# U ni te d S ta te s Co ur t of A pp ea ls For the Eig hth Circu it

__ __ __ __ __ __ __ __ __ __ __ __ __ _ No. 1 6- 16 81

__ __ __ __ __ __ __ __ __ __ __ __ __ _ Edwar d Hu y er; Co nn ie Huyer; Car lo s C as tro ; Haz el P. Nava s

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff s - Ap pe ll ees

W el ls Farg o & Co m

pa ny; W el ls Farg o B an k, N.A.

ll ll ll ll ll ll ll ll ll ll l Defe nd

an ts - App el le es

v.

St ev en Bu ck le y

ll ll ll ll ll ll ll ll ll ll l

Mov an t - Ap

pe ll an t

__ __ __ __ __ __ __ __ __ __ __ __ __ _ No. 1 6- 17 40

__ __ __ __ __ __ __ __ __ __ __ __ __ _ Edwar d Hu y er; Co nn ie Huyer; Car lo s C as tro ; Haz el P. Nava s

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff s - Ap pe ll ees

W el ls Farg o & Co m

pa ny; W el ls Farg o B an k, N.A.

ll ll ll ll ll ll ll ll ll ll l Defe nd

an ts - App el le es

v.

Je nn ife r Deach in

ll ll ll ll ll ll ll ll ll ll l

Mov an t - Ap

pe ll an t__ __ __ __ __ __ __ __ __ __ __ __ __ _ No. 1 6- 17 43

__ __ __ __ __ __ __ __ __ __ __ __ __ _ Edwar d Hu y er; Co nn ie Huyer; Car lo s C as tro ; Haz el P. Nava s

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff s - Ap pe ll ees

W el ls Farg o & Co m

pa ny; W el ls Farg o B an k, N.A.

ll ll ll ll ll ll ll ll ll ll l Defe nd

an ts - App el le es

v.

Ju li us Dun m or e, Jr

.
ll ll ll ll ll ll ll ll ll ll l

Mov an t - Ap

pe ll an t

__ __ __ __ __ __ App eal s fr om

Uni te d S ta te s Di st ric t Co ur t fo r th e So ut he rn Dis tri ct of I owa - Des M oi ne s

__ __ __ __ __ __ Su bm it te d: Jan ua ry

10 , 20 17 Fil ed : Fe bu rary 16, 2 01 7

__ __ __ __ __ __ Befo re SM ITH, GRUENDE R, an d S HEPHERD, Circ ui t J ud ge s.

__ __ __ __ __ __ GRUENDER, Circ ui t J ud ge

.

-2

-St ev en Bu ck le y , Je nn ife r Deach in , an d Ju li us Dun m or e, Jr ., (co ll ect iv el y

“ ob jecto rs ”) ap pe al th e di st ric t co ur t’s or de r award in g at to rn ey s’ fees in th e am ou nt 1 of on e-t hi rd of th e to ta l se tt le m en t fu nd in a cl as s act i o n s e t t le m en t. Bec au se th e

co ur t’s ch oi ce to cal cu la te at to rn ey s’ f e es ba se d on th e to ta l se tt le m en t fu nd rat he r th an th e n et set tl em en t fu nd di d n ot res ul t i n a n u nr eas on ab le award , we affi rm

.

I.

In 20 08 , pl ai nt iff

s fil ed th is cl as s act io n ag ai ns t W el ls Farg o & Co

. an d W el ls Farg o Ban k, N.A. (“ W el ls Farg o” ). The pl ai nt iff s’ cl ai m s rel at e d to W el ls Farg o’s
pr act ic e of au to m at ic al ly o rd eri ng an d ch arg in g fees fo r pr op ert y in sp ec t i o ns whe n

cu st om ers fel l beh in d on th ei r m or tg ag e pa y m en ts

. Over th e co ur se of s ev en y ears , th e p art ie s en ga ge d i n e xt en si ve m ot io n p ract ic e an d s ub st an ti al di sc ov ery.

