Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Cal.: Attorney fees not released from escrow fund in LCD price fixing action, (Nov 15, 2013)

By Tobias J. Gillett, J.D., LL.M.

Following settlements in an action against manufacturers of thin-film transistor liquid crystal display panels over alleged price fixing of the panels, a third party lending company could not obtain release of attorney fees currently held in an escrow account because the award of the fees was being challenged on appeal, the federal district court in San Francisco has ruled (In re TFT-LCD (Flat Panel) Antitrust Litigation, November 13, 2013, Illston, S.).

On April 3, 2012, the court issued an order granting final approval to combined class, parens patriae, and governmental entity settlements with AU Optronics, LG Display, and Toshiba. In that order, the court distributed attorney fees and expenses, and ordered that $28.2 million from plaintiff attorney Joseph Alioto’s fee award be placed in an escrow account pending determination of the validity of LFG National Capital, LLC’s lien against him. On September 6, 2013, several objectors appealed the court’s final approval of the settlement to the Ninth Circuit, seeking reversal of the attorneys’ fees award, and challenging Alioto’s award specifically based on an alleged fee-splitting agreement with LFG. In the present motion, LFG sought release of the $28.2 million from the escrow fund so that the bank would permit payment from the account when LFG requested the sheriff to levy it.

The court denied the motion. The court explained that during the pendency of an appeal, a court “may act to preserve the status quo, but may not take actions that alter any substantial rights on appeal or that cannot later be undone.” In the present case, the objectors sought reduction of the attorneys’ fee award, and reversal of Alioto’s award with instructions to limit it to fees for the time period prior to May 2009. Since a decision by the Ninth Circuit in favor of the objectors would reduce the attorneys’ fee award in general and/or “drastically cut” Alioto’s award in particular, granting LFG’s motion could affect “substantial rights on appeal.” Moreover, because LFG was not a party to the case, a later appeal could not undo a grant of the motion. If the Ninth Circuit decided in favor of the objectors, the funds could not be recovered, a result “the law does not permit.”

The case is No. C 07-01827 SI.

Attorneys: Jonathan C. Cross (Herbert Smith Freehills LLP) for LFG National Capital, LLC.

Companies: LFG National Capital, LLC

Cases: Antitrust CaliforniaNews