Background
Objecting members of the Risk Corridors Non-Dispute Subclasses sought $1.6255 million in attorney fees from class counsel. They argued that their successful challenges to class counsel’s fee request and their advocacy for prejudgment interest returned more than $100 million to the subclasses.
Class counsel opposed payment from its fee award. It argued that any fee for objectors should come from the common fund benefiting the subclasses, and that the circumstances did not justify shifting objectors’ fees directly to class counsel.
The Court’s Holding
The Court denied the motion. It agreed that objectors conferred a substantial benefit on the subclasses and ordinarily could recover some reasonable fees, but held that the common-fund doctrine generally requires the benefited class—not class counsel—to bear that cost.
The Court found no equitable basis to depart from that rule. Unlike cases in which class counsel had materially departed from promised fee arrangements, failed to protect the class, or otherwise acted improperly, class counsel here had not broken promises in the class notice or violated a duty. The only identified errors were inadvertent time-entry inclusions that class counsel conceded and that the Court addressed through a 15% reduction in class counsel’s hours. Because objectors sought fees only from class counsel and not from the subclasses, the Court did not decide whether their requested amount was reasonable.
Key Takeaways
- Objectors who substantially benefit a class may be eligible for fees, but the usual source is the common fund.
- A successful objection to class counsel’s fees does not alone justify making class counsel pay objectors’ fees.
- Fee shifting to class counsel requires equitable circumstances beyond ordinary disagreement over a reasonable fee request.
Why It Matters
The ruling underscores that objector-fee awards serve the common-fund principle: class members who receive the benefit generally share its cost. Courts may instead charge class counsel only where the record shows meaningful misconduct, broken commitments, or comparable failures that made the objection necessary.