CEI Calls for Investigation in Anthem Case Where Lawyers Overbill Class Members by 900 Percent


Last night, the Competitive Enterprise Institute’s Center for Class Action Fairness filed its response arguing why a special master is needed to investigate attorneys’ exorbitant fee request in the mega-fund settlement from the Anthem data breach litigation.

CEI argues that an investigation is warranted because scrutiny of the plaintiffs’ attorneys’ billing practices shows back-scratching and padding with 53 total firms, with hourly rates inflated by more than 900 percent over market rates. Given one of the lead firms in this case is already the subject of a $3 million special-master investigation in the District of Massachusetts, it seems these type of misstatements may be a trend rather than an honest mistake. 

“There are the same problems here that the State Street special master is investigating. The declarations were fascinating: the claim is that dozens of law firms allegedly ​did as much as $1.5 million of lodestar work on spec without any promise or tacit understanding of how they would be paid,” said CEI Director of Litigation Ted Frank. “I can’t even hire a local counsel for a couple of thousand dollars without signing a lengthy retainer agreement.” ​

Frank originally objected to the Anthem settlement in late December arguing the fee request is upside-down because class counsel and the settlement administrator are asking for $63.6 million of a $115 million settlement fund, leaving $51.4 million for 78 million class members, or less than a dollar per person.

>> Read more about this case here.