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Texas Jury Denies Attorney Fees to Prevailing Oil Companies

July 22, 2015

A recent Texas Lawyer story, “Suit Sparks Brawl Over $589K in Attorney Fees,” reports that two Texas oil companies recently won a jury trial in a landman case fought in Dallas County, yet the jury failed to award the winning parties their respective attorney fees that together total approximately $600,000.

In 2013, plaintiff Cherene Jackson Patty filed a breach of contract suit in Dallas County against SDC Montana Consulting and U.S. Enercorp. Patty alleged that the two companies are contractually obligated to pay her work as a landman for all past revenue shares and overriding royalty payments. Patty alleged that the two defendants owed her approximately $855,000 in commissions, after giving them credit for a partial payment of approximately $188,650. She also was seeking punitive damages and attorney fees.

The jury ruled in favor of the defendants, saying the oil companies did not violate their contract with Patty. However, the jurors did not award attorney fees to U.S. Enercorp and SDC Montana Consulting. In response, the two companies’ lawyers filed a motion asking the judge to disregard the jury’s verdict and award attorney fees. According to court records, U.S. Enercorp is asking for $490,000 in attorney fees and SDC Montana Consulting is asking for $99,751.

Corey Wehmeyer, a partner with the San Antonio-based law firm Santoyo Moore Wehmeyer who represents U.S. Enercorp in the case, said, “The contract plaintiff sued under contains a ‘loser pays’ clause awarding attorney fees to the prevailing party in any litigation. After being sued in approximately 11 different causes of action by the plaintiff, U.S. Enercorp Ltd. prevailed on the entirely of every claim asserted by plaintiff in the case. In addition to its contractual right to recover attorney fees, U.S. Enercorp prevailed in causes of action for fraudulent transfer and declaratory judgment that statutorily provide for an award of fees to U.S. Enercorp as the prevailing party.”

He commented that expert testimony from U.S. Enercorp’s counsel at trial established the reasonable fee for U.S. Enercorp’s attorneys’ services as $450,000, and plaintiff called no rebuttal witness and offered no testimony to rebut the reasonableness of the $450,000 in fees. Pursuant to Texas Supreme Court precedent, in this situation U.S. Enercorp is entitled to judgment against plaintiff for $450,000 as a matter of law, according to Wehmeyer.

Octane Fitness Seeks Attorney Fees One Year After Octane Ruling

July 20, 2015

A recent Corporate Counsel story, “In Patent Case, Fitness Co. Wants $2.8M in Attorney Fees,” reports that Octane Fitness, the small Minnesota-based company that transformed the law governing the awarding of attorney fees in patent litigation, has asked a federal in the U.S. District Court for the District of Minnesota to award it more than $2.8 million in attorney fees and expenses.

The fee request comes more than a year after the U.S. Supreme Court decided that the U.S. Court of Appeals for the Federal Circuit’s interpretation of the standard for awarding attorney fees was too inflexible and rigid.  District courts have more leeway in deciding whether the prevailing party should be awarded attorney fees, the high court said.

Octane’s $2.8 million fee request is not insignificant, but other companies have been granted higher fee awards since last year’s Supreme Court decision, which now is commonly referred to as Octane.  Sidense Corp., for example, was awarded more than $5.5 million in fees earlier this year after a district judge in California found that a patent infringement suit brought by Kilopass Technology Inc. was “objectively baseless” and “exceptionally meritless.”

The amount Octane requested is less than what has been demanded in many other cases because Octane was represented by a Midwest firm, where fees are about 40 percent lower than on the coasts, according to Octane attorney Rudy Telscher of Harness Dickey in St. Louis.

The judge has given ICON a week to respond to Octane’s fee request.  She is expected to issue her final ruling on the fee award soon.

The impact of Octane already has been significant in the world of patent law.  Between 2005 and 2011, no fee awards were affirmed based on the weak merits of e case. But in the year since Octane, there have been more than 30 such awards.

Still, some attorneys says the law doesn’t go far enough, and some judges remain reluctant to award fees.  The Eastern District of Texas, a favored venue for nonpracticing entity litigation, has not yet granted any attorney fees to prevailing defendants.

California Affirms Denial of Attorney Fees to Out-of-State Counsel

July 17, 2015

A recent Metropolitan News story, “C.A. Affirms Denial of Attorney Fees to Out-of-State Counsel,” reports that The Fourth District Court of Appeal yesterday upheld an Orange Superior Court judge’s ruling that out-of-state attorneys who claimed to have worked hundreds of hours on a consumer class action were not entitled to attorney fees.

Div. Three said in an unpublished opinion that Judge Kim G. Dunning was correct in holding that, even in the absence of opposition, attorney’s fees may not be awarded to counsel who are neither members of the State Bar of California nor admitted pro hac vice.

The case is Golba v. Dick’s Sporting Goods, Inc., G049611.

FHFA Paid Plaintiffs' Firms $373.5M to Sue Banks

July 16, 2015

A recent Reuters story, “U.S. Housing Regulator Paid Law Firms $373 Million to Sue Banks,” reports that the Federal Housing Finance Agency (FHFA) disclosed that it paid two law firms over $373.5 million since 2010 to pursue litigation against several banks over mortgage-back securities sold to Fannie Mae and Freddie Mac before the financial crisis.

The FHFA, which has acted as conservator for Fannie and Freddie since the government took them over in 2008, disclosed the figures in response to a Freedom of Information Act request filed by Reuters.

