End Excessive Fees in Class Action Litigation
The New Jersey Law Journal Editorial Board praises CEI’s Center for Class Action Fairness and their action on the Anthem class action case.
Competitive Enterprise Institute blew the whistle on this application, and rightly so. Anthem’s disclosure of the data breach triggered dozens of lawsuits all over the country. They were consolidated in Judge Koh’s court. Eight firms competed for leadership positions; she trimmed the list to the four applicants. Their steering committee originally assured her “No one other than the attorneys and firms proposed here will necessarily work on this case” but they brought 49 more firms into the case. They passed out $3.5 million in work to the four firms the court had excluded, and another $10 million to 45 other firms, and then they engaged 53 law firms. “If I thought eight was too many, what made you think I wanted 53 firms churning on this case?” Judge Koh asked. They paid 329 lawyers (100 were partners) millions of dollars, more than two dozen of whom were contract attorneys charging $300-$400 per hour to perform low-level work such as document review for which $50 per hour is the usual fee. “I would like you to find a single paying client that would have approved these types of markups in a contract attorney!” Judge Koh challenged.
The court has appointed a special master to review the fee applications and report his conclusions and recommendations for appropriate fee awards. He certainly will scrupulously review the requested fees of the more than 100 partners and two dozen contract attorney who charged $300-400 for their pedestrian work. Maybe, one commentator facetiously has suggested, “the Special Master can bring on a few $400 contract attorneys to help sort through the bills faster?” We commend Competitive Enterprise Institute and Judge Koh for a step toward restoring public confidence in the cost of the litigation process.