A recent Law 360 story by Emily Sawicki, “Fee Award for Defective Toilet Settlement Plunges to $1.95M,” reports that a Texas federal judge has awarded $1.95 million to attorneys representing U.S. consumers in cross-border class action settlements over allegedly defective toilets, following a Fifth Circuit decision last year tanking a $4.3 million fee award in the litigation. The ruling comes after a divided Fifth Circuit panel ruled in January 2022 that U.S. District Judge Amos L. Mazzant had abused his discretion when he declined to wade into whether the hours attorneys at Carpenter & Schumacher PC spent litigating ultimately unsuccessful consumer claims could be lopped off the lodestar.
"The Fifth Circuit determined that the court should have made specific factual findings regarding plaintiffs' overall success and only awarded attorneys' fees for time spent on successful claims as part of the court's lodestar calculation," Judge Mazzant wrote in the order. Plano, Texas-based Carpenter & Schumacher PC initially asked to pocket $12 million from settlements between two classes of consumers and Porcelana Corona De Mexico, a toilet manufacturer accused of producing defective toilets whose tank flaws caused property damage.
In the 2018 and 2019 settlements — encompassing two separate class actions against the Monterrey, Mexico-based Porcelana and its predecessor, Sanitarios Lamosa — class members were offered up to $300 to replace defective toilet tanks and, for some claimants, up to $4,000 for property damage resulting from the alleged defect, according to court documents. Following the settlements, in April 2020, Judge Mazzant cut down Carpenter & Schumacher's eight-figure settlement fee request to $4.3 million, after finding it would be inappropriate to add a multiplier as work performed on the case was adequately included in the lodestar total.
In its ruling last January, however, the Fifth Circuit upended the fee award and kicked the case back to the Eastern District of Texas to make a new lodestar calculation that distinguished between work spent on successful versus unsuccessful claims. The circuit court told Judge Mazzant to "address the 'common core of facts' and 'common legal theories' sufficiently so that no fees are awarded on unsuccessful theories."
"Consider the amount of damages and non-monetary relief sought compared to what was actually received by the Class," the Fifth Circuit further instructed Judge Mazzant. That direction proved difficult, Judge Mazzant said, because plaintiffs "did not, at any point, enumerate a specific monetary amount sought in their complaints."
By way of determining success, Judge Mazzant compared the total number of toilet tank models that had alleged defects, with the total number included in the settlement to determine how successful plaintiffs were in securing relief. That number came to a success rate of 22%. BiHowever, Judge Mazzant said that number alone does not "fully encompass the complex nature of plaintiffs' success in this case."
The judge approved an overall lodestar fee reduction of 55% based on "the court's factual findings, analysis of the results obtained, and additional review of class counsel's contemporaneous billing records." When it came to adjusting the remaining lodestar based on the 12 Johnson factors — established in 1974 by the Fifth Circuit in Johnson v. Georgia Highway Express — Judge Mazzant determined there was no more reason to enhance or reduce the lodestar since the last time the judge took up the fee request in 2020, and did not adjust the lodestar.
Judge Mazzant acknowledged that "[p]laintiffs recovered on only a handful of the claims that they brought" and, on Friday, signed off on a final fee award of $1,950,277.28. An accompanying litigation expense request of $371,354.98 was not included in the defendants' appeal to the Fifth Circuit and was not addressed by the appeals court; therefore, Judge Mazzant granted a motion by Carpenter & Schumacher to retain the full litigation pot, bringing the firm's total payout to $2,321,632.26.