The Ninth Circuit recently struck a blow against plaintiffs’ attorneys’ ability to recover handsome attorney’s fee awards in class action settlements when there is little actual benefit to the class. In Lowery v Rhapsody International, Inc., No. 22-15162 (9th Cir. June 7, 2023), a Ninth Circuit panel reversed the U.S. District Court for the Northern District of California’s award of $1.7 million in attorney’s fees to plaintiffs’ counsel in a copyright class action, finding that the fee award was not reasonable when compared to the class’ actual recovery of $52,841, without any injunctive relief.
In Laffitte v. Robert Half International Inc., No. S222996 (Aug. 11, 2016), the California Supreme Court held, in an employment class action lawsuit, that when attorney fees are awarded to class counsel from a common fund, that the award is not per se unreasonable because it is calculated as a percentage of the common fund, as opposed to pursuant to a lodestar calculation.
Continue Reading California Supreme Court Approves Attorney Fee Awards Calculated Based Upon Percentage of Class Action Common Fund
In Laffitte v. Robert Half International, Inc., No. BC321317, ___ Cal.App.4th ___ (Oct. 29, 2014; pub. ord. Nov. 21, 2014), the California Court of Appeal affirmed a $19,000,000 settlement that included an attorneys’ fee award of one-third the settlement amount. Mark Lafitte filed a wage and hour class action suit against Robert Half International alleging violations of the Labor and Business and Professions Codes. The parties settled, and the terms provided that Robert Half would pay a gross settlement amount of $19,000,000, of which class counsel’s attorneys’ fees would be no more than 6,333,333.33. Additionally, the proposed settlement included a “clear sailing” provision assuring that Robert Half would not oppose the court’s fee award if the amount was less than or equal to the specified amount.
Continue Reading Clear Sailing Ahead For Class Counsel in California Settlement
Over the last several months, Judge Richard Posner has authored a triumvirate of opinions reversing the district courts’ approval, over objections, of consumer class action settlements—Eubank v. Pella Corp., 753 F.3d 718 (7th Cir. 2014), Redman v. RadioShack Corp., 768 F.3d 622 (7th Cir. 2014), and Pearson v. NBTY, Inc., No. 12-1245, 2014 WL 6466128 (7th Cir. Nov. 19, 2014)—each of which could charitably be described as scathing. Among other things, Judge Posner takes aim at the manner in which a settlement is valued for purposes of determining attorney’s fees (administration costs and cy pres awards are not part of the value to the settlement class), the method of calculating attorney’s fees (a ratio based on actual value to the class, not the maximum potential value), and the manner and content of notice to the class as well as the claims process (simplification is key). While the class action bar awaits the impact of these decisions, there are several key lessons to be learned.
Continue Reading Now That That’s Settled: The Status of Class Action Settlements in the Seventh Circuit after Pella, Radioshack and NBTY
In Americana Art China Company, Inc. v. Foxfire Printing & Packaging, Inc., 743 F.3d 243 (7th Cir. Feb. 18, 2014), the U.S. Court of Appeals for the Seventh Circuit affirmed the district court’s attorneys’ fees award in a class action settlement arising from the defendant’s faxing of thousands of unsolicited advertisements in violation of the federal Telephone Consumer Protection Act. In doing so, the Seventh Circuit reaffirmed the district court’s discretionary power to use the lodestar method, rather than the percentage method, to determine an appropriate fee award for class counsel. The Seventh Circuit held that the lodestar methodology was properly applied and permissible under the circumstances.
Continue Reading Seventh Circuit Affirms Lodestar Method to Determine Attorneys’ Fees in TCPA Class Action Settlement