Thursday, April 18, 2019
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Ninth Circuit Approves $42 Million Award To Class Counsel in Action Against NCAA
By a MetNews Staff Writer
The Ninth U.S. Circuit Court of Appeals yesterday affirmed an award of nearly $42 million to attorneys in a class action who obtained a $209 million settlement from the National Collegiate Athletic Association based on formerly capping schools’ grants to student athletes at less than the full cost of attending.
A three-judge panel rejected contentions of former Western Michigan wide receiver Darrin Duncan, the sole objector out of 53,748 class members. In a memorandum opinion, the judges affirmed approval of the settlement by District Court Judge Claudia Wilken of the Northern District of California.
Duncan relied on a “mega fund rule” that where the settlement amount is massive, the percent of the fund allocated to attorney fees should diminish.
Discretion Not Abused
Wilken approved a $41,732,889.00 award based on 20 percent of the $208,664,445 fund. Yesterday’s opinion declares:
“The district court rejected Duncan’s objection based on the large size of the recovery because (1) an award of 20 percent was less than the percentage awarded in the comparably sized cases… and (2) counsel’s efforts led to the ‘exceptional, mega-fund results.’ The district court did not abuse its discretion in finding that the large size of the settlement fund did not warrant a reduction of the 20 percent fee award.”
The opinion notes that the Ninth Circuit has, in past decisions, set 25 percent as the “benchmark award” and has approved awards ranging up to 30 percent.
Cross-Check Performed
As a cross-check on the reasonableness of the 20 percent award, Wilken took the lodestar amount— $11,398.158.30 and multiplied it by 3.66, producing the sum of $41,717,259.38.
That, Duncan insisted, was not a meaningful cross-check because Wilken only required attorney fee summaries rather than the actual bills. The opinion responds:
“Here, after reviewing class counsel’s initial declarations that summarized the lodestar calculation, the district court ordered counsel to provide more detailed information including a summary of the hours spent on various categories of activities, such as motions, depositions, document review, and court appearances. In addition, because the settlement only resolved plaintiffs’ claims for damages, the district court ordered counsel who had not already done so to specify whether their activities billed related only to such claims. Based on the initial and supplemental declarations, the district court did not abuse its discretion in calculating a lodestar of $11,398.158.30 for purposes of a crosscheck on the reasonableness of the 20 percent fee award.”
The case is In re National Collegiate Athletic Association Athletic Grant-in-Aid Cap Antitrust Litigation, 18-15054.
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