Lawyers defend $205 million legal fee in US auto class action settlement

By Mike Scarcella

June 11 (Reuters) - U.S. law firm Kellogg, Hansen, Todd, Figel & Frederick is defending its bid for $205 million in legal fees in a $630 million antitrust class action settlement against automotive tech giant CDK Global, after a judge questioned whether the request was outside the norm.

In a court filing on Tuesday, the Washington, D.C.-based law firm said its fee request, amounting to about 33% of the settlement, was justified based on the risk and complexity of the case and the deal's value.

U.S. District Judge James Peterson in Wisconsin preliminarily approved the settlement in April but cautioned at the time that the law firm had not made a “robust case for justifying such a large amount of fees.”

Peterson said it was common for courts to award 33% of a settlement fund for legal fees, but also noted "this is not an ordinary case" given the amount CDK agreed to pay.

Kellogg Hansen called the agreement rare and “extraordinary” because it exceeded the vendors’ actual damages. To support its fee request, the law firm submitted billing records and declarations from legal experts who said the amount was in line with other cases.

Named plaintiff AutoLoop said CDK violated antitrust law by cutting off access to auto dealer data systems and driving up prices vendors pay to access data for their apps. Austin, Texas-based CDK sells software platforms that auto dealers use to run their daily sales, financing and service operations.

CDK, which denied any wrongdoing in agreeing to settle, did not immediately respond to a request for comment, and neither did attorneys at Kellogg Hansen.

CDK separately settled a related class action brought by dealers for $100 million.

Kellogg Hansen said it had spent more than 106,500 hours on the vendors' lawsuit, developing the case from scratch.

The firm disclosed standard billing rates in its fee filings, with partner Aaron Panner showing the highest rate of any lawyer on the case at $1,825 an hour. Some lawyers at the firm have hourly rates as high as $2,100, the filings showed.

A final approval hearing for the settlement and fees is scheduled for August.

The case is Loop LLC v. CDK Global LLC, U.S. District Court for the Western District of Wisconsin, No. 3:24-cv-00571-jdp.

For AutoLoop: Michael Nemelka, Derek Ho and Aaron Panner of Kellogg Hansen; and Jennifer Gregor of Godfrey & Kahn

For CDK: Mark Filip and Craig Primis of Kirkland & Ellis

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