Justia Class Action Opinion SummariesArticles Posted in Legal Ethics
Medical & Chiropractic Clinic, Inc. v. Oppenheim
The Tampa Bay Buccaneers were sued in at least five class action complaints, each one alleging that the Buccaneers sent telefax advertisements in violation of the Telephone Consumer Protection Act (TCPA). In one class action, lawyers from the AW Firm, who had previously filed suit on behalf of a different plaintiff, added another class action representative, M&C. Shortly after an unsuccessful mediation was conducted, defendant, an attorney at the AW Firm who was principally involved in the mediation, left the firm to join the Bock Firm. The Bock Firm then filed a separate class action against the Buccaneers, which resulted in a proposed settlement.M&C then filed suit against the Bock Firm in state court, alleging that they had breached fiduciary duties owed to it as a named class representative. M&C and its counsel claimed that defendant gave attorneys at the Bock Firm confidential information about settlement negotiations in the AW Firm's class action, which assisted the Bock Firm in settling their class action quickly and to the detriment of the class. The district court granted summary judgment for defendant and the Bock Firm.The Eleventh Circuit held that the duties owed to a class representative do not differ from the duties owed to a class. The court also clarified the duties owed by class counsel in class actions generally and in the context of this case specifically. In this case, the court determined that in filing this action M&C and a principal at the AW Firm launched an impermissible collateral attack on the Bock Firm's attempt to certify and settle a class action. The court explained that their assertions should have been made only before the court that was exercising jurisdiction over the Rule 23 putative class action — the court in which the request to certify a settlement class and approve the settlement was made. The court found no error in the district court's determination that M&C failed to establish that it was damaged by any alleged breach of a fiduciary duty owed to it by defendant. Accordingly, the court affirmed the district court's grant of summary judgment in favor of defendant and the Bock Firm. View "Medical & Chiropractic Clinic, Inc. v. Oppenheim" on Justia Law
Chambers v. Whirlpool Corp.
In a class action lawsuit regarding faulty Whirlpool dishwashers, the Ninth Circuit affirmed the district court's approval of a class settlement, but vacated and remanded the $14.8 million attorney's fees award. The panel held that the Class Action Fairness Act's (CAFA) attorney's fee provisions apply to all federal class actions; the district court improperly used a lodestar-only method to calculate attorney's fees for the coupon portion of the settlement where that methodology potentially inflates the amount of attorney's fees in proportion to the results achieved for the class because the coupons may end up providing minimal benefit to the class; the district court erred in awarding a 1.68 lodestar multiplier; and the district court did not abuse its discretion in approving the settlement.On remand, the panel instructed the district court to apply a percentage-of-redemption value methodology for the coupon portion of a settlement, and use a lodestar method for the non-coupon part of the relief. In the alternative, the panel stated that the district court may use a lodestar-only methodology, but only if it does not consider the coupon relief or takes into account its redemption value. View "Chambers v. Whirlpool Corp." on Justia Law
Vicki Linneman v. Vita-Mix Corp.
Some Vita-Mix blenders contained tiny flecks of polytetrafluoroethylene, a substance commonly used in kitchen appliances and used in the blenders' seals. Normal wear-and-tear caused tiny pieces to rub off from the seal into the blender container. Blender owners filed this class action. The parties entered into a settlement for two classes of plaintiffs: a household class and a commercial class. Household class members could request either a $70 gift card or a replacement blade assembly. Commercial class members could request only a replacement blade assembly. The court preliminarily approved this settlement.The court calculated attorneys' fees by multiplying the hours class counsel reasonably worked on the case by a reasonable hourly rate, resulting in an award of about $2.2 million. Based on the purportedly exceptional nature of the litigation, the court enhanced that figure by 75% for a final award of about $4 million, plus post-judgment interest.The Sixth Circuit vacated. The district court correctly used the lodestar method of calculation and correctly interpreted the settlement agreement but erred when it determined the billing rates based on class counsel’s affidavits. A lawyer seeking fees has the burden to show the reasonableness of his billing rate with something in addition to the attorney’s own affidavits” The district court abused its discretion when it used an upward multiplier, without addressing a crucial question: whether this case involves “rare and exceptional circumstances.” The court upheld the award of post-judgment interest. View "Vicki Linneman v. Vita-Mix Corp." on Justia Law
Indirect Purchaser Class v. Panasonic Corp.
The Ninth Circuit vacated the district court's award of attorneys' fees and litigation expenses to class counsel, following approval of two rounds of settlements in consumer class action litigation. The litigation stemmed from claims of civil antitrust violations based on price-fixing within the optical disk drive industry.The panel held that it has jurisdiction under 28 U.S.C. 1291. In a separately filed memorandum disposition, the panel affirmed the district court's approval of the first- and second-round settlements.Here, the panel vacated the awards of fees and litigation expenses, holding that when class counsel secures appointment as interim lead counsel by proposing a fee structure in a competitive bidding process, that bid becomes the starting point for determining a reasonable fee. The district court may adjust fees upward or downward depending on circumstances not contemplated at the time of the bid, but the district court must provide an adequate explanation for any variance. In this case, class counsel argues that an upward departure from its bid was warranted in part because it did not anticipate the need to litigate a second class certification motion or interlocutory appeals. Without more, the panel held that these factors are insufficient to justify a variance of the magnitude approved in the first- and second-round fee awards. Accordingly, the panel remanded for a more complete explanation of the district court's reasoning. View "Indirect Purchaser Class v. Panasonic Corp." on Justia Law
Douglas v. Price
The $8.5 million proposed settlement of a class action that claimed that Western Union violated the Telephone Consumer Protection Act by sending unsolicited text messages, 47 U.S.C. 227(b)(1)(A)(iii). defined the class as: “All Persons in the United States who received one or more unsolicited text messages sent by or on behalf of Western Union.” Price, thinking she was a class member because she had received two text messages from Western, objected, arguing that the settlement inadequately compensated the class; class counsel’s fee request was too high; the plaintiff’s incentive award was too high; the class definition was imprecise; and the list of class members had errors.Western’s records confirmed that Price had enrolled in its loyalty program, checking a disclaimer box consenting to receive text messages. The judge certified the class, ruled that Price was not a member, approved the settlement, and reduced class counsel’s fees. Price did not appeal her exclusion from the class and did not seek to intervene but sought attorney’s fees and an incentive award. Her motion was denied because Price had cited “no authority for the highly questionable proposition that a non‐class member can recover fees and an incentive award under Rule 23.” The Seventh Circuit dismissed her appeal for lack of jurisdiction. Price is not a party and lacks standing to appeal. View "Douglas v. Price" on Justia Law
Johnson v. Metro-Goldwyn-Mayer Studios, Inc.
