Brian Lyngaas, D.D.S. v. Curaden AG et al
Filing
183
OPINION AND ORDER Granting In Part Plaintiff's Motion for Litigation Expenses, Attorney Fees, and Name Plaintiff Incentive Award (Dkt. 174 ). Signed by District Judge Mark A. Goldsmith. (KSan)
Case 2:17-cv-10910-MAG-MKM ECF No. 183, PageID.25959 Filed 08/31/22 Page 1 of 13
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
BRIAN LYNGAAS, D.D.S.,
individually and as the representative
of a class of similarly situated persons,
Plaintiff,
Case No. 17-cv-10910
v.
HON. MARK A. GOLDSMITH
CURADEN AG, et al.,
Defendants.
___________________________________/
OPINION & ORDER
GRANTING IN PART PLAINTIFF’S MOTION FOR LITIGATION EXPENSES,
ATTORNEY FEES, AND NAMED PLAINTIFF INCENTIVE AWARD (Dkt. 174)
This Court entered judgment in favor of Plaintiff Brian Lyngaas, D.D.S.—who brought
this action both individually and as the representative of a class of similarly situated persons—
against Defendant Curaden USA, Inc. (Dkt. 146). Lyngaas now moves for litigation expenses,
attorney fees, and a named plaintiff incentive award out of the total recovery of $907,500 (Dkt.
174). For the reasons that follow, the Court grants Lyngaas’s motion in part, modifying his
requested relief to award (i) $96,490.78 in litigation expenses; (ii) $3,000 to Lyngaas in his role as
class representative, to be paid from the total amount recovered; and (iii) $202,002.31 in attorney
fees, equal to 25% of the total recovery after the subtraction of attorney fees and the class
representative award.1
1
Because oral argument will not aid the Court’s decisional process, the motion will be decided
based on the briefing. See E.D. Mich. LR 7.1(f)(2); Fed. R. Civ. P. 78(b). Lyngaas’s unopposed
motion includes a memorandum in support of his motion. After reviewing Lyngaas’s motion, the
Court ordered Lyngaas to file a supplemental memorandum and an affidavit or declaration in
support of certain of his claims, see 6/3/22 Order (Dkt. 175), which Lyngaas did on June 13, 2022
(Dkts. 176, 176-1).
1
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I. BACKGROUND
Lyngaas brought this class action based on unsolicited faxes advertising dental products
that Curaden and its parent, Curaden AG, allegedly sent to dental offices in violation of the
Telephone Consumer Protection Act, 47 U.S.C. § 227 (TCPA) (Dkt. 1). Following a bench trial,
the Court found that Curaden (but not its parent) was liable for violating the TCPA and ordered
that a claims administration process be established so that an award amount could be fixed and
distributed to eligible class members.
11/21/19 Order at 35–39 (Dkt. 129).
The Court
subsequently entered a final judgment in favor of the class against Curaden in an amount to be
determined through the claims administration process. See Final Judgment at 1–3.2 The United
States Court of Appeals for the Sixth Circuit affirmed this judgment. Lyngaas v. Ag, 992 F.3d
412, 438 (6th Cir. 2021).
Lyngaas filed a declaration from the administrator of the claims process stating that 919
class members had claimed receipt of 1,815 total violative fax transmissions. See Decl. of Dorothy
Sue Merryman ¶ 17 (Dkt. 159). Because Curaden was liable for $500 per violative transmission
under the TCPA, the Court found that Curaden was liable to the class for a total of $907,500. See
12/21/21 Op. & Order at 7 (Dkt. 173) (citing 47 U.S.C. § 227(b)(3)(B)).
The Court also allowed Lyngaas to file a renewed motion for attorney fees, an incentive
award, and/or litigation costs. Id. at 8. The motion presently before the Court followed.
