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Archive: 2020

Judge Approves Plaintiffs’ Fee Award, Citing Defense Fees

April 3, 2020

A recent Law 360 story by Dorothy Atkins, “Judge Oks $4.7M Atty Award, Citing Opponent’s Legal Bill,” reports that a California federal judge reduced a $50.4 million antitrust judgment against a Chinese telescope maker by $3.1 million, but awarded the rival plaintiff's counsel $4.7 million in fees and costs, pointing to the fact that Sheppard Mullin's defense bill was roughly twice the amount.  In a 29-page order, U.S. District Judge Edward J. Davila said Sheppard Mullin Richter & Hampton LLP has billed Ningbo Sunny Electronic Co. Ltd. more than $9 million to defend against Orion Telescopes & Binoculars's price-fixing claims.  That is approximately double the amount that Orion's counsel at BraunHagey & Borden LLP seeks in its post-trial fee bid, the judge said.

"The court finds that this disparity in billing between the two firms is strong evidence that BHB's bills and costs are reasonable," the order says.  The ruling is the latest in an antitrust lawsuit that the California-based Orion filed against Ningbo Sunny and other telescope makers in 2016, alleging that they conspired to fix the consumer telescope market.

After a six-week trial, a jury in November hit Ningbo Sunny with $16.8 million in antitrust damages, which were later trebled for a total judgment of $50.4 million, payable to Orion.  But in post-trial motions, Ningbo Sunny asked Judge Davila for a new trial or alternatively to slash damages from the judgment by more than $12 million to account for settlements from other companies and profits from its supply agreements.

Meanwhile, Orion's counsel asked Judge Davila to award nearly $5 million in attorneys' fees and costs and to sanction Ningbo Sunny and its chairman, Peter Ni, for falsely stating under oath that Ningbo Sunny wouldn't transfer assets to China while post-trial motions were pending.  After a hearing on the motions in March, Judge Davila hit Ningbo Sunny and Ni with sanctions.  The judge also denied Ningbo Sunny's request for a new trial and its alternative request for judgment as a matter of law.

Additionally, the judge wouldn't alter the judgment based on Orion's purported profits from supply agreements, concluding that Ningbo Sunny relied on an inadmissible expert report and "failed to carry its burden" to prove Orion made millions off of its supply agreements.  However, Judge Davila agreed in part with Ningbo Sunny's arguments that the judgment should be altered due to certain settlements and assets it required, and deducted $3.1 million from the $50.4 million judgment.

Additionally, the judge awarded Orion $4.7 million in attorney fees and costs for an amended judgement totaling $52 million.  The judge said BraunHagey & Borden's hourly rates, which range from $425 to $795, are reasonable and in line with rates that have been approved in other cases, particularly since this case was complex and hard-fought.

The judge also rejected Ningbo Sunny's arguments that the fee bid should be rejected altogether since the firm didn't submit its billing records for review.  "The court finds that significant difference in bills between the two law firms indicates that the claimed hours are reasonable under the circumstances, so the court may rely on Hagey's declaration — which was made and signed under penalty of perjury — without reviewing contemporaneous billing records," the order says.

CA Appeals Court: Cutting Fee Award By 28 Percent Was Warranted

April 2, 2020

A recent Metropolitan News story, “Slashing Fee Award to 28 Percent of Amount Claimed Was Warranted,” reports that the Court of Appeal for this district has affirmed Los Angeles Superior Court Judge Randolph Hammock’s award of $95,900 in attorney fees to the successful plaintiff in a “lemon law” case, holding that there was no abuse of discretion in spurning the trial lawyers’ request for $344,639.

Plaintiff Lorik Mikhaeilpoor was represented in the trial court by Strategic Legal Practices, APC (“SLP”), a Century City firm that is headed by Payam Shahian and specializes in actions under the Song Beverly Consumer Warranty Act.  Its telephone number is 888-SLP-LEMON and the firm promotes itself as providing services of “Lemon law attorneys for the toughest cases.”  Mikhaeilpoor sued BMW of North America LLC and Finchey Corporation of California alleging failed efforts to repair her 2013 BMW 328i and a refusal to replace the vehicle or make restitution.

