Nicholson v. Hooters of Augusta, Inc.

IN THE SUPERIOR COURT OF RICHMOND COUNTY

STATE OF GEORGIA

SAM NICHOLSON AND ALL OTHER PERSONS OR ENTITIES SIMILARLY SITUATED,

Plaintiffs

HOOTERS OF AUGUSTA, INC. AND BAMBI CLARK. D/B/A VALUE-FAX OF AUGUSTA,

Defendants

Civil Action File No:

95-RCCV-616

Judgment

The above stated case came on regularly for trial on March 19. 2001. Defendant Clark failed to answer the complaint and is in default. Defendant Hooters appeared at trial and presented a defense. Through a special verdict returned on March 21, 2001, the jury found that defendants violated the Telephone Consumer Protection Act ("TCPA") by unlawfully transmitting six (6) unsolicited Hooters facsimile advertisements to the 1,321 members of the certified class. Based on this finding, each class member is entitled to recover $3,000. 47 U.S.C. §227(b)(3)(B). However, the jury made the additional determination that defendants transmitted the Hooters facsimile advertisements willfully or knowingly. Based on this additional finding, the Court must increase the damages to $9,000 for each class member. 47 U.S.C. §227(b)(3)(C).

The testimony in this case was undisputed that the Hooters fax advertisements sent to the plaintiff class were not the result of an accident or mistake. The defendants had an agreement to send the facsimile advertisements and did exactly what was called for under the agreement. They engaged in illegal conduct and reaped a gain from this conduct in the form of reduced advertising costs and possibly new customers. The jury was fully aware of the possibility that plaintiffs could recover additional damages based on a finding that the advertisements were transmitted willfully or knowingly. Accordingly, the Court increases the amount of damages recoverable by each member of the class from $3,000 to $9,000.

Plaintiff and class counsel have petitioned the Court for an award of attorneys' fees and expenses incurred in the prosecution of this case. An evidentiary hearing on this fee application was conducted on April 17, 2001, where evidence and expert testimony was presented and arguments made.

This is a common-fund case. In assessing attorneys' fees in a common-fund case, the percentage of the fund analysis is the preferred method of determining such fees, unless there are unusual circumstances which would make its use unfair or impractical. Friedrich v. Fidelity National Bank, 247 Ga. App. 104, 707 (2001 ). In this case, therefore, it is entirely appropriate to use the percentage of the fund analysis because there are no unusual circumstances to suggest that such approach would result in an unfair or impractical result. As mandated by Friedrich, the Court must articulate specific reasons for selecting whatever percentage is ultimately awarded and must also identified all factors on which the Court relied and explain how each factor affected the selection of the percentage awarded as attorneys' fees. These factors are:

1) TIME AND LABOR REQUIRED.

This case was initiated in the Superior Court of Richmond County nearly six (6) years ago. It has followed a long and involved course through this Court, the United States District Court for the Southern District of Georgia, the Eleventh Circuit Court of Appeals, then back to this Court, then to the Georgia Court of Appeals, to the Georgia Supreme Court and finally back to this Court for a jury trial. A jury trial of a class action case is certainly the exception rather than the rule. By affidavit, class counsel has shown that more than 3,000 hours of attorney time and 250 hours of paralegal time have been devoted to this case. The time expended should obviously be considered, but only in relation to the result achieved, Nevertheless, this factor is an important consideration.

2) THE NOVELTY AND DIFFICULTY OF THE QUESTIONS INVOLVED.

Apparently, this is the first case certified as a class action under the TCPA in the United States. It is certainly the first case that was tried as a class action. Several legal issues presented were issues of first impression in both the Eleventh Circuit Court of Appeals and the Georgia appellate courts. This factor is one of the predominant considerations for arrival at an appropriate fee award.

3) SKILL REQUISITE TO PERFORM THE LEGAL SERVICE PROPERLY.

By its very nature, class action is complex litigation which requires familiarity with the substantive laws and rules of evidence at both the trial and appellate court levels. This case has been in both the trial and appellate court levels in both state and federal court. The case has been vigorously defended by able counsel for defendant Hooters. The verdict in this case is a result of the efforts of highly competent and proficient counsel. This factor has significant influence on the amount to be awarded as attorneys' fees.

4) THE PRECLUSION OF OTHER EMPLOYMENT BY THE ATTORNEY DUE TO THE ACCEPTANCE OF THIS CASE.

There is no indication that class counsel was forced to decline other representation because of the demands of this case. Accordingly, this factor has little, if any. influence in the decision.

5) THE CUSTOMARY FEE.

