Mr. Desai Addresses the Panoply of Issues Involved in the Class Action Settlement Confirmation Process.
Mr. Aashish Y. Desai, a partner at Mower, Carreon & Desai, LLP in Irvine and a participant at the recent NALFA Los Angeles seminar which we reviewed in our June 20, 2008 post, has written a very comprehensive, scholarly article in the July-August 2008 Los Angeles Lawyer.
Specifically, Mr. Desai addresses the confirmation process for class action settlements, with the Los Angeles Lawyer offering an MCLE credit test for those that are interested.
Among other things, Mr. Desai does devote discussion to our favorite topic—attorney’s fees requests, but in the context of class action cases. He makes these salient points:
· The court, at the preliminary approval hearing, generally approves—conditionally—an award of attorney’s fees and costs to class counsel.
· Class counsel is entitled to his or her attorney’s fees out of the common settlement fund or as the prevailing party under separate doctrines or fee-shifting statutes.
· Courts may base their fee award calculations on the lodestar or multiplier method when fee-shifting statutes are involved.
· When the value of the settlement is contingent on the claims filed, federal courts agree that the trial court should look to the total benefit provided to the class, regardless of the claims rate, when establishing a reasonable fee. “Unfortunately, state court judges in California tend to vary greatly in their awards of attorney’s fees based upon the total benefit provided to the class members.”
· Where defendants agree to pay class counsel fees from a separate fund apart from the class settlement fund, the court may conditionally approve that arrangement subject to objections at the time of final approval. The lower court may well ask for additional underlying factual data to evaluate a fee award under a separate fund arrangement.