Petition for Writ of Certiorari — David G. Behenna, Petitioner v. Blue Cross Blue Shield Association, et al.

No. 23-____

IN THE

DAVID G. BEHENNA,

v.

Petitioner,

BLUE CROSS BLUE SHIELD ASSOCIATION, ET AL.,

Respondents.

On Petition for a Writ of Certiorari

to the United States Court of Appeals

for the Eleventh Circuit

PETITION FOR A WRIT OF CERTIORARI

Daniel Woofter

Counsel of Record

GOLDSTEIN, RUSSELL &

WOOFTER LLC

1701 Pennsylvania Ave. NW

Suite 200

Washington, DC 20006

(202) 240-8433

dw@goldsteinrussell.com

QUESTIONS PRESENTED

1. When determining a reasonable attorney’s fee in a

class action settlement with a common benefit fund, are

district courts required to apply the percentage-of-thefund method?

2. Even if it is appropriate to apply the percentageof-the-fund method in a class action settlement with a

common benefit fund, may district courts presume that

25% of the fund is a reasonable request?

ii

PARTIES TO THE PROCEEDINGS

Petitioner was an objector in the District Court and

an appellant in the Court of Appeals. Petitioner is David

G. Behenna, a member of both subclasses. The other

appellants below were Topographic, Inc.; Employee

Services, Inc.; Jennifer Cochran; Aaron Craker; and

Home Depot U.S.A., Inc.

Respondents were the plaintiff-appellees and

defendant-appellees in the Court of Appeals. The plaintiffappellees below were Galactic Funk Touring, Inc.;

American Electric Motor Services, Inc.; CB Roofing,

LLC; Pearce, Beville, Leesburg, Moore, P.C.; Pettus

Plumbing & Piping, Inc.; Consumer Financial Education

Foundation of America, Inc.; Fort McClellan Credit

Union; Rolison Trucking Co., LLC; Conrad Watson Air

Conditioning, Inc.; Linda Mills; Frank Curtis; Jennifer

Ray Davison; Pete Moore Chevrolet, Inc.; Jewelers Trade

Shop; Saccoccio & Lopez; Angel Foster; Monika Bhuta;

Michael E. Stark; G & S Trailer Repair Incorporated;

Chelsea Horner; Montis, Inc.; Renee Allie; John G.

Thompson; Avantgarde Aviation, Inc.; Hess, Hess, &

Daniel, P.C.; Betsy Jane Belzer; Barlett, Inc.; Matthew

Alden Boyd; Gaston GPA Firm; Rochelle McGill; Brian

McGill; Sadler Electric; Jeffrey Garner; Amy Macrae;

Vaughn Pools, Inc.; Casa Blanca, LLC; Jennifer D.

Childress; Clint Johnston; Janeen Goodin; Marla Sharp;

Erik Barstow; GC/AAA Fences, Inc.; Angie Hill; Christy

Bradberry; Kevin Bradberry; Juanita Aschenbrenner;

Tom Aschenbrenner; Free State Growers, Inc.; Jason

Goodman; Tom Goodman; Comet Capital, LLC; Barr,

Sternberg, Moss, Lawrence, Silver & Munson, P.C.; Mark

Krieger; A. Duie Pyle, Inc.; Deborah Piercy; Lisa

Tomazolli; and Hibbett Sports.

iii

The defendants-appellees in the Court of Appeals

were Blue Cross Blue Shield Association, Blue Cross and

Blue Shield of Alabama; Blue Cross and Blue Shield of

Arizona, Inc.; Blue Cross and Blue Shield of Florida, Inc.;

Blue Cross and Blue Shield of Massachusetts, Inc.; Blue

Cross and Blue Shield of North Carolina, Inc.; BlueCross

BlueShield of Tennessee, Inc.; California Physicians’

Service d/b/a Blue Shield of California; CareFirst, Inc.;

Care-First of Maryland, Inc.; Group Hospitalization and

Medical Services, Inc.; CareFirst BlueChoice, Inc.; Hawaii

Medical Service Association (Blue Cross and Blue Shield

of Hawaii); Health Care Service Corporation, an Illinois

Mutual Legal Reserve Company, including its divisions

Blue Cross and Blue Shield of Illinois, Blue Cross and Blue

Shield of Texas, Blue Cross and Blue Shield of New

Mexico, Blue Cross and Blue Shield of Oklahoma, and Blue

Cross and Blue Shield of Montana; Caring for Montanans,

Inc., f/k/a Blue Cross and Blue Shield of Montana, Inc.;

Wellmark of South Dakota, Inc. (Wellmark Blue Cross

and Blue Shield of South Dakota); Wellmark, Inc.

(Wellmark Blue Cross and Blue Shield of Iowa); Triple-S

Management Corporation; Triple-S Salud, Inc.; Elevance

Health, Inc. f/k/a Anthem, Inc., and all of its named

subsidiaries in this consolidated action; Aware Integrated,

Inc.; Louisiana Health Service & Indemnity Company

(Blue Cross and Blue Shield of Louisiana); BCBSM, Inc.

(Blue Cross and Blue Shield of Minnesota); Blue Cross and

Blue Shield of South Carolina; Horizon Healthcare

Services, Inc. (Horizon Blue Cross and Blue Shield of New

Jersey); Blue Cross & Blue Shield of Rhode Island; Blue

Cross and Blue Shield of Vermont; Cambia Health

Solutions, Inc.; Regence BlueShield of Idaho; Regence

BlueCross BlueShield of Utah; Regence BlueShield (of

Washington); Regence BlueCross BlueShield of Oregon;

Health Care Service Corporation, an Illinois Mutual Legal

iv

Reserve Company, including its divisions Blue Cross and

Blue Shield of Illinois, Blue Cross and Blue Shield of

Texas, Blue Cross and Blue Shield of New Mexico, Blue

Cross and Blue Shield of Oklahoma, and Blue Cross and

Blue Shield of Montana; Caring for Montanans, Inc., f/k/a

Blue Cross and Blue Shield of Montana, Inc.; Highmark

Health, a Pennsylvania non-profit organization; Highmark

Inc., f/k/a Highmark Health Services; Highmark West

Virginia Inc.; Highmark Blue Cross Blue Shield Delaware

Inc.; Highmark Western and Northeastern New York

Inc.; Premera Blue Cross, d/b/a Premera Blue Cross Blue

Shield of Alaska; Blue Cross Blue Shield of Michigan

Mutual Insurance Company; Blue Cross & Blue Shield of

Mississippi, a Mutual Insurance Company; Independence

Hospital Indemnity Plan, Inc.; Independence Health

Group, Inc.; USAble Mutual Insurance Company, d/b/a

Arkansas Blue Cross and Blue Shield and as Blue

Advantage Administrators of Arkansas; Capital Blue

Cross; Blue Cross of Idaho Health Service, Inc.; Blue

Cross and Blue Shield of Kansas, Inc.; Blue Cross and

Blue Shield of Kansas City; Blue Cross and Blue Shield of

Nebraska; Blue Cross Blue Shield of North Dakota; Blue

Cross Blue Shield of Wyoming; and Excellus Health Plan,

Inc., d/b/a Excellus BlueCross BlueShield.

v

RELATED PROCEEDINGS

1. This case arises out of multi-district litigation

consolidated In re Blue Cross Blue Shield Antitrust

Litigation MDL 2406, 2:13-cv-20000 (N.D. Ala.), before

the Northern District of Alabama. The District Court

entered a final order and judgment approving the

settlement agreement on August 9, 2022. That judgment

was amended by the District Court on September 7, 2022.

2. Petitioner David G. Behenna appealed that

judgment on September 8, 2022. In re Blue Cross Blue

Shield Antitrust Litig. MDL 2406, No. 22-13051 (11th

Cir.). On October 25, 2023, the Eleventh Circuit affirmed

the District Court’s judgment approving the settlement

agreement. In re Blue Cross Blue Shield Antitrust Litig.

MDL 2406, 85 F.4th 1070 (11th Cir. 2023).

vi

TABLE OF CONTENTS

QUESTIONS PRESENTED ........................................................ i

PARTIES TO THE PROCEEDINGS ........................................... ii

RELATED PROCEEDINGS ....................................................... v

TABLE OF APPENDICES ....................................................... vii

TABLE OF AUTHORITIES ..................................................... viii

INTRODUCTION ....................................................................... 1

PETITION FOR WRIT OF CERTIORARI .................................. 3

OPINIONS BELOW ................................................................... 3

JURISDICTION ......................................................................... 3

STATUTORY PROVISIONS INVOLVED .................................... 3

STATEMENT ............................................................................. 5

REASONS FOR GRANTING THE PETITION .......................... 15

I.

