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Stetson v. Grissom

United States Court of Appeals, Ninth Circuit

May 11, 2016

Stephen Stetson, individual and all others similarly situated; Shane Lavigne, individual and all others similarly situated; Christine Leigh Brown-Roberts, individual and all others similarly situated; Valentin Yuri Karpenko, individual and all others similarly situated; Jake Jeremiah Fathy, individual and all others similarly situated, Plaintiffs-Appellees/ Cross-Appellants,
v.
Seth Bryant Grissom; James Ralph Garrison, III; Dustin Kennemer; Nathan Hunt; John Kelley; John Amari, Objectors-Appellants/ Cross-Appellees. and West Publishing Corporation, a Minnesota Corporation, DBA BAR/BRI; Kaplan, Inc., Defendants-Appellees/ Cross-Appellants,

Argued and Submitted February 2, 2016 -Pasadena, California

Appeal from the United States District Court for the Central District of California Manuel L. Real, District Judge, Presiding D.C. No. 2:08-cv-00810-R-E

Joseph L. Tucker (argued), Jackson & Tucker PC, Birmingham, Alabama, for Objectors-Appellants/Cross-Appellees.

Alan Harris (argued), Harris & Ruble, Los Angeles, California; Perrin F. Disner (argued), Law Offices of Perrin F. Disner, Los Angeles, California, for Plaintiffs-Appellees/Cross-Appellants.

Before: STEPHEN REINHARDT, RICHARD A. PAEZ, and MILAN D. SMITH, JR., Circuit Judges.

SUMMARY [*]

Settlement / Attorneys' Fees

The panel vacated the district court's order reducing class counsel's fees following a settlement.

The panel held that in a class action, an objector need not establish standing to object to an award of attorneys' fees by the district court. If the objector seeks to appeal the award, however, then he must demonstrate standing. An objector has standing to appeal a denial of his own request for fees. Here, the objectors were not yet entitled to any fees because the panel vacated the district court's order awarding attorneys' fees to class counsel.

The panel held that in this common-fund case, the district court acted well within its discretion in using the lodestar method to calculate fees. The district court abused its discretion, however, in failing specifically to articulate the reasoning supporting the large disparity between the requested fees and the awarded fees. In addition, the district court's reduction of class counsel's costs was based on clearly erroneous findings of fact.

The panel vacated the district court's award of costs and fees and remanded with instructions for the district court to (1) clearly provide reasons for the factors in its lodestar computation; (2) expressly consider both a risk multiplier and the Kerr reasonableness factors; and (3) base its decision on facts supported by the record. The panel directed that the case be reassigned to a different district judge on remand.

OPINION

M. SMITH, Circuit Judge.

We consider in this disposition whether, when a common-fund settlement agreement has been reached in a class action and fees have been awarded to class counsel, a non-participating class member who objects only to the fee award has standing to appeal the denial of his own request for fees. We also consider a cross-appeal concerning the district court's reduction of Plaintiffs' attorney's fees and costs. We vacate and remand.

FACTS AND PRIOR PROCEEDINGS

This case is before us for the third time. Plaintiffs Stetson et al. first appealed the district court's order dismissing their complaint in May 2008. After oral argument, we referred the case to mediation. A settlement was reached, and we remanded the case to the district court "for the limited purpose of considering approval of and approving the settlement agreement between the putative Class and Defendants." The district court rejected the proposed settlement, and we reasserted jurisdiction. We then reversed the district court's order of dismissal (the order from which the appeal had originally been taken) but ...


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