A recent Law 360 story by Celeste Bott, “Ill. Judge Needs More Info To OK $57M Chicken Antitrust Fee”, reports that an Illinois federal judge overseeing a sprawling antitrust litigation against broiler chicken producers said he couldn't rule on class counsel's renewed bid for a $57 million attorney fee award thrown out by the Seventh Circuit last year without more information on one of the firm's graduated fee arrangements in a similar 2015 antitrust case, which wasn't disclosed in the first go-around.

U.S. District Judge Thomas Durkin said during a remote hearing that he wanted more briefing from the both plaintiffs' firms — Hagens Berman Sobol Shapiro LLP and Cohen Milstein Sellers & Toll PLLC — and from class objector John Andren as to what effect the 2015 case has had in assessing the attorney fee award in the $181 million deal for chicken buyers.

In the earlier case, Cohen Milstein took on some of the nation's largest investment banks while representing the Public School Teachers' Pension and Retirement Fund of Chicago, a sophisticated plaintiff which negotiated attorney fees ex ante, or ahead of case resolution.

In that case, the plaintiff adopted a graduated scale.  If the same scale were to be used in the chicken case, class counsel estimated they would be entitled to $44 million for the $181 million settlement, or roughly 26%.  But the counsel argued they would have negotiated a higher rate in the broiler chicken case because it doesn't involve a trillion-dollar financial market.

Andren, meanwhile, said Judge Durkin should apply a similar fee schedule agreed to by Chicago Teachers, which entail fee brackets that decline both by the size of the settlement and by the stage of settlement.

"The latter is as important as the former, because sophisticated plaintiffs realize that trials are expensive and risky," Andren said in his opposition to the firms' renewed bid for a $57 million fee award in the chicken case.  "To align the incentives of class and counsel, attorneys need to receive a larger share of the recovery for more procedurally-advanced settlements and verdicts. This cannot occur when relatively early settlements are paid at 33%."  Judge Durkin also noted Tuesday that both are large, complex antitrust cases with many defendants and astronomical damages.  "There's enough similarities where I want to hear from both sides," he said.

The law firms, however, have contended "there is an ocean" between the size of the potential recovery, and potential fee awards, in both cases, and noted that in the chicken case, they represent indirect purchasers, which increases the risk relative to the banking cases.

"Indirect purchasers face defendant attacks that direct purchasers do not, and these attacks increase the chance of waking away with nothing.  And even though they take on this additional risk, the total damages indirect purchasers can recover based on state law claims is about half of what direct purchasers can recover for their federal claims," the firms said in a renewed fee motion filed in September 2023.

In that motion, they argued the court applied the correct methodology for determining fees the first time and came to the correct conclusion in awarding just over 33% of the settlement fund.  "Not only does the original award align with other awards in this specific case, it also aligns with the best available data on negotiated rates in antitrust cases," the class counsel said.  The fee award is back for reconsideration by Judge Durkin after the Seventh Circuit held last year that he failed to adequately consider bids made by class counsel in auctions in other cases and fee awards in different circuits.

Andren had taken issue with the roughly one-third cut of the settlement that Hagens Berman and Cohen Milstein were to receive in a deal the firms had struck with Fieldale Farms Corp., Peco Foods Inc., George's Inc., Tyson Foods Inc., Pilgrim's Pride Corp. and Mar-Jac Poultry.

Private plaintiffs began suing the nation's largest broiler-chicken producers in September 2016, claiming the producers coordinated and limited chicken production to raise prices and exchanged detailed information about capacity, sales volume and other data through statistical research compiler Agri Stats Inc.

The settlements at issue in this appeal were reached with Tyson for $99 million, Pilgrim's for $75.5 million, Peco for $1.9 million, George's for $1.9 million, Fieldale for $1.7 million and Mar-Jac for $1 million.  The agreements were awarded final approval by a district judge in December 2021.