The Eleventh Circuit’s Decision Conflicts

With the Rules of Other Circuit Courts. ................... 15

A. The circuits are divided 2 to 10 on the first

Question Presented. .............................................. 15

B. The circuits are divided at least 2 to 2 on

the second Question Presented. .......................... 19

II. The Eleventh Circuit’s Decision Is Wrong. .............. 22

A. The decision is contrary to this Court’s

precedent. ............................................................... 22

B. The decision is contrary to Rule 23(h)................ 26

III. The Questions Presented Are Important. ................ 29

CONCLUSION ......................................................................... 35

vii

TABLE OF APPENDICES

APPENDIX A: Opinion of the United States

Court of Appeals for the Eleventh Circuit

(Oct. 25, 2023) .................................................................... 1a

APPENDIX B: Opinion of the United States

District Court for the Northern District of

Alabama, Sourthern Division

(Aug. 9, 2022) ................................................................... 46a

APPENDIX C: Denial of Rehearing of the United

States Court of Appeals for the Eleventh Circuit

(Jan. 26, 2024) ................................................................ 173a

APPENDIX D: Settlement Agreement (excerpt)

of the United States District Court for the

Northern District of Alabama, Southern Division

(Oct. 30, 2020) ................................................................ 175a

viii

TABLE OF AUTHORITIES

Cases

Alyeska Pipeline Serv. Co. v. Wilderness Soc’y,

421 U.S. 240 (1975) ............................................. 5, 6, 10, 23

Americana Art China Co., Inc. v. Foxfire

Printing and Packaging, Inc.,

743 F.3d 243 (7th Cir. 2014) ............................................ 19

Blanchard v. Bergeron,

489 U.S. 87 (1989) ....................................................... 12, 30

Blum v. Stenson,

465 U.S. 886 (1984) ........................................... 7, 23, 24, 34

Boeing Co. v. Van Gemert,

444 U.S. 472 (1980) ..................................................... 10, 26

Brown v. Phillips Petroleum Co.,

838 F.2d 451 (10th Cir. 1988) .......................................... 19

Camden I Condo. Ass’n, Inc. v. Dunkle,

946 F.2d 768 (11th Cir. 1991) ........................ 14, 16, 18, 20

Cent. R.R. & Banking Co. v. Pettus,

113 U.S. 116 (1885) ..................................................... 10, 23

City of Burlington v. Dague,

505 U.S. 557 (1992) ................................... 7, 8, 9, 24, 25, 31

Faught v. Am. Home Shield Corp.,

668 F.3d 1233 (11th Cir. 2011) ............................ 12, 14, 20

Fikes Wholesale, Inc. v. HSBC Bank USA, N.A.,

62 F.4th 704 (2d Cir. 2023) .............................................. 18

Florin v. Nationsbank of Georgia, N.A.,

34 F.3d 560 (7th Cir. 1994) .............................................. 18

Goldberger v. Integrated Res., Inc.,

209 F.3d 43 (2d Cir. 2000) .............................. 18, 21, 22, 30

ix

Gottlieb v. Barry,

43 F.3d 474 (10th Cir. 1994) ............................................ 19

Gunter v. Ridgewood Energy Corp.,

223 F.3d 190 (3d Cir. 2000).............................................. 30

Halley v. Honeywell Int’l, Inc.,

861 F.3d 481 (3d Cir. 2017).............................................. 19

Harrison v. Perea,

168 U.S. 311 (1897) ..................................................... 10, 23

Heien v. Archstone,

837 F.3d 97 (1st Cir. 2016)............................................... 19

Hensley v. Eckerhart,

461 U.S. 424 (1983) ............................................................. 7

In re Black Farmers Discrimination Litig.,

953 F. Supp. 2d 82 (D.D.C. 2013) ................................... 16

In re Blue Cross Blue Shield Antitrust Litig.,

308 F. Supp. 3d 1241 (N.D. Ala. 2018) ................. 2, 11, 25

In re Bluetooth Headset Prod. Liab. Litig.,

654 F.3d 935 (9th Cir. 2011) ................................ 20, 28, 29

In re Dep’t of Veterans Affs. (VA) Data Theft

Litig.,

653 F. Supp. 2d 58 (D.D.C. 2009) ................................... 17

In re Equifax Inc. Customer Data Sec. Breach

Litig.,

999 F.3d 1247 (11th Cir. 2021) .................................. 14, 16

In re Home Depot Inc.,

931 F.3d 1065 (11th Cir. 2019) ........................................ 14

In re Mercury Interactive Corp. Sec. Litig.,

618 F.3d 988 (9th Cir. 2010) ...................................... 27, 28

x

In re Optical Disk Drive Prod. Antitrust Litig.,

959 F.3d 922 (9th Cir. 2020) ............................................ 19

In re Pet Food Prod. Liab. Litig.,

629 F.3d 333 (3d Cir. 2010).............................................. 22

In re Rite Aid Corp. Sec. Litig.,

396 F.3d 294 (3d Cir. 2005), as amended (Feb.

25, 2005) ............................................................................. 19

In re Washington Pub. Power Supply Sys. Sec.

Litig.,

19 F.3d 1291 (9th Cir. 1994) ............................................ 19

Linneman v. Vita-Mix Corporation,

970 F.3d 621 (6th Cir. 2020) ............................................ 18

McAdams v. Robinson,

26 F.4th 149 (4th Cir. 2022) ............................................. 19

NCAA v. Alston,

594 U.S. 69 (2021) ............................................................... 5

Pennsylvania v. Delaware Valley Citizens’

Council for Clean Air,

478 U.S. 546 (1986) ............................................. 5, 9, 24, 29

Perdue v. Kenny A. ex rel. Winn,

559 U.S. 542 (2010) ............. 1, 2, 8, 9, 25, 29, 30, 31, 33, 34

Ramey v. Cincinnati Enquirer, Inc.,

508 F.2d 1188 (6th Cir. 1974) .......................................... 30

Rawa v. Monsanto Co.,

934 F.3d 862 (8th Cir. 2019) ...................................... 19, 30

Rawlings v. Prudential-Bache Properties, Inc.,

9 F.3d 513 (6th Cir. 1993) ................................................ 18

Redman v. RadioShack Corp.,

768 F.3d 622 (7th Cir. 2014) ............................................ 28

xi

Six (6) Mexican Workers v. Arizona Citrus

Growers,

904 F.2d 1301 (9th Cir. 1990) .......................................... 20

Swedish Hosp. Corp. v. Shalala,

1 F.3d 1261 (D.C. Cir. 1993) ................................ 16, 17, 18

Trustees v. Greenough,

105 U.S. 527 (1881) ................................................. 2, 10, 23

Union Asset Management Holding A.G. v. Dell,

Inc.,

669 F.3d 632 (5th Cir. 2012) ...................................... 19, 30

United States v. Equitable Tr. Co. of New York,

283 U.S. 738 (1931) ..................................................... 10, 23

Voulgaris v. Array Biopharma, Inc.,

60 F.4th 1259 (10th Cir. 2023) ................................... 22, 30

Zenith Radio Corp. v. Hazeltine Rsch., Inc.,

395 U.S. 100 (1969) ............................................................. 5

Statutes

15 U.S.C. § 1........................................................................ 3, 5

15 U.S.C. § 15.................................................................. 4, 5, 6

15 U.S.C. § 26............................................................ 4, 5, 6, 25

28 U.S.C. § 1254...................................................................... 3

33 U.S.C. § 1365(d) ................................................................. 7

42 U.S.C. § 1988............................................................ 7, 8, 29

42 U.S.C. § 6972(e) ................................................................. 7

Hart-Scott-Rodino Antitrust Improvement Act of

1976, Pub. L. No. 94-435, 90 Stat. 1383 (1976)................ 6

xii

Rules

Fed. R. Civ. P. 23(b)(2) ........................................................ 11

Fed. R. Civ. P. 23(b)(3) ........................................................ 11

Fed. R. Civ. P. 23(h) ................................................ 26, 27, 28

Fed. R. Civ. P. 23(h)(1) ........................................................ 27

Fed. R. Civ. P. 23(h)(2) ........................................................ 27

Other Authorities

5 Newberg and Rubenstein on Class Actions

§ 15:13 (6th ed.) ................................................................. 27

H.R. Rep. No. 94-499 (1976) ................................................. 6

Petition for Writ of Certiorari, Home Depot

U.S.A., Inc. v. Blue Cross Blue Shield

Association, No. 23-1063 (U.S. Mar. 26, 2024) ....... 11, 33

S. Rep. No. 94-803 (1976) ...................................................... 6

Third Circuit Task Force, Court Awarded

Attorney Fees, 108 F.R.D. 237 (1986)............................ 21

INTRODUCTION

This Court has held that “there is a strong

presumption that the lodestar”—the “number of hours

worked multiplied by the prevailing hourly rates”—“is

sufficient” to calculate a reasonable attorney’s fee “under

federal fee-shifting statutes;” that “factors subsumed in

the lodestar calculation cannot be used as a ground for

increasing an award above the lodestar;” and that “a party

seeking fees has the burden of identifying a factor that the

lodestar does not adequately take into account and proving

with specificity that an enhanced fee is justified.” Perdue

v. Kenny A. ex rel. Winn, 559 U.S. 542, 546 (2010). When

courts fail to “apply these standards,” this Court will

“reverse” and “remand for further proceedings.” Ibid.

