Court Rules in 5 –2 Decision that 1975 Statutory Reforms to Class Actions in NY Allow Fees Only to Class Representative.
This next one is a bit off our beat, since it involves NY law, but we think it will be of interest to class action attorneys. New York’s highest court has ruled, in a divided decision, that a successful objectant to a fee award in a class action is not entitled to fees, because he was not a class representative, just the representative of a class member. Flemming v. Barnwell Nursing Home & Health Facilities, Inc., 2010 NY Slip Op 07414 (October 21, 2010).
Judge Pigott, writing for the majority, summarized: “Simply put, although a class may at times benefit from an objectant’s actions, the Legislature did not provide recompense for those efforts.”
Not surprisingly, the dissent, in which Chief Judge Lippman concurred, considered policy. The author of the dissent, Judge Smith, wrote: “Whatever the faults and virtues of the class action device, no one disputes the need to control class counsel’s fees — and nothing furnishes so effective a check on those fees as an objecting lawyer. . . . . Today’s decision greatly lessens the likelihood that fee applications submitted by class counsel will ever be opposed. Opposition will be filed only where a lawyer or client is willing to act from philanthropic motives, or in the few cases where a member of the class has a large enough interest in the size of the fee to justify bearing the expense of objecting to it.”
The lines are clearly drawn, and it looks like it will take further legislative action in NY, if the rule is to be changed in future class action cases brought in that state.
Joel Stashenko has reported on the case in the October 22, 2010 NYLJ.