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Thursday, July 19, 2012

Reuters News Quotes Steve Pearl on Class Action Attorney Fees

A reporter called me yesterday to ask about attorney fee awards in class actions in the Ninth Circuit. The reporter asked about McKenzie v. Federal Express Corp. (C.D.Cal, Judge Gary Allen Feess, Case No. CV 10-02420), an action for violation of Labor Code section 226. The parties settled the case for a non-reversionary $8.25 million, and counsel asked for one third, or $2.75 million in attorney fees. The district court considered the request and awarded the Ninth Circuit benchmark of twenty five percent. This resulted in an attorney fee award equal to 3.2 times counsel's lodestar (reasonable hours spent, multiplied by reasonable hourly rates).

I explained that this was not an unusual award. I cited Vizcaino v. Microsoft Corp., 290 F.3d 1043, which establishes the 25% benchmark in the Ninth Circuit.  The Court in Vizcaino approved a 28% common fund award, which resulted in a 3.65 lodestar multiplier, in part because the litigation had lasted more than 11 years.  

Despite this, the headline was still more sensational than I would have expected: "Lawyers' fees cut in FedEx wage-and-hour case: Is this a trend?"  No, I don't see it as a trend.  It's just the Ninth Circuit, where you have to work pretty hard to justify any departure from the 25% benchmark.  

In any case, the article is here, and the McKenzie Order Granting Final Approval is here.  

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