[*] Associate, Winston & Strawn, Chicago, Illinois. B.A., 1985, Haverford College; J.D., 1989, University of Virginia. Mr. Braun has also held the following positions: Editor-in-Chief, Virginia Law Review; Law Clerk, 1989-90, United States Court of Appeals for the Seventh Circuit, The Honorable Joel M. Flaum; Law Clerk, October Term, 1990, United States Supreme Court, The Honorable William H. Rehnquist. Along with the co-author and Christopher Kay and Michael Beaudine of Kay, Panzl & Latham, Mr. Braun served as co-counsel for the class in the Vehicle Impact Fee litigation. Return to text.

[**] Partner, Winston & Strawn, Chicago, Illinois. B.A., 1982, Boston University; J.D., 1986, Washington University. Mr. Dobie was the Managing Editor of the Washington University Law Quarterly. Along with the co-author and Christopher Kay and Michael Beaudine of Kay, Panzl & Latham, Mr. Dobie served as co-counsel for the class in the Vehicle Impact Fee litigation. Return to text.

[1] The Vehicle Impact Fee, FLA. STAT. § 319.231 (repealed by 1995, Fla. Laws ch. 95-140). Return to text.

[2] Kuhnlein v. Florida Dep't of Revenue, No. 92-6224, slip op. at 7-9 (Fla. 9th Cir. Ct. Nov. 30 1993). Return to text.

[3] U.S. CONST. art. I, § 8, cl. 3. Return to text.

[4] Camden I Condominium Ass'n, Inc. v. Dunkle, 946 F.2d 768 (11th Cir. 1991); Tenney v. City of Miami Beach, 11 So. 2d 188 (Fla. 1942). Return to text.

[5] Camden I, 946 F.2d at 768; Tenney, 11 So. 2d at 188. Return to text.

[6] On November 30, 1993, the trial court granted summary judgment and ordered a full refund to the Class. Florida Dep't of Revenue v. Kuhnlein, 646 So. 2d 717 (Fla. 1994), cert. denied, 115 S. Ct. 2608 (1995). Subsequently, the Florida Supreme Court affirmed the trial court's denial of the Class's motion for prejudgment and postjudgment interest. Florida Dep't of Revenue v. Kuhnlein, 662 So. 2d 308 (Fla. 1995). Return to text.

[7] Kuhnlein, 646 So. 2d at 726. Return to text.

[8] See, e.g., Fickinger v. C.I. Planning Corp., 646 F. Supp. 622 (E.D. Pa. 1986) (awarding 33.3% in case pending for five years because plaintiffs had survived summary judgment and a number of other motions and had done a significant amount of discovery); In re AIA Indus., Inc. Sec. Litig., No. 84-2276, 1988 WL 33883 (E.D. Pa. Mar. 31, 1988) (awarding 33% after substantial discovery and lengthy settlement negotiations; case pending approximately three years); Greene v. Emersons Ltd., [1986-87 Transfer Binder] Fed. Sec. L. Rep. (CCH) ¶ 93,263 (S.D.N.Y. May 20, 1987) (involving fees and costs of 46.2% in protracted case taking over ten years to resolve); Eltman v. Grandma Lee's, Inc., [1986-87 Transfer Binder] Fed. Sec. L. Rep. (CCH) ¶ 92,798 (E.D.N.Y. 1986) (awarding 33% after four years of extensive discovery, motions, and settlement negotiations); In re Infant Formula Antitrust Litig., MDL No. 878, 1992 WL 503465 (N.D. Fla. Sept. 7, 1993) (granting 25% fee award, resulting in a fee of $31.4 million, after class counsel's settlement of antitrust matter for $125 million); In re Am. Continental Corp./Lincoln Sav. & Loan Sec. Litig., MDL No. 834 (D. Ariz. July 24, 1990) (awarding class counsel 25% of the first $150 million of any settlement, 29% for all amounts thereafter, plus additional percentages as incentives to settle the case expeditiously); In re San Juan Dupont Plaza Hotel Fire Litig., 768 F. Supp. 912 (D.P.R. 1991) (awarding $35 million of $220.9 million settlement); In re RJR Nabisco, Inc. Sec. Litig., [1992 Transfer Binder] Fed. Sec. L. Rep. (CCH) ¶ 96,984 (S.D.N.Y. 1992) (awarding $17.7 million plus expenses—an amount representing 25% of $72.5 million settlement fund); In re Plywood Antitrust Litig., MDL No. 159 (E.D. La. Apr. 29, 1983) (awarding 15% of $171 million of the settlement fund). The court-awarded fee is also far below the percentage awarded in taxpayer class actions in Florida and elsewhere. See City of Miami Beach v. Jacobs, 341 So. 2d 236 (Fla. 3d DCA 1976) (awarding fee of 37% of the common fund), cert. denied, 348 So. 2d 945 (Fla.), and cert. denied, 434 U.S. 939 (1977); Tenney, 11 So. 2d at 188 (awarding fee of 33% of fund); City of Ozark v. Trawick, 604 So. 2d 360 (Ala. 1992) (approving 33% fee award from common fund); State v. Private Truck Council of Am., Inc., 371 S.E.2d 378 (Ga. 1988) (approving 33% fee award from common fund). Return to text.

