sunEthics

First DCA upholds trial court's rejection of attorney's fee provisions of proposed class action settlement  [Added 4/24/08]

    Class Counsel represented plaintiffs in a class action suit against County attacking the constitutionality of an ordinance.  Eventually the trial court considered several proposed settlement agreements submitted by the parties.  After rejecting several of them, the court considered the proposed agreement at issue in this case.  The trial court entered an order denying approval.  Among the problems found by the trial court were issues relating to the attorney's fees provisions of the proposed settlement agreement.  The parties petitioned the First DCA for a writ of certiorari.

    The appellate court granted the petition in part.

    Class counsel's right to appeal the underlying judgment.  The proposed agreement reserved to Class Counsel the right to appeal any final judgment approving the class action settlement.  This right to appeal was not limited to attorney's fees matters.  The appellate court agreed with the trial court that this provision went too far.  "The trial court expressed concern that the parties, based on attorneys’ fees, reserved a right to appeal any judgment of final approval itself, instead of just appealing the order awarding fees, which can be independently appealed.  By making attorneys’ fees and costs a determinative feature of the settlement, we agree with the trial court that the parties created an improper 'package deal.'  . . .  We uphold the trial court’s determination as to attorneys’ fees on this point."

    "Clear sailing" provision.  A "clear sailing" provision is one in which the party responsible for paying the attorney's fees agrees not to contest the amount awarded by the court as long as it falls below an agreed-upon ceiling.  See Weinberger v. Great N. Nekoosa Corp., 925 F.2d 518, 520 n.1 (1st Cir. 1991).  The court noted that "[s]uch an agreement is present in the proposed Settlement Agreement and Release where the parties agree that 'in no event shall the determination of the ‘lodestar’ amount or the application of any such ‘multiplier’ operate to expand or enhance such aggregate attorney’s fees beyond $335,000.00'.”  The court concluded that "although clear sailing agreements have attracted considerable debate, they do not render a settlement agreement per se invalid.  Instead, case law provides that where there is a clear sailing agreement, 'rather than merely rubber-stamping the request, the court should scrutinize it to ensure that the fees awarded are fair and reasonable.'  Lubitz v. DaimlerChrysler Corp., 2006 WL 3780789 (N.J. Super. L. 2006) (citing Weinberger, 925 F.2d at 519).  We, therefore, provide that, on remand, the trial court should have broad discretion to determine whether the fees requested in this case are fair and reasonable in order to protect the interests of the class members."  Nelson v. Wakulla County, Florida, ___ So.2d ___ (Fla. 1st DCA, No. 1D07-3423, 4/21/2008), 2008 WL 1774184.

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