A recent Metropolitan News story, “S.C. Will Not Review $7.5 Million Attorney Fee Award” reports that the California Supreme Court yesterday left standing an arbitrator’s award requiring a real estate developer to pay more than $7.5 million in fees to a Northern California law firm that represented it in complex environmental litigation.  Both the Court of Appeals and San Francisco Superior Court Judge Peter Busch ruled that the award was neither unconscionable nor against public policy in Cotchett, Pitre & McCarthy v. Universal Paragon Corporation.

The contingency fee agreement provided that if UPC acquired a contaminated site, the Cotchett firm would be paid an amount equal to the value of the property, or 16 percent of the cost of cleaning up the site, whichever was greater.  The case ultimately settled with UPC acquiring the property – valued at $1.8 million before cleanup – along with $6 million in cash.  The Cotchett firm demanded more than $19 million in fees based on an estimate of the cleanup costs.  The case ended up before JAMS arbitrator Rebecca Westerfield, who awarded the Cotchett firm about $8 million in fees based on a damage estimate of $50 million.  The fee award was upheld by Judge Busch and now the California Supreme Court.

NALFA first reported on this case in “CA Appeals Court Approves Fee Award That’s Greater Than Damages”.