The U.S. Justice Department is planning to oppose the $90.8 million legal fee request in the black farmers' loan discrimination case in Washington federal district court.
Justice lawyers said in a recent court filing the government will litigate the plaintiffs' attorneys assertion that they should receive 7.4% of the $1.25 billion settlement.
The settlement, reached in February 2010, set the fee range between 4.1% and 7.4%. The deal between the government and farmers resolved claims among people who missed a court-imposed deadline to participate in an earlier settlement that involved discrimination allegations.
The U.S. Department of Agriculture has called the settlement fair and reasonable. But that doesn’t mean the government is entirely on board with the plaintiffs’ lawyers, who include Gregorio Francis of Morgan & Morgan, Andrew Marks of Crowell & Moring and Henry Sander of Chestnut, Sanders, Sanders, Pettaway & Campbell.
“Although the USDA submits that this settlement agreement provides potential class members an opportunity to obtain meaningful relief for their claims while fairly resolving the parties’ respective litigation positions, the government does not agree with every point made by plaintiffs in support of final approval of this settlement agreement,” DOJ lawyer Tamra Moore of the federal programs branch said in court papers.
Moore did not articulate why the government will oppose the $90.8 million fee request. DOJ lawyers have not yet filed a formal opposition to the fee petition.
In two other recent large class actions in Washington where the plaintiffs’ lawyers asked for the maximum fee allowed, DOJ called the petitions excessive. DOJ argued in those cases the class members should receive as much of the settlement fund as possible.
The Justice Department has also asked Judge Paul Friedman of U.S. District Court for the District of Columbia to strike an expert’s declaration (PDF) that the plaintiffs’ lawyers in the black farmers case filed with the fee petition. DOJ called the declaration “improper.”
Cornell University Law School professor Theodore Eisenberg, who has written several studies on attorney fees and class actions, said in the declaration the plaintiffs’ fee petition is reasonable. The benefit the plaintiffs’ lawyers obtained for the class, he said, supports a $90.8 million legal fee award. Eisenberg charged $650 an hour to prepare the declaration.
Earlier this month, Precious Martin Sr., an attorney in Jackson, Miss., filed an objection to the settlement on behalf of ten people.
Martin said in court papers (PDF) that “there are obvious problems” with approving a settlement before discovery. The plaintiffs, he said, lose bargaining leverage with the federal government. Martin urged Friedman to reject class certification.
“Where there is less investigation into what the individual claims may be worth, and less admissible evidence regarding liability obtained from discovery, class counsel has significantly less bargaining power to obtain the best settlement for its clients,” Martin said.
Martin said there’s no “particularized evidence” as to what individuals claimants’ damages are. “There is no way to determine whether the settlement is fair or not, especially in light of the dearth of discovery in this case,” he said.
Friedman is scheduled to meet with lawyers in the case on Sept. 1 for a fairness hearing.