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Financial Fraud Law

$544.8 Million in Attorneys’ Fees Awarded in Credit Card Class Action

 The U.S. District Court for the Eastern District of New York has granted attorneys’ fees in the amount of $544.8 million, and expenses in the amount of $27,037,716.97, in the antitrust class action brought in 2005 by merchants against Visa, MasterCard, and a number of banks, alleging that the defendants had conspired to fix certain credit card fees and rules.

Previously, on December 13, 2013, the court had approved a settlement with two principal components: a fund of about $7.25 billion (before reductions for opt-outs, which reduced the fund to about $5.7 billion), against which merchants who did not opt out of a Rule 23(b)(3) class could make damages claims; and injunctive relief in the form of various credit card network rules changes, which apply to all members of a Rule 23(b)(2) class.

Now, the court has issued its order on the class plaintiffs’ motion for attorneys’ fees and costs.

In its decision on that motion, the court first said that the case stood out “in size, duration, complexity, and in the nature of the relief afforded to both the injunctive relief and damages classes.” It found that class counsel “took on serious risks in prosecuting the case.”

The court noted that class counsel – Robbins Geller Rudman & Dowd LLP; Robins, Kaplan, Miller & Ciresi L.L.P; and Berger & Montague, P.C. – represented that, taking together all of the hours that they and other plaintiffs’ counsel billed on this case, the lodestar figure for attorneys’ fees was approximately $160 million, reflecting almost 500,000 hours of attorney and paralegal work conducted through November 30, 2012. The court also pointed out that class counsel requested a fee of $570 million, equal to approximately 10 percent of the fund after opt-out reductions.

The court granted virtually the full amount requested.

The decision, by U.S. District Judge John Gleeson, is In re Payment Card Interchange Fee, No. 05-MD-1720 (JG)(JO) (E.D.N.Y. Jan. 10, 2014).

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