Vicki Linneman v. Vita-Mix Corp.
970 F.3d 621
6th Cir.2020Background
- Vita-Mix blenders shed tiny PTFE flecks from seals; owners sued in a class action alleging state-law claims.
- Parties negotiated a settlement creating two classes: household (choice of $70 gift card or replacement blade assembly; $140 if multiple) and commercial (replacement blade only); counsel’s fees reserved for later determination.
- District court preliminarily approved the settlement in 2017; parties litigated fees for ~2 years.
- Court calculated fees via the lodestar (hours × rates) at ≈ $2.2M, then applied a 75% upward multiplier for a final fee award just under $4M; it later awarded post-judgment interest; Vita-Mix appealed.
- Central disputes on appeal: whether CAFA §1712 required percentage-based fee calculation for coupons, whether the lodestar multiplier and billing rates were proper, whether the court properly assessed settlement value and a Rule 68 offer, and whether post-judgment interest was permissible.
Issues
| Issue | Plaintiff's Argument (Class) | Defendant's Argument (Vita‑Mix) | Held |
|---|---|---|---|
| 1. Applicability of CAFA §1712: must fees attributable to coupons be based on coupon redemption value (percentage method)? | §1712 requires percentage calculation for fees attributable to coupons; face value cannot be used. | §1712 requires percentage-method valuation of any fee portion attributable to coupons; district court should have used percentage or at least a crosscheck. | Court: §1712 prohibits using face value but does not force the percentage method in every coupon settlement; lodestar is permissible unless the court’s fee is "based upon" the coupons (i.e., grounded in coupon value). |
| 2. Whether settlement barred multiplier or fees‑on‑fees | Multiplier and fees‑on‑fees not justified by contract language. | Settlement allowed counsel to seek "reasonable" fees under Rules 23(h) and 54(d)(2); that can include multipliers and fees‑on‑fees. | Court: Contract permitted seeking a multiplier and fees‑on‑fees; agreement did not limit fees to pre‑settlement prosecution only. |
| 3. Proper hourly billing rates (community market rule) | Counsel submitted affidavits and requested higher, partially nationalized rates. | Vita‑Mix argued local market (Rubin) rates should apply and counselor affidavits insufficient. | Court (appellate): District court erred — must use community market rule; local rates presumed; affidavits alone insufficient to justify above‑market local rates. |
| 4. Use of upward multiplier on lodestar | Multiplier warranted by Johnson factors and case merits. | Multiplier permitted only in rare/exceptional circumstances per Perdue; record lacks specific evidence justifying enhancement. | Court: Applying Perdue, district court abused discretion by awarding a 75% enhancement without finding rare/exceptional circumstances or specific evidence that lodestar was inadequate. |
| 5. Reasonableness of fee award: consideration of Rule 68 offer, settlement value, redemption rates, and pre‑litigation relief | Fee award reasonable as assessed. | Court should have considered Vita‑Mix’s Rule 68 $3.1M offer (and exclude hours after rejection if reasonable), settlement value (incl. coupon redemption), and pre‑suit relief. | Court: District court abused discretion by not analyzing the Rule 68 offer, failing to make specific findings on settlement value or redemption rates, and ignoring pre‑suit relief. Remand required. |
| 6. Post‑judgment interest on fee award and jurisdiction | Interest not appropriate for court‑approved settlements or court lacked jurisdiction after appeal. | §1961 applies to any money judgment recovered in district court; post‑judgment interest allowed; appellate jurisdiction intact either way. | Court: §1961 applies to attorney‑fee judgments from settlements; district court’s interest award vacated and must be recalculated on remand in light of any revised fee award. |
Key Cases Cited
- Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542 (2010) (lodestar enhancement permissible only in rare and exceptional circumstances with specific supporting evidence)
- Hensley v. Eckerhart, 461 U.S. 424 (1983) (degree of success is most critical factor in determining reasonable fees)
- Gascho v. Global Fitness Holdings, LLC, 822 F.3d 269 (6th Cir. 2016) (describes lodestar and percentage methods in class actions)
- Hadix v. Johnson, 65 F.3d 532 (6th Cir. 1995) (community market rule for reasonable billing rates)
- In re HP Inkjet Printer Litig., 716 F.3d 1173 (9th Cir. 2013) (interpreting §1712 to require percentage allocation for coupon settlements; discussed and rejected here)
- In re Sw. Airlines Voucher Litig., 799 F.3d 701 (7th Cir. 2015) (permits lodestar in coupon settlements where coupon value is not used to determine fees)
- Ne. Ohio Coal. for the Homeless v. Husted, 831 F.3d 686 (6th Cir. 2016) (discussion on fees‑on‑fees and what constitutes reasonable market rates)
- Associated Gen. Contractors of Ohio, Inc. v. Drabik, 250 F.3d 482 (6th Cir. 2001) (post‑judgment interest under §1961 applies to attorney fee judgments)