Judd v Tnetix Wa Atty Fee Motion Tnetix Settlement 2013

Type: Phone Litigation • Topics: Telephones

Download original document:
Brief thumbnail

Document text

This text is machine-read, and may contain errors. Check the original document to verify accuracy.

HON. BETH ANDRUS
Hearing Date: April 12, 2013 @ 9:00 a.m.
With Oral Argument

1
2
3
4
5
6

IN THE SUPERIOR COURT OF WASHINGTON
FOR KING COUNTY

7
8
9
10

SANDY JUDD, TARA HERIVEL, and
COLUMBIA LEGAL SERVICES, for
themselves, and on behalf of all similarly
situated persons,
Plaintiffs,

11
12

13
14
15
16

NO. 00-2-17565-5 SEA
CLASS ACTION

CLASS COUNSEL’S MOTION
FOR COMPENSATION, COSTS
AND INCENTIVE AWARD RE:
T-NETIX SETTLEMENT

AMERICAN TELEPHONE AND
TELEGRAPH COMPANY and
T-NETIX, INC.,
Defendants.

17
18
19
20
21
22
23
24
25
26

CLASS COUNSEL’S MOTION FOR
COMPENSATION, COSTS AND INCENTIVE
AWARD RE: T-NETIX SETTLEMENT

SIRIANNI YOUTZ SPOONEMORE
999 THIRD AVENUE, SUITE 3650
SEATTLE, WASHINGTON 98104
TEL. (206) 223-0303 FAX (206) 223-0246

Table of Contents
1
2
3
4

INTRODUCTION ............................................................................................................... 1

II.

EVIDENCE RELIED UPON .............................................................................................. 1

III.

FACTS................................................................................................................................. 1

Overview of Case ....................................................................................................... 2

Overview of Settlement with T-Netix. ....................................................................... 5

IV. LAW AND ARGUMENT................................................................................................... 6

In Washington, Class Action Fees Are Awarded As A
Percentage Of The Recovery / Benefit, And Are Not Based On
Hours Expended. ........................................................................................................ 6

Class Counsel’s Request for 30% Should Be Approved. ........................................... 9

9
10
11

The Results Obtained. ..................................................................................... 10

The Risks of Litigation. ................................................................................... 11

The Skill Required and Quality of Work. ....................................................... 12

Contingent Nature of the Fee. ......................................................................... 12

The Awards in Similar Cases. ......................................................................... 13

The Time, Effort and Burden Expended By Class
Counsel. ........................................................................................................... 13

12
13
14
15
16
17
18

Class Counsel’s Costs and Expenses Should Be Reimbursed. ................................. 14

Columbia Legal Services Should be Awarded a Case
Contribution Award. ................................................................................................. 15

19
20
21

CONCLUSION ................................................................................................................. 16

22
23
24
25
26

CLASS COUNSEL’S MOTION FOR
COMPENSATION, COSTS AND INCENTIVE
AWARD RE: T-NETIX SETTLEMENT - i

SIRIANNI YOUTZ SPOONEMORE
999 THIRD AVENUE, SUITE 3650
SEATTLE, WASHINGTON 98104
TEL. (206) 223-0303 FAX (206) 223-0246

INTRODUCTION

With no assurance of payment, Class Counsel litigated this case for over twelve

years, finally obtaining a settlement that exceeds T-Netix’s maximum exposure by

$170,000. This outstanding result did not arise without a massive outlay of attorney

time, effort and expense on behalf of the class. Class Counsel, in connection with the

final approval of the Settlement Agreement with T-Netix, now seeks compensation

totaling 30% of the common fund ($423,750), cost reimbursement in the sum of

$105,537.43, plus an incentive award for class representative Columbia Legal Services

in the sum of $20,000.

If these amounts are approved by the Court, all claimants will still receive 100%

of their statutory damages after the payment of the requested fees, costs,

administrative expenses and case contribution award.

reasonable and should be approved.

In what follows, we will:

Class Counsel’s request is

(a) provide factual background relevant to this

motion; (b) discuss the law governing fee awards in this common fund case; (c) discuss

an appropriate percentage fee award in light of the results achieved (a 100% recovery

for each claimant); and (d) explain, in light of any factors this Court may choose to

consider other than “results achieved,” that the fee we seek is fair and reasonable.

19
20
21
22

II. EVIDENCE RELIED UPON

The Class relies upon the Declarations of Chris R. Youtz Re: Motion for
Compensation and Richard E. Spoonemore Re: Motion for Compensation.
III. FACTS

The Court is intimately familiar with the facts of this case. However, given that

Class Members may review this motion, a short summary of facts is provided below.

For more details on the Settlement Agreement and Allocation Plan, Class Members are

directed to the “Local Call Class’s Unopposed Motion for (1) Preliminarily Approval of
CLASS COUNSEL’S MOTION FOR
COMPENSATION, COSTS AND INCENTIVE
AWARD RE: T-NETIX SETTLEMENT - 1

SIRIANNI YOUTZ SPOONEMORE
999 THIRD AVENUE, SUITE 3650
SEATTLE, WASHINGTON 98104
TEL. (206) 223-0303 FAX (206) 223-0246

Settlement Agreement, (2) Preliminary Approval of Plan of Allocation, (3) Directive to

Send Notice, and Establishment of Final Approval Hearing” filed on November 5,

2012. This information, including the actual Settlement Agreement and Allocation

Plan, may be obtained at www.ratedisclosure.com.

