Court Opinion

ID: 9805246
Source: CourtListenerOpinion
Date Created: 2023-08-31 17:44:23.096558+00
Date Added: 2024-06-11T10:40:46.327937
License: Public Domain

TAYLOR, J.,
concurring (Joined by WINCHESTER, J.)
1 1 I concur in today's opinion finding that the trial court abused its discretion, vacating the attorney-fee award, and requiring the trial court to start anew in determining the reasonable amount of attorney fees, but write separately to provide guidance in determining reasonable attorney fees on remand. In reviewing the attorney-fee award, it is important to understand what this case is about and what it is not about. It is about a $140.00 replacement, including parts and labor, of a piece of decorative plastic on a Volkswagen Jetta. It is not about attorneys acting as private attorneys general protecting the social good; it is about attorneys acting with a business plan.1 It is not about righting a constitutional wrong, it is not about protecting Jetta owners from bodily injury or death, and it is not about protecting the public policy of this state. It is about 810 pieces of decorative plastic.
12 Rule 1.5(a) of the Oklahoma Rules of Professional Conduct (ORPC), 5 0.8.2011, ch. 1, app. 8-A, requires attorneys to charge a reasonable fee. Rule 1.5(a) is the basis for the requirement that all fees, even those awarded in a class action, be reasonable. The considerations for determining reasonable attorney fees were set out in Rule 1.5(a) well before State ex rel. Burk v. City of Oklahoma City, 1979 OK 115, 598 P.2d 659, see 5 O.S.1961, ch. 1, app. 3, § 12, and are substantially identical to those in Title 12, Section 2023(G) of the Oklahoma Statutes with the exeeption that Section 2023(G) also includes as considerations whether the case is undesirable, awards in similar causes, and *672the risk of recovery in the litigation.2 Rule 1.5(a)s considerations for determining whether a requested or collected fee is reasonable apply equally to fixed fees and contingency fees. In re Adoption of Baby Boy A, 2010 OK 39, 236 P.3d 116; Oliver's Sports Ctr., Inc. v. Nat'l Standard Ins. Co., 1980 OK 120, 615 P.2d 291.
T3 There are two primary methods of calculating attorney fees in class actions: the lodestar method and the contingency fee method.3 The contingency fee method assures that the fee has a reasonable relationship to the recovery. Even though this Court adopted the lodestar method in Burk, 1979 OK 115 at ¶ 10, 598 P.2d at 661, the contingency fee method is incorporated into any calculation of attorney fees because the amount in controversy and the results obtained must be considered in determining reasonable attorney fees. 12 O.S.Supp.2013, § 2023(G)(8). In fact, the relationship of the attorney fees to the recovery is "the most critical factor" in determining reasonable attorney fees. Tibbetts v. Sight 'n Sound Appliance Ctrs., Inc., 2003 OK 72, ¶ 13, 77 P.3d 1042, 1049. Attorney fees that are out of proportion with or have no relation to the recovery may be indicative of a case being overworked, of fee churning, and of unnecessarily protracted litigation.4
T4 In addition to failing to give proper weight to the most important consideration (the relationship between the attorney fees and the recovery), the trial court also misconstrued the nature of the claims and erred in its application of a number of the considerations in determining the reasonable attorney fees. For example, the district court's finding that the litigation was "arduous and complicated" and that the attorneys showed a particular level of "expertise and courage" is unfounded and an abuse of discretion. When one thinks of courage, Clarence Darrow and the fictional Atticus Finch come to mind. It is hard to imagine promoting the cause of decorative plastic spoilers on a Volkswagen Jetta as courageous. "Courage" and decorative plastic parts which cause no danger to any person are concepts that do not go together. This case involves two jurisdictions, Oklahoma and Ohio, as the Florida case was dismissed, not numerous jurisdictions making coordination unduly complex. The fact that the case was not certified in Florida does not make this a complex case or an unpopular cause which would make it difficult to obtain counsel or require courage to litigate.
T5 This is a very simple case which does not involve death, traffic safety, or bodily harm. This case involves a cosmetic defect so insignificant that the vast majority of the 2.1 million class members did not bother to file a claim, and only 810 were able to secure any recovery.5 In fact, the plaintiffs' attorneys expressly acknowledged that a majority of the 2.1 million class members suffered no injury from the alleged defect and would not be entitled to any recovery.
