District Judge Erred In Basing Fee Award Upon Only In Camera Review Of Timesheets Never Provided To The Defense.
Although occurring in a class action setting, this next case may have broader due process implications for cases in other areas of the law. Time will tell on this prediction.
In Yamada v. Nobel Biocare Holding AG, No. 14-55263 (9th Cir. Apr. 20, 2016) (published), class counsel was awarded more than $2.3 million in attorney’s fees based on a settlement agreement provision, CCP § 1021’s “substantial benefit” doctrine, and CCP § 1021.5 (California’s private attorney general statute). In awarding fees, the district judge engaged in in camera review of timesheet submissions after class counsel refused to turn them over to the defense for review in connection with the fee motion. The district judge then reduced the requested fees by 20% for degree of success, since plaintiffs only prevailed on one out of 5 claims (their UCL claim). The district judge also cross checked the requested lodestar with a percentage of recovery methodology.
The defense challenged the award, mainly on the due process ground.
That challenge was effective. The Ninth Circuit determined that the defense had a right to review appropriate redacted timesheets (excising privileged information) for purposes of determining whether to object to the fairness and reasonableness of class counsel’s fee request. The award was reversed so that this timesheet review could take place for purposes of defense scrutiny of the fees request.
However, the fee award was properly reduced for degree of success, and the district court had discretion to cross check the lodestar even though such a cross-check was only discretionary in a case where class benefits could not be easily monetized.