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Category: Fee Award

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.”

Law Firms Win Suit Over Pelvic Mesh Attorney Fees

March 27, 2020

A recent Law 360 story by Bill Wichert, “NJ, Texas Law Firms Beat Suit Over Pelvic Mesh Atty Fees,” reports that a New Jersey federal judge nixed a proposed class action against Potts Law Firm, Nagel Rice LLP and other firms over allegedly excessive attorney fees in pelvic mesh litigation against Johnson & Johnson and its Ethicon unit, saying Texas law governed the claims and permitted the fees.  U.S. District Judge Madeline Cox Arleo granted the firms' motions to dismiss an amended suit from plaintiffs Debbie Gore and Doris Lance-Smith over claims their retainer agreements ran afoul of a New Jersey rule capping contingent fees, noting that the fees were paid as part of settlement awards approved by a special master and a state judge in the Lone Star State.

The Garden State rule "does not apply and the fees awarded to defendants were entirely consistent with Texas law," Judge Arleo said in her written opinion.  The fee arrangements allowed the women's lawyers to receive 40% of their settlements, but Texas law has no particular cap on contingent fees, the judge said.  Under the New Jersey rule, an attorney can collect a fee of 33.33% of the first $750,000 recovered and then smaller percentages for subsequent amounts, and those fees must be based on the "net sum recovered" after deducting expenses.

Gore and Lance-Smith cited no authority for extending that rule "to litigation settled in a foreign court by out-of-state lawyers representing out-of-state plaintiffs who sustained injuries outside of New Jersey," according to the judge's opinion.  Nagel Rice, which is based in New Jersey, did not receive any of the fees in question, but Potts and other Texas firms did, the opinion said.

Gore, a Texas resident, and Lance-Smith, an Alabama resident, both retained Texas firms to pursue claims they suffered injuries from allegedly defective pelvic mesh products, the opinion said.  Lance-Smith retained Potts in June 2012 to litigate such claims, the opinion said.  The following May, Gore retained a firm then known as Steelman & McAdams PC and partner Annie McAdams to pursue similar claims, the opinion said.

About two months later, Gore agreed to McAdams working and splitting attorney fees with a firm then known as Bailey Perrin Bailey LLP, the opinion said.  In July 2014, Gore and Lance-Smith each filed a master short-form complaint in New Jersey state court "as part of the New Jersey iteration of the mesh litigation," the opinion said.  Nagel Rice and firm partner Andrew L. O'Connor were listed as the women's attorneys, with Potts and firm partner Derek Potts listed as co-counsel, the opinion said.

Those complaints represent the only connection in the current matter to New Jersey, but beyond them being filed, state dockets indicate that "no litigation activities occurred" and that those matters are now closed, Judge Arleo noted.  The settlements and fee awards at issue stem from a master settlement agreement reached in August 2016 between Potts Law Firm, among other firms, and J&J and Ethicon, the judge said.  That deal was administered through a Texas state court case, the judge said.  Judge Arleo pointed to that Texas link in finding that that state's law governed the proposed class action.

The judge noted that "the complex settlement process, which plaintiffs consented to after ample opportunity for objection, was reached by negotiations between Ethicon and Texas law firms and was administered by the Texas state court and a Texas special master."

"Indeed, no New Jersey law firms or lawyers were even listed as receiving contingency-based attorneys' fees as part of plaintiffs' settlements," the judge said.  "As such, the state with the most-significant relationship to the substantive claims at issue is Texas."

Adam M. Slater of Mazie Slater Katz & Freeman LLC, representing Gore and Lance-Smith, on Wednesday said they would appeal the judge's decision.  "When a case is filed in New Jersey, the New Jersey Court Rules apply, including the contingency fee rule.  According to this decision, the New Jersey contingency fee rule can be easily side stepped, allowing personal injury plaintiffs to be charged 40% contingency fees, in an MDL or any other New Jersey case," Slater told Law360.

Class Counsel Earn $8.3M in Fees in Resistor Antitrust Action

March 25, 2020

A recent Law 360 story by Nadia Dreid, “Cotchett Pitre Gets $8.3M in Fees in Resistor Antitrust Fight,” reports that Cotchett Pitre & McCarthy LLP will walk away with $8.3 million for its role in securing a $33.4 million deal for indirect buyers who say that Panasonic Corp. and other electronics companies overcharged them for resistors.  A California federal judge gave the settlement and accompanying attorney fee request his final blessing, finding that both were "fair and reasonable" and that the firm asked for less than it could have.

"Counsel for [indirect purchaser plaintiffs'] requested fee award represents less than 73% of their reasonable lodestar, a negative multiplier.  This further supports the reasonableness of class counsel for [indirect purchaser plaintiffs'] attorney fee request," U.S. District Judge James Donato said in his ruling.  The firm requested — and will be pocketing — about 25% of the settlement as attorney fees, as well as an additional $1.4 million as reimbursement for expenses, according to the court's order.

Class counsel ended up going with the percentage method to calculate its fees.  In cases where classes opt for the percentage method, 25% is normally used as a benchmark in California, with a possibility for attorneys to receive up to 30% of the settlement fund, depending on the circumstances.  But Cotchett Pitre won't get all those funds yet.  A quarter of the $8.3 million in attorney fees will be held back until the firm has finished up its post-distribution accounting, Judge Donato said in his order.

The fee approval was smooth sailing for the indirect purchaser attorneys compared to the ordeal faced by their colleagues representing direct purchasers of the resistors.  Judge Donato ripped into their $10 million fee bid for being "insufficient" in a September order, scolding Hagens Berman Sobol Shapiro LLP and Cohen Milstein Sellers & Toll PLLC for failing to provide enough detail and reasoning in their fee request in what he called a "disservice to the class and the court."  The judge did eventually greenlight the $10 million in attorney fees at a second hearing, after receiving billing charts that assured him everything was on the up-and-up.