Facts

In August of 1999, Plaintiff Roger Bacon filed a lawsuit against Alan T. Sasaki, based on the practice of the County of Los Angeles of failing to pay mandatory interest on property tax refunds. The lawsuit involved the period of 1993-2007. Ultimately, the County of Los Angeles was named as a party to the lawsuit and Plaintiffs asserted a fourth amended complaint on behalf of Bacon and a new Plaintiff, Reynolds Metals Company, and against the County of Los Angeles and other Los Angeles County affiliated defendants.

The County initially succeeded in its statute of limitations (government claim filing) challenge to the lawsuit. However, after prolonged litigation, Plaintiffs were able to overcome this challenge. Plaintiffs also successfully reversed on appeal denial of class certification and prevailed on their individual test cases.

Plaintiffs' lawsuit included theories of mandamus and conversion. The lawsuit was based on the statutory obligation of the County to pay interest on refunds of property taxes. Plaintiffs contended that the County failed to pay 9% interest on eligible refunds, incorrectly accrued interest on refunds of personal property assessments, paid the incorrect County Pooled Apportioned Rate of Interest approximately six months each year, and on some occasions unlawfully paid no interest at all. Plaintiffs also sought to compel the County to give notice to affected taxpayers of their right to make a refund claim.

The case settled for a maximum payment of $45 million dollars. The parties hired KPMG to determine the amount owed, which was determined to be approximately $41 million dollars. The refund recipients all were given notice of their right to make a claim for their share of the settlement, and approximately $30 million dollars was claimed by refund recipients.

The court, the honorable Anthony Mohr, gave final approval to the settlement in Nov. of 2010, with the exception of plaintiffs claim for attorney fees and costs, which was decided in Aug. of 2011, after the court heard oral argument on the contested fee application in June of 2011. The parties had attempted to mediate the fee issue in January of 2011, but were unsuccessful.

Settlement Discussions

Defendant offered $7,500,000 in 2009. The parties had a mediation regarding the fee in Jan. 2011 where the mediator made a proposal of $6,500,000.

Result

Case settled for maximum settlement value of $45 million dollars and the court awarded plaintiffs' counsel attorney fees and costs of $9,035,568.68. As part of its ruling, the court granted plaintiffs' counsel a multiplier of 2.0 on their lodestar as determined by the court. The court entered a formal judgment reflecting its final approval of the class action settlement and fee award on September 15, 2011.