2
The judgment also allowed Lyngaas to file any motion seeking an award of attorney fees and
costs to class counsel. Id. at 3. Lyngaas filed a motion for litigation expenses, attorney fees, and
an incentive award (Dkt. 147). The Court issued an order finding that class counsel was entitled
to a fee payment, but that “due to the uncertain nature of the case’s result, it would be premature
to determine how that payment will be calculated.” 9/3/20 Op. & Order at 4 (Dkt. 157).
2
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II. ANALYSIS
Lyngaas requests that the Court (i) award class counsel $96,490.78 in litigation expenses;
(ii) award class counsel one-third of the total recovery of $907,500—that is, $302,500; and (iii)
authorize class counsel to pay an incentive award of $15,000 to Lyngaas for serving as the class
representative, taken from monies that would otherwise be attorney fees. Pl. Mem. in Supp. Mot.
at 15. The Court addresses each request in turn.
I.
Litigation Expenses
“In common fund type cases, as here, generally class counsel is entitled to reimbursement
of all reasonable out-of-pocket litigation expenses and costs.” Allan v. Realcomp II, Ltd., No. 10cv-14046, 2014 WL 12656718, at *2 (E.D. Mich. Sept. 4, 2014) (punctuation modified, citations
omitted). Lyngaas supports his request with an itemization of all litigation expenses, which
include service and filing fees, travel costs, court reporter expenses, legal research charges, expert
witness compensation, and costs associated with the claims administration process. See Expense
Itemization (Dkt. 174-1). Lyngaas provides further documentation supporting the claims
administration costs (Dkts. 174-2–174-5).3
3
The Court ordered Lyngaas to provide further explanation and a declaration or affidavit in support
of two asserted claims administration costs: (i) a July 24, 2019 Class-Settlement.com invoice for
$9,932 (Dkt. 174-2), also identified as a “Class Notice” charge in Lyngaas’s itemization of his
expenses, see Expense Itemization at PageID.25866; and (ii) a February 14, 2020 ClassSettlement.com quote that includes $11,580 for “Settlement Distribution” (Dkt. 174-4), also
identified as a charge “[t]o be paid to Class-Settlement.com if money is recovered and distributed,”
see Expense Itemization at PageID.25866. See 6/3/22 Order at 1.
Lyngaas’s supplemental memorandum explains that the $9,932 charge relates to sending “the
notice of pendency in the class action” and includes the costs of (i) faxing 30,074 notices and (ii)
printing and mailing 4,752 postcards. 6/13/22 Pl. Suppl. Mem. at 2; 6/13/22 Merryman Dec. ¶ 5
(Dkt. 176-1). The $11,580 charge relates to work not yet performed by the administrator in
connection with the processing and mailing of payments to the class member claimants once
money is recovered, and it thus represents an estimate of future costs. 6/13/22 Pl. Suppl. Mem. at
2; 6/13/22 Merryman Dec. ¶ 6. Courts may award expected future expenses, setting that amount
3
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Lyngaas has adequately demonstrated that these “expenses were reasonable and necessary
to the representation of the Class,” In re Prandin Direct Purchaser Antitrust Litig., No. 2:10-cv12141-AC-DAS, 2015 WL 1396473, at *5 (E.D. Mich. Jan. 20, 2015), and that they “reflect
reasonable and appropriate expenditures associated with preparing for trial,” Cason-Merenda v.
VHS of Michigan, Inc., No. 2:06-cv-15601, 2016 WL 944901, at *2 (E.D. Mich. Jan. 29, 2016).
Accordingly, the Court grants Lyngaas’s request for litigation expenses. If actual future expenses
are less than the expected future expenses proposed by Lyngaas, then the lower figure must be
used to calculate distributions to class members. If the actual figure for future expenses is higher,
the claims administrator will remain responsible for completing the claims process, and no
additional amount may be paid to it from the recovered funds. See Bobbitt, 2009 WL 3336085, at
*3.
II.
Attorney Fees
When granting an award of attorney fees, a district court is “entitled to ‘substantial
deference because the rationale for the award is predominantly fact-driven.’” Gascho v. Glob.
