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Category: Challenging Fees

Feds Oppose Environmental Groups Fee Request in Fracking Case

September 4, 2019

A recent Law 360 story by Michael Philliis, “Feds Slam Enviros’ Atty Fees Bid in Offshore Permit Case,” reports that the Environmental Defense Center and another group that successfully blocked fracking permits for offshore California are prematurely seeking attorney fees, inflating their billing, and seeking reimbursement for matters on which they lost, the federal government told a California federal court.  Not only did the EDC and Santa Barbara Channelkeeper ask for attorney fees before a slew of complicated issues can be hashed out on appeal, but their request also represented an inflated bid to recover money that should never be the taxpayers' obligation to pay, the government said in a brief opposing the groups' fee request.

The environmental groups' hourly rate was allegedly puffed up; they billed some duplicated hours; they wanted reimbursement on claims that had been dropped or where they had lost; and they asked for costs that weren't allowed, including more than 10,000 pages of copying that the federal government painted as outlandish, according to the brief.  And no, talking to the media isn't something the groups can charge the government for, the response said.

"It makes little sense at this time to invest more of the court's or the parties' time and effort into briefing and deciding whether an award of fees under the [Endangered Species Act] is appropriate and, if so, what the amount of any award should be," the government said, asking the court to stay the fees request.  "The myriad potential outcomes on appeal counsel against the duplication of effort inherent in addressing the issue of fees now."

In November, U.S. District Judge Philip Gutierrez blocked the federal government from approving any offshore fracking permits in the state in a consolidated case brought by environmental groups and California.  He said the Bureau of Ocean Energy Management and the Bureau of Safety and Environmental Enforcement violated the Endangered Species Act and another law in crafting an environmental assessment of a plan to allow offshore well-stimulation treatments, also known as fracking or acidizing, in the state.  The BOEM and BSEE violated the ESA by failing to consult with other parts of the government, the judge said.

The Ninth Circuit will now hear appeals and cross-appeals in the case.  Any number of decisions in that venue could impact a fee award, and the EDC and Santa Barbara Channelkeeper moved too soon in their request for money, according to the government.  The move "risks putting the court in the awkward position of having to supervise plaintiffs' repayment in the event that federal defendants prevail on appeal," the government's brief said.

The environmental groups asked for $360,263.  The government, while noting that not all the environmental groups had requested attorney fees, said if the court does decide to award fees, it should provide a maximum of $229,814.  While the environmental groups won on their ESA claims, they lost on their National Environmental Policy Act claims and should not be paid for that part of their work.  The government also said that nearly 25 of the hours requested were duplicative and represented hours when multiple attorneys conferred.

The EDC and Santa Barbara Channelkeeper submitted their request in early August.  After winning the case, they argued the ESA provides them an opportunity to collect fees and costs.  "Plaintiffs achieved the requisite degree of success on their ESA claims" to make a fee award appropriate, they argued.  They added that the request was correct and that they had reduced the amount of hours in their request to make sure it was reasonable and did a line-by-line review to ensure that the time billed wasn't inflated.

Margaret Morgan Hall, an attorney for the Environmental Defense Center, called the government's framing of the fee request "overstated and incorrect."  "We are only seeking recovery of reasonable hours spent on the litigation, after taking significant reductions of our time to avoid any potential duplication of hours.  We likewise only seek to recover reasonable costs that we are entitled to under the Endangered Species Act citizen suit provision," Hall said in an email to Law360.

NALFA Announces The Nation’s Top Attorney Fee Experts of 2019

August 20, 2019

NALFA, a non-profit group, has a network of attorney fee expertise. Our network includes members, faculty, and fellows with expertise on the reasonableness of attorney fees.  We help organize and recognize qualified attorney fee experts from across the U.S. and around the globe.  Our attorney fee experts include court adjuncts such as bankruptcy fee examiners, special fee masters, and fee dispute neutrals.

