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: CAFA Law Blog - Information, cases and insights regarding the Class Action Fairness Act of 2005

Can you Hear Me Now?...Court Utilizes Lodestar Method to Calculate Attorneys Fees in Calling Card Case

Perez v. Asurion Corporation, 2007 WL 2591180 (S.D. Fla. 2007).

Asurion agreed to settle this class action by providing calling cards and replacement phone vouchers to class members. The class complained that Asurion’s advertisements and brochures failed to advise its customers that that cell phone repair or loss claims may be fulfilled with new and/or refurbished equipment and a replacement phone was subject to a non-refundable amount deducted per loss.

At a fairness hearing the only real issue addressed was how to determine attorney fees. The issue arose because calling cards and vouchers are not necessarily “coupons” that require additional purchases.  Section 1712(b)(1) of CAFA states:

If a proposed settlement in a class action provides for a recovery of coupons to class members, and a portion of the recovery of the coupons is not used to determine the attorney’s fee to be paid to Class Counsel, any attorney’s fee award shall be based upon the amount of time class counsel reasonably expended working on the action.

With Section 1712(b)(1) in mind, the Court determined that although cards and vouchers are not literally “coupons,” neither are they cash.   Thus, CAFA gives the Court discretion to award fees using the lodestar method, in which the Court will multiply the number of hours that Class Counsel reasonably worked by a reasonable hourly rate.

The Court discussed in detail the lodestar method and considered the hourly rates in Class Counsel’s fee affidavits, the actual work performed, the reasonableness of the award when considering the amount of hours billed, and the fact that the requested amount, $1.6 million, is less that Class Counsel’s actual loadstar amount, $1.9 million. The Court determined that the $1.6 million request was an appropriate lodestar amount. It next turned to reasonableness, which in the 11^th Circuit is determined by the Johnson factors. See Johnson v. Georgia Highway Express, Inc. 488 F.2d 714 (5^th Cir. 1974). After going through all 12 factors, the court determined the $1.6 million award was reasonable.

Full post as published by CAFA Law Blog - Information, cases and insights regarding the Class Action Fairness Act of 2005 on January 08, 2008 (boomark / email).