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In re Cathode Ray Tube (CRT) Antitrust Litigation

United States District Court, N.D. California

August 3, 2016



          JON S. TIGAR United States District Judge.

         The 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).[1]

         Now 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.[2] The Court also ordered disclosure of certain billing records, ECF Nos. 4508, 4522, which led to further briefing.[3] 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.

         For the 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.

         I. BACKGROUND

         The 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.

         As 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[4] and another fifteen (15) named plaintiffs who were not appointed by the Court but acted as state representatives for a period of time.[5] 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.


         “While 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).

         An 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).

         Finally, “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 workplace retaliation.

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).

         Here, 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).


         A. Attorneys’ Fees

         Class Counsel move the Court for $173, 025, 000 in aggregate attorneys’ fees (as adjusted by Special Master Quinn).[6] Mot. at 1. This revised fee request represents 30 percent of the overall $576, 750, 000 settlement fund.

         1. Proper Methodology

         In 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.[7]

         2. Benchmark Analysis

         In the 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.[8] 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. 2638(1992)).

         a. Results Achieved for the Class

         The 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).

         As the 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.[9] 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.

         Some 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 unnecessary.

         Overall, the Court concludes that the results obtained for the class support a modest increase over the Ninth Circuit benchmark.

         b. Complexity of the Case

         The 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.

         c. Skill, Experience, and Performance of Counsel

         The 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.

         Notwithstanding 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 ...

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