United States Court of Appeals

For the Eighth Circuit

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No. 15-3976

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In re: Life Time Fitness, Inc., Telephone Consumer Protection Act (TCPA) Litigation

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Plaintiffs’ Lead Counsel; Plaintiffs’ Executive Committee

lllllllllllllllllllll Plaintiffs - Appellees

Lindsey Thut

lllllllllllllllllllllObjector - Appellant

v.

Life Time Fitness, Inc.

lllllllllllllllllllll Defendant - Appellee

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Appeal from United States District Court 

for the District of Minnesota - Minneapolis

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 Submitted: October 19, 2016

 Filed: February 2, 2017

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Before RILEY, Chief Judge, WOLLMAN and BENTON, Circuit Judges.

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WOLLMAN, Circuit Judge.
Lindsey Thut appeals from the district court’s order awarding class counsel

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$2.8 million in attorney’s fees and expenses in a class-action lawsuit against Life

Time Fitness, Inc. We affirm.

In 2014, four law firms filed fourseparate class-action complaints against Life

Time, each alleging that Life Time had violated the Telephone Consumer Protection

Act (TCPA), 47 U.S.C. § 227, by sending unsolicited text-message advertisements

to putative class members’ cellular telephones. The class actions were consolidated

at Life Time’s request and assigned to the District of Minnesota by the Judicial Panel

on Multidistrict Litigation. After informal discovery, mediation, and “lengthy, arm’s

length negotiations,” the parties entered into a settlement agreement in February

2015, under which Life Time agreed to pay a minimum of $10 million and a

maximum of $15 million to settle the TCPA claims, to cover the costs of settlement

administration, and to pay attorney’s fees and expenses “in the amount awarded by

the [c]ourt.” The agreement provided that each class member who submitted a valid

claim would be entitled to choose between a cash award of $100 or a Life Time

membership award—either a three-month single membership or a $250 credit on an

existing membership.2

The district court granted preliminary approval of the settlement agreement on

March 9, 2015, conditionally certifying the class for settlement purposes, appointing

class representatives and class counsel, and directing that notice be provided to the

class. Despite mediation and negotiation efforts, however, the parties were unable

The Honorable Joan N. Ericksen, United States District Judge for the District 1

of Minnesota. 

The cash and membership awards were subject to a pro rata adjustment, 2

depending on the number of valid claims submitted. Based on the 29,843 valid claim

submissions, an upward adjustment of 60 percent was applied, which resulted in a

cash award of roughly $160 and a membership credit valued at roughly $400. 

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to reach an agreement regarding attorney’s fees and expenses. Class counsel filed an

initial motion for an award of $4.2 million, submitting billing records to the district

court for in camera review in support of the motion. Thut filed the sole objection by

a class member. After the claims period closed, class counsel filed an amended

motion for attorney’s fees, requesting an award of $3 million, or 30 percent of the

guaranteed $10 million minimum payment Life Time wasrequired to remit under the

settlement agreement. Class counsel attached declarationsin support ofthe requested

fee amount, which documented the hours and various billing rates of the individuals

who had worked on the lawsuit and which resulted in a lodestar of $687,928.75. 

On November 17, 2015, the district court conducted a hearing on the parties’

joint motion for final approval of the settlement agreement and on class counsel’s

amended motion for attorney’s fees and expenses. The parties and the court devoted

a significant portion of the hearing to the issue of attorney’s fees, discussing in detail

both the methodstypically used for calculating fees. On December 1, 2015, the court

granted final approval of the settlement agreement. It also granted in part and denied

in part class counsel’s amended motion for attorney’s fees and expenses, applying

class counsel’s requested percentage-of-the-benefit method to calculate the fee

amount, rejecting Life Time’s argument for application of the lodestar method, and

overruling Thut’s objection to the fee request. The district court found that class

counsel had “expended substantial time and effort in their able prosecution” of the

lawsuit, which ultimately resulted in a good-faith settlement that provided a “fair,

reasonable, adequate[,] and certain result” for the class. The court awarded a total

sum of $2.8 million in attorney’s fees and expenses—28 percent of the minimum $10

million amount of the settlement fund—and authorized class counsel, “in their sole

discretion, . . . to allocate and distribute the fees among [themselves].” 

Thut argues that the fee award was excessive and that the court improperly

delegated to the four class-counsel law firms the authority to allocate the award

among themselves. We review a district court’s award of attorney fees for abuse of

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discretion. See Petrovic v. Amoco Oil Co., 200 F.3d 1140, 1156 (8th Cir. 1999)

(“Decisions of the district court regarding attorney fees in a class action settlement

will generally be set aside only upon a showing that the action amounted to an abuse

of discretion.”). In a certified class action, a district court “may award reasonable

attorney’s fees and nontaxable costs that are authorized by law or by the parties’

agreement.” Fed. R. Civ. P. 23(h). In exercising its discretion to award attorney’s

fees, a district court generally applies one of two methods to determine a reasonable

fee amount: the “lodestar” method, under which “the hours expended by an attorney

are multiplied by a reasonable hourly rate of compensation so as to produce a fee

amount which can be adjusted, up or down, to reflect the individualized

characteristics of a given action,” or the “percentage of the benefit” method, under

which the fee amount is “equal to some fraction of the common fund that the

attorneys were successful in gathering during the course of the litigation.” Johnston

v. Comerica Mortg. Corp., 83 F.3d 241, 244-45 (8thCir. 1996); see also Petrovic, 200

F.3d at 1157 (noting well-established rule that a district court may use the percentageof-the-benefit method in a common-fund settlement case). “It is within the discretion

of the district court to choose which method to apply,” Johnston, 83 F.3d at 246, 247

(reiterating that “[t]he district court is free to utilize either the lodestar or the

percentage of the benefit method”); see also Galloway v. Kansas City Landsmen,

LLC, 833 F.3d 969, 972 (8th Cir. 2016) (same), as well as to determine the resulting

amount that constitutes a reasonable award of attorney’s fees in a given case, see

Travelers Prop. Cas. Ins. Co. v. Nat’l Union Ins. Co., 735 F.3d 993, 1002 (8th Cir.

