18th Annual Workplace Class Action Report - 2022 Edition

472 Annual Workplace Class Action Litigation Report: 2022 Edition Langer, et al. v. Capital One Auto Financial , 2021 U.S. App. LEXIS 11218 (3d Cir. April 19, 2021). Rudy Fabian of Pennsylvania and Richard Shenkan of Michigan worked in handling a class action and subsequently disputed the division of attorneys’ fees in the litigation. Following Fabian’s work for Shenkan as an independent contractor in performing work for nine class actions in which Shenkan was class counsel, Fabian paid Shenkan a total of $315,426 for the work and paid for office and travel expenses and provided office equipment. After settlement of the class actions, Fabian sought a share of the attorneys’ fees that Shenkan received as part of several settlements. Fabian filed three lawsuits, which were all consolidated and considered by the Third Circuit on appeal. Shenkan’s fee award of $2.6 million arose from the Langer class action, and Fabian sought part of the award under Rule 23(h)(1). The District Court in Langer denied Fabian’s motion for attorneys’ fees on the grounds that Fabian’s dispute was with Shenkan – not the Langer class members whom he did not represent. Id . at *3 .Fabian also pursued a quantum meruit claim to seek fees for his work on the Maszgay class action of approximately $1.4 million of Shenkan’s $2.92 million fee. The District Court in Maszgay entered summary judgment in favor of Shenkan, finding that it would not be unconscionable for Shenkan to retain the fees awarded in Maszgay and entering declaratory judgment to Shenkan. On appeal, Fabian argued that under Rule 23(h), a fee award may be made to persons other than class counsel. Although the Third Circuit confirmed Fabian was essentially correct, it noted that an award of attorneys’ fees under Rule 23(h) must be authorized by law or by agreement of the parties, which was not the case here. Accordingly, the Third Circuit held that the District Court in Langer did not err as a matter of law or abuse its discretion by denying Fabian’s motion for attorneys’ fees under Rule 23(h). Fabian also challenged the grant of summary judgment and entry of a declaratory judgment in favor of Shenkan by the District Court in Maszgay . The Third Circuit again found no err in the ruling by the District Court in Maszgay . The Third Circuit noted that Fabian and Shenkan reached a meeting of the minds on the material terms of their working arrangement: in exchange for Fabian’s legal research and writing services, Shenkan paid him biweekly, provided him with an office and equipment, and reimbursed his expenses. Id. at *9. The Third Circuit reasoned that quantum meruit does not allow a party to a contract to resort to equity to recover compensation that the party did not successfully negotiate in a contract. Accordingly, the Third Circuit found that the District Court in Maszgay did not err by granting Shenkan summary judgment on Fabian’s quantum meruit claim. The Third Circuit concluded that neither Rule 23(h) nor the doctrine of quantum meruit would allow Fabian to obtain additional compensation for his work on Langer or Maszgay . Accordingly, the Third Circuit affirmed the District Court’s rulings. M.B., et al. v. Tidball, 2021 U.S. App. LEXIS 33916 (8th Cir. Nov. 16, 2021). Plaintiffs, a group of parents who sued on behalf of a group of foster children, filed a class action alleging that Missouri did not have adequate procedures in place to guard against the overuse of psychotropic drugs in violation of their statutory and constitutional rights. Id . at *2. The parties ultimately settled the matter. After filing a motion for an award of attorneys’ fees and costs, the District Court awarded Plaintiffs’ counsel the sums of $3,253,651.25 in fees and another $132,907.56 in expenses, which was approximately 16% under the overall request. Defendant appealed the fee award, and on appeal, the Eighth Circuit affirmed the District Court’s ruling. The District Court used the lodestar method in calculating the attorneys’ fee award. The District Court calculated "the number of hours reasonably expended" by deducting the time entries that reflected staffing inefficiencies or for time records that were too vague. Id . at *4. The District Court further reduced the hourly rates of over half of the 20 attorneys who worked on the case and calculated a revised lodestar of $3,253,651.25, less than the $3.9 million that Plaintiffs’ counsel originally sought. The Eighth Circuit rejected Defendant’s objections to the award, which centered around Plaintiffs having to overcome the "‘strong presumption’ that the lodestar figure is reasonable." Id . at *5. Defendants argued that the District Court improperly flipped the burden on them to establish the fee award’s unreasonableness. The Eighth Circuit disagreed. It opined that the order made clear that the burden was on Plaintiffs. Defendant also argued that the fee award would result in a “windfall” of lawsuits alleging similar allegations. Id . at *6. The Eighth Circuit determined that the Supreme Court has expressly rejected this argument in fee shifting cases in the past. Accordingly, the Eighth Circuit affirmed the District Court’s ruling, reasoning that it could not determine that it abused its discretion by declining to provide special treatment for a common situation. McKnight, et al. v. Uber Technologies, 2021 U.S. Dist. LEXIS 177957 (N.D. Cal. Sept. 2, 2021). Plaintiffs filed a class action alleging that Defendant misrepresented its "Safe Rides Fee" and the safety measures, background checks, and other efforts it takes to provide safety for its customers. Id . at *3. The parties ultimately