In re Polyurethane Foam Antitrust Litigation

169 F. Supp. 3d 719, 2016 WL 951057, 2016 U.S. Dist. LEXIS 32497
Procedural entryThis page is a short order in In re Polyurethane Foam Antitrust Litigation. Read the opinion of the Court — 168 F. Supp. 3d 985
District Court, N.D. Ohio·Decided March 14, 2016·No. Case No. 1:10 MD 2196·Published

Opinion

MEMORANDUM OPINION AND ORDER RE: CCAF MOTION FOR FEES

JACK ZOUHARY, UNITED STATES DISTRICT JUDGE

Introduction

This Court previously granted' final approval to the nine class action settlement agreements reached between the class of Indirect Purchaser Plaintiffs (“IPPs”) and various Defendants (Doc. 2020). At that time, this Court addressed numerous objections, including those of Melissa Holy-oak and John Tabin on behalf of the Center for Class Action Fairness (“CCAF”). CCAF now moves for an award of attorney fees (Doc. 2028), and IPP Class Counsel oppose (Doc. 2032). For the reasons stated below, the Motion is denied.

Standard of Review ,

“Fees and costs may be awarded to the counsel for objectors to a class action settlement if the work of the counsel' produced a beneficial result for the class.” [720]*720Olden v. Gardner, 294 Fed.Appx. 210, 221 (6th Cir.2008) (citing Federal Civil Rule 23, Committee Notes to Subdivision (h), and various cases); see also Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1052 (9th Cir.2002) (“In the absence of a showing that objectors substantially enhanced the benefits to the class under the settlement, as a matter of law they [are] not entitled to fees....”); Lonardo v. Travelers Indem. Co., 706 F.Supp.2d 766, 803-04 (N.D.Ohio 2010) (“Sixth Circuit case law recognizes that awards of attorneys’ fees to objectors may be appropriate where the objector provided a benefit to the class by virtue of their objection.”).

The Sixth Circuit’s stance on objector awards is less permissive than others. For example, “some courts have also rewarded objectors’ counsel for advancing non-frivolous arguments and transforming the settlement hearing into a truly adversarial proceeding,” even when their objections did not “influence[ ] the court’s prior decision.” In re AOL Time Warner ERISA Litig., 2007 WL 4225486, at *2 (S.D.N.Y.2007) (citations and internal quotation marks omitted). This standard is more lenient than one where the objection must actually make a meaningful difference in the court’s decision. Cf. In re Countrywide Fin. Corp. Customer Data Sec. Breach Litig., 2010 WL 3328249, at *1-2 (W.D.Ky.2010) (denying an objector’s motion for fees because “[t]he Court does not believe that the [objector] raised any issues that the Court would not have considered otherwise when addressing the fairness, reasonableness, and adequacy of the settlement,” and ultimately “[t]here was no cause and effect between the decisions of this case and the action of the [objector]”).

But even the more lenient courts recognize “the trial judge has broad discretion in deciding whether, and in what amount, attorneys’ fees should be awarded, since [the judge] is in the best position to determine whether the participation of objectors assisted the court and enhanced the recovery.” White v. Auerbach, 500 F.2d 822, 828 (2d Cir.1974); see also Olden, 294 Fed.Appx. at 221 (reviewing objector award decision for abuse of discretion).

Discussion

CCAF asserts that “[t]he total pecuniary benefit to the class achieved by [CCAF’s] objection is at least $9,075,000 and up to $11,295,000,” and CCAF is therefore “entitled to at least $435,600” (Doc. 2028-1 at 3). Given CCAF’s Declaration that it spent a total of 158.1 hours pursuing its objection, this amounts to a breathtaking average hourly rate of $2,755. This figure is particularly ironic given the amount of ink CCAF spilled attacking the hourly rates of Class Counsel in its Objection, where it suggested a reasonable hourly rate “for an attorney in Ohio with more than 36 years of experience is $261/hour” (Doc. 1960 at 30).

CCAF does offer to “waive[] any fee award over $90,000” — which would still yield an average hourly rate of $569 — for the purported reason of “avoiding] any appearance of an unseemly windfall” (Doc. 2028 at 2). But the real reason behind this seemingly magnanimous offer is that tax law limits the amount CCAF can earn from court-awarded fees “to no more than 50% of [its] year-to-year expenses” (Doc. 2028-2 at 4).

CCAF is not entitled to fees. The fundamental premise for CCAF’s Motion is that it “is responsible for a pecuniary improvement to the class of at least $9,075,000” (Doc. 2028-2 at 3) (emphasis added). The simple fact, however, is that CCAF was not meaningfully responsible for any monetary benefit obtained by the class. Further, CCAF is not entitled to a fee for any clarifications to the settlement agreement made by this Court in its Final Approval Order. This Court explains its conclusion [721]*721by examining below each of the four benefits to the class for which CCAF claims responsibility (Doc. 2028-1). The common thread running through this explanation is that this Court decided these issues on its own.

Reduction of Class Counsel’s Percentage-of-the-Fund Award

Class Counsel submitted a fee application seeking an award of thirty percent of the overall settlement total of $151,250,000, or $45,375,000. This Court undertook a lengthy and detailed assessment of whether counsel’s request was reasonable (Doc. 2020 at 33-42).

Ultimately, this Court concluded: (1) it would employ the percentage-of-the-fund approach, with a lodestar cross-check; (2) counsel’s submitted lodestar of $33.74 million was twenty percent higher than it should be; (3) counsel’s requested multiplier of 1.34 was reasonable; and (4) accordingly, the requested fee award would be reduced from thirty percent of the gross settlement fund to twenty-four percent, amounting to a $9 million reduction.

CCAF asserts this fee reduction is entirely “attributable to [its] objection” (Doc. 2028-1 at 4). CCAF is wrong.

The timeline of this Court’s fee-award decisions illustrates the point. This Court entered its fee award to IPP Class Counsel in January 2016. Nearly one year earlier, this Court first awarded fees to class counsel for the Direct Purchaser Plaintiffs (“DPPs”) (Doc. 1534) (approving two DPP class action settlements and entering a thirty-percent fee award). Thereafter, this Court entered a second fee award to DPP class counsel (Doc. 1971) (approving six additional DPP settlements and entering an additional twenty-percent fee award). Thus, before reviewing IPP Class Counsel’s Motion for Fee Award or CCAF’s Objection, this Court twice addressed the question of fee awards in this case.

In the second DPP fee award Order, this Court undertook a lengthy analysis of all factors relevant to a fee award (id. at 14-24), and also reviewed empirical studies that surveyed awards entered in other cases. Two months later, undertaking a very similar analysis of the same factors, this Court concluded IPP’s Class Counsel’s fee request of thirty percent should be reduced to twenty-four percent, roughly the same overall percentage awarded to DPP class counsel. This was no coincidence.

Yet CCAF did not take the time to familiarize itself with this Court’s DPP fee analysis (Doc. 2018 at 38-39), choosing instead to file boilerplate objections from its own briefing in other cases (Doc. 2032 at 17 n.6) (identifying arguments previously submitted to other courts).

No more proof is needed, but it exists: (1) CCAF’s Objection actually urged this Court to award IPP’s counsel only ten to sixteen percent of the net settlement fund (Doc.

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In re Polyurethane Foam Antitrust Litigation, 169 F. Supp. 3d 719, 2016 WL 951057, 2016 U.S. Dist. LEXIS 32497 (N.D. Ohio 2016).

169 F. Supp. 3d 719 (In re Polyurethane Foam Antitrust Litigation) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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