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Category: Fee Reduction / Fee Denial

Attorneys Get Fraction of Fee Request in FACTA Settlement

November 27, 2017

A recent Law 360 story by Melissa Daniels, “UCLA Shoppers’ Attys Get Fraction of Fees Ask in FACTA Deal,” reports that a California judge said he’d award plaintiffs’ attorneys only about 6 percent of their requested fees for representing consumers in the settlement of a Fair and Accurate Credit Transaction Act class action against UCLA, after noting in his tentative ruling that “when lawyers accomplish little, they deserve little.”
Los Angeles County Superior Court Judge John Shepard Wiley Jr. had already granted preliminary approval to a settlement over receipts printed at the University of California, Los Angeles with a projected total value of nearly $1.2 million.  But after an underwhelming number of claims yielded about $20,000 in payouts, the parties negotiated to have about $830,000 of unclaimed funds be designated as cy pres awards to support privacy- and finance-related programs at the university.

After reviewing this outcome, Judge Wiley issued a tentative ruling on that took issue with the fact that the funds were staying within the realm of the university instead of benefiting any class members.  “This isn’t even a revisionary settlement, the money doesn’t revert,” he said. “It just stays.”

As a result of the perceived puffed-up value, Judge Wiley calculated the attorneys’ fees off of a $40,000 settlement value, awarding $13,333 instead of the $227,000 that was requested.  Judge Wiley’s tentative ruling, which he said he would adopt after making a few grammatical tweaks, also cut named plaintiff Cindy Fernandez’ class representative award from $5,000 to $500.  A final report will be due next year.

The suit, filed in March, said UCLA accepted credit and debit cards from at least 1,000 putative class members who made purchases at its establishments in Los Angeles, but that the machines at its points of sale gave receipts that showed an unlawful amount of card number digits — including some receipts that showed the first six and last four numbers of shoppers’ cards and others that showed the first and last four digits.

UCLA said the misprints stemmed from software vendors that the university reasonably relied upon to comply with applicable law — and it also cited its possible immunity as a public institution. Yet the school agreed to settlement without admitting liability to avoid the burdens of litigation, according to settlement documents.

The motion for final approval said the parties determined four programs to benefit from the nearly $830,000 in unclaimed funds: programs for privacy awareness and financial wellness, counselors for students in economic crises, funding for academic courses on privacy and funding and a security audit for the ASUCLA, the student-controlled, nonprofit organization that provides retail and student union services.

Daniel Gaines of Gaines & Gaines APLC, who represents the plaintiffs, defended the “important, worthy goals” of the cy pres programs and said that while he understood Judge Wiley’s point, he still sees the value of the deal at approximately $1.2 million.  “When you’re talking about the university, it’s a little different than when you’re talking about a private corporation,” Gaines said. “This money that’s being spent on projects, it’s projects that otherwise wouldn’t have been expended on.”

The case is Cindy Fernandez v. The Regents of the University of California et al., case number BC656256, in the Superior Court of the State of California for the County of Los Angeles.

Class Counsel for Pharmacies Challenge Attorney Fee Reductions

November 15, 2017

A recent Law 360 story by Diana Novak Jones, “Class Attys Fight Fee Cut at 7th Circ. In Pharmacy TCPA Row,” reports that counsel for a class of pharmacies asked the Seventh Circuit to allow them to collect what a pharmaceutical distribution company agreed to pay after a federal judge slashed attorneys’ fees and the plaintiffs’ incentive awards negotiated as part of a settlement in a Telephone Consumer Protection Act (TCPA) class action.

Counsel for the class of pharmacies that say they received unsolicited faxes from Cochran Wholesale Pharmaceutical Inc. told the appellate court the district court’s decision to reduce their fees and the named plaintiffs’ incentive awards unfairly allowed Cochran to dodge the full amount it said it would pay to exit the suit.

Class counsel Phillip Andrew Bock of Bock Hatch Lewis & Oppenheim LLC told the courtmthat U.S. District Judge Staci Yandle’s decision to base the fees on the amount class members actually claimed and not the amount Cochran agreed to pay put money back in Cochran’s pocket.  Cochran agreed to pay $233,333 in attorneys’ fees and $15,000 to each named plaintiff, but Judge Yandle reduced the fees to just more than $73,000 and the incentives to $1,000 each.

The incentive award in this case is “actually a disincentive,” Bock told the Seventh Circuit, “because the amount is actually less than the person could get [if they sued] as an individual.”  The 2016 suit accused Cochran, a Georgia-based pharmaceutical distribution company, of sending unsolicited faxes advertising its services to pharmacies in violation of the TCPA.

