The Fee-Shifting Reckoning: Why the $85 Million Google Play Fee Rejection Signals a New Era of Judicial Scrutiny in Class Actions

The Death of the Automatic Windfall

For decades, the calculus of class action litigation followed a predictable arc: plaintiffs’ lawyers invest years in discovery and certification battles, secure a settlement or verdict, and then petition for fees calculated as a percentage of the recovery—typically 25-30%—or through lodestar multipliers that reward risk and delay. That model suffered a significant blow on October 16, when U.S. District Judge James Donato rejected an $85 million fee request in the Google Play antitrust litigation, delivering a pointed rebuke to class counsel who had sought compensation for work performed before the court decertified the class.

The decision arrives at a moment when federal courts are increasingly skeptical of the "windfall" economics that have come to define mega-fund settlements. Coming just three months after a California federal judge slashed fees in the landmark Anthropic copyright settlement—calling the original request a potential "windfall"—Judge Donato’s ruling suggests a coordinated judicial pushback against the class action fee structure that has sustained plaintiffs’ firms for generations.

Decertification Changes Everything

What makes the Google Play ruling particularly significant for practitioners is its timing relative to the class certification lifecycle. The case, In re Google Play Store Antitrust Litigation, had once been certified as a class action before Judge Donato decertified it following the exclusion of plaintiffs’ economist testimony under Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). The fee request thus straddled two distinct phases: work performed when the case existed as a certified class, and work performed after decertification when the litigation proceeded on an individual basis.

This distinction matters enormously under the American Rule and its exceptions. While Federal Rule of Civil Procedure 23(h) permits courts to award "reasonable" attorney fees and nontaxable costs in certified class actions, the jurisprudence surrounding fee awards in decertified or failed class actions remains murky. The Supreme Court’s decision in Boeing Co. v. Van Gemert, 444 U.S. 472 (1980), established that lawyers who create a common fund for the benefit of a class are entitled to reasonable fees from that fund. But when the class ceases to exist—when the "common benefit" evaporates—the justification for fee-shifting weakens considerably.

Judge Donato’s rejection suggests that courts will no longer rubber-stamp fee requests simply because lawyers once represented a certified class. Instead, we are entering an era of granular, phase-specific scrutiny where fees must be justified by the actual value conferred upon actual clients, not hypothetical value conferred upon a theoretical class that no longer exists.

The Broader Pattern: Judicial Hostility to Fee Petitions

The Google Play decision does not exist in isolation. It follows the Seventh Circuit’s July decision to vacate the Clearview AI settlement—a move that sent shockwaves through the privacy class action bar—and the Anthropic fee reduction in July. Together, these rulings represent a tripartite assault on the traditional class action business model: appellate courts are policing settlement adequacy more aggressively (Clearview), trial courts are scrutinizing fee requests even in successful settlements (Anthropic), and now courts are rejecting fees outright when the class mechanism fails mid-stream (Google Play).

For defense counsel, this trend offers new leverage. The threat of decertification has always been a weapon in the defendant’s arsenal, but the Google Play ruling adds a financial dimension: defeat the class, and you may also defeat the fee. This creates asymmetric incentives in settlement negotiations. Plaintiffs’ firms, facing the prospect of recovering nothing for years of work if certification is lost, may accept lower settlements earlier in the litigation. Conversely, defendants may calculate that fighting certification through Daubert challenges and interlocutory appeals—while expensive—could ultimately cost less than paying a premium settlement that includes a 30% fee kicker.

The Practical Impact on Class Action Strategy

Practitioners should expect three immediate changes in how class actions are litigated and resolved.

First, the rise of "insurance" settlements. We will likely see more plaintiffs’ firms seeking partial fee awards or settlement structures that guarantee fees for pre-decertification work, even if the case subsequently loses class status. This mirrors the "settlement class" phenomenon where parties certify a class solely for settlement purposes, but with a twist: forward-looking fee agreements that survive decertification.

Second, increased attention to Daubert strategy. Because the Google Play decertification followed the exclusion of expert testimony, the ruling underscores that the battle over expert admissibility is now effectively a battle over fees. Defense firms should prioritize early, aggressive Daubert challenges not merely as merits tactics but as fee-shifting prophylactics.

Third, a chilling effect on marginal cases. The economics of class action practice rely on portfolio theory: firms win big on some cases to offset losses on others. If courts systematically reject fees in decertified cases—effectively treating them as losses for fee purposes even when individual plaintiffs prevail—the risk calculus for filing borderline class actions changes dramatically. This may reduce the filing of "strike suit" class actions, but it may also deter legitimate public interest litigation where the individual damages are small but the aggregate harm is significant.

The Unresolved Tension

Judge Donato’s ruling leaves open a critical question: what happens to the work product created during the certified class period that benefits individual plaintiffs post-decertification? Under the "common fund" doctrine, lawyers who create a benefit for a class are entitled to fees. But when the class dissolves, does the benefit transfer to the individual litigants? And if so, should the lawyers who created that benefit be compensated from those individual recoveries?

The answers to these questions will determine whether the Google Play decision represents a temporary correction or a fundamental restructuring of class action economics. What is certain is that the days of automatic 30% fees on nine-figure settlements are over. The class action bar must now justify every dollar, and the judiciary is watching with newly skeptical eyes.

"The court’s rejection of the $85 million request sends an unmistakable message: the class action mechanism is a vehicle for compensating victims, not a wealth transfer device for counsel."

For practitioners, the lesson is clear: document your hours meticulously, prepare to defend your fees with the same rigor you defend your merits, and never assume that certification—once obtained—will survive to payday.