Plaintiffs filed this class action on June 6, 2000. It arises from Washington’s

Overview of Case

telephone rate disclosure laws.

See RCW 80.36.5101, 80.36.5202, WAC 480-120-141

(1991) and WAC 480-120-141 (1999).

telecommunications company operating as an “operator service provider” or “OSP” is

Under those statutes and regulations, a

10
11
12
13
14
15
16
17
1

The legislature finds that a growing number of companies provide, in a nonresidential
setting, telecommunications services necessary to long distance service without
disclosing the services provided or the rate, charge or fee. The legislature finds that
provision of these services without disclosure to consumers is a deceptive trade
practice.

19
20
21
22
23
24
25
26

This statute provides that:

RCW 80.36.510.
2

This statute directs the Washington Utilities and Transportation Commission to promulgate
specific disclosure regulations:
The utilities and transportation commission shall by rule require, at a minimum, that
any telecommunications company, operating as or contracting with an alternate
operator services company, assure appropriate disclosure to consumers of the
provision and the rate, charge or fee of services provided by an alternate operator
services company.
RCW 80.36.520. Those regulations are set forth in WAC 480-120-141.
CLASS COUNSEL’S MOTION FOR
COMPENSATION, COSTS AND INCENTIVE
AWARD RE: T-NETIX SETTLEMENT - 2

SIRIANNI YOUTZ SPOONEMORE
999 THIRD AVENUE, SUITE 3650
SEATTLE, WASHINGTON 98104
TEL. (206) 223-0303 FAX (206) 223-0246

required to provide consumers with verbal rate disclosures for collect calls. Failure to

comply is a per se violation of Washington’s Consumer Protection Act.3

During 1996-2000 inmates in Washington correctional facilities could only call

families, friends, attorneys and others in the proposed class by calling collect. Inmates

could only place these calls through a carrier who had an exclusive contract to handle

the calls. Some companies took advantage of their monopoly over prisoner-initiated

collect calls by charging rates that were much higher than rates normally charged for

similar calls. These rates were charged to the recipients without providing the required

rate disclosure or the opportunity to obtain information about the cost of the collect

call. Thus, in June 2000, this action was brought on behalf of those consumers.

This action has proceeded for over twelve years. This case has been through

multiple appeals and was referred to the WUTC to determine whether defendants

AT&T and T-Netix were liable under the Commission’s regulations. The WUTC

entered a final order (1) setting forth a test to be applied to determine what entity is the

OSP, finding AT&T as the OSP under that test for some call types (and deferring to the

King County Court the issue of whether T-Netix could be an OSP under its test), and

(2) finding that no proper disclosures had been made under its regulations. Youtz

Decl., ¶¶ 3-7.

19
20
21
22
23
24
25
26

The statute specifically provides:
In addition to the penalties provided in this title, a violation of RCW 80.36.510, RCW
80.36.520, or RCW 80.36.524 constitutes an unfair or deceptive act in trade or commerce
in violation of chapter 19.86 RCW, the consumer protection act. Acts in violation of
RCW 80.36.510, RCW 80.36.520, or RCW 80.36.524 are not reasonable in relation to the
development and preservation of business, and constitute matters vitally affecting the
public interest for the purpose of applying the consumer protection act, chapter 19.86
RCW. It shall be presumed that damages to the consumer are equal to the cost of the
service provided plus two hundred dollars. Additional damages must be proved.

RCW 80.36.530.
CLASS COUNSEL’S MOTION FOR
COMPENSATION, COSTS AND INCENTIVE
AWARD RE: T-NETIX SETTLEMENT - 3

SIRIANNI YOUTZ SPOONEMORE
999 THIRD AVENUE, SUITE 3650
SEATTLE, WASHINGTON 98104
TEL. (206) 223-0303 FAX (206) 223-0246

AT&T appealed the WUTC’s Order to Thurston County Superior Court under

Washington’s Administrative Procedure Act. The Thurston County Superior Court

affirmed the WUTC’s test for determining OSP status and its conclusion that AT&T

was the OSP for some of the calls in the litigation. It remanded to the WUTC the

question of whether the regulations were violated. The Court concluded that the

defendants were not afforded a full opportunity to litigate that issue before the WUTC

issued its decision.

AT&T then appealed the Thurston County Superior Court’s affirmance of the

OSP test. That appeal is still pending in Division II of the Washington State Court of

Appeals. The issue of whether the regulations were violated was remanded to the

WUTC.

After the WUTC’s decision, the original litigation was reactivated in King

County Superior Court. There, over the following two years, the following key events

occurred:

15
16
17
18
19
20
21
22
23
24
25

• The original complaint was amended and Columbia Legal Services
was named as an additional class representative.
• The action was certified as a class action, with one class certified to
pursue claims against T-Netix, and two classes certified to pursue
claims against AT&T.
• The King County Court revoked the referral to the WUTC on the issue
of whether the regulations were violated.
• Extensive discovery took place on multiple issues in the case,
including on the question of whether disclosures were made.
• Multiple motions on dispositive issues were made to the Court, which
entered numerous orders on the key liability issues in the case,
including (1) how damages would be calculated, (2) the requirements
of the WUTC regulations, and (3) the types of calls implicated in the
case as to each defendant.