A jury on Feb. 28, 2018, awarded her $17,902.54 in compensatory damages, which was doubled, as provided for by the Song Beverly Act, for a total of $35,805.08.  The act also mandates an award of attorney fees “reasonably incurred”—although, under case law, an award may be denied where the amount sought is unconscionable.  In his Sept. 21, 2018 order granting $95,900 in attorney fees—reduced to $94,864 in light of awards of attorney fees and costs to the defendants—Hammock said “that the amounts billed” by SLP “are unreasonable, including dual billing of attorneys when the work of only one (at times) was reasonably required.”

The SLP attorneys sought fees at rates ranging from $325/hour to $595 an hour.  Those rates, the judge found, are “reasonable in the community,” but added that attorneys who bill at such rates “should not need to research routine issue of law and should resort to boilerplate when it will serve the client’s purposes.”

Hammock commented:  “This was not a complicated case. Plaintiff was lucky, in this Court’s opinion, to win anything.  This Court will not compound the generosity of the jury.”  He added: “Plaintiffs attorneys should be forewarned: This Court did seriously consider denying the motion for fees in its entirety, since the request of almost $350,000 was quite shocking and ‘unreasonably inflated.’

“This Court is aware of the substantial fees and costs which are incurred in bringing a case to trial before a jury.  It is also aware of the pro-consumer rationale of the Song Beverly Act in liberally awarding such fees and costs….A request of almost $350,000 in fees for this particular case— which this Court has essentially handled from beginning to end—is simply unacceptable.  Indeed, the request for a multiplier was specious.”

Mikhaeilpoor argued on appeal that Hammock  acted arbitrarily in setting the fee award and had neglected to begin his analysis by setting a lodestar amount.  “In finding that $95,900 was the reasonable amount of attorney fees in this case, the trial court expressly invoked the lodestar method.”  White wrote.

The order says: “In light of the foregoing, the Court finds that the lodestar amount of attorney’s fees is $95,900.00, which includes the fees incurred in connection with bringing the instant motion.  This was calculated by finding a total amount of 274 hours which were reasonably incurred to  date, at the average rate of $350 per hour.”

White remarked: “Despite the trial court’s clarity, Mikhaeilpoor mischaracterizes the analysis the court employed in order to create the illusion of error where there is none.”  The jurist pointed to Hammock’s findings and declared, in agreement with him: “Plaintiff ’s counsel spent an unreasonably excessive amount of time dealing with this non-complex case.”

Rejecting Mikhaeilpoor’s contrary contention, she said Hammock did not impermissibly tie the attorney fee award to the amount of compensatory damages that were recovered.  The $344,639 award proposed by Mikhaeilpoor was comprised of $226,426 in fees allegedly earned, with a .50 multiplier enhancement—or $113,213—plus $5,000 for work in connection with the defendants’ objection to the amount that was sought.  Hammock’s award included recompense for time spent on the fee motion but there was no enhancement.

“While the court’s rationale for the lodestar reduction also  influenced the denial of a multiplier, the court went further as to  the multiplier issue, emphasizing that this was ‘not a complicated  case,’ and the ‘request for a multiplier was specious,’ ” White wrote.  This, she said, has a bearing on the issue of whether an enhancement is warranted based on the “novelty and difficulty of the  questions involved.”  That the case was a simple one, White noted, is borne out by evidence that Shahian only becomes personally involved in a case if it’s complex, and there was no billing for his time.

Christine Haw was lead counsel in the case. Haw, who is no longer with SLP, had been an attorney for only about five years, but, it was claimed, she had handled “hundreds of automotive defect cases involving Song-Beverly.” Hourly rates were sought for her at $365 and $375.

White said that despite that experience, Hammock “reasonably found that Haw did not leverage her experience to produce efficient litigation,” noting: “Haw personally billed more than 240 hours, and required the help of nine other attorneys at various points in the litigation.”  She said Hammock was in the best position to determine the reasonableness of the amount sought, substantial evidence supported his decision, and there was no abuse of discretion.

Judge Hints at Over-Litigation Before Awarding Fees in IP Case

April 1, 2020

A recent Delaware Law Weekly story by Scott Graham, “Delaware Judge Puts Foot Down on Over-Litigation in Shoe Design Case,” reports that it sounds as if U.S. District Judge Maryellen Noreika of the District of Delaware is ready to move on from a hard-fought design patent and trademark dispute over Tieks ballet flats.  Gavrieli Brands LLC won a $2.9 million judgment last year after persuading a jury that a Kickstarter-funded company was infringing the distinctive design of its shoes.  Jurors found that Soto Massini (USA) Corp.’s Terzetto Milano flats infringed four Gavrieli design patents and the Tieks trade dress, and that the company intentionally committed false advertising.

