February 3, 2017 – Yesterday, the Eighth Circuit upheld a lower court decision approving settlement terms and attorney’s fees in a class action lawsuit filed by former members Life Time Fitness, Inc. against the company. This decision is welcomed news for the nearly 580,000 putative class members who will now be able to proceed toward final resolution of the lawsuit.
In re: Life Time Fitness, Inc., Telephone Consumer Protection Act (TCPA) Litigation, MDL No. 2564, is a group of class action lawsuits brought on behalf of current and former Life Time Fitness members alleging the company violated the TCPA by sending them unauthorized text-message advertisements. Baillon Thome Jozwiak & Wanta LLP is Lead Class Counsel in the consolidated litigation.
In February 2015, after informal discovery, mediation and negotiations, the parties entered into a settlement agreement under which Life Time agreed to pay between $10 to $15 million in settlement awards and administration costs to class members. Under the terms of the settlement, each class member submitting a valid claim would be entitled to portion of the settlement as either a cash award or credit toward an existing membership. Final approval of the settlement was granted by the district court in December 2015.
At the heart of this appeal was the district court’s decision to award attorney’s fees based on the percentage-of-the-benefit method of calculation. Under this method, the court awarded $2.8 million in attorney’s fees and expenses – 28 percent of the minimum $10 million settlement amount – to be allocated between four class counsel law firms in their discretion. The district court reasoned the method of calculation and fee award were appropriate given that class counsel had “expended substantial time and effort in the able prosecution” of the lawsuit, resulting in a good-faith settlement that provided a “fair, reasonable, adequate[,] and certain result” for class members.
While the parties agreed to the method of calculation, settlement terms and fee award, a lone class member, Lindsey Thut, objected, arguing the fee award was excessive and that the court improperly delegated to class counsel the authority to allocate the award among themselves.
On appeal, the Eighth Circuit agreed with the district court’s decision, finding: “The district court’s analysis was thorough, its findings were amply supported, and it did not abuse its significant discretion by electing to use the percentage-of-the-benefit method to calculate the fee award or by determining that an award of $2.8 million in attorney’s fees and expenses was reasonable.”
Similarly, the panel held the district court did not abuse its discretion in allowing class counsel to determine fee award allocation among themselves without judicial oversight or approval.
“Today’s decision is good news for the tens of thousands of putative class members across the country who submitted claims and will finally be able to recover their shares of the settlement fund,” said Shawn J. Wanta, partner at Baillon Thome Jozwiak & Wanta LLP, Lead Class Counsel in the lawsuit.