CCAF Objects to Egregious 30% Fee Grab by Counsel in Polyurethane Class Suit Settlement

Today the Competitive Enterprise Institute’s Center for Class Action Fairness (CCAF) filed an objection to the class action settlements in the Polyurethane Foam Antitrust Litigation. Representing two members of the indirect purchaser class, CCAF objected in the U.S. District Court for the Northern District of Ohio to class counsel’s inflated $50.4 million fee and expense request, as well as other issues that arose from the settlement that skew the calculations in determining what the class should receive versus their counsel.

In the original litigation, a number of polyurethane foam companies were sued by a class of their customers for conspiring to fix prices of the foam in violation of antitrust laws. In the course of the settlement, counsel for the class requested a whopping 30 percent of the $151 million “mega-fund” provided by the defendants, ignoring case law which prescribes an amount in the 10-15 percent range.

CCAF attorney Anna St. John said, “If awarded in full, the excessive fee requested by class counsel would transfer to plaintiffs’ attorneys tens of millions of dollars that rightfully belong to class members. It’s an all-too-common example of attorneys purporting to represent consumers harmed by unlawful business practices, when in reality these attorneys try to harm those same consumers again by seeking far more than they are entitled to by law.”

The estimate of fees that class counsel submitted in support of their request included rates well above the market rates in Ohio and what other courts have awarded, and failed to include evidence that such rates were appropriate. In particular, the request included work by contract attorneys billed at several times the typical market rate and hourly rates for firm attorneys that had been deemed unreasonable and reduced by another court earlier this year.

Now CCAF and its clients await a ruling from the court to see if their objection is successful.

You can read the filing here.