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Texas Wants Supreme Court to Hear Attorney Fee Issue

October 1, 2015

A recent NLJ story, “Texas Wants Supreme Court to Strike Legal Fee Award in Voting Case,” reports that Texas wants that U.S. Supreme Court to review an order that forces the state to pay more than $1 million in attorney fees to groups that challenged the state’s redistricting plans.

The U.S. Court of Appeals for the D.C. Circuit in August ordered Texas to pay the fees, finding lawyers for the state forfeited the issue by failing to make substantive arguments in the lower court.  The Texas Solicitor General Scott Keller said in court papers that the state planned to appeal to the U.S. Supreme Court.

In the meantime, the state is fighting efforts by the redistricting challengers to collect nearly $200,000 for their work on the fee issue in the D.C. Circuit.  In papers filed this week, Keller argued that awarding any new fees “imposes an unconstitutional cost on the state.”

Texas argued that the D.C. Circuit and the lower court judge, U.S. District Judge Rosemary Collyer, were wrong to find that the challengers—representing Texas voters, state lawmakers and the Texas Conference of NAACP Branches—were the winning parties in the redistricting case.  The challengers did not win, Keller wrote, because the Supreme Court in its 2013 Shelby County decision invalidated the section of the Voting Rights Act that acquired Texas to get approval for its redistricting plan in the first place.

“A party cannot be a prevailing party when the statutory basis for its purported victory is nullified as unconstitutional by the Supreme Court while the case is on appeal,” Keller wrote.

The challengers, in court papers filed in August asking for $196,294 in fees, said they took a number of steps to reduce their costs.  They cut the number of hours spent working on the appeal by 13 percent, including time spent by lawyers other than Paul Smith of Jenner & Block, who argued for the challengers before the D.C. Circuit.  The three sets of challengers were each represented by their own lawyers, but said they chose Jenner to take the lead as a cost-saving measure.

“Despite Texas’s tactical decision that increased the scope of the appellate proceedings, intervenors exercised reasonable discretion to limit the amount of fees incurred in this appeal,” the challengers’ lawyers wrote.  Smith claimed the highest hourly rate, charging between $1100 and $1150.  Hourly rates for the rest of the lawyers from Jenner & Block, Perkins Coie and other firms ranged from $150 to $735, charged by Marc Elias, chairman of Perkins Coie’s political law practice.

Keller countered that if the challengers were entitled to fees, the D.C. Circuit should cut the amount they request in half.  The state argued that Jenner & Block and Perkins Coie failed to justify their “excessive” rates, and asked the court to use rates based on the U.S. DOJ Attorneys’ Office’s Laffey Matrix.  Under that fee model, Smith, the most experienced lawyer from the Jenner team, would earn only $520 per hour.  Keller also asked the D.C. Circuit not to rule on the fee issue until the Supreme Court decides whether to hear the case.

BP’s Deepwater Legal Tab: $55 Billion and Counting

September 30, 2015

A recent Corporate Counsel story, “BP’s Deepwater Toll: $55B and Counting,” reports that the Deepwater Horizon oil spill has already costs, and that number is expected to rise over the next few years.  And in its most recent quarterly report, BP took a $10.8 billion charge related to its Gulf oil spill “response” in the second quarter of 2015, according to documents on its website.

The documents, and accompanying information, say $9.8 billion went for state and federal claims arising from the April 2010 spill.  Another $460 million charge was for “business economic loss claims not provided for,” while the reminder went for “adjustments to other provisions” and “ongoing costs of the Gulf Coast Restoration Organization.”

There was no separate breakdown for its legal fees, and David Nicholas, head of BP’s group press office in London, said there was no further breakdown of the Gulf oil spill expenses behind what was offered in the quarterly report.  In February 2014 the company reported it had already spent more than $1 billion on lawyers’ fees.  The company retained Gibson Dunn, Kirkland & Ellis and William & Connolly for work related to the massive spill’s aftermath.

The bulk of the second quarter claims involve the July 2 agreements BP made with the U.S., five Gulf Coast states and some 400 local governments.  The settlement commits BP to pay up to $18.7 billion over the next 18 years.  The settlement does not cover other private securities litigation, which could go on for years.

Foreign Nations Not Immune to Fee Dispute Litigation

September 29, 2015

A recent NLJ story, “Dentons’ Fee Suit to Proceed,” reports that the Republic of Guinea must face allegations in the U.S. court that failed to pay the law firm Dentons more than $10 million in legal fees, a federal district judge in Washington ruled last week.