But in this case, the Eleventh Circuit held that

because the parties agreed to settle plaintiffs’ statutory

fee-shifting claims on behalf of a nationwide class in

exchange for diluted injunctive relief and $2.67 billion—a

small fraction of their claimed damages—the District

Court was required to award plaintiffs’ lawyers a

percentage of the class’s fund rather than the

$194.23 million lodestar. App.41a. That minority view

conflicts with the decisions of nearly every other circuit

and this Court’s precedent. And because the lawyers

requested

23.47%

of

the

fund—a

whopping

$626.65 million, over three times the lodestar—the

Eleventh Circuit held that the judge could presume the fee

was reasonable without regard to any other consideration,

since it fell within a “benchmark” range of 20% to 25%.

App.41a-42a. That minority view also conflicts with the

decisions of other circuits and this Court’s precedent.

Plaintiffs are subscribers of health insurance from 36

Blue Cross Blue Shield (“BCBS”) businesses. These

health-insurance subscribers alleged that the BCBS

2

Association and its 36 member BCBS businesses agreed

not to compete in violation of federal antitrust laws. The

District Court agreed, granting partial summary

judgment to plaintiffs. In re BCBS Antitrust Litig., 308 F.

Supp. 3d 1241, 1267 (N.D. Ala. 2018).

Petitioner, a non-lawyer member of the class who

represented himself pro se before coming to this Court,

did not object to the substantive terms of the settlement.

What he could not abide was counsel’s fee request, given

the “strong presumption” that the lodestar figure is

“sufficient” under federal fee-shifting statutes like the

Clayton Act. Perdue, 559 U.S. at 554. And this is not an

outlier case. The lower courts are rubber-stamping fee

requests without “moderation” or “a jealous regard for the

rights of those who are interested in the fund.” Contra

Trustees v. Greenough, 105 U.S. 527, 536-37 (1881).

Whether federal courts are free to disregard this

Court’s instructions regarding what constitutes a

“reasonable” attorney’s fee award in litigated cases so long

as they resolve their disputes through common-fund

settlements is a recurringly important issue this Court

should address. Plaintiffs’ lawyers have not identified a

single mega-fund case that was litigated to judgment. And

it’s easy to understand why. If they had litigated this case

to judgment and achieved all the treble damages and

injunctive relief they sought, they would have faced a

strong presumption that the lodestar is suitable. By

settling for pennies on the dollar and diluted injunctive

relief, plaintiffs’ counsel were able to obtain many times

that amount with no real scrutiny.

This Court’s intervention sorely is needed to put an

end to this unacceptable trend.

3

PETITION FOR WRIT OF CERTIORARI

Petitioner David G. Behenna respectfully petitions

for a writ of certiorari to review the judgment of the

United States Court of Appeals for the Eleventh Circuit.

Alternatively, the Petition should be held for this Court’s

disposition of Home Depot U.S.A., Inc. v. BCBS

Association, No. 23-1063 (U.S.) (petition pending).

OPINIONS BELOW

The order of the Court of Appeals denying rehearing

en banc (App.173a-174a) is unreported. The opinion of the

Court of Appeals (App.1a-45a) is reported at 85 F.4th 1070.

The opinion of the District Court (App.46a-172a) is

unreported but available at 2022 WL 4587618.

JURISDICTION

The Court of Appeals entered its judgment on

October 25, 2023. Petitioner timely petitioned for

rehearing en banc, after being granted an extension, on

December 15, 2023. The Court of Appeals denied en banc

rehearing on January 26, 2024. This Court’s jurisdiction is

invoked under 28 U.S.C. § 1254.

STATUTORY PROVISIONS INVOLVED

Section 1 of the Sherman Act, 15 U.S.C. § 1, provides,

in relevant part:

Every contract, combination in the form of trust

or otherwise, or conspiracy, in restraint of trade

or commerce among the several States, or with

foreign nations, is declared to be illegal.

***

4

Section 4 of the Clayton Act, 15 U.S.C. § 15, provides,

in relevant part:

(a) … [A]ny person who shall be injured in his

business or property by reason of anything

forbidden in the antitrust laws may sue therefor

in any district court of the United States in the

district in which the defendant resides or is found

or has an agent, without respect to the amount in

controversy, and shall recover threefold the

damages by him sustained, and the cost of suit,

including a reasonable attorney’s fee.

***

Section 16 of the Clayton Act, 15 U.S.C. § 26, provides,

in relevant part:

Any person, firm, corporation, or association

shall be entitled to sue for and have injunctive

relief, in any court of the United States having

jurisdiction over the parties, against threatened

loss or damage by a violation of the antitrust

laws, including sections 13, 14, 18, and 19 of this

title, when and under the same conditions and

principles as injunctive relief against threatened

conduct that will cause loss or damage is granted

by courts of equity, under the rules governing

such proceedings, and upon the execution of

proper bond against damages for an injunction

improvidently granted and a showing that the

danger of irreparable loss or damage is

immediate, a preliminary injunction may issue:

***

5

In any action under this section in which the

plaintiff substantially prevails, the court shall

award the cost of suit, including a reasonable

attorney’s fee, to such plaintiff.

STATEMENT

1. The Sherman Act prohibits “contracts,

combinations, or conspiracies in restraint of trade or

commerce.” NCAA v. Alston, 594 U.S. 69, 80 (2021)

(quoting 15 U.S.C. § 1) (cleaned up). To bolster

enforcement of that prohibition, Congress created a

private right of action that authorizes “any person, firm,

corporation, or association” to sue for injunctive relief or

treble damages. 15 U.S.C. §§ 15, 26; see Zenith Radio

Corp. v. Hazeltine Rsch., Inc., 395 U.S. 100, 130-31 (1969)

(Congress’s purpose in “giving private parties trebledamage and injunctive remedies was not merely to provide

private relief, but was to serve as well the high purpose of

enforcing the antitrust laws”).

a. Congress also provided for fee-shifting—an

exception to the “well established” “‘American Rule,’”

under which “‘the prevailing litigant is ordinarily not

entitled to collect a reasonable attorneys’ fee from the

loser.’” Pennsylvania v. Delaware Valley Citizens’

Council for Clean Air, 478 U.S. 546, 561 (1986) (“Delaware

Valley I”) (quoting Alyeska Pipeline Serv. Co. v.

Wilderness Soc’y, 421 U.S. 240, 247 (1975)). Thus, a

successful antitrust plaintiff “shall recover threefold the

damages by him sustained, and the cost of suit, including

a reasonable attorney’s fee.” 15 U.S.C. § 15. And in “any

action” for injunctive relief under Section 16, “in which the

plaintiff substantially prevails, the court shall award the

6

cost of suit, including a reasonable attorney’s fee, to such

plaintiff.” 15 U.S.C. § 26.

Previously, this Court held that exceptions to the

American Rule for claims seeking injunctive relief must

come from Congress. See Alyeska, 421 U.S. at 262-63. The

Court highlighted “[f]ee shifting in connection with trebledamages awards under the antitrust laws [a]s a prime

example.” Id. at 263. But at the time, there was no feeshifting provision in Section 16. Concerned this would

hinder private plaintiffs from bringing actions to enjoin

federal antitrust violations, Congress responded with the

Hart-Scott-Rodino Antitrust Improvement Act of 1976,

Pub. L. No. 94-435, 90 Stat. 1383 (1976)—amending the

Clayton Act in part to provide for mandatory fee-shifting

to plaintiffs who substantially prevail on their Section 16

claims. See 15 U.S.C. § 26.

“Alyeska invite[d] Congress to enact specific

legislation authorizing the award of attorneys’ fees when

there is a strong public policy,” and “[i]n the case of § 16

antitrust injunction actions, there is such a compelling

public policy to justify the award of attorneys’ fees.” H.R.

Rep. No. 94-499, at 19 (1976); see S. Rep. No. 94-803, pt. 1,

at 37-39 (1976). “Indeed, the need for the awarding of

attorneys’ fees in § 16 injunction cases is greater than the

need in § 4 treble damage cases.” H.R. Rep. No. 94-499,

at 20. “In injunction cases, ... without the shifting of

attorneys’ fees, a plaintiff with a deserving case would

personally have to pay the very high price of obtaining

judicial enforcement of the law and of the important

national policies the antitrust laws reflect.” Ibid. “A

prevailing plaintiff should not have to bear such an

expense.” Ibid.

7

b. Interpreting other statutes for which Congress

permits an award of “reasonable attorney’s fees,” this

Court has held: “The most useful starting point for

determining the amount of a reasonable fee is the number

of hours reasonably expended on the litigation multiplied

by a reasonable hourly rate”—the lodestar. Hensley v.

Eckerhart, 461 U.S. 424, 433 (1983) (so holding as to 42

U.S.C. § 1988, which permits courts to award “a

reasonable attorney’s fee” to “the prevailing party”). “This

calculation,” the Court explained, “provides an objective

basis on which to make an initial estimate of the value of a

lawyer’s services.” Ibid.

