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New Study Examines Attorney Fee Awards in Federal Class Actions

November 29, 2011 | Posted in : Fee Award, Fee Scholarship, Study / Report

In a new academic paper, “An Empirical Study of Class Action Settlements and their Fee Awards” (pdf), Law Professor Brian T. Fitzpatrick of Vanderbilt University Law School examines attorney fee awards in class action litigation in federal court.

The following is a brief synopsis of the 42-page paper:

"This article is a comprehensive empirical study of class action settlements in federal court.  Although there have been prior empirical studies of federal class action settlements, these studies have either been confined to securities cases or have been based on samples of cases that were not intended to be representative of the whole (such as those settlements approved in published opinions).  By contrast, in this article, I attempt to study every federal class action settlement from the years 2006 and 2007.  As far as I am aware, this study is the first attempt to collect a complete set of federal class action settlements for any given year. 

I find that district court judges approved 688 class action settlements over this two-year period, involving nearly $33 billion.  Of this $33 billion, roughly $5 billion was awarded to class action lawyers, or about 15% of the total.  Most judges chose to award fees by using the highly discretionary percentage-of-the-settlement method, and the fees awarded according to this method varied over a broad range, with the mean and median around 25%.  Fee percentages were strongly and inversely associated with the size of the settlement.  The age of the case at settlement was positively associated with fee percentages.  There was some variation in fee percentages depending on the subject matter of the litigation and the geographic circuit in which the district court was located, with lower percentages in securities cases and in settlements from the Second and Ninth Circuits.  There was no evidence that fee percentage were associated with whether the class action was certified as a settlement class of with the political affiliation of the judge who made the award."