A recent BLT blog post, “Judge Cuts Fees for Plaintiffs’ Lawyers in LivingSocial Settlement,” reports that, citing inefficient staffing and high hourly rates, U.S. District Judge Ellen Segal Huvelle slashed attorney fees in half for plaintiffs’ lawyers in multi-district litigation against daily deal company LivingSocial.  In her opinion (pdf) approving a settlement between consumers and LivingSocial over expired deals, Huvelle awarded $1.35 million in fees to the 12 law firms that represented the plaintiffs, instead of the $3 million they asked for as part of the settlement.

Washington-based LivingSocial was hit with a series of class actions beginning in 2011 over expired deals that consumers bought through the company’s website.  The plaintiffs claimed the vouchers’ limited expiration violated the federal Credit Card Accountability Responsibility and Disclosure Act, as well as state laws regulating gift certificates.  LivingSocial denied its vouchers were gift certificates and argued that even if they were, the expiration dates did comply with state and federal laws.

The cases from across the U.S. were consolidated as an MDL in D.C. in August 2011 and settlement talks started soon after, according to court filings.  Under the settlement, LivingSocial agreed to establish a $4.5 million fund reimburse class members whose deal expired before they were used.  The class included about 10.9 million consumers who bought deals between 2009 and late 2012.  Any remaining funds would go to the Consumer Union and National Consumers League as cy pres awards.

Plaintiffs’ lawyers asked for $3 million in fees, an amount that LivingSocial agreed not to contest.  Huvelle wrote that although the four formal fee objections to the settlement agreement were “largely meritless,” she agreed with complaints about the size of the fee request.  Huvelle criticized how the plaintiffs’ legal team staffed the case, noting that 46 lawyers, at the 12 firms involved in the case, billed time.  “At a minimum, this is a highly inefficient was of doing business,” she wrote.

Plaintiffs’ lawyers billed more than 4,000 attorney and paralegal hours, a number that Huvelle called “excessive” given that there were only three depositions taken and two briefed motions.  She said she was unwilling to accept the high hourly rates charged by some attorneys working on the case, citing the $600 rate charged by Cuneo Gilbert partner Charles La Duca as exceeding the established Laffey Matrix.

Huvelle rejected the argument that plaintiffs’ counsel should be paid based on a percentage of the estimated value of the settlement and its injunctive relief, which the plaintiffs’ lawyers pegged at $62 million.  She instead awarded 18 percent of the settlement fund, which was estimated at $7.5 million.  “A modest percentage is appropriate in this case given the limited value of the direct benefits to the class members, the small number of class members who will benefit, the proportionally large cy pres distributions…and the somewhat dubious value of the injunctive relief,” Huvelle wrote.

NALFA also reported on this case in “Lawyers in LivingSocial Class Action Seek $3M in Fees”.  For more on this case, visit http://www.livingsocialvouchersettlement.com/index