United States District Court, N.D. California
IN RE CATHODE RAY TUBE (CRT) ANTITRUST LITIGATION MDL No. 1917 This Relates To: ALL INDIRECT PURCHASER ACTION
ORDER ON ATTORNEYS’ FEES, EXPENSES, AND
INCENTIVE AWARDS RE: INDIRECT PURCHASER PLAINTIFF
TIGAR United States District Judge.
Court has previously approved eight settlements, resolving
all cases brought by the Indirect Purchaser Plaintiffs
(“IPPs”). See ECF Nos. 992 (Chunghwa for
$10, 000, 000), 2542 (LG Electronics for $25, 000, 000), 4712
(“IPP Settlement Order”) (Philips for $175, 000,
000, Panasonic for $70, 000, 000, Hitachi for $28, 000, 000,
Toshiba for $30, 000, 000, Samsung SDI for $225, 000, 000,
and Thomson and TDA for $13, 750, 000).
before the Court is a motion for approval of attorneys’
fees, reimbursement of expenses incurred by Class Counsel for
the IPP class, and incentive awards for certain named
plaintiffs, ECF No. 4071 (“Mot.”), as framed by
the Report and Recommendation from Special Master Martin
Quinn. See ECF No. 4351 (“R&R”).
Class Counsel for the IPPs originally sought $192, 250, 000
(33.3 percent) of an aggregate common fund of $576, 750, 000,
but Special Master Quinn instead recommended the Court award
$173, 025, 000 (30 percent) in attorneys’ fees, plus
$7, 634, 372.50 in expenses, and $450, 000 in aggregate
incentive awards to individual plaintiffs. See
R&R at 77. The R&R sparked numerous objections: one
from Mr. Mario Alioto, Lead Counsel for IPPs, and the
remainder from non-party objectors. The Court also ordered
disclosure of certain billing records, ECF Nos. 4508, 4522,
which led to further briefing. The Court held oral arguments on
March 15, 2016 and April 19, 2016. Following oral arguments,
Class Counsel filed additional evidence at the direction of
the Court in support of the notice costs for the separate
Chunghwa settlement. See ECF Nos. 4572 at 2 ¶
2, 4584, 4592.
reasons set forth below, the Court grants the motion for
attorneys’ fees, reimbursement, and incentive awards as
modified by the R&R. However, the Court lowers the fees
as originally requested by Class Counsel from 33.3 percent of
the common fund to 27.5 percent of the common fund.
Accordingly, the Court awards Class Counsel an aggregate fee
award of $158, 606, 250. The Court further awards $7, 634,
372.50 in expenses and $450, 000 in aggregate incentive
awards to certain individual plaintiffs.
parties are familiar with the facts of this case. The Special
Master sets them out in detail, see R&R at 5-17,
and the Court has already summarized the relevant facts as to
the settlements or adopted relevant portions of the R&R
in the IPP Settlement Order.
related to fees, expenses, and incentive awards, Lead Counsel
moves the Court to provide for these expenditures from the
aggregated common fund, valued at $576, 750, 000. Special
Master Quinn recommends an award of $173, 250, 000 in
Attorneys’ Fees. This represents 30 percent of the
aggregate value of all eight settlements, and a fee
multiplier of roughly 2.14 (using a lodestar as recalculated
at current rates and then reduced 10 percent by Special
Master Quinn). Lead Counsel also requests reimbursement of
expenses in the amount of $7, 364, 372.50. Finally, Lead
Counsel requests incentive awards on behalf of twenty-five
(25) Court-appointed Class Representatives and another
fifteen (15) named plaintiffs who were not appointed by the
Court but acted as state representatives for a period of
time. Lead Counsel requests that those in the
former group receive $15, 000 each, totaling $375, 000, and
that those in the latter group receive $5, 000 each, totaling
an additional $75, 000. All told, the aggregate incentive
award requested is $450, 000, which is 0.07 percent of the
grand total of the litigation fund.
attorneys’ fees and costs may be awarded in a certified
class action where so authorized by law or the parties’
agreement, Fed.R.Civ.P. 23(h), courts have an independent
obligation to ensure that the award, like the settlement
itself, is reasonable, even if the parties have already
agreed to an amount.” In re Bluetooth Headset
Prods. Liab. Litig., 654 F.3d 935, 941 (9th Cir. 2011).
“Where a settlement produces a common fund for the
benefit of the entire class, ” as here, “courts
have discretion to employ either the lodestar method or the
percentage-of-recovery method” to determine the
reasonableness of attorneys’ fees. Id. at 942.
“Because the benefit to the class is easily quantified
in common-fund settlements, ” the Ninth Circuit permits
district courts “to award attorneys a percentage of the
common fund in lieu of the often more time-consuming task of
calculating the lodestar.” Id. “Applying
this calculation method, courts [in the Ninth Circuit]
typically calculate 25% of the fund as the
‘benchmark’ for a reasonable fee award, providing
adequate explanation in the record of any ‘special
circumstances’ justifying a departure.”
