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Kohner, Mann & Kailas reaches $15M settlement in 13-year natural gas lawsuit

Milwaukee law firm Kohner, Mann & Kailas has reached a $15 million settlement in a massive natural-gas antitrust lawsuit, the largest to date in the case’s 13 years of litigation.

The class-action suit accuses several energy companies of fixing the price of natural gas and costing Wisconsin industrial and commercial purchasers hundreds of millions of dollars collectively. The case bounced between state and federal courts, and it was part of a multidistrict litigation action for years before being remanded in 2019. While in the MDL court, six of the 11 defendant groups settled.

A seventh defendant group has now reached a settlement with the plaintiffs, effective on Aug. 20. The CMS defendants agreed to a $15 million settlement. Of that about $10 million is to be disbursed to class members, according to the court order issued after the settlement approval hearing on Aug. 7.

All 1,250 class members have received notice of the settlement, and the class administrator received no opt-outs or objections. Class members will need to complete claim forms to receive payments pro rata on the amount or estimates of amounts of natural gas purchased between Jan. 1, 2000, and Oct. 31, 2002. If all class members complete claims, the average payment will be $8,000 each.

The seven named plaintiffs also requested $75,000 in incentive awards, a figure the judge’s order said was high in light of the average award, but justified given the time the plaintiffs had spent on the case.

The order said class counsel had sought a total award of fees and costs of 35% of the settlement fund, which equates to $5.2 million in attorney fees and $124,129 in expenses. Accounting for fee awards from the other settlements, this will bring plaintiffs’ counsel to about 58% of their lodestar.

“(T)he percentage seems reasonable in light of the long history of this case, uncertainty of antitrust claims, both as to liability and damages, and the tremendous amount of work class counsel has completed to date (estimated to be about 55,000 hours on these cases to date),” the order said.

The order awarding attorneys’ fees and reimbursement of expenses and authorizing class-representative incentive awards was entered on Aug. 20. The final judgment of dismissal with prejudice as to Cantera Gas Company, Cantera Resources Management Company, CMS Energy Corporation and CMS Energy Resource Management Company was entered the same day.

The trial for the remaining defendants is set for June 2021.

Type of action: Settlement

Amount: $15 million

Date of resolution: Aug. 20, 2020

Case name: Arandell Corporation et al. v. Xcel Energy Inc. et al.; NewPage Wisconsin System Inc. v. CMS Energy Resource Management Company et al

Case number: 3:09-cv-00240-wmc

Case type: 15:717 Natural Gas Act

Court: Western District of Wisconsin

Presiding official: District Judge William M. Conley

Plaintiff’s lawyers: Robert L. Gegios, Kohner, Mann & Kailas; Andrew Ennis, Polsinelli PC; Autumn Nero, Perkins Coie; Brian H. Potts, Perkins Coie; Charles Grant Curtis Jr., Perkins Coie; Christopher G. Hanewicz, Perkins Coie; David J. Gold, Perkins Coie; John S. Skilton, Perkins Coie; Lance Duroni, Kohner Mann & Kailas; Melinda Anne Bialzik, Kohner, Mann & Kailas; Russell S. Jones Jr., Polsinelli PC; Ryan Matthew Billings, Kohner Mann & Kailas; Sopen Bharat Shah, Perkins Coie

Defendant’s lawyers: Sean A. Commons, Theodore Robert Scarborough Jr. and Sherry A. Knutson of Sidley Austin in Los Angeles and Chicago

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