Fee Dispute Hotline
(312) 907-7275

Assisting with High-Stakes Attorney Fee Disputes

The NALFA

News Blog

Category: Defense Fees / Costs

Texas Energy Companies Can’t Block Rival’s Attorney Fee Win

October 6, 2017

A recent Law 360 story by Jess Krochtengel, “Texas Energy Cos. Can’t Block Rival’s Atty Fee Win,” reports that a Texas appeals court affirmed a $280,000 attorneys’ fee award to Crawford Hughes Operating Co., rejecting arguments from a group of energy companies that formerly worked with Crawford that a trial court wrongly granted a new trial on the fee issue.

A panel of the Fourteenth Court of Appeals held Crawford’s pleadings support a recovery of defensive attorneys’ fees.  The court also determined it lacked jurisdiction to consider arguments from Anglo-Dutch Energy LLC, Explorer Investments LLC and Saxton River Corp. that a trial court had wrongly allowed Crawford a new trial on attorneys’ fees.

The trial court had initially ruled Crawford could not recover any fees despite winning a jury trial in a dispute between the energy companies over bills for operating expenses incurred under multiple joint operating agreements.  But it granted Crawford a partial new trial limited to the fee issue and ultimately awarded the company a total of about $280,000 in fees.

The Anglo-Dutch group had argued the new trial was improperly granted because there was no good cause to allow Crawford an opportunity to fix a “strategic mistake” in how it had initially requested attorneys’ fees.  But the appellate panel said its authority to review new trial orders is limited, and that the circumstances in the Crawford trial don’t merit appellate review.

“The working interest appellants’ arguments on appeal do not invoke any of the scenarios in which appellate review is permitted,” the court said.  “Because this challenge does not fall within one of the narrow exceptions identified by the Supreme Court of Texas, we lack appellate jurisdiction to entertain the working interest appellants’ challenge to the new trial orders.”

The dispute over operating expenses was tried in Harris County District Court in November and December 2014 and a jury awarded the Crawford entities about $44,000 in damages and $233,000 in legal fees.  The trial judge initially struck Crawford’s fee award, finding the group did not properly attribute the fees to reflect the different entities, claims and counterclaims involved in the case.  But Crawford asked the court to modify the judgment and requested a partial new trial limited to the amount of fees it could recover.  The trial court agreed, prompting an earlier appeal from the Anglo-Dutch parties.

In December 2015, the Anglo-Dutch group asked the Texas Supreme Court to block Crawford from getting a new trial on the attorneys’ fee issue.  They argued Crawford was trying to get a “mulligan” after making a strategic mistake in how it marshalled and presented its evidence.

When the case returned to the trial court, the parties stipulated the amount of fees Crawford Hughes Operating had incurred.  A modified final judgment issued in May 2016 awarded Crawford Hughes Operating about $42,000 in damages against Anglo-Dutch and $2,600 in damages against Explorer Investments and Saxton River.

The modified judgment awards Crawford Hughes Operating about $240,000 against Anglo-Dutch and $7,400 against Explorer and Saxton River for attorneys’ fees incurred in defending the case and another $31,000 in fees against Anglo-Dutch and $2,000 in fees against Explorer and Saxton River for what it incurred litigating its counterclaim.

The case is Anglo-Dutch Energy LLC et al. v. Crawford Hughes Operating Co. et al., case number 14-16-00635-CV, in the Texas Court of Appeals for the Fourteenth District.

Tiffany Asks for $5.6 M in Attorney Fees in Trademark Case

October 4, 2017

A recent Law 360 story, “Tiffany, Costco Trade Blows After $21M TM Award” reports that Tiffany and Costco are trading post-trial blows following a ruling that the retailer must pay the jeweler more than $21 million for using “Tiffany” on diamond engagement rings, with Tiffany demanding millions more in attorneys' fees and Costco pushing to overturn the loss.

The new wrangling comes after more than four years of litigation over the Tiffany trademark. Costco argued it had merely used it as shorthand for “Tiffany setting” — a generic term for a style of ring — but U.S. District Judge Laura Taylor Swain ruled in favor if the jeweler in 2015.

With Costco already on the hook for $21 million, Tiffany asked earlier this month for $5.6 million in attorneys' fees, saying Costco’s aggressive defense made the big fee-shifting reasonable.  “Throughout the case Costco revisited and relitigated issues previously decided against it, and generally engaged in a scorched earth strategy that forced Tiffany — and the court — to undertake all manner of extra work,” the company wrote.

Costco, meanwhile, asked Judge Swain last week to change her ruling, particularly her findings that the company was liable for counterfeiting, a more serious infraction that is usually reserved for situations where “entire products have been copied stitch-for-stitch.”  “Counterfeiting is the ‘hard core’ or ‘first degree’ of trademark infringement,” the retailer wrote. “The evidence here shows no such ‘stitch-for-stitch’ mimicry.”

The rings at issue in the case, Costco told Judge Swain, were sold in unbranded packaging that didn’t look anything like Tiffany boxes and were not identified as Tiffany rings on the store receipt. They were also stamped with a manufacturer’s mark, not Tiffany’s.

