18th Annual Workplace Class Action Report - 2022 Edition

648 Annual Workplace Class Action Litigation Report: 2022 Edition certification of a settlement class. The Court also granted the IPPs’ motion for class certification, and the IPP class reached a tentative settlement yielding a common fund. Class counsel subsequently moved for an award of attorneys’ fees, and proposed a percentage-of-recovery fee structure different from the structure proposed in its previous sealed bid. Certain IPP class members objected that the requested fee was excessive. The Court approved the first settlement and attorneys’ fees of $31.125 million. The IPP class reached a second settlement with three additional groups of affiliated Defendants, resulting in an additional common fund. The appeals of a group of objectors arising from the Court’s awards of fees and litigation expenses for the first and second round of settlements, were successful, and the awards of attorneys’ fees were vacated. An objector, Conner Erwin, one of the attorneys who argued against the size of the award in the appeals, thereafter sought an attorney fee award of $1,524,180, representing 7% of the $21,827,042 increase in the fund to be distributed to the class that resulted from the reconsideration of the prior fee and cost awards. The Court determined that Erwin was entitled to recover fees under the circumstances and should receive the funds from Hagens Berman, IPP class counsel, instead of deducting them from the remaining balance of the common fund. Id . at *24. Erwin asserted that he had a lodestar of $508,650, representing 687.6 total hours. Hagens Berman argued the hours were not reliably recorded when incurred and were not sufficiently documented in the motion. However, the Court reasoned that for purposes of applying a cross-check Erwin has made a satisfactory showing that his attorneys reasonably incurred the requested fees. The Court held that the requested fee award was reasonable under the percentage-of-the-fund method, at approximately 7%, and that the lodestar cross-check confirmed that the award was within acceptable range. The Court also awarded an Erwin an individual incentive award of $1,500. For these reasons, the Court granted Erwin’s request for attorneys’ fees and for an incentive award. In Re Wells Fargo & Co. Shareholder Derivative Litigation, 2021 U.S. Dist. LEXIS 48593 (S.D. Cal. March 4, 2021). Plaintiffs filed a shareholder derivative action on behalf of Defendant Wells Fargo & Co. against the company’s officers, directors, and senior management. The parties ultimately settled the matter. The Court granted final approval of a settlement and awarded attorneys’ fees to co-lead counsel. Two Objectors, Kevin Fisher and John Cashman, thereafter filed a joint motion for attorneys’ fees, and co-lead counsel filed a motion for sanctions against Fisher and his counsel. The Court granted the fee award as to Cashman, denied it as to Fisher, and denied the motion for sanctions. Fisher and Cashman argued that they provided a substantial benefit to Wells Fargo in the form of the $15.2 million reduction in fees awarded to co-lead counsel, since the Court had adopted “the Objectors’ theories and arguments." Id . at *12. Fisher and Cashman also asserted that they “independently developed and submitted similar arguments to this Court in their respective Objections" and that they had no prior association with each other before their motion for fees. Id . Fisher and Cashman sought $500,000 in attorneys’ fees, and provided lodestar calculations for each of their fee requests. Co-lead counsel argued that the Objectors were not entitled to any fees because their arguments were either unsuccessful or had already been raised by the Court and thus resulted in no additional benefit to Wells Fargo. Id . at *13. Co- lead counsel also contended that the Objectors had not provided sufficient support to demonstrate that their requested fee award of $500,000 was reasonable. Finally, co-lead counsel argued that the Court should not award fees to Fisher and his counsel because they were “engaged in a scheme to extort the Bank for a hefty payday in connection with" Fisher’s appeal of the settlement in a similar derivative action against Wells Fargo in California state court. Id . Plaintiffs alleged that Fisher filed a "frivolous appeal" of the state court settlement in order to pressure Wells Fargo into paying him to drop the appeal and allow the settlement in this case to move forward. Id . Accordingly, co-lead counsel’s motion for sanctions requested that the Court order the disgorgement of the $1.75 million that Wells Fargo already agreed to pay Fisher in exchange for dropping his appeal of the state court settlement. Id . The Court held that that Fisher’s $1.75 million payment from Wells Fargo in the state action more than amply compensated him for any benefit he may have provided via his objections to these settlements. Id . at *28. Cashman sought $242,243.58 in fees, with a claimed lodestar of $98,473 and a multiplier of 2.46. The Court found a lodestar calculation appropriate, and determined that the requested lodestar of $98,473 provided reasonable compensation for the benefit he provided. For these reasons, the Court granted the fee award as to Cashman, denied it as to Fisher, and denied co-lead counsel’s motion for sanctions. (lvii) Predominance Issues In Class Actions Adams Pointe I, L.P., et al. v. Tru-Flex Metal Hose, 2021 U.S. App. LEXIS 2431 (3d Cir. Aug. 16, 2021). Plaintiffs filed a class action on behalf of putative class of property owners for claims brought against Defendants for damages sustained from allegedly defective yellow-jacketed corrugated stainless-steel tubing