In 20 15 , th e pa rti es p art ic ip at ed in m ed ia ti on an d reac he d a se tt le m en t ag reem en t. The se tt le m en t ag reem en t pr ov id es th a t W el ls Farg o wil l pa y $2 5,7 50 ,00 0 in fu ll se tt le m en t of al l cl as s cl ai m s (“ to ta l se tt le m en t f u n d ”). Thi s

am ou nt in cl ud e s $ 3 , 2 5 0 ,00 0 in te nd ed to co ve r th e co st s of pr ov id in g no ti ce an d ad m in is te rin g th e se tt le m en t. If th e co st s of no ti c e a n d ad m in is tra ti on ex ceed $3 ,25 0,0 00 , an y ad di ti on al co st s wil l be de du ct ed fro m th e $2 2,5 00 ,00 0 av ai la bl e to pa y cl as s m em

be rs (“ ne t se tt le m en t fu nd ” )

. I f , h owe ve r, th os e co st s do no t reac h $3 ,25 0,0 00 , any rem ai ni ng fun ds wil l b e av ai la bl e to di st rib ut e to cla ss m em be rs

.

The di st ric t cou rt pre li m in ari ly ap pr ov ed th e se tt le m en t ag reem en t, and m or e th an 2.7 m il l i o n n o t i c e s were se nt to cl as s m em be rs

. Cl as s co un se l al so req ue st ed
at to rn ey s’ fees in th e am ou nt of on e-t hi rd of th e to ta l se tt le m en t fu nd

. Ea c h o f th e th ree ob jecto rs fil ed writ te n ob

jecti on s to t h e a mo u nt of at to rn ey ’s fees

. Bu ck le y

The Hon or ab le Ro be rt W

. Prat t, Uni te d St at es Dis tri ct Ju dg e fo r th e So ut he rn 1 Dis tri ct of I owa

. -3

-arg ue d th at no ti ce an d ad m in is tra ti on co st s di d no t r e p r e s e n t a be ne fit to th e cl as s

m em be r s , an d th us th e co ur t sh ou ld cal cu la te at to rn ey s’ fees ba se d on ly on th e ne t

se tt le m en t fu nd rat he r th an th e to ta l se tt le m en t fu nd

. Deach in an d Dun m or e arg ue d th at th e am ou nt of a tt or ne y s’ fees req ue st ed was u nr eas on ab le

.

Afte r ho ld in g a fai rn es s h eari ng , t he co ur t gr an te d fin al ap pr ov al of th e cl as s act io n se tt le m en t an d award ed cl as s co un s e l $8 ,58 3,3 32 .48 in at to rn ey s’ fees to be
pa id ou t of th e to ta l se tt le m en t fu nd

. Thi s award rep res en ts on e-t hi rd o f t h e to ta l

se tt le m en t fu nd . The o bjec to rs no w app eal th is award

.

II.

“ Deci si on s of th e di st ric t co ur t r e g a rd in g at to rn ey fees in a cl as s act io n

se tt le m en t wil l ge ne ral ly be se t as id e on ly up on a sh owi ng th at th e act io n am ou nt ed
to an ab us e of di sc ret io n.” Petr ov ic v. Amoco Oil Co

. , 20 0 F.3 d 11 40 , 11 56 (8 th Ci r. 19 99 ). “ Co ur ts ut il iz e two m ai n ap pr oa ch es to an al y zi ng a req ue st fo r at to rn ey fees .” Jo hn st on v. Co mer ic a Mor tg

. Co rp

. , 83 F.3 d 24 1, 24 4 (8 th Ci r. 19 96 ). “ Und er th e ‘lod es ta r’ m et ho do lo gy, th e ho ur s ex pe nd ed by an at to rn ey a r e m ul ti pl ie d by a

reas on ab le ho ur ly rat e of co m pe ns at io n so as to pr od uc e a fee am ou nt whi ch can be ad jus te d, up or do wn, to refl ect th e in di vi du al iz ed ch arac te ris ti cs of a gi ve n act io n.” Id

. “ Ano th er m et ho d, th e ‘perce nt ag e of th e be ne fit ’ ap pr oa ch , pe rm it s an award of fees th at is eq ua l to so m e frac ti on of th e co m m on fu nd th at th e a t t o r n e ys were

su cces sf ul in ga th eri ng du rin g th e co ur se of th e li ti ga ti o n

. ” I d

. at 24 4- 45

. “ It is wit hi n th e di sc ret io n of th e di st ric t co ur t to ch oo se whi c h met h o d t o ap pl y .” Id

. at 24 6

. Here, th e co ur t ch os e to ap pl y th e pe rcen ta ge -o f-t he -b en efi t ap pr oa ch an d to award on e-t hi rd of t he to ta l s et tl em en t fu nd

.

