Indirect Purchaser Class v. Panasonic Corp., No. 17-15065 (9th Cir. 2020)
Annotate this Case
The Ninth Circuit vacated the district court's award of attorneys' fees and litigation expenses to class counsel, following approval of two rounds of settlements in consumer class action litigation. The litigation stemmed from claims of civil antitrust violations based on price-fixing within the optical disk drive industry.
The panel held that it has jurisdiction under 28 U.S.C. 1291. In a separately filed memorandum disposition, the panel affirmed the district court's approval of the first- and second-round settlements.
Here, the panel vacated the awards of fees and litigation expenses, holding that when class counsel secures appointment as interim lead counsel by proposing a fee structure in a competitive bidding process, that bid becomes the starting point for determining a reasonable fee. The district court may adjust fees upward or downward depending on circumstances not contemplated at the time of the bid, but the district court must provide an adequate explanation for any variance. In this case, class counsel argues that an upward departure from its bid was warranted in part because it did not anticipate the need to litigate a second class certification motion or interlocutory appeals. Without more, the panel held that these factors are insufficient to justify a variance of the magnitude approved in the first- and second-round fee awards. Accordingly, the panel remanded for a more complete explanation of the district court's reasoning.
Court Description: Class Action Settlement / Attorneys’ Fees. The panel vacated the district court’s award of attorneys’ fees and litigation expenses to class counsel, following approval of two rounds of settlements in consumer class action litigation concerning antitrust violations in the optical disk drive industry, and remanded for further consideration and findings. IN RE OPTICAL DISK DRIVE PRODS. 5 The claims of direct purchaser plaintiffs (DPPs) and indirect purchaser plaintiffs (IPPs) were consolidated in multidistrict litigation. Three groups of attorneys applied for appointment as class counsel. The district court received their bids under seal and appointed one group. The DPPs obtained certification of a settlement class and entered into settlement agreements resolving their claims. The district court also granted the IPPs’ motion for class certification. The IPP class reached a tentative settlement with four groups of affiliated corporate entities, yielding a common fund. Counsel moved for fees, proposing a percentage-of-recovery fee structure different from the structure proposed in its sealed bid. IPP class members objected that the requested fee was excessive. The district court approved the first settlement and the requested attorneys’ fees and litigation expenses. The IPP class reached a second settlement with three additional groups of affiliated defendants, resulting in an additional common fund. The district court largely adopted class counsel’s proposed order approving a second motion for fees and expenses. The IPP class reached a third settlement with two additional defendant groups, and the district court approved counsel’s third fee request. The district court’s approval of the first- and second- round settlements was addressed in a separately filed memorandum disposition. Objections to the third-round fee award also were addressed in a separate memorandum disposition. In its opinion, the panel addressed objectors’ appeals arising from the district court’s awards of fees and litigation expenses for the first- and second-round settlements pursuant to Federal Rule of Civil Procedure 23(h). The panel held that in awarding fees, the district court properly considered the 6 IN RE OPTICAL DISK DRIVE PRODS. size of the common funds, which qualified as “megafunds.” The panel followed case law declining to adopt a bright-line rule requiring the use of sliding-scale fee awards for class counsel in megafund cases. The panel held that the district court erred by failing to explain adequately the significant variance between the fee grid included in counsel’s appointment application and the actual awards. The panel explained that it was difficult to tell what role the fee bid played in the district court’s approval of the motions for fees and expenses. Given the record and the fiduciary duty the court owes to the class at the fee award stage, the panel vacated and remanded the first- and second-round fee awards for further consideration and findings. The panel held that when class counsel secures appointment as interim lead counsel by proposing a fee structure in a competitive bidding process, that bid becomes the starting point for determining a reasonable fee. The district court may adjust fees upward or downward depending on circumstances not contemplated at the time of the bid, but the court must provide an adequate explanation for any variance. Here, class counsel argued that an upward departure from its bid was warranted in part because it did not anticipate the need to litigate a second class-certification motion or interlocutory appeals. Without more, these factors were insufficient to justify a variance of the magnitude approved in the first- and second-round fee awards. The panel explained that the bid to become interim class counsel clearly contemplated that counsel would move to certify the plaintiff class, and it is not unusual for interim class counsel to have to take more than one run at class certification. In addition, the proposed fee structure in this case explicitly contemplated appellate litigation. IN RE OPTICAL DISK DRIVE PRODS. 7 The panel also vacated the district court’s award of litigation-related expenses and remanded. The panel held that the district court properly interpreted counsel’s bid as encompassing all litigation expenses. Nonetheless, the record was unclear about whether the district court had the opportunity to take this into account when it reviewed the expense requests associated with the first two settlement rounds. Because the bid was under seal, objectors did not have the information necessary to squarely raise this issue before the district court, but the fiduciary duty the court owed to the class required that the case be remanded so the class could be assured the issue was considered.
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.