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Category: Fee Award Factors

CA Appeals Court: Cutting Fee Award By 28 Percent Was Warranted

April 2, 2020

A recent Metropolitan News story, “Slashing Fee Award to 28 Percent of Amount Claimed Was Warranted,” reports that the Court of Appeal for this district has affirmed Los Angeles Superior Court Judge Randolph Hammock’s award of $95,900 in attorney fees to the successful plaintiff in a “lemon law” case, holding that there was no abuse of discretion in spurning the trial lawyers’ request for $344,639.

Plaintiff Lorik Mikhaeilpoor was represented in the trial court by Strategic Legal Practices, APC (“SLP”), a Century City firm that is headed by Payam Shahian and specializes in actions under the Song Beverly Consumer Warranty Act.  Its telephone number is 888-SLP-LEMON and the firm promotes itself as providing services of “Lemon law attorneys for the toughest cases.”  Mikhaeilpoor sued BMW of North America LLC and Finchey Corporation of California alleging failed efforts to repair her 2013 BMW 328i and a refusal to replace the vehicle or make restitution.

A jury on Feb. 28, 2018, awarded her $17,902.54 in compensatory damages, which was doubled, as provided for by the Song Beverly Act, for a total of $35,805.08.  The act also mandates an award of attorney fees “reasonably incurred”—although, under case law, an award may be denied where the amount sought is unconscionable.  In his Sept. 21, 2018 order granting $95,900 in attorney fees—reduced to $94,864 in light of awards of attorney fees and costs to the defendants—Hammock said “that the amounts billed” by SLP “are unreasonable, including dual billing of attorneys when the work of only one (at times) was reasonably required.”

The SLP attorneys sought fees at rates ranging from $325/hour to $595 an hour.  Those rates, the judge found, are “reasonable in the community,” but added that attorneys who bill at such rates “should not need to research routine issue of law and should resort to boilerplate when it will serve the client’s purposes.”

Hammock commented:  “This was not a complicated case. Plaintiff was lucky, in this Court’s opinion, to win anything.  This Court will not compound the generosity of the jury.”  He added: “Plaintiffs attorneys should be forewarned: This Court did seriously consider denying the motion for fees in its entirety, since the request of almost $350,000 was quite shocking and ‘unreasonably inflated.’

“This Court is aware of the substantial fees and costs which are incurred in bringing a case to trial before a jury.  It is also aware of the pro-consumer rationale of the Song Beverly Act in liberally awarding such fees and costs….A request of almost $350,000 in fees for this particular case— which this Court has essentially handled from beginning to end—is simply unacceptable.  Indeed, the request for a multiplier was specious.”

Mikhaeilpoor argued on appeal that Hammock  acted arbitrarily in setting the fee award and had neglected to begin his analysis by setting a lodestar amount.  “In finding that $95,900 was the reasonable amount of attorney fees in this case, the trial court expressly invoked the lodestar method.”  White wrote.

The order says: “In light of the foregoing, the Court finds that the lodestar amount of attorney’s fees is $95,900.00, which includes the fees incurred in connection with bringing the instant motion.  This was calculated by finding a total amount of 274 hours which were reasonably incurred to  date, at the average rate of $350 per hour.”

White remarked: “Despite the trial court’s clarity, Mikhaeilpoor mischaracterizes the analysis the court employed in order to create the illusion of error where there is none.”  The jurist pointed to Hammock’s findings and declared, in agreement with him: “Plaintiff ’s counsel spent an unreasonably excessive amount of time dealing with this non-complex case.”

Rejecting Mikhaeilpoor’s contrary contention, she said Hammock did not impermissibly tie the attorney fee award to the amount of compensatory damages that were recovered.  The $344,639 award proposed by Mikhaeilpoor was comprised of $226,426 in fees allegedly earned, with a .50 multiplier enhancement—or $113,213—plus $5,000 for work in connection with the defendants’ objection to the amount that was sought.  Hammock’s award included recompense for time spent on the fee motion but there was no enhancement.

