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Court Trims Apple's Trial Expenses

September 30, 2014

A recent The Recorder story, “Koh Pares Apple’s Bill of Costs,” reports that U.S. District Judge Lucy Koh has made it official: Apple is the prevailing party in its titanic smartphone trial against Samsung.  Winning a $1 billion jury verdict will do that to you.

Samsung Electronics Co. and its counsel at Quinn Emanuel had argued that the 2012 verdict represented only a “partial recovery” so that neither said should be awarded costs.  Koh disagreed, saying in an order she was “not persuaded by Samsung’s effort to minimize the degree to which Apple prevailed in this litigation.

She did, however, slice Apple Inc.’s request for $6.2 million in taxable costs down to $1.8 million, saying Apple had overreached and underdocumented in seeking reimbursement for deposition transcripts, photocopies, e-discovery, and trial graphics and demonstratives.

The biggest hit came on Apple’s $1.5 million request for the cost of “blowbacks.” Printed copies of electronic files.  Apple and its counsel at Morrison & Foerster and Wilmer Culter failed to document whether the blowbacks were produced for discovery or for their own witnesses.  “Given the lack of appropriate documentation, the court denies Apple’s request for copying costs in its entirety,” Hoh wrote.

Similarly, Koh disallowed about half of the $1.6 Apple billed for graphics and demonstratives, saying it wasn’t clear all of them were used at trial.  Claiming to have uploaded more than 2 million documents to a content repository, Apple sought to shift $1.4 million in e-discovery costs to Samsung.  Koh reduced the figure to $238,000 based on the number of documents Apple actually produced to Samsung.

Deposition transcripts raised a tricky area of law.  “Courts across the Northern District have struggled to interpret Civil Local Rule 54-3(c)(1),” Koh wrote.  She concluded that Apple was entitled to the cost of deposition transcripts and video, but not additional expedited online transcripts.

Finally, one of the few areas of agreement between the bitter smartphone rivals fell into dispute when it came to costs.  Apple and Samsung had agreed to share the cost of an interpreter at the trial.  But after prevailing, Apple had moved to recover its half of the $11,900 cost.  The court concludes that the lack of detail regarding the cost-sharing agreement—and particularly the lack of detail concerning whether the parties specifically intended for the agreement to be only temporary—weighs in favor of denying the cost,” Koh wrote.

Lawyers Seek $195M in Fees in LBO Collusion Settlement

September 26, 2014

A recent Reuters story, “Lawyers Seek Fees of $195 mln for LBO Collusion Settlement,” reports that lawyers won a $590.5 million settlement against seven private equity firms, accusing them of conspiring to depress the prices of corporate buyouts before the financial crisis, are seeking attorney fees of $195 million for their work.  According to the court filings on Friday, the three law firms that led the nearly seven years of litigation are requesting fees equal to 33 percent of the settlement fund, plus as much as $15 million to cover litigation expenses.

The law firms are Robbins Rudman & Dowd; Scott & Scott, and Robins Kaplan Miller & Ciresi.  Both the settlement and the fee request require court approval.  U.S. District Judge William Young in Boston will consider preliminary approval of the settlement at a Sept. 29 hearing.

The December 2007 lawsuit was brought on behalf of shareholders in companies that were taken private.  It accused the private equity firms of conspiring to reduce compensation, refrain from bidding on each other’s buyouts and not trying to outbid each other after buyouts were announced.

The seven firms that settled were Bain Capital LLC, Blackstone Group LP, Carlyle Group LP, a Goldman Sachs Inc. affiliate, KKR & Co., Silver Lake Partners LP and TPG Capital LP.  Twenty-seven buyouts were originally part of the case, but only eight figured into the settlements: AMC Entertainment Inc., Aramark Corp., Freescale Semiconductor Inc., Harrah’s Entertainment Inc., HCA Inc., Kinder Morgan Inc., SunGard Data Systems Inc. and TXU Corp.  Some of the companies have since again become public.

The case is Dahl et al v. Bain Capital Partners LLC et al, U.S. District Court, District of Massachusetts, No 07-12388.

PA Justices Consider Attorney Fees as Loss Under UTPCPL

September 25, 2014

A recent Legal Intelligencer, “Justices Eye Counsel Fees as Loss Under UTPCPL,” reports that in a case before the Pennsylvania Supreme Court, Grimes v. Enterprise Leasing, an attorney argued that allowing the costs associated with retaining counsel to count as ascertainable loss under the Unfair Trade Practices and Consumer Protection Law (UTPCPL) would lead to a “cottage industry” of “private attorneys general.”

Fox Rothschild attorney Abraham C. Reich, who represents the defendant rental company said that allowing a case to go forward where attorney fees are the only damages would lead attorneys to start looking for potential claims and then file on behalf of individuals, claiming their fees as the only losses.  "Voluntary expenses" aren't ascertainable loss, Reich told the justices during the oral argument session.

According to court records, Grimes rented a vehicle from Enterprise Leasing and agreed that if the vehicle was damaged during the rental period she would pay for repairs, loss of use, diminution of value and administrative costs. 

She returned the vehicle with a 10-to-12 inch scratch along the body, and was notified by Enterprise that the total cost would be $840.  Four months later, Grimes filed a counterclaim, alleging that deceptively inflated fees fell into the UTPCPL’s catch-all provision, and that the legal fees she incurred to fight the charges constituted an ascertainable loss.

