Jones v. GN Netcom, Inc., 654 F.3d 935

Settlement provides $100,000 in cy pres awards to four nonprofits; no monetary class recovery for economic injury.
Notice plan reached ~80% of potential class; 715 opted out; 50 objected, including the Appellants.
District court approved the settlement and certified the class for settlement purposes only.
Separate fee order awarded class counsel $850,000 (lodestar-based) and $12,000 to nine class representatives; cy pres and other costs were set.
Objectors argue the fee award is disproportionately large relative to class relief and that the fee structure (clear sailing and kicker) risks collusion; district court did not adequately justify the fee relative to outcomes.
The Ninth Circuit vacated both the Approval Order and the Fee Order and remanded for a more searching inquiry, including whether to treat the settlement as a common fund and the appropriate method for fee calculation.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the fee award was reasonably tied to results	Objectors: fee dwarfs class recovery; lodestar lacked explicit calculation	Motorola: fee reasonable under lodestar given effort and risk	Remand required to explicit calculations and relation to results
Whether the district court should treat the settlement as a common fund	Objectors: constructive common fund approach applicable; 25% benchmark appropriate	Defendants: no automatic common fund treatment due to injunctive relief and cy pres	Remand to decide treatment and recalculate accordingly
Whether the pre-certification settlement and clear sailing provision warranted heightened scrutiny	Objectors: signs of collusion and disproportionate fees undermine fairness	Defendant: mediation and severability suffice to safeguard fairness	Remand to scrutinize the fee provision and its relation to overall settlement
Whether the court adequately weighed Churchill factors and signs of collusion	Objectors: court failed to scrutinize disproportionate fee; ignored kicker	Court found factors favored settlement but did not detail fee justification	Remand to reanalyze Churchill factors in light of fee structure

Staton v. Boeing Co., 327 F.3d 938 (9th Cir. 2003) (independent duty to ensure fee awards are reasonable; constructs common fund considerations)
Hensley v. Eckerhart, 461 U.S. 424 (U.S. 1983) (fees must be reasonable in relation to results obtained)
In re Mercury Interactive Corp., 618 F.3d 988 (9th Cir. 2010) (lodestar vs. percentage-of-fund cross-checks; avoid windfalls)
In re Gen. Motors Corp. Pick-Up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d 768 (3d Cir. 1995) (constructive common fund discussion; funds as a whole)
Six Mexican Workers v. Aram. Citrus Growers, 904 F.2d 1301 (9th Cir. 1990) (benchmark 25% of fund; adjust for special circumstances)
Hanlon v. Eckerhart, 150 F.3d 1011 (9th Cir. 1998) (guides reasonableness of attorney fees; supports review of outcomes)
McCown v. City of Fontana, 565 F.3d 1097 (9th Cir. 2009) (requires adequate explanation of lodestar adjustments and results)