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Linneman v. Vita-Mix Corp.

United States Court of Appeals for the Sixth Circuit

August 3, 2020, Argued; August 12, 2020, Decided; August 12, 2020, Filed

File Name: 20a0255p.06

Nos. 19-3993, 19-4249

Opinion

 [**2]  THAPAR, Circuit Judge. What began as a case about defective blenders has devolved into a quarrel about attorney's fees. In this appeal, we consider several questions of first impression about attorney's fees in class-action settlements. We agree with the district court on many issues but find that it abused its discretion as to the final award of fees. We therefore [*2]  vacate the award and remand for further proceedings.

Vita-Mix is a family-owned company that manufactures and sells high-performance blenders. Several years ago, the company learned that some of its blenders contained tiny black flecks after use. Vita-Mix determined that these flecks were polytetrafluoroethylene—a substance commonly used in kitchen appliances and used in the seals of its blenders. Normal wear-and-tear would cause tiny pieces—so tiny they were almost invisible to the naked eye—to rub off from the seal and end up in the blender container.

Because of this defect, the named plaintiffs (owners of Vita-Mix blenders) filed this class action, alleging various claims against the company under state law. The parties soon entered into settlement negotiations and eventually agreed to a proposed settlement. The settlement provided for two classes of plaintiffs: a household class and a commercial class. Class members who owned a household blender could request either a $70 gift card or a replacement blade assembly, which included a non-flecking blender seal. (Those with multiple household blenders were eligible for a $140 gift card.) In contrast, class members who owned a commercial [*3]  blender could request only a replacement blade assembly. The settlement also specified that class counsel were entitled to attorney's fees but that the parties had not agreed on the amount. The district court preliminarily approved this settlement in late 2017.

The parties then spent most of the next two years arguing about attorney's fees. The district court ultimately decided to calculate the fees by multiplying the hours class counsel reasonably worked on the case by a reasonable hourly rate. That calculation resulted in a fees [**3]  award of a little over $2.2 million. But based on the purportedly exceptional nature of the litigation, the court enhanced this figure by 75% for a final award of just under $4 million. Vita-Mix appealed that decision. The district court later awarded post-judgment interest on the fees award. Vita-Mix appealed that order too.

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2020 U.S. App. LEXIS 25597 *; 2020 FED App. 0255P (6th Cir.) **

VICKI A. LINNEMAN and OBADIAH N. RITCHEY, on behalf of themselves and those similarly situated, Plaintiffs-Appellees, v. VITA-MIX CORPORATION, VITA-MIX MANAGEMENT CORPORATION, and VITA-MIX MANUFACTURING CORPORATION, Defendants-Appellants.

Prior History:  [*1] Appeal from the United States District Court for the Southern District of Ohio at Cincinnati. No. 1:15-cv-00748—Susan J. Dlott, District Judge.

Linneman v. Vita-Mix Corp., 2018 U.S. Dist. LEXIS 82692 (S.D. Ohio, Feb. 9, 2018)

CORE TERMS

settlement, coupons, calculate, lodestar, multiplier, post-judgment, blenders, enhancement, redemption, cleaned, causation, Dictionary, fees-on-fees, cards, gift

Civil Procedure, Appeals, Standards of Review, Abuse of Discretion, De Novo Review, Special Proceedings, Class Actions, Compromise & Settlement, Class Attorneys, Fees, Costs & Attorney Fees, Attorney Fees & Expenses, Reasonable Fees, Judicial Discretion, Judicial Officers, Judges, Discretionary Powers, Class Action Fairness Act, Governments, Legislation, Interpretation, Business & Corporate Law, Corporate Finance, Dividends & Reacquisition of Shares, Cancellation & Redemption, Basis of Recovery, Statutory Awards, Evidence, Burdens of Proof, Allocation, Appellate Jurisdiction, Lower Court Jurisdiction, Notice of Appeal, Remedies, Judgment Interest, Postjudgment Interest