Fitness Holdings, LLC, 822 F.3d 269, 279 (6th Cir. 2016) (quoting Imwalle v. Reliance Med.
Prods., Inc., 515 F.3d 531, 551 (6th Cir.2008)). The Sixth Circuit “require[s] only that awards of
attorney’s fees be reasonable under the circumstances.” Moulton v. U.S. Steel Corp., 581 F.3d
344, 352 (6th Cir. 2009) (punctuation modified, citations omitted). “[A] reasonable award of
attorney fees is one that is adequate to attract competent counsel, but does not produce a windfall
as a ceiling in the event that actual expenses are higher than the expected future expense figure,
and providing for the use of the actual expense figure if it is lower than the expected future expense
figure. See, e.g., Bobbitt v. Acad. of Ct. Reporting, Inc., No. 07-10742, 2009 WL 3336085, at *3
(E.D. Mich. Oct. 15, 2009).
4
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to attorneys.” Michel v. WM Healthcare Sols., Inc., No. 1:10-cv-638, 2014 WL 497031, at *16
(S.D. Ohio Feb. 7, 2014) (citing Gonter v. Hunt Valve Co., Inc., 510 F.3d 610, 616 (6th Cir. 2007)).
A court awarding attorney fees in a class action may calculate that award through either (i)
the lodestar method, according to which the court “multiplies the number of hours reasonably
expended on the litigation by a reasonable hourly rate,” or (ii) the percentage-of-the-fund method,
according to which the court awards to class counsel an appropriate percentage of the monies won
by the class. Gascho, 822 F.3d at 279 (punctuation modified, citations omitted). “District courts
have the discretion to select the particular method of calculation, but must articulate the ‘reasons
for adopting a particular methodology and the factors considered in arriving at the fee.’” Id. at
280 (quoting Moulton, 581 F.3d at 352) (punctuation modified, other citations omitted). Courts
“[o]ften, but by no means invariably,” explain their rationale for granting attorney fees in class
actions by addressing six factors:
(1) the value of the benefit rendered to the plaintiff class; (2) the value of the services on
an hourly basis; (3) whether the services were undertaken on a contingent fee basis; (4)
society’s stake in rewarding attorneys who produce such benefits in order to maintain an
incentive to others; (5) the complexity of the litigation; and (6) the professional skill and
standing of counsel involved on both sides.
Moulton, 581 F.3d at 352 (punctuation modified, citations omitted).
Lyngaas proposes that the Court apply a percentage-of-the-fund approach. Pl. Mem. in
Supp. Mot. at 9–12. The Court agrees that the percentage-of-the-fund approach is appropriate.
“This method of awarding attorneys’ fees is preferred in this District because it conserves judicial
resources and aligns the interests of class counsel and the class members.” In re Auto. Parts
Antitrust Litig., No. 2:12-cv-00203, 2017 WL 3525415, at *2 (E.D. Mich. July 10, 2017); see also
Cason-Merenda, 2016 WL 944901, at *1–2 (noting that “the recent trend has been towards
application of the percentage of the fund method”). As courts have found in other TCPA class
5
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actions, the percentage-of-the-fund method here “most accurately reflects the results achieved in
[the] case.” Todd S. Elwert, Inc., DC v. All. Healthcare Servs., Inc., No. 3:15-cv-2673, 2018 WL
4539287, at *4 (N.D. Ohio Sept. 21, 2018) (noting that this approach “is the preferred method in
the Sixth Circuit for common fund cases”).
Lyngaas also proposes that the requested percentage be applied to the entire recovery
amount of $907,500—that is, that class counsel get its attorney fee cut before the deduction of
litigation costs. See Pl. Mem. in Supp. Mot. at 9, 15. Lyngaas does not make any argument or
cite any case law specifically in support of applying the percentage to the gross amount of the fund
in this fashion, rather than granting an attorney award based on the net amount remaining after the
removal of litigation costs. Although Lyngaas’s proposed approach is allowable, see, e.g., In re
Packaged Ice Antitrust Litig., No. 08-MDL-01952, 2011 WL 6209188, at *17 (E.D. Mich. Dec.