Id. (citing Six (6) Mexican Workers v. Ariz.
Citrus Growers, 904 F.2d 1301, 1311 (9th Cir. 1990)).
However, the benchmark should be adjusted when the percentage
recovery would be “either too small or too large in
light of the hours devoted to the case or other relevant
factors.” Six (6) Mexican Workers, 904 F.2d at
1311. “[W]here awarding 25% of a ‘megafund’
would yield windfall profits for class counsel in light of
the hours spent on the case, courts should adjust the
benchmark percentage or employ the lodestar method
instead.” Id.; see also In re Bluetooth
Headset Products Liab. Litig., 654 F.3d at 942 (citing
Six (6) Mexican Workers, 904 F.2d at 1311). A
district court’s “award of fees and costs to
class counsel, as well as its method of calculation”
are reviewed for abuse of discretion. In re Online
DVD-Rental Antitrust Litig., 779 F.3d 934, 942 (9th Cir.
Feb. 27, 2015).
attorney is also entitled to “recover as part of the
award of attorney’s fees those out-of-pocket expenses
that would normally be charged to a fee paying client.”
Harris v. Marhoefer, 24 F.3d 16, 19 (9th Cir. 1994)
(citation omitted). An attorney seeking an expense award
should file an itemized list of her expenses by category,
listing the total amount advanced for each category, allowing
the Court to assess whether the expenses are reasonable.
Wren v. RGIS Inventory Specialists, No.
06-cv-05778-JCS, 2011 WL 1230826, at *30 (N.D. Cal. Apr. 1,
2011), supplemented, No. 06-cv-05778-JCS, 2011 WL
1838562 (N.D. Cal. May 13, 2011).
“named plaintiffs, as opposed to designated class
members who are not named plaintiffs, are eligible for
reasonable incentive payments.” Staton v. Boeing
Co., 327 F.3d 938, 977 (9th Cir. 2003). “Incentive
awards are discretionary . . . and are intended to compensate
class representatives for work done on behalf of the class,
to make up for financial or reputational risk undertaken in
bringing the action, and, sometimes, to recognize their
willingness to act as a private attorney general.”
Rodriguez v. W. Pub. Corp., 563 F.3d 948, 958-59
(9th Cir. 2009). Further,
The district court must evaluate [incentive] awards
individually, using relevant factors including the actions
the plaintiff has taken to protect the interests of the
class, the degree to which the class has benefitted from
those actions, the amount of time and effort the plaintiff
expended in pursuing the litigation and reasonable fears of
Staton, 327 F.3d at 977 (citation, internal
quotation marks, and alterations omitted). District courts
must scrutinize “all incentive awards to determine
whether they destroy the adequacy of the class
representatives.” Radcliffe v. Experian Info.
Solutions, Inc., 715 F.3d 1157, 1165 (9th Cir. 2013);
see also id. at 1663; Staton, 327 F.3d at
977; Dyer v. Wells Fargo Bank, N.A., 303 F.R.D. 326,
334-35 (N.D. Cal. 2014).
the Court reviews these questions as framed by Special Master
Quinn’s Report and Recommendations and the objections
to it. The Court reviews Special Master Quinn’s
findings of fact and conclusions of law de novo, and
his rulings on procedural matters for abuse of discretion.
See ECF No. 4077 at 7, amended by ECF No.
4298 at 3. The Ninth Circuit “usually impose[s] the
burden on the party objecting to a class action
settlement.” See United States v. Oregon, 913
F.2d 576, 581 (9th Cir. 1990).
Counsel move the Court for $173, 025, 000 in aggregate
attorneys’ fees (as adjusted by Special Master
Quinn). Mot. at 1. This revised fee request
represents 30 percent of the overall $576, 750, 000
determining the appropriate fee to be taken from a common
fund settlement, “courts have discretion to employ
either the lodestar method or the percentage-of-recovery
method.” Bluetooth, 654 F.3d at 942. As
“the benefit to the class is easily quantified in
common-fund settlements, ” the Court here exercises its
discretion “to award attorneys a percentage of the
common fund in lieu of the often more time-consuming task of
calculating the lodestar.” Id.
Ninth Circuit, the “benchmark” percentage for an
award of attorneys’ fees in a class action is 25
percent. Id.. This benchmark is just a starting
place, however, and the Court must determine the appropriate
percentage by “tak[ing] into account all of the
circumstances of the case.” Vizcaino v. Microsoft
Corp., 290 F.3d 1043, 1048 (9th Cir. 2002). Typically,
the Court analyzes the following factors in performing its
analysis: (1) the results achieved for the class; (2) the
complexity of the case and the risk of and expense to counsel
of litigating it; (3) the skill, experience, and performance
of counsel (both sides); (4) the contingent nature of the
fee; and (5) fees awarded in comparable cases. See
id. at 1048-49; Bluetooth, 654 F.3d at
941-42. These factors are known as the
“Kerr factors.” Fischer v. SJB-P.D.
