18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 465 on certification," since a District Court retains jurisdiction even after it denies class certification. For these reasons, the Eleventh Circuit vacated and remanded the District Court’s ruling dismissing the action. (viii) Attorneys ’ Fee Awards In Class Actions Amorin, et al. v. Taishan Gypsum Co., 2021 U.S. App. LEXIS 17097 (11th Cir. June 9, 2021). Plaintiffs in this multi-district litigation alleged that Defendant’s drywall was defectively manufactured and resulted in property damage and physical ailments. Following settlement of the parties’ claims, the District Court awarded common benefit costs and attorneys’ fees to class counsel. The award came out of fees received by another group of attorneys (“Individual Counsel”) who negotiated private settlements for 497 Florida-based Plaintiffs. The order awarded class counsel 45% of the total fees received by Individual Counsel in the Florida settlements. The Individual Counsel appealed the District Court’s fee award. On appeal, the Eleventh Circuit affirmed the District Court’s ruling, finding no abuse of discretion. Defendants made a total payout of more than $40 million dollars to the 497 claimants who accepted the individual settlement agreements. The claimants paid attorneys’ fees to Individual Counsel pursuant to private contingency fee agreements. Id . at *3. Class counsel moved for an award of common benefit costs and/or fees from the proceeds, arguing that a substantial amount of their work was used to secure the individual settlements. Class counsel claimed that they were entitled to 60% of the total settlement, consistent with what they were awarded in the settlement of the multi-district litigation. The District Court ultimately awarded class counsel 45% of all of the attorneys’ fees obtained by Individual Counsel. Subsequently, the Individual Counsel argued that common benefit fees were only appropriate when there existed a "common fund" from which to award the fees, which was not present from the individual settlements. Id . at *4. Alternatively, the Individual Counsel argue that even if a common benefit fee was appropriate here, the order did not allow for meaningful review and the percentage standard for calculating an award was misapplied. The Individual Counsel cited to cases from other circuits to argue that this case did not have any common fund that would allow for this type of award because the individual settlements were subject to their own contingency fee agreements. However, the Eleventh Circuit found those settlements contained different factual circumstances, as many of them included Defendants who were paying the fees, and therefore they were not common fund cases. The Eleventh Circuit reasoned that in this action, the common fund consisted of the fees awarded to the Individual Counsel as a sum of the individual settlements’ fee award. The Eleventh Circuit explained that class counsel worked for over 10 years to provide the foundational work that class counsel that the Individual Counsel used to secure the recoveries in the individual settlements. Accordingly, the Eleventh Circuit found that the District Court did not abuse its discretion in awarding attorneys’ fees to class counsel, and therefore it affirmed the underlying ruling. Arkansas Teacher Retirement System, et al. v. Insulet Corp., 2021 U.S. Dist. LEXIS 119484 (D. Mass. June 25, 2021). Plaintiffs filed a securities fraud class action on behalf of a class of investors in Insulet stock alleging that Defendants defrauded investors by misrepresenting the success of a new version Insulet’s wearable insulin infusion pump. The parties ultimately settled the matter and the Court granted final settlement approval, which created a common fund in the amount of $19.5 million. Four law firms representing the class have jointly requested an award of 25% of the common fund – $4,875,000 – as attorneys’ fees. The Court granted in part and denied in part the motion. The Court noted that two of the four firms, Bernstein Litowitz Berger & Grossmann LLP ("Bernstein") and Glancy Prongay & Murray LLP ("Glancy"), made false and misleading statements in support their requests for attorneys’ fees and thus it awarded a reduced fee to those firms. The Court determined that Bernstein and Glancy both submitted declarations attesting to the hourly time and rates for the purposes of calculating the lodestar, and stated that the fee request was based on the "firm’s regular rates charged for their services." Id . at *4. However, the Court noted that at the hearing for settlement approval, both Firms admitted that they almost always worked on a contingent fee basis. The Court was prepared to award 25% in fees to each Firm, but reduced the award by 2% each for Bernstein and Glancy based on the misrepresentations. Accordingly, the Court awarded 25% of the fund to two of the four firms, and 23% to Bernstein and Glancy. Arkansas Teacher Retirement System, et al. v. State Street Bank and Trust Co., 2021 U.S. Dist. LEXIS 48340 (D. Mass. March 12, 2021). In this class action, the Court initially awarded attorneys’ fees in the amount of $75 million, which was 25% of the $300 million common fund. However, after information came to light that class counsel had overstated their collective lodestar by more than 9,300 hours and $4 million, the Court