Arkin v. Smith Medical Partners, LLC et al

Filing 100

ORDERED: Arkin and the Wanca firm fail to demonstrate that the firm's work conferred a substantial benefit to the class members to entitle the Wanca firm to recover non-class counsel attorney's fees. Plaintiff Arkin's Motion for Attorney's Fees in the Event the Pressman Settlement Gains Final Approval 82 is DENIED. Signed by Judge Charlene Edwards Honeywell on 4/1/2021. (JDE)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
STEVEN ARKIN,
Plaintiff,
v.

Case No: 8:19-cv-1723-CEH-AEP
consolidated with
Case No. 8:19-cv-2410-CEH-TGW

SMITH MEDICAL PARTNERS, LLC,
H.D. SMITH, LLC and JOHN DOES
1-5,
Defendants.
___________________________________/

OPINION AND ORDER
I.

INTRODUCTION
These consolidated cases arise out of claims asserted against Defendants for

alleged violations of the Telephone Consumer Protection Act, 47 U.S.C. §
227(b)(1)(C) (“TCPA”), due to unsolicited advertisements sent via facsmile. Plaintiff
Steven Arkin initiated one of the suits, which was ultimately consolidated with the
TCPA class action claims brought by Plaintiff Pressman, Inc. (“Pressman”). Before
the Court is Arkin’s “Motion for Attorney Fees in the Event the Pressman Settlement
Gains Final Approval” (Doc. 82), wherein he seeks attorney’s fees for the work
performed by the law firm representing him as non-class counsel. Pressman opposes
the motion (Doc. 85). In the motion, Arkin contends that to the extent the Court grants
approval of the Pressman class action settlement, the Court should award Arkin’s

counsel a portion of the attorney’s fees recovered based on the 1,660 claims initially
filed by Arkin’s counsel against Defendants. Pressman and its counsel argue the
motion should be denied because Arkin’s counsel failed to provide any benefit to the
class members. The parties presented oral argument on the motion at the final fairness
hearing conducted December 10, 2020. Following the hearing, the Court entered a
Final Approval Order approving a $4,500,000 settlement fund and an attorney fee
award to Pressman’s counsel of $1,250,000.1 Doc. 97. The Order indicated that no
portion of the attorney’s fees shall be payable to non-class counsel, Anderson + Wanca
(the firm representing Arkin), and that a separate order will issue denying Plaintiff
Arkin’s motion for attorney’s fees. Id. at 7.
Upon due consideration of Arkin’s motion (Doc. 82), the declarations,
arguments of counsel, the parties’ submissions, and the applicable law, and being fully
advised in the premises, the Court issues the following Findings of Fact and
Conclusions of Law pursuant to Federal Rule of Civil Procedure 52(a).
II.

FINDINGS OF FACT
1.

Plaintiff Dr. Steve Arkin sued Defendants, Smith Medical Partners, LLC

and H.D. Smith, LLC (collectively “Defendants”), in September 2017, alleging

The Final Approval Order grants a fee award of $1,250,000. Doc. 97 at 7. This amount
should be $1,125,000, which equals 25% of the $4,500,000 common fund. The Court has been
advised by the Bock Hatch firm that, in light of Arkin’s appeal and this Court no longer having
jurisdiction, it will be filing a motion requesting the Eleventh Circuit to relinquish jurisdiction
to this Court to allow the Court to consider Bock Hatch’s Rule 60(a) motion, which will be
forthcoming.
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violations of the TCPA arising out of facsimiles sent by “Smith Medical Partners” to
the putative class. Doc. 82 at 2; see Doc. 1, Arkin v. Smith Medical Partners, LLC, et al.,
No. 8:17-cv-2233-CEH-AEP (M.D. Fla.) (“Arkin I”).
2.

The Arkin I class action complaint was filed in this Court by the Anderson

+ Wanca law firm (“Wanca firm” or “Arkin’s Counsel”). See Doc 1 in Arkin I.
3.

