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Haas v. Burlington County

United States District Court, D. New Jersey, Camden Vicinage

September 3, 2019




         This Report and Recommendation addresses counsels' fee dispute.[1] In short, counsel dispute how to allocate $900, 000 in attorney's fees and $25, 000 in costs defendants agreed to pay as part of their settlement of this strip-search class action. On the one hand, Carl Poplar, Esquire and William Riback, Esquire (hereinafter collectively, “Poplar”), ask that they be allocated 100% ($900, 000) of the available fees and costs ($25, 000). On the other hand, David Novack, Esquire and Susan Lask, Esquire (hereinafter collectively, “Novack”), ask that they be allocated 50% of the disputed attorney's fee ($450, 000) and $4, 931.20 in costs. The Court will not address how to allocate each side's share. To assist in the preparation of this recommended allocation, the Court not only read the parties' extensive motion papers, but it also reviewed its lengthy file and notes going back to “day one” of the case.

         As will be discussed in detail herein, as to fees the Court recommends Poplar and Riback be allocated 82.5% ($742, 500), and Novack and Lask be allocated 17.5% ($157, 500). As to costs, the Court recommends Novack/Lask be reimbursed 100% of their claim ($4, 931.20), and that Poplar/Riback be allocated the remainder ($20, 068.80) of the $25, 000 to be shared. The Court makes the following findings in support of its Recommendation.


         Before proceeding to its analysis, the Court will make three general observations.

         First, it can hardly be debated that this Court is in the best position to make a fair, unbiased, objective and informed allocation recommendation. No. one else has firsthand knowledge of all relevant developments in the case, and was an eyewitness participant to virtually every relevant liability and settlement issue, conference and discussion. Further, the Court has not only managed this case from its inception, but it also managed the related Florence litigation.

         The Court's second general observation is that it regrets counsel was unable to agree to allocate the settlement fund. “Ideally, allocation is a private matter to be handled among class counsel.” Turner v. Murphy Oil USA, Inc., 582 F .Supp. 2d 797, 808 (E.D. La. 2008) (citation and quotation omitted). The Court takes no satisfaction in creating winners and losers. The fact the Court has to allocate a fixed sum results in a zero-sum game. For every dollar one side receives, there is one less dollar available to the other side. The best course would have been for counsel to resolve their dispute without significant involvement of the Court.

         Third, although the Court originally stated it would keep this recommendation confidential, it changed its mind. The Court wholeheartedly agrees with the following quote from In re High Sulfur Content Gasoline Prod. Liab. Litig., 517 F.3d 220, 230 (5th Cir. 2008):

         On a broad public level, fee disputes, like other litigation with millions at stake, ought to be litigated openly. Attorneys' fees, after all, are not state secrets that will jeopardize national security if they are released to the public. As the Third Circuit has noted, “[p]ublic confidence [in our judicial system] cannot long be maintained where important judicial decisions are made behind closed door and then announced in conclusive terms to the public, with the record supporting the court's decision sealed from public view.” United States v. Cianfrani, 573 F.2d 835, 851 (3d Cir. 1978). From the perspective of class welfare, publicizing the process leading to attorneys' fee allocation may discourage favoritism and unsavory dealings among attorneys even as it enables the court better to conduct oversight of the fees. If the attorneys are inclined to squabble over the generous fee award, they are well positioned to comment-publicly-on each other's relative contribution to the litigation.

         Having completed its introduction, the Court will proceed to its allocation analysis.


         1. Background

         A detailed history of the background of the case is necessary to put the present dispute in context. Riback filed the initial complaint in this action on February 26, 2008, naming Tammy Haas and Conrad Szczpaniak as plaintiffs. The complaint generally challenged Burlington County's practice of “strip-searching” all pre-trial detainees. The Haas/Szczpaniak complaint was filed shortly after the Florence action was instituted on July 19, 2005 (C. A. No. 05-3619 (JHR/JS)). Riback filed an amended complaint [Doc. No. 11] on February 2, 2009 but only named Haas as a plaintiff. Haas filed her second amended complaint on April 3, 2009 [Doc. No. 18]. The third amended complaint was filed on November 28, 2012. [Doc. No. 18].

         Szczpaniak (represented by Riback) filed a state court complaint in Burlington County on December 3, 2009. The case was removed to federal court on January 13, 2010 (C.A.No.10-199 (NLH/JS)), and thereafter stayed. As the parties know, the Florence summary judgment decision in Florence's favor was reversed on appeal by the Third Circuit on September 21, 2010. See 621 F.3d 296 (3d Cir. 2010). On April 2, 2012, the reversal was affirmed by the U.S. Supreme Court in a 5-4 decision. See 566 U.S. 318 (2012). On August 30, 2012, Poplar entered his appearance in the Haas and Szczpaniak cases. The two cases were consolidated on September 12, 2012, under the Haas docket number.

         This Court granted plaintiff's motion to amend her complaint based on Florence on November 13, 2012. [Doc. No. 69]. On appeal the decision was affirmed and reversed in part on June 30, 2013. [Doc. No. 121]. Plaintiff filed her first motion to certify the class on October 11, 2013. [Doc. No. 141]. Defendant filed its motion for summary judgment on November 15, 2013. [Doc. No. 144]. On February 10, 2014, plaintiff re-filed her motion for class certification and filed plaintiff's motion for summary judgment. [Doc. Nos. 155, 156]. The pending motions for class certification and for summary judgment were withdrawn on February 18, 2014. [Doc. Nos. 159, 166]. Oral argument on the motions was held on January 15, March 26 and June 5, 2015, before the Honorable Noel L. Hillman.

