September 3, 2020

In Dissent, 9th Circ. Judge Rips Fees Equaling $6,700 An Hour

In a split decision, the Ninth Circuit panel affirmed the approval of a $14.5 million attorney fee award in a class action over Bank of America’s overdraft fees, with a dissenting judge criticizing the deal for awarding class counsel fees that come out to $6,700 per hour, according to a report in Law360.

“That amount of money is not an insubstantial incentive to bring claims that settle before discovery, yet the district court awarded about ten times that much to class counsel,” U.S. Circuit Judge Andrew Kleinfeld wrote.

In an 18-page dissent, Judge Kleinfeld noted that class counsel only worked 2,158 hours on the case, and therefore the $14.5 million fee amounts to a rate of more than $6,700 per hour, even though class counsel said their rates are between $250 and $800 per hour, which would have added up to roughly $1.42 million.

Judge Kleinfeld pointed out that under the deal, customers who were charged the $35 fee are not being reimbursed in whole for the fees and will likely instead receive $1.07 per fee paid. Customers whose accounts were closed will likely only receive $35, regardless of how many times the bank charged them the allegedly usurious fees, he said.

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