Class Actions: Ninth Circuit Holds That There Is No “Bright-Line Rule” For Percentage-Of-Recovery Benchmark In Megafund Class Action Settlements And That Variance Of Requested From Fees From A Class Counsel’s Upfront Bid In The Case Should Be Consi

Higher Fee Awards/Cost Award Remanded For Reconsideration.

            Class action attorneys, especially those representing the class, will want to read the Ninth Circuit’s opinion in In re Optical Disk Drive Products Antitrust Litig., Nos. 17-15065 et al. (9^th Cir. May 15, 2020) (published).  There, the Ninth Circuit remanded for reconsideration of some fee/costs awards to class counsel in megafund settlement situations.  Class counsel had moved in two cases, respectively, for 25% of the fund (with counsel’s sealed upfront bid for the case being 12-13% of the fund) and for 21% of the fund (with the sealed bid being 12% of the fund). In remanding the eventual awards by the district court (which largely adopted class counsel’s requests), the federal court of appeals held that (1) the size of the fund in megafund settlements is a relevant consideration for which there is no “bright-line” benchmark or sliding-scale approach, although the 25% benchmark for smaller cases is of little assistance in megafund cases; and (2) the variance between a competitive bid, upfront fee structure by class counsel and the requested fees is a relevant concern, with the bid becoming the starting point for determining a reasonable fee—with that bid amount subject to adjustment upward or downward depending on circumstances not contemplated at the time of the bid as long as the district court provides an adequate explanation for any variance.