Two private law firms that helped Texas ink a $1.4 billion biometric privacy settlement with Facebook parent Meta Platforms (META.O) this week could wind up with more than $300 million in combined legal fees for their work on the case, according to contracts they signed with the state.
The Texas attorney general's office hired Chicago-founded Keller Postman and Dallas-founded McKool Smith to sue Meta in 2022, agreeing to two paths for their eventual payment. One option grants each firm 11% of the recovery, which works out to about $154 million apiece from the settlement. The other provides for them be paid by the hour, with individual lawyer rates ranging up to $945 per hour, but with the total multiplied by four.
The firms will receive whatever option produces the smaller sum, according to the contracts, so they could not collect more than the 11% contingency fee. They have not disclosed their hours.
Reuters obtained the contracts through a records request.
Keller Postman and McKool Smith must submit a final written statement detailing their fees and expenses within 60 days of the Meta settlement being "fully executed."
Zina Bash, a Keller Postman partner and former senior counsel to Texas' Republican Attorney General Ken Paxton who was lead counsel in the Meta case, said in an email that her firm faced "an aggressive defendant with limitless resources and an appetite for challenging every conceivable aspect of our case."
"Our team spent countless hours and advanced millions of dollars to help bring this momentous settlement to fruition," she said.
Asked about its fee share, McKool Smith in a statement said it was proud of its work "to secure this historic result."
A spokesperson for the Texas attorney general did not immediately respond to a request for comment on the legal fees.
Texas sued Facebook in 2022, accusing the social media platform of capturing biometric information "billions of times" from photos and videos that users uploaded to the social media platform as part of a free, discontinued feature called "Tag Suggestions."
It was the first lawsuit the state had brought under its 2009 biometric privacy law, according to law firms that tracked the litigation. The law provides for damages of up to $25,000 per violation.
Meta denied any wrongdoing. A spokesperson for the social media platform said Tuesday it was pleased to resolve the matter and looks forward to "exploring future opportunities to deepen our business investments in Texas, including potentially developing data centers."
A Meta spokesperson did not immediately respond to a request for comment on the law firms' fees. The company was represented by law firms Gibson, Dunn & Crutcher and Mayer Brown.
Texas is separately waging a lawsuit against Alphabet’s GOOGL.O Google that accuses the company of violating the state’s biometric law. Google has denied wrongdoing. The state is represented by a team of attorneys from Norton Rose Fulbright in that case.
The Texas attorney general has active outside counsel contracts with at least 10 other law firms, according to its website.
It has become relatively common for attorneys general to contract with private law firms, especially in technically complex lawsuits like privacy and cybersecurity cases, said Ashley Taylor, a partner and co-leader of Troutman Pepper's state attorneys general practice.
"It’s a very consistent trend line over a 20-year period," Taylor said.
-- In other legal fee news, the 8th U.S. Circuit Court of Appeals on Monday rejected a $78 million legal fee award for plaintiffs' lawyers in a $350 million class action settlement with T-Mobile.
The fee award amounted to a "windfall" for the three class firms -- Stueve Siegel Hanson, Hausfeld and Keller Rohrback -- the panel found.
The award would have provided $7,000 to $9,500 an hour for the lawyers' time, "which we think no reasonable class member would willingly pay to an attorney to help resolve this claim," the panel said.
-- U.S. law firms Hagens Berman Sobol Shapiro and Winston & Strawn could earn more than $515 million in fees from a $2.7 billion deal with the National Collegiate Athletic Association over rules against paying student athletes.
Hagens Berman and Winston & Strawn could also apply for more fees in the future, based on a percentage of the pool of money that schools anticipate using to pay athletes. Those additional fees could be worth tens of millions of dollars.
(Legal Fee Tracker is a weekly feature exploring attorney compensation awards and disputes in class actions, bankruptcies and other matters. Please send tips or suggestions to [email protected])
Read More:
Legal Fee Tracker: Quinn Emanuel fights to keep $185 million award in Obamacare case
Legal Fee Tracker: Lawyers want $122.5 million in Apple securities case
Legal Fee Tracker: Billions on the line in fee fight over Musk pay