[9] See, e.g., Woosley v. State, 838 P.2d 758 (Cal. 1992) (upholding finding that similar tax was unconstitutional but dismissing suit on finding that taxpayers could not use class action mechanism to seek refund from the state), cert. denied, 508 U.S. 940 (1993); Bailey v. State, 412 S.E.2d 295 (N.C. 1991) (requiring taxpayers to exhaust administrative remedies), cert. denied, 504 U.S. 911 (1992); American Trucking Ass'n, Inc. v. Smith, 496 U.S. 167 (1990) (holding that where a decision breaks new constitutional ground, a state may in certain instances deny retroactive relief); Boston Stock Exch. v. State Tax Comm'n, 429 U.S. 318 (1977) (noting inconsistency in Commerce Clause holdings). Return to text.

[10] Kuhnlein, 646 So. 2d at 717. Return to text.

[11] Id. Return to text.

[12] Id. Return to text.

[13] Id. Return to text.

[14] Internal Imp. Fund Trustees v. Greenough, 105 U.S. 527, 532-33 (1881). Return to text.

[15] Fidelity & Casualty Co. v. O'Shea, 397 So. 2d 1196, 1198 (Fla. 2d DCA 1981) (quoting Estate of Hampton v. Fairchild-Fla. Constr. Co., 341 So. 2d 759 (Fla. 1976)). Return to text.

[16] O'Shea, 397 So. 2d at 1196; City of Miami Beach v. Jacobs, 341 So. 2d 236 (Fla. 3d DCA 1976); City of Miami v. Florida Retail Fed'n, Inc., 423 So. 2d 991 (Fla. 3d DCA 1982). Return to text.

[17] Deposit Guar. Nat'l Bank v. Roper, 445 U.S. 326, 338 (1980). Return to text.

[18] See Florida Retail, 423 So. 2d at 991; Jacobs, 341 So. 2d at 236. Return to text.

[19] HERBERT B. NEWBERG, ATTORNEY FEE AWARDS § 2.02, at 31 (1986); Third Circuit Task Force Report on Court-Awarded Attorneys' Fees, 108 F.R.D. 237, 242 (3d Cir. 1985) [hereinafter Task Force Report]; see also Paul, Johnson, Alston & Hunt v. Graulty, 886 F.2d 268, 272 (9th Cir. 1989) (citing Blum v. Stenson, 465 U.S. 886, 900 n.16 (1984)) (stating that "the percentage basis method is grounded in tradition"). Return to text.

[20] Frost v. Inhabitants of Belmont, 88 Mass. 152, 164-65 (1863); see John P. Dawson, Lawyers and Involuntary Clients in Public Interest Litigation, 88 HARV. L. REV. 849, 882 n.120 (1975); see also NEWBERG, supra note 19, § 2.02, at 31; Task Force Report, supra note 19, at 242; Graulty, 886 F.2d at 272. Return to text.

[21] Camden I Condominium Ass'n, Inc. v. Dunkle, 946 F.2d 768, 771 (11th Cir. 1991) (citing Central R.R. & Banking Co. v. Pettus, 113 U.S. 116 (1885); Internal Imp. Fund Trustees v. Greenough, 105 U.S. 527 (1881)). Return to text.

[22] Task Force Report, supra note 19, at 242. Return to text.

[23] Camden I, 946 F.2d at 772 n.3; Florida Bar Rule 4-1.5. Return to text.

[24] Lindy Bros. Builders v. American Radiator & Standard Sanitary Corp., 487 F.2d 161, 169 (3d Cir. 1976). Return to text.

