Antitrust Law Daily Wrap Up, ANTITRUST—E.D. Mich.: $14M in attorney fees awarded in hospital wage suppression conspiracy suit, (Feb 1, 2016)

By Greg Hammond, J.D.

The federal district court in Detroit awarded attorneys $14 million in fees in a class action in which two Detroit-area nurses claimed that VHS of Michigan, Inc., doing business as Detroit Medical Center (DMC), conspired with other area hospitals to suppress wages. The fees, according to the court, are reasonable under the circumstances and are supported by the six Bowling factors (Cason-Merenda v. VHS of Michigan, Inc., January 29, 2016, Rosen, G.).

Class counsel sought 33 percent, or $14 million, of the $42 million settlement with DMC. The fees sought under the total recovery, however, would amount to less than 29 percent of the over $90 million common fund created by the litigation.

The court concluded that the Bowling factors all support an award of the attorney 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, have 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—are particularly complex; and (6) counsel for both plaintiffs and defendants are highly experienced practitioners.

Plaintiffs Pat Cason-Merenda and Jeffrey A. Suhre claimed that eight local hospitals participated in a conspiracy to suppress wages in violation of the Sherman Act. Specifically, they claimed that the hospitals: (1) conspired among themselves and with other local hospitals to hold down the wages of registered nurses employed at these hospitals; and (2) exchanged compensation-related information among themselves that reduced competition among Detroit-area hospitals in the wages paid to registered nurses.

The case is No. 2:06-cv-15601-GER-DAS.

Attorneys: Daniel Cohen (Cuneo Gilbert & LaDuca, LLP) for Pat Cason-Merenda. Andrew Patrick LeGrand (Gibson Dunn & Crutcher LLP) for VHS of Michigan, Inc.

Companies: VHS of Michigan, Inc.

Cases: Antitrust MichiganNews