A three-judge Seventh Circuit panel complimented the lower court in August 2023 for its "fine job of shepherding" the complex litigation, but said it made a mistake when it discounted bids made by one of the two firms serving as class counsel in other cases because the proposals had declining fee scale award structures.

Andren had also argued that the lower court should have taken into account that class counsel frequently did work in Ninth Circuit district courts, which employ a lower 25% "benchmark" for presumptively reasonable attorney fees.  The Seventh Circuit panel agreed the Illinois district judge shouldn't have categorically assigned less weight to Ninth Circuit cases in which counsel was awarded fees under a mega-fund rule.  In addition to vacating the fee award, the panel remanded the matter for "greater explanation and consideration" of the factors it laid out, noting it expressed no preference as to the amount or structure of the award, just the need for further review.

A recent Law.com story by Alexander Lugo, “Akerman Sues Former Client for Almost $3 Million in Unpaid Fees”, reports that Akerman is suing a former client alleging that he has a total overdue bill of more than $2.8 million.

The client, Blaine Iler, was convicted of extortion, conspiracy and bribery in June along with two other executives of a food servicer for bribing a New York City Department of Education official.  Former Akerman partner Bradley Henry was originally lead counsel on the case, but in February he moved to Blank Rome and took Iler with him as a client, according to the lawsuit filed in New York state court.

Before Henry moved to Blank Rome, Iler allegedly accumulated just under $2.8 million in legal fees along with another $67,000 in other costs to Akerman.  The firm is also seeking interest on those fees, according to the lawsuit.  A total of 16 Akerman attorneys allegedly put in almost 6,000 hours on Iler’s defense, which culminated in a four-week jury trial, according to the complaint.

Akerman claims that Iler has acknowledged his debt to the firm in the past, most recently on a February call with Henry, Akerman litigation practice chair Lawrence Rochefort and Akerman COO David Ristaino, according to the court documents.  Around the time of that phone call, the judge on the case out of New York denied a post-trial motion for an acquittal or a new trial after being convicted in June.

This lawsuit follows a trend of law firms seeking to leave no legal fees on the table and using litigation as a way of obtaining those fees.  That trend has led to higher realization fees for firms generally.

However, Akerman’s $2.8 million case against Iler is on the high end of the spectrum when it comes to fee disputes.  New York-based litigation firm Kasowitz Benson Torres sued former clients for a total sum of more than $4.5 million during all of 2023.  Although litigation may be an effective way to collect unpaid fees, especially when a client is disputing those fees, law firms don’t want to seem too trigger-happy toward former clients so lawsuits tend to be a last resort.

A recent Law 360 story by Lauraann Wood, “Ill. Justices Weigh Whether Rule Violation Merits Fee Award”, reports that the Illinois Supreme Court has questioned whether two law firms should be allowed to preserve their $1.7 million fee award for their work on a family dispute that settled after they were fired, as the justices asked whether fees are appropriate if the firms never disclosed how they would split the money.

Every justice on the state high court bench offered either a question or a criticism during oral argument as they weighed whether the quantum meruit claim by Stephen J. Schlegel Ltd. and Andrew W. Levenfeld & Associates Ltd. was correctly sent back to the trial court for an award that ignores their illegal fee agreement with former clients Maureen V. O'Brien and her nephew Daniel O'Brien III.

Some justices highlighted on one hand the 3,000 hours and years of work the firms put into the O'Briens' underlying family dispute before they were fired and the case settled about two weeks later.  Other justices, including Justice Joy Cunningham, noted the firms' failure to properly disclose their fee-sharing agreement to the O'Briens and questioned whether allowing them to recover fees essentially rewards them for violating a rule of professional conduct.

"Rules exist for a reason," Justice Cunningham said.  "It seems to me from looking at the figure that … they basically got what they would have gotten anyway, so the rule means nothing, and as a Supreme Court, are we supposed to agree that it's OK not to follow our rules?"