13, 2011), courts often apply the percentage-of-the-fund after the removal of litigation costs, as
evidenced by some of the case law cited by Lyngaas. See Pl. Mem. in Supp. Mot. at 10 (citing In
re Auto. Parts, 2017 WL 3525415, at *2). In this circumstance, the Court finds it appropriate to
apply the percentage-of-the-fund to the net amount of the fund remaining after class counsel takes
out litigation costs, which incentivizes attorneys to responsibly manage those costs.
Lyngaas asks that the Court award class counsel one third of the fund, asserting that “[c]lass
action attorney’s fees are typically one third of the funds made available to the class members.”
Pl. Mem. in Supp. Mot. at 12. Lyngaas is correct that class counsel awards often hover at or a bit
below 33%, though courts have found that the majority of awards are in the range of 20–30%.4
4
See, e.g., Garner Properties & Mgmt., LLC v. City of Inkster, No. 17-cv-13960, 2020 WL
4726938, at *10 (E.D. Mich. Aug. 14, 2020) (“‘The majority of common fund fee awards fall
between 20% and 30% of the fund.’”) (quoting Gooch v. Life Invs. Ins. Co. of Am., 672 F.3d 402,
426 (6th Cir. 2012)) (punctuation modified); Elwert, 2018 WL 4539287, at *5 (awarding one third
of fund in TCPA class action, noting: “one-third of the fund is an amount frequently awarded by
6
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And even though “[a]n award of 1/3 of a common fund is within the percentage range that courts
have awarded [to class counsel . . .] in the Sixth Circuit[, . . . ] it remains incumbent upon the Court
to evaluate the propriety of the fee award in this case based on the circumstances of this case, not
necessarily what has been appropriate in other cases.” Michel, 2014 WL 497031, at *14 (emphasis
in original) (awarding class counsel 15% of fund in TCPA suit instead of requested award of one
third of fund); see also Bowman v. Art Van Furniture, Inc., No. 17-11630, 2018 WL 6444514, at
*1 (E.D. Mich. Dec. 10, 2018) (rejecting class counsel’s request for an award of one third of fund
won in TCPA class action—equal to over $1.9 million—and instead granting an award of
approximately half that amount, noting: “case law supports a range of percentages as acceptable
awards in various circumstances”). The Court, therefore, considers the factors identified in
Moulton as applied to the particular context of this suit.
As to the first factor that courts weigh when considering a request for attorney fees, the
achieved benefit to the class under Lyngaas’s proposed approach is fair. Following the deduction
of litigation expenses and the proposed attorney fees, the remaining fund would hold $508,509.22.
Class members would thus receive $280.17 for each violation—a reasonably healthy outcome in
a TPCA suit. See Michel, 2014 WL 497031, at *18 (granting attorney award in TCPA class action
that resulted in approximately $245 paid to each class member). The Court notes, however, that
district courts in the Sixth Circuit”); Cason-Merenda, 2016 WL 944901, at *2 (noting that “roughly
29% of the overall common fund[] is well within the bounds of what courts have found
appropriate”); In re Packaged Ice, 2011 WL 6209188, at *19 (“[T]he requested award of close to
30% appears to be a fairly well-accepted ratio in cases of this type and generally in complex class
actions.”); In re Cardizem CD Antitrust Litig., 218 F.R.D. 508, 532 (E.D. Mich. 2003) (“The
requested 17% fee is well within the 20–30% range of reasonable attorneys’ fees generally
awarded in this Circuit.”) (citing Fournier v. PFS Invs., Inc., 997 F. Supp. 828, 832 (E.D. Mich.
