The Court of Appeals for the Seventh Circuit has upheld a lower court’s decision in reducing the fees awarded to plaintiffs’ attorneys in a Telephone Consumer Protection Act class-action lawsuit by nearly 70% because the court ruled the lawyers did not perform enough work to justify the higher fees.
A copy of the ruling in Camp Drug Store Inc. v. Cochran Wholesale Pharmaceutical Inc. can be accessed by clicking here.
The defendant in the case moved almost immediately to settle upon service of the lawsuit, and a settlement was reached without the need for any discovery or depositions. The original settlement amount was $700,000, of which the plaintiff’s attorneys would be entitled to 33%, or $233,000. The settlement called for an award of $125 to each member of the class who agreed to participate. About 1,700 plaintiffs participated, meaning the defendant’s total payout to the plaintiffs was $220,000. The District Court judge ruled that the plaintiffs’ attorneys should be entitled to 33% of that total, or $73,000. The plaintiff’s appealed the ruling to the Seventh Circuit, which upheld the lower court’s decision.
“The district court concluded that class counsel’s requested fee of nearly a quarter million dollars for merely filing a complaint and negotiating a settlement bore little relationship to market reality,” the Appeals Court wrote in its ruling. “Given the paucity of effort expended by counsel compared to the size of the proposed fee, the district court did not abuse its discretion in concluding that the award be reduced accordingly.”