The retailer also asked the judge to toss out a finding that it infringed the trademarks willfully, saying that finding, too, was “clearly unsupported.”

This month’s filings were merely a prelude to an appeal to the Second Circuit, a move Costco has already repeatedly promised. The retailer tried to get an immediate appeal following the 2015 ruling, but was refused at the time.  The two companies instead held a damages trial, leading to an award of $19 million; interest and other fees later increased the award to $21 million.

The case is Tiffany & Co. v. Costco Wholesale Corp., case number 1:13-cv-01041, in the U.S. District Court for the Southern District of New York.

Judge Reduces Fees, Offers Primer on Legal Billing

September 13, 2017

A recent New York Law Journal story by Jason Grant, “Judge Slashes Fees, Offers Primer on Billing, in Cookbook Case,” reports that a New York federal judge has more than halved attorney fees due to an Ethiopian cookbook author who was wrongly sued for copyright infringement, finding that her defense counsel billed "excessive" hours for often straightforward work.

In July, U.S. District Judge Brian Cogan of the Eastern District of New York lambasted the plaintiff, author of a different Ethiopian cookbook, for bringing "unreasonable" claims in Schleifer v. Berns, 17-cv-1649. And he awarded an as-yet-undetermined amount of attorney fees to the defendant.

Cogan turned his sights to the defendant's counsel.  He criticized Berns' lawyers at Kushnirsky Gerber, calling their requested fees "excessive" and at times "redundant," and he chopped their itemized request for $29,365 in attorney fees down to $13,055 in attorney fees (plus $316.15 in costs).  He went through the categories and tasks billed, point by point, while explaining why the hours were often too high.  Underlying his reasoning was the notion—as explained in the July dismissal decision—that the plaintiff had brought a particularly flimsy action.

"The number of hours expended [by Kushnirsky Gerber]—83.9 hours—is too many in light of the weakness of plaintiff's case and counsel's experience with copyright cases," Cogan wrote before analyzing the amounts billed.  He also said, "the court continues to be guided by the overarching purposes of the Copyright Act, that is, compensation and deterrence," and noted that "the test is whether the plaintiff 'spen[t] the minimum necessary to litigate the case effectively,'" quoting Simmons v. N.Y. City Transit Auth., 575 F.3d 170, 174 (2d Cir. 2009).

Cogan wrote that, "First, it seems inherently excessive and redundant that defendant [counsel at Kushnirsky Gerber] expended 6.5 hours drafting the pre-motion conference letter in anticipation of the motion to dismiss, 33.7 hours on the motion to dismiss itself, and then 19 hours on the reply brief, for a total of 59.2 hours."

"The minimum necessary hours to have effectively litigated the motion to dismiss in this case cannot be nearly 60 hours when the case was so patently deficient," he continued, then added, "The research necessary to draft the pre-motion conference letter should certainly have transferred to the motion to dismiss and reply.  With much of the legwork already done ... the motion itself should not have taken more than 10 to 15 hours."

Continuing his breakdown, Cogan also wrote that "even though plaintiff filed an amended complaint after defendant filed her motion to dismiss, the changes to the amended complaint were so minimal that the court in fact saw no need to reinitiate motion practice.  Accordingly, the application for 19 collective hours on the reply is excessive."  In the end, Cogan ruled that "no more than 25 hours" total should be allotted to time spent on the pre-motion conference letter, motion to dismiss and reply.

He also wrote that "it is similarly unreasonable that counsel spent 3.5 hours conducting a 'Preliminary Case and Pleadings Review,'" when the complaint was only seven pages.  "Nor is it clear from the itemization which portions of time were preliminary 'case review' and which were 'pleadings review.'  Because the itemization fails to apprise the court properly … the court will not allow fees for this task," Cogan continued, adding, "Nor will the court permit fees for 1.2 hours of 'court correspondence,' as the only court correspondence on the docket (apart from the pre-motion conference letters) is a barely one-page letter asking the court to adjourn the initial status conference."

Cogan concluded by writing that Kushnirsky Gerber's final category of billing, 12 hours for preparing its fees application to him, was also too many.  "Half of the application is a general recitation of counsel's qualifications and a description of their firm and cases, and counsel's declarations … The remainder of the fee request includes the printouts of the itemizations and billing records, counsel's resumes, defendant's own declaration and her documented expenses, all of which would have (or certainly should have) been collated and put together by support staff," he wrote.

Defense Win $18.5M in Fees in Antitrust Case

August 28, 2017

A recent Law 360 story by Carolina Bolado, “Patheon Gets $18.5M Fees After Prevailing in Antitrust Row,” reports that a Florida federal judge granted pharmaceutical manufacturer Patheon Inc.’s request for $18.5 million in attorneys' fees and defense costs related to former joint venture partner Procaps SA's $255 million antitrust suit, which the court said was “especially unpleasant and nasty.”

U.S. Magistrate Judge Jonathan Goodman said now that the Eleventh Circuit has upheld the summary judgment order ending Procaps' suit, Patheon is entitled to a fee award under the Florida Deceptive and Unfair Trade Practices Act (FDUTPA) in the “full-throttle lawsuit” that he noted has generated 1,165 docket entries since it was first filed in December 2012.