Representing the firms, Jeremy Boeder of Tribler Orpett & Meyer PC argued that his clients should receive an equitable fee award for their work because the trial court considered their rule violation and its potential effects before awarding their fees.  Pressed by Justice Cunningham to identify the consequence they would then face for violating the state's fee-sharing disclosure rule, Boeder said there would be none.  "And it's our position that there shouldn't always be a consequence in a case like this for a violation of a rule of professional conduct," he argued.

Acknowledging Justice Lisa Holder White's suggestion that the trial court could award the firms the same amount in fees even without considering their client contract, Boeder argued that spending the time "to get to the point that we've already reached" is unnecessary.  That process would also be wrong because sending the case back would essentially tell the trial court that it "has to go with the second-best option" despite considering all the relevant evidence in a six-day bench trial, he told the justices.  "Why should that be a command upon a trial court of equity, who really was in the best position to evaluate all of the issues here?" the attorney said.

The O'Briens' counsel argued that the firms should not receive any fees even if the justices agree they should go back to the trial court for a new award. Indeed, the O'Briens believe the firms' work is worth "less than zero," partly because they advised Maureen O'Brien to resign as the coexecutor of her parents' estate, which was her "only source of leverage, or power, or control" in the underlying dispute, John Fitzgerald of Tabet DiVito & Rothstein LLC told the justices.  "It is impossible to overstate how catastrophic that legal advice was," he told the court.

The state high court has previously voided a fee agreement that violated professional conduct rules in a case between a litigation consultant and an expert search firm, and the reasoning then should still apply because "there's no public policy reason or any other reason to treat lawyers differently from anyone else who enters a contract that violates public policy," Fitzgerald argued.  "Quantum meruit means 'as much as he or she deserves. 'No one deserves anything that violates public policy," he said.

Fees are also inappropriate because although the firms litigated some issues in the O'Briens' underlying dispute and made some settlement offers, there is no proof the O'Briens' subsequent counsel relied on the firms' earlier work to eventually reach their $16.85 million settlement, Fitzgerald argued.  Any outstanding settlement offers had been withdrawn, and no new offers had been made for weeks by the time the firms were fired, so any potential numbers had gone back to zero by the time the O'Briens' subsequent counsel began handling their case, he said.  "The fact that the next lawyer was able to settle the case on certain terms, I don't think that necessarily means these plaintiffs could have gotten that deal done on the same terms or comparable terms," Fitzgerald said.

Blasting that contention on rebuttal, Boeder argued that it was the firms' settlement back-and-forth that ultimately brought the underlying litigants to their agreeable meeting points and resolve their family dispute.  The firms had made an $18.3 million demand that was met with a $16.25 offer, which then prompted a $16.75 million counter-demand the firms were prepared to send back before they were ultimately fired, he said.  "The settlement was on almost exactly the same terms as the counter-demand that my client proposed," Boeder argued.  "Why wasn't that counter-demand made?  Because Dan and Maureen O'Brien refused to allow my clients to make it on their behalf."

A recent Law 360 story by Emlyn Cameron, “Plaintiffs in Kwok Trustee Case Must Pay Paul Hastings’ Fees”, reports that a New York magistrate judge said a group of U.S.-based Chinese nationals must compensate Paul Hastings LLP for more than $327,000 in legal fees the firm wracked up combating a case found to be part of a harassment campaign against billionaire exile Ho Wan Kwok's Chapter 11 trustee.  U.S. Magistrate Judge Jennifer E. Willis said Tao An and other Chinese nationals owed Paul Hastings and one of its former attorneys, Luc A. Despins, more than $326,000 in attorneys fees and more than $840 in costs for employing Davis Polk & Wardwell LLP.

An and the others brought an ill-fated suit alleging the firm was a foreign agent because it represented a bank controlled by the Chinese Communist Party, but U.S. District Judge Valerie Caproni dismissed the suit and sanctioned the plaintiffs in August.  "Having sought a fight, plaintiffs cannot now complain that they've been punched in the face," Judge Willis said in her order.