1998)) (“The ‘benchmark’ percentage for this standard has been 25%, with the ordinary range for
attorney’s fees between 20–30%.”).
7
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judgment is just now being entered, and no amount has yet been collected.5 Additionally, recovery
would be more secure if class counsel had successfully established the liability of Curaden’s parent
company.
The second factor calls for a consideration of the value of the services rendered on an
hourly basis. Class counsel’s lodestar totals more than $1.9 million.6 Class counsel’s proposed
award of under $300,000 is thus a “discount,” which weighs in favor of granting their requested
award. Allan, 2014 WL 12656718, at *2.
The third factor concerns “whether the services were undertaken on a contingent fee basis.”
Upon the Court’s order, see 6/3/22 Order at 1, class counsel produced a copy of their agreement
providing for their representation of Lyngass, see Representation Agreement (Dkt. 179-2). This
agreement confirms that counsel’s claim to costs was contingent on obtaining a recovery, id. at 2,
which favors the grant of their requested award, see, e.g., Kogan v. AIMCO Fox Chase, L.P., 193
F.R.D. 496, 504 (E.D. Mich. 2000).
However, the Court observes that class counsel also made costs contingent on the
obtainment of a recovery, which violates codes of professional ethics requiring that “[c]osts and
5
After finding that Curaden was liable to the class for a total of $907,500, the Court directed that,
within 14 days, either (i) the parties submit a proposed order or judgment, if they could agree on
the form and language; or (ii) Lyngaas file a motion for entry, if the parties could not agree on the
form and language. See 12/21/21 Op. & Order at 7 (Dkt. 173). Not having received any proposed
order, proposed judgment, or motion for entry almost seven months after issuing this order, the
Court instructed Lyngaas to provide an explanation (Dkt. 181). Lyngaas then submitted a
proposed “final judgment order” and stated that the Court’s deadline was overlooked due to an
“oversight.” 7/19/22 Pl. Mem. at 2 (Dkt. 182).
6
Counsel for Lyngaas initially represented that its lodestar amount was “more than one million
dollars.” Pl. Mem. in Supp. Mot. at 12. The Court ordered Lyngaas to provide further explanation
of this lodestar value. See 6/3/22 Order at 1. Lyngaas submitted the total hours and rates of
fourteen attorneys and three paralegals who worked on this case, adding up to a collective lodestar
value of $1,969,024.50. 6/13/22 Pl. Suppl. Mem. at 3–4. Lyngaas submits that these hourly rates
are consistent with standard market rates based on experience level. Id. at 4–5.
8
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other expenses of litigation are costs to be borne by the client.” Stevenson v. HH & N/Turner, No.
01-71750, 2003 WL 22480156, at *2 (E.D. Mich. Oct. 22, 2003) (citing Mich. Rule Prof’l Conduct
1.8(e)(1)) (“A lawyer shall not provide financial assistance to a client in connection with pending
or contemplated litigation . . . .”).
This lapse in judgment reflects poorly on counsel’s
professionalism, which—as discussed below in relation to class counsel’s professional skill—
supports a reduction of class counsel’s fee.
As to the fourth factor—society’s stake in rewarding attorneys for producing such benefits
to incentivize others—it is true that “[t]here is value to society in enforcing the TCPA, which was
enacted . . . to protect consumers from the annoyance, irritation, and unwanted nuisance of
telemarketing phone calls, granting protection to consumers’ identifiable concrete interests in
preserving their rights to privacy and seclusion.”
Bowman, 2018 WL 6444514, at *3.
Nonetheless, the goal of properly incentivizing attorneys here favors granting an award “less than
the contingent fee requested by Plaintiff’s counsel.” Id. Notwithstanding society’s “significant
stake in rewarding attorneys who pursue [TCPA] actions,” an award is not reasonable if it provides
attorneys with a “windfall.” Michel, 2014 WL 497031, at *16. In light of the factors that follow,
a grant of Lyngaas’s requested award would more closely approximate a “windful” than a reward
for work well-done that properly incentivizes other attorneys to emulate class counsel’s approach.
