Ne. Eng'rs Fed. Credit Union v. Home Depot, Inc. (In Re Home Depot Inc.)
931 F.3d 1065
| 11th Cir. | 2019Background
- 2014 Home Depot data breach compromised ~56 million payment cards; banks sued and the cases were consolidated in an MDL (financial-institution track).
- A parallel private card-brand recovery process (Visa/Mastercard assessments) led Home Depot to pay $120M in assessments plus $14.5M in premiums to some banks in exchange for releases. Many larger banks accepted these releases before the class settlement.
- Parties mediated and settled: Home Depot agreed to a $25M settlement fund (for class members), up to $2.25M for certain smaller "sponsored" banks, security improvements, and to pay “reasonable attorneys’ fees, costs and expenses” separately and in addition to the settlement fund (amount to be determined by the court).
- District Court used the lodestar method, accepted Class Counsel’s lodestar (~$11.7M), applied a 1.3 multiplier for risk, and awarded $15.3M; it also used a percentage-method cross-check and included the $14.5M premiums in the class benefit but excluded attorney fees from that benefit.
- Home Depot appealed the multiplier and several fee-related compensability and procedural issues; Class Counsel conditionally cross-appealed the District Court’s exclusion of attorney fees from the class-benefit calculation.
Issues
| Issue | Plaintiff's Argument (Class Counsel) | Defendant's Argument (Home Depot) | Held |
|---|---|---|---|
| Whether a multiplier may be applied to the lodestar to account for risk | Multiplier is appropriate to compensate risk and matches approach used in consumer-track settlement | Multiplier was unwarranted; court abused discretion to enhance lodestar for risk | Multiplier for risk vacated: applying a risk-based multiplier in a contractual fee-shifting lodestar analysis was an abuse of discretion (Supreme Court reasoning limiting risk multipliers applies) |
| Whether time spent litigating the card-brand recovery/releases is compensable | Time was reasonable and necessary to protect class interests; discovery was court-authorized | Time was discrete/unsuccessful and unrelated to the class litigation; should be excluded | District Court did not abuse discretion; time was reasonably spent and compensable under the contract-based reasonableness standard |
| Whether time soliciting/finding class representatives is compensable | Vetting and securing representatives for multiple-state classes was necessary and reasonable | Such solicitation is pre-litigation/client-finding and not compensable | District Court did not abuse discretion; vetting reps in a class action was reasonably compensable |
| Whether the District Court’s fee order permits meaningful appellate review | Order lacked detailed hour-by-hour deductions and explicit Johnson-factor analysis | The order fails to explain acceptance of 21,000+ hours and the multiplier sufficiently | Court held the order provided adequate explanation given the specificity of objections; no requirement to parse Johnson factors or perform hour-by-hour review absent particularized objections |
Key Cases Cited
- Camden I Condo. Ass’n v. Dunkle, 946 F.2d 768 (11th Cir.) (percentage method benchmark for common-fund class fees)
- Hensley v. Eckerhart, 461 U.S. 424 (1983) (lodestar methodology and prevailing-party principles for fee awards)
- Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542 (2010) (lodestar is presumptively reasonable; multipliers are rare; limits on enhancements)
- Dague v. City of Burlington, 505 U.S. 557 (1992) (prohibits enhancing lodestar for risk in statutory fee-shifting cases)
- Boeing Co. v. Van Gemert, 444 U.S. 472 (1980) (attorneys recovering a common fund are entitled to reasonable fees from the fund)
- Muransky v. Godiva Chocolatier, Inc., 922 F.3d 1175 (11th Cir.) (abuse-of-discretion standard for appellate review of fee awards)
- Norman v. Housing Auth. of Montgomery, 836 F.2d 1292 (11th Cir.) (billing judgment; courts must exclude excessive, redundant, or unnecessary hours)
- ACLU of Ga. v. Barnes, 168 F.3d 423 (11th Cir.) (limits on compensable pre-litigation solicitation under statutory fee-shifting context; discussion of district-court duty to explain fee awards)
- Florin v. Nationsbank of Ga., N.A., 34 F.3d 560 (7th Cir.) (distinction between common-fund and fee-shifting analyses; multipliers in common-fund cases)