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Judge Trims Fee Request in Apple Bag Check Class Settlement

July 7, 2022 | Posted in : Contingency Fees / POF, Fee Benchmark / Standard, Fee Jurisprudence, Fee Reduction, Fee Request, Hours Billled, Lodestar, Practice Area: Class Action / Mass Tort / MDL, Settlement Data / Terms

A recent Law 360 story by Bonnie Eslinger, “Alsup Cuts 33% Apple Bag-Check Deal Atty Fee Ask to 30%” reports that U.S. District Judge William Alsup said the lawyers who represented workers in a bag-search case against Apple that settled for $30.5 million can get 30% for their fees, but not the one-third requested, noting that the hours counsel said they spent on the case are "staggering" and likely "inflated."

At a morning hearing in San Francisco, Judge Alsup initially told counsel for the certified class of 14,000 workers that he was inclined to award 28% of the settlement fund for their legal fees, a few percentage points higher than the federal court's 25% benchmark.  "I don't agree with the one-third, but I agree that you get more than 25% because I think you did do above average work," the judge said.

Counsel for the class, Lee Shalov of McLaughlin and Stern LLP, told the court that the lawyers collectively racked up 11,400 hours of work on the case, a total the judge said seemed excessive, even with the case going to the state's high court at one point.  "It's staggering," the judge said.  Another lawyer for the class, Kimberly Kralowec of Kralowec Law PC, urged the court to grant the one-third cut requested, arguing that California law governs the calculation of the fee award where there are state law claims, citing cases where the Ninth Circuit approved a higher amount.

Judge Alsup shot back that if counsel was not happy with his 28% offering, perhaps he should look into whether the number of hours the lawyers claimed they put into the case showed that their work was inefficient.  "What I'm thinking about doing is appointing one of these auditors who will come in and scrutinize your lodestar [hours], which I believe is inflated," the judge said. "You can either take the 28% or we'll go back and do it the hard way."

The judge also said he was trying to ensure the most amount of money went to the class members.  He added that a higher percentage might be justified with a smaller settlement amount.  "But in a case where you are collecting vast amounts, like $30 million, then instead of getting more you should get less in my view," the judge said, explaining that "25% of a huge number is a lot more than 25% of a smaller number."

Kralowec told the court that she was arguing for the sake of making a record, but the class would go along with the court's decision.  "I appreciate that you've decided to award something above the 25% benchmarked by the Ninth Circuit," she said.

Shalov chimed in and told the court that counsel had secured every dollar for the workers that they should have been paid.  Judge Alsup said that was not a convincing argument.  "That money belongs to the class, it doesn't belong to you," the judge said.  "However, I'm going to raise it to 30%."