CLASS COUNSEL’S MOTION FOR
COMPENSATION, COSTS AND INCENTIVE
AWARD RE: T-NETIX SETTLEMENT - 4

SIRIANNI YOUTZ SPOONEMORE
999 THIRD AVENUE, SUITE 3650
SEATTLE, WASHINGTON 98104
TEL. (206) 223-0303 FAX (206) 223-0246

Overview of Settlement with T-Netix.

As a result of summary judgment motions, T-Netix was left with exposure
2

arising from an alleged lack of disclosure on local calls made to five DOC facilities:
3

Clallam Bay, Washington Correction Center for Women, Coyote Ridge Corrections
4

Center, Olympic Corrections Center and Pine Lodge Work Pre-Release.
5

In an effort to resolve these claims, T-Netix and Class Counsel participated in a
6

mediation in Boston on August 29, 2012. Although the case did not resolve at that
7

point, Class Counsel had additional discussions with T-Netix, finally reaching a CR 2A
8

agreement on October 15, 2012, which was then expanded in a final agreement on
9

October 18, 2012. The key terms of the agreement are:
10
11
12
13
14
15
16
17
18
19
20
21
22

• Payment of $1,412,500. T-Netix paid $1,412,500 into a settlement trust
fund to resolve the claims brought by the Local Call Class. Agreement,
¶6.1.
• Release limited to Local Call Class. The Local Call Class will release
T-Netix and AT&T for only the Local Call Class Claims.4
• Attorney fees, costs and costs of administration. Attorney fees (up to
one-third of the recovery) costs and costs of administration will be
paid from the amount paid by T-Netix. Agreement, ¶10.
• Case contribution award. The Agreement allows a case contribution
award not to exceed $20,000 to be paid to Columbia Legal Services
from the amount paid by T-Netix, subject to approval by the Court.
Agreement, ¶10.
• The Plan of Allocation. Payments to Class Members would be made
under an allocation plan.
• Excess Funds. Because it is anticipated the excess funds will remain
even after the payment of claims at 100%, attorney fees, costs and

23
24
25
26

4 “Local Call Class Claims” are defined as “claims for violations of the CPA alleged by the Local Call
Class arising out of the receipt of a local call, or local calls, from Clallam Bay, Washington Correction
Center for Women, Coyote Ridge Corrections Center, Olympic Corrections Center and Pine Lodge Work
Pre-Release.” Agreement, ¶1.9.

CLASS COUNSEL’S MOTION FOR
COMPENSATION, COSTS AND INCENTIVE
AWARD RE: T-NETIX SETTLEMENT - 5

SIRIANNI YOUTZ SPOONEMORE
999 THIRD AVENUE, SUITE 3650
SEATTLE, WASHINGTON 98104
TEL. (206) 223-0303 FAX (206) 223-0246

expenses, the Agreement provides that the excess funds will be
distributed to the Legal Foundation of Washington and other
organizations approved by the Court. See CR 23(f)(2); Plan of
Allocation, ¶¶1, 7.

1
2
3
4
5
6
7

The Settlement Agreement and Allocation Plan were presented to the Court,
who preliminarily approved the Agreement and Plan and established a process under
which Class Members could comment on, or object to, the Agreement and Plan. Part of
that process required Class Counsel to move for fees, costs, expenses and an incentive
award in advance of the final approval hearing.

IV. LAW AND ARGUMENT
9
10

In Washington, Class Action Fees Are Awarded As A Percentage Of
The Recovery / Benefit, And Are Not Based On Hours Expended.

Courts have historically used one of two different methods to determine

attorneys’ fees in class actions. One method—the “lodestar approach”—is based upon

the number of hours expended by class counsel. See Bowles v. Department of Retirement

Sys., 121 Wn.2d 52, 72, 847 P.2d 440, 450 (1993). These hours are then multiplied by “a

reasonable hourly compensation, [before] adjusting this amount upward or downward

based on additional factors.”

approach” is not determined by reference to the hours spent by counsel on a matter.

Id. Instead, this approach focuses on the results that counsel was able to obtain for the

class. Attorney fees are set “by calculating the total recovery secured by the attorneys

and awarding them a reasonable percentage of that recovery ....” Id.

Id.

In contrast, the “percentage of the recovery

Following the lead of a majority of jurisdictions, the Washington Supreme Court

rejected the hours-based lodestar approach in favor of the result-based percentage of

recovery method. See Bowles, 121 Wn.2d at 72 (“the percentage of recovery approach is

used in calculating fees under the common fund doctrine”); Lyzanchuk v. Yakima

Ranches Owners Assoc., 73 Wash. App. 1, 9, 866 P.2d 695, 699 (1994) (“The ‘percentage of

the recovery’ approach is used to calculate fees under the common fund doctrine ...”);
CLASS COUNSEL’S MOTION FOR
COMPENSATION, COSTS AND INCENTIVE
AWARD RE: T-NETIX SETTLEMENT - 6

SIRIANNI YOUTZ SPOONEMORE
999 THIRD AVENUE, SUITE 3650
SEATTLE, WASHINGTON 98104
TEL. (206) 223-0303 FAX (206) 223-0246

Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1047 (9th Cir. 2002) (“Under Washington law,

the percentage-of-recovery approach is used in calculating fees in common fund

cases.”). As Judge Coughenour succinctly observed:

4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

The Washington Supreme Court has held that the
percentage-of-recovery approach is used in determining
attorneys’ fees in a common fund class action. The
Washington Supreme Court rejected the lodestar method for
determining attorneys’ fees in a common fund action.
Vizcaino v. Microsoft Corp., 142 F. Supp. 2d 1299, 1032 (W.D. Wash. 2001), aff’d, 290 F.3d
1043 (9th Cir. 2002) (citation to Bowles omitted).
The Settlement Agreement, ¶ 10, provides that “pursuant to the common fund
doctrine, Class Counsel shall petition the Court prior to the Fairness Hearing for an
award of attorney fees not to exceed one-third of the Settlement Amount….” The
parties’ agreement reflects the law in this state—that the amount of fees should be
determined as a percentage of the common fund obtained for the class.
The primary consideration in setting the fee in a common fund/common benefit
action is the magnitude of benefit conferred on class members because “[i]n a common
fund case, the size of the recovery constitutes a suitable measure of the attorneys’
performance.” Bowles, 121 Wn.2d at 72. See also id., p. 75 (“Under the percentage of
recovery approach, the attorneys are to be compensated according to the size of the
judgment recovered, not the actual hours expended.”); Vizcaino, 142 F. Supp. 2d at
1302. Accord, MANUAL FOR COMPLEX LITIGATION (4TH), § 14.121 (“[T]he factor given the
greatest emphasis is the size of the fund created, because ‘a common fund is itself the
measure of success … [and] represents the benchmark from which a reasonable fee will
be awarded.’”) (hereinafter “MANUAL”); 4 Alba Conte & Herbert B. Newberg,
NEWBERG ON CLASS ACTIONS § 14.6 (4th ed. 2002) (same) (hereafter “NEWBERG ON CLASS

CLASS COUNSEL’S MOTION FOR
COMPENSATION, COSTS AND INCENTIVE
AWARD RE: T-NETIX SETTLEMENT - 7

SIRIANNI YOUTZ SPOONEMORE
999 THIRD AVENUE, SUITE 3650
SEATTLE, WASHINGTON 98104
TEL. (206) 223-0303 FAX (206) 223-0246

ACTIONS”); Shaw v. Toshiba Am. Information Sys., 91 F. Supp. 2d 942, 963-64 (E.D. Tex.

2000).

Courts typically award fees in the range of 20% to 50% of the common fund

created by counsel’s efforts. NEWBERG ON CLASS ACTIONS, § 14.6. See also MANUAL FOR

COMPLEX LITIGATION, § 24.121 (“Attorney fees awarded under the percentage method

are often between 25% and 30% of the fund.”). In Washington, 20% to 30% of the total

benefit conferred on the class is awarded in the typical case, with 25% considered the

benchmark. Bowles, 121 Wn.2d at 72-73; Vizcaino, 290 F.3d at 1047-48 (20%-30% is the

“usual” range under both Washington law and Ninth Circuit authority); Vizcaino, 142

F.Supp.2d at 1032 (“The [Washington Supreme] Court defined the ‘benchmark’

percentage of recovery fee as 25% of the recovery obtained, including future benefits,

with 20 to 30% as the usual range of common fund fees.”). The “usual range” is not a

cap or ceiling on fees. When supported by “the complexity of the issues and the risks”

a court may depart from that range. See, e.g., In re Pacific Enterprises Securities Lit., 47

F.3d 373, 379 (9th Cir. 1995) (approving 33% award); Morris v. Lifescan, Inc., 54 Fed.

Appx. 663, 664 (9th Cir. 2003) (approving 33% award).

In fact, empirical evidence and studies of actual fee awards in class litigation

indicates that the normal range of fees awards is actually slightly higher, at one-third of

the recovery:

20
21
22
23
24
25

[B]ased on the opinions of other courts and the available
studies of class action attorneys' fees awards (such as the
NERA study), this Court concludes that attorneys' fees in the
range from twenty-five percent (25%) to thirty-three and
thirty-four one-hundredths percent (33.34%) have been
routinely awarded in class actions. Empirical studies show
that, regardless whether the percentage method or the
lodestar method is used, fee awards in class actions average
around one-third of the recovery.

CLASS COUNSEL’S MOTION FOR
COMPENSATION, COSTS AND INCENTIVE
AWARD RE: T-NETIX SETTLEMENT - 8

SIRIANNI YOUTZ SPOONEMORE
999 THIRD AVENUE, SUITE 3650
SEATTLE, WASHINGTON 98104
TEL. (206) 223-0303 FAX (206) 223-0246

Shaw, 91 F.Supp.2d at 972 (emphasis added).5
Class Counsel’s Request for 30% Should Be Approved.

While the usual range is “a starting point for analysis,” the fee award must be

supported by findings that “take into account all of the circumstances of the case.”