A potential settlement of Arkin I was reached in August 2018, wherein a

fund of $21 million was to be made available for payment of attorney’s fees and
expenses and claims of the putative class members. Doc. 82-1, ¶¶ 2, 19; Doc. 82 at 3.
4.

According to attorney Ross Good, the Wanca firm expended 671.95

hours litigating Arkin I. Doc. 82-1, ¶ 10; Doc. 82 at 3.
5.

Pursuant to agreement of the parties, Arkin I was dismissed, and the

action was re-filed in state court in Illinois for purposes of settlement approval. 2 Doc.
61 at 5; Doc. 61-17; see Arkin v. Smith Medical Partners, LLC, et al., No. 18 CH 894 (Ill.
Cir. Ct., Lake Cty.) (“Arkin II”).
6.

The Arkin II court preliminarily approved the settlement on January 25,

2019. Doc. 61-21.
7.

In response to the notice of settlement sent to the putative class, 1,660

class members filed claims, which was the equivalent of $493 per class member. Doc.
82 at 3.

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Defendants are located in Illinois. Doc. 82 at 3.
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8.

The settlement included an award of $7 million in attorney’s fees to the

Wanca firm based on one-third of the common fund created by the proposed
settlement. Doc. 58-6 at 27; Doc. 61-20 at 2. In its supplemental briefing attempting
to justify its fees to the Illinois court, the Wanca firm cited over 30 Illinois TCPA cases
which granted attorney fee awards representing one-third of the common fund.3 Doc.
55-5 at 3–5.
9.

An objection to the proposed settlement of Arkin II was filed by

Pressman, Inc., represented by the Bock Hatch Lewis & Oppenheim law firm (“Bock
Hatch”). Doc. 60-1.
10.

Arkin’s counsel conceded that the negotiated settlement permitted

Defendants to cancel the settlement at any time up to the final approval hearing. Doc.
95 at 18; see Doc. 58-6 at 22.
11.

The Arkin II settlement ultimately failed, with Defendants exercising

their right to terminate the settlement agreement. Defendants filed a notice of
termination of settlement in the Illinois action. Doc. 58-12; Doc. 61-24.
12.

After the settlement was canceled, the Arkin II class was decertified. Doc.

13.

Pursuant to the parties’ agreement, if the settlement failed, the parties

58-13.

were returned to their respective positions as if the agreement had not been entered

In contrast, courts in the Eleventh Circuit routinely award class counsel attorney’s fees
representing 25% of the common fund. See Camden I Condo. Ass’n, Inc. v. Dunkle, 946 F.2d 768,
775 (11th Cir. 1991) (noting 25% as the benchmark percentage fee award which may be
adjusted in accordance with the individual circumstances of each case) and its progeny.
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into. Doc. 58-6 at 22–23. Following the termination of the settlement, Arkin re-filed
his case in the Middle District of Florida (the instant action) (“Arkin III”). Doc. 1.
14.

Separately, Plaintiffs Sawyer and Pressman filed a putative class action

in the United States District Court for the Northern District of Illinois against Smith
Medical, which ultimately was transferred to this Court and consolidated with Arkin
III. See Docs. 1, 60 in Sawyer v. Smith Medical Partners, LLC, No. 8:19-cv-2410-CEHTGW (M.D. Fla.). The consolidated actions are now before the Court.
15.

Beginning in July 2019, Defendants agreed to produce documents to

Pressman for purposes of negotiation and possible settlement. Doc. 85 at 7; Doc. 851. The Parties engaged in settlement discussions until August, at which time an
impasse was declared. Doc. 85 at 8. In December 2019, after Pressman reviewed
voluminous electronic files produced by Defendants, the parties resumed negotiations
and reached a settlement. Doc. 85-1 ¶¶ 9–18.
16.

The Bock Hatch firm independently reviewed a folder entitled “Fax

Logs, Reports and JSR Emails; a folder labeled “Images,” a folder labeled “Invoices,”
a folder entitled “List,” nine bates-labeled PDF documents totaling 2,238 pages, and
a summary prepared by Defendants’ counsel. Id.; see also Doc. 85 at 8–10. Bock Hatch
did not have access to the Wanca firm’s work product. Id. at 10.
17.

