Employment Law Daily $14M in attorneys' fees awarded in hospital wage suppression conspiracy suit
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Thursday, February 4, 2016

$14M in attorneys' fees awarded in hospital wage suppression conspiracy suit

By Greg Hammond, J.D. A federal district court in Michigan awarded $14 million in attorneys’ fees in a class action in which two Detroit-area nurses claimed that a healthcare entity conspired with other area hospitals to suppress wages. The fees are reasonable under the circumstances and are supported by the six Bowling factors, according to the court (Cason-Merenda v. VHS of Michigan, Inc., January 29, 2016, Rosen, G.). Wage-fixing suit. The plaintiffs in this long-running suit claimed that eight local hospitals participated in a conspiracy to suppress wages, in violation of the Sherman Act. Specifically, they alleged that the hospitals conspired among themselves and with other local hospitals to hold down the wages of registered nurses employed at the hospitals, and exchanged compensation-related information, thus reducing competition among Detroit-area hospitals in the wages paid to registered nurses. The district court granted the nurses’ motion for class certification in 2013; the parties reached a settlement in the case in September 2015, and filed a motion for preliminary approval just weeks before trial was set to begin. Fee request. Class counsel sought 33 percent, or $14 million, of the $42 million settlement resolving the antitrust wage-fixing claims. The fees sought under the total recovery, however, would amount to less than 29 percent of the more than $90 million common fund created by the litigation. The court concluded that the Bowling factors all support an award of the fees requested. In particular, the court concluded: (1) the settlements would confer significant and valuable benefits to the class members, including a cash recovery of more than $90 million; (2) the attorneys would be awarded less than 80 percent of their total lodestar; (3) plaintiffs’ counsel, with one exception, pursued the case on a contingent fee basis; (4) antitrust cases pursue important societal goals and attorneys should be provided with an appropriate incentive; (5) the claims to be tried—a wage exchange conspiracy subject to the Rule of Reason, rather than the typical per se price fixing agreement—were particularly complex; and (6) counsel for both plaintiffs and defendants are highly experienced practitioners.

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