Dissent Believes Lodestar Calculation Can Be Used, With Redemption Rate Being a Limitation on the Percentage of Recovery Test.
In a 2-1 decision authored by Circuit Judge Smith, the Ninth Circuit in In re HP Inkjet Printer Litig. (Ciolino v. Frank), Case No. 11-16097 (9th Cir. May 15, 2013) (published) reversed a $1.5 million fee/$596,990.70 costs award to plaintiff class action counsel in a coupon redemption settlement situation. The majority found that the fee award violated the dictates of the Class Action Fairness Act (CAFA) by not basing the fee award on the coupon redemption rate, despite all judges finding CAFA was poorly drafted. Circuit Judge Berzon, in a lengthy dissent, believed that the lodestar test could be utilized for fee fixing in coupon cases, but that CAFA did place limitations on utilizing the percentage-of-recovery benchmark in such situations.