Ninth Circuit Even Takes Unusual Step Of Assigning To A Different District Judge On Remand.
Stetson v. Grissom, Case Nos. 13-57061/13-57159 (9th Cir. May 11, 2016) (published) is a case where a nonparticipating class member objector challenged an award of fees to Class Counsel and appealed the district judge’s failure to award fees to the objector (who asked to be awarded 20% of any fee reduction), even though the district judge slashed Class Counsel’s requested fees of $1.9 million by 70% in awarding only $585,000, prompting an appeal by Plaintiffs on the fee reduction. The case involved a class action settlement with a gross common fund of $9.5 million, with the Class Counsel fee request being 20% of the common fund. The district judge concluded that a lodestar analysis should be utilized, but found that only $450 per hour in rates was justified (not the higher rates requested), that hours had to be reduced for redundancy/inefficiencies, and that a multiplier was not justified.
The Ninth Circuit gave something to everybody, but then took an extraordinary step we have seldom seen.
With respect to the objector’s appeal, the federal appeals court reasoned that a nonparticipating class member objector has no standing to appeal the fee award to Class Counsel, although the result would be different if the class member actually participated in the settlement. (The Ninth Circuit also made clear that the nonparticipating objector did have district court standing to challenge the fee award at the fairness hearing.) However, the objector did have standing to appeal the denial of his fees motion, which had to be reconsidered given the reversal of the reduction in Class Counsel fee award.
The Class Counsel fee award was reversed because the district judge did not specifically articulate why the $450 hourly rate was appropriate given that the district judge relied on a 1996 outdated decision in doing so, did not indicate with particularity what redundancies/inefficiencies were at issue in light of a substantial 70% haircut, and did not indicate why a multiplier was not justified given some risk and inadequate analytical exploration of the Kerr factors. However, reliance on the lodestar methodology was within the district court’s discretion.
But, at the end of the opinion, the Ninth Circuit reassigned the matter to a different district judge on remand after concluding that the deciding jurist, the Hon. Manuel L. Real, might have a jaded perspective on future proceedings.