A recent Law 360 story by Emilie Ruscoe, “Kessler Topaz Garners $41.1M For Repping Snap Investors,” reports that Kessler Topaz Meltzer & Check LLP attorneys will take home $41.1 million for their work representing social media giant Snap Inc. investors in a suit alleging fraud, even as the federal judge who approved the deal opined that the overall fee request process does not face any "meaningful opposition and rigorous testing."

In his order out of Los Angeles, U.S. District Judge Stephen V. Wilson found that the multimillion counsel fee, which comprises a quarter of the $155 million settlement sum in the case, is reasonable "in light of the length of the litigation, a comparison to awards made in similar cases, and the minimal reaction from the class."  Judge Wilson signed off on the settlement sum in the same order.

Though the judge approved the fee total, he also noted in his analysis that, "Ultimately, the [counsel fee request] process fails to create any incentive to ensure that requests for attorney's fees in these cases face meaningful opposition and rigorous testing, thereby rendering a court's task in these situations unusually difficult."

Neither the defendants nor the members of the proposed class are in a position to really scrutinize the requested attorney fee, the judge said.  Defendants would have to pay their own attorneys more to go through the process of opposing the counsel fee, and class members are unlikely to retain and pay additional counsel just to oppose the counsel fee, he said.

While courts are required to undertake their own review of the requested counsel fee, they also "are faced with hundreds of cases per year and must allocate limited time across those cases," Judge Wilson said.  Nonetheless, the judge said, the requested 25% fee is reasonable.  Only two members of the putative class, out of 828,000 who received notice about the case, objected to the settlement, and neither of them objected to the attorney fees.

The settlement ends claims that Snap failed to disclose in its initial public offering that Snap's daily active user engagement metrics had been negatively impacted as a result of stiff competition from Facebook.  Snap's March 2017 IPO raised $3.4 billion, but investors claim that revelations about the company's stalling performance indicators pushed down the company's trading price.