Court Denies $2.5 Million Law Firm Fee Claim

The ruling prevents a secondary firm from collecting fees that would otherwise reduce a $150 million class settlement fund.

Updated on Oct. 27, 2026 in Business Strategy

Court Denies $2.5 Million Law Firm Fee Claim

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Should law firms be entitled to settlement funds if they did not actively negotiate the settlement?

A federal court has denied a request to award $2.5 million in fees to the law firm Heygood, Orr & Pearson from a $150 million class action settlement. The court ruled the firm provided no independent value to the class, effectively protecting the funds available to plaintiffs.

Why it matters

The ruling underscores the standard that legal counsel must contribute directly to settlement negotiations or outcomes to qualify for fees from a class fund. For operators, it clarifies the scrutiny courts apply to third-party fee requests that would otherwise dilute compensation for class members.

The court rejected a $2.5 million fee request from Heygood, Orr & Pearson, noting the firm contributed nothing to the $150 million total settlement fund. This follows the previous award of $50 million in fees and expenses already granted to primary class counsel.

The players

Heygood, Orr & Pearson

A law firm that unsuccessfully sought fees from a class action settlement after advising clients to opt out and then back into the case.

LG Defendants

The corporate entity involved in the underlying class action litigation.

The details

The court denied the motion after finding the firm did not participate in settlement negotiations or improve the value of the deal for plaintiffs. Instead, the firm’s actions were limited to filing separate litigation and advising clients to toggle between opting out and opting back into the existing settlement. By blocking this payment, the court prevented a reduction in the total pool of money available to the class members.

December 22, 2025: The court granted final approval of the $150 million settlement.
October 27, 2026: The court denied the motion for attorneys' fees to the law firm.

Market Landscape

This decision reaffirms the judicial oversight central to the class action settlement approval process. It signals a departure from cases where secondary firms attempt to claim fees without demonstrably adding value to the class fund.

Operators involved in class action litigation should note that courts prioritize the preservation of settlement funds over external legal fee claims. Firms must demonstrate quantifiable contributions to settlement size to justify fee requests from the common fund.

The takeaway

The court will not grant fee awards to counsel who do not directly increase the value of a class settlement or assist in its negotiation. Stakeholders should track how courts assess 'independent value' to determine if their own legal expenses in class-related matters are recoverable.