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Category: Contingency Fees / POF

Uber Attorneys Seek $5M in Fees in Employment Action

May 23, 2019

A recent Law 360 story by Linda Chiem, “Uber Drivers’ Attys Seek $5M in Fees in Classification Deal,” reports that California and Massachusetts drivers who aren't bound by Uber’s arbitration agreement asked a federal judge to sign off on $5 million in attorney fees after they reached a $20 million deal to end long-running claims the ride-hailing giant wrongly classified drivers as independent contractors.

Nearly 14,000 California and Massachusetts drivers for Uber Technologies Inc. filed a request for attorney fees and costs with U.S. District Judge Edward Chen in the Northern District of California, seeking about $3.8 million in fees for lead attorney Shannon Liss-Riordan of Lichten & Liss-Riordan PC.  Five other attorneys and paralegals at the Boston-based firm would receive between $16,200 and $589,000 each based on the number of hours they put into the case, according to the filing.

The total $5 million request works out to nearly 25% of the settlement fund, which is in line with the benchmark for attorney fees that courts in the Ninth Circuit have approved in class deals.  Liss-Riordan said she had no additional comment beyond the court filing.  “This fee request is more than justified by the cutting-edge nature of this case, the skill and creativity used in litigating the issues, the case law made here that has assisted and will assist other workers challenging their mis-classification as independent contractors, the unusually high risk taken on by filing the case, and the significant monetary and non-monetary relief obtained for settlement class members,” the drivers’ attorneys said in the filing.

In addition to the $5 million in attorney fees, the drivers requested $7,500 service awards apiece for plaintiffs Elie Gurfinkel, Matthew Manahan, Mokhtar Talha and Pedro Sanchez, and $5,000 service awards apiece for plaintiffs Aaron Dulles and Antonio Oliveira for their work in representing the class in the litigation.  “These awards are reasonable and well within the range of approved incentive payments in class action litigation,” they said.  “Indeed, merely associating their names with such high-profile lawsuits created a tremendous risk of being blackballed in the ‘gig economy’ industry and beyond.  When searching for their names on the internet, potential employers will likely find reference to the O’Connor and Yucesoy cases.”

Judge Chen greenlit the overall $20 million settlement in March after getting the parties to provide additional information about various aspects of the agreement.  Under the deal, about 11,000 drivers in California and 2,600 drivers in Massachusetts who aren't bound by arbitration would receive average payments of $2,206 each after fees and other costs are deducted, according to court filings.  Uber also agreed to change some of its policies in both states to give drivers more job security, but it did not agree to classify the drivers as employees.

Specifically, Uber will no longer “deactivate,” or block from using the app, drivers who have a low rate of accepted rides.  It will also clarify and give advance warning before deactivating drivers, and will allow a formal appeal process for certain cases of deactivation as well as increased access to quality courses for drivers so they can become eligible for reactivation, according to court filings.

The drivers’ attorneys said they achieved “exceptional results” in nearly six years of hard-fought litigation over the classification issue, despite taking a big hit in September when the Ninth Circuit dismantled Judge Chen’s previous class certification orders covering hundreds of thousands of Uber drivers who claimed they were classified as independent contractors and shorted on tips and work expenses.

Article: How the Contingency Fee Provides Access to Justice

May 20, 2019

A recent article in Legal Intelligencer by Samuel H. Pond, “The ‘Great Equalizer—How the Contingent Fee Provides Access to Justice” reports on the benefits of the contingency fee model in civil litigation.  This article was posted with permission.  The article reads:

The core principle of our legal system is that all people, no matter their station in life, can bring their disputes to be heard in a court of law.  That’s in theory, in practice, however, justice is not always so available to those with limited means.  However, one innovation has somewhat evened the playing field—the contingent fee agreement.

Leveling the Playing Field

The pursuit of justice can be expensive, with litigation costs and attorney fees piling up quickly.  The average billing rate in 2018 for Pennsylvania attorneys was $262 per hour, according to Clio, a Canadian research firm tracking legal industry metrics.  Corporations and insurance companies often have unlimited resources at their disposal during litigation, putting the average person at a great disadvantage.

Under a contingent fee agreement, a client in a civil matter does not need to pay an attorney unless the case is successful.  Often, attorneys will also front all litigation costs.  Thus, the client does not have to pay anything out of their pocket.  Thus, all fees and costs are paid out of the recovery.

‘Not Going to Get Bullied’

This arrangement has greatly expanded access to the justice system and allowed those with modest means obtain the justice they deserve.  It’s the only way an injured worker can go up against a big insurance company and feel comfortable and confident. You’re not going to get bullied.  It’s a great equalizer.

