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Sunday, May 26, 2024 | Back issues
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Class Counsel to See $7.5 Million From Verizon

OAKLAND, Calif. (CN) - Lawyers who helped settle a class action against Verizon over third-party billing claims deserve $7.5 million in fees, a federal judge ruled.

U.S. District Judge Saundra Brown Armstrong granted the fee award, noting that class counsel "achieved excellent results for the class and significant benefits for non-class members."

Keller Grover in San Francisco represented the class, as did Lieff Cabraser Heimann & Bernstein, the Law Offices of David Schachman and Jacobs Kolton.

Their clients accused Verizon of charging consumers for products and services that they did not purchase and illegally billing and collecting of these charges.

"Verizon knows that its third-party billing and collection system lacks sufficient checks and safeguards to prevent unauthorized charges from being added to customers' wireline telephone bills - indeed, to the contrary, it knows that there is a significant likelihood of unauthorized charges, given the system presently used - yet it continues to bill and collect such third-party charges without taking sufficient steps to ensure that the charges are in fact authorized by the persons legally empowered to authorize charges," the complaint stated.

A 2013 settlement required Verizon to fully refund customers of all unauthorized third-party charges during the seven-year class period, and to overhaul its third-party billing practices, complete with an opt-in requirement for all new accounts.

Verizon also agreed outside of the settlement not to engage in third-party billing for enhanced or miscellaneous services.

In their settlement motion, class counsel called the settlement "unprecedented," and said that it has led "a great number of Verizon customers to claim refunds" and millions more consumers "have benefited from Verizon's subsequent exit from billing for so-called miscellaneous or enhanced services, a move that was subsequently matched by its major competitor, AT&T, and then yet a third major player, CenturyLink."

Referred the matter of attorneys' fees and expenses, U.S. Magistrate Judge Jacqueline Scott Corley recommended approving a motion for $7.5 million in fees and expenses.

Verizon argued that the award was "patently unreasonable" because 75 percent of class counsel's claimed hours were post-settlement, many of the post-settlement hours were for a "cell center' set up to perform administrative tasks, and that a multiplier was not warranted.

Verizon requested the lodestar be reduced to $4.6 million based on duplication of work and inefficiency.

Armstrong found Friday, however, that class counsel's post-settlement time spent "communicating with class members was reasonably expended and necessary to effectuate the parties' claims-made settlement. As noted by Magistrate Corley, this Court's Order preliminarily approving the settlement expressly directed class counsel and the settlement administrator to respond to inquiries by class members."

Additionally, through their post-settlement work, the lawyers were able to identify an additional 326,505 class members who had not received notice of the settlement, leading to the submission of additional claims, including a $1.2 million claim made by a public educational institute.

"In the court's view, class counsel should be applauded, not penalized, for their efforts to ensure that class members receive the benefits they are entitled to under the settlement," Armstrong wrote.

Armstrong also defended using a multiplier of at least 1.5, given the results achieved and "because there is ample evidence in the record establishing that this case was risky and that recovery was far from certain."

"A review of the record reveals that class counsel displayed great skill in resolving this complex case and protecting the interests of class members through an extraordinary commitment of time, resources, and energy that could have been devoted to other less risky non-contingency matters," Armstrong wrote. "It is clear to the court that the results achieved would not have been possible but for the considerable effort and skill of class counsel."

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