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Category: Fee Expert / Member

Fee Expert John O’Connor Wins 60 Percent Fee Reduction in Federal Court

January 11, 2019

In a case in the U.S. District Court for the Central District of California, Jayantibhai Patel, et al. v. City of Long Beach et. al., NALFA member John D. O’Connor of O’Connor & Associates in San Francisco served as an expert witness on the reasonable of attorney fees on behalf of the non-prevailing party, the City of Long Beach.  Plaintiffs’ attorney Frank Weiser requested $344,000 in fees for prevailing in a claim against the City of Long Beach that its ordinance allowing unannounced inspection of hotel records amounted to an unreasonable search and seizure. 

Attorney fee expert John O’Connor recommended the fee request at $122,000.  The court ultimately awarded $143,880 in attorney fees, reducing plaintiffs’ fee request by 60 percent.  The court keyed in on several issues raised by O’Connor.  U.S. District Judge Andre Birottee cited John O’Connor’s expert declaration several times in the fee ruling.  On hourly rates, Judge Birotte, said, “The Court finds Mr. O’Connor analysis more compelling”. 

For more on John O’Connor, visit www.joclaw.com.

Federal Judge to Hear Attorney Fee Expert in Acacia Fee Dispute

December 27, 2018

A recent Law 360 story by Aaron Leibowitz, “Mass. Judge to Hear Expert in $1.75M Acacia Atty Fee Fight,” reports that a Boston federal judge said he wants to hear from an expert before deciding a dispute over a $1.75 million attorneys’ fee proposition from Acacia Communications Inc. shareholders, but approved a settlement between the shareholders and the fiber optics company in their insider trading case.  In putting forward that figure, the shareholders' attorneys said the internal reforms proposed in the settlement deal would increase stockholder value.  They filed a declaration by Harvard Law School scholar Matthew D. Cain, who estimated the changes would net between $68 million and $82 million for Acacia shareholders.

U.S. District Judge William G. Young said that he would like to hear from Cain directly as he tried to put a dollar value on work in a settlement that is not monetary, but rather involves changes to the oversight of insider trading at Acacia.  "I will be more comfortable having heard this expert," Judge Young said, noting that Acacia's attorneys would be allowed to cross-examine the expert.  He was skeptical of a request by Acacia to depose the scholar before he appears in court, but said he would consider it.

The consolidated cases set to be resolved allege that Acacia executives and private equity backers obtained early releases from insider trading agreements, allowing them to sell off their shares two weeks before announcements from the company's two largest customers led to a significant drop in Acacia's stock price.

"You say you are the catalyst that caused [these reforms] to be put in place," Judge Young said to the shareholders' attorneys.  "How are you gonna value it?"

Geoffrey Johnson of Scott & Scott Attorneys at Law LLP, representing the shareholders, said it's more of an art than a science, but he said the Harvard expert used "very conservative assumptions" on how the reforms would boost Acacia's worth.  In a court filing last month, the shareholders' attorneys said they expended nearly 1,690 hours on the case and used a multiplier of 1.72 to calculate the award.  They asked to be reimbursed for about $34,000 in expenses.

But Acacia has said the $1.75 million calculation is unreasonable, pointing to a settlement in a recent case involving internal reforms at Aveo Pharmaceuticals in which the plaintiffs requested over $800,000 in attorneys' fees, but were instead awarded about $200,000 by U.S. District Judge Denise J. Casper, also in Boston.  "The requested fee here is just way too high," Daniel Halston of WilmerHale, representing Acacia, told the judge. "It's just out of bounds."

Judge Young said he had no issue with the settlement itself.  He rescheduled an afternoon hearing to the morning so he could hear arguments on the fees first, but held the afternoon session in case anyone showed up to object to the deal.  When no one objected — the only people in the gallery were a lawyer and a reporter — the judge gave his formal approval.

The case is Tharp et al. v. Acacia Communications et al., case number 1:17-cv-11504, in the U.S. District Court for the District of Massachusetts.

Special Fee Master Recommends $500M in Fees in Syngenta MDL

November 27, 2018

A recent Law.com story by Amanda Bronstad, “Syngenta Special Master Rejects $150M in Fees for Texas Attorney Mikal Watts,” reports that a special master reviewing fee requests from hundreds of law firms in the $1.51 billion settlement with Syngenta has recommended that lead counsel get half the estimated $500 million in legal fees but rejected the idea that attorney Mikal Watts, who represents 60,000 farmers in the deal, should get $150 million.

U.S. District Judge John Lungstrum on Nov. 15 approved the class action settlement, which resolved lawsuits alleging Syngenta sold genetically modified corn seed that China refused to import, causing about 600,000 farmers and other producers to lose billions of dollars.  Lungstrum oversaw the multidistrict litigation coordinated in Kansas federal court, but many other cases were pending in federal and state courts in Minnesota and Illinois.  Some were class actions, while others were individual lawsuits.  That led to a big battle over attorney fees. On Nov. 21, special master Ellen Reisman issued a report and recommendation on how to allocate fees to about 400 law firms.

