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Category: Settlement Data / Terms

Saxena White Secures $40.5M in Fees in DaVita Investor Settlement

July 16, 2021

A recent Law 360 story by Katryna Perera, “DaVita Investor Attys Score $40.5M in Fees From Settlement”, reports that the law firms that represented investors in a case against health care company DaVita Inc. were awarded $40.5 million Thursday for their work on a $135 million class-action settlement of claims that shareholders were hurt when it was revealed that the company pressured patients to enroll in high-cost, private insurance plans.

U.S. District Judge William Martinez of the District of Colorado awarded attorney fees of 30% of the settlement fund as well as reimbursement of $547,409.27 in litigation expenses and $10,000 in representative rebates after the lead plaintiffs requested it.

Attorneys from Saxena White PA and Shuman Glenn & Stecker represented the plaintiffs, led by the Peace Officers' Annuity and Benefit Fund of Georgia and the Jacksonville Police and Fire Pension Fund.

Judge Martinez said the attorney fees would be calculated using a percentage rather than the lodestar approach because the case is a common fund case.

In his order, Judge Martinez mentioned the "extensive and extremely comprehensive investigation" the attorneys conducted and how time-consuming the settlement negotiations were.

Over four years of litigation, the lead counsel expended more than 31,000 hours, equivalent to $14.7 million in attorney and staff time, the judge said.

Additionally, the lead counsel will continue to work and incur out-of-pocket expenses in connection with the distribution of the settlement, now that it has received final approval, Judge Martinez noted.

A 30% award fee is typical even in "megafund" settlements, the judge said, and he noted the prominence of the $135 million resolution, calling it an "exceptional" monetary result.

"The $135 million recovery represents the second-largest all-cash securities class action recovery ever obtained in this district, is among the top five such settlements in Tenth Circuit history, and is more than 20 times larger than the $6.7 million median for securities class action settlements in the Tenth Circuit from 2010 to 2019," Judge Martinez said.

The judge also pointed out the risk that law firms take with class actions, as there is no guarantee of success.

"To date, lead counsel has received no compensation for its prosecution of this case, and since the extensive commitment of time and resources devoted here necessarily entailed the preclusion of other projects, the primary focus of this factor is to acknowledge this incongruence by permitting a higher recovery to compensate for the risk of recovering nothing," he said.

DaVita settled with investors last year after it was accused of steering patients away from government health insurance plans and into high-cost, private insurance plans.

According to the original complaint brought in 2017, DaVita pressured patients to enroll in the high-cost plans to obtain dialysis reimbursement rates that were up to 10 times higher than the rates for the same dialysis treatment under government plans.

The class members alleged that DaVita stock prices plummeted after its "scheme" was revealed.

Trouble continued for the company on Thursday when the U.S. Department of Justice announced that DaVita and its former CEO, Kent Thiry, were indicted by a federal grand jury in Denver, charged with conspiring with competing employers not to solicit certain employees.

Class Counsel Earn $10M in Fees in $31M Keurig Antitrust Settlement

June 23, 2021

A recent Law 360 story by Bryan Koenig, “Class Counsel Awarded $10M in Fees From $31M Keurig Deal, reports that a New York federal judge signed off on a $10.3 million attorney fees award, plus $2.3 million in litigation costs, for plaintiff firms that negotiated a $31 million antitrust settlement with Keurig Green Mountain Inc. resolving claims the coffee giant monopolized the market for single-serve coffee packs.  U.S. District Judge Vernon S. Broderick also granted final approval to the deal itself covering indirect buyers who purchased Keurig K-Cup Portion Packs through middlemen between September 2010 and August 2020.  Taking the lead on negotiating that settlement were attorneys from Kaplan Fox & Kilsheimer LLP, Wolf Haldenstein Adler Freeman & Herz LLP and Pearson Simon & Warshaw LLP.

The firms, backed by others, had sought approval for their one-third cut last month on arguments that the request was fair and reasonable in light of the length, complexity and risks involved in pursuing the litigation.  Judge Broderick agreed, signing off on legal costs that also include up to $911,286.43 in administrative and notice costs for JND Legal Administration, along with a $3,000 award for each of 11 class representatives who submitted to depositions and another $1,500 for the remaining 20 named plaintiffs.

