Lemus v. H&R Block Tax and Business Services, Inc. et al

Filing 166

ORDER GRANTING PLAINTIFFS' ADMINISTRATIVE MOTION AND GRANTING PLAINTIFFS' MOTION FOR RECONSIDERATION; MODIFYING ORDER GRANTING FINAL APPROVAL OF CLASS ACTION SETTLEMENT AND AWARDING ATTORNEYS' FEES AND INCENTIVE AWARDS 165 (Illston, Susan) (Filed on 9/10/2012)

1
2
3
4
5

IN THE UNITED STATES DISTRICT COURT

6

FOR THE NORTHERN DISTRICT OF CALIFORNIA

7
8
9

ARABELLA LEMUS, individually and on
behalf of all others similarly situated,
Plaintiff,

United States District Court
For the Northern District of California

10
11
12
13

No. C 09-3179 SI

v.
H&R BLOCK ENTERPRISES LLC., a Missouri
corporation,
Defendant.

/

ORDER GRANTING PLAINTIFFS’
ADMINISTRATIVE MOTION AND
GRANTING PLAINTIFFS’ MOTION
FOR RECONSIDERATION;
MODIFYING ORDER GRANTING
FINAL APPROVAL OF CLASS ACTION
SETTLEMENT AND AWARDING
ATTORNEYS’ FEES AND INCENTIVE
AWARDS

14
15

Plaintiffs have filed an administrative motion seeking leave to file a motion for reconsideration

16

of this Court’s Order Granting Final Approval of Class Action Settlement and Awarding Attorneys’

17

Fees and Incentive Awards. Plaintiffs contend that the Court erred by not awarding a risk multiplier

18

when granting fees to plaintiffs’ counsel.

19

“Under Ninth Circuit law, the district court has discretion in common fund cases to choose either

20

the percentage-of-the-fund or the lodestar method.” Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1047

21

(9th Cir. 2002) (citing In re Wash. Pub. Power Supply Sys. Sec. Litig., 19 F.3d 1291, 1295-96 (9th Cir.

22

1994)). “Courts may compare the two methods of calculating attorney’s fees in determining whether

23

fees are reasonable.” Fischel v. Equitable Life Assur. Society of the United States, 307 F.3d 997, 1007

24

(9th Cir. 2002). “A district court generally has discretion to apply a multiplier to the attorney’s fees

25

calculation to compensate for the risk of nonpayment.” Id. at 1008. “It is an abuse of discretion to fail

26

to apply a risk multiplier, however, when (1) attorneys take a case with the expectation that they will

27

receive a risk enhancement if they prevail, (2) their hourly rate does not reflect that risk, and (3) there

28

is evidence that the case was risky.” Id.

1

The Court originally awarded plaintiffs’ counsel their lodestar of $3,983,134, which represented

2

approximately 20% of the total amount paid by defendant to fund the settlement. The Court did not

3

apply a risk multiplier. Upon further review, the Court finds that plaintiffs’ counsel have demonstrated

4

that they are entitled to a risk multiplier because counsel have submitted declarations showing that this

5

case was risky, that the lawyers’ hourly rates do not reflect that risk, and that counsel took this case with

6

the expectation that they would receive a risk enhancement if they prevailed. The Court finds it

7

appropriate to award a risk multiplier of 1.3, resulting in a fee award of $5,178,074.20, which is

8

approximately 25% of the total amount paid by defendant to fund the settlement.1 See Vizcaino, 290

9

F.3d at 1047 (stating that in common fund cases the “benchmark” award is 25%).

United States District Court
For the Northern District of California

10

This order resolves Docket No. 165.

11
12

IT IS SO ORDERED.

13
14

Dated: September 10, 2012
SUSAN ILLSTON
United States District Judge

15
16
17
18
19
20
21
22
23
24
25
26
1

27
28

By awarding fees of $5,178,074.20, the Net Settlement Amount is $29,399,862.30, with
50.42%, or approximately $14,823,410.57, distributed to the class. Based upon these figures, defendant
pays a total of approximately $20,423,548.27, and the fee award is approximately 25% of the total
amount paid by defendant to fund the settlement.
2