Delaware Chancery Court Could Weigh in on Fee-Shifting

September 24, 2014

A recent Delaware Business Court Insider story, “Chancery Court Could Weigh in on Fee-Shifting,” reports that shareholders in a derivative action against a biopharmaceutical company are seeking to amend their Delaware Court of Chancery lawsuit so they can challenge the corporation’s fee-shifting bylaw requiring stockholders to bear the costs of unsuccessful litigation.  The motion, currently pending before Chancellor Andre G. Bouchard, could present the court with an opportunity to opine on the controversial bylaws.

Hemispherx Biopharma Inc., a Philadelphia biopharmaceutical company, was sued by its shareholders last June in the Chancery Court.  The stockholders alleged the company wasted corporate assets when it awarded a combined $2.3 million in incentive bonuses to its CEO, William A. Carter, and general counsel, Thomas K. Equels, after it raised $23 million through a common stock offering.  In addition, the plaintiffs asserted breach of fiduciary duties and unjust enrichment claims against the defendants in Kastis v. Carter.

While the case was moving through the Chancery Court, the Delaware Supreme Court upheld the validity of fee-shifting bylaws in ATP Tour v. Deutscher Tennis Bund.  The Supreme Court’s May decision carved out a corporate exception to the “American Rule” requiring parties in litigation to generally cover their own attorney fees and costs.

Delaware’s General Assembly attempted to draft legislation prohibiting corporations formed under state laws from drafting such provisions, but the bill was pulled after several entities, including the U.S. Chamber of Commerce, announced their opposition.  The bill’s sponsor, state Sen. Bryan Townsend (D-Newark) told Delaware Business Court Insider in June he planned to reintroduce the measure at the start of the next legislative session in January 2015.

After the Supreme Court’s ruling, several Delaware corporations, including Hemispherx, adopted fee-shifting provisions.  The Hemisphex bylaw, also known as Section 5.07, was implemented to apply retroactively to any litigation pending against the corporation, according to court documents.  Therefore, if the plaintiffs lose their case against the biopharmaceutical company, they will be responsible for the corporation’s attorney fees and legal costs.

Last month, Hemispherx’s shareholders filed a motion seeking to invalidate the bylaw and asked Bouchard if they can continue the case without exposure to financial difficulties.  “The plain terms of the bylaw … demonstrate an intent to force plaintiffs and their counsel to discontinue this litigation by threatening financial liability under the bylaw,” said plaintiffs attorney Michael Hanrahan of Prickett Jones & Elliott in the filing.  “The bylaw has had intended effect.  Plaintiffs and counsel have concluded that, of the bylaw is valid and enforceable, it would be economically irrational to continue this litigation.”

NALFA also reported on this issue in “Delaware Lawyers Draft Legislation to Protect Legal Fees” and “Delaware High Court Upholds Attorney Fee-Shifting in Corporate Bylaws”

Judge Cuts Coffee and Meal Expenses in Fee Request

September 23, 2014

A recent National Law Journal, “After Deleting Coffee and Meal Charges, Judge OKs Fees,” reports that a California federal judge has signed off on the deal between Target Corp. and thousands of employees after plaintiffs’ attorney scrubbed $404 in Starbucks purchases, meals and other charges in their fee request for litigation costs in a $350,000 class action settlement.

U.S. District Judge Yvonne Gonzalez Rogers, of the Northern District of California, had balked at approving the agreement upon examining the line-by-line breakdown of $6,339.41 in costs submitted by plaintiffs’ attorneys.  Her objection: Fourteen charges at cafes and restaurants, including a $104.14 bill at a San Francisco sushi place.  Judge Gonzalez ordered Setereh Law Group of Beverly Hills, Calif. to produce a “revised bill of costs,” which it did and gone were the meal and food costs.

This apparently did the trick.  On Sept. 16, the judge signed off on the settlement of Bernardino v. Target, which was brought by former employees who alleged the company violated California labor law by delayed final paychecks to workers who were terminated.

The settlement includes about $200,000 for 4,300 class members, which breaks down to a mean award of $46, according to the agreement documents.  Settlement expenses will claim about $35,000.  Attorney fees are set at $87,500.  Lead plaintiffs will get $7,500.  And final litigation costs, minus coffee and food, are $5,935.32.

Insurer Denies Attorney Fee Coverage

September 22, 2014

A recent Legal Intelligencer story, “AmerisourceBergen Denied Attorney Fee Coverage,” reports that AmerisourceBergen is not entitled to have attorney fees incurred from a...

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Hurricane Ike Claim Leads to $250K in Fees

September 17, 2014

A recent Texas Lawyer story, “Hurricane Ike Claim Leads to $254,000 in Attorney Fees,” reports that to win a Hurricane Ike-related claim against State Farm defendants, Hart Green faced...

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Judge Cautions about Attorney Fees in Coca-Cola Class Action

September 12, 2014

A recent NLJ story, “Calif. Judge Warns Plaintiffs Lawyers About Fees in Class Action,” reports that a California federal judge has fired a warning shot at a cadre of plaintiffs lawyers,...

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Jury to Decide if Goldman Sachs Pays Legal Bills

September 12, 2014

A recent New Jersey Law Journal story, “Jury to Decide if Goldman Sachs Pays Ex-Employee's Legal Bill,” reports that the U.S. Court of Appeals for the Third Circuit has reversed an order...

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New York Fee Dispute Case Can Effect State's Contingency Fee System

September 11, 2014

A recent New York Law Journal story, “Fees Case Draws Support for Contingency Arrangements,” reports that an attorney fee dispute that is making an encore appearance before the Court of...

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