Th e ob jecto rs co nc ed e th at th e di st ric t co ur t’s ch oi ce of a pe rcen ta ge sh ou l d be rev ie wed un de r an ab us e-o f-d is cret io n st an da rd

. Nev ert he le ss , th ey co nt en d th at th e co ur t’s d eci si on to ap pl y th at pe rcen ta ge to th e to ta l s et tl em en t fu nd rat he r th an

-4

-th e ne t se tt le m en t fu nd co ns ti tu te s le ga l erro r be cau se th e to ta l se tt le m en t fu nd

in cl ud es ad m in is tra ti ve co st s, whi ch do no t co ns ti tu te a be ne fit to th e cl as s. W e di sa gr ee.

W e ha ve rece nt ly ad dr es se d th is ex act is su e an d co nc lu de d th at a di st ric t co ur t

m ay in cl ud e “ fu nd ad m in is tra ti on co st s as part of th e ‘ben efi t’ whe n cal cu la ti ng th e pe rcen ta ge -o f-t he -b en efi t fee am ou nt .” In re : Li fe Ti me Fit ne ss , In c., Tel

. Co ns ume r Pro t. Act (TCPA) Li ti

g. , --- F.3 d ---, No. 15 -3 97 6, sl ip op

. at 6 (8 th Ci r. Feb

. 2, 20 17 ). Alt ho ug h we ack no wled ge d th at “ [t]he Sev en t h Ci rcu it ha s in di cat ed th at di st ric t

co ur ts sh ou ld sc ru ti ni ze ad m in is tra ti ve co st s to de te rm in e whe th er th ey real ly co nf er

a be ne fit on th e cl as s,” id

. (ci ti ng Red man v. Rad io Sh ac k Co rp

. , 7 68 F.3 d 62 2, 63 0 (7 th Ci r. 20 14 )), we ag reed wit h th e reas on in g of th e Nin th Ci rcu it th at “ whe re th e de fen d a n t pa y s th e jus ti fia bl e co st of no ti ce to th e cl as s[ ,]

. . . it is reas on ab le (al th ou gh cert ai n l y n o t r e q ui red ) to in cl ud e th at co st in a pu ta ti ve co m m on fu nd be ne fit in g th e pl ai nt iff

s fo r al l pu rp os es , in cl ud in g th e cal cu la ti on of at to rn ey s’ fees ,” id

. (q uo ti ng St at on v. Boe in g Co

. , 32 7 F

. 3 d 9 3 8 , 9 7 5 (9 th Ci r. 20 03 )). Thu s, we

rev ie wed th e di st ric t co ur t’s de ci si on to in cl ud e ad m in is tra ti ve co st s in it s cal cu la ti on of at to rn ey s’ fees fo r ab us e of di sc ret io n, an d we he ld th at th e co ur t di d no t ab us e it s di sc ret io n be cau se th e ap pe ll an t m ad e “ no sh owi ng th at th e ad m in is tra ti ve co st s were

un jus ti fia bl e.” Id

.
Here, t he ob

jecto rs li ke wis e h av e fai le d t o s ho w th at th e ad m in is tra ti ve co st s

are un jus ti fi a b l e

. I n fact , if th e co st s of no ti ce an d ad m in is tra ti on do no t reac h $3 ,25 0,0 00 , an y rem ai ni ng fu nd s wil l be av ai la bl e fo r di st rib ut io n to cl as s m em be rs

. Thu s, th e di st ric t co ur t di d no t ab us e it s di sc ret io n by ba si ng it s fee award on th e to ta l

se tt le m en t fu nd , whi ch in cl ud ed ad m in is tra ti ve co st s. 2

W e no te th at th e di st ric t cou rt di d no t exp res sl y di sc us s why it ch os e to ba se 2 at to rn ey s’ fees on th e to ta l se tt le m en t fu n d r a th er th an th e ne t se tt le m en t fu nd

