United States District Court, S.D. California
MICHAEL PEMBERTON and SANDRA COLLINS PEMBERTON, individually and on behalf of others similarly situated, Plaintiffs,
NATIONSTAR MORTGAGE, LLC, a Federal Savings Bank, Defendant.
ORDER GRANTING MOTION FOR ATTORNEYS' FEES AND
NAMED REPRESENTATIVE AWARD [ECF NO. 133]
CYNTHIA BASHANT JUDGE
December 16, 2019, Plaintiffs filed a Motion for
Attorneys' Fees and Named Representative Award in
connection with the class action settlement reached in this
case. (ECF No. 133.) Plaintiffs request $700, 000 in
attorneys' fees, with a waiver of all costs, and $10, 000
for each named Plaintiff. (Id.) Defendant does not
oppose the request. However, two class members have objected
to the amount being requested for the two named Plaintiffs.
(ECF Nos. 137, 139.)
Court held a hearing on the issue on January 13, 2020. At the
hearing, no objectors appeared.
reviewing the time sheets and considering the arguments of
counsel both oral and written, the Court concludes that the
request is reasonable and GRANTS
Plaintiffs' Motion for Attorneys' Fees and Incentive
Award. (ECF No. 133.)
five years ago, Plaintiffs' counsel filed this lawsuit on
behalf of a class of Plaintiffs who had obtained an
adjustable rate mortgage (“ARM”) loans that
permitted them to defer payment of accrued interest.
(See ECF No. 76, Second Amended Complaint
(“SAC”).) Plaintiffs argued that the unpaid
accrued interest that was added back to the principal balance
(“negative amortization”) should have been
included as interest in the Mortgage Interest Statement
(“Form 1098”) that Nationstar provided to each
class member. (See id.)
background and extensive pretrial history of this case has
been detailed in the Court's Order Granting
Plaintiffs' Motion to Certify Class and for Preliminary
Approval of Settlement. (ECF No. 131.) Suffice it to say,
class counsel has spent five long years litigating this case.
The litigation included multiple motions to dismiss, briefing
on motions to stay, extensive discovery and related disputes,
attempts to get the IRS to respond to the Court's request
for a directive, and mediation with both Judge Ronald Sabraw
(Ret.) as well as Magistrate Judge Michael Berg.
counsel achieved their primary goal-to get Nationstar to
change the way it reported interest on its Forms 1098.
Plaintiffs' counsel now requests $700, 000 in
attorneys' fees which is well below the lodestar
proffered by counsel. The attorneys' fee amount will be
paid by Nationstar outside of any settlement pool.
Additionally, counsel indicates it will waive any request for
reimbursement of costs.
have an independent obligation to ensure that the
attorneys' and class representative fee awards, like the
settlement itself, are reasonable. In re Bluetooth
Headsets Products Liability Litig., 654 F.3d 935, 941
(9th Cir. 2011). Although courts have the discretion to
employ a “percentage of recovery method, ”
id. at 942, injunctive relief should generally be
excluded from the value of the common fund when calculating
attorneys' fees because, most often, the value of the
injunctive relief is not measurable. Staton v. Boeing
Co., 327 F.3d 938, 945-46 (9th Cir. 2003).
25% benchmark rate, although a starting point for analysis,
may be inappropriate in some cases.” Vizcaino v.
Microsoft Corp., 290 F.3d 1043, 1047 (9th Cir. 2002).
Thus, court are encouraged to cross-check this method by
employing the “lodestar method” as well. In
re Bluetooth, 654 F.3d at 949.
“lodestar method, ” the Court multiplies the
number of hours the prevailing party reasonably expended by a
reasonable hourly rate for the work. Id. at 941. The
hourly rate may be adjusted for the experience of the
attorney. Id. “Time spent obtaining an
attorneys' fee in common fund cases is not compensable
because it does not benefit the Plaintiff class.”
In re Washington Public Power Supply System Secs.
Litig., 19 F.3d 1291, 1299 (9th Cir. 1994). The
resulting amount is “presumptively reasonable.”
In re Bluetooth, 654 F.3d at 949. However,
“the district court . . . should exclude from the
initial fee calculation hours that were not ‘reasonable
expended.'” Sorenson v. Mink, 239 F.3d
1140, 1146 (9th Cir. 2001) (quoting Hensley v.
Eckerhart., 401 U.S. 424, 433-34 (1983)). The Court may
then adjust this presumptively reasonable amount upward or
downward by an appropriate positive or negative multiplier
reflecting a whole host of reasonableness factors including
the quality of the representation, the complexity and novelty
of the issues, the risk of nonpayment, and, foremost in
considerations, the benefit achieved for the class. In re
Bluetooth, 654 F.3d at 942.
awards that are intended to compensate class representatives
for work undertaken on behalf of a class are fairly typical
in class actions cases” and “do not, by
themselves, create an impermissible conflict between class
members and their representative.” In re Online
DVD-Rental Antitrust Litig., 779 F.3d 934, 943 (9th Cir.
2015). Nonetheless, the Court has an obligation to ensure
that the amount requested is fair. In re Bluetooth,
654 F.3d at 941. “The propriety of incentive payments
is arguably at its height when the award represents a
fraction of the class representative's likely damages . .
. But we should be more dubious of incentive payments when
they make the class representative whole, or (as here) even
more than whole.” In re Dry Pampers Litig.,
724 F.3d 713, 722 (6th Cir. 2013.)