Circuit's "benchmark range" of 20% to 30%. He also gave final approval to the settlement itself Tuesday.

The fees amount is "fair and reasonable" given the nature of the settlement, according to the judge, who noted that "the settlement also provides historic, transformative, pro-competitive injunctive and equitable relief that will greatly benefit the members of the subscribers class."

"The case presented a myriad of difficult factual issues, requiring substantial discovery to resolve, including the production of millions of pages of documents and the taking of scores of depositions," he added.

The $40.9 million in litigation costs and expenses is also "fair, adequately documented, reasonable," according to the judge.

"As the judge said, it's consistent with awards that have been approved in the Eleventh Circuit, and therefore we met all the factors that the court said needed to be considered," one of the subscribers' lead attorneys, Michael Hausfeld, told Law360 Tuesday.

Attorneys coordinating the defense for the Blue Cross and Blue Shield insurers did not respond to a request for comment.

Hausfeld and David Boies were appointed by Judge Proctor in 2013 to serve as lead counsel for a putative class of plan subscribers.

The nation's BCBS insurers agreed in 2020 to the $2.67 billion class settlement fund and sweeping anticompetitive practice reforms to settle the long-running multidistrict suit based in Alabama federal court that was filed by dozens of subscriber groups.

The multidistrict litigation, opened in January 2013, accused dozens of mostly nonprofit BCBS-affiliated insurers of using trademarking and other practices, including limits on non-Blue revenues to suppress competition. The MDL eventually grew to include more than 40 plaintiffs' groups nationwide.

In addition to the financial award, injunctions proposed under the agreement eliminate a national cap on revenues permitted for the organizations that requires two-thirds of each member plan's national health care-related revenue to come from "Blue-branded" services.

The agreement also eliminates some restraints on acquisitions by BCBS organizations, eliminates some direct-contracting restrictions and limits other practices giving preference to BCBS-related services.

Individuals who opted out of the settlement filed their own suit in Florida federal court in 2021, saying the deal doesn't compensate health plan subscribers enough for the Sherman Act violations they've claimed.

The case is In re: Blue Cross Blue Shield Antitrust Litigation, case number 2:13-cv-20000, in the U.S. District Court for the Northern District of Alabama.

Lodestar Multiplier Sought in Landmark $508M Title VII Win

May 10, 2022

A recent Law 360 story by Craig Clough, “Attys in Historic $508M Title VII Win Want Bigger Lodestar” reports that attorneys representing a class of 1,100 women in a long-running lawsuit against Voice of America asked a D.C federal judge to grant them a lodestar enhancement, arguing the extraordinary legal work that spanned four decades and resulted in a record $508 million settlement calls for such a boost.

U.S. District Judge Amit Mehta previously blocked the attorneys' bid for an additional $34 million in fees that would have brought their total award to $75 million.  Since that 2020 ruling, the parties have reached a deal on a $19 million lodestar fee award, but the class attorneys asked the court to grant an enhancement up to 4.5 times that amount.

The extraordinary if not unprecedented circumstances of the lawsuit and the record-breaking settlement amount for a case brought under Title VII of the Civil Rights Act supports the enhancement, class attorneys at Steptoe & Johnson LLP said in the motion.  Steptoe & Johnson is one of many firms that represent the class.

"If ever such a case for enhancement was presented, it is this one where, through superior lawyering and incredible determination, counsel was able to achieve — by far — the largest class-wide recovery and largest individual class member recoveries for employment discrimination in the history of the Civil Rights Act," the class attorneys said.

A group of journalists in 1977 sued Voice of America and its former parent agency, the U.S. Information Agency, in a case that eventually covered discrimination claims between 1974 and 1984 and more than 1,000 plaintiffs.  The government disputed the accusations for more than 20 years ahead of the 2000 settlement.

Bruce Fredrickson of Webster & Fredrickson PLLC led the representation of the class for more than four decades. The lodestar motion said he was assigned to the case as a young associate at Hudson Leftwich & Davenport fresh out of law school, and he has remained on the case ever since. He drafted the initial complaint for lead plaintiff Carolee Brady Hartman and first motion to certify the class before losing at trial in1979, according to the motion.  When Hudson Leftwich declined to take up the appeal, Fredrickson represented the women in his spare time until he formed his own firm in 1982.  He eventually reversed the trial outcome on appeal, according to the motion.

"Hartman went on to become the most successful employment discrimination case in history," the class attorneys said in the motion.  "While ultimately requiring additional lawyers engaged in decades of hard work and the resources of additional firms to achieve this result, it was Mr. Fredrickson, with his commitment to excellence, his brilliant strategic decisions, his tenacity in facing off against the best-financed defendant that obstinately refused to accept the judgment of liability, and his sheer perseverance that made this extraordinary success possible."