[25] Id. at 162. Return to text.

[26] Id. at 168. Return to text.

[27] Id. at 168-69. Return to text.

[28] Id. at 167. Return to text.

[29] Id. at 168. Return to text.

[30] Task Force Report, supra note 19, at 251. Return to text.

[31] Id. (quoting In re Fine Paper Antitrust Litig., 751 F.2d 562, 583 n.19 (3d Cir. 1984)). Return to text.

[32] Camden I Condominium Ass'n, Inc. v. Dunkle, 946 F.2d 768, 771 (11th Cir. 1991) (quoting Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (1980)). Return to text.

[33] Brown v. Phillips Petroleum Co., 838 F.2d 451, 454 (10th Cir.), cert. denied, 488 U.S. 822 (1988). Return to text.

[34] NEWBERG, supra note 19, § 2.06, at 39-43; City of Riverside v. Rivera, 477 U.S. 561 (1986). Return to text.

[35] Task Force Report, supra note 19, at 247. Return to text.

[36] NEWBERG, supra note 19, § 1.10, at 17 (citations omitted). Return to text.

[37] See, e.g., In re "Agent Orange" Prod. Liab. Litig., 611 F. Supp. 1296, 1306 (E.D.N.Y. 1985) (stating that the lodestar method "tends to increase enormously the cost of the litigation to the defense in fees and to the court in hours it must spend on supervision"); Feuerstein v. Burns, 569 F. Supp. 268, 272 (S.D. Cal. 1983) (finding that lodestar method "is criticized for overemphasizing the number of hours expended, and thus allowing counsel to artificially inflate attorneys' fees requests"); Dorfman v. First Boston Corp., 70 F.R.D. 366, 375 (E.D. Pa. 1976) (same); Blank v. Talley Indus., Inc., 390 F. Supp. 1, 5 (S.D.N.Y. 1975) (same); George D. Hornstein, Legal Therapeutics: The "Salvage" Factor in Counsel Fee Awards, 69 HARV. L. REV. 658 (1956); John C. Coffee, Jr., Understanding the Plaintiff's Attorney: The Implications of Economic Theory for Private Enforcement of the Law Through Class and Derivative Actions, 86 COLUM. L. REV. 669, 724-25 (1986). Return to text.

[38] Task Force Report, supra note 19, at 237. Return to text.

[39] Id. at 242. Return to text.

[40] Id. at 258. Return to text.

[41] Id. at 246-49; see also Camden I Condominium Ass'n, Inc. v. Dunkle, 946 F.2d 768, 774 (11th Cir. 1991); Swedish Hosp. Corp. v. Shalala, 1 F.3d 1261, 1271 (D.C. Cir. 1993). Return to text.

[42] Task Force Report, supra note 19, at 246. Return to text.

[43] Id. at 245-46. Return to text.

[44] See Brown v. Phillips Petroleum Co., 838 F.2d 451, 454 (10th Cir.), cert. denied, 488 U.S. 822 (1988) (discussing the different dynamics in statutory fee cases and common fund cases and agreeing with the Task Force that applying variant fee recovery methods to these two categories of actions will best achieve the differing policy objectives each was designed to further). Return to text.

[45] Task Force Report, supra note 19, at 246-49, 256. Return to text.

[46] Id. at 242. Return to text.

[47] See Camden I Condominium Ass'n, Inc. v. Dunkle, 946 F.2d 768, 774 (11th Cir. 1991); Swedish Hosp. Corp. v. Shalala, 1 F.3d 1261, 1271 (D.C. Cir. 1993). Return to text.

[48] Hensley v. Eckerhart, 461 U.S. 424, 437 (1983). Return to text.

[49] Kirchoff v. Flynn, 786 F.2d 320, 325 (7th Cir. 1986). Return to text.

[50] In re Activision Sec. Litig., 723 F. Supp. 1373, 1376 (N.D. Cal. 1989). Return to text.

[51] HERBERT B. NEWBERG & ALBA CONTE, ON CLASS ACTIONS § 14.03 (3d ed. 1992). Return to text.

[52] 465 U.S. 886 (1984). Return to text.

[53] Id. at 900 n.16. Return to text.

[54] Sprague v. Ticonic Nat'l Bank, 307 U.S. 161, 167 (1939); Central R.R. & Banking Co. v. Pettus, 113 U.S. 116, 128 (1885); Internal Imp. Fund Trustees v. Greenough, 105 U.S. 527, 532 (1881). Return to text.

