The roller coaster ride isn’t over yet for plaintiffs’ lawyers attempting to recover legal fees in the antitrust case against the parent company of BARBRI.
U.S. District Judge Manuel Real in Los Angeles, citing an “egregious breach of McGuireWoods’s ethical duties,” on Monday granted $500,000 in fees to the firm — significantly less than the $12 million originally awarded in a $49 million settlement with West Publishing Corp. in 2007.
The settlement resolved a class action by 300,000 consumers who alleged they paid an average $1,000 in overcharges for the bar examination review course because West Publishing conspired to monopolize the market in a secret deal with Kaplan Inc., which sells preparatory courses for the Law School Aptitude Test.
Monday’s hearing was the latest in a developing saga over legal fees. In addition to McGuireWoods, several other attorneys want fees for having represented groups of plaintiffs who objected to the original settlement on ground of conflict of interest. Specifically, they argued that incentive payments worth $25,000 to $75,000 that McGuireWoods promised to five class representatives were tied to the value of the settlement — providing little reason to fight rather than make a deal.
Real approved the settlement but slashed the incentive payments.
Last year, the U.S. Court of Appeals for the 9th Circuit upheld the settlement but reversed Real’s decision regarding the fees, concluding that the incentive payments, even if eliminated, presented a “disturbing appearance of impropriety.” The panel asked Real to reassess the fees.
On remand, Real awarded no fees to McGuireWoods, saying the firm violated the California Rules of Professional Conduct by failing to inform class members about the incentive awards.
On a motion for reconsideration, Sidney Kanazawa, a partner in the Los Angeles office of McGuireWoods, said there “clearly was no egregious conduct by McGuireWoods,” since similar incentive awards were approved in other cases and everyone knew about the awards in the BARBRI case. Furthermore, he wrote, the awards didn’t harm class members, and any conflict was nullified when Real rejected the awards.
The firm has spent more than $1.25 million in expenses and about $5.6 million in attorney time, according to court documents.
On Monday, Real read his decision from the bench. The $500,000 in fees cover the period between July 10, 2007, and Sept. 10, 2010.
Outside the courtroom following the hearing, Kanazawa had no comment. He later provided an e-mailed statement: “We are disappointed and will appeal.”
Real denied motions for reconsideration filed by several lawyers for the objectors, whose fees were reduced earlier this year.
Amanda Bronstad can be contacted at email@example.com.