The parties went to mediation not long after the suit was filed, and some discovery revealed that the company may have sent the advertisements to 16,846 different fax numbers between April 19, 2012, and Nov. 1, 2016.  A settlement was reached, and Cochran agreed to pay up to $700,000. That cash would cover $125 per claim from each class member, $233,333 in attorneys’ fees and $15,000 to each named plaintiff, according to the settlement agreement.

Judge Yandle granted the deal preliminary approval, and notice was sent to the more than 16,000 class members.  Of those, 1,765 submitted claim forms, resulting in $220,625 in payments.

In April, Judge Yandle granted the settlement final approval but reduced the fees and incentives.  She used the amount paid out to class members to calculate the one-third portion going to attorneys, resulting in a fee award of $73,468, and cut the plaintiffs’ incentives down to $1,000 because the case didn’t require much of their input.

Sitting on the panel, Circuit Judge Diane Sykes told Bock she thought the court’s holding in another TCPA junk fax case made it so class counsel couldn’t collect on the full $700,000 Cochran agreed to pay.  The ruling found that TCPA cases create discrete injuries, so calculating attorneys’ fees based on a common fund doesn’t work here, she said.

The case is Camp Drug Store, Incorporated v. Cochran Wholesale Pharmaceutical Inc., case number 17-2086, in the Seventh Circuit Court of Appeals.

CA Court: No Fee Multiplier for “Fees for Fees” in Private Attorney General Action

November 8, 2017

A recent Met News story, “Enhancement Based on ‘Risk’ Inapplicable in Seeking ‘Fees on Fees’ Award—C.A.” reports that an attorney fee award in connection with work done in securing fees in a private attorney general action would logically not be enhanced based on “risk,” the Court of Appeal for this district held.  The decision came in a case in which trial court ordered the state to pay $836,211.25 in attorney fees to lawyers for work they did in defending previous attorney fee awards in the case, a case which stretches back to the filing of a complaint on June 20, 1978, and includes a decision by the California Supreme Court.  It was alleged in the class action that the state unconstitutionally collected higher vehicle license fees and use taxes on vehicles purchased out of state.

The state appealed the latest fee awards, divided among three firms and one sole practitioner, now located in Houston; the sole practitioner and plaintiff, Patrick G. Woosley, cross appealed.  Broken down, the awards were: $14,332.50 to Jones, Bell, Abbott, Fleming & Fitzgerald L.L.P, $80,010 to the Gansinger Firm, $15,600 to the Law Offices of John F. Busetti, and $70,000 to Woosley.

Writing for Div. Five, Justice Lamar Baker said Los Angeles Superior Court Judge Stephanie M. Bowick did not abuse her discretion in making the awards.  With respect to the enhancements Woolsey sought in connection with the risk a lawyer in a private attorney general action takes that no fees will be ordered, should there be a lack of success, and based on a delay in payment, Baker wrote:

“[W]e conclude the trial court’s decision not to enhance Woosley’s fee award for risk and delay was not error.  By the time Plaintiffs’ Counsel applied for the attorney fees at issue here, their entitlement to an award of some amount was all but inevitable (notwithstanding the State’s arguments to the contrary) based on their success in the underlying litigation and their earlier fee award…. Thus, the trial court did not abuse its discretion in failing to enhance Woosley’s award for risk.”

He went on to say that while a small enhancement based on delay in payment is permissible, being akin to interest, the award is discretionary.  Woosley contested deductions Bowick made from the amount he requested, but Baker declared:  “The court’s method and results were both sound.”

Bowick rebuffed the state’s contention that the attorneys were entitled to no further fees.  She cited the California Supreme Court’s 1982 decision in Serrano v. Unruh (Serrano IV) for the proposition if a party has received attorney fees in a private attorney general action, pursuant to Code of Civil Procedure §1021.5, entitlement to fees in connection with gaining fees follows.

In that decision, the high court said: “We conclude that, absent circumstances rendering an award unjust, the fee should ordinarily include compensation for all hours reasonably spent, including those relating solely to the fee.”

Woosley initially scored a victory in the trial court.  Then-Los Angeles Superior Court Judge Lester M. Olson awarded $13.7 million to class counsel and $1 million in fees to Woosley “for services rendered as class representative.”  The state appealed from a judgment in favor of the two classes Olson certified, and Woosley appealed from the denial of fees for his legal services.  The Court of Appeal affirmed the judgment for the classes and reversed the denial of fees for Woosley’s legal work.

The California Supreme Court in 1992 affirmed and reversed the Court of Appeal.  Then-Chief Justice Ronald George (now retired) wrote: “[W]e hold the state violated the commerce clause of the United States Constitution by imposing vehicle license fees and use taxes on vehicles originally sold outside California that were higher than the fees and taxes charged on similar vehicles first sold within the state….