Judge Caproni determined the case was part of a harassment campaign aimed at Despins, who had been appointed Chapter 11 trustee in Kwok's bankruptcy.  Since An and the others brought the case, they have to bear the costs that Despins and Paul Hastings incurred pushing back, Judge Willis said.  An and the other plaintiffs had argued against the fees, saying they were excessive and not backed by reliable evidence of the time each attorney spent on the case.  But, that wasn't true, Judge Willis said.

The way that Despins and Paul Hastings submitted the hours worked for the various Davis Polk attorneys was difficult to parse but not impossible, and the court was able to work out what each was owed.  The hours those attorneys billed were reasonable and resulted in legal successes for the defendants, the order said.  The defendants had given the court evidence that showed Davis Polk was charging rates consistent with those charged by similar firms, Judge Willis said.

The plaintiffs had also argued that the fees were too large for them to pay, with Despins and Paul Hastings retorting that it seemed like they were being bankrolled by Kwok, a self-described billionaire, and so should not have trouble paying.  Judge Willis sided with the defendants, because An and the others hadn't given the court evidence that they couldn't pay, she said.

A recent Law 360 story by Emily Johnson, “Ga. Panel Finds $43M Trust Not On Hook For Legal Fees”, reports that the Georgia Court of Appeals rejected a request from beneficiaries of a $43 million furniture fortune, finding that the trust's ex-trustees should not be saddled with attorney fees and litigation costs while the trust's beneficiaries sued them for allegedly mishandling the trust and overpaying themselves.

At the same time, an appellate panel said that former trustees Phillip Faircloth and Ted Sexton were not faced with a threat of irreparable injury, so the lower court erred in granting the interlocutory injunction that ordered the trust to pay for Faircloth and Sexton's attorney fees while the trust sues them.  The lower court's interlocutory injunction required the current trustees to take up the cost of the former trustees' legal battle, including attorney fees and litigation costs.  "In sum, the record lacks evidence to support a finding that the interlocutory injunction is necessary to prevent an irreparable harm having no adequate legal remedy," the appellate panel said.

Beneficiaries of a trust tied to furniture tycoon Sherwin Glass, who founded Farmers Furniture Co., sued Faircloth and Sexton in 2017.  The appellate court panel found that because the trust has been lending money to Faircloth and Sexton for their legal costs, they were not harmed, a requirement for an interlocutory injunction.  "Due to the loan by Farmers, they have not been harmed by going unrepresented, and any monetary harm can be remedied by repayment of interest paid pursuant to the loan," the appellate panel said.

The appellate panel left in place a lower court's rejection of the request that the former trustees reimburse the trust about $4.6 million in legal fees that had already been paid.  This is the third time the case has been before the state's Court of Appeals, according to the decision.

Counsel for the Glass Dynasty Trust told the panel in September that the injunction required the trust to pay 50% of attorney fees and costs incurred by two of the firms representing Faircloth and Sexton, as well as 100% of the fees incurred by another, within 14 days of receiving an invoice.

Representing Faircloth and Sexton, J. Randolph Evans, partner at Squire Patton Boggs LLP, told Law360 Pulse on Monday that the court's decision is one of the biggest decisions this year in the state, saying this has "turned indemnity/insurance law on its head."

"The whole purpose of us having [a] duty to defend is so we don't have to front money to the lawyer," Evans said. "They pay the lawyer. Now they're saying, you pay the lawyer, and sue the insurance company and get back the money."  Evans said that the decision means that the former trustees and others won't be able to enforce a duty to defend from insurance carriers or indemnitors unless you can't pay for your defense.

The implications of the panel's decision for Georgia are enormous, he said.  "They went one step further, which made people really react," Evans said. "It's not just that you don't have the money; if you can borrow the money, you can't enforce the duty to defend."

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