Vizcaino, 290 F.3d at 1048. The Ninth Circuit has identified six factors that may be

relevant in determining if a fee request is reasonable: (1) the results achieved; (2) the

risks of litigation; (3) the skill required and the quality of work; (4) the contingent

8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26

Awards of one-third (or slightly more) are commonplace. See e.g. Serrano v. Sterling Testing Sys.,
Inc., 711 F. Supp. 2d 402, 421 (E.D. Pa. 2010) (“Recently, another court in this District took note of a study
of class action fee awards within the Third Circuit Court of Appeals, and determined that the average
attorney's fees percentage in such cases was 31.71% and that the median fee award was 33.3%.”);
Bradburn v. 3M, 513 F.Supp.2d 322, 341-42 (E.D. Penn. 2007) (35% award); In re Corel Corp. Inc. Sec. Litig.,
293 F.Supp.2d 484, 497 (E.D. Pa. 2003) (“[T]he 33 ⅓% fee request in this complex case is within the
reasonable range.”); In re Gen. Instrument Sec. Litig., 209 F.Supp.2d 423, 439 (E.D. Pa. 2001) (awarding
attorneys' fees of one-third of settlement as “fair and reasonable,” plus reimbursement of expenses); In re
Eng'g Animation Sec. Litig., 203 F.R.D. 417, 423–24 (S.D. Iowa 2001) (awarding one third of common fund,
plus expenses); In re Safety Components Int'l, Inc. Sec. Litig., 166 F.Supp.2d 72, 101–102 (D. N.J. 2001)
(approving fee request of one-third of $4.5 million settlement); Cullen v. Whitman Medical Corp., 197
F.R.D. 136, 150 (E.D. Penn. 2000) (“I conclude that an award of one-third of the settlement fund is
reasonable in consideration of other courts' awards.”); Neuberger v. Shapiro, 110 F.Supp.2d 373, 386 (E.D.
Pa. 2000) (approving one third of $4.325 million settlement fund); Kogan v. AIMCO Fox Chase, L.P., 193
F.R.D. 496, 503 (E.D. Mich. 2000) (awarding attorneys' fees of one-third of common fund); Gaskill v.
Gordon, 942 F. Supp. 382, 387–88 (N.D. Ill. 1996) (awarding 38% of the settlement fund), aff'd, 160 F.3d 361
(7th Cir. 1998); Muehler v. Land O'Lakes, Inc., 617 F. Supp. 1370, 1380–81 (D. Minn. 1985) (awarding
attorneys' fees of 35 percent of settlement recovery); In re Ampicillin Antitrust Litig., 526 F. Supp. 494, 500
(D. D.C. 1981) (awarding attorneys’ fees of 45% of settlement recovery); Bredbenner v. Liberty Travel, Inc.,
2011 WL 1344745, *21 (D. N.J. 2011) (collecting recent cases in approving 32.6% of the settlement fund as
“clearly fall[ing] within this range”); Moore v. Comcast Corp., 2011 WL 238821, *5 (E.D. Penn. 2011)
(“Furthermore, we note that in similar cases our Court of Appeals has approved awards of counsel fees
that range from 19% to 45%. The fee represents 33% of the monetary value of the settlement and in this
case is comparable to the average fee customary in this circuit.”) (citation omitted); In re Ravisent Techs.,
Inc. Sec. Litig., 2005 WL 906361, at *15 (E.D. Pa. Apr. 18, 2005) (awarding attorneys' fees of one-third of $7
million settlement); Faircloth v. Certified Fin. Inc., 2001 WL 527489, at *12 (E.D. La. May 16, 2001)
(awarding attorneys' fees of 35% of settlement plus interest and reimbursement of expenses); In re Unisys
Corp. Sec. Litig., 2001 WL 1563721, at *3–4 (E.D. Pa. Dec. 6, 2001) (approving one-third fee sought by
plaintiffs' counsel as fair and reasonable); In re Neoware Sys., Inc. Sec. Litig., 2000 WL 1100871, at *3–4
(E.D. Pa. July 27, 2000) (awarding counsel fees of approximately one-third of each of two settlement
funds, plus a proportionate share of interest accrued and reimbursement of expenses); Linney v. Cellular
Alaska Partnership, 1997 WL 450064, *7 (N.D. Cal. 1997) (“Courts in this district have consistently
approved attorneys’ fees which amount to approximately one-third of the relief procured for the class.”).
CLASS COUNSEL’S MOTION FOR
COMPENSATION, COSTS AND INCENTIVE
AWARD RE: T-NETIX SETTLEMENT - 9

SIRIANNI YOUTZ SPOONEMORE
999 THIRD AVENUE, SUITE 3650
SEATTLE, WASHINGTON 98104
TEL. (206) 223-0303 FAX (206) 223-0246

nature of the fee; (5) the burdens carried by class counsel; and (6) the awards made in

similar cases. Id., pp. 1048-50.6

While the usual range in Washington is between 20%-30%, this case is far from

“typical” and “usual.” Under each of the factors identified by the Ninth Circuit, the

unusual and extraordinary nature of this case would support a request for an award

higher than typical range, and in line with the empirical evidence of actual awards.

However, Class Counsel only seeks an award of 30% of the T-Netix recovery, an

amount which falls within the typical range.
1.

The Results Obtained.

The Settlement Amount exceeds T-Netix’s total exposure to statutory damages

by $170,000. This fact alone makes this settlement extraordinary in the world of class

action litigation where fractional settlements are commonplace. In an era of public

suspicion

settlements), the result in this case proves that the class action process, when

aggressively pursued to the end, can provide full reimbursement for victims and

advance important public policies.

over

pennies-on-the-dollar

class

action

settlements

(or

“coupon”

The “usual” or “typical” range of 20%-30% contemplates compromise

settlements – it does not contemplate a settlement where Class Counsel is able to obtain

more than the defendant’s total exposure. This important fact cannot be overlooked.