“[W]e hold the class claim filed in this case was not authorized by statute. That claim is valid only as to Woosley in his individual capacity.  Although our ruling does not automatically preclude continuation of this suit as a class action, the class may include only persons who timely filed valid claims for refunds.”  George noted that under the judgment as it stood, refunds, according to the state’s reckoning, would amount to more than $1 billion.  He also noted that the state had ceased its discriminatory practice on 1976.

The chief justice added: “Because our opinion will result in a substantial reduction in the amount of the judgment, the trial court shall reconsider the amount of its award of attorney fees to counsel for the class and the amount of its award to Woosley ‘as fees for services rendered as class representative.’”

On remand, there came a $23 million attorney fee award, with costs, which the Court of Appeal in 2010 reversed because consideration had not given “any consideration to the lack of success.” In 2014, the trial court pared the award to $2.8 million, and the lawyers appealed.

The case is Woosley v. State of California, B275402.

Attorney Fees Awarded in Skim Milk Labeling Case

October 23, 2017

A recent Daily Business Review story by Catherine Wilson, “$437,000 in Legal Fees Flow From All-Natural Skim Milk Fight” reports that a judge awards fees to two Miami attorneys who lost a skim-milk labeling case at the trial court level and won on appeal.  Florida has agreed to pay $428,855 in legal fees to pro bono attorneys who beat the state on a First Amendment skim-milk labeling dispute filed by a natural-foods creamery.

Mary Lou Wesselhoeft of Ocheesee Creamery was represented by two Miami attorneys at the Institute for Justice, a nonprofit libertarian public interest law firm based in Virginia.  The Florida Panhandle milk producer “felt like she was banging her head against the wall” and sued state Agriculture Commissioner Adam Putnam for rejecting the proposed label, Justin Pearson wrote in his motion for fees.

The state asked for a fee reduction, claiming the creamery met with only limited success.  U.S. District Judge Robert Hinkle concluded, “As a practical matter, the plaintiff prevailed completely.”

Regulations require producers to add vitamins to meet the definition of skim milk.  An injunction gives the dairy “the right to sell in Florida vitamin-deficient skim milk and call it skim milk,” the judge wrote.  The fee question returned to Hinkle, who ruled against the creamery after the U.S. Court of Appeals for the Eleventh Circuit rejected state arguments.

“Having initially ruled the the plaintiff’s claim was unfounded, I have no difficulty now concluding that the plaintiff’s attorneys did excellent work to achieve an excellent result in a difficult case,” Hinkle said following the reversal.

The judge accepted as reasonable hourly rates of $375 for Pearson, $275 for attorney Ari Bargil and $125 for paralegal Rebekah Ramirez.  The state objected to the claimed fee, and Hinkle cut the hours about 2 percent.

In the litigation, the state insisted Ocheesse’s’ product without the vitamins was “imitation” skim milk and wanted the Ocheesee label to use that word.  Pearson called the decision “the first of a kind in litigation regarding food labels.”  He noted no Tallahassee attorneys would take the case against the state agency.

Law Firm Resolves Fee Dispute in Sungevity Chapter 11 Bankruptcy

October 9, 2017

A recent Law 360 story by Matt Chiappardi, “MoFo Resolves Fee Dispute in Sungevity Ch. 11” reports that Morrison & Foerster LLP resolved its fee dispute with bankrupt rooftop solar firm Sungevity Inc.’s buyer and post-petition lender, agreeing to reduce its bid by $25,000 and clearing the way for its total request of about $2.5 million for the roughly six-month-long case.

During a hearing in Wilmington, U.S. Bankruptcy Judge Kevin Gross agreed to approve the fee requests from both Morrison & Foerster and restructuring adviser AlixPartners LLP, both of which worked on Sungevity’s case, after hearing that a dispute with Solar Spectrum Holdings LLC was resolved after giving the parties some time to hammer out a deal.  “There are no longer any objections to the fee applications,” Sungevity attorney M. Blake Cleary of Young Conaway Stargatt & Taylor LLP told Judge Gross after returning from a recess called so the sides could negotiate.

Under the deal both Morrison & Foerster and AlixPartners would reduce their fee bids by $25,000 apiece and neither would bill for having to defend their applications.  The parties are expected to file their final proposed orders for fees, which Judge Gross agreed to sign.

The fees became a disputed issue in the case last week, when Solar Spectrum asked the court to cut about $304,000 from a $1.6 million Morrison & Foerster bill and nearly $183,000 from a $1.1 million AlixPartners bill, arguing that the money was for duplicative and unnecessary work.

The case is In re: Sunco Liquidation Inc. et al., case number 1:17-bk-10561, in the U.S. Bankruptcy Court for the District of Delaware.

Seventh Circuit Cuts Fee Award in Half

August 18, 2017

A recent NLJ story by Amanda Bronstad, “Fees in Class Action Over Moldy Washing Machines Nearly Halved,” reports that a federal appeals court has slashed plaintiffs' attorney fees by nearly half...

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