Objection to $22.5M attorney's fee request in proposed $75M settlement leads to discovery dispute over class counsel's past TCPA cases

By Bethany Krajelis | Nov 25, 2014

An objection to a request for $22.5 million in attorney’s fees in what is believed to be the largest settlement in the history of the Telephone Consumer Protection Act has produced a discovery battle in Chicago’s federal court.

On one side of the fight is Jeffrey T. Collins, a Florida man who has successfully asked the court to make the plaintiff’s attorneys fork over information related to their fee awards in past TCPA cases in an attempt to bolster his contention the amount of attorney’s fees requested in this case is way too high because the risk in bringing it was relatively low.

A team of plaintiffs’ attorneys spanning from New York to Washington sit on the other side of the dispute, which stems from a TCPA action that Capital One and a trio of collection agencies have agreed to settle for $75 million. A federal judge in August gave his preliminary approval to the proposed settlement.

A Nov. 14 declaration from one of the plaintiffs’ attorneys says that 4,267.55 hours were spent working on the case by attorneys, paralegals and support staff from six law firms: Lieff Cabraser Heimann & Bernstein LLP; Terrell Marshall Daudt & Willie PLLC; Keogh Law Ltd.; Burke Law Offices LLC; Williamson & Williams; and Meyer Wilson Co. LPA.

Dividing the $22.5 million proposed attorney's fee award by the amount of hours listed in that declaration produces an average hourly rate that hovers at slightly more than $5,300. The declaration lists hourly rates that range from $775 for a partner at Lief Cabraser to a $100 for a paralegal at Terrell Marshall.

Attorneys’ fees in class actions are typically calculated using the lodestar method, in which a judge multiplies the number of hours worked by a reasonable hourly rate to reach the lodestar amount and then adjusts that by a multiplier to account for various factors, such as the risk of taking on cases on a contingency basis.

The lodestar amounts and multipliers in class counsel's previous TCPA cases are at the center of Collins' discovery requests.

In their objection to his most recent discovery-related motion, the plaintiffs’ attorneys just last week said Collins basically invented “a new ‘risk analysis’” that instead of analyzing class counsel’s risk before filing the suit, attempts to “analyze each firm’s (or perhaps all of the firms’ collective) practice-wide income based on all TCPA cases, both successful and unsuccessful.”

They said they “provided fulsome and transparent responses” to Collins’ original request for limited discovery into the lodestar amounts that U.S. District James Holderman granted in late October, when he referred the case to Magistrate Judge Young B. Kim for discovery supervision.

Collins’ request included an interrogatory seeking the identification of all TCPA in which the counsel of record in this case were awarded attorneys’ fees and/or expenses, the lodestar amount and multiplier requested, amount award and the amount of expenses requested and awarded.

On Nov. 19, Collins filed a motion to compel discovery responses, claiming that production to that interrogatory was deficient as the plaintiffs’ attorneys didn’t include certain information, such as both the lodestar amount and multiplier, because they argued they were only required to give the lodestar summaries for cases in which it was requested.

“But now, having obtained responses to the discovery it actually served—discovery well beyond anything typically ordered in class cases—Collins and his counsel have moved the goalposts,” the plaintiffs’ attorney argued in their Nov. 20 filing opposing the motion to compel.

In a Nov. 21 order, Kim, the magistrate judge, granted in part and denied in part Collins’ motion that in addition to compelling discovery responses, sought additional discovery via two more interrogatories.

Kim granted the motion in that he ordered the plaintiffs’ attorneys to respond to a newly-phrased interrogatory that asks for the lodestar amount, regardless of whether it was requested or submitted to the court, as well as the multiplier used, fees awarded and expenses incurred in all TCPA actions in which the counsel of record in this case have been awarded fees and expenses.

The judge gave the plaintiffs’ attorneys a Nov. 25 deadline to do so and told them to provide two sets of their answers: one that identifies the case name and numbers and the other using anonymized case information.

He also gave Collins until Nov. 25 to explain in writing why he needs the case names and numbers of TCPA cases he is seeking fee information about since they are unrelated to the one in which he is objecting to the attorney’s fee award.

Kim denied Collins’ motion in that rejected his request to serve two additional interrogatories seeking new discovery. The judge set a status hearing for Nov. 26.

Collins is one of a handful of objectors to the proposed $75 million settlement that stems from claims Capital One, Capital Management Systems (CMS), Leading Edge Recovery Solutions and AllianceOne Receivables Management used automatic dialing systems to call class members on their cell phones without their consent.

The U.S. Panel on Multidistrict Litigation in 2012 consolidated and transferred class action lawsuits alleging TCPA violations against Capital One and the three collection agencies to Chicago’s federal court, where it was assigned to Holderman.

If approved following a final fairness hearing that has been pushed back to January, each member of the class that is estimated to include about 21 million people would get between $20 and $40 while their attorneys would get $22.5 million.

Collins is being represented in his objection by Melissa A. Holyoak with The Center for Class Action Fairness, which Ted Frank founded in Washington D.C.

Frank, who has not entered his appearance in this case, said the information requested in Collins’ discovery motions will show the level of risk in prosecuting TCPA cases and help determine whether the proposed attorneys’ fee is warranted.

If the information shows TCPA cases typically get settled and end in “big time windfalls,” Frank said the attorneys’ fee award request in this case should be reduced substantially. But, if it shows plaintiffs’ attorneys undertook a high level of risk and spent a lot of time on the case, Frank said the requested award may be warranted.

The plaintiffs are represented by a number of attorneys in the case. Their most recent filing was submitted by Jonathan D. Selbin, Daniel M. Hutchinson and Douglas I. Cuthbertson of Lieff Cabraser in New York and California; Beth E. Terrell and Michael D. Daudt of Terrell Marshall in Washington; and Keith James Keogh and Timothy J. Sostrin of Keogh Law in Chicago.

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