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Firms Jockey for $159M in Fees in $577M CRT MDL Settlement

October 22, 2018 | Posted in : Fee Award, Fee Request, Hourly Rates, Lodestar, Practice Area: Class Action / Mass Tort / MDL

A recent Law 360 story by Bryan Koenig, “Left-Out CRT Buyers Blast ‘Paltry’ $6M Fee-Sharing Proposal,” reports that carving $6 million from a massive attorneys' fees award isn’t enough to overcome the fundamental failure to represent indirect buyers of Cathode Ray Tubes (CRT) from three states originally excluded from a $576.8 million bundle of antitrust settlements, buyers from the excluded states told a California federal judge.

The class of indirect purchaser plaintiffs is seeking an “indicative ruling” to say how the judge would rule on tweaking the settlements with technology giants such as Philips, Panasonic and LG that had excluded people in Massachusetts, New Hampshire and Missouri.  But objectors from those three states argued that the class can’t use the indicative ruling to overcome failings highlighted by a Ninth Circuit panel in April.

The group of buyers that had taken its objection to the underlying settlement to the appeals court urged the court not to ignore the "absence of and affronts" to its due process guarantees.  The indirect purchasers' "classic no harm, no foul argument to support the proposal fails," the buyers said.  "There is no case holding that an improper certification of a settlement class can be remedied by altering distribution terms.  Once it is determined that a subgroup of class members did not receive constitutionally guaranteed adequate representation during the litigation and in the process of reaching settlement, the resultant settlement pot — no matter how large or how it is divvied up — is infirm.”

The class itself first sought the indicative ruling at the beginning of October.  At the same time, it also asked the Ninth Circuit to pause the appeal while the lower court thinks it over.  The idea is to avoid an appellate decision on the challenge to settlements between the indirect purchasers and the electronics companies — including Philips Electronics North America Corp., Panasonic Corp. and Samsung SDI Co. Ltd. — that would resolve consolidated multidistrict litigation.

At least one part of the case remains ongoing, however, as China-based Irico Group Corp. and a subsidiary claim they should be granted sovereign immunity because they are controlled by the Chinese state.  Irico was dealt a setback when a special master ordered it to comply with discovery requests from direct and indirect purchasers, rejecting the company’s objections and assertions of compliance.

The MDL, which has also seen settlement with direct purchasers, centers on claims that the companies divvied up the cathode ray tube market and cut down on supply to boost prices of CRTs used in televisions and computer monitors from early 1995 through late 2007.  A district court approved the last of the deals in July 2016, amid objections by indirect purchasers in Massachusetts, Missouri and New Hampshire, and two attorneys general.  

The objectors' attorneys also argued that Alioto had wrongly claimed that consumers in those states didn’t have viable claims, even though he had a duty to represent everyone in the class and vigorously prosecute their claims.  They also challenged the $158.6 million attorneys’ fees award, saying Alioto's hourly bill-rate multiplier was based on “nothing but theater.”

Earlier this month, the indirect buyer class proposed taking a small chunk of that award — $6 million — and applying it to the settlement fund instead.  If the district judge indicates he’ll sign off, the buyers said they would ask the Ninth Circuit for “a limited remand” to implement the tweak.

According to the indirect buyers, they have resolved the appeals of four groups of objectors while three more out of the original seven remain.  Those outstanding objectors argued, however, that the “paltry” $6 million carveout seeks to “impose a constitutionally deficient and unfair settlement” on them.  The three states’ real claims, they said, actually total $283 million, and they asserted that granting the indicative ruling “will unnecessarily prolong, rather than eliminate, an inevitable appellate opinion absent a true, mutually agreed upon settlement of the objectors/appellants’ appeals.”

The appellate cases are Indirect Purchaser Plaintiffs v. John Finn et al., case numbers 16-16368, 16-16371, 16-16373, 16-16374, 16-16377, 16-16378, 16-16379, 16-16399 and 16-16400, in the U.S. Court of Appeals for the Ninth Circuit.  The underlying case is MDL No. 1917 In Re: Cathode Ray Tube (CRT) Antitrust Litigation, case number 3:07-cv-05944, in the U.S. District Court for the Northern District of California.