[55] Evans v. Jeff D., 475 U.S. 717, 736-37 n.28 (1986). Return to text.

[56] See Camden I Condominium Ass'n, Inc. v. Dunkle, 946 F.2d 768, 773 (11th Cir. 1991); see supra note 54. Return to text.

[57] Camden I, 946 F.2d at 768. Return to text.

[58] Ressler v. Jacobson, 149 F.R.D. 651, 653 (M.D. Fla. 1992) ("In class action suits, where a fund is recovered and fees are awarded by the court from the fund," Camden I and Blum require the court to "comput[e] fees as a percentage of the common fund recovered."). Return to text.

[59] Camden I, 946 F.2d at 774. Return to text.

[60] See Swedish Hosp. Corp. v. Shalala, 1 F.3d 1261, 1271 (D.C. Cir. 1993); see also Uselton v. Commercial Lovelace Motor Freight, Inc., 9 F.3d 849, 853 (10th Cir. 1993) ("[T]his court [has] distinguished common fund cases from statutory fee cases and recognized the propriety of awarding attorneys' fees in the former on a percentage of the fund, rather than lodestar basis."); Paul, Johnson, Alston & Hunt v. Graulty, 886 F.2d 268, 272 (9th Cir. 1989). Return to text.

[61] See, e.g., Tenney v. City of Miami Beach, 11 So. 2d 188 (Fla. 1942). Return to text.

[62] Id. at 188. Return to text.

[63] Id. Return to text.

[64] Id. at 190. Return to text.

[65] Id. Return to text.

[66] City of Miami Beach v. Jacobs, 341 So. 2d 236 (Fla. 3d DCA 1976); City of Miami v. Florida Retail Fed'n, Inc., 423 So. 2d 991 (Fla. 3d DCA 1982); Shlachtman v. Mitrani, 508 So. 2d 494 (Fla. 3d. DCA 1987). Return to text.

[67] 341 So. 2d at 236. Return to text.

[68] Id. Return to text.

[69] Id. Return to text.

[70] Id. Return to text.

[71] 423 So. 2d at 991. Return to text.

[72] Id. at 992. Return to text.

[73] Id. at 993. Return to text.

[74] See, e.g., Bailey, Hunt, Jones & Busto, P.A. v. Roland Langen, P.A., 632 So. 2d 82 (Fla. 3d DCA 1993) (affirming attorneys' contractual fee award of 25% of the common fund in a class action settlement). Return to text.

[75] 508 So. 2d 494 (Fla. 3d DCA 1987). Return to text.

[76] Id. Return to text.

[77] Id. Return to text.

[78] Id. at 495; see 1 JAMES C. HAUSER, ATTORNEYS' FEES IN FLORIDA 31 (1995). Return to text.

[79] Kuhnlein v. Florida Dep't of Revenue, 662 So. 2d 309, 313 (Fla. 1995) (quoting Baruch v. Giblin, 164 So. 831, 833 (1935)). Return to text.

[80] Id. at 312. Return to text.

[81] Id. at 313 (quoting Florida Patient's Compensation Fund v. Rowe, 472 So. 2d 1145, 1149-50 (Fla. 1985)). Return to text.

[82] Id. Return to text.

[83] Id. Return to text.

[84] Id. Return to text.

[85] Id. Return to text.

[86] Id. Return to text.

[87] Id. at 314-15. Return to text.

[88] Standard Guar. Ins. Co. v. Quanstrom, 555 So. 2d 828, 834 (Fla. 1990). Return to text.

[89] Kuhnlein, 662 So. 2d at 315. Return to text.

[90] Id. Return to text.

[91] Id. Return to text.

[92] Id. Return to text.

[93] Id. at 316 (Kogan, J. and Shaw, J., dissenting). Return to text.

[94] Id. at 317-19 (Kogan, J. and Shaw, J., dissenting). Return to text.

[95] Id. at 320 (Harding, J., dissenting separately). Return to text.

[96] Id. at 322 (Harding, J., dissenting separately). Return to text.

[97] Id. at 313. Return to text.

[98] Florida Bar re Amendment to Code of Professional Responsibility (Contingent Fees), 494 So. 2d 960 (Fla. 1986); Florida Bar Rule 4-1.5(f)(4)(B)(i) (stating that any fee exceeding the following standards shall be excessive: 1) 40% of any recovery up to one million dollars and 2) 30% of any portion between one and two million dollars). Return to text.

