The Northern District of Illinois vacated its grant of fees to class counsel for work performed following an initial fee award, finding that Rule 23(h) required notice to the class regarding counsel’s new fee request, even though the total attorneys’ fees awarded were within the range disclosed in the original class notice. As discussed in a prior post, the Seventh Circuit affirmed the initial award of fees to class counsel, notwithstanding that the settlement included a “clear sailing” clause through which the defendant agreed not to challenge a request for fees of up to $3 million.
Following the appeal, class counsel moved in the district court for an additional award of fees based on work performed after the initial award, including work done on the appeal. The court granted, in part, class counsel’s request. However, an objector moved for reconsideration, arguing, among other things, that Rule 23(h) mandated the class be given notice of the request for additional fees. In response, class counsel and the defendant argued that additional notice was not required, given that the initial class notice disclosed the possibility of a fee award exceeding the amount of the initial award and the requested supplemental award combined.
The court noted in its opinion that the original class notice stated that class counsel would seek between $1 and $7 million in fees and that the total of class counsel’s supplemental request and the initial fee award was well within that range. Nevertheless, the court determined that “prudence counsels in favor of providing an additional notice to the class in connection with the request for post-fee award and appellate fees.” The court based its decision on the following: (1) class members may have viewed the original notice as contemplating only one request for fees, as opposed to several separate requests; (2) the notice provided that the defendant would not object to a fee award of up to $1.75 million because the agreement not to object to an award of up to $3 million in fees came after notice was provided to the class; and (3) class counsel’s request for additional fees would make the total fee award exceed the $1.75 million stated in the original notice Consequently, the court vacated its award of additional fees to class counsel and directed class counsel and defendant to confer and provide a proposed notice form and plan regarding counsel’s additional request for fees.