And “in determining an award of reasonable

attorney’s fees under § 7002(e) of the Solid Waste Disposal

Act (SWDA) or § 505(d) of the Federal Water Pollution

Control Act (Clean Water Act (CWA)),” the Court

reaffirmed that the “‘lodestar’ figure has, as its name

suggests, become the guiding light of our fee-shifting

jurisprudence.” City of Burlington v. Dague, 505 U.S. 557,

559, 562 (1992) (citations omitted). “We have established a

‘strong presumption’ that the lodestar represents the

‘reasonable’ fee, and have placed upon the fee applicant

who seeks more than that the burden of showing that ‘such

an adjustment is necessary to the determination of a

reasonable fee.’” Ibid. (quoting Blum v. Stenson, 465 U.S.

886, 898 (1984)) (citation omitted).

In Dague, the Court rejected the plaintiff’s argument

“that a ‘reasonable’ fee for attorneys who have been

retained on a contingency-fee basis must go beyond the

lodestar, to compensate for risk of loss and of consequent

nonpayment.” 505 U.S. at 562. “Fee-shifting statutes

should be construed, he contend[ed], to replicate the

8

economic incentives that operate in the private legal

market, where attorneys working on a contingency-fee

basis can be expected to charge some premium over their

ordinary hourly rates.” Ibid.

Writing for the Court, Justice Scalia noted “at the

outset that an enhancement for contingency would likely

duplicate in substantial part factors already subsumed in

the lodestar.” Dague, 505 U.S. at 562. The “risk of loss,”

for example, “is ordinarily reflected in the lodestar—

either in the higher number of hours expended to

overcome the difficulty” of the case, “or in the higher

hourly rate of the attorney skilled and experienced enough

to do so.” Ibid. “Taking account of it again through

lodestar enhancements,” the Court held, “amounts to

double counting.” Ibid. Nor should counsel be awarded an

enhancement based on any risk related to the “relative

merits of the claim,” because “that always exists (no claim

has a 100% chance of success).” Id. at 563. “Moreover, the

consequence of awarding contingency enhancement to

take account of this ‘merits’ factor would be to provide

attorneys with the same incentive to bring relatively

meritless claims as relatively meritorious ones.” Ibid.

Reviewing the foregoing precedents, the Court

reiterated more recently that the lodestar results in a

presumptively reasonable “attorney’s fee, under federal

fee-shifting statutes.” Perdue, 559 U.S. at 546. “First, a

‘reasonable’ fee is a fee that is sufficient to induce a capable

attorney to undertake the representation of a meritorious

... case.” Id. at 552. Just like the fee-shifting provisions of

the Clayton Act, “Section 1988’s aim is to enforce the

covered civil rights statutes, not to provide ‘a form of

economic relief to improve the financial lot of attorneys.’”

9

See ibid. (quoting Delaware Valley I, 478 U.S. at 565).

“Second, the lodestar method yields a fee that is

presumptively sufficient to achieve this objective.” Ibid.

“Indeed,” that “presumption is a ‘strong’ one.” Ibid.

(quoting Dague, 505 U.S. at 565). “Third,” this Court has

“never sustained an enhancement of a lodestar amount for

performance,” but “repeatedly said that enhancements

may be awarded in ‘rare’ and ‘exceptional’ circumstances.”

Ibid. (citation omitted).

“Fourth,” the Court “ha[s] noted that the lodestar

figure includes most, if not all, of the relevant factors

constituting a ‘reasonable’ attorney’s fee, and ha[s] held

that an enhancement may not be awarded based on a

factor that is subsumed in the lodestar calculation.”

Perdue, 559 U.S. at 553 (cleaned up). For example, “the

novelty and complexity of a case generally may not be used

as a ground for an enhancement because these factors

presumably are fully reflected in the number of billable

hours recorded by counsel.” Ibid. (cleaned up). And “the

quality of an attorney’s performance generally should not

be used to adjust the lodestar because considerations

concerning the quality of a prevailing party’s counsel’s

representation normally are reflected in the reasonable

hourly rate.” Ibid. (cleaned up).

Since “the burden of proving that an enhancement is

necessary must be borne by the fee applicant,” the “fee

applicant seeking an enhancement must produce ‘specific

evidence’ that supports the award.” Perdue, 559 U.S.

at 553. “This requirement is essential if the lodestar

method is to realize one of its chief virtues, i.e., providing

a calculation that is objective and capable of being

reviewed on appeal.” Ibid.

10

c. In the absence of a federal fee-shifting statute, this

Court established in 1881 a limited exception to the

American Rule when a party “recovers a fund for the

common benefit” of nonparties. Greenough, 105 U.S. at

534. In that situation, this Court held, federal courts have

the inherent power to award actual “costs and

expenditures” to be “paid out of the fund,” including the

“fees of solicitors and counsel.” Id. at 530, 534. This

“common-fund doctrine reflects the traditional practice in

courts of equity,” which “rests on the perception that

persons who obtain the benefit of a lawsuit without

contributing to its cost are unjustly enriched at the

successful litigant’s expense.” Boeing Co. v. Van Gemert,

444 U.S. 472, 478 (1980). Yet “allowances of this kind,” the

Court cautioned, must be “made with moderation and a

jealous regard to the rights of those who are interested in

the fund.” Greenough, 105 U.S. at 536-37.

“That rule has been consistently followed” by this

Court. See Alyeska, 421 U.S. at 257-58 (1975) (collecting

cases from 1881 through 1970); see, e.g., United States v.

Equitable Tr. Co. of New York, 283 U.S. 738, 746 (1931)

(district court awarded 25% of common fund, Second

Circuit reduced the award to 15%, and this Court further

reduced the award to 7.5%); Cent. R.R. & Banking Co. v.

Pettus, 113 U.S. 116, 128 (1885) (reducing “10 per cent” fee

award by half); see also Harrison v. Perea, 168 U.S. 311,

325 (1897) (approving reduction of fee award from

equitable fund to 10%).

2. This consolidated action involves several private

antitrust enforcement suits, the facts and procedure of

which are also described in a related Petition for Writ of

Certiorari, Home Depot U.S.A., Inc. v. BCBS Association

11

(“Home Depot Petition”), No. 23-1063 (U.S. Mar. 26, 2024),

at 8-15 (pending).

In short, several health-insurance subscribers filed

class-action complaints alleging that defendants violated

federal antitrust law by restricting their competition

through the BCBS Association. App.3a. For these alleged

violations, the subscribers sought money damages, treble

damages, restitution, and injunctive relief under the

Clayton Act. App.4a.

In April 2018, the District Court granted partial

summary judgment to the subscribers, holding that

defendants’ agreements violated the Sherman Act per se.

BCBS, 308 F. Supp. 3d at 1267.

3. Subscribers’ counsel engaged defendants in

settlement discussions beginning in 2015. A class

settlement was reached in October 2020.

The settlement agreement includes two classes: a

Rule 23(b)(2) injunctive-relief class (no opt out) and a

Rule 23(b)(3) damages class (opt out). Petitioner is a

member of both. See App.5a.

Defendants agreed to pay $2.67 billion in damages to

the (b)(3) class. App.230a. And defendants agreed that so

long as plaintiffs’ lawyers’ request for attorney’s fees and

costs did not exceed “25% of the $2.67 billion fund,” they

would not object. App.239a. The agreement further

provided that a “partial award of seventy-five million

($75,000,000) of the total attorneys’ fees, expenses, and

interest ... shall be paid ... no later than 31 days after the

entry of and order preliminarily approving the

Settlement”—long before any common fund or injunctive

relief was secured for the class, and indeed long before

12

plaintiffs’ lawyer had submitted their attorney’s fee

application. App.239a.

4.a. Petitioner objected pro se and “presented

argument on his objection at the Fairness Hearing.”

App.138a.

Relevant here, Petitioner argued that “Subscribers’

counsel’s fees should be limited to the lodestar because the

Sherman Act is a fee-shifting statute.” App.139a; see

D.Ct.Doc.2812-20. The District Court disagreed.

Applying Eleventh Circuit precedent, the court held

that it was required to use the percentage-of-the-fund

method. App.142a. Moreover, according to the court, the

“fee sought by Subscribers’ Counsel, 23.47% of the

Common Fund, is at or below the percentage fee typically

awarded in similar cases” and within the “‘benchmark

range’ in this Circuit.” App.142a (footnote and citation

omitted). “Because the requested fee—even when

including expenses—does not exceed 25%,” the court held

it did not “need [to] consider” other factors. App.143a

(citing Faught v. Am. Home Shield Corp., 668 F.3d 1233,

1242 (11th Cir. 2011)).

“Nevertheless,” the court held that “even if the

factors” set out in Johnson v. Georgia Highway Express,

Inc., 488 F.2d 714 (5th Cir. 1974), abrogated by Blanchard

v. Bergeron, 489 U.S. 87 (1989), “applied here, that process

confirms that the requested fee is reasonable.” App.143a;

see App.144a-147a (summarily concluding that every

Johnson factor weighed in favor of approving the

$626.65 million fee request).