         Although Judge Hillman did not enter a formal Order granting Poplar's summary judgment motion, he indicated the motion would be granted on state law grounds. See Transcripts, Doc. Nos. 181, 185, 196. Judge Hillman also indicated that class certification would be granted. Id. Judge Hillman referred the case to mediation on June 9, 2015 [Doc. No. 195]. The first and second mediation sessions were held on August 18, 2015 and February 26, 2016, before the Honorable John Hughes (Ret.).

         Beginning in June 2016 the case took an unfortunate turn. At that time Haas indicated she wanted to fire Riback and Lask sought to be admitted pro hac vice to represent Haas. This development resulted in counsel filing numerous papers and arguing about Lask's admission, an issue that had nothing to do with the merits of the case. Novack's first written appearance in the case was on March 3, 2017, when he advised the Court he was representing Haas. [Doc. No. 290].[2]

         The issues involving Lask's pro hac vice appearance were finally resolved on March 13, 2017, when this Court granted her motion with conditions. [Doc. No. 297]. After the issues involving Lask's appearance were finally resolved, and the parties turned their attention back to the merits of the case, this Court ended the parties' mediation and undertook substantial efforts to settle the case. After countless in-person and phone conferences, the parties finally agreed to settle. Plaintiffs' Motion to Certify the Class and for Preliminary Settlement Approval was filed on October 4, 2017. [Doc. No. 331]. The hearing on the motion was held on January 31, 2018. [Doc. No. 348]. Judge Hillman granted preliminary settlement approval on April 20, 2018 [Doc. No. 357] and appointed Poplar (individually) and Novack (individually) as Co-Class Counsel. The final Order approving the parties' settlement was entered on January 31, 2019 [Doc. No. 383] and was amended on February 1, 2019. [Doc. No. 384].

         2. Common Fund Allocation

         Having summarized the fact and procedural background of the case, the Court will begin its allocation analysis with a discussion of the applicable allocation law which will guide its recommendation. In this regard it is necessary to focus the parties' discussion. While the parties discuss the lodestar analysis, to a large extent they focus on each side's contribution to the successful resolution of the case. This is understandable since counsel explicitly or implicitly agree that a qualitative rather than a quantitative analysis of their time should be done.

         Importantly, this is not an instance where the parties have to justify the attorney's fees defendants will pay in the case. The Court has already determined that $900, 000 is an appropriate sum. Instead, the Court's task is to allocate amongst different counsel an already approved $900, 000 common fund. Even if deductions are taken, it is likely counsels' combined lodestar will exceed $900, 000. After all, Poplar's lodestar is approximately $1.3 million and Novack's lodestar is $992, 362.

         In addition to the fact that a pure lodestar analysis is not workable given that the parties' lodestar exceeds the common fund to be paid, the analysis ignores the quality and importance of each attorney's work. Not all work on the case is entitled to equal weight. As noted, a qualitative rather than a quantitative analysis needs to be done. This accounts for why a pure lodestar analysis has been criticized in common fund cases. In re E.I. Dupont DeNemours and Co. C-8 Personal Inj. Litig., No. 2-13-MD-2432, 2018 WL 4771524, at *4. (S.D. Ohio Oct. 3, 2018) (“[Trying to make precise lodestar calculations would only provide illusory mathematical precision unsupported by the realities of…time keeping practices and disconnected to the value that the work provided to the litigation.”). Further:

[T]he task at hand is not solely a matter of counting hours…but rather assigning a weight to each person or entity's input in the product achieved as a result of the collective effort of the group. Stated another way, while an hour is sixty (60) minutes, all hours are not equal.

LeBlanc v. Texas Brine Co., LLC, C. A. No. 12-2059 c/w, 2015 WL 13574286, at *1 (E.D. La. May 7, 2015).

         Instead of doing a pure lodestar analysis, the Court will treat this as a common fund case. “Where, as here, a defendant has voluntarily undertaken the establishment of a separate fund to pay class counsel's costs and fees, the case is most appropriately reviewed as a common fund case.” In re: National Football League Players' Concussion Injury Litigation, MDL No. 2323, 2018 WL 1635648, at *3 (E.D.Pa. April 5, 2018).”[3]

         The Court will consider as common benefit work efforts that contributed to the settlement, thereby benefitting the settlement class. In re Syngenta AG MIR 162 Corn Litig., MDL No. 2591, 2018 WL 6839380, at *14 (D. Kan. Dec. 31, 2018). The Court will not consider as common benefit work efforts that did not advance the interests of the class or settlement of the class action. For example, the Court will disregard the time spent by both sides between June 2016 and March 2017 when the parties argued about Lask's pro hac admission[4]. This time did not benefit the class. To be sure, however, work done for individual clients may be considered common benefit work “if [the] work provided a benefit to the entire settlement class.” Id.

         Insofar as the factors to analyze when allocating a common fund are concerned, the cases that discuss the issue focus on the nature and quality of the work performed. An illustrative case is In re: High Sulfur Content Gasoline Prod. Liab. Litig., 517 F.3d 220, 228 (5th Cir. 2008). In High Sulfur the Court emphasized the importance of the so-called Johnson factors. These are: (1) time and labor required, (2) novelty and difficulty of the questions, (3) skill requisite to perform the legal service properly, (4) preclusion of other employment by the attorney due to acceptance of the case, (5) customary fee, (6) whether the fee is fixed or contingent, (7) time limitations imposed by the Court or the circumstances, (8) the amount involved and the results obtained, (9) the experience, reputation, and ability of the attorneys, (10) the ...

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