In the suit, Procaps alleged that Patheon's acquisition of Banner Pharmacaps Europe BV made the previously agreed-upon Procaps-Patheon collaboration on the development of a softgel capsule for pharmaceutical products a restraint on trade.  But the Eleventh Circuit in January said Procaps couldn't prove any harm that would justify a Sherman Act suit, such as a reduction in output, increase in prices or decrease in quality.

In the order, Judge Goodman ruled that though the FDUTPA claims were essentially “tag-along” claims based on Procaps' claims under the federal Sherman Act — which does not authorize prevailing party fees — the claims were all clearly related and the time Patheon spent defending the federal claims was time spent defending the state law claims.  Judge Goodman pointed to Florida Supreme Court precedent authorizing fees to a prevailing party under FDUTPA unless the non-FDUTPA claims were clearly unrelated to or clearly beyond the scope of the FDUTPA proceeding.  That is not the case in this dispute, he said.

“There is no dispute about the reality of the FDUTPA claim: it was an alternative theory of recovery to the Sherman Act claim, based in large part on the same transaction and facts,” Judge Goodman said.  “The antitrust claim work cannot fairly be described as being 'totally unrelated' to the FDUTPA claim.”  He had choice words for the parties, saying that counsel regularly launched personal attacks and that filings in the court were “routinely riddled with insults, allegations of bad faith and unprofessionalism, and, in general, purple prose.”

Judge Goodman awarded Patheon the full $18,494,846 it had requested, noting that Procaps had not objected to the amount and that Patheon's attorneys had already self-discounted.

Patheon's attorney Michael Klisch said his client appreciated the significant time and effort the district court spent on the case that lasted almost five years.  He said Patheon had invested significant time and money into the case, which required a forensic analysis of Procaps' computer system and “a nearly complete do-over after Procaps changed its antitrust theory years into the case.”

“Given all the circumstances and applicable law, we believed an award of fees and costs was entirely appropriate, and are pleased the court agreed with us,” Klisch said.

The case is Procaps SA v. Patheon Inc., case number 1:12-cv-24356, in the U.S. District Court for the Southern District of Florida.

Defense Fees Awarded in CEPA Claim Deemed Baseless

August 3, 2017

A recent New Jersey Law Journal story by Charles Toutant, “Hospital Award Fees After Plaintiff’s CEPA Claim Deemed Baseless,” reports that a federal judge has awarded legal fees to a hospital as the prevailing party in an ex-employee's whistleblower claim after the plaintiff could not name any laws or regulations broken by the defendant.

Capital Health Systems is entitled to fees for defending lab technician Janice Marrin's claims under the Conscientious Employee Protection Act (CEPA) because her claims about lax procedures at the defendant's microbiology lab are without basis in law or fact, U.S. District Judge Freda Wolfson ruled.  Wolfson said the plaintiff had failed to advance any argument to support her CEPA claims.  Wolfson said lack of support distinguished Marrin's CEPA claim from a situation where claims were merely not viable.

Capital Health sought reimbursement for efforts to oppose Marrin's whistleblower claim for more than three years, from the first filing of the complaint in March 2014, but Wolfson granted the defendant fees from after the close of discovery in September 2016 until the plaintiff withdrew the CEPA claim in November 2016.

Marrin first worked in the defendant's hospital in Trenton and later was transferred to its hospital in Hopewell.  Her suit claimed she was terminated for complaining to supervisors about improper procedures in the lab.  She met with Capital Health's director of human resources in February 2013 to discuss her concerns about her co-workers' deficient procedures.  In April 2013 she was terminated for failure to cooperate with an internal investigation into how she obtained emails between her supervisors and the human resources department that discussed her but were not addressed to her.

Besides the CEPA claim, Marrin's suit brought claims under the state Law Against Discrimination and the Family and Medical Leave Act.  Wolfson dismissed the remainder of the claims this May.  Capital Health sought fees for the entire duration of the litigation because it claimed Marrin admitted during the August 2015 deposition that she lacked a basis for her CEPA claim when she filed the suit, but Wolfson called that assertion "highly speculative."

"Plaintiff was entitled at the pleading stage to maintain both her CEPA and NJLAD retaliation claims, and defendants chose to wait until after the close of discovery to move on all of plaintiff's claims, rather than moving on the CEPA claim as soon as Defendants contend it became apparent that the claim lacked merit.  This Court, considering the foregoing and looking to the parameters of CEPA's safe harbor provision … finds that an appropriate threshold for the imposition of fees and costs in this case was the close of discovery," Wolfson said.

The lawyer for Capital Health, Kelly Bunting of Greenberg Traurig in Philadelphia, said she and her client were both "thrilled" with the decision, given the difficulty of winning motions for fees.  Bunting said she had yet to calculate how much she will seek on the CEPA issue, adding that her motions for legal fees under the LAD and for a bill of costs are still pending. Bunting said she had no disagreement with the court's limits on the scope of her CEPA fee award, which was based on a finding that some time spent on that motion could also apply to the plaintiff's LAD claim.