The contingent fee has allowed ordinary people to sue large corporations and influential entities and receive monetary compensation.  In addition, the contingent fee has given credence to the idea all should be held accountable for their actions and no one is above the law.

Incentivizing Success

In addition, the contingent fee ensures that a lawyer’s interests are fundamentally linked to those of the client.  It incentivizes lawyers to provide the best quality service to clients because if they fail, they will not get paid.

The contingent fee agreement also discourages the filing of frivolous matters.  It is highly unlikely that an attorney on a contingent fee agreement will take on a case that lacks merit because doing so would mean investing thousands of dollars on a case with no hope of recovery.

Contingent fees restore some fairness to the system.  A powerful corporation with its economic clout and high-priced attorneys cannot simply steamroll over a litigant of modest means.  The average person can still get a fair shake by hiring a worthy champion to take up their cause.

Samuel H. Pond is the managing partner at Pond Lehocky Stern Giordano, the a workers’ compensation firm.  For more than 30 years, he has been representing workers injured on the job.  He is also the host of the Legal Eagles radio show, which aims to educate the public on the law.

How Rohrmoos Ruling Could Change Attorney Fees in Texas

May 16, 2019

A recent Law 360 story by Michelle Cassady, “4 Ways Rohrmoos Could Change Fee Fights in Texas,” reports that the Texas Supreme Court's recent opinion laying out what evidence is needed to prove up attorney fees already is being called by some practitioners the seminal case on the topic and one that could have a major impact on fee fights in the state.

In its Rohrmoos Venture v. UTSW DVA Healthcare LLP ruling, issued, the court sought to dispel what it said was confusion on the part of lawyers and courts about two methods of calculating fees: the Arthur Andersen eight-factor test and the lodestar method.  It said the lodestar method — determining fees by multiplying the number of hours spent working on the case by a reasonable hourly rate — should be the starting point for calculating fees.

The state's high court intended the 56-page opinion to be a "big black-letter case," said Jadd Masso of Clark Hill Strasburger PLC, characterizing it as "the conclusion of an evolution on the part of the court" that encompasses its 2012 opinion in El Apple I Ltd. v. Olivas and its 2013 opinion in City of Laredo v. Montano.  Masso said the lengthy opinion amounts to a "treatise on attorneys fees in Texas."  "It is the way, the truth and the life, and the only way to get fees is through the lodestar method," he said.  The El Apple decision was a signal from the court it wanted to encourage the use of lodestar, Masso said.  And with Rohrmoos, there's no more question about whether there's more than one way to prove up fees, he said.

Here are four ways that the ruling could change fee fights in Texas.

Detailed Billing Records Will Become the Norm

The Rohrmoos opinion didn't mandate real-time billing records to prove up attorney fees, but the court said they are "strongly encouraged to prove the reasonableness and necessity of requested fees when those elements are contested."  While most defense attorneys already do keep such records, the ruling will likely have a bigger impact on plaintiffs attorneys and others who work on a contingent fee or flat fee basis, said Frank Carroll of Roberts Markel Weinberg Butler Hailey.

"I think they have put the final nail in the coffin that anything short of contemporaneous billing records is sufficient," he said.  "People need to avoid the idea that 'this doesn't apply to me.'"  Carrol said lawyers doing simple, flat-rate cases for small amounts of money may not need to worry about keeping those records.  "But for everyone else: Proceed at your own peril if you don't follow the mandate of El Apple, City of Laredo, and this case."

Some defense lawyers, like Michelle Hartmann of Baker McKenzie, already are being pushed by clients into alternative fee arrangements rather than the hourly rate model.  "But we still enter all of the hours that go toward the case.  Not because we're going to bill the client for them, but to double check profitability and see if that was a good fit for both the client and the firm," she said.  "I think most defense attorneys do it now, even with flat-fee arrangements.  But this is a reminder you still need to keep good billing records."

Lawyers Could Face Lengthy Cross-Examinations on Fees

The attorney who represented UTSW in the Rohrmoos case, Wade Howard of Liskow & Lewis, said he tried at oral arguments before the high court to stress that putting hundreds of pages of detailed billing records before the jury would "do nothing" to help them determine what costs are actually reasonable and necessary.  Other practitioners have said that while the jury panel might not be going through those documents page by page, it does provide the other side "better ammunition to cross examine a lawyer," said Kelli Hinson of Carrington Coleman Sloman & Blumenthal LLP.

"They can then ask the tough questions, like, 'Why did you spend 50 hours on a motion for summary judgment that never got filed?' or 'Why were three attorneys doing this when one would have been sufficient?'" she said.  "So the jury gets the advantage of that even if they themselves don't pore through the record."  The Texas Supreme Court seemed to understand that the new guidance could have unintended consequences and warned in its Rohrmoos ruling that it was not "endorsing satellite litigation as to attorney's fees."