Plaintiff challenged the district court's attorneys' fee award, arguing that the entire award was arbitrary because the district court did not adequately explain its decision to cut the number of hours expended by class counsel by 25%. The underlying class action was brought by plaintiff on behalf of a nationwide class of consumers, alleging that defendants marketed James Bond DVD and Blu-ray sets as containing all the Bonds films, when in fact they failed to include two movies. The parties settled and the settlement agreement included defendants' agreement to pay attorneys' fees and cost.The Ninth Circuit affirmed the attorneys' fee award, holding that the district court's order, when read in its entirety, explained the lodestar calculation it conducted and its application of the percentage-of-recovery analysis as a cross-check for reasonableness. Therefore, the panel found that the district court adequately explained its reasoning and did not abuse its discretion. View "Johnson v. Metro-Goldwyn-Mayer Studios, Inc." on Justia Law
Fast v. Cash Depot, Ltd.
Cash Depot underpaid employees for their overtime work. Fast filed suit under the Fair Labor Standards Act, 29 U.S.C. 203 (FLSA), on behalf of himself and other Depot employees. Depot hired an accountant to investigate. The accountant tallied Depot’s cumulative underpayments at less than $22,000. Depot issued checks to all underpaid current and former employees covered by the suit and issued checks to Fast for his underpaid wages, for liquidated damages under the FLSA, and for Fast’s disclosed attorney fees to that point. Fast and his attorney never cashed their checks. The district court denied a motion to dismiss because Fast contested whether Depot correctly calculated the amount it owed but granted partial summary judgment for Depot, “to the extent that [it] correctly calculated” what it owed Fast. Eventually, Fast conceded that Depot correctly paid the missing wages and urged that only a dispute over additional attorney fees remained. After Fast’s demand for additional attorney fees went unanswered, he filed a motion for attorney fees. The court determined that because Fast was not a prevailing party for the purposes of the FLSA, he was not entitled to attorney fees, and granted Depot summary judgment. The Seventh Circuit affirmed. Fast never received a favorable judgment. View "Fast v. Cash Depot, Ltd." on Justia Law
Northeastern Engineers Federal Credit Union v. Home Depot, Inc.
The parties appealed the district court's award of attorney's fees in a class action settlement brought by banks against Home Depot to recover resulting losses from a data breach.The Eleventh Circuit held that this was a contractual fee-shifting case, and the constructive common-fund doctrine did not apply. The court held that the district court erred by enhancing class counsel's lodestar based on risk; the district court did not abuse its discretion in compensating class counsel for time on the card-brand recovery process and for time spent finding and vetting class representatives; and there was no merit to Home Depot's contention that the district court's order did not allow for meaningful review. The court also held that the district court properly excluded attorney's fees from the class benefit, and the district court did not abuse its discretion by including the $14.5 million premiums in the class benefit. Accordingly, the court affirmed in part, vacated in part, and remanded. View "Northeastern Engineers Federal Credit Union v. Home Depot, Inc." on Justia Law
P.J. v. Connecticut State Board of Education
Plaintiffs filed suit against the State in 1991 on behalf of a statewide class of children with intellectual disabilities for failing to comply with the requirement in the Individuals with Disabilities Education Act (IDEA), that children with disabilities be educated in the "least restrictive environment" that meets their needs. After the parties negotiated a settlement, and near the end of the agreement's term, plaintiffs' counsel moved for additional attorneys' fees.The Second Circuit affirmed the district court's award of attorneys' fees in part, holding that counsel was not barred from further attorneys' fees by the text of the settlement agreement or the definition of "prevailing party" contained in Buckhannon Board & Care Home, Inc. v. West Virginia Department of Health & Human Resources, 532 U.S. 598 (2001). However, the court reversed in part, holding that the district court misapplied the Delaware Valley standard in awarding several categories of work. Accordingly, the court remanded for further proceedings. View "P.J. v. Connecticut State Board of Education" on Justia Law
Ahearn v. Hyundai Motor America
The en banc court reviewed five consolidated appeals from the district court's orders and judgment certifying a nationwide settlement class, approving a settlement, and awarding attorney's fees in a multidistrict litigation brought against automakers regarding alleged misrepresentations about their vehicles' fuel economy. After class counsel and the settling parties negotiated a settlement that the district court approved, objectors challenged the certification order and fee awards.The en banc court affirmed and held that the district court did not abuse its discretion in finding that common issues predominated where the inclusion of used car purchasers in the class did not defeat predominance and variations in state law did not defeat predominance. The en banc court rejected challenges to the adequacy of the class and held that the notice to class members provided sufficient information; the claim forms were not overly burdensome; and there was no evidence of collusion between class counsel and the automakers. Finally, the en banc court held that the district court did not abuse its discretion in denying fees. View "Ahearn v. Hyundai Motor America" on Justia Law