[99] See FLA. STAT. § 409.910(15)(b) (1995) (attorneys' fees in Medicaid/tobacco litigation capped at 30% of common fund); id. § 768.28(8) (permitting negligence statutes fees as high as 25%). Return to text.

[100] Id. § 409.910(14)(b) (attorneys' fees in Medicaid/tobacco litigation capped at 30% of the common fund). Return to text.

[101] See supra note 58. Return to text.

[102] Tenney v. City of Miami Beach, 11 So. 2d 188 (Fla. 1942); City of Miami Beach v. Jacobs, 341 So. 2d 236 (Fla. 3d DCA 1976), cert. denied, 348 So. 2d 945 (Fla. 1977), and cert. denied, 434 U.S. 939 (1977). Return to text.

[103] In re King Resources Co. Sec. Litig., 420 F. Supp. 610, 631 (D. Colo. 1976) (quoting Hornstein, supra note 37, at 660). Return to text.

[104] The percentage method thus more accurately reflects the economics of litigation practice which, "given the uncertainties and hazards of litigation, must necessarily be result-oriented." Swedish Hosp. Corp. v. Shalala, 1 F.3d 1261, 1269 (D.C. Cir. 1993) (quoting Howes v. Atkins, 668 F. Supp. 1021 (E.D. Ky. 1987)); see also In re Continental Ill. Sec. Litig., 962 F.2d 566, 572 (7th Cir. 1992) (finding that percentage approach most closely approximates the manner in which attorneys are compensated in the marketplace for these types of cases); Steiner v. Hercules, Inc., 835 F. Supp. 771, 792 (D. Del. 1993) (stating that "percentage method is widely used in the legal marketplace in contingent fee agreements and better reflects what a client, at the outset of the litigation, is willing to pay"). Return to text.

[105] See 27 Fed. Sec. L. Rep. 116-117 (Jan 20, 1995) (noting that Representative Edward Markey (Dem. Mass.) introduced the Securities Reform Bill (HB 555) that would mandate that fees be calculated on the percentage of funds recovered, rather than on how many billable hours the lawyers generated, "[to] assure that the interests of the plaintiffs' attorneys are more closely aligned with the interests of their clients."). Similarly, the "Private Securities Litigation Reform Act" (SB 240) sponsored by Senators Peter Domenici (Repub. N.M.) and Christopher Dodd (Dem. Conn.) also contains a provision requiring that the courts tie an award of attorneys' fees directly to the amount recovered by investors. Id. The final bill, styled "Private Securities Litigation Reform Act of 1995," as approved by the Committee of Conference, provides for the recovery of attorneys' fees based upon a "reasonable percentage" of the amount recovered for the class. See HR Conf. Rep. No. 104-369, 104th Cong., 1st Sess. (1995). Return to text.

[106] Coffee, supra note 37, at 724-25. Return to text.

[107] See Feuerstein v. Burns, 569 F. Supp. 268, 272 (S.D. Cal. 1983). Return to text.

[108] The Florida Supreme Court's adoption of the lodestar in common fund cases turns class actions seeking a refund of taxes into a disfavored subset of class action suits. Since the federal Tax Anti-Injunction Act, 26 U.S.C § 7421(a) (1988), bars the filing of suits in federal courts to challenge the constitutionality of state taxes where the state provides a plain and speedy remedy, attorneys representing putative class representatives in taxpayer refund actions will be condemned to state court and to a lodestar recovery. Return to text.

[109] 488 F.2d 714 (5th Cir. 1974). Return to text.

[110] Id. at 718. Return to text.

[111] See Eisen v. Carlisle & Jacquelin, 417 U.S. 156 (1974) (recognizing that litigation over small individual claims would be prohibitive without class action mechanism); Hawkins v. Thorp Loan & Thrift Co., No. 85-6074, 1992 WL 589727 (D. Minn. Feb. 21, 1992) (finding nonmonetary benefit of establishing incentives for such cases to be filed in future supports large fee award); Alpine Pharmacy, Inc. v. Chas. Pfizer & Co., Inc., 481 F.2d 1045, 1050-51 (2d Cir.), cert. denied, 414 U.S. 1092 (1973). Return to text.

[112] Florida Bar re Amendment to Code of Professional Responsibility (Contingent Fees), 494 So. 2d 960, 969 (Fla. 1986) (Barkett, J., concurring in part, dissenting in part). Return to text.