Trial Court Cannot Double Count Contingent Risk in Both the Lodestar and Enhancement Analyses.
In Braun v. Wal-Mart Stores, Inc., 2011 Pa.Super. 121 (June 10, 2011) (per curiam), the Pennsylvania Superior Court affirmed the major portions of $187.65 million judgment in a plaintiffs’ class action against Wal-Mart for certain state wage/hour violations. (This judgment included Wal-Mart having to pay plaintiffs’ attorneys about $33.8 million in fees.)
The plaintiffs’ attorneys requested and were awarded $12.34 million in fees and $3.6 million in expenses, which was then enhanced with a 3.7 multiplier so that fees and expenses totaled $45.6 million or 31% of the value of the total monetary recovery of about $151 million when the fee award assessed against Wal-Mart was backed out. Interestingly enough, the court ordered Wal-Mart to produce its defense expenses, which totaled about $10 million in fees and $7 million in expenses–which actually showed that plaintiffs‘ counsel was under defense expenses for lodestar purposes. The fee award was apportioned this way: $33.8 million payable by Wal-Mart; about $11 million payable by the common fund.
On appeal, the Pennsylvania Superior Court reversed the fee award to two of plaintiffs’ firms because the lower court appears to have “double counted” the contingency risk factor in setting the lodestar and in awarding a multiplier enhancement. In reaching this conclusion, it relied on Perdue v. Kenny A., 130 S.Ct. 1662, 1672 (2010) and other like-minded cases for remand purposes to correct the “double dip” concern.