See Bowman, 2018 WL 6444514, at *3; Michel, 2014 WL 497031, at *16.
The last two factors—the complexity of the litigation and the professional skill and
standing of counsel—counsel the Court to decrease class counsel’s proposed award. Like the
TCPA case where the Bowman court reduced class counsel’s attorney fees award, “this case was
not particularly complex, nor protracted . . . .” Bowman, 2018 WL 6444514, at *3. The Court has
already noted counsel’s lack of professionalism in including unethical terms in its representation
9
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agreement and in failing to timely comply with Court orders necessary to secure payment for the
class. Additionally, there were times during trial when counsel’s performance was simply inept.7
This level of competence supports a reduction to class counsel’s attorney fee. See Michel, 2014
WL 497031, at *14–18 (reducing a proposed award of one third of the fund to 15% where the
“quality of the work done . . . was ordinary at best” and featured “several substantive mistakes”).
Based on all of these considerations, the Court reduces Lyngaas’s proposed award of one
third of the gross amount of the fund to 25% of the fund after subtraction of litigation expenses
and the class representative award discussed below. The Court thus awards attorney fees equal to
$202,002.31, leaving $606,006.91 in the fund for class members and resulting in a distribution of
$333.89 per violative fax transmission.
III.
Named Plaintiff Incentive Award
Lyngaas seeks to individually award Lyngaas $15,000 for serving as class representative—
taken from monies that otherwise would go to attorney fees. Pl. Mem. in Supp. Mot. at 13–15.
Lyngaas submits that this award is merited because he “filed and pursued the action, responded to
discovery, was deposed, stayed involved and informed, and testified at trial.” Id. at 15.
Requests for incentive awards for class representatives “are scrutinized carefully by courts
who sensibly fear that incentive awards may lead named plaintiffs to expect a bounty for bringing
7
The Court asked Plaintiff’s counsel to explain why no representative from Westfax—the
company that sent faxes on behalf of Curaden—had testified. Trial Tr. at 43 (Dkt. 116). Counsel
responded unsatisfactorily that they had not determined that Westfax had been used to send faxes
until the end of the discovery period. Id. at 44–45. Counsel was unable to explain why they had
not sought to extend discovery or subpoena a representative of Westfax, suggesting—
incorrectly—that a Westfax representative in Colorado or California was beyond the reach of a
federal subpoena. Id. at 44. As a result of class counsel’s failure to secure Westfax’s testimony,
no determination could be made at trial as to how many faxes had been sent, which precluded a
judgment at the conclusion of trial of an amount to award the class as a whole. This issue
necessitated further briefing on the propriety of the administration process to determine the
amount. See 11/21/19 Op. & Order at 36–38 (Dkt. 129).
10
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suit or to compromise the interest of the class for personal gain.” Hadix v. Johnson, 322 F.3d 895,
897 (6th Cir. 2003). Courts “should be most dubious of incentive payments when they make the
class representatives whole, or (as here) even more than whole; for in that case the class
representatives have no reason to care whether the mechanisms available to unnamed class
members can provide adequate relief.” In re Dry Max Pampers Litig., 724 F.3d 713, 722 (6th Cir.
2013).
The Court is skeptical of Lyngaas’s proposal that his willingness to be deposed and to
testify at trial should result in an award more than 50 times the amount received by non-named
class members. See Michel, 2014 WL 497031, at *11–*12 (finding that proposed award to class
representative of $10,000 in TCPA class action was “disproportionate to the benefit awarded to
unnamed Class Members”—approximately $190 per class member according to class counsel’s
request—and reducing class representative award to $3,000); Spine & Sports Chiropractic, Inc. v.
ZirMed, Inc., No. 3:13-cv-00489, 2015 WL 9413143, at *3 (W.D. Ky. Dec. 22, 2015) (reducing
proposed class representative award of $10,000 in TCPA class action to $5,000). Other than
Lyngaas’s very brief testimony at trial, there is no other action on his part that he says justifies the
award of a significant amount.
