A recent Law 360 story by Ganesh Setty, “Lawyers Want $3.6M Award in Insurance Software Breach Suit” reports that one-third of an $11 million settlement to resolve a data-breach class action against Zywave Inc., a software provider for insurance companies, should go toward attorney fees, the three named plaintiffs in the case told a Texas federal court.  Jay Heath, Edward Shapiro and Daisy Becerra Lopez said in a motion that a roughly $3.67 million fee award is reasonable both under the percentage method and "lodestar" method used by courts in the Fifth Circuit to determine an attorney fee award's appropriateness.

The $11 million settlement fund will cover more than 4.3 million individuals nationwide who may have had their personal identifiable information put at risk due to the data breach.  The settlement also includes a subclass of California residents and contains three tiers of relief: statutory cash payments to California residents, reimbursements up to $5,000 for out-of-pocket costs per class member, and an identity theft monitoring service for a year, filings show.

Courts in the Fifth Circuit regularly award attorney fees between 30% and 36% of the total recovered amount, making a request for one-third of the total $11 million settlement fund reasonable, the plaintiffs said.  Under the lodestar approach, a court takes the number of hours reasonably spent on the case per attorney, multiplies it by each of the attorneys' hourly rates and then adjusts that total lodestar amount by a multiplier based on 12 factors.  Those factors include the novelty and difficulty of legal questions at issue, time and labor required and the experience and reputation of the attorneys.

Counsel for the plaintiffs and the class collectively spent more than 730 hours for a lodestar amount of roughly $587,000, the plaintiffs said, meaning that the proposed $3.67 million fee award represents a 6.24 multiplier.  The multiplier will ultimately decrease as attorneys continue to work toward final approval and monitor the settlement, they added.

Counsel also took up the case on a purely contingent basis, the plaintiffs noted, adding that the attorneys' hourly rates are on par with rates charged by other farms handling multi-state class actions concerning data breaches.  The plaintiffs further requested that they each receive a $2,000 service award for their role as class representatives, which would be taken out of the $11 million settlement fund as well.