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Hagens Berman Says It Earned Every Penny of $48M Fee Request

October 27, 2020 | Posted in : Expenses / Costs, Fee Agreement, Fee Award Factors, Fee Entitlement / Recoverability, Fee Issues on Appeal, Fee Request, Practice Area: Class Action / Mass Tort / MDL, Settlement Data / Terms

A recent Law 360 story by Emily Lever, “Hagens Berman Says It Earned Every Penny of $48M Fees,” reports that Hagens Berman Sobol Shapiro LLP continued to defend its demand for $48 million in attorney fees from optical disk drive price-fixing settlements, saying the litigation was high risk and they deserve a high reward.  Hagens Berman, the lead counsel for a class action accusing Samsung, Toshiba, Panasonic and others of colluding to inflate the cost of optical disk drives, hit back at an objector from the class who said they should get nothing.  "This litigation was extremely risky and it obtained an exceptional result," Hagens Berman said in a brief.

The multidistrict litigation, consolidated in 2010, resulted in three rounds of settlements totaling $205 million.  The firm initially secured $48 million in attorney fees, but the Ninth Circuit nixed the award, saying it was much steeper than the original $21 million bid the firm submitted and it needed to provide "further explanation."

The firm is holding on to the $48 million while the San Francisco federal court takes a second look.  But Hagens Berman should have returned the money, and their "defiant" conduct should lead to their fees getting zeroed out, according to objector Connor Erwin.  "They have no legal entitlement to the funds, which belong to the class," Erwin told the court.

Hagens Berman took exception to what they called Erwin's "vacillating arguments."  The firm argues that regardless of whether the lower court ultimately invalidates the award or finds "some impropriety in the fee arrangement," they remain entitled to recovering the value of their services.  And the value of those services is high, they contend, given that they were extraordinarily successful.

The case ended up being much more difficult than Hagens Berman could have reasonably predicted when it bid for a mere $21 million in attorney fees 10 years ago at the outset of the case, the firm argued.  Hagens Berman said that contrary to Erwin's claim that the length and complexity of the case were par for the course and should have been expected, the case was unusually long and treacherous.  The class was denied certification on the first attempt, and the second attempt was only successful because of the firm's hard work, it said.

Hagens Berman also contested Erwin's claim that it was trying to "manufacture" the appearance that it was receiving a lesser amount than it really was by factoring in litigation expenses into its demand after earlier saying it would waive them.  Just because they are waiving expenses does not mean the court shouldn't consider counsel's net gain or loss when assessing what an appropriate fee should be, Hagens Berman said.