While the total size of the benefit is critical in common fund/common benefit fee

analysis, from a Class Member’s perspective the most critical consideration is the

percentage of their loss that he or she will recover.

23
24
25
26

Washington law, which generally requires that the fee award be “reasonable” without setting forth
the factors to consider, therefore looks to federal law for guidance in this area. Bowles, 121 Wn.2d at 72;
Vizcaino, 290 F.3d at 1047.
CLASS COUNSEL’S MOTION FOR
COMPENSATION, COSTS AND INCENTIVE
AWARD RE: T-NETIX SETTLEMENT - 10

SIRIANNI YOUTZ SPOONEMORE
999 THIRD AVENUE, SUITE 3650
SEATTLE, WASHINGTON 98104
TEL. (206) 223-0303 FAX (206) 223-0246

In assessing “size of the settlement” factor and whether the
settlement was favorable to the plaintiffs and class members,
the district court may also want to determine what
percentage of the plaintiffs' and class members’
approximated actual damages that the settlement figure
represents. This figure, when viewed in context of the risk of
nonrecovery, may be helpful in determining how well the
counsel did for their clients.

Conte, ATTORNEY FEE AWARDS § 2:8 (3d ed.). In this case, the settlement amount will

fully pay all claimants even after payment of attorneys’ fees and costs of litigation. A

fee award of 30% of the total benefit will not result in a single claim being reduced.

This is an unusual achievement.

1
2
3
4

In the rare class actions where residual funds remains, those funds often revert

back to the defendant after the claims process. See, e.g., Boeing Co. v. Van Gemert, 444

U.S. 472, 477, 100 S. Ct. 745, 62 L.Ed.2d 676 (1980). Not here. Here, Class Members will

further be benefited because any funds remaining after paying claims, fees and costs

will be used to fund legal services and other projects designed to advance class

interests.

This first factor would justify an award higher than the typical or usual range

because of the atypical and unusual result. Counsel’s request for 30%, within the

typical range, should be approved.
2.

The Risks of Litigation.

Class Counsel decided to pursue this case after another Seattle firm rejected it.

Youtz Decl., ¶ 2. The class largely consisted of prisoners’ families and defense lawyers

(and involved prisoners), groups of individuals which are not viewed sympathetically

by jurors.

defended by an army of defense lawyers from across the county. The case involved

novel issues and questions of first impression, in a highly technical and specialized

area of telecommunications. Every fact that could be contested was challenged, and

It was brought against some of the largest corporations in the world, and

CLASS COUNSEL’S MOTION FOR
COMPENSATION, COSTS AND INCENTIVE
AWARD RE: T-NETIX SETTLEMENT - 11

SIRIANNI YOUTZ SPOONEMORE
999 THIRD AVENUE, SUITE 3650
SEATTLE, WASHINGTON 98104
TEL. (206) 223-0303 FAX (206) 223-0246

every legal argument that could be made was advanced by the defendants.

generally, Youtz Decl., ¶¶ 2, 13.

The case was fraught with risk from its inception.

See

Many of the original

defendants escaped liability after the Washington State Supreme Court ruled that

plaintiffs could not pursue defendants for violations of the disclosure statutes without

showing a violation of a regulation as well. This case was killed in 2005, only to rise

from the dead after the plaintiffs won on appeal. Even then, the plaintiffs had to run a

gauntlet of dispositive motions advanced by the defendants. With respect to many of

those motions, a loss would have again killed the action. Youtz Dec., ¶¶4-6.

The Skill Required and Quality of Work.

The Court, who devoted substantial judicial resources in this case, is in the best

position to access the skill and qualify of legal work performed by Class Counsel.

Class Counsel only notes that this case also involved highly technical issues relating to

obscure telecommunications concepts, as well as issues related to the functioning of the

complex P-III computer platform. Class Counsel’s ability to navigate these waters was,

in conjunction with the legal arguments, critical to the success of the action. Youtz

Decl., ¶¶ 12-13.

Contingent Nature of the Fee.

Judge Coughenour’s comment in Vizcaino is apt here:

20
21
22
23
24
25
26

Class Counsel argue that due to a variety of factors,
including the nature of the Defendant, the novel and
complex issues presented, the risk and expense of litigating a
class action, no rational private lawyer in the nation would
have taken this case for less than one-third of any recovery.
The Court agrees.
Vizcaino, 142 F. Supp. 2d at 1304 (emphasis added). Class Counsel took this case on a
fully continent basis. Not only were Class Counsel’s fees contingent upon success, but
CLASS COUNSEL’S MOTION FOR
COMPENSATION, COSTS AND INCENTIVE
AWARD RE: T-NETIX SETTLEMENT - 12

SIRIANNI YOUTZ SPOONEMORE
999 THIRD AVENUE, SUITE 3650
SEATTLE, WASHINGTON 98104
TEL. (206) 223-0303 FAX (206) 223-0246

costs were as well. See RPC 1.8(e)(2) (“[I]n matters maintained as class actions only,

repayment of expenses of litigation may be contingent on the outcome of the matter.”).

