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Court Error – Class Counsel Fees

By: Derek Hawkins//August 22, 2017//

Court Error – Class Counsel Fees

By: Derek Hawkins//August 22, 2017//

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7th Circuit Court of Appeals

Case Name: Kevin Barnes v. Sears, Roebuck and Co.

Case No.: 16-3554

Officials: POSNER, RIPPLE, and HAMILTON, Circuit Judges.

Focus: Court Error – Class Counsel Fees

Sears, the principal defendant/appellant in this class action suit, challenges the district court’s decision to award the plaintiffs’ attorneys (class counsel) 1.75 times the fees they originally had charged for their work on the case. The judge’s reasoning was that the case was unusually complex and had served the public interest and that the attorneys had obtained an especially favorable settlement for the class, even though the fees they sought—$4.8 million with the 1.75 multiplier, versus $2.7 million without—greatly exceeded the likely award of damages to the class.

The presumption is not irrebuttable, however, and in this case the extensive time and effort that class counsel had devoted to a difficult case against a powerful corporation entitled them to a fee in excess of the benefits to the class. But they failed to prove that a reasonable fee would exceed $2.7 million—the pre-multiplier figure sought by class counsel and already thrice the damages awarded the class. We therefore reverse the judgment of the district court and remand with directions to award $2.7 million—no more, no less—in fees to the class counsel.

Reversed and Remanded

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.

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