. Howev er, we do n o t be li ev e th at th is om is si on su gg es ts th at th e co ur t fai le d to

-5

-Fu rth erm or e, th e di st ric t co ur t di d no t ab us e it s di sc ret io n in ap prov in g th e to ta l

am ou nt of at to rn ey s’ fees

. In de ed , as th e Nin th Ci rcu it ha s no te d, “ th e ch oi ce of whe th er to b a s e a n a t t o r ne y s’ fee award on ei th er ne t or gr os s reco ve ry sh ou ld no t

m ak e a di ffer en ce s o l o n g as th e en d res ul t is reas on ab le .” Pow er s v. Eich en , 22 9 F.3 d 1 24 9, 1 25 8 (9 th Cir . 2 00 0)

. Acco rd in gl y , we rev ie w t he am ou nt of a tt or ne y s’ fees fo r reas on ab le ne ss

. Here, th e co ur t ap pr ov ed an award i n t he am ou nt of on eth ird of t he to ta l s et tl em en t fu nd . This am ou nt was re as on ab le for th ree r eas on s.

Fi rs t, th e di st ric t co ur t di d no t err in co nc lu di ng th at th e ci rcu m st an ces of th is

c a s e jus ti fie d a la rg e award

. The co ur t de te rm in ed th at fiv e fact or s were re l e v a n t :

“ (1 ) th e ti m e an d wor k req ui red ; (2 ) th e pr ecl us io n of ot he r em pl oym en t by th e at to rn ey d u e t o a c c e p ta nc e of th is cas e; (3 ) th e co nt in ge nt na tu re of th e fee; (4 ) th e

re s u l t s ob ta in ed ; an d (5 ) th e ex pe rie nc e, rep ut at io n, an d ab il it y of th e at to rn ey s.” Huy er v. We l l

s Fa r go & Co

. , 31 4 F.R.D. 62 1, 62 8- 29 (S.D. Io wa 20 16 ) (ci ti ng Jo hn so n v. Ga. Hig hw ay Exp re ss , 48 8 F.2 d 71 4, 71 9- 20 (5 th Ci r. 19 74 )). In

ev al ua ti ng th es e fact or s, th e co ur t no te d th at “ [t]hi s cas e ha s be en on go in g si nc e 20 08

an d ha s in cl ud ed ex te ns iv e m ot io n pr act ic e, di sc ov ery, an d se tt le m en t ne go ti at io ns

. Fu rth erm or e, al l of th e at to rn ey s wor ke d on a co nt in ge nt ba si s, an d m os t at to rn ey s ret ai ne d on be ha lf of th e cl as s ha ve rel ev an t ex pe rie nc e in cl as s act io n li ti ga ti on .” Id

. at 62 9. We fin d n o e rro r in th e co ur t’s an al y si s.

Se co nd, unde r th e pe rcen ta ge -o f-t he -b en efi t m et ho d, th e award was in lin e w ith
ot he r award s in th e Eig ht h Ci rcu it

. In de ed , co ur ts ha ve freq ue nt ly award ed at to rn ey s’ fees ran gi ng up to 36 % in cl as s act io ns

. Se e, e.g

. , In re U.S. Ban co rp Li ti g. , 29 1 F.3 d

co ns id er th is is su e. In fact , cl as s co un se l di sc us se d Bu ck le y ’s ob jecti on in th ei r rep ly br ie f in s u p p o rt of th ei r m ot io n fo r at to rn ey s’ fees , an d th e co ur t no te d th at it ha d

rev ie wed bo th th e rep ly br ie f an d al l ob jecti on s. Cf

. Jo ne s v. Pil lo w , 47 F.3 d 25 1, 25 2 (8 th Ci r. 19 95 ) (“ Thi s co ur t ha s pr es um ed de no vo rev ie w was co nd uc te d whe re th e di st ric t c o u rt st at ed th at it ha d m ad e a fu ll rev ie w of th e fil es an d reco rd s

. . . .” (q uo ta ti on om it te d) ).