2013). 

The district court reviewed the parties’ submissions on the attorney’s fee issue,

heard extensive argument on the matter, and considered the fees awarded and the

methods used to calculate those fees in similar cases. The court engaged in a pointed

inquiry into class counsel’s requested percentage-of-the-benefit fee amount and Life

Time’s suggested lodestar and appropriate multipliers and considered in detail

argument from both parties. See Petrovic, 200 F.3d at 1157 (noting that use of

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lodestar method may be warranted to double-check the result of the percentage-ofthe-fund method). The district court also reviewed in camera the itemized daily time

records kept by each attorney and other legal professional who participated in

representing the class and ultimately accepted those records as additional evidence

that class counsel “expended substantial time and effort in their prosecution of claims

on behalf of” the class. Those efforts, the court found, led to an expeditious

settlement of the class claims and an agreement that was “fair, reasonable, and

adequate”; that achieved “substantial savings oftime, money, and effort” for the court

and the parties; and that “further[ed] the interests of justice.” The court determined

that a percentage-of-the-benefit award of $2.8 million in attorney’s fees and expenses

was reasonable, finding specifically that “the requested award is typical of that

awarded in other class actions and TCPA settlements,” that class counsel “obtained

a substantial benefit for the class [and] assumed significant risk in taking on [the

lawsuit] on a contingency basis,” that the lawsuit “presented difficult legal

questions,” that class counsel “devoted significant time and effort” to the lawsuit, and

that “there was only one objection,” which was filed by Thut and was rejected by the

court as “not well founded.”

The district court’s analysis was thorough, its findings were amply supported,

and it did not abuse its significant discretion by electing to use the percentage-of-thebenefit method to calculate the fee award or by determining that an award of

$2.8 million in attorney’s fees and expenses wasreasonable. See Galloway, 833 F.3d

at 973 (observing that “[c]lass counsel can and invariably does propose that the court

choose a certain” fee-calculation method, but noting that “the court has discretion to

accept or reject that proposal”); Petrovic, 200 F.3d at 1157 (stating that “[i]t is well

established in this circuit that a district court may use the ‘percentage of the fund’

methodology to evaluate attorney fees in a common-fund settlement”); see also In re

U.S. Bancorp Litig., 291 F.3d 1035, 1038 (8th Cir. 2002) (concluding that district

court did not abuse its discretion by applying percentage-of-the-benefit method to

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award “36% of the guaranteed $3.5 million fund amount,” where class counsel

“obtained significant monetary relief on behalf of the class). 

Likewise, the district court did not abuse its discretion by including

approximately $750,000 in fund administration costs as part of the “benefit” when

calculating the percentage-of-the-benefit fee amount. The Seventh Circuit has

indicated that district courts should scrutinize administrative costs to determine

whether they really confer a benefit on the class before including them in fee-award

calculations. See Redman v. RadioShack Corp., 768 F.3d 622, 630 (7th Cir. 2014). 

The Ninth Circuit, however, leaves inclusion of administrative costs to the district

courts’ discretion, reasoning that “where the defendant pays the justifiable cost of

notice to the class[,] . . . it is reasonable (although certainly not required) to include

that cost in a putative common fund benefiting the plaintiffs for all purposes,

including the calculation of attorneys’ fees.” Staton v. Boeing Co., 327 F.3d 938, 975

(9th Cir. 2003). The Ninth Circuit’s approach is in keeping with the deference our

court affords district courts in awarding attorney’s fees. Since Thut makes no

showing that the administrative costs were unjustifiable, the district court did not

abuse its discretion by including them as part of the benefit.

Nor did the district court abuse its discretion by allowing class counsel

themselves to determine how to allocate the total $2.8 million attorney’s fee award

without further judicial oversight or approval. Thut argues that the court was 3

required to monitor the allocation of the award, and she cites the Fifth Circuit’s

decision in In re High Sulfur Content Gasoline Products Litigation, 517 F.3d 220, 227

(5th Cir. 2008), in support of her argument. Even if High Sulfur were controlling in

this Circuit, it is distinguishable, for that case involved a dispute among class counsel

In her opening brief, Thut argued that we should apply a de novo standard of 3

review to assess this claim of error, but she has conceded in her reply brief that an

abuse-of-discretion standard of review applies. 

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over how to allocate a fee award. The Fifth Circuit noted a “district court’s duty to

scrutinize the allocation of a fee award when an attorney objects to his co-counsels’

fee recommendations,” and it remanded with instructions for the district court to

develop the record and determine the adequacy of the proposed allocation of the fee

award among class counsel. Id. at 233-35 (“It is one thing for all attorneys to come

to an agreement about dividing up fees, and quite another for five attorneys to declare

how an award will cover themselves and seventy-four other attorneys with no

meaningful judicial supervision or review.”). Here, by contrast, there is no dispute

among class counsel over how to allocate the award of attorney’s fees and expenses,

and the district court did not abuse its discretion by leaving the matter to class counsel

to resolve among themselves. 

The judgment is affirmed. 

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