Page 1
Ninth Circuit Approves $34 Million Attorney-Fee Award
Panel Rejects Contention That Judge Erroneously Failed to Consider Rate That Bidding Law Firm Proposed
By a MetNews Staff Writer
The Ninth U.S. Circuit Court of Appeals yesterday approved an award of nearly $34 million to counsel in a nationwide class action by indirect purchasers of lithium ion batteries against makers of those devices, accused of price-fixing, with a three-judge panel spurning the protest by an objector that services of lawyers could have been secured at a lower price.
Circuit Judge M. Margaret McKeown and Senior Circuit Judges Jay S. Bybee and Michael Daly Hawkins signed the memorandum opinion affirming an order by District Court Judge Yvonne Gonzalez Rogers of the Northern District of California.
Rogers, who earlier approved settlements amounting to $113.45 million, said in her Dec. 10, 2020 decision:
“[T]he Court finds that a total attorneys’ fee award of $33,829.176.00. is fair and reasonable. The award amounts to just under 30 percent of the settlement fund. Courts in this district in similar antitrust litigation have awarded attorneys’ fees constituting similar percentages of the total fund as sought here.”
She noted that $4,495,000.00, the amount of an interim award, would be deducted from that sum, but a proportional share of the interest would be added. The judge also awarded $6,751,735.84, minus $860,188.50 provided for in the interim award.
Objector’s Contention
Objector Frank Bednarz argued on appeal that Rogers failed to take into account the bid by Hagens Berman Sobol Shapiro LLP, an international law firm with an office in Pasadena, to be lead counsel. Rogers did appoint that firm, as well as the Santa Monica firm of Cotchett Pitre & McCarthy LLP and the San Francisco-based Lieff Cabraser Heimann & Bernstein LLP, as co-lead counsel.
The judges acknowledged that when a firm secures a place as lead counsel for a class, through bidding, its “bid becomes the starting point for determining a reasonable fee.” However, they continued:
“Here, however, the district court determined that a three-firm co-lead interim counsel structure was preferable to a sole lead counsel structure. Consequently, Hagens Berman’s bid to be sole interim counsel was not relevant to the district court’s assessment of the reasonableness of class counsel’s fee request….”
The Hagens firm, they explained, did not land the appointment based on being the winning bidder.
“Importantly, when interim counsel is selected in the manner it was in this case—as opposed to through a competitive bidding process—the risk that a firm will deliberately submit a low bid to secure the position as lead counsel only to make a substantially higher fee request when the case resolves is mitigated,” the judges said. “And, when the counsel structure differs from that conceived of in the singular competitive bid submitted, that bid offers little insight into market rates.”
Conflict Alleged
Bednarz also contended that there was a conflict inherent in the firms representing plaintiffs in states that allow antitrust actions by indirect purchasers—those who buy products from an intermediary rather than directly from the manufacturer—and those who don’t.
The U.S. Supreme Court held in the 1977 case of Illinois Brick v. Illinois that indirect purchasers lack standing under the federal antitrust laws, but most states, including California, either by case law or legislation, have recognized standing, and are denominated “repealer” states.
The memorandum opinion notes that the distribution plan approved by Rogers allocates to class members in repealer states 90 percent of the classes’ share of the settlement, with 10 percent going to those in non-repealer states “to account for the differing strength of their claims.” It also recites that fees no fees were claimed in connection with responding to Bednarz’s claim of a conflict raised in an earlier appeal and on remand.
“As such, the district did not abuse its discretion in declining to reduce class counsel’s award because of an alleged representational conflict,” the judges said.
Objector’s Fee Request
In a separate order on Dec. 10, 2020, Rogers denied Bednarz’s Request for an award of $900,000 in attorney fees, but granted a $250,000 award to come from funds paid to class counsel.
Yesterday’s opinion affirms the order, declaring:
“The district court did not err in partially granting Bednarz’s motion for attorney’s fees. Because Bednarz generated an extra $10 million benefit for repealer-state class members by successfully objecting to the original distribution plan…, he is entitled to attorney’s fees for conferring a material benefit to a portion of the class….However, because the benefit represented a transfer from non-repealer-state class members to repealer-state class members, it is difficult to quantify the benefit to the class as a whole.”
Where it is difficult to pinpoint the value of services, the judge has discretion to come up with an award based on gaging the amount of time counsel spent and the value of the time, the panel said, observing:
“Here, the district court did precisely that.”
The case is Indirect Purchaser Plaintiffs v. Panasonic Corporation, 21-15120.
Copyright 2022, Metropolitan News Company