No Fees To Class Counsel Who Committed Ethical Violation By Representing Clients Whose Interests Were Conflicting.

Plaintiffs filed an antitrust class action against a publishing company. At the outset of the litigation, lawyers entered an “incentive agreement” with some of the plaintiffs whereby the firm would apply to the court for a fee award based on recovery against West Publishing. The agreement provided “If the settlement amount was greater than or equal to $500,000, class counsel would seek a $10,000 award for each client who signed an agreement; if the settlement amount were $1.5 million or more, counsel would seek a$25,000 award; if it were $5 or more, counsel would seek $50,000; and if it were $10 million or more, counsel would seek $75,000.” Shortly before trial, the case settled for $49 million, with 25 percent of the settlement fund set aside for attorney fees. The district court awarded attorney fees to class counsel, but “declined to approve incentive awards totaling $325,000 to the class representatives, finding that the incentive agreements created an appearance of impropriety, violated the ethics rule against fee-sharing with non-lawyers, and created conflicts of interest between the class representatives and unnamed class members.” The first time the case went to the Ninth Circuit, the appeals court reversed the award of attorney fees to class counsel because of the conflict between the plaintiffs who were part of the incentive agreement and those who were not. On remand, the district court ordered that no fees would be awarded to class counsel for any work counsel performed while the incentive fee was in effect. This time around, the Ninth Circuit affirmed the trial court’s attorney fee decision. Rodriguez v. McGuireWoods, LLP (Ninth Cir.; August 10, 2012) 688 F.3d 645.