6 This case was brought on a contingency fee basis, meaning that the attorneys would have recovered at most $25,000.00 in fees from their clients. The trial court took into account that "much of the litigation occurred follow[ing] the reversal of certification" in the Florida case. Contingency fees are generally based on the final recovery in a case. Here, the trial court should give no consideration to resources expended in a failed certification attempt in Florida.
T 7 In considering the nature and length of the professional relationship between the attorneys and the clients, the trial court mistakenly considered the length of this litigation, including the litigation in Florida which did not involve most of the attorneys in this *673case. Rather, the trial court should have considered the length and nature of the relationship before the litigation began. The situation here is not like that of an attorney on retainer, employed by a business, or who represents a client in all legal matters. There is no evidence that the attorneys here had a relationship with any of the class representatives before the litigation began.
T8 The trial court considered several factors improperly in rationalizing that the attorney-fee award is reasonable, such as recovery of future claims. The class recovery at the relevant time, i.e., when the attorney fees were awarded, was at most $47,040.00. In trying to justify the attorney fees, the trial court improperly considered future claims. Still, the trial court's most egregious error by far was failing to give proper consideration to the relationship of the attorney fees to the recovery.
19 The attorneys' requested fees of over $14,000,000.00 is 317 times the recovery. The trial court's attorney-fee award of $7,221,438.30 is 154 times the recovery. The initial trial court award of $8,610,719.15 in attorney fees is 77 times the recovery. Last ly, if the trial court on remand omits only the fees charged in the Florida litigation and caps attorney fees at $650.00 an hour, the attorney-fee award will still be 64 times the claimants' recovery. Such a disproportional benefit to the lawyers relative to the claimants' recovery is repugnant to the purposes of our judicial system and to the purposes of class actions and erodes confidence in the courts. See Pearson v. NBTY, Inc., 772 F.3d 778, 781, 2014 WL 6466128 *3 (7th Cir.2014) (calling "outlandish" attorney fees amounting to sixty-nine percent of the aggregate value of the settlement).
1 10 Justice O'Connor warned against another "troubling [consequence]" of approving fee agreements without inquiring into any rational relationship between the fee and the recovery. Int'l Precious Metals Corp. v. Waters, 530 U.S. 1223, 1223, 120 S.Ct. 2237, 147 L.Ed.2d 265 (2000) (O'Connor, J., statement respecting the denial of the petition for a writ of certiorari). Such fee agreements would "encourage the filing of needless lawsuits where, because the value of each class member's individual claim is small compared to the transaction costs in obtaining recovery, the actual distribution to the class will inevitably be minimal." Id. Justice O'Con-nor's concerns are relevant when class attorneys are awarded fees based on a settlement agreement. The claimed transaction costs for this simple litigation are curiously high-eight attorneys and two paralegals from four firms in four different states racked up over 7,100 hours to secure a $140.00 recovery for about 310 class members. The trial court's attorney-fee award reflected a preposterous number of attorney and paralegal hours given the minimal and paltry recovery. On remand, the trial court must act with a wise and courageous sword to sever the unreasonable attorney fees and bring them in line with the recovery by about 310 class member of at most $47,040.00 in benefits.

. It would be interesting to know how these class representatives came to be plaintiffs since no Oklahoma plaintiffs benefitted from the recovery. Did they seek out counsel?

. Title 12, Section 2023(G) of the Oklahoma Statutes is quoted at footnote 2 of this Court's opinion and does not need to be restated here.

. In the lodestar method of calculating fees, the court multiplies the reasonable number of hours worked times a reasonable hourly rate. The court may then use an up or down multiplier based on Burk criteria to determine reasonable attorney fees. In the contingency fee method, the attorney-fee award is based on a percentage of the plaintiffs' recovery.

. Rule 3.2 of the ORPC provides: "A lawyer shall make reasonable efforts to expedite litigation consistent with the interests of the client."

. This does not include nine pending claims with the potential recovery of $1,260.00.