363 F. Supp. 3d 401
S.D. Ill.2019Background
- Plaintiff Altareek Grice sued Bottling Group, LLC (Pepsi) under the FCRA for obtaining consumer reports for employment without a stand‑alone disclosure; case settled early after private mediation.
- Parties created a $1,192,275 common fund to cover class payouts, attorneys' fees, costs, administration, and a $5,000 service award.
- Only 1,879 of 23,133 class members (≈8.1%) submitted valid claims, triggering a contractual reversion: 40% of the Net Settlement Fund reverts to Defendant; only 60% is paid to claimants.
- Class Counsel sought fees equal to one‑third of the gross settlement ($397,387), costs of $74,507.79, and a $5,000 service award for Grice. Defendant did not oppose; no class objections.
- Court evaluated fees using the percentage‑of‑fund method with Goldberger factors and a lodestar cross‑check, reduced the baseline percentage due to the low claims rate/reversion, awarded reduced fees, costs, and the service award.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Appropriate fee method & percentage | One‑third of gross fund (contingency, >450 hours expended) | Did not oppose fee but reversion/magnitude relevant | Court applied percentage method, set baseline 27% then reduced to 22% of gross fund; awarded $262,300.50 |
| Effect of reversionary settlement on fee | Fee based on gross common fund is customary | N/A (defendant did not oppose) | Reversion discouraged awarding fees on pre‑reversion gross; 5% cut from baseline to avoid misalignment of counsel/class incentives |
| Lodestar cross‑check and hourly rates | Counsel claimed lodestar ~$331,281 based on rates $500–$875 | Rates not supported for S.D.N.Y.; lacking timesheets for most counsel | Court used $300/hr (prevailing S.D.N.Y. consumer rate), accepted 450.4 hours as cross‑check; lodestar $135,120; awarded fee yields 1.94 multiplier, reasonable |
| Costs and service award | Sought $74,507.79 costs; $5,000 service award for Grice | N/A | Court granted costs: $16,537.57 to counsel + $57,970.22 admin; granted $5,000 service award |
Key Cases Cited
- Goldberger v. Integrated Res., Inc., 209 F.3d 43 (2d Cir. 2000) (establishes multi‑factor test and percentage/lodestar approaches for common fund fees)
- Wal‑Mart Stores, Inc. v. Visa U.S.A., Inc., 396 F.3d 96 (2d Cir. 2005) (discusses advantages of percentage‑of‑fund method)
- McGreevy v. Life Alert Emergency Response, Inc., 258 F. Supp. 3d 380 (S.D.N.Y. 2017) (framework applying percentage method with Goldberger factors in three steps)
- Int'l Precious Metals Corp. v. Waters, 530 U.S. 1223 (2000) (statement noting reversionary funds may signal misaligned incentives)