In a closely watched legal showdown, attorneys from the Washington, D.C.-based firm Kellogg, Hansen, Todd, Figel & Frederick are defending their $205 million legal fee request in a high-stakes $630 million antitrust class action settlement with automotive software giant CDK Global. The unusually large fee—about 33% of the settlement amount—is drawing scrutiny from a federal judge, sparking a wider debate about the cost of complex litigation in the U.S.
Why the Fee Is Under Scrutiny
U.S. District Judge James Peterson, who preliminarily approved the settlement in April, expressed concern about whether the $205 million request was justified. While courts often approve legal fees amounting to around one-third of a settlement in class actions, Peterson noted this case was “not ordinary,” particularly given the size of the settlement and the complexity of the issues involved.
Kellogg Hansen argues that their requested fee reflects the extraordinary risk and complexity of the case. They describe the agreement as rare because the $630 million exceeds the vendors’ actual damages—something that doesn’t often happen in class action settlements.
Legal Strategy and Hours Billed
To bolster its position, the firm submitted detailed billing records and expert declarations. The filings reveal that the firm logged more than 106,500 billable hours developing the case. Partner Aaron Panner’s hourly rate of $1,825—one of the highest in the case—underscores the premium nature of the legal work. Other attorneys billed as high as $2,100 per hour.
Here’s a quick breakdown:
| Item | Value |
|---|---|
| Total Settlement | $630 million |
| Legal Fees Requested | $205 million (32.5%) |
| Total Hours Worked | 106,500+ hours |
| Highest Hourly Rate Disclosed | $2,100 per hour |
| Settlement With Dealers | $100 million (separate) |
| Final Hearing Date | August 2025 |
Background of the Case
The class action was brought by AutoLoop, a vendor claiming CDK Global violated antitrust laws by restricting access to key dealership data systems. This alleged move forced vendors to pay inflated prices to access data necessary for their applications. CDK, which provides software for dealership operations such as sales and financing, denied wrongdoing but agreed to the settlement to resolve the litigation.
This case is separate from a related $100 million settlement CDK reached with auto dealers.
What Comes Next?
A final approval hearing scheduled for August will determine whether the $205 million fee is allowed. Judge Peterson’s comments suggest that while large fees are not unheard of in class actions, justification must be rock-solid—especially when a settlement reaches this magnitude.
As the hearing approaches, the case is likely to set a precedent for how large legal fees are assessed in future high-value settlements.
With the stakes this high, the legal community is paying close attention—not just to the outcome, but to how the court evaluates what qualifies as “reasonable” compensation in high-risk litigation.
FAQs
Why is the $205 million fee controversial?
Because it’s unusually high—even though 33% is standard in class actions, the judge noted that the massive size of the $630 million settlement calls for extra scrutiny.
What did the law firm argue to justify the fee?
They pointed to the risk, complexity, and the fact that the settlement exceeded actual damages—making it a rare win for plaintiffs.
What is CDK Global?
A software company that provides platforms for auto dealerships to manage sales, financing, service, and more.