Eighth Circuit Overturns $78.75 Million Attorney Fee Award in T-Mobile Data Breach Case, Citing Excessive Multiplier.
In a significant ruling, the Eighth Circuit Court of Appeals has overturned a $78.75 million attorney fee award in a data breach case against T-Mobile. The court found that the district court had abused its discretion by applying an excessive multiplier to the lodestar amount.
Background
In 2021, a class action lawsuit was filed against T-Mobile after a data breach exposed the personal information of approximately 77 million customers. The plaintiffs alleged that T-Mobile had failed to take adequate security measures to protect their data. The case was settled for $350 million, and the plaintiffs’ attorneys requested $78.75 million in attorney fees.
The district court awarded the full amount of the requested fees, using a lodestar multiplier of 2.25. This multiplier was based on the court’s finding that the case was complex, the attorneys had achieved a favorable result, and the fees were reasonable in comparison to other similar cases.
Eighth Circuit’s Ruling
On appeal, the Eighth Circuit overturned the district court’s award. The court agreed that the case was complex and that the attorneys had achieved a favorable result. However, the court found that the lodestar multiplier of 2.25 was excessive.
The court noted that the lodestar multiplier should be based on the prevailing market rate for similar legal services. The court found that the prevailing market rate for complex class action data breach cases was typically between 1.5 and 2.0. The court also noted that the plaintiffs’ attorneys had failed to provide any evidence to support the use of a higher multiplier.
As a result, the Eighth Circuit remanded the case to the district court for a recalculation of the attorney fees award. The court instructed the district court to use a lodestar multiplier of no more than 2.0.
Implications
The Eighth Circuit’s ruling is a significant victory for defendants in data breach cases. The ruling makes it clear that courts will not tolerate excessive attorney fee awards in these cases. Defendants can now use this ruling to challenge attorney fee requests that are based on excessive multipliers.
Conclusion
The Eighth Circuit’s ruling in T-Mobile USA, Inc. v. Parker is a landmark decision that will have a significant impact on attorney fee awards in data breach cases. The ruling makes it clear that courts will not hesitate to overturn excessive attorney fee awards. Defendants should use this ruling to challenge attorney fee requests that are based on excessive multipliers.
Kind regards Dr. R. Hamilton.
