18th Annual Workplace Class Action Report - 2022 Edition

466 Annual Workplace Class Action Litigation Report: 2022 Edition vacated the fee award. A court-appointed Master investigated the matter and discovered that class counsel had, in violation of the Rules of Professional Conduct, made a $4.1 million referral fee to a lawyer who did no work on this case, but had used political influence to obtain class representative Arkansas Teacher Retirement System as the lead Plaintiff in the case. The Master recommended that the Court again award $75 million in fees, but order that class counsel disgorge about $10 million. At the hearing on the matter, the Court informed class counsel that it would consider, as a public policy factor, whether false or misleading statements had been made when advocating for the initial fee award and, if so, where within the reasonable range the award should be made. Class counsel argued that the Court should again award $75 million, but did not contest the Court’s authority to take any misconduct of counsel into account in deciding the amount to award. The Court then issued its ruling explaining its decision to make a new award of $60 million in attorneys’ fees. The Court’s order stated even absent the serious, repeated misconduct of class counsel, an award of less than 25% of the common fund would be most appropriate because class counsel’s performance was "deficient" in certain areas. Id. at *6. The Court concluded that it was also permissible and appropriate to take class counsel’s misconduct into account in its new attorneys’ fee award. In its ruling to award $15 million less than the original award, the Court opined that it was neither imposing sanctions nor denying a fee award to any attorney or firm because of misconduct. It was, however, considering such misconduct in deciding the reasonable range to make a total fee award and how to allocate the total award among counsel. The Court ordered class counsel to escrow the overpaid funds so that the funds could be transferred to ERISA counsel and the class. The law form of Lieff Cabraser Heimann & Bernstein, LLP ("Lieff"), moved for a stay of the distribution of its escrowed funds in the amount of $1,140,000 pending its appeal of the Court’s ruling. The Court denied Lieff’s motion for a stay because Lieff failed to make a strong showing that it was likely to prove that the Court abused its discretion in its new award. The heart of Lieff’s argument was that the Court sanctioned it for violating Rule 11 without giving it the notice required. However, the Court determined that it had expressly stated in its ruling that it was not imposing sanctions, and instead merely took into account the proven misconduct of class counsel in deciding to make the new fee award. Further, the Court found that Lieff failed to make the required showing that it would be irreparably harmed if a stay was not granted, and further concluded that the balance of hardship favored denying a stay so that distributions to the class would not be further delayed. Binotti, et al. v. Duke University, 2021 U.S. Dist. LEXIS 224227 (M.D.N.C. Aug. 30, 2021). Plaintiff filed an action against Defendants Duke University and University of North Carolina, alleging that the schools agreed to eliminate competition for each other’s medical faculty in violation of federal and state antitrust laws. The parties ultimately settled the action. Under the terms of the settlement, Defendants agreed to pay $19 million to a common fund. Class counsel requested attorneys’ fees of 25% of the common fund, or $4.75 million. The Court found that the fee request was reasonable, as the average net recovery for each class members was approximately $2,341.19. Further, the Court noted that a fee of up to one-third of the settlement fund was common in antitrust cases. The Court determined that class counsel had specialized experience and expertise in employment, antitrust, and class action cases, and were particularly experienced in such hybrid cases. Id . at *7. Further, the Court noted there were difficulties in the action and class counsel devoted significant time and resources to the litigation. In conducting a lodestar cross-check, the Court found that class counsel submitted hourly market rates that were reasonable and within the ranges in the area of law and the locale of the Court. With the time entries submitted of 13,400 hours over the course of six years, the lodestar equated to $6.8 million, and thus 25% of the common fund would result in a lodestar multiplier of 3.35. The Court ruled that the lodestar was reasonable and appropriate. Class counsel also requested reimbursement of expenses in the amount of $125,201.41. The Court found that class counsel’s cost reimbursement request was fair and reasonable. Finally, the Court determined that Plaintiff’s request for a $65,000 service award was fair and reasonable. For these reasons, the Court granted attorneys’ fees, costs, and a service award to the named Plaintiff. City Of Westland Police & Fire Retirement System, et al. v. Metlife, 2021 U.S. Dist. LEXIS 112107 (S.D.N.Y. June 15, 2021). Plaintiffs filed a securities fraud class action against Defendant that the parties that litigated for almost nine years. The parties settled the matter, and the Court approved a settlement of $84 million. Lead counsel Robbins Geller Rudman & Dowd LLP filed a motion for an award of attorneys’ fees of $21 million, or 25% of the settlement, and litigation expenses of $1,856, 169. Id . at *2. The lead Plaintiff Central States, Southeast and Southwest Areas Pension Fund also sought an award of $10,880 "in recognition of the