The settlement, which was approved by this Court, provides for a $4.5

million non-reversionary settlement fund, at least $3.25 million of which is to be paid
to the claiming class members, which resulted in each member recovering
approximately $1,100. Doc. 58 at 12; Doc. 95 at 20. Of the total settlement fund, class
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counsel (Bock Hatch) sought and recovered 25% of the settlement fund, for a total fee
of $1,125,000, the correct amount of the fee award. Doc. 58 at 14; Doc. 97 at 7.
18.

Arkin files the instant motion for attorney’s fees on behalf of the Wanca

firm, which seeks recovery of a portion of the $1,125,000 attorney fee award for the
fees attributable to the recovery of the 1,660 class members whose claims were
previously a part of the failed Arkin II settlement. Doc. 82.
III.

CONCLUSIONS OF LAW
The Eleventh Circuit has explained:
One of the recognized exceptions to the American Rule is
the “common fund” case. The common fund exception
“rests on the perception that persons who obtain the benefit
of a lawsuit without contributing to its cost are unjustly
enriched at the successful litigant’s expense.” Boeing Co. v.
Van Gemert, 444 U.S. 472, 478, 100 S.Ct. 745, 749, 62
L.Ed.2d 676 (1980). Attorneys in a class action in which a
common fund is created are entitled to compensation for
their services from the common fund, but the amount is
subject to court approval. Fed. R. Civ. P. 23(e).

Camden I Condo. Ass’n, Inc. v. Dunkle, 946 F.2d 768, 771 (11th Cir. 1991). In Camden I,
the Court held that such fees awarded to class counsel from a common fund shall be
based upon a “reasonable percentage of the fund established for the benefit of the
class.” Id. at 770. Twenty-five percent has been described as the “benchmark”
attorneys’ fee award in such cases. Id. at 774-75.
Both parties acknowledge Federal Rule of Civil Procedure 23(h) provides, in
certain circumstances, for non-class counsel to recover attorney’s fees in class action

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cases. See Doc. 82 at 7; Doc. 85 at 11. The Advisory Committee Notes to Rule 23(h)
support the same conclusion:
[Rule 23(h)] provides a format for all awards of attorney fees
and nontaxable costs in connection with a class action, not
only the award to class counsel. In some situations, there
may be a basis for making an award to other counsel whose
work produced a beneficial result for the class, such as
attorneys who acted for the class before certification but
were not appointed class counsel, or attorneys who
represented objectors to a proposed settlement under Rule
23(e) or to the fee motion of class counsel. Other situations
in which fee awards are authorized by law or by agreement
of the parties may exist.
Fed. R. Civ. P. 23(h), Advisory Committee Notes to the 2003 Amendments.
In determining whether non-class counsel are entitled to fees, the Court is
persuaded by the Third Circuit’s opinion in In re Cendant Corporation Securities
Litigation, 404 F.3d 173, 197 (3d Cir. 2005). There, the court held that non-designated
counsel “who confer an independent benefit upon the class will merit compensation.”
Id. at 197 (emphasis added). “Only work that actually confers a benefit on the class
will be compensable; in the ordinary case, simply filing a complaint that is substantially
identical to other complaints will not by itself warrant compensation.” Id. The Second
Circuit similarly held that “when a substantial benefit has been conferred on the class,
non-lead counsel are entitled to reasonable compensation.” Victor v. Argent Classic
Convertible Arbitrage Fund L.P., 623 F.3d 82, 87 (2d Cir. 2010) (emphasis added).
Here, the Wanca firm claims that it conferred a benefit on the class for which it
should be compensated. Specifically, Wanca argues the Pressman settlement was built
on the foundation laid by it. The Wanca firm points to the fact that it initially filed the
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first TCPA lawsuit against Defendants. But merely being the first to file the complaint
is generally not enough. See In re Cendant Corp. Sec. Litig., 404 F.3d at 197. Next,
Wanca contends it litigated Arkin I for nearly a year. While that may be the case, when
Wanca achieved what it believed to be a settlement, it dismissed Arkin I and refiled in
Illinois. It is unclear to the Court whether the reason for dismissing and refiling in
Illinois was because that is the state in which Defendants’ principal place of business
is located or because the case law in that state appears to be more favorable to class
counsel seeking higher fee awards. Regardless of the reason, the dismissal and re-filing
does not appear to have been a decision made in the interest or for the benefit of the
class members. When the settlement failed, the Wanca firm re-filed the action, at the
potential loss of some claims due to the expiration of the statute of limitations,4 in the
Florida federal court.
Next, the Wanca firm claims that its efforts during the discovery process
resulted in the production of voluminous documents by Defendants, which counsel
spent significant time reviewing and analyzing. Arkin and the Wanca firm rely on the
Tenth Circuit’s opinion in Gottlieb v Barry, 43 F.3d 474, 489 (10th Cir. 1994), to argue
Wanca’s entitlement to a percentage of the fees recovered. However, in Gottlieb, class
counsel specifically acknowledged the benefit to the class conferred by certain non-

