18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 471 Act and Consumer Protection Act. The parties ultimately settled the matter and the Court granted final settlement approval. Class counsel thereafter filed a motion for an award of attorneys’ fees and expenses and for incentive awards to the named Plaintiffs. The Court granted the motion. Class counsel requested that the Court use the percentage-of-the-fund calculation method and award 25% of the $155 million common fund as attorneys’ fees. The Court held that the requested award was fair and reasonable because class counsel provided excellent work and achieved an exceptional result for the class. The Court also reasoned that class counsel obtained significant injunctive relief for the class. The Court opined that the case was risky, as class counsel worked entirely on contingency, prosecuted a line of several class actions against well-funded corporations, and pursued an entirely novel legal theory under the RMLGA. Id . at *5. The Court concluded that the award of 25% was well within other fee awards granted in complex class actions. Accordingly, the Court granted attorneys’ fees of 25% of the settlement fund, or $38.75 million. Class counsel also requested reimbursement of $1,785,942.27 in costs and expenses, which the Court found reasonable and appropriate. Finally, class counsel requested an incentive award of $10,000 each for Cheryl Kater and Manasa Thimmegowda and an incentive award of $50,000 for Suzie Kelly. The Court granted the awards, nothing that Kelly’s service to and sacrifice for the class was unique, substantial, and far beyond the typical contributions of a class representative. The Court granted the motion for an award of attorneys’ fees, costs, and incentive awards. Knox, et al. v. John Varvatos Enterprises, Inc ., 2021 U.S. Dist. LEXIS 29410 (S.D.N.Y. Feb. 17, 2021). Plaintiffs, a group of female salespeople, filed a class action alleging that Defendant improperly granted a clothing allowance to its male salespeople but not its female salespeople in violation of Title VII of the Civil Rights Act of 1964 (“Title VII”) and various other federal and state equal pay and anti-discrimination laws. Id . at *1. Defendant provided male salespeople with $12,000 per year to buy John Varvatos signature clothing to wear at work, while Plaintiffs only received a 50% discount at Defendant’s sister clothing store, which sold significantly cheaper clothing. The parties proceeded to trial, where the jury returned a verdict in favor of Plaintiffs on all claims. The jury initially awarded Plaintiffs approximately $3.5 million, but after Defendant’s successful motion for a new trial on damages, Plaintiffs accepted a remittitur of 50% of the total damages award. Plaintiffs thus received a judgment of approximately $1.76 million and subsequently filed a motion for an award of attorneys’ fees. In their motion, Plaintiffs sought statutory attorneys’ fees of $1,730,304.50, in addition to a service payment to Plaintiff Knox of $300,000 and an additional award of attorneys’ fees between $50,000 and $125,000. Id . at *2. The Court granted Plaintiffs’ motion, but substantially reduced their requests for fees. Defendant initially sought a 50% reduction of Plaintiffs’ fee request based on the fact that Plaintiffs’ judgment was cut in half, but the Court rejected this argument. According to the Court, Plaintiffs’ results did not reflect a lack of success, but rather in successful litigation resulting in Plaintiffs winning on all of their claims. Defendants further contended that Plaintiffs’ counsel’s requested hourly fees should all be reduced because they were not experienced in litigating employment claims or class and collective actions. While the Court did not completely disregard Defendant’s argument, it found the argument to be misguided by focusing only on the experience of Plaintiffs’ counsel and ignoring the novel issues of law involved in this high-stakes litigation. Rather than reducing the individual hourly rates of Plaintiffs’ counsel, the Court proceeded to analyze Plaintiffs’ fee request as a whole, which was allegedly based on 5,035 hours of work. After reviewing jurisdictional case law on the reasonableness of attorneys’ fees in similar matters, the Court agreed with Defendant that Plaintiffs’ fee request was unreasonable. The Court found that counsel in similar class action cases typically billed under 1,000 hours, and even in complex matters, the approved number of hours worked rarely rose above 2,500 hours. Given that Plaintiffs used no experts and dealt with relatively simple facts in this case, the Court reduced Plaintiffs’ fee request by 50%. As to Plaintiff Knox’s proposed service fee, Plaintiffs sought this fee on the grounds that Plaintiff Knox took on the risk of filing this lawsuit and jeopardized her professional reputation by doing so. Though the Court agreed that Plaintiff Knox deserved a service award for her efforts, it found her request to be “disproportionately large” in relation to the amount recovered, and thus it awarded Plaintiff Knox a service payment of $20,000. Id . at *6. Finally, with respect to the requested additional fee of Plaintiffs’ counsel, the Court reasoned that this case warranted an additional payment due to the unique aspects of this case, i.e. , Defendant’s bankruptcy occurring during the litigation and the presence of a punitive damages fund. The Court thus awarded Plaintiffs’ counsel an additional fee of $105,880.21 to be taken from the punitive damages award as to not withdraw payments from Plaintiffs’ common fund. In sum, the Court granted Plaintiffs’ motion for attorneys’ fee and modified the request to award $748,321.21 in attorneys’ fees, $105,880.21 in additional attorneys’ fees, and a $20,000 service payment to Plaintiff Knox.