Stetson v. Grissom, No. 13-57061 (9th Cir. 2016)
Annotate this CaseAfter the parties reached a settlement, the district court granted $585,000 in fees to Class Counsel, which reflected a reduction of requested fees of approximately 70 percent. It also reduced Class Counsel’s costs reimbursement to $20,588.17. The district court also found that Class Counsel inadequately supported its claim for expert fees, and denied Objectors' fee request in its entirety. Both Plaintiffs and Objectors appealed. The court held that, in a class action, an objector need not establish standing to object to an award of attorney’s fees by the district court; if an objector seeks to appeal an award of fees to class counsel, he must independently satisfy Article III standing; nevertheless, an objector has standing to appeal a denial of his own claim for fees; and, in this case, Objectors are not yet entitled to attorney's fees because the court vacated and remanded the district court's decision reducing Class Counsel's fees. The court concluded that the district court was well within its discretion to use the lodestar method to calculate fees. However, the district court abused its discretion by failing to specifically articulate its reasoning for such a large disparity between the requested fees and the reduction from Class Counsel's computed lodestar fee. Therefore, the court vacated the district court's order and remanded. On remand, the district court should (1) clearly provide reasons for the factors in its lodestar computation; (2) expressly consider both a risk multiplier and the Kerr v. Screen Extras Guild, Inc., factors; and (3) base its decision on facts supported by the record.
Court Description: Settlement / Attorneys’ Fees. The panel vacated the district court’s order reducing class counsel’s fees following a settlement. The panel held that in a class action, an objector need not establish standing to object to an award of attorneys’ fees by the district court. If the objector seeks to appeal the award, however, then he must demonstrate standing. An objector has standing to appeal a denial of his own request for fees. Here, the objectors were not yet entitled to any fees because the panel vacated the district court’s order awarding attorneys’ fees to class counsel. STETSON V. GRISSOM 3 The panel held that in this common-fund case, the district court acted well within its discretion in using the lodestar method to calculate fees. The district court abused its discretion, however, in failing specifically to articulate the reasoning supporting the large disparity between the requested fees and the awarded fees. In addition, the district court’s reduction of class counsel’s costs was based on clearly erroneous findings of fact. The panel vacated the district court’s award of costs and fees and remanded with instructions for the district court to (1) clearly provide reasons for the factors in its lodestar computation; (2) expressly consider both a risk multiplier and the Kerr reasonableness factors; and (3) base its decision on facts supported by the record. The panel directed that the case be reassigned to a different district judge on remand.
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