Petitioner appealed.

13

b. Before the Eleventh Circuit, Petitioner argued

that “the District Court failed to treat separately the

injunctive relief in its analysis and assessment of Plaintiffs’

Counsel’s fee application.” C.A.Doc.122 (“Objection”), at 9.

Because the “District Court found that the injunctive

relief was of greater value to the Class than was the

$2,670,000,000 monetary relief,” he argued that the

District Court “should have bifurcated its fee analysis.”

Ibid. The “greater value” injunctive relief was obtained

pursuant to a mandatory fee-shifting statute, “requir[ing]

the District Court to assess the attorneys’ fees for the

injunctive relief using the lodestar method.” Ibid.

He also argued that the $75,000,000 prepayment for

attorney’s fees and costs at the preliminary approval stage

was improper. Objection, at 9-10. Moreover, he argued,

the judge’s “lodestar multiplier” was inaccurate, and

should have been understood to represent a 10x lodestar

multiplier, not 3.23. Id. at 10.1 Finally, Petitioner argued,

“the District Court erred in finding that 23.5% was a

reasonable percentage-of-fund attorneys’ fee,” since the

analysis “included the injunctive relief lodestar,” and

because the judge erred in applying “the Johnson factors.”

Ibid.

The Eleventh Circuit rejected the arguments.

Although the Eleventh Circuit viewed Petitioner’s specific

See id. at 87-88 (because counsel “disclose[d] that up to threequarters of the lodestar ... was billed on non-monetary relief, the

lodestar related to non-monetary relief is estimated at $146,000,000

and the lodestar related to monetary relief would approximate

$48,000,000,” such that lodestar multiplier would be “10.0 times” the

“est. monetary relief lodestar”) (citation omitted).

1

14

bifurcation objection as forfeited, it proceeded to consider

the merits, holding that “the district court did not abuse

its discretion.” App.39a-40a.

Whether the claims “arose under a fee-shifting

statute ‘is of no consequence,’” the Eleventh Circuit held.

App.40a-41a (quoting In re Equifax Inc. Customer Data

Sec. Breach Litig., 999 F.3d 1247, 1279 n.24 (11th Cir.

2021)). “What matters,” in the Eleventh Circuit, “is the

kind of fund that the settlement agreement creates. See In

re Home Depot Inc., 931 F.3d 1065, 1082 (11th Cir. 2019)

(‘Where there has been a settlement, the basis for the

statutory fee has been discharged, and it is only the fund

that remains.’).” App.41a. Because the “settlement created

a common fund,” the court held that under its circuit

precedent, the “district court did not abuse its discretion

in using the percentage-of-the-fund analysis” instead of

“the lodestar methodology or some combination of the

two.” Ibid.

The court also reaffirmed its circuit precedent

requiring that in “a common fund settlement, attorneys’

fees ‘shall be based upon a reasonable percentage of the

fund established for the benefit of the class.’” App.41a

(quoting Camden I Condominium Ass’n, Inc. v. Dunkle,

946 F.2d 768, 774 (11th Cir. 1991)). And the court

reaffirmed its precedent reasoning that courts “typically

award fees of 20 to 30 percent of the common fund, see In

re Home Depot, 931 F.3d at 1076, and view the mean of

that range—25 percent—as a rough benchmark,

Camden I, 946 F.2d at 775.” App.41a. “If a fee award falls

between 20 and 25 percent, it is presumptively reasonable”

in the Eleventh Circuit. Ibid. (citing Faught, 668 F.3d at

1242. “If the fee exceeds 25 percent,” then, according to

15

the court, “the district court must assess the

reasonableness of the percentage using the 12 Johnson

factors. Ibid.

“Even though this fee fell within the range of

reasonableness,” such that the District Court did not need

to take case-specific factors into consideration under

circuit precedent, the Court of Appeals noted that “the

district court reviewed the percentage under the Johnson

factors” anyway, “then used the lodestar to confirm the

reasonableness of the percentage.” App.42a. “That

thorough analysis” and award of 3.23 times the lodestar,

the court concluded, “followed our precedents and was not

an abuse of discretion.” Ibid.

The Eleventh Circuit denied rehearing en banc.

App.174a.

REASONS FOR GRANTING THE PETITION

I.

The Eleventh Circuit’s Decision Conflicts With

the Rules of Other Circuit Courts.

The Eleventh Circuit’s ruling exacerbates a deeply

entrenched circuit split on each question presented. The

circuits are divided 2 to 10 on the first Question, and at

least 2 to 2 on the second.

A.

The circuits are divided 2 to 10 on the first

Question Presented.

1. Only the Eleventh and D.C. Circuits have held that

district courts are precluded from using the lodestar

method to calculate reasonable attorney’s fees in commonfund cases.

In Camden I, the Eleventh Circuit considered

whether attorney’s fees and expenses awarded “out of the

16

fund that has been created for the class .... should be based

upon a percentage of the fund or the lodestar computation

method.” 946 F.2d at 771. Because it “believe[s] that the

percentage of the fund approach is the better reasoned in

a common fund case,” the court held that district judges

do not have discretion to use any other method. Id. at 774.

“Henceforth in this Circuit,” the court held, “attorneys’

fees awarded from a common fund shall be based upon a

reasonable percentage of the fund established for the

benefit of the class.” Ibid. “The lodestar analysis,” on the

other hand, “shall continue to be the applicable method

used for determining statutory fee-shifting awards.” Ibid.

In this case, the court reaffirmed its circuit precedent

in rejecting Petitioner’s objections. “In a common fund

settlement,” the court held, “attorneys’ fees ‘shall be based

upon a reasonable percentage of the fund established for

the benefit of the class.’” App.41a (quoting Camden I, 946

F.2d at 774). It did not matter to the court that the Clayton

Act is a fee-shifting statute. “[W]hether the claim arose

under a fee-shifting statute ‘is of no consequence.’”

App.40a-41a (quoting In re Equifax, 999 F.3d at

1279 n.24). “What matters is the kind of fund that the

settlement creates.” App.41a.

The D.C. Circuit is the only other circuit that forbids

district courts from using the lodestar method in commonfund cases. The panel majority in Swedish Hospital Corp.

v. Shalala, 1 F.3d 1261 (D.C. Cir. 1993), “conclude[d] that

percentage-of-the-fund is the proper method for

calculating fees in a common fund case.” Id. at 1272; see

also In re Black Farmers Discrimination Litig., 953 F.

Supp. 2d 82, 87-88 (D.D.C. 2013) (“While the commonly

used ‘lodestar’ method represents one way of calculating

17

reasonable attorneys’ fees, this circuit has indicated that

in cases involving a common fund that has been

established for the benefit of the plaintiffs, the ‘percentage

of the fund’ method ‘is the appropriate mechanism for

determining the attorney fees award.’” (quoting In re

Dep’t of Veterans Affs. (VA) Data Theft Litig., 653 F.

Supp. 2d 58, 60 (D.D.C. 2009))).

Judge Douglas H. Ginsburg dissented “insofar as the

court relie[d] upon the percentage-of-the-fund approach

as the only permissible measure of a reasonable fee in a

common fund case.” Swedish Hosp., 1 F.3d at 1273 (D.H.

Ginsburg, J., concurring in part and dissenting in part).

The “lodestar is the starting point for calculating a fee

award,” he argued, “and the percentage-of-the-fund it

represents is merely a secondary check upon the

reasonableness of the resulting award.” Ibid. “[R]eliance

upon the percentage-of-the-fund approach without any

regard for the lodestar,” he cautioned, “may produce

excessively high awards.” Ibid. The case at bar was “a case

in point: since the fee award c[ame] to about 3.3 times what

it would be using the lodestar, the case would have been

worth bringing (i.e., would have given counsel an ex ante

probability of earning the lodestar rate) even if the

plaintiff had only a 30% chance of any success.” Ibid.

2. Every other circuit holds that district courts have

discretion to apply the lodestar method in common-fund

cases.

a. At least five circuits have expressly considered and

rejected “the District of Columbia and Eleventh Circuits

mandate” of “the exclusive use of the percentage approach

in common fund cases.” E.g., Goldberger v. Integrated

18

Res., Inc., 209 F.3d 43, 50 (2d Cir. 2000) (citing Swedish

Hosp., 1 F.3d at 1271; Camden I, 946 F.2d at 774).

The Second Circuit, for example, “question[ed] the

wisdom of abandoning the lodestar entirely,” which in the

court’s view “remains useful as a baseline even if the

percentage method is eventually chosen.” Goldberger, 209

F.3d at 50. “The district court’s use of the lodestar

method” in that case was thus “a permissible exercise of

its discretion.” Ibid. The Second Circuit recently

reaffirmed its long-held approach, “established at the turn

of this century.” See Fikes Wholesale, Inc. v. HSBC Bank

USA, N.A., 62 F.4th 704, 723 (2d Cir. 2023) (citing

Goldberger, 209 F.3d at 50).

