United States District Court, D. Kansas
MEMORANDUM AND ORDER
D. CRABTREE UNITED STATES DISTRICT JUDGE.
matter comes before the court on the Class
Representative's Motion for Approval of Attorneys'
Fees and Reimbursement of Expenses (“Fee
Request”). Doc. 138. Defendant Wells Fargo Bank,
National Association d/b/a Wells Fargo Dealer Services, Inc.,
has not opposed the Fee Request. Nor has any Class Member
filed an objection to the Fee Request or Settlement. The
court has considered all submissions and evidence, and now
grants the Fee Request. The court orders defendant to pay
Class Counsel's attorneys' fees in the amount of $1,
691, 250 and to reimburse Class Counsel for litigation
expenses of $78, 209.59 as set forth in the Settlement
Agreement. The court explains its reasoning, below.
OF ATTORNEYS' FEES
Under Federal Rule of Civil Procedure 23(h), “the court
may award reasonable attorney's fees and nontaxable costs
that are authorized by law or by the parties'
agreement.” Fed.R.Civ.P. 23(h). The court finds that
the attorneys' fees requested here are reasonable and
authorized by the parties' agreement.
Fee Request is authorized by the Settlement Agreement, which
the court has approved in a separate order. Under the
Settlement Agreement, defendant agreed to pay $5, 125, 000 to
the Settlement Class (the “Gross Settlement
Fund”). Defendant also agreed to pay, separate and
apart from the Gross Settlement Fund, Class Counsel's
attorneys' fees in an amount up to 33% of the Gross
Settlement Fund. See Doc. 127-1 at 14 (Settlement
Agreement at ¶¶ VI.A. & B). Class
Representative has requested Class Counsel attorneys'
fees in the amount of $1, 691, 250, which is 33% of the Gross
Rule 23(h) and case authorities establish that the standard
for setting the fee award is reasonableness. See Brown v.
Phillips Petroleum Co., 838 F.2d 451, 453 (10th Cir.
1988); Fed.R.Civ.P. 23(h) advisory committee's note to
2003 amendment (providing that “reasonableness”
is the customary measurement for common-fund fees). The
Settlement Agreement provides for defendant to pay fees based
on a percentage of the Gross Settlement Fund. For that
reason, the court looks to common-fund cases to assess the
reasonableness of the Fee Request under Rule 23(h).
court considers the reasonableness of the Fee Request under
federal law because this court's jurisdiction was invoked
under 28 U.S.C. § 1331. The Tenth Circuit prefers the
percentage of the fund method in determining the award of
attorneys' fees in common-fund cases. See, e.g.,
Chieftain Royalty Co. v. Enervest Energy Institutional
Fund XIII-A, L.P., 888 F.3d 455 (10th Cir. 2017);
Gottlieb v. Barry, 43 F.3d 474, 483 (10th Cir.
1994); Brown, 838 F.2d at 454. This methodology
calculates the fee as a reasonable percentage of the value
obtained for the benefit of the class. See Brown,
838 F.2d at 454.
court analyzes the reasonableness of the Fee Request under
the Johnson factors. See Id. at 454-55
(citing Johnson v. Georgia Highway Express, Inc.,
488 F.2d 714 (5th Cir. 1974)). Not all Johnson
factors will apply in every case. See Id. at 453.
Addressing each applicable factor by order of importance, the
court concludes that the Fee Request is reasonable.
Results obtained (factor 8).
court finds that the result obtained deserves greater weight
than the other Johnson factors. See Id. at
456 (holding this factor may be given greater weight when
“the recovery [is] highly contingent and that the
efforts of counsel were instrumental in realizing recovery on
behalf of the class.”); see also Farrar v.
Hobby, 506 U.S. 103, 114 (1992) (“[T]he most
critical factor in determining the reasonableness of a fee
award is the degree of success obtained.”) (quotations
omitted). Here, Class Counsel achieved a significant cash
recovery of $5, 125, 000 for the Settlement Class despite the
existence of serious disputes as to liability. There are no
claim forms to fill out, and Settlement Class members do not
have to take any action whatsoever to receive their money.
