Class Counsel Loses $7,000,000 in Attorney Fees Due to Conflict of Interest
November 8, 2012

Lawyers for the Profession® Alert

Rodriguez v. Disner, ____F.3d ___, 2012 WL 3241334 (9th Cir. 2012)

The U.S. Court of Appeals for the Ninth Circuit affirmed a denial of approximately $7 million in attorneys’ fees due to class counsel’s conflict of interest, holding that the U.S. District Court for the Central District of California did not abuse its discretion because the court has broad discretion to deny or limit fee awards based on attorney ethical violations. ... The court focused on longstanding equitable principles under both federal and California law which create broad discretion for the courts to deny fees to an attorney who violates the ethical rules. Such principles allow courts to consider the extent/egregiousness of the misconduct and any actual or potential harm to the client. Here, although there was arguably little or no harm to the client, the district court acted within its discretion given the extent of class counsel’s ethical violation (e.g., the duration of the conflict and the fact that class counsel acted willfully).