Every year, we announce the nation's top attorney fee experts.  Attorney fee experts are retained by fee-seeking or fee-challenging parties in litigation to independently prove reasonable attorney fees and expenses.  The following NALFA profile quotes are based on bio, CV, case summaries and case materials submitted to and verified by us.  Here are the nation's top attorney fee experts of 2019:

"The Nation's Top Attorney Fee Expert"
John D. O'Connor
O'Connor & Associates
San Francisco, CA
 
"Over 30 Years of Legal Fee Audit Expertise"
Andre E. Jardini
KPC Legal Audit Services, Inc.
Glendale, CA
 
"Outstanding Skills Assessing Reasonable Attorney Fees in Class Actions"
Stephen J. Herman
Herman Herman & Katz LLC
New Orleans, LA

"The Nation's Top Bankruptcy Fee Examiner"
Robert M. Fishman
Fox Rothschild LLP
Chicago, IL

"Widely Respected as an Attorney Fee Expert"
Elise S. Frejka
Frejka PLLC
New York, NY
 
"Experienced on Analyzing Fees, Billing Entries for Fee Awards"
Robert L. Kaufman
Woodruff Spradlin & Smart
Costa Mesa, CA

"Highly Skilled on a Range of Fee and Billing Issues"
Daniel M. White
White Amundson APC
San Diego, CA
 
"Strong on Fee and Billing Issues in Mass Torts"
Craig W. Smith
Robbins Arroyo LLP
San Diego, CA
 
"Highly Experienced in Dealing with Fee Issues Arising in Complex Litigation"
Marc M. Seltzer
Susman Godfrey LLP
Los Angeles, CA

"Total Mastery in Resolving Complex Attorney Fee Disputes"
Peter K. Rosen
JAMS
Los Angeles, CA
 
"Understands Fees, Funding, and Billing Issues in Cross Border Matters"
Glenn Newberry
Eversheds Sutherland
London, UK
 
"Solid Expertise with Fee and Billing Matters in Complex Litigation"
Bruce C. Fox
Obermayer Rebmann LLP
Pittsburgh, PA
 
"Excellent on Attorney Fee Issues in Florida"
Debra L. Feit
Stratford Law Group LLC
Fort Lauderdale, FL
 
"Nation's Top Scholar on Attorney Fees in Class Actions"
Brian T. Fitzpatrick
Vanderbilt Law School
Nashville, TN
 
"Great Leader in Analyzing Legal Bills for Insurers"
Richard Zujac
Liberty Mutual Insurance
Philadelphia, PA

Novartis Attacks $3M Fee Request in Whistleblower Case

July 5, 2019

A recent Law 360 story by Bill Wichert, “Novartis Attacks $3M Atty Fees Bid in Whistleblower Case,” reports that counsel for Novartis told a New Jersey state court that an attorney fees award to a former company executive who prevailed on a whistleblower claim at trial should be cut in half because the pharmaceutical giant succeeded on its unjust enrichment counterclaim against her.  More than three months after jurors handed a roughly $1.8 million whistleblower award to Min Amy Guo, Novartis Pharmaceuticals Corp.'s attorneys said her lawyers' more than $3 million in proposed fees should be reduced for various reasons, including because the jury also awarded nearly $350,000 to Novartis on the counterclaim after concluding she violated company policy.

"There is nothing in New Jersey jurisprudence, there is nothing in American jurisprudence that supports a fee-shifting provision being applied to compensate plaintiff's counsel on a count that she was not successful in," Novartis attorney Patricia Prezioso told Superior Court Judge Louis S. Sceusi during oral arguments on the fees application.  Beyond the 50% "limited success" reduction, Novartis is seeking additional cuts in the proposed fees.

The judge acknowledged he "can't pay the plaintiff for losing the unjust enrichment claim," but questioned the company's proposed 50% reduction for Guo's limited success at trial.  "How do you come up with 50%?  How is that more justified than 20%, 30%?” Judge Sceusi asked Prezioso.

Prezioso pointed to the substantial amount of trial testimony that focused on Guo's policy violations, saying "unjust enrichment and the policy violations ... was far more than 50% of the case."  "It was more like 80% of the case," said Prezioso, adding that "asking for 50%, in light of the fact that we prevailed on that and there's no support for fee-shifting ... when they lost on a claim, is fair."

But Guo attorney James K. Webber countered that she is entitled to reasonable attorney fees as the prevailing party on her state Conscientious Employee Protection Act claim, and the award should not be cut because she lost on the unjust enrichment counterclaim.  Webber argued that the issues underlying both claims were the same, since Guo's purported policy violations constituted the company's defense to her whistleblower claim.  "There's certainly no support for defendant's position," Webber told the judge.

The former executive director of the health economics and outcomes research group at Novartis, Guo said she was fired in retaliation for objecting to a proposed study by pharmaceutical distribution company McKesson Corp. of Afinitor's use as a breast cancer drug. Novartis ultimately did not move forward with the study.  Among her claimed objections to the proposed McKesson study was that it appeared to be a kickback to the company to help sell Afinitor.

