Antitrust Law Daily Wrap Up, RICO—D. Conn.: $99M attorney fee award granted following settlement of RICO class action against food distributor, (Dec 17, 2014)
Law Firms Mentioned:Akin Gump Strauss Hauer & Feld LLP | Drubner & Hartley, LLC | Foote, Mielke, Chavez & O’Neil, LLC | Gray & White | Hunton & Willaims LLP | McNair Law Firm, P.A. | Quinn Emanuel Urquhart & Sullivan LLP | Strom Law Firm, LLC | White & Case LLP
Organizations Mentioned:Akin Gump Strauss Hauer & Feld, LLP | Cason, Inc. | Catholic Healthcare West | Foote, Mielke, Chavez & O'Neil | Frankie’s Franchise Systems Inc. | McNair Law Firm, PA | Quinn Emanuel Urquart & Sullivan, LLP | Royal Ahold | Thomas & King, Inc. | U.S. Foods, Inc. | U.S. Foodservice | Whatley Kallas, LLP | White & Case, LLP
By Linda O’Brien, J.D., LL.M.
The federal district court in Hartford, Connecticut has given final approval to the settlement of a class action suit brought against a food distributor for allegedly artificially inflating a component of its cost-plus billing, and awarded $99 million in attorneys fees and $8.1 million for reimbursement of litigation expenses (In re Foodservice, Inc. Pricing Litigation, December 9, 2014, Thompson, A.).
Catholic Healthcare West, Cason, Inc., Frankie’s Franchise Systems Inc., and Thomas & King, Inc. were customers of U.S. Foods, Inc. (formerly known as U.S. Foodservice, Inc.), the second-largest food distributor in the United States. The customers sued U.S. Foods and its former parent company, Royal Ahold, alleging that the distributor artificially inflated a component of its cost-plus billing and disguised the proceeds through the use of purported promotional allowances. U.S. Foods allegedly used shell companies, sham transactions, and false invoices for the purpose of fraudulently inflating its costs to customers in violation of the Racketeer Influenced Corrupt Organization Act (RICO). The Second Circuit affirmed the district court’s class certification with respect to all claims in August 2013.
In July 2014, the court granted preliminary approval of a class settlement totaling $297 million. Subsequently, the plaintiffs moved for final approval of the settlement agreements and for an award of fees and expenses.
The court gave final approval to the settlement and awarded $99 million in fees, along with $8.1 million in litigation expenses. In a motion for award of fees and expenses, the class counsel stated that it had diligently represented the interests of the class since the inception of the case eight years ago and looked for fair compensation for the time and expense advanced on behalf of the class. The fee award as approved was one-third of the settlement fund.
The orders were entered on December 9 but not released until December 12.
The case is No. 3:07-md-01894.
Attorneys: Ryan P. Phair (Hunton & Willaims LLP), Edith M. Kallas (Whatley Kallas, LLP), James E. Hartley, Jr. (Drubner & Hartley, LLC), R. Laurence Macon (Akin Gump Strauss Hauer & Feld LLP), Celeste T. Jones (McNair Law Firm, P.A.), Mark Gray (Gray & White), Robert M. Foote (Foote, Mielke, Chavez & O’Neil, LLC), and J. Preston Strom (Strom Law Firm, LLC) for Catholic Healthcare West, Cason, Inc., Frankie’s Franchise Systems Inc., and Thomas & King, Inc. Glenn M. Kurtz (White & Case LLP) and Kathleen M. Sullivan (Quinn Emanuel Urquhart & Sullivan LLP) for U.S. Foods, Inc.
Companies: U.S. Foods, Inc.; Catholic Healthcare West; Cason, Inc.; Frankie’s Franchise Systems Inc.; Thomas & King, Inc.
Cases: RICO ConnecticutNews