By David Thomas and Mike Scarcella
Jan 9 (Reuters) - Nearly five years after Blue Cross Blue Shield agreed to pay $2.7 billion in one of the largest U.S. antitrust class action settlements ever, a handful of law firms involved in the case are still fighting over their share of the attorney fees.
A trio of small law firms claims that Louisiana-based Pendley, Baudin & Coffin never paid them their dues from Pendley's portion of a $667 million fee award allocated to the more than 30 plaintiffs' firms in the case, according to complaints made public on Monday by an Alabama federal judge who oversaw the antitrust litigation.
Blue Cross denied wrongdoing but agreed to the settlement in 2020 to resolve claims that it overcharged commercial and individual subscribers. U.S. District Judge R. David Proctor in Birmingham approved the settlement and fee award, and the U.S. Supreme Court finally pushed aside lingering objections in June.
Details about how lawyers in class actions divvy up legal fee awards are rarely made public, and are often based on a web of private agreements among firms. The disputes with the Pendley firm provide a rare peek into the process in the Blue Cross Blue Shield case.
The lion's share of the $667 million award went to law firms Boies Schiller Flexner and Hausfeld, which led the case for the subscriber plaintiffs. The Pendley firm stood to receive close to $13 million, according to the complaints filed by Gordon Ball LLC, the Dampier Law Firm and McArthur Law LLC.
Gordon Ball, a Knoxville, Tennessee lawyer, alleged that he had a written agreement with the Pendley firm to receive half of its fee in the Blue Cross Blue Shield case. The Dampier and McArthur law firms claimed they had a written agreement with the Pendley firm to collectively receive a quarter of the firm's fee.
The Pendley firm and its partners Patrick Pendley, Stanley Baudin and Christopher Coffin did not immediately respond to requests for comment. Attorneys representing the Ball, Dampier and McArthur law firms also did not respond to comment requests.
Pendley led a committee in charge of calculating the plaintiffs' damage claims, a person familiar with the case told Reuters, and the $667 million fee award was apportioned among the many law firms in the case by Edgar Gentle, a Hoover, Alabama-based lawyer appointed to serve as special master in the litigation.
The vast majority of the firms accepted Gentle's allocations and were paid after the Supreme Court's ruling last summer, the person said, adding that Proctor dismissed objections from two other firms in a confidential December ruling after they also objected to their shares.
Gentle did not immediately respond to a request for comment.
The complaints against Pendley do not challenge Gentle's apportionment decisions, Proctor said in his Monday order. He forbade the parties from disclosing details of the fee allocations in any public filings.
Proctor also severed the complaints against the Pendley firm from the larger antitrust litigation, so they will proceed as separate civil actions.
Proctor last month tentatively approved a separate $2.8 billion settlement between Blue Cross Blue Shield and healthcare providers who alleged they were underpaid for reimbursements. Blue Cross Blue Shield denied the providers' claims.
– In other legal fee news, a Delaware judge on Wednesday awarded $176 million in legal fees to plaintiffs lawyers who secured a $919 million settlement with Tesla directors accused of overpaying themselves.
Lawyers at Fields Kupka & Shukurov; McCarter & English; Bleichmar Fonti & Auld; and Clark Hill had requested more than $230 million for their work on the lawsuit against Tesla directors, including Chair Robyn Denholm.
The settlement, which Chancellor Kathaleen McCormick approved on Wednesday, requires Tesla board members to return roughly $277 million in cash, $459 million in stock options and forgo stock options for 2021-23 worth $184 million.
Tesla had asked McCormick to cap attorney fees at $64 million. The electric carmaker had argued that the $230 million request was an "unwarranted windfall" that worked out to an hourly rate of $10,690.
Though McCormick declined to grant the lawyers their full request, the $176 million award is still the fourth-largest in the history of shareholder litigation in Delaware.
– Plaintiffs firms including Lowey Dannenberg; and Scott+Scott that negotiated a $95 million privacy class action settlement with Apple said they may seek up to $28.5 million in fees, plus $1.1 million for expenses, from the settlement fund. The lawsuit claimed Apple’s voice-activated assistant Siri violated users’ privacy.
Apple, represented by Morrison & Foerster, denied wrongdoing while agreeing to settle. The proposed accord, disclosed on Tuesday, is pending approval before U.S. District Judge Jeffrey White in federal court in Oakland, California.
(Legal Fee Tracker is a weekly feature focused on attorney compensation. Please send tips or suggestions to D.Thomas@thomsonreuters.com)
Read more:
Settlements spur big fee awards, with more to come in 2025
Meta case yields Texas-size fees as more firms ink state contracts
Ex-judge sues law firm Hagens Berman over pharma fee award
(Reporting by David Thomas and Mike Scarcella)
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