Dentons claims the Republic of Guinea never paid the firm for thousands of hours it spent working on a large-scale mining and construction effort known as the Simandou Project.  U.S. District Judge Royce Lamberth rejected Guinea’s arguments that it was protected against the lawsuit by sovereign immunity and the terms of its contract with the firm.

Foreign governments generally are immune against litigation in U.S. courts under federal law.  However, there are a few exceptions, such as cases that involve “commercial activity.”  Lamberth found that the type of business Guinea hired Dentons to perform fell under the commercial-activity exception.

Dentons released a statement saying that it was pleased with Lamberth’s decision but was open to settlement talks.  “While we would prefer to resolve this fee dispute outside of litigation, we will continue to advocate on behalf of the work done by our team,” the firm said in the statement.

Dentons claimed in court papers that it spent more than 10,000 hours on the Simandou Project between May 2012 and June 2013.  The firm said that Guinea paid $2 million of the $12 million it owed, but then the payments stopped.  At no time did Guinea contest the reasonableness of the fees that Dentons charged, the firm said in its suit.

According to a copy of the retainer agreement filed with Dentons’ complaint, the firm charged hourly rates between $700 to $1000 for partners in Washington, London and Paris; $700 to $850 for senior advisers in Washington; $600 to $700 for of counsel in Washington and Paris; and $200 to $550 for associates in Washington, London and Paris.

$15M in Fees in Comcast Antitrust Class Action

September 28, 2015

A recent Legal Intelligencer story, “$50M Accord, $15M in Lawyer Fees in Comcast Class Action,” reports that a federal judge has approved a $50 million settlement in the long-running Comcast antitrust class action, carving out $15 million for attorney fees and expenses.  U.S. District Judge John R. Padova of the Eastern District of Pennsylvania signed off on the settlement, capping a class action that had seen three trips to the U.S. Court of Appeals for the Third Circuit and one to the U.S. Supreme Court since its initiation in 2003.

The settlement is broken down into a cash component of $16.7 million and services component valued at $33.3 million.  The $15 million in attorney fees will come from the cash component.  Those fees are broken down into $6.4 million in attorney fees and $8.6 million in expenses.

Representing the class members were 17 law firms from across the country, which had requested a combined sum of nearly $25 million in fees and expenses.  While Padova’s opinion did not list the breakdown of each firm’s share of the $15 million in fee and expenses he ultimately awarded, three firms had requested compensation over the million dollar mark.

Minneapolis-based firm Heins Mills & Olson, which performed 33,145 hours of work in the litigation, initially requested roughly $13 million.  Following Heins Mills, Houston-based Susman Godfrey put in 11,807 hours of work and requested $5.6 million, Bolognese & Associates in Philadelphia put in 2,564 of work and requested just over $1 million.  In total, attorneys for the class members worked for a total of 65,511 hours.  According to Padova, the attorney asserted their fee request were well below those awarded in similar antitrust cases.

$200M Fee Request in Massive Price Fixing Case

September 25, 2015

A recent The Record story, “Plaintiffs Team Seeks $200 Million Payday in Price-Fixing Case,” reports that plaintiffs lawyers with Trump Alioto & Prescott have requested $192 million in fees for their work settling a massive antitrust case over the price of cathode ray tubes.  The fee request represents one-third of the $577 million settlement fund, which lead counsel lauded as “one of the largest recoveries on behalf of indirect purchasers.”

The lawyers also asked to be reimbursed for about $3 million in litigation expenses and to distribute $450,000 in incentive awards among the lead plaintiffs, according to the fee request filed in the Northern District of California.

The deals resolve claims that defendants conspired between 1995 and 2007 to fix the prices of cathode ray tubes used in computers and TV monitors.  Lead counsel with Trump Alioto proposed dividing the fee award among 48 other firms that also put hours into the case, including Kirby McInerney; Zelle, Hoffmann Voelbel Mason & Gette; and Straus & Boies.

Lawyers with Trump Alioto pointed out the recovery goes directly into the pockets of class members—there will be no refund to the defendants or cy pres distribution, and claimants won’t be paid with vouchers or coupons.  They also emphasized the difficulties and risks of the case, which required lawyers to travel the world tracking down evidence of the 20-year old conspiracy.  The proposed fee award equates to a 2.3 multiplier of plaintiffs counsel lodestar.