## Facts

- A multidistrict antitrust action consolidated in 2005 involved merchants alleging that Visa, Mastercard, and affiliated issuing and acquiring banks imposed and enforced network rules that enabled supracompetitive interchange fees and constrained merchant steering to lower-cost payment options.
- The litigation asserted claims under §§ 1 and 2 of the Sherman Act and parallel state laws.
- The case involved two class tracks: a Rule 23(b)(3) damages class (merchants accepting Visa/Mastercard during the class period) and a separate Rule 23(b)(2) injunctive-relief class.
- A prior settlement covering both damages and injunctive relief was vacated on appeal due to inadequate class representation and conflicts between the class components, and the matter was remanded.
- On remand, the parties negotiated a new damages-only settlement for the Rule 23(b)(3) class creating a cash common fund of approximately $5.54–$5.6 billion; the court preliminarily approved the settlement and certified the settlement class.
- The decision addressed Class Counsel’s motion for (1) attorneys’ fees from the common fund, (2) reimbursement of litigation expenses, and (3) service (incentive) awards for class representatives.

## Issues

1. What attorneys’ fee award was reasonable from the common fund under the percentage-of-the-fund method, with a lodestar cross-check.
2. Whether Class Counsel’s documented litigation expenses should be reimbursed from the common fund.
3. Whether requested service awards to class representatives were reasonable in amount and supported by their contributions to the class.

## Decision

- The court applied the common-fund doctrine and used the percentage-of-the-fund method, employing a lodestar cross-check to assess reasonableness.
- The court granted the fee motion in substantial part, awarding a percentage fee it found reasonable for a mega-fund settlement, reflecting economies of scale and comparisons to similar cases.
- The court approved reimbursement of reasonable, documented out-of-pocket litigation expenses (including experts and discovery-related costs).
- The court approved service awards for certain class representatives after evaluating proportionality and justification.

## Legal Principles

- In common-fund class settlements, class counsel may recover a reasonable fee from the fund, commonly calculated as a percentage of the recovery, subject to judicial review for reasonableness.
- For very large funds, courts often consider a declining-percentage approach because fixed-percentage awards may overcompensate relative to the work required as the fund size increases.
- A lodestar cross-check (hours times reasonable rates, with an implied multiplier) may be used to test whether a percentage fee is within a reasonable range given the risk, complexity, duration, and results achieved.
- Reasonable, necessary, and adequately documented litigation expenses may be reimbursed from the fund.
- Service awards may be granted to compensate class representatives for time, effort, and burdens undertaken on behalf of the class, but must be justified and proportionate to their contributions and consistent with Rule 23’s protective function.

## Conclusion

The court approved substantial attorneys’ fees, expense reimbursements, and service awards associated with a damages-only, multi-billion-dollar antitrust settlement, applying common-fund fee principles tailored to a mega-fund recovery and confirming that fees, costs, and representative awards must remain tied to documented effort, risk, and benefit to the class.


In re Payment Card Interchange Fee & Merchant Discount Antitrust Litig., 330 F.R.D. 11 (E.D.N.Y. 2019)