The class attorneys cited several U.S. Supreme Court cases on lodestar enhancement, including 2010's Perdue v. Kenny A. and 1984's Blum v. Stenson, which said rare and exceptional legal representation can support an enhancement.  "After decades of hard-fought litigation and unsurpassed results, it is clear that this is the rare and exceptional case which unambiguous Supreme Court precedent firmly establishes as appropriate to compensate plaintiffs' counsel for superior lawyering by awarding an enhancement above their lodestar fees," the class attorneys said.  The motion concluded with the class attorneys saying, "The greatest result in the history of Title VII deserves nothing less."

Federal Circuit to Hear $184M ACA Attorney Fee Award Dispute

April 1, 2022

A recent Law 360 story by Dorothy Atkins, “Quinn Emanuel ACA Clients Urge Fed. Circ. To OK $184M Fees” reports that a group of health care plan insurers represented by Quinn Emanuel Urquhart & Sullivan LLP have urged the Federal Circuit to affirm class counsel's $184 million attorney fee award for settlements totaling $3.7 billion that resolve litigation over so-called risk corridor payments under the Affordable Care Act.  In a 73-page response brief, the insurers argued that objections raised by Kaiser and United Healthcare health plan insurers largely ignore "key facts" that U.S. Court of Federal Claims Judge Kathryn C. Davis relied upon in determining that Quinn Emanuel's fee request was reasonable.

The insurers said Judge Davis awarded fees based on her finding that Quinn Emanuel "pioneered" a novel claim at great risk to itself and achieved a 100% recovery for the class.  She also found that the firm filed the first complaint by several months and drafted the first substantive brief on the issue, so she didn't abuse her discretion in awarding 5% in fees, the brief said.

The insurers added that the objectors' appeal focuses "myopically" on the lodestar multiplier, which is the number of times the firm's hourly rate would be multiplied to get the total fee award.  The objectors criticize the fee award for awarding the firm what comes out to an $18,000 hourly rate, but a percentage-of-the settlement fund is the appropriate method of determining fees, the brief said.  "Indeed, it would be nonsensical to treat hourly rates as the only legitimate means of determining reasonable compensation, especially when the competitive legal market for bringing these very claims proves otherwise," the brief said.

The multimillion-dollar fight over fees and the trip to the Federal Circuit is the latest chapter in litigation that Quinn Emanuel-represented Health Republic Insurance Co. initially launched in 2016, accusing the federal government of unlawfully reneging on a commitment to shield ACA insurers from heavy financial losses.  The certified opt-in class of health care plans accused the federal government of failing to make required "risk corridor" payments under the ACA, and Quinn Emanuel's suit purportedly sparked a firestorm of parallel litigation across the country — two of which ended up before the U.S. Supreme Court.

In April 2020, the justices reversed Congress' denial of $12 billion in "risk corridor" funding, which the ACA dangled as an incentive for insurers during the law's first three years of operation.  Although Quinn Emanuel didn't work on those cases directly, the firm argued in its request for fees in July 2020 that the Supreme Court "adopted the exact legal theory Quinn Emanuel set forth in the initial Health Republic complaint and which it advocated at every step."

But objectors Kaiser Foundation Health Plan Inc., UnitedHealthcare Insurance Co. and others argued that class counsel was entitled to just $8.8 million after a lodestar cross-check, and no more.

They told the trial court that Quinn Emanuel had little to do with the litigation that ended up at the Supreme Court, and the firm was trying to walk away with an award that would work out to an astronomical hourly rate of $18,000. Class members also signed on to the suit with a guarantee that the proposed 5% fee award would be subject to a lodestar cross-check, the objectors said, which the firm had eschewed.  But in September, Judge Davis granted the fee request, saying despite the "at times hyperbolic" motions for fees, Quinn Emanuel did show "foresight" in focusing on a successful legal theory months before other parties jumped on that bandwagon.

The objectors appealed the judge's ruling and told the Federal Circuit in their opening brief in January that Judge Davis abused her discretion by failing to cross-check the fee request.  The objectors argued that a reasonable hourly-rate multiplier for the firm's work should be in the lower single digits, and certainly not the 18 to 19 multiplier that would apply to reach the $184 million fee award.

"The effective multiplier of more than 18 the Claims Court awarded is astronomical and unjustified," the objectors said in their opening brief.  "In holding that a multiplier exceeding 18 would be reasonable (if it were to conduct a lodestar crosscheck, which it didn't do), the Claims Court cited three cases with high multipliers, though it did not provide any discussion as to why these cases were germane."  The insurers fired back, arguing the lower court appropriately rejected the lodestar method, particularly since adopting it would create "warped incentives, whereby attorneys are not rewarded for achieving outstanding results, and instead are rewarded for litigating inefficiently."