But courtroom opponents could easily use the records "as an opportunity to try and make the burden that the claimant has to meet even harder than this decision intended it to be," Hartman said.  And finding that sweet spot could be a years-long process, Hinson said.

"They said we don't want attorneys on the stand for days going through the bills bit by bit," she said.  "I think that's going to be where we struggle over the next few years — trying to find that fine line between what's enough and what's too much."

Outside Experts Could Be Used to Back Up Fee Requests

The ruling could also mean that attorney fees — which in many cases are the largest element of damages — will stop being treated like the "stepchild" of litigation, said John W. Bridger of Strong Pipkin Bissell & Ledyard LLP.  Bridger said that for years he's been advising other attorneys on the value of having an outside expert testify to the reasonableness of requested fees rather than the attorney on the case taking the stand.

For one, it can keep defense lawyers out of the sometimes awkward position of attacking the plaintiffs' attorney fees in front of a jury, and secondly, he said, it would encourage attorneys to spend more time developing the evidence to prove fees.  "This case only pushes us more and more toward outside experts, particularly where the attorneys' fees are larger than the amount in controversy," he said.

And the increasing amount of fees being sought is another reason calling in an outside expert could be worthwhile, said Kurt Kuhn of Kuhn Hobbs PLLC.  "It's inevitable that you're going to see people develop that evidence more. It clearly can't be an afterthought," he said.  "To get an outside expert is going to give you, in front of a jury, a little more credibility."

Counsel-to-Counsel Fee Agreements Could Proliferate

Hinson also speculated that the guidance could cause an uptick in attorneys agreeing to their respective fees ahead of time, keeping that issue out of litigation entirely.  "I do think it will be interesting to see if attorneys veer more that way so at least they know they won't get overturned for not having enough evidence," she said.

In the Rohrmoos opinion, the court "hints at" and "suggests" that stipulating to fees before trial in an agreement with opposing counsel could be a way to avoid contentious fee fights, Masso said.  Because the ruling could be interpreted as requiring "more work" on the part of attorneys trying to prove up fees, Masso said it's possible you'll see more negotiation and agreement on fees.  "This opinion makes the litigation of attorneys' fees a little more complex than it was before," he said.  "And there's no way that it doesn't result in that litigation getting a little more complex, and a little more involved and lengthy."

The cases is Rohrmoos Venture et al. v. UTSW DVA Healthcare LLP, case number 16-0006, in the Supreme Court of Texas.

Milberg Wants New Look at $12M Fee Request in Argentine Bond Case

May 14, 2019

A recent New York Law Journal story by Jack Newsham, “Milberg Claims Firm Cheated Out of $12M Fee in Argentine Bond Case,” reports that, the plaintiffs firm Milberg has sued a group of European investors that it previously represented in years of Argentina bond litigation, alleging the investors fired the law firm to avoid paying an $11.9 million fee.  In the suit, the New York firm is asking a federal judge to throw out an arbitral award that left Milberg with a mere $87,000.

According to Milberg’s suit, filed in Manhattan federal court, money manager Hans Wilhelm Brand fired the firm shortly after receiving a $162 million settlement offer from Argentina and learning that Milberg would be entitled to an $11.9 million contingency fee if he accepted.  People and entities whose money Brand managed, called the HWB investors, switched lawyers and reached a nearly identical settlement a year later, according to Milberg’s suit against the investors.

Milberg said it initiated arbitration against the HWB investors in 2017 seeking legal fees, but received a stunning decision from a three-man disputes panel in February 2019 that found the investors’ payments to Milberg and its other lawyers, totaling $513,000, was sufficient.  The neutrals at the International Centre for Dispute Resolution acknowledged Milberg had done more work for the HWB group than the firm’s billing records might indicate, but said “qualitative considerations have their limitations,” and said no further fees were merited.

“Anyone with passing familiarity with complex litigation prosecuted on a contingency fee basis … would be shocked to learn that a hard-fought case lasting well over a decade, which resulted in a settlement recovery by plaintiffs of $162 million, could end with an award of fees to plaintiffs’ counsel of zero,” the law firm said in its petition. (The firm was paid $87,000 before the arbitration over legal fees began.)

Documents Milberg filed in its suit indicate that it took over the HWB entities’ claims from Marc Dreier by 2010, after Dreier admitted to orchestrating a massive investment fraud scheme and his law firm failed.  The clients had previously paid $110,000 to Dreier and around $300,000 to Argentine lawyer Patricia Rosito Vago and her nonlawyer husband, the arbitral award said in a footnote.