Common-fund cases are almost always brought on a contingent fee basis. In federal Court, most fee awards fall between 20% to 30% of the fund while the federal courts have established 50% of the fund as an upper limit. The federal courts have typically used 25% as a benchmark or starting point for a fee award. A widely accepted standard contingent fee arrangement is one-third of the recovery, whether by settlement or verdict. Certainly, the measure of the recovery itself is the best determinant of the reasonableness and quality of time expended in common fund cases. The customary fee is another important consideration in this case.

6) WHETHER THE FEE IS FIXED OR CONTINGENT.

The attorney fee agreement in the present case calls for a 40% contingent fee, and this is also an important consideration.

7) THE TIME LIMITATIONS IMPOSED BY THE CLIENT OR THE CIRCUMSTANCES.

There is no indication that this factor is found in the present case, so the Court will not give it any consideration.

8) THE AMOUNT INVOLVED AND THE RESULTS OBTAINED.

The Court has determined that each of the 1,321 class members is entitled to recover $9,000, which results in the creation of a common fund of $11,889,000. In common-fund recovery cases the weight assigned to the monetary results achieved, of necessity, must predominate over all other criteria, including time expended, in determining the appropriate fee award. The Friedrich Court clearly held that the results obtained should predominate over all other factors. Accordingly, this factor is the single most important consideration in awarding attorneys' fees in this case.

9) EXPERIENCE, REPUTATION AND ABILITY OF THE ATTORNEYS.

This Court knows the reputation of class counsel and is completely familiar with their abilities and special expertise. It is abundantly clear that class counsel met with strong opposition at every substantive and procedural stage of this proceeding and stayed the course up to and through a jury trial. This factor is of considerable importance to the Court In making its fee award.

10) THE “UNDESIRABILITY” OF THE CASE.

The Court is not aware of any "undesirability" of this case, so this factor has little, if any, influence in the decision.

11) THE NATURE AND LENGTH OF THE PROFESSIONAL RELATIONSHIP WITH THE CLIENT.

This case has been vigorously defended for nearly six (6) years and has included both federal and state court appeals, the removal to federal court, a remand to state court, multiple motions and hearings and a three-day jury trial. This factor should be given some consideration, but is not predominant in the analysis.

12) AWARDS IN SIMILAR CASES.

The Court is aware of other class actions brought within Georgia and the amount of attorneys fees awarded in such cases. The Court has also been furnished the terms of another case brought under the TCPA which was preliminarily settled in the State of South Carolina. See Biggerstaff v. RIM Associates, Case No. 98-CP-10-4722 (Court of Common Pleas, 9th Judicial Circuit, SC. 2000). Even though both the amount of the common fund and the recovery per class member is much smaller in that case, it is noteworthy that the preliminary settlement calls for an award of attorneys' fees and expenses of a minimum of 36% of the total value of the settlement. This factor is rather important so that there is some consistency in the awards of attorneys' fees in class actions in general and class actions under the TCPA specifically.

13) NON-MONETARY BENEFITS.

Another consideration in this case under Friedrich is the non-monetary benefits that the class (and other members of the public) might derive from the results achieved in this case. In all probability other facsimile advertisers and telemarketers throughout the state and the rest of the country will be deterred from violating the TCPA in the future because of the results in this case. Accordingly, the public at large may well benefit because of this case.

In sum, the Court concludes that factors 2, 3, 5, 6, 8, 9 and 12 are the primary considerations under the facts and circumstances of this case in determining an appropriate fee award in this case. Without question, factors 2, 3, 5 and 8 are the predominant factors that influence the Court in its decision. Having given due consideration to all these factors and being fully informed on this case, the Court concludes that 33% of the common fund or $3,923,370 is a reasonable and appropriate award of attorneys' fees.

By affidavit, class counsel have shown that they incurred $7,665.62 in expenses in this case. Upon review of this information, the Court finds these expenses reasonable and awards $7,665.62 to class counsel as reimbursement of expenses.

The Court awards Sam Nicholson $15,000 for his services as the named class representative.

ACCORDINGLY, IT IS HEREBY ORDERED, DECREED AND ADJUDGED that plaintiffs shall have judgment against defendants jointly and severally in the sum of $11,889,000. From that sum, attorneys' fees and expenses in the sum of $3,931,035.62 shall be deducted and paid to class counsel, Burnside, Wall, Daniel, Ellison & Revell. The sum of $15,000 is awarded to Sam Nicholson for his services as class representative.

IT IS FURTHER ORDERED, DECREED AND ADJUDGED that all remaining sums after the foregoing deductions are made shall be distributed equally to the remaining 1,320 members of the certified class.

SO ORDERED AND ADJUDGED this 25th day of April, 2001.

Signed

Carl C. Brown, Jr., Judge

Superior Court of Richmond County

This page was last modified on July 22, 2007.

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