Three Federal Judges Opted To Use Lodestar Method In Recent Cases.
National Association of Legal Fee Analysis (NALFA) recently summarized a recent Reuters article suggesting that some federal judges in the Northern District of California have opted to use the lodestar approach to awarding fees, versus the percentage of recovery method, in mega-class actions with sizable settlements.
Here are the specifics:
• District Judge Lucy Koh in a Disney/Dreamworks case awarded fees of $18.5 million (lodestar plus a “doubling” multiplier), although class action counsel had requested $31.5 (21% of the $150 million settlement);
• District Judge William Alsup used the lodestar approach in awarding fees in a $200 million settlement against Wells Fargo in 2015; and
• District Judge Charles Breyer, in the VW dealer wing of the clean diesel class action litigation, awarded $3 million to class counsel (using the $1.5 million lodestar, but doubling to $3 million) as opposed to the $28.6 million request based on a 2.4% recovery by dealers in a billion dollar settlement context.
We will say that the California Supreme Court provided state court judges with flexibility to use either approach in the Lafitte decision, 1 Cal.5th 480 (2016) [one of our top 20 2016 Year-End decisions]. Looks like federal judges are using discretion to deviate from the normative practice of utilizing the percentage of recovery methodology at the federal level, depending on the case circumstances.
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