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Torregano v. Sader Power, LLC

United States District Court, E.D. Louisiana

February 28, 2019

TWYLA TORREGANO, CLEMENT TORREGANO, JR., AND ALL OTHERS SIMILARLY SITUATED
v.
SADER POWER, LLC, ET AL

         SECTION: "S" (3)

          ORDER AND REASONS

          MARY ANN VIAL LEMMON UNITED STATES DISTRICT JUDGE

         IT IS HEREBY ORDERED that plaintiffs' Motion for Award of Attorneys' Fees Expenses, and Costs (Rec. Doc. 32) is GRANTED.

         The court held a final settlement fairness hearing on February 20, 2019, at which it approved the settlement in the captioned case. In connection with the settlement, plaintiffs have moved for an award of attorneys' fees in the amount of $1, 492, 500.00. Defendants do not oppose the motion.

         BACKGROUND

         This matter arises from a class action brought by the class representatives and approximately 2500 other individuals who had solar panel array systems installed by defendants Sader Power, LLC and/or Sader Power Enterprises (collectively, "Sader"), and entered into a standardized maintenance agreement for the installation, maintenance, and monitoring of the Solar Power Arrays with Griswold Power, LLC ("GP"). The class representatives asserted claims for violations of the Consumer Leasing Act, breach of contract, and other claims arising from defendants' installation of the solar panel arrays, the terms of the maintenance agreements, and representations made to them by defendants. GP denied the allegations, but agreed to a class settlement with the class defined as: "All persons who entered into a Solar Power Maintenance Agreement with Griswold, and all current owners of property in Louisiana upon which Solar Panel Arrays owned by Griswold are installed."

         The settlement agreement transfers ownership of the solar panels to the class members, forgoes outstanding monthly payments, and cancels class members' obligations to pay continuing maintenance contract fees.[1] The value of the settlement is between $12, 500, 000 and $25, 000, 000.The value of the settlement comprises forgone amounts due owed by class members amounting to approximately $1, 880, 000, the value of the solar panel array system transferred from Sader to the class members, and future maintenance contract fees. Assuming a value of $10, 600.00 per solar array system, the total value of the transferred systems is $23, 304, 176.18.[2]Added to the foregone receivables, the settlement value exceeds $25, 000, 000.00 before accounting for future payments. However, if a more conservative value of $5000.00 per solar array system is assumed, the value of the settlement is approximately $12, 500, 000. Thus, the court analyzes the fee request based on a settlement value range of $12, 500, 00.00 to $25, 000, 000.00.

         On November 8, 2018, the court granted preliminary approval of the proposed class action settlement agreement, based on its finding that the requirements of Rule 23(a) and 23(b)(3) were met. Following notice to class members, sent to all potential members who could be identified through reasonable effort, the court held the final fairness hearing, at which it approved the settlement. The approval was based on the court's conclusion that the large number of potential class members made joinder impracticable, and because the maintenance agreement is a standardized form, the class representatives' claims are typical of potential class members' claims. For the same reason, issues of law and fact common to all class members predominate over individual issues. Further, the court determined that plaintiffs' counsel would adequately represent the proposed class, and it would be uneconomical for the class members for the claims to be litigated individually. Thus, a class action was determined to be superior to other methods for resolving this case.

         The settlement was negotiated at arm's length by experienced counsel, which occurred over a two-year period and included a full-day mediation session. Class counsel gained extensive knowledge by interviewing potential witnesses and reviewing voluminous documents from public sources and from the defendants through discovery. As well, in the absence of settlement, the class members would be exposed to unnecessary complexity, expense, and a lengthy trial. Accordingly, the settlement was reached under conditions that indicate that it is fair, reasonable, and adequate.

         APPLICABLE LAW

         The Supreme Court "has recognized consistently that a litigant or a lawyer who recovers a common fund for the benefit of persons other than himself or his client is entitled to a reasonable attorney's fee from the fund as a whole.” Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (1980). Class counsel may not bill the class directly for their services but must petition the court for an award of fees reasonable under the circumstances and in light of the monetary benefit created for the class. 3 H. Newberg, A. Conte, Newberg on Class Actions § 14.02 (3d ed. 1992). Even when the fee award is agreed upon, attorneys' fees and costs, authorized by law or the parties' agreement, must be reasonable. Fed.R.Civ.P. 23(h).

         In calculating fees, courts employ either the percentage method or the lodestar method. Union Asset Mgmt. Holding A.G. v. Dell, Inc., 669 F.3d 632, 642-43 (5th Cir. 2012). Under the percentage method, the court awards fees as a reasonable percentage of the common fund; under the lodestar method, the court computes fees by multiplying the number of hours reasonably expended on the litigation by a reasonable hourly rate and, in its discretion, applying an upward or downward multiplier. Id. In Union Asset Management, the Fifth Circuit explicitly stated: "We join the majority of circuits in allowing our district courts the flexibility to choose between the percentage and lodestar methods in common fund cases, with their analyses under either approach informed by the Johnson[3] considerations." Id. at 644. "Furthermore, the United States Supreme Court has approved the percentage method in common fund cases, but has never formally adopted the lodestar method in common fund cases." In re Vioxx Prod. Liab. Litig., No. MDL 1657, 2018 WL 4613941, at *6 (E.D. La. Sept. 26, 2018)(citing Camden I Condo. Ass'n v. Dunkle, 946 F.2d 768, 773-74 (11th Cir. 1991) (interpreting Blum v. Stenson, 465 U.S. 886, 900 n.16 (1984), as the Supreme Court's “acknowledgment” of the percentage method in common fund cases); In re Prudential-Bache Energy Income P'ships Sec. Litig., MDL No. 888, 1994 WL 150742 (E.D. La. Apr. 13, 1994) (tracing the history of the various methods)). "The percentage method provides more predictability to attorneys and class members or plaintiffs, encourages settlement, and avoids protracted litigation for the sake of racking up hours, thereby reducing the time consumed by the court and the attorneys." Id. at *5 (citations omitted). For this reason, many district courts in this circuit have simply applied the percentage fee method in common fund cases. Braud v. Transp. Serv. Co. of Illinois, 2010 WL 3283398, at *8 (E.D. La. Aug. 17, 2010)(citing In re Harrah's Entm't, Inc., 1998 WL 832574, at *1 (E.D. La. Nov. 25, 1998)(citing In re Catfish Antitrust Litig., 939 F.Supp. 493, 500 (N.D. Miss.1996); In re Prudential-Bache Energy Income P'ships Secs. Litig., No. MDL 888, 1994 WL 150742, at *4 (E.D. La. Mar.7, 1994)); Turner v. Murphy Oil USA, Inc., 422 F.Supp.2d 676 (E.D. La. 2006) (applying percentage fee method to compute common benefit fees in class action);Faircloth v. Certified Fin., Inc., 2001 WL 527489 (E.D. La. May 16, 2001) (same).

         No general rule exists as for what is a reasonable percentage of a common fund. Fifty percent "is the upper limit on a reasonable fee award to assure that fees do not consume a disproportionate part of the recovery obtained for the class, though somewhat larger percentages are not unprecedented." In re Combustion, Inc., 968 F.Supp. 1116, 1133 (W.D. La. 1997)(citing Camden I Condominium Assn. v. Dunkle, 946 F.2d 768 (11th Cir.1991)(other citations omitted). In the Fifth Circuit, district courts have often awarded percentages of approximately one-third. Id. (citations omitted).

         APPLICATION ...


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