In a recent decision, the US Court of Appeals for the Ninth Circuit has scrutinized the financial parameters of a settlement deal involving California Pizza Kitchen. This pertains to a data breach incident which occurred in September 2021, impacting over 103,000 current and former employees of the firm. While the appellate court sanctioned a $950,000 settlement, it simultaneously declined the proposed $800,000 attorneys’ fee, a rejection that underscores a growing judicial emphasis on proportionality in legal remuneration.
The divided panel’s judgment, however, upheld the settlement’s approval by the lower court, yet mandated a reassessment of the financial award allocated for attorneys’ fees. This remand requires the district court to closely evaluate the actual value that this settlement delivers to class members, aligning the fee award with the “reasonable and proportionate” standard expected in such cases. The court’s decision is guided by the traditional “25% percentage-of-recovery benchmark,” which could potentially indicate a decrease in the proposed fee.
To access the full appellate court’s decision and understand its implications on class action settlements and fee structures, refer to the original report by Bloomberg Law here.
This decision forms an essential conversation point for legal professionals involved in class action suits, emphasizing the need for transparency and equitability in fee awards, particularly when juxtaposed against the settlement benefits to plaintiffs.