Rodriguez v. West Publishing Corp.

Recent law-school graduates who had bought Bar/Bri bar-exam preparation courses (class) (plaintiffs) filed an antitrust class action against West Publishing Corporation (West) (defendant) and Kaplan, Inc. (defendant). Five of the class representatives entered into retainer agreements that included incentive award provisions. The awards were to be granted pursuant to a sliding scale based on the amount ultimately recovered in the matter. The maximum incentive, $75,000, would be awarded for a recovery amount of $10 million or more. Two class representatives did not enter into award agreements. The agreements were not disclosed to the court until the parties negotiated a proposed settlement involving a $49 million settlement fund. At that time, plaintiffs’ counsel applied to the court for the incentive awards, and several class members objected both to the settlement and to the award agreements. The district court upheld the settlement but held that the agreements were inappropriate and contrary to public policy because they: (1) obligated counsel to request awards that did not reflect the actual amount of work or risk involved, (2) created the appearance of impropriety, (3) violated fee-sharing rules, (4) encouraged plaintiff shopping, and (5) violated the representatives’ fiduciary duties to the class and their duty of candor to the court. The class members appealed.