Class Counsel stood to lose not just over three million of dollars in time value, but

$500,000 in firm income if the case was not successful. Youtz Dec., ¶17. Impacting firm

revenue for over twelve years is a long time to wait for a return:

6
7
8
9
10
11

The representation of a class for more than a decade on a
contingent-fee basis is, of course, an extremely long time to
represent a client without getting paid and without knowing
when, and if you will ever get paid. Class Counsel also
incurred hundreds of thousands of dollars in expenses in
connection with the Vizcaino case, had to forgo significant
other work to pursue the case, and the firm's annual income
greatly declined as a consequence.
Vizcaino, 142 F. Supp. 2d at 1305.

The Awards in Similar Cases.

13
14
15
16
17

As noted above, the “typical” range in 20%-30%, with empirical data showing
that one-third is the functional award. Class Counsel’s request is within the “typical”
range, and less than the actual percentage of empirical evidence of actual fee awards.
6.

The Time, Effort and Burden Expended By Class Counsel.

After over twelve years of litigation, it would be an understatement to say that

this was not a case that settled quickly. The litigation was active for over a decade,

involving proceedings before this Court, the WUTC, Division I (twice), Division II

(once) and the Washington State Supreme Court. Although “[u]nder Washington law,

the percentage method, without a lodestar cross-check, should be used in common

fund cases,” see Vizcaino, 142 F.Supp.2d at 1302, it is significant that over 7,000 billable

hours, with a time value of well over $3,000,000 was spent pursuing this action.

Spoonemore Decl., ¶ 3; Youtz Decl., ¶ 18. In addition, over $500,000 in costs were

advanced by Class Counsel. Spoonemore Decl., ¶ 4; Youtz Decl., ¶ 17. With between
CLASS COUNSEL’S MOTION FOR
COMPENSATION, COSTS AND INCENTIVE
AWARD RE: T-NETIX SETTLEMENT - 13

SIRIANNI YOUTZ SPOONEMORE
999 THIRD AVENUE, SUITE 3650
SEATTLE, WASHINGTON 98104
TEL. (206) 223-0303 FAX (206) 223-0246

five and seven attorneys during this time period, the legal and financial resources

necessary for this type of complex, protracted and continuous litigation made this a

classic “bet your firm” case. See A. Conte, ATTORNEY FEE AWARDS, § 2.22 (3d ed. 2012)

(“expenditure of time and money by a small firm” is factor to consider).

Counsel took reduced draws, funded the costs with earned firm income, and

was forced to turn away hourly work and other attractive contingent fee matters

because of the time and financial commitment demanded by this litigation. Youtz

Decl., ¶ 18. These risks were far from typical, even for a contingent fee case. The

extraordinary risk would justify an award outside of the usual range. Class Counsel’s

request for 30%, within the usual range, easily passes muster.
Class Counsel’s Costs and Expenses Should Be Reimbursed.

Class counsel’s out-of-pocket costs in this case against both T-Netix and AT&T

exceed $500,000. Spoonemore Decl., ¶ 3, Exh. A (invoices paid to date total $538,601.03,

more expenses coming due).

identified costs which could fairly be allocated to one specific defendant – such as the

costs of notice to each class. Expenses incurred after the settlement with T-Netix, or

work done before the settlement which was directed primarily or exclusively at AT&T,

were also allocated to the AT&T side of the litigation. All other expenses, such as

experts who worked on behalf of both classes, were then split evenly between the two

cases.

reimbursement of $105,537.43 in expenses advanced to date.7 Counsel has been paying

for all costs out of pocket, with no guarantee of ever being repaid if the action was lost.

Thus, counsel had every incentive to be cautious in incurring costs.

In order to allocate those costs, Class Counsel first

Spoonemore Decl., ¶ 3.

Using this allocation, Class Counsel seeks

24
25
26

Additional expenses, such as those related to the claims process and administration will continue
to be incurred by the Class. Class Counsel will continue to advance those funds, and will seek a
supplemental award of costs at the time the excess funds will be distributed.
CLASS COUNSEL’S MOTION FOR
COMPENSATION, COSTS AND INCENTIVE
AWARD RE: T-NETIX SETTLEMENT - 14

SIRIANNI YOUTZ SPOONEMORE
999 THIRD AVENUE, SUITE 3650
SEATTLE, WASHINGTON 98104
TEL. (206) 223-0303 FAX (206) 223-0246

Class counsel should be reimbursed for costs that have already been paid. Newberg,

§ 14.02, p. 14-2-3 (class counsel who “created that class recovery are entitled to be

reimbursed from the common fund for their reasonable expenses”); Conte, § 2.08, p. 50

(“The prevailing view is that expenses are awarded in addition to the fee percentage.”).

Class counsel respectfully requests that the Court award $107,537.43 as reimbursement

for costs expended on behalf of the class to date, with a supplemental award to be

made at when the excess funds are distributed.

Columbia Legal Services Should be Awarded a Case Contribution
Award.

Columbia has actively pursued this case for two years. They were not a passive
10

class representative, despite the fact that Columbia’s stake in the T-Netix class came
11

down to one call ($200.90).

John Midgley, Columbia’s former director, attended

numerous meetings with class counsel, assisted in drafting and obtaining declarations,
13

and received and reviewed all substantive pleadings and orders in this case.
14

Spoonemore Decl., ¶ 2. Mr. Midgley brought additional legal experience to this case
15

and actively participated in numerous significant strategic decisions.
16

The litigation imposed numerous burdens on Columbia. Columbia employees
17

were deposed, and its documents were subject to production.

