Common Fund/Class Action: What Happens When Class Action Fee Recovery Justified Under Both Common Fund And Contractual Fees Clause?

 

Eighth Circuit Court Of Appeals Gives Us Some Hints—Contractual Fee Recovery First, And Then Equitable Consideration Of Common Fund Recovery.

 

    Although outside of California, we do report on nationwide decisions which may have some impact on attorney's fees in different substantive areas of the law. McKeage v. TMBC, LLC, 847 F.3d 992 (8th Cir. 2017) is one of those cases.

 

    The issue presented in McKeage, in a class action context, is how does a district judge deal with a contract's fee-shifting provision when fee recovery is also allowable under a common fund doctrine. As we read the decision, unless there is some statutory scheme dictating otherwise, the district judge first awards under the contractual fees provision and then uses equitable discretion to see if any adjustment in fees is necessary under the common fund doctrine. Equity was the end result in this one.