Inc., 214 F.3d 1115, 1119 (9th Cir. 2000) (citing
Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 70
(9th Cir.1975), abrogated on other grounds by City of
Burlington v. Dague, 505 U.S. 557, 112 S.Ct.
Results Achieved for the Class
most important factor is the results achieved for the class.
See In re Omnivision Techs., Inc., 559 F.Supp.2d
1036, 1046 (N.D. Cal. 2008); Bluetooth, 654 F.3d at
942. Outstanding results merit a higher fee. See
Omnivision, 559 F.Supp.2d at 1046 (awarding a fee of 28
percent where class counsel achieved “triple the
average recovery in securities class action
settlements”). On the other hand, “where the
plaintiff achieved only limited success, the district court
should award only that amount of fees that is reasonable in
relation to the results obtained.” Hensley v.
Eckerhart, 461 U.S. 424, 440 (1983).
Court previously noted in its order approving the IPP
settlement, the result here ' $576, 750, 000 '
represents a large sum of money. ECF No. 4712 at 10. But the
reason the settlement is so large is that the injury was so
large; the settlement represents 20 percent of an antitrust
injury that Plaintiffs’ counsel estimated to be $2.78
billion before trebling. See In re Prudential Ins. Co. Am.
Sales Practice Litig. Agent Actions, 148 F.3d 283, 339
(3d Cir. 1998) (“In many instances the increase [in
recovery] is merely a factor of the size of the class and has
no direct relationship to the efforts of counsel.”)
(citations omitted). Thus, the settlement represents a good
result, but not one on par with the 50 percent of potential
recovery achieved in the LCD litigation, In re TFT-LCD
(Flat Panel) Antitrust Litig., No. 07-md-1827 SI, 2013
WL 1365900, at *7 (N.D. Cal. Apr. 3, 2013), or the settlement
in Omnivision, in which counsel obtained
“triple the average recovery” for that kind of
case, Omnivision, 559 F.Supp.2d at 1046. In those
cases, the courts awarded 28.6 percent and 28 percent,
respectively. LCD, 2013 WL 1365900 at *20;
Omnivision, 559 F.Supp.2d at 1046.
objectors argue that the results achieved for the class were
deficient because certain class members were required to
surrender their claims but received no compensation.
See, e.g., Hull Obj. at 4-5. Also,
individuals in three states that permit the recovery of
damages by indirect purchasers ' the so-called omitted
repealer states of Massachusetts, Missouri, and New Hampshire
' received no compensation. See, e.g.,
St. John Obj. at 6. The Court has already addressed these
criticisms in the context of the approval of the overall IPP
settlement. ECF No. 4712. Turning to these criticisms’
relationship to the fee request, the Court agrees that Class
Counsel would have achieved a better result for the class if
they had obtained compensation for the omitted repealer
states. However, because Class Counsel’s failure to do
so lowered the size of the total settlement fund, thereby
lowering the proportional fee that could be awarded to Class
Counsel, the Court concludes that a reduction in the
percentage used to calculate the attorneys’ fees is
the Court concludes that the results obtained for the class
support a modest increase over the Ninth Circuit benchmark.
Complexity of the Case
Court agrees with the Special Master’s analysis of the
complexity of the case, as well as his conclusionthat the
risk and expense to counsel of litigating it was significant,
and no one has objected to his analysis or conclusions. The
Court adopts the relevant discussion in the R&R at 59-60.
As did the Special Master, the Court concludes that this
factor weighs slightly in favor of an upward adjustment of
the 25 percent benchmark for attorneys’ fees.
Skill, Experience, and Performance of Counsel
Special Master concluded that, with certain exceptions
addressed in the R&R, “the entire record of the
litigation viewed fairly demonstrates that Class Counsel
managed this case diligently and efficiently for the benefit
of the class.” R&R at 60. In support of this
conclusion, he pointed to Lead Counsel’s 30 years of
experience in antitrust cases, as well as his management of
the class action among the various participating law firms.
Id. at 60-61. As noted, the “prosecution of
the case was divided in a sensible way among class counsel
law firms, both by defendant and by task.” Id.
at 61. “Class Counsel was superb at coordinating the
class effort so that the team remained united in its
objectives, and avoided squabbling over strategy, finances,
personalities, and the like.” Id. As the case
approached trial, Lead Counsel retained three very
experienced antitrust trial firms, which deepened Class
Counsel’s bench by “add[ing] focus, intensity and
recent trial experience.” Id. at 63-64.
this finding, the Special Master found that this factor
supported neither an increase to nor a decrease from the
Ninth Circuit’s 25 percent benchmark. Id. at
64. He was not troubled by either Class Counsel’s
failure to obtain recovery for the omitted repealer states or
the release of certain claims without compensation. He found,
however, that Class Counsel’s failure to integrate the
Chunghwa plan of allocation with the notice plan adopted for
the settlements as a whole ...