The Sixth Circuit, “aware of the recent trend towards

adoption of a percentage of the fund method” in common

fund cases (citing Swedish Hospital and Camden I), noted

that other “sister courts of appeals have recognized that

the appropriate method for use in common fund cases

depends on the circumstances of each case.” Rawlings v.

Prudential-Bache Properties, Inc., 9 F.3d 513, 515-16 (6th

Cir. 1993). “In this circuit,” the Sixth Circuit concluded,

“we require only that awards of attorney’s fees by federal

courts in common fund cases be reasonable under the

circumstances.” Id. at 516; see also Linneman v. Vita-Mix

Corporation, 970 F.3d 621, 624 (6th Cir. 2020).

The Seventh Circuit also “considered ... and rejected”

arguments that it should follow the Eleventh and D.C.

Circuits’ approach and “compel district courts to use the

‘percentage-of-recovery method’ to award attorney’s fees

in all common fund cases.” Florin v. Nationsbank of

Georgia, N.A., 34 F.3d 560, 565 (7th Cir. 1994); see also

19

Americana Art China Co., Inc. v. Foxfire Printing and

Packaging, Inc., 743 F.3d 243, 247 (7th Cir. 2014).

The Ninth Circuit has done so as well. In re

Washington Pub. Power Supply Sys. Sec. Litig., 19 F.3d

1291, 1295 (9th Cir. 1994); see also In re Optical Disk Drive

Prod. Antitrust Litig., 959 F.3d 922, 929 (9th Cir. 2020).

Same for the Tenth Circuit. Gottlieb v. Barry, 43 F.3d

474, 483 (10th Cir. 1994); see also Brown v. Phillips

Petroleum Co., 838 F.2d 451, 454 (10th Cir. 1988).

b. Five other circuits agree that “in a common fund

case,” district courts “may calculate counsel fees either on

a percentage of the fund basis or by fashioning a lodestar.”

Heien v. Archstone, 837 F.3d 97, 100 (1st Cir. 2016)

(quotation marks omitted); see Halley v. Honeywell Int’l,

Inc., 861 F.3d 481, 496 (3d Cir. 2017) (same); McAdams v.

Robinson, 26 F.4th 149, 162 (4th Cir. 2022) (same); Union

Asset Management Holding A.G. v. Dell, Inc., 669 F.3d

632, 644 (5th Cir. 2012) (same); Rawa v. Monsanto Co., 934

F.3d 862, 870 (8th Cir. 2019) (same).

“Regardless of the method chosen,” these courts

generally “suggest[] it is sensible for a court to use a

second method of fee approval to cross-check its initial fee

calculation.” See, e.g., In re Rite Aid Corp. Sec. Litig., 396

F.3d 294, 300 (3d Cir. 2005), as amended (Feb. 25, 2005).

B. The circuits are divided at least 2 to 2 on the

second Question Presented.

1. Only the Eleventh and Ninth Circuits have held

that district courts may presume a request for attorney’s

fees is reasonable so long as it meets a fixed “benchmark.”

20

In Faught, the Eleventh Circuit held that it is “wellsettled law from this court that 25% is generally

recognized as a reasonable fee award in common fund

cases.” 668 F.3d at 1243. The district court had not even

“separately analyze[d] whether the 25% awarded ... was a

reasonable fee in itself, but determined that because 25%

is generally accepted as reasonable in common fund cases,

see Camden I, 946 F.2d at 774, it should also be considered

reasonable in this case.” Ibid. The Eleventh Circuit

nonetheless affirmed. Ibid.

Here, the Eleventh Circuit reaffirmed its approach:

“If a fee award falls between 20 and 25 percent, it is

presumptively reasonable.” App.41a (citing Faught, 668

F.3d at 1242). “If the fee exceeds 25 percent,” then “the

district court must assess the reasonableness of the

percentage using the 12 Johnson factors.” Ibid. (citing

Johnson, 488 F.2d at 717-19); see, e.g., Faught, 668 F.3d at

1243 (affirming district court, which “turned its attention

to [a] $1.5 million lump sum award that took the total fee

award above the 25% benchmark and” only “analyzed that

[additional] amount under the Johnson factors”).

The Ninth Circuit similarly fixes “25% of the fund as

the ‘benchmark’ for a reasonable fee award” in commonfund cases; if trial judges wish to vary from that

benchmark, they must “provid[e] adequate explanation in

the record of any ‘special circumstances’ justifying a

departure.” See In re Bluetooth Headset Prod. Liab.

Litig., 654 F.3d 935, 942 (9th Cir. 2011) (quoting Six (6)

Mexican Workers v. Arizona Citrus Growers, 904 F.2d

1301, 1311 (9th Cir. 1990) (“[W]e established 25 percent of

the fund as the ‘benchmark’ award that should be given in

common fund cases.”)).

21

2. Other circuits have expressly rejected the

“benchmark” approach.

In Goldberger, the Second Circuit confronted whether

“25% of the recovery—whether reached by application of

a [lodestar] multiplier, or as a straight percentage—is an

established ‘benchmark’ in common fund cases.” 209 F.3d

at 51. The court acknowledged “the Ninth Circuit has

cautioned that district courts must justify departure from

the 25% benchmark by pointing to unusual

circumstances.” Ibid. Soo too, the court understood that

“district courts across the nation have apparently eased

into a practice of ‘systematically’ awarding fees in the 25%

range, ‘regardless of type of case, benefits to the class,

numbers of hours billed, size of fund, size of plaintiff class,

or any other relevant factor.’” Ibid. (quoting Third Circuit

Task Force, Court Awarded Attorney Fees, 108 F.R.D.

237, 274 (1986)).

The court was “nonetheless disturbed by the essential

notion of a benchmark.” Goldberger, 209 F.3d at 51. In

particular, the Second Circuit reasoned that “even a

theoretical construct as flexible as a ‘benchmark’ seems to

offer an all too tempting substitute for the searching

assessment that should properly be performed in each

case.” Id. at 52. “Starting an analysis with a benchmark,”

the court warned, “could easily lead to routine windfalls

where the recovered fund runs into the multi-millions.”

Ibid. “Obviously, it is not ten times as difficult to prepare,

and try or settle a 10 million dollar case as it is to try a

1 million dollar case.” Ibid. (quotation marks omitted).

“But the principal analytical flaw,” the court

reasoned, is the “assumption that there is a substantial

contingency risk in every common fund case.” Goldberger,

22

209 F.3d at 52. The court noted in the securities class

action context that “there appears to be no appreciable

risk of non-recovery” because “virtually all cases are

settled.” Ibid. (quotation marks omitted). “Even where

there is some contingency risk but recovery remains

virtually certain,” the court “question[ed] whether a fully

informed group of plaintiffs able to negotiate collectively

would routinely agree to pay their lawyers a fee of 25% of

a multi-million dollar settlement.” Ibid.

Recently, the Tenth Circuit also rejected the idea that

“a ‘benchmark’ of 25% for attorneys’ fees from a common

fund” is presumptively reasonable. Voulgaris v. Array

Biopharma, Inc., 60 F.4th 1259, 1263 (10th Cir. 2023). “To

date, we have not adopted a benchmark percentage for

attorneys’ fees from common fund settlements.” Ibid.

“And we decline to pronounce a bright-line benchmark

today. Instead, we reiterate our prior recognition that

awards across a range of percentages may be reasonable.”

Id. at 1263-64 (emphasis added); see also In re Pet Food

Prod. Liab. Litig., 629 F.3d 333, 361 (3d Cir. 2010) (Weis,

J., concurring in part and dissenting in part) (“There

appears to be a perception in many district courts that the

twenty-five percent ‘benchmark’ is an appropriate place to

begin the fee analysis for most common fund purposes.

Too often that is the end of the discussion, rather than a

beginning point for determining whether a particular fee

is reasonable.” (citing Goldberger, 209 F.3d at 43, 48)).

II. The Eleventh Circuit’s Decision Is Wrong.

A.

The decision is contrary to this Court’s

precedent.

1. As discussed, this Court instructs that the lodestar

is the presumptively reasonable attorney’s fee award, so it

23

is error to require district courts to apply the percentage

method instead. Contra App.41a. Nor can the Eleventh

Circuit’s “benchmark” presumption be squared with this

Court’s case-specific scrutiny in common-fund cases

policing equitable fee awards. E.g., Equitable Trust Co.,

283 U.S. at 746 (reducing fee award to 7.5% of the award

already reduced by Second Circuit); Pettus, 113 U.S.

at 128 (slashing common-fund fee award from 10% to just

5% based on “all the circumstances” of the case); see also

Harrison, 168 U.S. at 325 (approving reduction of

common-fund fee award to 10%).

The Eleventh Circuit affirmed the over $626 million

in attorney’s fees awarded because the percentage “fell

within the range of reasonableness,” and even though the

District Court thus did not need to go any further under

circuit precedent, its “thorough analysis” of the “Johnson

factors and lodestar cross-check confirmed that a fee

award of 23.47 percent was reasonable.” App.42a. That

was wrong.

