Judge Slashes Legal Fees in Napster Class Action Settlement

Photo Credit: Alexander Grey

Back in June 2023, an appellate court rejected a $1.7 million legal-fees award in a copyright suit filed against Rhapsody International/Napster. Now, a district judge has officially slashed the total to just over $86,000.

Judge Jeffrey White just recently awarded that comparatively modest sum plus another $13,162 in costs to the songwriter plaintiffs’ counsel, Michelman & Robinson LLP.

Long story short, those plaintiffs filed the original complaint nearly a decade ago, accusing Napster of exploiting their works without authorization.

Fast forward to early 2019, when the parties hammered out a class action settlement calling for (among other things) $35 payments for each qualifying work played in its entirety on Napster/Rhapsody between 2013-19.

When all was said and done, with a separate NMPA settlement having significantly limited the class size here, just $52,841.05 was distributed to the small number of claimants at hand.

Nevertheless, the plaintiffs’ counsel sought (based on a huge hypothetical benefit to the class) an astonishing $6,120,042 in legal fees – or almost 116 times more than the actual settlement sum.

Subsequently, a magistrate judge when consulted recommended somewhere in the ballpark of an $860,000 award, though the court ultimately decided on the aforesaid $1.7 million, we previously broke down at length.

Then – there is, of course, quite a lot of ground to cover even in summary given the case’s marathon nature – the initially mentioned appellate court denied the proposed payout in 2023.

With that, the plaintiffs’ counsel decided to seek $1.2 million in fees, but the court wasn’t on board with this dialed-back request.

After calculating the total value of the settlement for the litigants – including the cost of establishing an “Artist Advisory Board,” additional payments to the class representatives, and more – Judge White stacked the sum against the $1.7 million proposal.

“The difference between the settlement value—$147,182.10—and the lodestar figure— $1,720,441.57—is staggering,” he pointed out. “The Court therefore finds it appropriate to substantially reduce the lodestar figure.”

Furthermore, “[a]lthough this case spanned almost four years,” the court pointed out, “there was very minimal discovery and motion practice.” And “it seems the case primarily revolved around settlement,” Judge White wrote.

For these and other reasons, the judge found “it appropriate to reduce the lodestar by 95% to $86,022.08.” Added to the $13,162 in costs, that comes out to $99,184.08.

One needn’t stretch the imagination to guess how the relevant firm feels about the development. Separately, Napster, which has had a new owner since March, remains embroiled in litigation with Sony Music and SoundExchange.