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Feder v. Frank (In re HP Inkjet Printer Litig.)

United States Court of Appeals for the Ninth Circuit

November 5, 2012, Argued and Submitted, San Francisco, California; May 15, 2013, Filed

No. 11-16097

Opinion

 [*1175]  SUMMARY1

Class Action Fairness Act / Attorneys' Fees

The panel reversed the district court's orders granting final approval to a class action settlement between Hewlett-Packard Company and a nationwide class of consumers who purchased certain HP inkjet printers,  [**2] and awarding attorneys' fees.

The panel held that the attorneys' fee award to class counsel violated the Class Action Fairness Act ("CAFA"), and specifically 28 U.S.C. § 1712(a)-(c), which governs the calculation of attorneys' fees in class action cases containing a coupon component. The panel held that when a settlement provides for coupon relief, either in whole or in part, any attorneys' fee that is "attributable to the award of coupons" must be calculated using the redemption value of the coupons. The panel reversed and remanded, because the district court awarded fees that were "attributable to" the coupon relief, but failed to first calculate the redemption value of those coupons.

Judge Berzon dissented, and would hold that there was no violation of § 1712 of CAFA, where the district court did not award a contingency fee calculated as a percentage of the purported value of the total class recovery, but instead chose to award a lodestar fee, calculated on the basis of hours worked and rates charged, carefully limited by a fair estimate of the amount of the benefit received by the class. Judge Berzon would affirm the district court because the fee award was consistent with CAFA.

OPINION

M. SMITH, [**3]  Circuit Judge:

Objectors Kimberly Schratwieser and Theodore Frank (Objectors) appeal the district court's orders granting final approval to a class action settlement between Hewlett-Packard Company (HP) and a nationwide class of consumers who purchased certain HP inkjet printers between September 6, 2001 and September 1, 2010. The district court approved a settlement that provides both coupon and injunctive relief to the class members. The district court also approved an award of attorneys' fees in the amount of $1,500,000 and costs in the amount of $596,990.70.

Objectors argue that the settlement is neither fair, reasonable, nor adequate, as required by Federal Rule of Civil Procedure 23(e)(2) and Section 3 of the Class Action Fairness Act (CAFA), codified at § 28 U.S.C. 1712(e). Objectors contend that the settlement is the product of tacit collusion between class counsel and HP. Objectors also challenge the fee award, arguing it too violates CAFA, and specifically § 1712(a)—(c), which govern the calculation of attorneys' fees in class action cases containing a coupon component. Because we agree that the fees award violates CAFA, we do not address any of Objectors' other contentions.  [**4] See Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998) (holding that a class action settlement "must stand or fall in its entirety"); see also In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 945-46 (9th Cir. 2011) (noting that vacatur of a fees award necessitates invalidation of a settlement approval order where the parties "expressly negotiated" a potentially unreasonable amount of fees).] When a settlement provides for coupon relief, either in whole or in part, any attorney's fee "that is attributable to the award of coupons" must be calculated using the redemption  [*1176]  value of the coupons. § 1712(a). Since the district court awarded fees that were "attributable to" the coupon relief, but failed to first calculate the redemption value of those coupons, we reverse the orders of the district court and remand for further proceedings consistent with this opinion.

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716 F.3d 1173 *; 2013 U.S. App. LEXIS 9744 **; 2013 WL 1986396

IN RE: HP INKJET PRINTER LITIGATION, NICKLOS CIOLINO, individually and on behalf of all those similarly situated; DANIEL FEDER, Plaintiffs-Appellees, v. THEODORE H. FRANK; KIMBERLY SCHRATWIESER, Objectors-Appellants, v. HEWLETT-PACKARD COMPANY, Defendant-Appellee.

Subsequent History: On remand at, Motion granted by, Settled by, Motion granted by, in part, Motion denied by In re HP Inkjet Printer Litig., 2014 U.S. Dist. LEXIS 139850 (N.D. Cal., Sept. 30, 2014)

Prior History:  [**1] Appeal from the United States District Court for the Northern District of California. D.C. No. 5:05-cv-03580-JF. Jeremy D. Fogel, District Judge, Presiding.

In re Hp Inkjet Printer Litig. This Document Relates To: All Actions, 2011 U.S. Dist. LEXIS 37446 (N.D. Cal., Mar. 29, 2011)

Disposition: REVERSED, VACATED AND REMANDED.

CORE TERMS

coupons, settlement, attorney's fees, calculated, lodestar, district court, class member, class action, cases, contingency fee, redeemed, equitable relief, fee award, redemption, awards, legislative history, injunctive relief, percentage-of-recovery, non-coupon, provisions, confirms, refers, fees award, class relief, hours worked, Dictionary, lodestar method, award fees, Fairness Act, e-credits

Civil Procedure, Class Actions, Class Attorneys, Fees, Settlements, Settlement Agreements, General Overview, Appeals, Standards of Review, Abuse of Discretion, Costs & Attorney Fees, Attorney Fees & Expenses, Special Proceedings, Class Action Fairness Act, Class Members, Effect of Agreements, Governments, Legislation, Interpretation

Civil Procedure, Class Actions, Class Attorneys, Fees, Settlements, Settlement Agreements, General Overview, Appeals, Standards of Review, Abuse of Discretion, Costs & Attorney Fees, Attorney Fees & Expenses, Special Proceedings, Class Action Fairness Act, Class Members, Effect of Agreements, Governments, Legislation, Interpretation