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NALFA Welcomes DGT Costs Lawyers

November 18, 2014

NALFA would like to welcome DGT Costs Lawyers to our membership.  DGT Costs Lawyers is Australia’s premium legal cost management firm.  DGT Costs Lawyers is the first international firm to qualify to review fees/legal bills in the U.S.

DGT Costs Lawyers is a boutique law firm that specializes and offers services exclusively in the complex area of legal costs law and practice. Services include acting in and/or mediating fee disputes between practitioners and clients, acting in assessments to determine quantum of court ordered costs, consulting on fee arrangements for law firms and in-house counsel, as well as auditing of legal bills. DGT has been doing this type of work since the 1980's and are based on the east coast of Australia.

“We’re excited to have our first international member.  Law costs firms from aboard deal with the same issues as our domestic member firms.  Hourly rates, billing entries, fee disputes and litigation management are issues without borders,” said Terry Jesse, Executive Director of NALFA. 

For more on DGT Costs Lawyers, visit http://www.dgt.com.au/

Lenovo Fights Fee Request in Laptop Litigation

November 17, 2014

A recent NLJ story, “Lenovo Fights Legal Fee Request in Laptop Litigation,” reports that Lenovo Inc. is blasting as “fantasy” a fee request by plaintiffs attorneys for eight times the attorney fees the company says they are due for crafting a relatively simple class action settlement over laptops with WiFi connection problems.

Lenovo contends plaintiffs’ counsel in Kacsuta v. Lenovo have built their nearly $9 million fee request on “wildly unsupported assumptions,” including that all 83,201 class members will be eligible to make a claim and will actually do so, and that will opt to have their Ultrabook laptops repaired, at an estimated value of $600.

According to studies in “claims-made” settlements fewer than 10 percent of class members typically make claims, according to Lenovo’s Nov 7 memorandum opposing what it calls an “astronomical” fee request.  That reduces the chance the settlement will reach the $50 million in value estimated by plaintiffs.

“Plaintiffs’ ‘value’ of $50 million is based on fantasy compounded by fantasy and cannot be accepted,” Lenovo argues.  The company puts the settlement value at $1.06 million to $2.37 million.

The deal, provisionally approved Aug. 22 in U.S. District Court for the Central District of California, offers a menu of benefits for purchasers of Lenovo U310 and U410 Ultrabook IdeaPad laptops, which originally sold for between $729 and $1,200 each.

Under the terms of the proposed settlement, Lenovo will repair the wireless capability of devices that previously have not been returned to the company.  Those who do not opt for repair will be eligible for either a $100 cash refund or $250 credit towards a purchase of any Lenovo product.  The company also offers reimbursement of documented out-of-pocket repair costs.

The plaintiffs’ attorneys justify their fee request by citing the 8,628 hours they worked on the case, the complexity of the legal and technical issues involved, and the generous benefits negotiated for class members.  They used the lodestar method to calculate the fees, and applied a 2.84 multiplier.  They also are requesting $300,000 in expenses.

The Root Cause of Skyrocketing Defense Costs

November 14, 2014

A recent article, “The Root Cause of Skyrocketing Defense Costs,” by Douglas W. Greene of Lane Powell’s blog, D&O Discourse, discusses the skyrocketing costs of defending securities class actions.  He writes:

Why do the costs of defending securities class actions continue to increase?  Because of my writings on the subject (e.g. here and here), I’m asked about the issue a lot.  My answer has evolved from blaming BigLaw economics – a combination of rates and staffing practices – to something more fundamental.  BigLaw economics is a consequence of the problem, not its cause.  I believe the root cause is a convergence of two related factors:

The prevailing view, fueled by defense lawyers, that securities class actions are “bet the company” cases and threaten the personal financial security of director and officer defendants; and

As a result of these perceived threats, the reflexive hiring of BigLaw firms, which companies and their directors and officers feel are uniquely equipped to defend them – in other words, they go to what they perceive to be the “Mayo Clinic” of defense firms.

But it simply isn’t necessary, and is often even strategically unwise to turn to a BigLaw firm for most securities class actions.  To be sure, securities class actions are serious matters that assert large theoretical damages.  But the vast majority of cases, if defended effectively and efficiently by securities litigation specialists, are easily managed and settled within D&O insurance limits, with no real risk of any out-of-pocket payment by the company’s directors and officers.

Click Here for the entire article.

Douglas W. Greene is a Shareholder at Lane Powell in Seattle and co-chairman of the firm’s securities litigation group.

