Fee Recovery for ESI Protocol in Class Action

Flynn-Murphy v. Jaguar Land Rover of N. Amer., LLC, 2025 WL 3771284 (D.N.J. Dec. 31, 2025)(unpublished), was before the court on Class Counsel’s Motion for an Award of Attorneys’ Fees, Reimbursement of Expenses, and Class Representative Service Awards.

Plaintiffs asserted defective turbochargers in Defendants’ vehicles and that they cause expensive damage.  After four years of litigation, the case settled.  The settlement agreement established a process for fee claims.  Class counsel were awarded $6.6 million in attorneys’ fees.

This blog focuses solely on the ESI Protocol, which was only one of many issues.

[After a scheduling conference] [o]ver the course of the next eight months, the Parties served written discovery, met and conferred regarding their respective responses and objections thereto, negotiated aspects of an ESI Protocol and the substantive terms of a discovery confidentiality order, and engaged in several rounds of document production with the UK Defendants…. In total, the Parties conducted twenty-two meet-and-confers and attended nine discovery status conferences with Magistrate Judge Clark…. While these cooperative efforts were largely successful, the Parties also raised discovery disputes with the Court.

The court wrote that following the settlement of a class action lawsuit, the court, in its discretion, may award attorneys’ fees that are “authorized by law or by the parties’ agreement.” Fed. R. Civ. P. 23(h).

The court applied the lodestar method, cross-checked it under the percentage-of-recovery method, and in pertinent part wrote:

Defendants next argue that Class Counsel’s lodestar should be reduced by $250,451.50—or seventy-five percent of the total time each firm billed for discovery—for fees accumulated for certain discovery activities. Specifically, given the stage of the case at the time of settlement, Defendants contend that the time Class Counsel spent negotiating an ESI protocol and preparing for depositions was unnecessary, and that the time spent conducting “document discovery” was excessive. Class Counsel counters that the time spent negotiating an ESI protocol and conducting document discovery was reasonable and conducted at an appropriate time, and that the entries related to depositions were miscoded. The Court again agrees with Class Counsel.

Id. at *9 (emphasis added).

One important aspect of ESI-related litigation is that it is front-loaded.  The Flynn-Murphy court found that the time spent preparing and negotiating the ESI Protocol was reasonable “for two reasons.” Id.

• “First, pursuant to Federal Rule of Civil Procedure 26, ‘ESI obligations’ arise ‘at the outset of the case.’ … Class Counsel cannot be faulted for taking steps early in this case to comply with their legal obligations under Rule 26.” Id. (cleaned up).
• “Second, Defendants own actions undermine their argument. If Defendants believed negotiation of an ESI protocol was premature, Defendants could have entirely ignored Class Counsel’s initial outreach. Instead, Defendants ultimately responded with their own revised ESI protocol on two separate occasions…. That engagement justifies Class Counsel’s continued efforts to revise and negotiate an ESI Protocol early in the case. Moreover, it strains credulity to believe that Defendants’ own attorneys declined to bill this work. That only further buttresses the reasonability of Class Counsel doing the same.” Id. (emphasis added).

The court added:

The Court also concludes that the time spent by Class Counsel conducting document discovery was reasonable. Defendants’ argument, simply put, is that because there were not “significant document production[s]” completed in this case, the approximately 260 hours billed to “document discovery” must be excessive. But that position myopically presumes that the majority of time billed for “document discovery” must only relate to reviewing documents produced by an opposing party. Reviewing the narratives associated with Class Counsel’s time entries reveals that significant time billed as “document discovery” related to various additional discovery tasks …. [listing omitted].

In short, the billing “also includes preparing for and attending twenty-two meet-and-confers with the Defendants and nine status conferences before Magistrate Judge Clark to discuss outstanding discovery issues…. The Court, based on its own review and experience with this case, finds that the total time spent on these myriad discovery activities over the course of eight months was entirely reasonable.” Id. (emphasis added).

The court also rejected defendants argument because, in my words, it lacked supporting metrics:

Once again, Defendants also “fail to specify the number of hours that would be reasonable and why those hours would be reasonable” for any of these various discovery activities…. Instead, they seek an across the board reduction of seventy-five percent for time billed for “document discovery” that is pulled “out of thin air” and unsupported by “competent evidence,” such as evidence of the amount of time Defendants’ counsel spent on discovery related activities…. This fails to satisfy their burden of justifying why the time spent on these activities was unreasonable.

Id. at *10 (emphasis added).

One of many interesting arguments unrelated to the ESI Protocol was:

Defendants’ second objection—their complaints about “top-heavy” billing practices within Class Counsel’s firms—also lacks merit…. Defendants also fail to appreciate that the structure of Class Counsel’s firms is far different from that of its own attorneys. It is “well know that [smaller] law firms frequently follow a different model than large mega-firms in terms of the allocation of work between partners and associates, placing much more responsibility at higher levels.” …  In short, the Court declines Defendants’ offer to instruct Class Counsel—two undisputed preeminent law firms with developed experience handling complex class action lawsuits—about how it should have staffed this case.

Id. at *12-13.