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California Court Slashes Attorney’s Fee Award in TCPA Settlement

December 23, 2014 | Topic: Class Actions

The fact that the court approved another multimillion-dollar Telephone Consumer Protection Act (“TCPA”) class action settlement is not particularly surprising.  What is particularly surprising, however, is that the court in Rose v. Bank of America Corporation reduced plaintiffs’ counsel’s attorney’s fee award by approximately 70%, and did so even though the defendant did not object to the fees being sought.  2014 U.S. Dist. LEXIS 121641, *3, 36–37 (N.D. Cal. Aug. 29, 2014).

In Rose, the plaintiffs alleged that the defendant “engaged in a systematic practice of calling or texting consumers’ cell phones through the use of automatic telephone dialing systems and/or an artificial or prerecorded voice without their prior express consent, in violation of the Telephone Consumer Protection Act.”  Id. at *3–4.  As part of the settlement agreement, the defendant agreed to pay “over $32 million dollars into a nonreversionary Settlement Fund.”  Id. at *13. 

Along with the plaintiffs’ motion for final approval of the parties’ settlement, plaintiffs’ counsel submitted a motion for attorney’s fees and costs.  Id. at *3.  Plaintiffs’ counsel requested that the court utilize the percentage-of-the-fund method and thereby award them 25% of the common fund (i.e. 25% of the $32 million settlement fund), or utilize the loadstar method along with a high lodestar multiplier (e.g., a multiplier of 5 or 8).  See id. at *20, 28–36.

However, the court refused to award plaintiffs’ counsel 25% of the common fund.  It also refused to grant them a fee award, which included a high lodestar multiplier.  Id. at *36.  The court declined to utilize these methods because the relevant factors did not justify their use.  In particular, the court found that plaintiffs’ counsel’s billable hours were bloated and duplicative.  Id. at *22.  As a result, the court reduced the initial billable hour calculation of 2,560.7 hours by 960 hours.  (Id. at *28–29.)  The court also noted that the results achieved by the settlement were on the low-end because the claimants would only receive an average recovery of between $20 and $40.  Id. at *30.  The court therefore found that “the touted relief [fell] short … [b]ecause the primary goal of [the] litigation, as described by Class Counsel, was to put an end to these phone calls.”  Id. at *33.     

In the end, using the lodestar method along with a 2.59 multiplier, the court awarded plaintiffs’ counsel $2.4 million in fees, which is substantially less than the $8 million plaintiffs’ counsel was hoping to receive.  Id. at *36–38.