A U.S. appeals court on Monday threw out a legal fee award of $78 million for plaintiffs’ lawyers in a $350 million class action settlement with T-Mobile, calling the amount a “windfall” for the effort the attorneys put into the case.
The St. Louis-based 8th U.S. Circuit Court of Appeals ruled 3-0 that the awarded amount was excessive based on the hours of legal work expended by the lawyers behind the consumer privacy case, which T-Mobile agreed to settle in 2022.
“If we permitted the fee award here to stand, it would mean that counsel could make $7,000 to $9,500 an hour, which we think no reasonable class member would willingly pay to an attorney to help resolve this claim,” Circuit Judge Morris Arnold wrote in the ruling, joined by Chief Circuit Judge Steven Colloton and Circuit Judge Raymond Gruender.
T-Mobile and lawyers for two class members who objected to the attorney fees did not immediately respond to requests for comment on Monday.
One of the class attorneys, Brad Wilders, in a statement said they “look forward to getting the relief in the hands of class members as soon as possible on remand.”
The appeals court said the plaintiffs’ lawyers for a matter of months had “represented the class well, and they obtained a significant result.”
But, the panel said, “the case had barely gotten off the ground before it settled, and counsel hadn't yet invested the time and effort to yield a return like the one the court awarded.”
The panel said reducing the fee amount by half — to about $39 million — would not harm the class attorneys because the hourly rate would amount to $3,500 to $4,750.
The court declined to rule that a judge must always award a lowered percentage in “megafund” cases where the settlement is above $100 million.
It said determining fees in such a case is a "wide-ranging inquiry that seeks to account for a variety of case-specific circumstances."
The cases are Daruwalla v. Hampe and Daruwalla v. Pentz, 8th U.S. Circuit Court of Appeals, Nos. 23-2744 and 23-2798.
For objectors: Robert Clore of Bandas Law Firm; and John Pentz
For class: Norman Siegel and Bradley Wilders of Stueve Siegel Hanson; James Pizzirusso of Hausfeld; and Cari Campen Laufenberg of Keller Rohrback
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