By: Zachary Zagger
A court-appointed expert brought in to address several questions surrounding attorneys’ fees payouts in the uncapped NFL concussion settlement recommended Monday that the Pennsylvania federal court overseeing the settlement should cap contingency fees for individual attorneys at 15 percent and scrap another request to set aside 5 percent of settlement awards to compensate future work in administering the settlement.
Harvard Law School professor William B. Rubenstein submitted his final report to the the court, arguing that the “recommendations strike a proper balance between fairly compensating the lawyers for the services that they have provided — or will provide — while ensuring that the absent class members do not pay fees that are, in total, unreasonable.”
The report comes after U.S. District Judge Anita B. Brody appointed Rubenstein in September to review questions over the attorneys' fees emanating from the class settlement as the court considers whether to approve the $112.5 million in attorneys' fees and costs sought by the co-lead class counsel firms Seeger Weiss LLP and Anapol Weiss. The co-lead firms have additionally asked for 5 percent to be set aside from individual settlement awards to the NFL players or their families in the class for work in administering the settlement fund, which is set to pay out for 65 years.
However, the process has been marred by several disputes over the sought lead counsel fees and fees for the attorneys representing individual or smaller groups of clients, some of whom have filed liens on any recovery funds obtained by their clients through the settlement.
Nearly half of the over 20,376 class members who have registered for relief under the settlement as of Nov. 1 have at some point retained their own counsel in the case, entering into individual contingent fee agreements.
Rubenstein said he was only able to review 640 of the estimated 10,000 individual retainer agreements in the case, finding contingency fee rates ranged from 15 percent to 40 percent. Other rates discovered in attorney liens and other court filings showed some as high as 45 percent and some as low as 1 percent with at least one attorney agreeing to work pro bono.
He argued that the 15 percent cap on these contingency fees is justified and would ensure that class members with individual attorneys would only have to pay less than a third of their award in attorneys' fees.
The co-lead attorneys set the sought fees amount at just over 9 percent, 9.6 percent when including the costs, of the estimated $1.16 billion total settlement, which includes a $950 million monetary award fund. But Rubenstein reasoned that the fees and costs are actually $15.6 percent of the total settlement when looking at its net present value, which factors in the lower value of the amount over time as it will be distributed over a 65-year period.
However, Rubenstein said that the cap should only be “presumptive” and “establish a process whereby counsel or their client could seek relief from it in particular circumstances,” such as attorneys who took risk and put in a lot of work for individual clients before the case was consolidated into multidistrict litigation.
Rubenstein further recommended that the court reject the 5 percent “set-aside” for administering future work sought by co-lead counsel, arguing it was not addressed in the settlement agreement and would essentially allow the lead class counsel to be paid twice for the same work.
He said that co-lead class counsel should have negotiated the total amount of the set-asides into their fees and cost request.
“Having failed to do so, nothing in the settlement agreement bars class counsel from seeking that amount from the NFL now, other than the fact that they would have to convince this court, over the NFL’s objections, that they deserve that amount,” Rubenstein told the court in the report. “ If they are not confident they can make that showing, it hardly seems right to instead seek to extract the money from their own clients”
Still, the lead class counsel had noted in earlier filings that they would not be the ones receiving amounts over the 65-year period of the settlement as at some point “future generations” of lawyers would be administering the settlement.
“We are reviewing the report and will respond per the schedule set by the court,” Christopher Seeger of Seeger Weiss LLP, one of the co-lead class firms, told Law360 on Tuesday.
Judge Brody approved the settlement in April 2015, but the implementation of the settlement was held up with challenges over its fairness. The Third Circuit affirmed the deal last year.
The settlement class is represented by co-lead counsel Seeger Weiss LLP and Anapol Weiss.
The NFL is represented by Brad S. Karp, Bruce Birenboim and Lynn B. Bayard of Paul Weiss Rifkind Wharton & Garrison LLP.
The case is In re: National Football League Players' Concussion Injury Litigation, case number 2:12-md-02323, in the U.S. District Court for the Eastern District of Pennsylvania.