-6

-10 35 , 10 38 (8 th Ci r. 20 02 ) (aff irming at to rn ey s’ fee award of 36 % in cl as s act io n

se tt le m en t); In re Xcel Ene rg y, In c., Se c., Der iv at iv e & “ERISA” Li ti g. , 36 4 F. Su pp

. 2d 98 0, 99 8 (D. Mi nn

. 20 05 ) (“ [C]ou rts in th is ci rcu it an d th is di st ric t ha ve freq ue nt ly award ed at to rn ey fees be twee n twen ty-fiv e an d th irt y -s ix pe rcen t of a co m m on fu nd in ot he r cl as s ac ti on s.”)

. The di st ric t cou rt’s award rep res en ts on e-t hi rd of t he to ta l

se tt le m en t fu nd

. Eve n un de r th e ob jecto rs ’ ap pr oa ch , t he a w a r d r e p r e se nt s 38 % o f th e ne t se tt le m en t fu nd , whi ch is on ly 2% hi gh er th an th e hi gh es t pe rcen ta ge we ha ve ap pr ov ed pr e v i o u s l y. Alt ho ug h 38 % is on th e hi gh en d of th e typic al ran ge , we

can no t sa y th at it is un reas on ab le whe n co m pa red to ot he r award s wit hi n th is ci rcu it

. 3 Thu s, ev en whe n vi ewed as a pe rcen ta ge of th e ne t se tt le m en t fu nd , th e co ur t’s award

was no t u nr eas on ab le

.

Thi rd , th e di st ric t co ur t ve rif ie d th e reas on ab le ne ss of it s award by cro ss
ch eck in g it ag ai ns t th e lo de st ar m et ho d. Se e Pe t r o v i c , 2 0 0 F.3 d at 11 57 (“ [U]se of th e ‘lod es ta r’ ap pr oa ch i s so m et im es warra nt ed to do ub le -ch eck th e res ul t of th e ‘perce nt ag e of th e [b en efi t]’ m et ho d.” ). The co ur t de te rm in ed th at “ an award of $8 .5

m il li on rep res en ts a lo de st ar m ul ti pl ie r of 1.8 2, whic h th e Co ur t fin ds reas on ab le in

reco gn it io n of th e pr ot ract ed na tu re of th e li ti ga ti on .” Huy er , 31 4 F.R.D. at 62 9. Thi s

m u l t i p li er is well wit hi n th e ran ge of m ul ti pl ie rs award ed in th is an d ot he r ci rcu it s. Se e W al -Ma rt St or es , In c. v. Vis a U.S.A., In c. , 39 6 F.3d 96 , 10 3, 12 3 (2d Ci r. 20 05 ) (fi nd in g m

ul ti pl ie r of 3.5 ap pr op ria te in cl as s act io n th at was li ti ga te d fo r se ve n y ears ); Nel

so n v. W al -Ma rt St or es , In c. , No. 05 -cv -0 00 13 4, 20 09 W L 24 86 88 8, at *2 (E.D. Ark

. Aug

. 12 , 20 09 ) (ap pr ov in g m ul ti pl ie r of 2.5 an d ci ti ng cas e s w i t h i n t he Eig ht h Ci rcu it ap pr ov in g m ul ti pl ie rs of up to 5.6 ). The refo re, we fin d no erro r in th e

co ur t’s co nc lu si on th at th e award was re as on ab le un de r th e lo de st ar m et ho d.

Alt ho ug h Deach in an d Dun m or e arg ue th at w e sh ou ld es ta bl is h a ne w 25 % 3 be nc hm ark , th ey pr ov id e no co m pe ll in g reas on fo r us t o de pa rt fro m ou r se tt le d pr act ic e of le av in g de ci si on s reg ard in g at to rn ey s’ fees to th e reas on ab le di sc ret io n of di st ric t co ur ts , and we de cl in e to do so

. -7

-Bec au se th e am ou nt of at to rn ey s’ fees was no t un reas on ab le , we co nc lu de th at

th e co ur t d id no t ab us e it s d is cret io n.

III.

Fo r th e f o reg oi ng reas on s, we affi rm th e di st ric t co ur t’s award of at to rn ey s’ fees

.

__ __ __ __ __ __ __ __ __ __ __ __ __ __ __

-8

-