NALFA Goes International

November 14, 2014

NALFA is now welcoming international members.  Legal fee analysis is an international practice with professionals throughout the world including the UK, Australia, and Canada. While legal billing practices vary from nation to nation and locality to locality, the nature of many of the underlying issues are the same.

“With U.S. law firms opening offices abroad and foreign corporations involved in litigation in U.S. courts, at NALFA, we think there’s tremendous business opportunity for domestic and international members to work together,” said Terry Jesse, Executive Director of NALFA.  “With the proper training, domestic and international members can learn from one another.  Many of the skills are transferable such that our members can look beyond their home country for clients,” Jesse concluded.

$91M Fee Award in Pfizer Neurontin MDL

November 13, 2014

A recent Law 360 story, “Attys’ Fee Award Cut to $91M in Pfizer Neurontin MDL,” reports that a Massachusetts federal judge awarded $91 million to the plaintiffs attorneys in multidistrict litigation accusing Pfizer Inc. of illegally marketing Neurontin for off-label use, saying the $108.3 million they requested from the $325 million settlement pot was too high.

U.S. District Court Judge Patti B. Saris said in her ruling that the fee request, which represented a third of the settlement, was more than is traditionally awarded in “megafund” cases that settle for more than $100 million.  A study of cases in the First Circuit, where Judge Saris’ court is located, found that the mean attorney fee award in settlements between $250 million and $500 million was 17.8 percent, she said in her ruling.

“In fashioning the fee award, the Court gives the due weight to the fact that this case was lengthy and complex.  Class counsel achieved excellent results for their clients.  They brought a great deal of experience to the case, and throughout the litigation they performed with considerable skill,” Judge Saris said, noting that in a settlement with more than 40,000 class members, there was only one objection, unrelated to the amount of the fund or the attorneys’ fees.

She also considered the fact that class counsel has already been compensated in the case for its work in a bellwether trial against Pfizer in which Kaiser Foundation Health Plan served as the lead plaintiff.  On top of that, the attorneys didn’t provide detailed information backing their lodestar claim for $27.4 million, not including time spent on Kaiser trial, Judge Saris said in her fee ruling.

In analyzing the fee request, Saris wrote plaintiffs lawyers gave the court a $27.4 million "lodestar" amount for their work but did not provide hourly rates or hours worked.  In class actions, courts typically apply a multiplier to the lodestar figure--and, citing case law, Saris noted that multipliers of between one and three are the norm.  In this case, the multiplier of 3.32--to arrive at $91 million--was "well within the acceptable range," she wrote

Some courts have shied away from awarding large amounts of fees in “megafund” cases to “avoid giving attorneys a windfall at the plaintiffs’ expense,” Judge Saris wrote.  However, other courts refuse to lower those fees, believing that “the sliding-scale approach creates the perverse incentive for Class Counsel to settle too early for too little,” the fee ruling said.

The case is In re Neurontin Marketing and Sales Practices Litigation.  For more on this case, visit http://www.mad.uscourts.gov/worcester/MDL1629/

Florida Supreme Court Takes Up Attorney Fee Caps in Workers Comp Cases

November 12, 2014

The Florida Supreme Court heard oral arguments in a case that asks the justices to decide whether the attorney fee caps in the state’s workers compensation laws are constitutional.  The...

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Judge to Review Fees in Detroit Bankruptcy

November 11, 2014

Attorneys and consultants have billed nearly $141 million for services in the Detroit bankruptcy, the largest Chapter 9 bankruptcy case in U.S. history.  The hefty costs have not gone unnoticed...

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Judge Applies Third Circuit Prudential Fee Factors in Fee Award

November 10, 2014

A recent Legal Intelligencer story, “$1.2M in Attorney Fees for Wage-and-Hour Suit Against TD Bank,” reports that class counsel who settled a wage-and-hour suit brought by tellers at TD...

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Judge Considers Success Fee in Exceptional Patent Case

November 7, 2014

A recent The Recorder story, “In Seminal Case, Chipmaker Asks Judge for $8.1 Million Fee Award,” reports that semiconductor Sidense Corp. may not make new law by recovering its $2.5...

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$1.2M Fee Request in $3M FLSA Class Action Settlement

November 6, 2014

A recent Texas Lawyer story, “Proposed Fees in FLSA Class Action Top $1.2 Million,” reports that attorney fees for class action plaintiffs in a proposed settlement with SuperMedia Inc. and...

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