The fact that no member of the Settlement Class elected to be
excluded from the Settlement or objected to the Settlement
bolsters the court's confidence in the results Class
Counsel has obtained. Mr. Nakamura, Class Counsel, and the
mediator support the Settlement as fair, reasonable, and
adequate. See Doc. 140-5 at 3 (Nakamura Decl. ¶
Doc. 140-1 at 14 (Joint Counsel Decl. ¶ 45); Doc. 129;
Doc. 140-2 at 4 (Layn Phillips Decl. ¶¶ 14-15). The
court agrees. In light of the results Class Counsel obtained
for the Settlement Class, the court finds the Fee Request is
Customary fee (factor 5), whether fee is fixed or
contingent (factor 6), and awards in similar cases (factor
actions typically involve a contingent fee arrangement
because it insulates the class from the risk of incurring
legal fees and shifts that risk to counsel.”
Nieberding v. Barrette Outdoor Living, Inc., 129
F.Supp.3d 1236, 1250 (D. Kan. 2015) (citing Freebird,
Inc., 2013 WL 1151264, at *4). Mr. Nakamura and Class
Counsel negotiated a contingent-fee agreement whereby Mr.
Nakamura agreed that Class Counsel would be compensated 40%
of any recovery obtained for the class as a result of
settlement or judgment. Doc. 140-1 at 13 (Joint Counsel Decl.
¶ 43). This agreed-upon fee supports the reasonableness
of the Fee Request of 33%. See Nieberding, 129
F.Supp.3d at 1250 (percentage in representation agreement
between plaintiff and counsel “provides some market
context suggesting that a fee award in this range is a
Nieberding, this court recognized a fee award of
one-third of the common fund was “well within the range
typically awarded in class actions.” Id. Since
2015, however, class actions have become more complex and
riskier for counsel willing to prosecute them. This increased
complexity and risk has led to requests for higher
percentages of the common fund obtained for the benefit of
recent years, some courts in the Tenth Circuit have awarded
fees based on 40% of the common fund. See, e.g.,
Order Awarding Attorneys' Fees, Reimbursement of
Litigation Expenses, and Case Contribution Award, Cecil
v. BP Am. Prod. Co., No. CIV-16-410-KEW (E.D. Okla. Nov.
19, 2018) (No. 260) (awarding 40% fee on $147 million cash
component of the class settlement); Chieftain Royalty Co.
v. XTO Energy Inc., No. CIV-11-29-KEW, 2018 WL 2296588,
at *7 (E.D. Okla. Mar. 27, 2018) (citing Order Awarding
Attorneys' Fees, Reirdon v. XTO Energy Inc., No.
CIV-16-87-KEW (E.D. Okla. Jan. 29, 2018) (Doc. 124) (awarding
40% fee on cash component of the settlement)); Chieftain
Royalty Co. v. QEP Energy Co., No. CIV-11-212-R, 2013 WL
12090676, at *3 (W.D. Okla. May 31, 2013) (awarding a fee of
$46.5 million, which represented approximately 39% of the
cash portion of a $155 million settlement); see also
Doc. 140-2 (Declaration of Layn R. Phillips, Hitch
Enters., Inc. v. Cimarex Energy Co., No. CIV-11-13-W, at
¶ 19 (W.D. Okla. Dec. 28, 2012) (opining an
attorneys' fee in the range of 33.33% to 40% along with
the value for reimbursement of litigation expenses was
reasonable and in line with amounts approved by courts in the
Tenth Circuit as being fair and reasonable)); Doc. 140-3
(Declaration of Geoffrey P. Miller, Chieftain Royalty Co.
v. XTO Energy, Inc., No. CIV-11-29-KEW, at ¶ 57
(E.D. Okla. Feb. 23, 2018) (“[A]n attorneys' fee of
40% is in line with awards in both federal and state courts
in the Tenth Circuit . . .”)); Doc. 140-4 (Declaration
of Steven S. Gensler, Cecil v. BP Am. Prod., Inc.,