I should have posted on the Ninth Circuit's decision in Rodriguez v. Disner when it came down last week. The decision involved the federal antitrust class action in which the plaintiffs alleged that BAR/BRI (a subsidiary of West Publishing) conspired with others to monopolize the market for certain bar-review courses. The case settled a while back, and an earlier appeal regarding the settlement's fairness is now final. (Disclosure: I was one of the counsel for objectors in the initial appeal. The particular arguments that my clients raised in that appeal were rejected by the Ninth Circuit, which affirmed approval of the settlement.)
In the earlier appeal, the Ninth Circuit had affirmed a holding of the district court that the large "incentive" payments offered by some of the plaintiffs' lawyers to some of the named plaintiffs -- payments that would incease as the total class recovery increased, but would top off at a certain amount -- created a conflict of interest between the class lawyers (who had a duty to seek the best deal for the class) and the named representatives. See 563 F.3d 948 (9th Cir. 2009). The Ninth Circuit remanded to determine what effect the conflict finding should have on the fee award to the conflicted lawyers.
On remand, the district court denied all fees to the conflicted lawyers. The district court also denied any fees to the objectors' lawyers who had brought the conflict to the district court's attention and had argued the point to the Ninth Circuit the first time around.
In the second appellate decision issued last Friday, the Ninth Circuit affirmed the denial of fees to the conflicted plaintiffs' counsel, calling the conflict "egregious," and holding that the district court acted within its discretion. The Ninth Circuit reversed, however, regarding fees for objectors' counsel. It noted that when an objector's counsel's work improves a class settlement and the class members benefit -- as is the case when forfeited fees go back to the class -- the objector's counsel should get a fee. On the other hand, the Ninth Circuit affirmed the denial of fees to other objectors' counsel whose objections, the court concluded, were unsuccessful and, therefore, did not benefit the class.