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Plaintiffs Counsel Lose on Attorney Fee Risk Multiplier Issue in Kia Class Action

December 9, 2011 | Posted in : Fee Award, Fee Issues on Appeal, Fee Reduction, Lodestar

A recent The Legal Intelligencer story, “Pa. Judges Uphold $5.6 Mil. Brake Class Action Against Kia” reports that the Supreme Court of Pennsylvania upheld a Philadelphia court class action verdict awarding $5.6 million to owners of Kia sedans with faulty braking systems, but class counsel lost on the attorney fee risk multiplier issue.  Philadelphia Common Pleas Court Judge Mark I. Bernstein had awarded a risk multiplier of 1.375 times the $3 million lodestar, for a total of $4.125 million. 

Chief Justice Ronald D. Castille wrote the federal statute under which the class won its verdict – the Magnuson-Moss Warranty Act – explicitly states that attorney fees are to be based on actual time expended and does not “provide for discretionary fee enhancement.”

“Pennsylvania generally adheres to the ‘American Rule,’ under which ‘a litigant cannot recover counsel fees from an adverse party unless there is express statutory authorization, a clear agreement of the parties or some other established exception,’” Castille said.

Class co-counsel include James A. Francis of Francis & Mailman and Alan M. Feldman of Feldman Shepherd Wohlgelernter Tanner Weinstock & Dodig.  Even with the fee reduction, Feldman said the attorney fees award would probably be close to the original award because of interest and the appellate work done by plaintiffs counsel.

Arguing on behalf of appellee, Michael D. Donovan of Donovan Axler said because the U.S. Supreme Court has ruled against multipliers in a class action case, the state Supreme Court’s ruling makes it unlikely that Kia could challenge the attorney fees because of a multiplier.