No Way, Said Appellate Court in Affirming Decision Interpreting Scope of Class Action Settlement.
Here is a post on a case demonstrating that the trial court is the ultimate gatekeeper as far as determining that a class action settlement is fair, including the attorney’s fees award under a settlement.
In In re General Chemical Cases, Case Nos. A126881/A127769 (1st Dist., Div. 5 June 14, 2011) (unpublished), a $6.25 million settlement was reached in a sulfuric acid company chemical release class action by which attorney’s fees of $2.25 million were paid in common benefit fees with a cy pres feature for unclaimed funds. After a claimant calculation error was discovered, attorneys requested more fees and argued a lower court was mistaken in ordering the unclaimed settlement payment to be paid to the cy pres-designated charity.
Not so, said the appellate court. The settlement agreement was clear on this aspect, and there was no mutual mistake of fact justifying equitable relief. Beyond that, the court properly played its gatekeeper role with respect to fees (with such an award being reviewed for abuse of discretion). The lower court was within its province to not award more contingent fees when the result would be that attorneys would have garnered more than 51% of the settlement amount considering the fees previously awarded and paid.