“While the court’s rationale for the lodestar reduction also  influenced the denial of a multiplier, the court went further as to  the multiplier issue, emphasizing that this was ‘not a complicated  case,’ and the ‘request for a multiplier was specious,’ ” White wrote.  This, she said, has a bearing on the issue of whether an enhancement is warranted based on the “novelty and difficulty of the  questions involved.”  That the case was a simple one, White noted, is borne out by evidence that Shahian only becomes personally involved in a case if it’s complex, and there was no billing for his time.

Christine Haw was lead counsel in the case. Haw, who is no longer with SLP, had been an attorney for only about five years, but, it was claimed, she had handled “hundreds of automotive defect cases involving Song-Beverly.” Hourly rates were sought for her at $365 and $375.

White said that despite that experience, Hammock “reasonably found that Haw did not leverage her experience to produce efficient litigation,” noting: “Haw personally billed more than 240 hours, and required the help of nine other attorneys at various points in the litigation.”  She said Hammock was in the best position to determine the reasonableness of the amount sought, substantial evidence supported his decision, and there was no abuse of discretion.

$3.8M in Attorney Fees Sought in Sorin MDL

March 30, 2020

A recent Law 360 story by Matthew Santoni, “Anapol Weiss Seeks Much of $3.8M Sorin MDL,” reports that Anapol Weiss is seeking nearly $2 million for helping clients reach a global settlement over allegations that the former Sorin Group USA’s heater-coolers put heart surgery patients at greater risk of contracting dangerous bacterial infections, according to a filing in Pennsylvania federal court.  In its filing, the firm sought approval of a total of $3.8 million in fees and $441,000 in expenses for itself and 14 other firms that had worked toward a $225 million global settlement with Sorin, now known as Livanova PLC, which would leave about $334,000 in a common fund established for payment of fees and expenses to benefit all the cases gathered together under the multidistrict litigation.

“The size of the global settlement fund is approximately [$225 million] and a substantial number of individuals benefitted from the settlement program devised by lead counsel and members of the [plaintiffs’ executive committee], including plaintiffs with suits in the MDL and various state courts as well as others with unfiled claims,” the petition said.

As lead counsel, Anapol Weiss sought $1.7 million in fees and more than $250,000 in expenses for nearly 2,000 hours of “common benefit” work, with other firms —  including Johnson/Becker PLLC, Hayes Lorenzen Lawyers PLC and Chaffin Luhana LLP —  claiming the rest of the request for $3.8 million in fees and $440,000 in expenses from the fund.  Anapol Weiss also asked U.S. District Judge John E. Jones III to reduce the 6 percent assessment he’d put on all monetary recoveries in the MDL that fed into the common benefit fund.

In the original lawsuit, filed in 2016, lead plaintiffs Edward Baker and Jack Miller had sought medical monitoring and a declaration from the court that the Sorin 3T heater-cooler device, used to control the temperature of a patient’s blood during open-heart surgeries, was defective.  The devices allegedly made patients more susceptible to a slow-growing but potentially fatal bacterial infection from a family of bacteria known as nontuberculosis mycobacterium, or NTM.

Spearheaded and hosted by Johnson/Becker, the executive committee gathered data on potential claimants and negotiated the proposed settlement with Livanova, the petition said. Livanova and Anapol Weiss announced that they had reached a global settlement in March 2019, while the Baker case reached its own settlement in October.

The petition said the fees were reasonable given the amount of work required, the complexity of the case and the relative size of the global settlement.  “The current request for a total fee award of $3,750,000 represents less than 2% of the global settlement and is well within the range deemed reasonable in similar cases,” the petition said.

An earlier case management order had set an assessment of 6%  from each claimant’s monetary awards, including 2% for common-benefit fees and 4% for expenses.  Though it did not set a new target, Anapol Weiss requested that the court lower the assessment based on costs so far, and streamline the allocation of money from the fund.

“The actual common benefit costs were only 0.19% of each claimant’s gross monetary award,” the petition said. “Lead counsel requests that CMO 5 be modified to reduce the cost assessment and eliminate the need for a CPA to review the time and expenses as there is an agreement for the allocation among all counsel receiving a common benefit fee award and/or common benefit expense reimbursement.”  The remainder of the common benefit fund would be reserved for any future common work and the estimated $3,200-a-month cost of maintaining an online document repository, the petition said.