Guo said she believed the study would violate a corporate integrity agreement that Novartis entered into in 2010 as part of a settlement with the U.S. Department of Justice.  That agreement required Novartis to comply with federal health care program requirements, including a federal anti-kickback statute, court documents state.  Novartis claimed Guo was terminated for violating company policies.

At the end of the more than seven-week trial, the jury in a 7-1 vote on Feb. 26 awarded about $1.8 million to Guo on her CEPA claim.  The jurors then unanimously awarded nearly $350,000 to Novartis on its counterclaim for unjust enrichment.  On Feb. 27, the jury denied Guo's bid for punitive damages.

On March 26, Judge Sceusi rejected the company's bid to set aside the CEPA verdict and, about a month later, Guo's attorneys submitted their fees application.  During a hearing, however, the judge pushed back against the fees request.  For example, Judge Sceusi pointed to Novartis' criticism of Guo attorney Richard J. Murray's request of fees for more than 1,200 hours spent on the case over less than a year, whereas Webber is requesting fees for nearly 1,400 hours spent over five years on the suit.  In that regard, the company has called Murray's fees request "simply glutinous."

NCAA Rips $45M Fee Request in Student Athlete Pay Suit

May 24, 2019

A recent Law 360 story by Dave Simpson, “NCAA Rips $45M Atty Fee Bid in Student Athlete Pay Suit,” reports that the $45 million attorney fee bid from the legal team whose March victory barred the NCAA from restricting student athletes' education-related compensation is unreasonable because it seeks pay for "excessive, redundant, and unnecessary" hours worked, the NCAA said in California federal court.  The NCAA and several of its conferences said that rather than multiplying the requested $30 million attorney fee lodestar by 1.5, as proposed by the student players, it should be reduced by 10% to exclude non-compensable hours from the fee application, and then hit it with a negative multiplier to reflect the fact that the attorneys only scored a partial victory for their clients.

"The district court rejected much of plaintiffs' demands, retaining the cost-of-attendance cap on financial aid and permitting defendants to limit the levels of non-education-based compensation that Division I schools may offer their student-athletes," the organizations said.  The bid for attorney fees stems from the key injunction the student athletes won in March.

U.S. District Judge Claudia Wilken rejected the NCAA's arguments that its compensation rules promote demand for college sports and justify its antitrust violations.  She prohibited the association from enforcing rules that she considered "overly and unnecessarily restrictive."

Following that major win, the players' attorneys sought a compensation package of $29.9 million plus the multiplier for what they said was the economic value of the injunction, and submitted an economist's declaration to bolster their argument.  But the NCAA says that the proposal is off-base, starting with the calculation for hours worked by the attorneys.

"Their refusal to provide detailed billing records, submitting instead evidence only of the total number of hours spent by various attorneys by year — or in one instance across all years of the litigation — without identifying the subject matter of any individual's time expenditures has made it impossible for defendants or the court to evaluate whether the time spent on particular tasks was reasonable," the NCAA said.  Likewise, the requested 1.5 multiplier is meritless, the NCAA said, because the players' attorneys don't argue that the lodestar is unreasonably low, nor do they show that they took on unreasonable risks or won an exceptional victory.

The organizations also claim that the $1.3 million sought in costs is "unsupported, inappropriate and unreasonable," saying that almost $1 million of it is not supported "with even a single invoice or document."  Instead, the NCAA claims, the players' attorneys are "simply listing vague categories of purported costs for which they claim reimbursement."  As for the remaining costs, which the NCAA says are accounted for through invoices, much of it is not compensable as a matter of law, the motion claims.

The NCAA says that among these costs are bills for expenses that have already been covered, bills for video services on days when no video services were used, and more than $200,000 in unspecified color copy printing costs, which the NCAA says should be reduced by at least 50% because they are excessive.  "I think the time has come to see what defendants spent to put this in perspective," Steve W. Berman, who is representing the students, said in an email to Law360.  "I have a bet in the litigation team pool that they are twice what we spent!"

The March ruling followed a landmark 10-day bench trial that kicked off in Oakland, California, on Sept. 4 over allegations by Division I college football and basketball players that the NCAA's rules illegally restrict what they can receive to play.  For years, the rules limited athlete benefits to cost-of-attendance scholarships; student assistance funds, which cover certain school-related expenses; some need-based grants, like Pell Grants; and bowl participation awards, which are typically capped around $450.