The nearly $373.5 million amounted to less than 2 percent of the $18.7 billion obtained by the U.S. regulator through settlements and judgments against 16 banks, including $806 million after it took Nomura Holdings Inc to trial.

The disclosure marked the first time the FHFA had said how much it had paid Quinn Emanuel and Kasowitz Benson.  The FHFA did not break down how much each firm earned.  Emanuel handled 14 lawsuits, while Kasowitz Benson handled four.

Firm Must Pay Fee to Avandia MDL Committee

July 15, 2015

A recent Legal Intelligencer story, “Firm Must Pay Fee to Avandia MDL Committee,” reports that a firm that used work product from a plaintiffs' steering committee in the Avandia multidistrict litigation must pay a percentage of the settlement proceeds from its cases to the committee's attorney compensation fund.

The U.S. Court of Appeals for the Third Circuit affirmed a ruling from the district judge presiding over the MDL that the Girardi Keese firm of Los Angeles—which represented thousands of plaintiffs in Avandia cases in California state court and 25 in the Eastern District of Pennsylvania-based MDL—could not get out of paying into the committee's "common benefit fund."

Third Circuit Judge D. Michael Fisher said in the panel's opinion that the Avandia steering committee created the fund to compensate attorneys for administration and work product in the MDL.  By signing a contract to participate within the steering committee, Girardi Keese agreed to pay 7 percent of the gross recovery gained from its cases to the fund, a payment that the firm later refused after settling all of its cases.

When the district judge ordered Avandia's manufacturer, GlaxoSmithKline, to withhold 7 percent of the settlement proceeds for the common benefit fund, Girardi Keese appealed, challenging the court's jurisdiction.  The total amount of settlement money from the Girardi Keese cases was not clear.

Fisher said the agreements between attorneys and the steering committee were properly enforced by a court order.  "A district court that supervises a multidistrict litigation 'has—and is expected to exercise—the ability to craft a plaintiffs' leadership organization to assist with case management,'" Fisher said.  "Included in that ability 'is the power to fashion some way of compensating the attorneys who provide classwide services.' 

Here, the district court issued an order—Pretrial Order 70—dictating how it would allow the leadership organization—the steering committee—to be compensated.  One way was to assess a percentage of the recovery of the cases before the MDL.  The district court also permitted the steering committee to, essentially, trade work product for a share in the recovery in cases not before the MDL.  The district court identified a form agreement that the steering committee and interested counsel must use to participate in the common benefit scheme and 'incorporated' the agreement into the order."

Avandia is a prescription drug used to treat Type 2 diabetes.  Thousands of the drug's users sued GSK claiming that it increased the risk of heart failure.  The court appointed a steering committee in the MDL to direct the proceedings, Fisher said.

The agreement between the committee and Girardi Keese, in addition to providing work product such as expert reports to be used in Avandia state and federal cases, authorized Girardi Keese to request compensation for work performed for the common benefit.  The court's Pretrial Order 70 echoed that.

After Girardi Keese's settlements, a dispute arose over the firm's refusal to pay the 7 percent fee and the court's subsequent order.  Girardi Keese argued that by ordering the firm to adhere to the agreement, the district court improperly exercised jurisdiction over the state-court cases in California—cases outside of the MDL judge's jurisdiction, Fisher said.

"We agree with Girardi Keese that had the district court simply ordered the firm, as total strangers to the litigation, to contribute to the common benefit fund from the settlement of its clients' state-court cases, it would have exceeded its jurisdiction," Fisher said.  "However, that is not what the district court did here.  The proper question we must ask is did the district court properly exercise jurisdiction to enforce the contract Girardi Keese made with the plaintiffs' steering committee.  We conclude that it did."

Girardi Keese also argued that it should have received compensation for the work it did for the common benefit.  "Although Girardi Keese says it spent $14 million litigating its cases, it did not offer evidence that its efforts were for the common benefit as opposed to solely on behalf of its clients.  We cannot say the district court abused its discretion in failing to consider or grant a credit for the common benefit Girardi Keese provided when no evidence exists in the record that Girardi Keese actually provided a common benefit," Fisher said.

NALFA: Without Qualfied Fee Expert, NCAA Loses $46M Fee Challenge

July 14, 2015

A recent CBS Sports story, “NCAA Ordered to Pay $46 Million in Ed O’Bannon Legal Fees,” reports that a federal magistrate judge ordered the NCAA to pay nearly $46 million to Ed...

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NJ Court Upends Fee Award, Citing Retainer

July 13, 2015

A recent New Jersey Law Journal story, “Court Upends $52K Fee Award, Citing Retainer Dispute,” reports that a $52,000 award in a New Jersey firm’s fee-recovery suit was tossed...

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Judge Cuts Plaintiffs Contingency Fee Request in Texas

July 9, 2015

A recent Texas Lawyer story, “Judge Issues $4.5M Judgment, but Slashes Plaintiffs’ Lawyer Fees,” reports that plaintiff lawyers won a jury trial and a $4.5 million final judgment for...

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Beastie Boys Win Sizable Fee Award from Monster Energy

July 7, 2015

A recent American Lawyer story, “An Expensive Victory for the Beastie Boys,” reports that the Beastie Boys had the right to hire a “Cadillac” legal team at Sheppard Mullin to...

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Court Upholds $1.7M Fee Award in Insurance Dispute

July 1, 2015

A recent New Jersey Law Journal story, “Court Upholds $1.7M Fee Awards in Title Insurance Dispute,” reports that a New Jersey appeals court has upheld a $1.7 million attorney fee award...

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