The Court makes no finding regarding whether certain claims were barred by the statute of
limitations, but notes Bock Hatch’s reference to analyzing broadcasts by date to determine
which and how many transmissions were potentially affected by the statute of limitations
following the Wanca firm’s dismissals and re-filings. According to Bock Hatch counsel, the
maneuvering potentially impaired 75% of the faxes at issue. Doc. 85-1 ¶ 18.
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class counsel’s work. Id. Here, Bock Hatch did not rely on Wanca’s work product to
obtain the documents from Defendants, to pursue the class members’ claims, or to
negotiate the settlement. As explained by Bock Hatch counsel, they independently
reviewed 81 “detail reports,” 1,975 “exception reports,” and 2,146 “summary reports.”
Doc. 85 at 9. Bock Hatch counsel reviewed 3,088 PDFs of monthly WestFax invoices
to Defendants. Id. Counsel reviewed 2,287 target lists, four annual insurance policies,
document retention policy documents, and an internal memorandum to employees
regarding rules for fax broadcasts. Id. Further, counsel reviewed broadcasts of
advertisements, summaries, and exception reports. Id. at 10. Thus, notwithstanding
the Wanca firm’s nearly 700 hours litigating Arkin I, the Wanca firm fails to direct the
Court to any efforts by the firm that created a substantial, independent benefit to the
class.
Additionally, the Wanca firm contends it participated in extensive settlement
negotiations with Defendants and ultimately reached a settlement for 1,660 class
members. However, the settlement agreement permitted Defendants to back out of the
settlement at any time up until the final approval hearing. Additionally, the proposed
recovery by all class members totaled less than one million dollars, whereas counsel
was poised to recover $7,000,000.
The Court notes, despite the Wanca firm’s representations as to the amount of
work the firm performed, the settlement failed because Defendants were able to and
did cancel it. Critically, the settlement agreement that the Wanca firm negotiated with
Defendants allowed for a right of cancellation for any reason, including if there were
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too many claims. The Court fails to see how such agreement provided a substantial
benefit to the class members.
In contrast, the settlement reached by class counsel, Bock Hatch, recovered for
each class member approximately $1,100 each, over double the amount the Wanca
firm’s failed settlement would have provided. Arkin fails to demonstrate how his
counsel’s work substantially benefited the class. As such, the motion to recover fees as
non-class counsel fails.
IV.

CONCLUSION
For the reasons stated above, it is hereby ORDERED:
1.

Arkin and the Wanca firm fail to demonstrate that the firm’s work

conferred a substantial benefit to the class members to entitle the Wanca firm to
recover non-class counsel attorney’s fees. Plaintiff Arkin’s Motion for Attorney’s Fees
in the Event the Pressman Settlement Gains Final Approval (Doc. 82) is DENIED.
DONE AND ORDERED in Tampa, Florida on April 1, 2021.

Copies to:
Counsel of Record and Unrepresented Parties, if any

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