Photo by Diego M. Radzinschi

A court-appointed special master has recommended cutting more than $9 million off a legal fee request by plaintiffs lawyers involved in a $115 million class-action settlement of data breach litigation against health insurer Anthem Inc.

Pointing to duplicated efforts and excessive hourly billing rates for contract lawyers, special master James Kleinberg, a retired Santa Clara County superior court judge who is now a mediator and arbitrator at JAMS, recommended on Tuesday a legal fee award of $28.59 million to lawyers for the settlement class, plus just more than $2 million in expenses, according to his report.

The special master was appointed in February by U.S. District Judge Lucy Koh in San Jose, California. Koh is overseeing multidistrict litigation spurred by a massive, 2015 cyberbreach at Anthem that compromised the personal information of more than 78 million people.

Tuesday's recommendation marks a significant reduction from the $38 million that plaintiffs lawyers sought after settling the Anthem litigation in June. The plaintiffs lawyers' initial request constituted 33 percent of the $115 million settlement, but Kleinberg recommended awarding them just less than 25 percent of the total settlement.

Explaining the downward revision, Kleinberg pointed to several issues that he saw with the fee request. One specific critique involved the billing rates for 33 contract lawyers on the case; plaintiffs firms paid those lawyers between $25 and $65 per hour, according to Kleinberg. By contrast, the initial fee request asked for the equivalent of, on average, nearly $360 per hour for those lawyers.

“It is simply inappropriate for these rates to be charged,” Kleinberg wrote.

The special master also found that, because some 53 law firms were involved as plaintiffs counsel, there were instances of duplicated efforts that, in turn, led to overbilling.

“The special master is not accusing plaintiffs' counsel of deliberate overbilling. However, every time a new law firm was added to the group, those lawyers had to spend time learning the history, issues and facts being litigated. Thus, the inevitable result of 53 firm billing participants presents at least a strong probability of duplication and unreasonable hours,” Kleinberg wrote.

Kleinberg's report and recommendation come after Koh said during a hearing in February that she was “deeply disappointed” in the plaintiffs lawyers' initial fee request, in part because it included bills submitted from some 53 firms. Earlier in the case, Koh had explicitly urged the plaintiffs firms to keep their leadership team lean.

The judge ultimately appointed as lead counsel Eve Cervantez of Altschuler Berzon, and Andrew Friedman of Cohen Milstein Sellers & Toll, and allowed for a plaintiffs steering committee led by Michael Sobol of Lieff Cabraser Heimann & Bernstein and Eric Gibbs of Girard Gibbs. In February, the judge informed the plaintiffs firms that she intended to appoint Kleinberg as a special master to scrutinize their billing records.

Cervantez didn't immediately respond to a request for comment.

Following the submission of the special master report, Koh on Tuesday issued an order that gives parties in the litigation until May 15 to object to or file a motion to adopt or modify the recommendations. The judge also set a hearing on the special master's report for May 31.