Michael Spencer was the lead Milberg lawyer on the Argentine bond cases, according to the arbitral award, and the firm said the HWB group was its biggest Argentine bonds client.  Milberg received between $5 million and $5.5 million from other clients for its work on those cases, the award said.

The arbitrators noted that Milberg clocked 172 attorney hours and 90 paralegal hours on the HWB entities’ cases, worth $142,900, but spent “more time on the representation of HWB than is reflected in its HWB-specific time records.”  Still, the panel declined to award Milberg any more than it had been paid, saying the $513,000 the HWB investors had paid to all their lawyers was “a reasonable total fee recovery.”

In its lawsuit, Milberg, which reorganized in 2018 and now does business through the firm Milberg Tadler Phillips Grossman, argued that the award should be vacated because it showed manifest disregard for the law.  After firing Milberg, the award said, the HWB clients hired the firm Wilk Auslander to go to bat for them; that firm was paid $1.6 million after billing $2.3 million, according to the award. Milberg argued that Wilk Auslander failed to secure a better settlement than Argentina offered in 2016 through its bond dispute settlement program known as the “propuesta.”

But Wilk Auslander partner Jay Auslander, a lawyer for HWB investors, said in an interview that Milberg had ridden the coattails of other law firms whose clients held much greater amounts of Argentine bonds.  It was those firms that did the heavy lifting, he said, not Milberg.  “That [Milberg] caused the propuesta is, in our view, absurd,” he said in the interview. “We had a highly qualified, highly experienced three-lawyer panel that had a very high level of juridical sophistication and heard a tremendous amount of evidence. … We believe their award will not reasonably be challenged.”

Special Fee Master Defends Fee Allocation Work in $1.5B Syngenta MDL

May 8, 2019

A recent Law 360 story by Celeste Bott, “Special Master Defends Fee Divvy in $1.5B GMO Corn Deal,” reports that Heninger Garrison Davis LLC "ignored established law" when it asked for $50 million to $60 million in fees for its work on a $1.51 billion settlement over Syngenta's genetically modified corn, a special master tasked with divvying up the attorney fees told a Kansas federal court.  Special Master Daniel J. Stack, a retired Illinois judge, said the firm mischaracterized and misapplied a district court ruling on the $500 million attorney fee award when it objected to his recommendation it be paid $9.7 million.

The firm had argued it deserved a far bigger slice of the fees — between 65% and 85%of a pool of fees designated for Illinois attorneys, or between $50.7 million and $62.4 million.  An award that high would work out to an hourly rate of roughly $2,500 to $3,200 for Heninger Garrison’s work, Stack said.  “In a comparison that I am privy to from other work on common benefit fees, it is my recollection that the highest hourly rates for the very top leading attorneys is not more than $1,200 per hour,” Stack said.

Stack said that while Heninger Garrison focused its objection largely on litigation and in-court hours, U.S. District Judge John Watson Lungstrum made clear in a fee allocation order that compensable work includes other types of work that contributed to the eventual settlement.  “I did not simply give credit for all hours and weigh them equally, but considered whether they in fact truly contributed to the benefit of the class,” Stack said.  “Consistent with the allocation order, I discounted certain hours and recognized that other hours contributed enormously to achieving the settlement.”

Heninger Garrison objected to Stack’s fee recommendation in March, calling it “fundamentally flawed.”  The firm criticized his decision to award Clark Love & Hutson GP, Meyers & Flowers LLC and Phipps Anderson Deacon LLP — referred to in the report as “the Clark/Phipps group” — 80% of the Illinois portion of the fee pool, arguing that Heninger Garrison and several affiliates did the legwork in the case, including taking depositions, completing plaintiff fact sheets and voluminous discovery.  In addition, Heninger Garrison told the court that the Clark/Phipps group never submitted time entries, only summaries, making it impossible to verify the group’s claims for hours worked.

But that ignores established law that permits a court to rely on time summaries and affidavits submitted under penalty of perjury, Stack said. In this case, it was the “reasonable and efficient” approach, he said.  The firm’s argument that courts in Kansas and Minnesota awarded their attorneys fees differently was “beside the point,” Stack said, adding that the litigation was more advanced in those states and that a benefit determination in Illinois couldn’t build on a pre-existing common benefit process.

In April last year, Judge Lungstrum granted preliminary approval of a mediated $1.51 billion settlement agreement hashed out by farmers in all but four cases involved in the MDL.  The deal came after years of litigation over allegations that Syngenta should have delayed launching the seeds until Chinese authorities — controlling a major corn market for U.S. growers — approved importing the GMO corn.