Stephen Stetson v. West Publishing Corp.
821 F.3d 1157
| 9th Cir. | 2016Background
- This is the third appeal in a putative class action; after multiple mediations the parties reached a $9.5 million common-fund settlement submitted to the district court for approval.
- Class Counsel sought $1.9 million in fees (~20% of the fund) and $49,934.89 in costs; certain class members (Objectors) objected to the fee request but not to the settlement and sought fees for themselves if Class Counsel’s award were reduced.
- The district court applied the lodestar method, set a $450/hr rate across counsel, reduced total hours, awarded $585,000 in fees and ~$20,588 in costs to Class Counsel, and denied Objectors any fees.
- Objectors appealed the denial of their fee petition; Class Counsel cross-appealed the reduction in their requested fees and costs.
- The Ninth Circuit reviewed whether non-participating objectors have standing to appeal a denial of their own fee requests and whether the district court adequately explained its large reduction of Class Counsel’s fee and costs.
- The Ninth Circuit vacated and remanded both the denial of Objectors’ fees and the Class Counsel fee/cost awards, ordered reassignment to a different district judge, and directed that each party bear its own costs on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing of non‑participating objectors to appeal denial of their fee request | Objectors: denial of their petition for fees is a particularized, redressable injury giving Article III standing | Class Counsel: objectors who did not participate lack standing to appeal fee awards | Held: Objectors have standing to appeal denial of their own fee petition (distinguishing Knisley; consistent with Rodriguez II) |
| Timeliness of objectors’ objection | Objectors: filed July 29, 2013, consistent with 21‑day rule in settlement documents | Class Counsel: other deadline language required July 8 postmark, so objection untimely | Held: ambiguity construed against drafter (Class Counsel); objection deemed timely |
| Adequacy of district court’s lodestar calculation and large fee reduction | Class Counsel: court failed to adequately explain hours cut, choice and basis of $450 rate, treatment of risk multiplier, and consideration of Kerr factors | District court: applied lodestar, found excessive hours and market rate justification via Trevino, declined to apply multiplier | Held: vacated and remanded — court abused discretion by insufficient explanation for hours reduction, improper reliance on outdated rate authority, failure to address risk multiplier and Kerr factors specifically |
| Reduction of costs (expert fees) | Class Counsel: timely identified experts and explained their indispensability in supplemental declaration | District court: reduced costs for inadequate support as to unnamed experts | Held: district court’s factual finding was clearly erroneous; costs award vacated and remanded for fact‑based analysis |
Key Cases Cited
- In re Bluetooth Headset Prods. Litig., 654 F.3d 936 (9th Cir. 2011) (lodestar/Kerr analysis guidance for class‑action fee awards)
- Rodriguez v. Disner, 688 F.3d 645 (9th Cir. 2012) (Rodriguez II) (objector standing to appeal denial of fee petition; common‑fund fee principles)
- Stanger v. China Elec. Motor, Inc., 812 F.3d 734 (9th Cir. 2016) (district court must provide specific, clear explanation for large reductions in fee awards)
- Fischel v. Equitable Life Assurance Soc’y, 307 F.3d 997 (9th Cir. 2002) (percentage vs. lodestar methods; lodestar presumption)
- Trevino v. Gates, 99 F.3d 911 (9th Cir. 1996) (community hourly rate evidence; court erred to rely on outdated rates without adjustment)
- Hensley v. Eckerhart, 461 U.S. 424 (1983) (standards for reasonable hours in lodestar)
- Vizcaino v. Microsoft Corp., 290 F.3d 1043 (9th Cir. 2002) (objector must increase fund or substantially benefit class to recover fees)
- Moreno v. City of Sacramento, 534 F.3d 1106 (9th Cir. 2008) (duplicative hours inherent to litigation; courts must account for this when reducing hours)
- Boeing Co. v. Van Gemert, 444 U.S. 472 (1980) (common‑fund doctrine authorizing fees from recovered fund)
- Knisley v. Network Assocs., Inc., 312 F.3d 1123 (9th Cir. 2002) (limits on standing for non‑participating objectors to appeal fee awards)
- Kerr v. Screen Actors Guild, Inc., 526 F.2d 67 (9th Cir. 1975) (Kerr factors for adjusting lodestar)
- United States v. Atondo‑Santos, 385 F.3d 1199 (9th Cir. 2004) (reassignment appropriate to preserve appearance of justice)