First, the court disregarded this Court’s requirement

that common-fund fee awards must be “made with

moderation and a jealous regard to the rights of those who

are interested in the fund.” Greenough, 105 U.S. at 536-37.

Although this Court has not categorically prohibited the

percentage method in common-fund cases, cf. Blum, 465

U.S. at 900 n.16, it has always held that the equitable

exception to the American Rule is “limited,” Alyeska, 421

U.S. at 257 (common-fund doctrine allows “a party

preserving or recovering a fund for the benefit of others in

addition to himself[] to recover his costs, including his

attorneys’ fees, from the fund or property itself”

(emphasis added)).

24

Second, this Court has repeatedly chastised the lower

courts for using the Johnson factors to determine whether

attorneys entitled to a “reasonable” fee for their services

should be awarded an enhancement to their lodestar,

because “many of the Johnson factors ‘are subsumed

within the initial calculation’ of the lodestar.” Delaware

Valley I, 478 U.S. at 565 (quoting Blum, 465 U.S. at

898-900). Yet the Eleventh Circuit affirmed the District

Court’s “thorough” Johnson analysis as justifying an

award amounting to a lodestar enhancement of 323%.

App.42a.

The trial judge found that the $626.65 million fee was

appropriate, for example, because the “case required an

immense amount of time and labor” (number of hours

worked reflected in the lodestar); “presented a plethora of

difficult factual issues” requiring “substantial discovery

and pretrial litigation” (same); “raised novel and complex

legal questions” (same); class counsel “are among the

nation’s most experienced and able litigators in the

antitrust arena” (prevailing hourly rates based on

experience reflected in the lodestar); “the significant

commitment of time and resources that were required to

litigate this case” (number of hours worked reflected in the

lodestar); “this case was contingent” and plaintiffs’ counsel

“invested their own money in fronting the expenses in this

litigation, all in the face of significant risk” (contingency

risk not appropriate enhancement consideration, Dague,

505 U.S. at 562); and “the enormous commitments of time

and resources, as well as the significant risk entailed”

(number of hours worked reflected in the lodestar and

inappropriate risk consideration). See App.144a-147a.

25

It is hard to see how these conclusory findings,

spanning just a few pages of the Appendix, are fairly

described as a “thorough analysis.” App.42a. More

importantly, every one of them is already reflected in the

lodestar or is otherwise an inappropriate basis to enhance

the fee. Indeed, the District Court reasoned that the

lodestar calculation itself reflected a “significant

commitment of time and resources” justifying an upward

departure from the lodestar. App.145a. “Taking account

of” these same considerations “again through lodestar

enhancements amounts to double counting.” See, e.g.,

Dague, 505 U.S. at 562.

2. Even if it might be appropriate to apply the

percentage method in some common-fund cases, the

lodestar calculation is the correct method in common-fund

cases settling claims for which Congress has already

provided for fee-shifting in the statute that creates the

right of action. Perdue, 559 U.S. at 546 (so holding as to

discretionary fee-shifting statute).

This is an even stronger case because the fee-shifting

provisions of the Clayton Act are mandatory. When a

private plaintiff “substantially prevails” in a private action

under Section 16, for example, “the court shall award the

cost of suit, including a reasonable attorney’s fee, to such

plaintiff.” 15 U.S.C. § 26 (emphasis added). The

subscribers substantially prevailed here, when the District

Court granted partial summary judgment on their claim

that defendants’ agreements were a per se violation of the

Sherman Act. See BCBS, 308 F. Supp. 3d at 1267. Perdue

requires fees awarded pursuant to such provisions to

apply the lodestar method. 559 U.S. at 546.

26

This Court explained in Boeing that the common-fund

doctrine “rests on the perception that persons who obtain

the benefit of a lawsuit without contributing to its cost are

unjustly enriched at the successful litigant’s expense.” 444

U.S. at 478. Here, counsel agreed to settle the case and

release plaintiffs’ right to statutory fees in exchange for a

common fund—such that they were able to get many times

the fee-shifting lodestar. The class was not unjustly

enriched, because they were entitled to recuperate

attorney’s fees under the Clayton Act, regardless of any

common fund negotiated for the class. Rather, it is unjust

that the lawyers get more than three times their

lodestar—taken from the common fund intended to

benefit the class—because they decided to forgo the lower

fee amount they could get under the statute.

B. The decision is contrary to Rule 23(h).

The Eleventh Circuit silently rejected Petitioner’s

argument that the $75,000,000 prepayment of attorney’s

fees, awarded at the preliminary approval stage before the

class had received anything and before the lawyers even

submitted their motion for attorney’s fees, was improper.

See Objection, at 22-23 (“[T]he District Court approved

the payment and payment was made (1) without benefit of

a fee application, (2) before class members had been

noticed, (3) before the fairness hearing and (4) before

settling defendants paid to a plaintiff class the full

monetary damages.”).

In its preliminary approval order, the District Court

remarked that it was “the first time the court ha[d] been

presented with such a ‘quick pay’ agreement,” but held

that “concerns about equitable distribution between the

class and its counsel are not at issue.” D.Ct.Doc.2641,

27

at 46-47. But before district courts may award “reasonable

attorney’s fees and nontaxable costs authorized ... by the

parties’ agreement,” the “claim for an award must be made

by motion,” notice of such motion by class counsel “must

be ... directed to class members in a reasonable manner,”

and class members must have the opportunity to object.

See Fed. R. Civ. P. 23(h)(1)–(2).

“The plain text of the rule requires a district court to

set the deadline for objections to counsel’s fee request on

a date after the motion and documents supporting it have

been filed.” See In re Mercury Interactive Corp. Sec.

Litig., 618 F.3d 988, 993 (9th Cir. 2010). “The Advisory

Committee Notes to the 2003 amendments to Rule 23(h)

further support this reading of the rule,” elaborating “that

in setting the date objections are due, the court should

provide sufficient time after the full fee motion is on file to

enable potential objectors to examine the motion.” Id. at

994 (cleaned up).

Policy concerns also support this reading. “Allowing

class members an opportunity thoroughly to examine

counsel’s fee motion, inquire into the bases for various

charges and ensure that they are adequately documented

and supported is essential for the protection of the rights

of class members.” See Mercury, 618 F.3d at 994. “It also

ensures that the district court, acting as a fiduciary for the

class, is presented with adequate, and adequately-tested,

information to evaluate the reasonableness of a proposed

fee.” Ibid.

“A host of circuits, many districts courts, and at least

one state supreme court have adopted” the Ninth Circuit’s

reasoning. 5 Newberg and Rubenstein on Class Actions

§ 15:13 (6th ed.) (collecting cases from the Third, Sixth,

28

Seventh, Eighth, Ninth, Tenth, and Eleventh Circuits, as

well as the Alabama Supreme Court, in footnote 16). As

then-Judge Richard Posner agreed, “Rule 23(h) of the civil

rules requires that a claim for attorneys’ fees in a class

action be made by motion, and ‘notice of the motion must

be served on all parties and, for motions by class counsel,

directed to class members in a reasonable manner.’”

Redman v. RadioShack Corp., 768 F.3d 622, 637 (7th Cir.

2014). Because “[c]lass counsel did not file the attorneys’

fee motion until after the deadline set by the court for

objections,” they “violated the rule.” Id. at 637-38 (citing

Mercury, 618 F.3d at 993-95).

In Redman, as here, “the objectors knew that class

counsel were likely to ask for” a certain total attorney’s

fee, “but they were handicapped in objecting because the

details of class counsel’s hours and expenses were

submitted later ... and so they did not have all the

information they needed to justify their objections.” See,

e.g., 768 F.3d at 638. “The objectors were also handicapped

by not knowing the rationale that would be offered for the

fee request, a matter of particular significance in this case

because of the invocation of administrative costs as a

factor warranting increased fees.” See, e.g., ibid. “There

was no excuse for permitting so irregular, indeed unlawful,

a procedure.” See, e.g., ibid.

This is especially important when, as here, App.239a,

defendants agree to a settlement that includes a “clear

sailing” provision—an agreement not to challenge class

counsel’s fee request. “The very existence of a clear sailing

provision increases the likelihood that class counsel will

have bargained away something of value to the class.” See,

e.g., In re Bluetooth Headset Prod. Liab. Litig., 654 F.3d

29

at 948 (cleaned up). “Therefore, when confronted with a

clear sailing provision, the district court has a heightened

duty to peer into the provision and scrutinize closely the

relationship between attorneys’ fees and benefit to the

class, being careful to avoid awarding unreasonably high

fees simply because they are uncontested.” Ibid.

(quotation marks omitted).

III. The Questions Presented Are Important.

This Court’s intervention is desperately needed

because federal courts are entirely failing to seriously

scrutinize fee applications in common-fund cases.

1. In Delaware Valley I, this Court considered the

“Johnson factors” first employed by the Fifth Circuit in

1974. See 478 U.S. at 562, 565. The “major fault” with

“[t]his mode of analysis,” the Court reasoned, was “that it

gave very little actual guidance to district courts”

assessing the reasonableness of attorney’s fee awards. Id.

at 563. “Setting attorney’s fees by reference to a series of

sometimes subjective factors placed unlimited discretion

in trial judges and produced disparate results.” Ibid.