The Court is further concerned that Lyngaas’s relationship with class counsel suggests that
he may be seeking an inappropriate “bounty” for bringing suit. Not only does the representation
agreement absolve Lyngaas of costs in violation of professional standards, see Representation
Agreement at 2; Mich. Rule Prof’l Conduct 1.8(e)(1), but Lyngaas has already filed multiple TCPA
class actions through class counsel, see Lyngaas v. Reckner Associates, Inc., et al., Case No. 17cv-12867, Compl. (Dkt. 1) (E.D. Mich.); Lyngaas v. IQVIA INC., Case No. 20-cv-02370 (E.D.
Penn.), Compl. (Dkt. 1); Lyngaas v. United Concordia Companies, INC. et al., Case No. 21-cv-
11
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11604, Compl. (Dkt. 1) (E.D. Mich.); Lyngaas v. Solstice Benefits, Inc., Case No. 22-cv-10830,
Compl. (Dkt. 1) (E.D. Mich.). This trend may suggest that Lyngaas and class counsel have
identified each other as referral sources for TCPA litigation.
Additionally, although Lyngaas proposes that his class representative award be taken from
attorney fees rather than the fund, this Court is not aware of any case in this district approving such
an arrangement, and none of the cases cited by Lyngaas in support of his request for a class
representative award allocated those monies out of the attorney fee award. See Pl. Mem. in Supp.
Mot. at 13–15 (citing Rusgo and DePanicis, Inc. v. Walter J. Svenkesen Ins. Agency, Inc., et al.,
Case No. 16-cv-12966, 9/19/17 Order (Dkt. 32) (E.D. Mich.); Imhoff Investment, LLC v.
Sammichaels, Inc., Case No. 10-cv-10996, 11/2/16 Order (Dkt. 120) (E.D. Mich.); Jackson’s Five
Star Catering, Inc. v. Beason, et al., Case No. 10-cv-10010, 4/15/2015 Order (Dkt. 90) (E.D.
Mich.)) (other citations omitted). Where professional rules of conduct disallow fee-sharing
between attorneys and their clients, an attorney’s “arrangement to split his fee with his client [is]
patently unethical.” Keener v. Dep’t of Army, 136 F.R.D. 140, 150 (M.D. Tenn. 1991) (denying
plaintiff’s attorney’s request for fees), aff’d, 956 F.2d 269 (6th Cir. 1992). Even where the absence
of such a rule mitigates these ethical concerns, “it is generally best for incentive awards to be paid
out of a common fund or by defendants, rather than by plaintiffs’ counsel,” because an incentive
award paid out of attorney fees creates a “problematic” circumstance where the attorneys’ “own
financial interest conflicts with [the interests of] the named plaintiffs.” In re UnumProvident Corp.
Derivative Litig., No. 1:02-cv-386, 2010 WL 289179, at *8 (E.D. Tenn. Jan. 20, 2010) (denying
request for incentive award allocated out of attorney fees).
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Accordingly, the Court finds it appropriate to award Lyngaas $3,000, see Michel, 2014 WL
497031, at *12, and to apply the more typical arrangement of awarding this amount out of the total
recovery rather than the award of attorney fees.
III. CONCLUSION
For the reasons explained above, the Court grants Lyngaas’s motion in part (Dkt. 174),
modifying his requested relief to award (i) $96,490.78 in litigation expenses; (ii) $3,000 to Lyngaas
individually in his role as class representative, to be paid from the total amount recovered; and (iii)
$202,002.31 in attorney fees, equal to 25% of the total recovery after the subtraction of attorney
fees and the class representative award.
SO ORDERED.
Dated: August 31, 2022
Detroit, Michigan
s/Mark A. Goldsmith
MARK A. GOLDSMITH
United States District Judge
13
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