Noreika made that verdict hurt a little more, entering an injunction that orders Soto Massini to destroy remaining inventory of accused shoes and refrain from selling any others that are “not colorably different.”  She also held Soto Massini CEO Thomas Pichler personally liable for damages, and found the case exceptional under the Lanham Act.  Noreika noted that she’d already declined to dismiss Pichler from the case, and rejected defense arguments that she had done so “without explanation.”

“At the conclusion of the February 11, 2019 argument, the Court read its ruling from the bench, along with the accompanying reasoning, all of which appears on the record in this case,” she wrote in a 29-page order in Gavrieli Brands v. Soto Massini.  In finding the case exceptional, Noreika rapped Soto Massini for “discovery deficiencies, questionable assertions made by Mr. Pichler, prejudicially late disclosures, surprise requests at trial and improper arguments at trial.”

Soto Massini was represented by Stamoulis & Weinblatt and SML Avvocati.  In fairness to them, Noreika stated that she “could not determine whether the unreasonable manner in which this case was litigated is attributable to Defendants or to Defendants’ counsel.”  But Noreika threw a little shade their way too.  “Plaintiff over-litigated this case,” she wrote. “Although Plaintiff is certainly entitled to enforce its intellectual property rights and pursue litigation, the Court believes some of the fees incurred by Plaintiff could have been avoided.”

That, combined with Pichler’s likely inability to satisfy the judgment, meant that Noreika will award fees “only for the most egregious actions by Defendants,” such as their midtrial request for a claim construction hearing.  She gave Gavrieli two weeks to submit an accounting.  That should not include any fees for briefing the fee motion, she added, “at least in part because a fee amount or estimate should already have been provided.”

Client Says Law Firm Can’t Collect Attorney Fee ‘Windfall’

March 31, 2020

A recent Law 360 story by Lauraann Wood, “Gaming Co. Says Jackson Lewis Can’t Collect Fee ‘Windfall’,” reports that a now-closed gaming terminal company has said that an Illinois state judge should vacate a $328,000 judgment against it and prevent Jackson Lewis PC from collecting a "windfall" of attorney fees based on a legally unenforceable engagement letter and unsupported charges.

LZ Entertainment LLC said on that the judgment entered against it in an underlying malpractice suit requires it to pay the New York-based firm $134,000 in purportedly unpaid attorney fees and $194,000 in service charges it was never legally entitled to seek or recover.  The entertainment company says the court should vacate the judgment and let it fight the charges, arguing that the order is rooted in a "self-serving" engagement letter it never received and charges the firm can't support with invoice documentation.  LZ Entertainment also claims it didn't know its prior counsel hadn't responded to the underlying summary judgment request that resulted in the judgment's entry.

LZ claims that after Jane McFetridge, now the firm's Chicago office principal, told company manager Stefen Lippitz that Jackson Lewis' work could cost "as much as $80,000," it agreed to let the firm defend it in a June 2014 lawsuit over an employee who worked for a rival.  The company says Jackson Lewis began performing legal work on its behalf that June, but the firm never sent it an engagement letter and didn't send out its first invoice until two months later.

Lippitz received a copy of the engagement letter in December 2014, "well after" the firm's engagement and litigation in the rival's lawsuit had ended, according to the petition.  The firm purportedly sent the letter through physical mail, even though all of the parties' correspondence had been through email, according to the petition.  "Critically and surprisingly," LZ claims, the firm's engagement letter included a provision stating that the firm would assume its terms were acceptable unless the company responded in writing to the contrary.

"Attempting to bind a client to the terms of an engagement letter without the client executing the letter is unusual and problematic, to say the very least," the company said.  LZ also said Jackson Lewis had already billed it for more than $130,000 by the time it received its first invoice in August 2014.  That invoice reflected a purported prior balance of more than $61,000, but "it would make no sense for there to be a prior balance" if that was the firm's first invoice since its June 2014 engagement, LZ said.