“Here, the settlement agreement recognizes that the successful result in this case was obtained through the work of multiple counsel in multiple jurisdictions who collectively applied litigation pressure in multiple forums that ultimately persuaded Syngenta to resolve the various litigations through a nationwide class action settlement,” wrote Reisman, of Reisman Karron Greene in Washington, D.C. “How to allocate the attorneys’ fee award among plaintiffs’ counsel is less straightforward.”

Objections to the report are due Dec. 5, and a hearing is set for Dec. 17.  Reisman’s report largely reflects a suggestion from lead counsel in the multidistrict litigation in Kansas on how to divvy up the fees, much of which was based on a fee sharing agreement in the settlement.  Although other lawyers played key roles in reaching the settlement, 50 percent of the fees should go to 95 law firms in the multidistrict litigation in Kansas, Riesman wrote.  That included lead counsel Patrick Stueve of Kansas City, Missouri-based Stueve Siegel Hanson; Don Downing of Gray, Ritter & Graham in St. Louis; Scott Powell of Hare, Wynn, Newell & Newton in Birmingham, Alabama; and William Chaney of Dallas-based Gray Reed & McGraw.

Reisman particularly praised the work of a lead settlement counsel Chris Seeger of New York’s Seeger Weiss.  “Mr. Seeger was the clear leader of the settlement effort on the plaintiffs’ side, and without his efforts a settlement would not have been achieved,” she wrote.  She rejected arguments from Watts, of Watts Guerra in San Antonio, that he and a group of 224 associated law firms, representing primarily individual farmers with cases in Minnesota state court, should get one third of the pie.

The dispute mirrors similar fee fights that have erupted in mass torts between plaintiffs attorneys appointed to represent the class and those who have brought individual suits on behalf of their clients.  Reisman, in her report, acknowledged those other cases, predominantly the $1 billion concussion settlement with the National Football League.  In that case, she wrote, the judge allowed some portion of attorney fees to go to lawyers with individual clients, and not just lead class counsel, but capped their contingency rates.  “There is significant legal support for the proposition that the courts have the required personal and subject-matter jurisdiction and the legal and equitable authority to modify contingent fee arrangements,” she wrote.

But she found that the Syngenta litigation had some key differences—most notably, the pressure that a large chunk of individual cases had on reaching a settlement.  In her report, she wrote that “no single event or group of plaintiffs’ counsel was solely responsible for pushing this litigation to resolution.”

The Syngenta multidistrict litigation, created in 2014, involved subclasses of farmers in eight states planned for trials.  Last year, a mistrial aborted the first bellwether trial, in Minnesota, but a federal jury awarded $217.7 million to a class of Kansas farmers in a second trial.  Another trial, on behalf of a class of Minnesota farmers, was ongoing when both sides struck a deal.

Watts Guerra partner Francisco Guerra was co-lead plaintiffs counsel in Minnesota state court, but no one from the firm had a lead role in the multidistrict litigation.  The firm did work on the Minnesota trial, however, and Watts was one of four lawyers appointed to the plaintiffs’ negotiating committee.  Watts did not sign the fee sharing agreement in the settlement but instead based his request on a 2015 joint prosecution agreement with lead counsel in the multidistrict litigation.  He calculated his request using a reduced contingency rate of less than 24.2 percent and $12.8 million in reimbursements for common benefit expenses he paid in the Minnesota state court litigation.

His request for fees got some pushback.  Some lawyers representing individual farmers, including one who filed a lawsuit with Watts earlier this year, accused the Texas lawyer of cutting them out of negotiations and luring farmers to retain him in order to get fees. Watts called the suit “frivolous.”

In court documents, lead counsel in the multidistrict litigation argued that the 2015 joint prosecution agreement had nothing to do with the class actions and would set Watts up to get as much as $200 million.  They sought 50 percent of the $500 million, with Seeger Weiss getting at least 10 percent, but suggested that 12.5 percent go to the lead lawyers in Minnesota state court and 17.5 percent to attorneys in Illinois.  The remaining $100 million would be reserved for other lawyers.

Reisman agreed on the 50 percent and, as to the arguments from Watts, found that the 2015 agreement was “irrelevant” to the fee award in a nationwide class action.  But she doubled the allocation to the Minnesota group, which includes Watts, assigning 24 percent, or about $120.8 million.

“Unquestionably, the Minnesota state court litigation both advanced the cause of pressuring Syngenta on multiple fronts and, through coordination with Kansas counsel, assisted the nationwide class effort,” Reisman wrote.  Lawyers in the Illinois cases, whose award totaled $80.5 million, or about 16 percent, “presented an important third pressure point on Syngenta,” she wrote.

She also allocated 10 percent to lawyers with individual clients, capping their contingency rates at 10 percent.  She said most of those firms recruited clients and filled out fact sheets, while lawyers in leadership in Kansas, Minnesota and Illinois did the “vast majority” of the work.  “A 10 percent contingent fee is obviously a significant reduction from the typical 30-40 percent contingent fee,” she wrote. “However, it is appropriate given the history of this litigation.”

