The Ninth Circuit today upheld a $49 million settlement of antitrust claims against West Publishing for its rough tactics in marketing bar exam prep courses.
The panel rejected objectors' point that the district court should have judged the pact by looking at treble damages instead of single damages. "It is our impression that courts generally determine fairness of an antitrust class action settlement based on how it compensates the class for past injuries, without giving much, if any consideration for treble damages." Rodriguez v. West Publishing Corp., No. 07-56646, slip op. at 4769 (9th Cir. Apr. 23, 2009).
Their Honors looked less kindly on a fact that didn't come out until after preliminary approval of the settlement. Between the prelim and the final, class counsel disclosed an odd feature of the fee contracts between certain firms and five class representatives. Those agreements bound the lawyers to ask the court to award between $10,000 and $75,000 as an "incentive" award. The amount varied with how many dollars the class got.
The arrangement troubled the court. It put the reps and the firms in conflict with the class; it affected the reps' adequacy as reps; it split pay between lawyers and non-lawyers; and the delay in telling the district court about it trenched on counsel's ethical duty of candor.
The court remanded "the award of attorney's fees to class counsel for consideration of the effect, if any, of the incentive agreements on entitlement to fees." Id. at 4776.