SAN JOSE (CN) - A federal judge Wednesday approved $42 million in attorneys' fees from the $415 million settlement of an antitrust class action employment lawsuit against Apple, Google, Intel and Adobe.
The high-tech leaders had de facto agreements not to poach each other's software engineers or lure them with higher salaries from 2005 to 2009.
U.S. District Judge Lucy Koh's final approval of the settlement and the attorneys' fees brings to an end the engineers' lawsuit. The engineers claimed that the late Steve Jobs and other Silicon Valley executives had "gentlemen's agreements," also known as "no cold-call agreements," that restricted or eliminated competition for high-tech employees.
Three other defendants in the original complaint - Lucasfilm, Pixar and Intuit - settled in 2013 for $20 million, covering 8 percent of the employee class.
The remaining four companies last year offered to settle for $325 million, which Koh rejected as too low.
Six of the more than 64,000 class members objected to the $415 million agreement as still too low. But Koh said the objectors did not take into account the risks involved in proceeding to trial and "that the settlement provides the class with a timely, certain, and meaningful cash recovery."
Under the settlement, the average class member will receive about $5,770.
As for the objectors' complaint that the settlement is not large enough to punish the defendants for their wrongdoing, Koh said that the gravity of the $415 million settlement "should send a strong message" to the tech giants.
More than $42 million of the settlement will pay attorneys' fees and costs : well below the $87 million requested by the attorneys.
The four firms that acted as co-lead counsel sought $81.1 million in fees - 19.5 percent of the settlement - and $1.2 million in expenses.
Attorneys for class representative Michael Devine - who objected to the $325 million settlement offer - sought $4.5 million in fees and expenses, or 5 percent of the $90.5 million settlement increase.
Class counsel already had been awarded $5 million in fees in the settlement with Pixar, Lucasfilm and Intuit.
Having overseen the case for four years, Koh determined that attorney fees should be determined by the lodestar method - applying fee awards to the actual hours spent on the litigation and selecting a multiplier - rather than by percentage of the settlement fund.
Factoring in the $5 million in fees already awarded, the total requested fees for the attorneys in this case would amount to a lodestar multiplier of 8.7 percent, which is "simply too high for a settlement of this size and would result in 'windfall profits for class counsel in light of the hour spent on the case,'" Koh said.
Koh found a lodestar of $18 million with a 2.2 multiplier is appropriate for class counsel, resulting in $40 million in attorney fees for Lief Cabraser Heimann & Bernstein LLP; Berger & Montague PC; Grant & Eisenhofer PA; and The Joseph Saveri Law Firm.
She also approved $1.2 million in expenses.
Girard Gibbs LLP, representing Devine, is entitled to a 1.5 multiplier on its $518,000 lodestar for its work on the case from May 2014 to March 2015. The lower multiplier is because Devine's counsel entered the litigation late, did not advance any of the millions of dollars in expenses in the case, or assume the same risk of nonpayment.
The lower fee awards will increase the average recovery for class members from approximately $5,070 to $5,770, Koh said.
Devine will receive a class representative service award of $120,000, and the other four class representatives will each receive $80,000.
The awards are appropriate since each class representative spent hundreds of hours on the case over four years and "risked significant workplace retaliation by serving as a named plaintiff in this high-profile lawsuit," Koh said.
Devine is entitled to the heightened award since his objection to the initial settlement received considerable media coverage and he will likely have an even harder time getting a job in the tech industry again.
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