In Perdue, this Court quoted Delaware Valey I for

this proposition when considering the appropriate method

for determining a “reasonable attorney’s fee” under a feeshifting statute like the Clayton Act. 559 U.S. at 550-51

(interpreting same “reasonable attorney’s fee” language

in 42 U.S.C. § 1988). In contrast to the boundless Johnson

factors, the Court noted “several important virtues” of the

lodestar method.

“First, in accordance with [the Court’s]

understanding of the aim of fee-shifting statutes” like the

Clayton Act, “the lodestar looks to ‘the prevailing market

30

rates in the relevant community.’” Perdue, 559 U.S. at 551.

“Second,” and perhaps more importantly, “the lodestar

method is readily administrable, and unlike the Johnson

approach, the lodestar calculation is objective, and thus

cabins the discretion of trial judges, permits meaningful

judicial review, and produces reasonably predictable

results.” Ibid.

As earlier described, this Court has a long history of

criticizing Johnson as a means of assessing a reasonable

attorney’s fee. Indeed, Johnson’s central holding was

abrogated by this Court. Blanchard, 489 U.S. at 94

(assuming without deciding that the “Johnson factors may

be relevant in adjusting the lodestar amount, but” holding

that “no one factor is a substitute for multiplying

reasonable billing rates by a reasonable estimation of the

number of hours expended on the litigation”).

And yet many circuits continue to require application

of the Johnson factors when analyzing common-fund fee

requests. See Union Asset Mgmt. Holding A.G., 669 F.3d

at 643 (5th Cir.) (requiring use of the Johnson factors to

assess reasonableness); Rawa, 934 F.3d at 870 (8th Cir.)

(same); Voulgaris, 60 F.4th at 1263 (10th Cir.) (same); see

also App.41a (requiring district courts to “assess the

reasonableness of the percentage using the 12 Johnson

factors” if “the fee exceeds 25 percent” of the common

fund). Other circuits apply similar variations that include

the same factors this Court has repeatedly criticized as too

subjective or already accounted for in the lodestar. See

Goldberger, 209 F.3d at 50 (2d. Cir.); Gunter v. Ridgewood

Energy Corp., 223 F.3d 190, 195 n.1 (3d Cir. 2000); Ramey

v. Cincinnati Enquirer, Inc., 508 F.2d 1188, 1196 (6th Cir.

1974).

31

But again, “the novelty and complexity of a case

generally may not be used as a ground for an

enhancement.” Perdue, 559 U.S. at 553 (cleaned up). And

“the quality of an attorney’s performance generally should

not be used to adjust the lodestar because considerations

concerning the quality of a prevailing party’s counsel’s

representation normally are reflected in the reasonable

hourly rate.” Ibid. (cleaned up). The same goes for the

“risk of loss in a particular case (and, therefore, the

attorney’s contingent risk).” Dague, 505 U.S. at 562.

2. The result is that no matter how the Courts of

Appeals have come down on the Questions Presented, the

data show that federal district and circuit courts are

entirely failing to protect class members from excessive

attorney’s fee awards in common-fund class actions.

This Court need look no further than plaintiffs’

counsel’s fee application. See D.Ct.Doc.2733-1 (“Fee

Memo”). According to plaintiffs’ counsel, the 23.47% fee

request “falls comfortably within the range of percentage

awards that the courts have approved.” Id. at 57 (citing

D.Ct.Doc.2733-4 (“Fitzpatrick Decl.”)). They cite eight

district court cases from the Third, Fifth, Eleventh, and

D.C. Circuits approving fee awards from 25% to 43.87% of

a common fund. Ibid. & n.55. None were litigated to

judgment.

Plaintiffs’ counsel then cite 25 district court cases

from the Second, Third, Fifth, Sixth, Seventh, Eighth, and

Eleventh Circuits that they argue are comparably

“complex cases,” where the judges approved fee requests

ranging from 33.3% to 50% of the common fund. Fee

Memo, at 57-58 & n.56. None were litigated to judgment.

32

Perhaps most illustrative, plaintiffs’ counsel cited

several “‘mega-fund’ cases involving funds over $100

million,” including “so-called ‘super-mega’ fund cases, in

which funds of over $1 billion are created,” where district

courts from the Second, Fifth, Eleventh, and D.C. Circuits

approved fee applications ranging from 30% to 36% of the

common fund. Fee Memo, at 57-58 & n.57. None were

litigated to judgment.

Plaintiffs’ counsel’s expert “collected the fee awards

in every billion-dollar class action recovery in federal court

that [he] could find from any year and listed them” in

“Table 1” of his declaration. See Fitpatrick Decl. ¶18. He

identified 34 cases, and calculated that the awards resulted

in fees that were on average 2.8 times the lodestar rate,

and several where the lodestar was enhanced more than

fourfold. Ibid. The decisions hail from the Second, Third,

Fourth, Fifth, Sixth, Seventh, Ninth, Tenth, Eleventh, and

D.C. Circuits. Ibid. & nn.3-36. If the fee expert’s report is

accurate, it means there has never been a case litigated to

judgment that resulted in at least a $1 billion common

benefit fund.

3. It makes little sense that an attorney who settles a

case at a fraction of the claimed damages and only partial

injunctive relief is entitled to more than three times as

much the attorney’s fees they would have been awarded

had they litigated the case to judgement and won all the

claimed damages and injunctive relief the class sought.

Yet that is precisely what federal district and circuit courts

routinely permit.

This case is illustrative. Plaintiffs’ counsel claim that

“damages nationwide for the Damages Class over the

Settlement Class Period are estimated to range from $18.6

33

billion to $36.1 billion.” D.Ct.Doc.2610-11, at 5 (Declaration

of Dr. Ariel Pakes, in support of Subscriber Plaintiffs’

Motion for Preliminary Approval). And plaintiffs sought

injunctive relief that would prohibit defendants from

continuing their anticompetitive behavior. App.190a-93a,

201-202a, 219a-220a, 224a. Had they litigated the case to

judgment and won everything they claimed—$55.8 billion

to $108.3 billion in treble damages and full injunctive

relief—they presumptively would have been entitled only

to their lodestar. And they would have had to argue for an

enhancement based on considerations that were not

already subsumed in that calculation.

But class counsel did not litigate the case to judgment.

They agreed to settle the case for 2.4% to 4.8% of the

treble-damages claimed. Cf. D.Ct.Doc.2610-11, at 5. And

as Home Depot describes in its related petition, plaintiffs’

counsel agreed that defendants could “modify some—but

not all—of the allegedly anticompetitive practices that

they engaged in.” See Home Depot Petition, at 11. Worse,

plaintiffs’ counsel agreed to a release that immunizes

defendants from private enforcement of claims seeking

market-wide injunctive relief that accrue after the

settlement’s effective date. See id. at 12-15.

It makes no sense to award class counsel 323% of the

fees they would be entitled to had they won the case

merely because they instead agreed to settle for pennies

on the dollar and diluted injunctive relief. That absurd

result cannot be sustained.

*

*

*

It is hard to understand how any of the foregoing

comports with this Court’s precedent. Perdue set forth

34

three “‘rare’ and ‘exceptional’” circumstances where

“either the quality of an attorney’s performance or the

results obtained are factors that may properly provide a

basis for an enhancement” to the lodestar. 559 U.S. at 554

(quoting Blum, 465 U.S. at 897). “First, an enhancement

may be appropriate where the method used in determining

the hourly rate employed in the lodestar calculation does

not adequately measure the attorney’s true market value,

as demonstrated in part during the litigation.” Id. at

554-55. “Second, an enhancement may be appropriate if

the attorney’s performance includes an extraordinary

outlay of expenses and the litigation is exceptionally

protracted.” Id. at 555. “Third, there may be

extraordinary circumstances in which an attorney’s

performance involves exceptional delay in the payment of

fees.” Id. at 556.

Perhaps, on remand, plaintiffs’ counsel will be able to

show that this is one such “rare” and “exceptional” case

justifying an upward departure from their $194,226,321.65

lodestar. Presently, though, the “District Court did not

provide proper justification for the large enhancement it

awarded.” E.g., Perdue, 559 U.S. at 557. Even then, it is

unlikely that a “lodestar multiplier of 3.23,” App.146a,

would be warranted applying the proper standard on

remand. Cf. ibid.

35

CONCLUSION

The Petition should be granted. Alternatively, the

Petition should be held for Home Depot U.S.A., Inc. v.

BCBS Association, No. 23-1063 (U.S.) (petition pending).

April 25, 2024

Respectfully submitted,

Daniel Woofter

Counsel of Record

GOLDSTEIN, RUSSELL &

WOOFTER LLC

1701 Pennsylvania Ave. NW

Suite 200

Washington, DC 20006

(202) 240-8433

dw@goldsteinrussell.com