The settlement, which does not affect ongoing claims from Keurig competitors like TreeHouse Foods Inc., came out of suits brought against Keurig that were consolidated into multidistrict litigation in 2014 over allegations of anti-competitive practices in the marketing of the company's single-serve packs of roasted and ground coffee for use in its coffee machines.

Buyers and coffee companies, including TreeHouse, alleged Keurig's anti-competitive actions included forcing distributors to enter exclusive agreements, filing baseless patent infringement lawsuits against competitors and attempting to dissuade retailers from selling competitors' products.  They also alleged Keurig misled consumers into believing that rival pods wouldn't work with "Keurig 2.0" coffee machines and modified the machines purely to make them incompatible with competitor pods.

In April, the court allowed the attorneys general of Illinois and Florida to object to the method of distributing the $31 million settlement to residents of their states.  Neither Keurig nor the indirect buyers who reached the deal opposed the intervention bid, though the judge said the settlement class has "made clear" it will not willingly change the allocation plan and sought to reserve the right to argue that the objections should have come sooner.

The indirect buyer class cut a deal with the Illinois and Florida enforcers last week that recognized the ability of residents of those states to recover antitrust damages as indirect buyers.  The revised plan treats Florida and Illinois as "repealer states," putting them among those that have acted at the state level to counter the U.S. Supreme Court's Illinois Brick doctrine, which generally blocks indirect buyers from securing monetary damages under the Sherman Act.  The indirect plaintiffs filed the revision, which does not change the Keurig settlement itself, the same day as a special master's report that recommended adopting the changes.

Law Firms Set for Fee Allocation Dispute in CytoDyn Action

June 22, 2021

A recent Law 360 story by Rose Krebs, “Fight on Tap Over Firms’ $4M Fee Bid in CytoDyn Suit Deal,” reports that as a Delaware vice chancellor is set to consider a proposed stockholder suit settlement that will require five directors of life sciences venture CytoDyn Inc. to forfeit certain awards, three firms have come under fire for seeking $4.1 million in fees for their work on the case.  In a letter to Vice Chancellor Paul A. Fioravanti Jr., attorney Mark Richardson of Labaton Sucharow LLP argued that a special litigation committee set up by CytoDyn's board is being unreasonable in proposing that the firms representing shareholders only receive $1 million in attorney fees and expenses.

In the letter, Richardson told the vice chancellor that the committee's proposal is "well outside the range of reasonableness, lacks support under Delaware law, and is not the product of a 'logical deductive process' that is helpful to the court."  In a March court filing, Labaton Sucharow, Faegre Drinker Biddle & Reath LLP and Purcell Julie & Lefkowitz LLP asserted they are entitled to the $4.1 million award for successfully challenging "fiduciary malfeasance that was blatant and egregious in equal measure, and, thus, entirely unfair to CytoDyn."

Earlier this year, the CytoDyn special litigation committee asked the Chancery Court to approve the settlement, which would require five directors to forfeit some or all of the 7.2 million shares they were granted in 2019.  The committee said it could find no "meaningful" justification for the compensation.  The recommendation followed Vice Chancellor Fioravanti's decision in 2020 granting the SLC's request to stay the litigation so it could investigate the December 2019 and January 2020 stock awards that were flagged by the suing stockholders in their 2020 derivative suit.

The three firms asserted that the rescission of December 2019 awards and additional stock options from CytoDyn's CEO, Nader Z. Pourhassan, "represents an economic benefit for the company valued at approximately $15,647,828."  The firms also argued the plaintiffs "deserve at least partial credit" for the forfeiture of January 2020 awards that were valued at roughly $41 million.  The firms argued that the six suing stockholders obtained a roughly $13.6 million benefit for the company through their challenge of the 2020 stock awards.

The firms said the suit also led to important corporate governance reforms by CytoDyn, including considering the addition of a new independent director within the next year, a reconstituted compensation committee that will have at least three independent directors and strengthened compensation policies.

The fee award the firms are seeking amounts to roughly 10% of the nearly $27.2 million "economic benefit achieved for CytoDyn as a result of this lawsuit" and is "appropriate and reasonable," they said in a court filing.  But the committee is unhappy with the fee award being sought with its attorney Andrew D. Cordo of Wilson Sonsini Goodrich & Rosati telling the vice chancellor in a recent letter that "a $1 million fee award to plaintiffs' counsel would be reasonable."

