A federal judge greenlit nearly $56 million in interim legal fees for the attorneys who led a massive antitrust class action accusing chicken producers of price fixing.
U.S. District Judge Thomas Durkin issued an opinion Nov. 30 granting the requests of lawyers who represented so-called direct buyers of chicken, like supermarkets and food service providers, for what the judge called "interim attorney fees," as well as reimbursement of litigation expenses and incentive awards for five named class representatives.
Representing the plaintiffs are attorneys from the firms of Lockridge Grindal Nauen, of Minneapolis; Pearson Simon & Washaw, of San Francisco and Sherman Oaks, Calif.; and Hart McLaughlin & Eldridge, of Chicago.
Clifford Pearson
| Pearson Simon Warshaw
The case is based on the same legal theory as a different class action brought on behalf of so-called "end users" of chicken, including consumers and restaurants. Settlements in that action also are expected to hatch payouts to lawyers of more than $60 million.
Durkin is presiding over both proceedings, which rest on an identical legal theory: allegations the nation’s largest chicken producers hatched a plan to manipulate supply, using an insider data network to keep prices artificially high at a time their input costs were falling, especially those related to chicken feed.
The lawsuit from direct purchasers moved toward a $155 million settlement in February. Under that deal, Tyson agreed to pay $80 million and Pilgrim’s Pride paid $75 million. That followed two earlier settlements with other producers accounting for more than $15 million.
Durkin said the main firms representing plaintiffs employed 20 other firms for assistance, for a total of 100,608 hours worked worth $50.9 million in fees. With a total settlement pool of $170 million, the firms are seeking one third of the settlement, or about $56.7 million. They are also seeking $4.5 million of the $5.1 million in litigation expenses and $25,000 incentive awards for each named plaintiff.
“Appointed counsel invested massive resources of time and money when no other counsel expressed interest, with little assurance of success,” Durkin wrote. “No government investigation preceded the complaint in this case for appointed counsel to piggy-back. And plaintiffs have been opposed by many defendants, including a number of very large and well-funded corporations, which have retained some of the most prominent and sophisticated law firms in the United States.
"The court’s 92-page decision denying the motions to dismiss was a relatively close call. Discovery proceeded while the motions to dismiss were briefed and decided, so appointed counsel was immediately incurring costs of time and money without any assurance of an award. Furthermore, issues raised in the motions to dismiss show that success on class certification and summary judgment, let alone trial, is no guarantee.”
Although Durkin granted the request for $4.5 million in expenses, he did specify that money “should be deducted from the common fund before the fee award percentage is applied.” He further explained that a law firm’s out-of-pocket costs don’t benefit the class and aren’t part of what those members receive through a settlement.
Durkin lowered the award for the named plaintiffs in the class action - known as "class representatives" - to $15,000, saying that “appears to be a customary maximum” in similar actions. He further noted the record contains no indication of how much time the named plaintiffs spent on the litigation and that the class representatives — which are businesses, not individuals — didn’t appear to put themselves at any risk by filing the lawsuit.
“Litigation is convenient for no one,” Durkin wrote. “But business entities are in a much better position to devote time to a lawsuit and delegate the burdens among their officers and employees than a person who must bear the entire burden individually.”
Attorneys representing the plaintiffs have included, W. Joseph Bruckner, Brian D. Clark and Simeon A. Morbey, of Lockridge Grindal Nauen; and Clifford H. Pearson, Daniel L. Warshaw, Thomas J. Nolan, Bobby Pouya, Michael H. Pearson and Bruce L. Simon, of Pearson Simon& Warshaw, who were each appointed by the judge as interim co-lead class counsel; and attorneys Steven A. Hart, Brian Eldridge and Kyle Pozan, of Hart McLaughlin & Eldridge, identified as plaintiffs' liaison counsel.