Id.

Columbia’s

employees spent many hours working with Class Counsel on responding to discovery
19

requests, searching for old phone records, and contacting former employees. Mr.
20

Midgley accompanied Class Counsel to Boston for the mediation with T-Netix which
21

would eventually lead to the settlement. Id.
22
23
24

Courts routinely approve incentive awards to compensate named plaintiffs for
the services they provided and the risks they incurred during the course of the class

action litigation. Cullen v. Whitman Medical Corp., 197 F.R.D. 136, 145 (E.D. Penn. 2000).

These awards are “not uncommon in class action litigation and particularly where, as
CLASS COUNSEL’S MOTION FOR
COMPENSATION, COSTS AND INCENTIVE
AWARD RE: T-NETIX SETTLEMENT - 15

SIRIANNI YOUTZ SPOONEMORE
999 THIRD AVENUE, SUITE 3650
SEATTLE, WASHINGTON 98104
TEL. (206) 223-0303 FAX (206) 223-0246

here, a common fund has been created for the benefit of the entire class.” In re Southern

Ohio Correctional Facility, 175 F.R.D. 270, 272 (S.D. Ohio 1997).

appropriate where the named plaintiff provided active assistance to class counsel.

Bradburn Parent Teacher Store, Inc. v. 3M, 513 F.Supp.2d 322, 342 (E.D. Pa. 2007).

5
6

Such awards are

Awards to class representatives generally range from $10,000 to $50,000. See,
e.g., In re Remeron End–Payor Antitrust Litig., 2005 WL 2230314, *32–*33 (D. N.J. 2005)

7
8
9

($30,000); In re Dun & Bradstreet Credit Services Customer Litig., 130 F.R.D. at 374 (awards
of $35,000 and $50,000); Roberts v. Texaco, Inc., 979 F. Supp. 185, 201 (S.D. N.Y. 1997)

(“The reported cases … generally range from individual awards of $50,000….”). The

$20,000 award sought here for Columbia is within this range and is warranted,

particularly given that it will not, in any way, reduce the claim of any class member.
V. CONCLUSION

13
14

Class Counsel seeks an award of $423,750 in attorney fees under the common

fund doctrine, an interim award of costs in the sum of $105,537.43, and a case

contribution award to Columbia Legal Services in the sum of $20,000.

DATED: March 25, 2013.

SIRIANNI YOUTZ SPOONEMORE

/s/ Richard E. Spoonemore
Chris R. Youtz (WSBA #7786)
Richard E. Spoonemore (WSBA #21833)
Attorneys for Plaintiffs and Class

20
21
22
23
24
25
26

CLASS COUNSEL’S MOTION FOR
COMPENSATION, COSTS AND INCENTIVE
AWARD RE: T-NETIX SETTLEMENT - 16

SIRIANNI YOUTZ SPOONEMORE
999 THIRD AVENUE, SUITE 3650
SEATTLE, WASHINGTON 98104
TEL. (206) 223-0303 FAX (206) 223-0246

CERTIFICATE OF SERVICE

I certify, under penalty of perjury and in accordance with the laws of the State of

Washington, that on March 25, 2013, I caused a copy of the foregoing document to be

served on all counsel of record in the manner shown and at the addresses listed below:

5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20

Bradford Axel
STOKES LAWRENCE, P.S.
1420 Fifth Avenue, Suite 3000
Seattle, WA 98101

Attorneys for AT&T
By Email:
bradford.axel@stokeslaw.com
deborah.messer@stokeslaw.com

Charles H.R. Peters
David C. Scott
Brian L. Josias
SCHIFF HARDIN LLP
233 S. Wacker Drive, Suite 6600
Chicago, IL 60606

Attorneys for AT&T
By Email:
cpeters@schiffhardin.com
dscott@schiffhardin.com
bjosias@schiffhardin.com

Charles W. Douglas
David W. Carpenter
SIDLEY AUSTIN LLP
One South Dearborn
Chicago, IL 60603

Attorneys for AT&T
By Email:
cdouglas@sidley.com
dcarpenter@sidley.com

Don Paul Badgley
Donald H. Mullins
Duncan C. Turner
BADGLEY-MULLINS LAW GROUP PLLC
701 Fifth Avenue, Suite 4750
Seattle, WA 98104

Attorneys for T-Netix
By Email:
donbadgley@badgleymullins.com
donmullins@badgleymullins.com
duncanturner@badgleymullins.com
climon@badgleymullins.com

Stephanie A. Joyce
ARENT FOX LLP
1717 K Street, NW
Washington, DC 20036

Attorneys for T-Netix
By Email:
joyce.stephanie@arentfox.com

21
22

DATED: March 25, 2013, at Seattle, Washington.

/s/ Richard E. Spoonemore
Richard E. Spoonemore (WSBA #21833)

24
25
26

CLASS COUNSEL’S MOTION FOR
COMPENSATION, COSTS AND INCENTIVE
AWARD RE: T-NETIX SETTLEMENT - 17

SIRIANNI YOUTZ SPOONEMORE
999 THIRD AVENUE, SUITE 3650
SEATTLE, WASHINGTON 98104
TEL. (206) 223-0303 FAX (206) 223-0246