Duane Morris Class Action Review - 2023 - Report - Page 322
excessive because it represented 45.8% of the cash fund and exceeded the cash
remaining for distribution to the class members.
The Ninth Circuit also ruled on attorneys’ fees in analyzing a class action settlement. In
McKnight, et al. v. Uber Technologies, Inc., No. 21-16623 (9th Cir. Nov. 30, 2022), the
plaintiffs filed a class action alleging that the defendant made misrepresentations and
omissions regarding its “Safe Rides Fee” and the safety measures, background checks,
and other efforts it took to provide safety for its customers. The parties ultimately settled
the matter for $32.5 million. The district court granted final settlement approval and an
attorneys’ fee award of $8.2 million. On appeal, the Ninth Circuit affirmed the ruling.
Several objectors challenging the attorneys’ fee award on the basis that the settlement
should have been limited by attorneys’ fee restrictions pursuant to the Class Action
Fairness Act (CAFA) because it was essentially a coupon settlement. Under the CAFA,
attorneys’ fees in coupon settlements should be based on the value of redeemed
coupons by class members. The Ninth Circuit determined the settlement was not a
coupon settlement, as class members were able to elect to take their reward in cash, or
to receive a cash award later if they ultimately decide not to utilize the credit to their
account. The Ninth Circuit noted that the individual class member recoveries were
small, but that the district court did not abuse its discretion in awarding attorneys’ fees
because the award was not disproportionate to the actual value of the settlement. For
these reasons, the Ninth Circuit affirmed the district court’s ruling granting final
settlement approval and awarding attorneys’ fees.
Calculating attorneys’ fees is also a process that often leads to disputes, especially at
the end of a hard fought class action when some claims were dismissed and class
counsel nonetheless attempts to recover their time attributable to the work on the
unsuccessful claims. More often than not, class counsel will assert that the time spent
on unsuccessful claims nonetheless contributed to the overall successful results or were
tied to other claims that were successful. As a result, analysis of and factual findings on
unsuccessful claims must be considered in awarding attorneys’ fees to prevailing class
counsel as part of class settlement.
The Fifth Circuit considered these issues in 2022 in Fessler, et al. v. Porcelana Corona
De Max, S.A., 23 F.4th 404 (5th Cir. 2022). In this case, a putative class of consumers
sued Porcelana, a toilet manufacturer, for defective toilet tanks. The case settled in two
parts. The parties first entered into a partial settlement over certain model toilets
manufactured in Porcelana’s Benito Juarez plant between 2007 and 2010. The
settlement agreement authorized the district court to determine appropriate attorneys’
fees. Plaintiffs then sought to certify the non-settled claims, and the district court denied
the motion. Subsequently, the parties reached a class-wide settlement agreement for
this second part of the case. Plaintiffs’ counsel thereafter filed a motion for an award of
attorneys’ fees for the two classes, and Porcelana challenged the amount sought.
Porcelana argued that the recovery by plaintiffs’ counsel should be limited to hours
spent on behalf of successful class claims only. The district court granted the plaintiffs’
motion in part, finding it “practically impossible” to identify which hours should be
removed from the attorneys’ fee award. Instead, it simply reduced the lodestar
applicable to the fee award. Porcelana appealed, and the Fifth Circuit reversed the
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Duane Morris Class Action Review – 2023
