Polyurethane Foam Antitrust Litigation

Docket number: 10-MD-2196 (N.D. Ohio)

On November 12, 2015, the Center for Class Action Fairness (CCAF) filed an objection in the U.S. District Court for the Northern District of Ohio on behalf of two class members objecting to class action settlements. The underlying case alleged that polyurethane foam manufacturers and suppliers had violated antitrust laws.

Class counsel sought 30% in fees — over $45 million — from the $150 million mega-fund and justifies the request with a lodestar that is both inadequately supported and based on numerous forms of over-billing. The objectors argued that in mega-fund cases such as this one, attorneys’ fees of 10-16% of the fund are more appropriate. CCAF objected that the requested fee was excessive and would provide a windfall to the plaintiffs’ attorneys at the expense of class members. Due to economies of scale, “mega-fund” recoveries tend to be the result of class size rather than attorney skill and, thus, the percentage awarded should be in a lower range. CCAF further objected that the fee request overstated the value of the time that plaintiffs’ attorneys and their staff devoted to the case and should be reduced to reflect market rates. As a consequence, and to deter plaintiffs’ attorneys from submitting such overinflated fee requests in the future, CCAF argued that the fee award should be reduced further.

Under the settlement agreements, $10 million is not due for full payment until mid-2017, and another $9.25 million is contingent upon two of the defendants’ recovery in separate litigations against a third party. CCAF objected to any fee award that was based on those amounts before they were available for disbursement to the class. CCAF additionally objected to any allocation among the firms requesting fees that was not undertaken by the Court, in accordance with the federal rules, and, further, that the notice provided to class members was defective in that it failed to disclose information material to a class member’s decision to remain in the class or opt-out.

UPDATE: January 28, 2016:

The U.S. District Court for the Northern District of Ohio denied the indirect purchaser plaintiffs’ attorneys their full requested fees in the Polyurethane Foam Antitrust litigation, granting them twenty percent (or $9 million) less than they were seeking. CCAF had objected to the original fee request, arguing that class counsel’s excessive request would transfer to plaintiffs’ attorneys tens of millions of dollars that rightfully belong to class members. CCAF is encouraged by the court’s order that places more of the award in the hands of consumers rather than the class attorneys.

UPDATE: October 30, 2017:

Plaintiffs reserved the right to file a supplemental fee request for the time spent dealing with objections, such as the won that earned class members an additional $9 million. The district court was not receptive to the new fee request, however, and awarded supplemental fees and costs of only $167,275.71 ($110k fees, $57,275.71 in costs) after class counsel requested over $1.3 million.

This case was litigated while the Center for Class Action Fairness ​was a project of the Competitive Enterprise Institute.

Case Documents