Attorneys Awarded $300M in Fees in Forex Price Fixing Settlement

November 8, 2018

A recent New York Law Journal story by Colby Hamilton, “Attorneys Awarded $300M in Fees in Bank Exchange Fee Settlement” reports that U.S. District Judge Lorna Schofield of the Southern District of New York knocked more than three-and-a-half percentage points off the requested attorney fees in the blockbuster $2.3 billion settlement over price-fixing by banks in the foreign exchange market, but that still left the lawyers for the 15 consolidated cases with more than $300 million in approved fees.  As the court noted, the litigation involved several hundred attorneys working over the course five years, resulting in what the plaintiffs claim is the third largest antitrust class action settlement in history.

Class counsel, led by co-lead counsel from Scott + Scott and Hausfeld LLP, were already awarded $22.5 million for litigation expenses.  Schofield granted counsel 13 percent of the settlement fund for attorney fees—which was less than the 16.51 percent sought.  Schofield noted that two class members objected to the proposed fee as being “grossly excessive,” while requesting a fee of no more than 8 percent.  Schofield found that the experts presented by the plaintiffs ultimately showed that comparable settlements of such size had a regressive percentage attached to them, noting that a pair of settlements that exceeded $3 billion had the smallest fee percentages, under 10 percent.

In looking at risk, results and policy consideration, the judge also found that “nothing in the record … indicates that this case is exceptional” when compared with similar cases.  Notably, Schofield pointed to government investigations and criminal prosecutions relating to price-fixing in the foreign exchange market that laid substantial groundwork ahead of the litigation.  Finally, Schofield’s cross-check against the lodestar multiplier, which she said stood at 1.72 and was “within the typical range for megafund cases.”

Law Firms Seek $90M in Fees in Illinois State Farm Judicial Election Case

October 17, 2018

A recent Law 360 story by Diana Novak Jones, “Lieff Cabraser, Others Want $90M in State Farm Judge Case,” reports that Lieff Cabraser, Clifford Law Offices and several other firms have asked for $90 million in fees and expenses for their work representing a class of State Farm customers who settled claims the insurance giant rigged an Illinois judicial election for $250 million.  Counsel for a class of nearly 5 million policyholders who filed a Racketeer Influenced and Corrupt Organizations Act suit against State Farm said that their work on the unusual and contentious litigation — which brought claims straight out of the pages of a legal thriller — warranted a fee award of more than $83 million and another $7 million in expenses.

The suit's allegations date to the late 1990s, when State Farm was hit with a more than $1 billion verdict in a separate class action over crash repairs.  After appealing that judgment to the Illinois Supreme Court, the company funneled millions into the campaign coffers of a candidate for an open seat on the court in order to buy his vote to overturn — and then lied about it in court filings, the suit claimed.  State Farm and the policyholders settled on Sept. 4, the same day opening statements were scheduled to begin, with State Farm agreeing to pay $250 million to resolve the litigation that class counsel said was a hard-fought longshot.

Taking that and the opinions of three experts on attorneys' fees into account, "Class counsel's request is reasonable, customary, and even conservative in large and complex cases like this one — and is fully supported by both the facts and law," they told U.S. District Judge David Herndon.

Class counsel asked for 33.3 percent of the $250 million, which comes out to more than $83.3 million, including interest accrued, but excluding the cost of settlement administration.  They also requested $6,971,852 in expenses, which covered the cost of experts, consultants, document review and more, according to their motion.  Each of the three named plaintiffs should receive $25,000 for their work over the past six years, class counsel added.

The insurance company will not oppose the fee request, State Farm spokesman Jim Camoriano said.  As part of the terms of the settlement, State Farm agreed to leave the question of fees to the judge, he said.  The one-third fee request is not unusual in this circuit for cases this unique or involved, class counsel told the judge.

The allegations surrounding Illinois Supreme Court Chief Justice Lloyd Karmeier and his election to the state's highest court were likely the first time a RICO suit has been filed over so-called "dark money" in judicial elections, class counsel said.  And the alleged scheme was uncovered by class attorneys and their investigators, which is rare, the attorneys said.  Overall, class counsel spent more than 55,000 hours on the case, which translates to about $30 million in lodestar, according to the filing.

Also, the class asked Judge Herndon to give the final go-ahead to the settlement ahead of the scheduled Dec. 13 fairness hearing.  The $250 million figure was reached after several attempts at mediation, three trips to the Seventh Circuit, dozens of depositions and two rounds of summary judgment motions, they said in urging the judge to approve the deal.  After the fees and awards, the remainder of the cash will be divvied up evenly among the class members.  Many in the class will receive their payments automatically, while others will have to file a claim form, according to class counsel.

The case is Hale et al. v. State Farm Mutual Automobile Insurance Co. et al., case number 3:12- cv-00660, in the U.S. District Court for the Southern District of Illinois.