Jackson Lewis produced a copy of its July 2014 invoice in February, while responding to an investigation that LZ launched after receiving the firm's citation to discover assets, according to the petition. That invoice reflected a $61,000 balance for attorney fees and disbursements incurred for the month of June 2014, but the firm "could not provide any evidence whatsoever demonstrating that Jackson Lewis ever sent the July 2014 Invoice to LZ," the company claimed.  "Indeed, LZ never received the July 2014 invoice from Jackson Lewis," the company said.

The company said the invoices for its June 2014 and July 2014 fees also "raise more questions about what actual services were performed, as there are multiple entries by the same attorneys for the same days on both invoices."  And because Jackson Lewis never sent LZ its July invoice, the company never got the opportunity to "pump the brakes" on the fees the firm was assessing, the petition argued.

Jackson Lewis sought payment of the fees LZ allegedly owed as a counterclaim in a malpractice suit relating to a revenue share agreement it helped the company enter with its rival, Accel Entertainment Gaming LLC.  The firm didn't attach the July 2014 invoice to a summary judgment bid it renewed on that claim in March 2019, submitting only its August 2014 bill and various other invoices reflecting "service charges," according to the petition.

$3.8M in Attorney Fees Sought in Sorin MDL

March 30, 2020

A recent Law 360 story by Matthew Santoni, “Anapol Weiss Seeks Much of $3.8M Sorin MDL,” reports that Anapol Weiss is seeking nearly $2 million for helping clients reach a global settlement over allegations that the former Sorin Group USA’s heater-coolers put heart surgery patients at greater risk of contracting dangerous bacterial infections, according to a filing in Pennsylvania federal court.  In its filing, the firm sought approval of a total of $3.8 million in fees and $441,000 in expenses for itself and 14 other firms that had worked toward a $225 million global settlement with Sorin, now known as Livanova PLC, which would leave about $334,000 in a common fund established for payment of fees and expenses to benefit all the cases gathered together under the multidistrict litigation.

“The size of the global settlement fund is approximately [$225 million] and a substantial number of individuals benefitted from the settlement program devised by lead counsel and members of the [plaintiffs’ executive committee], including plaintiffs with suits in the MDL and various state courts as well as others with unfiled claims,” the petition said.

As lead counsel, Anapol Weiss sought $1.7 million in fees and more than $250,000 in expenses for nearly 2,000 hours of “common benefit” work, with other firms —  including Johnson/Becker PLLC, Hayes Lorenzen Lawyers PLC and Chaffin Luhana LLP —  claiming the rest of the request for $3.8 million in fees and $440,000 in expenses from the fund.  Anapol Weiss also asked U.S. District Judge John E. Jones III to reduce the 6 percent assessment he’d put on all monetary recoveries in the MDL that fed into the common benefit fund.

In the original lawsuit, filed in 2016, lead plaintiffs Edward Baker and Jack Miller had sought medical monitoring and a declaration from the court that the Sorin 3T heater-cooler device, used to control the temperature of a patient’s blood during open-heart surgeries, was defective.  The devices allegedly made patients more susceptible to a slow-growing but potentially fatal bacterial infection from a family of bacteria known as nontuberculosis mycobacterium, or NTM.

Spearheaded and hosted by Johnson/Becker, the executive committee gathered data on potential claimants and negotiated the proposed settlement with Livanova, the petition said. Livanova and Anapol Weiss announced that they had reached a global settlement in March 2019, while the Baker case reached its own settlement in October.

The petition said the fees were reasonable given the amount of work required, the complexity of the case and the relative size of the global settlement.  “The current request for a total fee award of $3,750,000 represents less than 2% of the global settlement and is well within the range deemed reasonable in similar cases,” the petition said.

An earlier case management order had set an assessment of 6%  from each claimant’s monetary awards, including 2% for common-benefit fees and 4% for expenses.  Though it did not set a new target, Anapol Weiss requested that the court lower the assessment based on costs so far, and streamline the allocation of money from the fund.

“The actual common benefit costs were only 0.19% of each claimant’s gross monetary award,” the petition said. “Lead counsel requests that CMO 5 be modified to reduce the cost assessment and eliminate the need for a CPA to review the time and expenses as there is an agreement for the allocation among all counsel receiving a common benefit fee award and/or common benefit expense reimbursement.”  The remainder of the common benefit fund would be reserved for any future common work and the estimated $3,200-a-month cost of maintaining an online document repository, the petition said.