During the trial, sports economists, former athletes, university officials and NCAA administrators took turns testifying on the impacts of the NCAA's compensation rules.  Three former athletes who didn't play professionally after college recalled how they struggled as students to pay for meals, clothes and trips home, while they spent between 40 to 60 hours a week on their sports, leaving little time for academics.

The case is In re: National Collegiate Athletic Association Athletic Grant-In-Aid Cap Antitrust Litigation, case number 4:14-md-02541, in the U.S. District Court for the Northern District of California.

DOJ Opposes Attorney Fees in Dial Soap Class Action

May 10, 2019

A recent NLJ story by Nate Robson and Amanda Bronstad, “DOJ Opposes $3.8M in Legal Fees in Latest Swipe at Plaintiffs Bar,” reports that the U.S. Justice Department announced it is opposing a class action settlement in New Hampshire federal court that grants a $3.8 million attorney fee award to plaintiffs’ lawyers who alleged Dial overstated the ability of its antibacterial soap to kill germs.

The government said in a prepared statement that the fee award “would afford little value to consumers while handsomely compensating attorneys.”  The department’s opposition to the class action settlement was filed as a statement of interest by trial attorneys in the consumer protection branch, a component of the civil division.  The government argued that the settlement fund of $7.4 million fails to adequately compensate consumers and that the injunctive relief, in the form of changes to the soap’s ingredients, is “virtually worthless.”

“A class action settlement that affords little meaningful consumer benefit while rewarding attorneys with sizable fees is inappropriate,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division.  “Congress intended to prevent these types of unbalanced settlements with the Class Action Fairness Act.”  A final approval hearing is set for May 29.  Plaintiffs attorney Lucy Karl of Shaheen & Gordon and Robert Miller, of Sheehan Phinney, who represents Dial, did not respond to requests for comment. Both are in New Hampshire.

The Trump-era Justice Department has ramped up efforts to weigh in on pending class actions under the Class Action Fairness Act.  In a separate class action settlement with Lenny & Larry’s, the department in February criticized the purported $3.5 million settlement, preliminarily approved Nov. 1, for giving $1.1 million in legal fees to plaintiffs attorneys, while class members received up to $50 in cash or $30 worth of cookies.  Separately, the DOJ also filed a Feb. 4 amicus brief challenging a settlement over allegedly defective Tristar pressure cookers that gave $2.3 million to plaintiffs attorneys and discount coupons to class members.  The Arizona Attorney General’s Office, joined by 17 other states, has petitioned the U.S. Court of Appeals for the Sixth Circuit to unravel that deal.

Plaintiffs in the soap case, In re: Dial Complete Marketing & Sales Practices Litig., alleged that The Dial Corp. falsely advertised its “Dial Complete” hand soaps containing triclosan as more effective at killing germs over other brands’ soap.  Under a proposed settlement reached between the parties, Dial would pay $2.32 million to class members, with most class members receiving up to $8.10 in compensation for previous purchases of certain soap products, according to the statement of interest.  The settlement also provides for injunctive relief that would require Dial to refrain from using triclosan or claiming that its hand wash product “Kills 99% of Germs.”

Under the agreement, class counsel would seek a total of $3.825 million in attorney’s fees without opposition from Dial, including $1.9 million in fees specifically tied to obtaining the injunctive relief.  In its Statement of Interest, the United States argues that the injunction would provide no benefit to consumers, given that Dial years ago voluntarily made the same changes to its soap products that are required by the proposed injunctive relief.  Moreover, the U.S. Food and Drug Administration banned the use of triclosan in such products in 2016.  The case is pending in U.S. District Court for the District of New Hampshire, which must approve any settlement.

The government also complained about the use of cy pres in the settlement.  Under the deal, any unclaimed funds would go to the Ronald McDonald House Charities or Children’s Health Fund.  A footnote in the Statement of Interest said a cy pres distribution is “very unlikely,” given the government’s communication with the parties.  The settlement had no objectors.

The case got attention in 2017 when Dial appealed class certification based on the plaintiffs’ inability to identify class members, particularly in cases where people don’t keep receipts, like consumer products.  The U.S. Court of Appeals for the First Circuit refused to take up the interlocutory appeal, but, in a dissent, Judge William Kayatta warned his colleagues that the court’s recent precedent over how class members could be identified was destined to result in “further mischief” that could challenge the constitutional rights of defendants.