The committee takes issue with the way the firms calculated the monetary value for the benefit achieved as a result of the lawsuit and asserts that "there is no factual basis for plaintiffs (or anyone) to take credit for the expiration of the January awards."

Those awards "lapsed on their own due to the failure of a vesting condition unrelated to this litigation," the committee said.  "Removing the value incorrectly attributed to the January awards and otherwise applying plaintiffs' methodology yields a fee of $1.875 million," the committee asserted.  However, the committee also argued the amount still needed to be reduced to take into account that the plaintiffs' firms only played a "relative role in bringing about the settlement."  "The SLC conducted the investigation and negotiated the settlement," Cordo's letter contended.  The committee also argued that a $4.1 million award "would be damaging to the company's financial condition."

Boies Cites ‘Trench Warfare’ in $627M BCBS Fee Request

June 21, 2021

A recent Bloomberg Law story by Roy Strom, “Boies Cites ‘Trench Warfare’ in $627 Million BCBS Legal Fee Bid,” reports that David Boies and Michael Hausfeld are requesting nearly $627 million in fees and another $40 million in expenses for the work a horde of lawyers did over eight years to secure a $2.7 billion antitrust settlement with Blue Cross Blue Shield.  The fee could provide a much-needed boost for Boies’ law firm, Boies Schiller Flexner, which has suffered an exodus of lawyers and saw its revenue in 2020 fall nearly 40% to $250 million, according to AmLaw data.

It’s unclear how the fee would be split between the myriad lawyers who worked on the case, but Boies and Hausfeld stand to gain most having served as co-lead counsel.  The fee application follows a preliminary approval in November of a settlement between the health insurer and plaintiff’s counsel. The judge in the case, R. David Procter of the Northern District of Alabama, said at the time the fees would be subject to his approval and would “receive intense scrutiny.”  He also said the proposed fee, which is roughly 25% of the settlement value, is “in line with benchmarks” for the Eleventh Circuit.

“This case has been the litigation equivalent of trench warfare, engaging scores of lawyers on both sides,” wrote Boies and Hausfeld, who are co-lead counsel.  The lawyers noted that from 2013 to August last year, a total of more than 434,000 hours had been spent litigating the case.

Filed in February 2012, the case alleged Blue Cross Blue Shield health plans divided up insurance markets across the country and agreed not to compete with one another across those markets.  The settlement agreement includes changes to the Blue Cross business model designed to enhance the market for health insurance, including eliminating a cap on revenue that BCBS affiliates could earn selling other health insurance plans.

The motion for legal fees compared the scope of the litigation to some of the most well-known antitrust cases, including those brought against Standard Oil, American Tobacco Co., and AT&T. Those cases were investigated and brought by the U.S. government.  Boies and Hausfeld noted there was no government investigation in the Blue Cross case.  “This was a purely private effort to enforce the antitrust laws,” the lawyers wrote.  The parties briefed over 150 discovery motions that led to 91 discovery orders, Judge Procter noted in an earlier filing.  He wrote that lawyers conducted over 120 depositions and defended over 20 depositions of class representatives and experts.

The lawyers wrote in their fee application that the defendants produced more than 75 million pages that were reviewed by a team of 178 attorneys for the plaintiffs.  The settlement negotiations began in 2015 and included 158 in-person and virtual meetings with mediators and 282 telephone conferences, they wrote.  The lawyers also noted they went up against “a who’s who of the nation’s most experienced antitrust litigators” at a number of major law firms, including Kirkland & Ellis, Hogan Lovells, Crowell & Moring, Foley & Lardner, Shearman & Sterling, and Cravath, Swaine & Moore.

10 Largest Class Action Attorney Fee Awards in U.S. History

June 20, 2021

A recent Bloomberg Law story by Roy Strom, “Meet the Professor Big Law Hires to Collect Nine-Figure Fees,” reports on attorney fee awards in the 10 largest class action recoveries in the U.S. have paid class counsel a range of fee when measured as a percentage of the settlement amount:

As stated in the article, there is no central authority to track class action settlements and attorney fee award data.  We at NALFA, would like to to be this authority.  As a non-profit group, we can worked with outside groups and individuals to promote and promulgate empirical research and data on attorney fee awards in a range of underlying litigation practice areas.