A recent The Recorder story, “Koh Axes $40 Million in Fees for ‘No-Poach’ Lawyers,” reports that a group of prominent plaintiffs lawyers saw their request for fees slashed in half in the Silicon Valley “no poach” case that recovered more than $400 million for engineers who once worked for Apple, Google and other major technology companies.
U.S. District Judge Lucy Koh signed off on the $415 million settlement with the largest defendants, and in a separate order awarded $40,043,932.50 in fees to the team led by Lieff Cabraser Heimann & Bernstein and the Joseph Saveri Law Firm. The award is less than half the $81 million in attorney fees they were seeking.
Koh wrote that she saw "nothing inherently reasonable" in the request from lead plaintiffs firms for 19.5 percent of the total settlement amount, even though it fell below the 25 percent benchmark for contingency fee awards in the Ninth Circuit. She noted that reducing the lawyers' fees would boost the average recovery for 64,410 class members by $700 to about $5,770.
"In a case with such a large settlement fund and such a great disparity between the fees requested and the average recovery of individual class members, the court finds the lodestar method preferable to blind acceptance of percentages that seem largely untethered to the results achieved in this litigation," Koh wrote. Koh awarded a little more than $40 million after multiplying each firm's reported billings in the case by 2.2. She also approved $1.2 million in costs.
The suit accused the companies of suppressing wages for technology workers by agreeing not to recruit each other's employees.
When plaintiffs counsel submitted their request for fees in May, they cited the "landmark" result of getting "one of the largest monopsony wage settlements ever approved." Although the second deal increased the settlement fund by $90.5 million, the request for fees remained at $81.1 million, the same level as proposed in the prior rejected deal.
Koh wrote that applying the percentage-of-recovery method to such a "megafund" case could result in an inappropriate windfall to class counsel. "Having overseen this case for four years, the court finds that justice would be best served by applying the lodestar method—i.e., tying the fee awards for class counsel and Devine counsel to the actual hours they reasonably expended on this litigation and then selecting a multiplier," Koh wrote.
Her effort was confounded by a wide disparity in the value co-lead counsel at Lieff Cabraser and the Joseph Saveri Law Firm initially attached to their combined work on the case. In separate filings, Lieff submitted a joint lodestar amount of $14 million while Saveri submitted more than $20 million. When she probed at a fairness hearing in July, Koh learned that the disagreement was rooted in concern other firms had with the Saveri firm's billing practices and ordered the plaintiffs to go through Saveri's billing records entry-by-entry. Plaintiffs ultimately settled on a total revised sum of roughly $18 million, cutting $2 million billed by Saveri.