Legal Fee Tracker: Lawsuit reveals fight over awards after $5.6 bln 'swipe fees' settlement
By David Thomas
Oct 31 (Reuters) -Private deals between class action law firms to divide up attorney fee awards rarely see the light of day, leaving outsiders to wonder how hundreds of millions of dollars in court-approved fees are allocated each year.
A new lawsuit between Scott + Scott and Robins Kaplan peels back some of that secrecy in one of the biggest private antitrust cases of the century.
Scott + Scott sued Robins Kaplan in state court in Manhattan on Tuesday, demanding $5 million it said it was promised in connection with a $5.6 billion antitrust class action settlement with Visa Inc V.N and MasterCard Inc MA.N over credit and debit card transaction "swipe" fees.
According to the lawsuit, Scott + Scott reached an agreement in 2015 to pay Robins Kaplan $6 million from its share of a $195 million fee award in a different case, a class action against private equity firms for allegedly conspiring to depress the prices of corporate buyouts before the financial crisis of the 2000s.
The payment allowed Robins Kaplan to collect a total of $50 million in fees from the private equity case. In return, the lawsuit said, Robins Kaplan agreed to make a payment to Scott + Scott from its winnings in the Visa-MasterCard litigation to ensure that Scott + Scott collected $20 million in that case.
Last year the 2nd Circuit U.S. Court of Appeals finally affirmed the $5.6 billion Visa and MasterCard settlement, which resolved nearly 20-year-old claims that retailers were overcharged when shoppers used credit or debit cards. The court also upheld $523.2 million in fees for the plaintiffs' attorneys, led by court-appointed class counsel at Robins Kaplan, Berger Montague and Robbins Geller Rudman & Dowd.
According to Scott + Scott, the firm was told by Robbins Geller that its share of the award would be $15 million. Robins Kaplan, the lawsuit said, then reneged on its deal to make up the $5 million difference so that Scott + Scott could walk away with $20 million.
Firm leaders from Scott + Scott and Robins Kaplan did not immediately respond to requests for comment on the lawsuit. Attorneys at Berger Montague and Robbins also did not immediately respond to requests for comment.
Class action fee awards are public because they must be approved by a judge. But how firms agree to split such awards, including with firms that did not secure a coveted class counsel appointment, is rarely disclosed. Past cases have shone a partial light in some instances, such as a fight over how to divvy up $503 million in fees in litigation over Syngenta's genetically modified corn seed.
In general, judges presiding over class actions prefer to keep out of such disputes, said University of Michigan law professor Adam Pritchard. By the time a court has approved a settlement and awarded fees, it would rather clear the case from its docket, he said.
Pritchard noted that Scott + Scott did not include a written fee-sharing contract with Robins Kaplan as part of its lawsuit. He said such agreements, while common, are sometimes informal.
"If it were in writing, this would be the time to share it," Pritchard said.
There's another wrinkle to Scott + Scott's case that isn't mentioned in its lawsuit. The Robbins Geller teams in both the swipe fee litigation and the corporate buyout case were co-led by longtime antitrust lawyer Patrick Coughlin. In 2023, Coughlin left Robbins Geller and joined Scott + Scott.
Coughlin did not immediately respond to a request for comment.
Spokespersons for Visa and MasterCard did not immediately respond to requests for comment.
Robins Kaplan and Scott + Scott are currently co-leading antitrust litigation against the property management company RealPage and companies that allegedly used its software to overcharge for rental housing. The defendants have denied wrongdoing.
-- In other legal fee news, lawyers for DISH Network and its Sling TV video service are fighting to reinstate an award of $3.9 million in attorney fees after it was wiped out by an appeals court earlier this year.
A U.S. Court of Appeals for the Federal Circuit panel tossed the fee award in August after finding a judge made several errors in awarding the fees to DISH, which was the defendant in a failed patent lawsuit.
DISH's lawyers at Fish & Richardson filed an en banc petition last week for the full Federal Circuit to rehear the case, arguing that a fee-shifting provision for "exceptional" patent cases should apply.
(Legal Fee Tracker is a weekly feature exploring attorney compensation awards and disputes in class actions, bankruptcies and other matters. Please send tips or suggestions to D.Thomas@thomsonreuters.com.)
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Reporting by David Thomas
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