Ohio Supreme Court Cuts $4M in Fees; Redefines Lodestar

March 26, 2020

A recent Bloomberg Law story by Alex Ebert, “$4M Attorney Fee Award Cut in Half by Ohio High Court,” reports that a nearly $4 million payday for a prevailing group of attorneys was lopped in half by the Ohio Supreme Court, which ruled an “enhancement” that doubled the winning lawyers’ fees went too far.  Ohio’s lodestar calculation, the method for determining a reasonable attorneys fee, already factors in the complexity and time of litigation, and the expertise of the attorneys involved, the court said in its opinion issued.

A state trial and appellate court were wrong to look to these factors and double the more than $1.99 million in attorneys fees awarded to Phoenix Lighting Group LLC’s lawyers, the high court said.  The legal team won the lighting business a $5,518,335 judgment following years of litigation over claims that its value was reduced by unlawful actions by a competitor, Genlyte Thomas Group LLC, dating back to incidents that occurred in 2009.

“Today’s decision communicates the Ohio Supreme Court’s desire to limit an attorney’s ability to receive an enhancement in attorney fees in cases where his or her performance was exceptional or where the attorney, for the best interest of the client, took on a case with exceptional risk,” Phoenix Lighting Group’s attorney Jeffrey Witschey, a partner with Akron-based Witschey Witschey & and Firestine Co., LPA, said in an email.

“The danger with the decision is the potential chilling effect on attorneys taking cases for clients that are unable to financially support long legal battles with wealthier opponents,” he said.  The court made the “right decision and established appropriate limitations that will make enhancements rare in Ohio and require the rare enhancement to be based on objective evidence that is reviewable on appeal,” Genlyte Thomas Group’s attorney Benjamin Sasse, a partner in Tucker Ellis LLP’s Cleveland office, said in an email.

The court shouldn’t increase the fees just because the payoff took a long time, the justices said.  “Enhancements to the lodestar should be granted rarely and are appropriate when an attorney produces objective and specific evidence that an enhancement of the lodestar is necessary to account for a factor not already subsumed in the lodestar calculation,” Justice Melody Stewart wrote in the majority opinion signed by seven justices.

Justice Sharon Kennedy issued a concurring opinion that agreed with Stewart but said trial courts must weigh each reasonable-fee factor individually, and not believe all factors are bound-up perfectly in the lodestar analysis.  Justice Patrick Fischer also a separate concurring opinion saying that courts must also be mindful of the “time value of money” in cases that take years to resolve.  The underlying issues in this matter began in 2004.  “Prevailing plaintiffs who have paid their attorneys over the course of the lawsuit and attorneys working on a contingent-fee basis have been deprived of the use of their money throughout the lawsuit,” Fischer said in his concurrence.

Class Counsel Earn $8.3M in Fees in Resistor Antitrust Action

March 25, 2020

A recent Law 360 story by Nadia Dreid, “Cotchett Pitre Gets $8.3M in Fees in Resistor Antitrust Fight,” reports that Cotchett Pitre & McCarthy LLP will walk away with $8.3 million for its role in securing a $33.4 million deal for indirect buyers who say that Panasonic Corp. and other electronics companies overcharged them for resistors.  A California federal judge gave the settlement and accompanying attorney fee request his final blessing, finding that both were "fair and reasonable" and that the firm asked for less than it could have.

"Counsel for [indirect purchaser plaintiffs'] requested fee award represents less than 73% of their reasonable lodestar, a negative multiplier.  This further supports the reasonableness of class counsel for [indirect purchaser plaintiffs'] attorney fee request," U.S. District Judge James Donato said in his ruling.  The firm requested — and will be pocketing — about 25% of the settlement as attorney fees, as well as an additional $1.4 million as reimbursement for expenses, according to the court's order.

Class counsel ended up going with the percentage method to calculate its fees.  In cases where classes opt for the percentage method, 25% is normally used as a benchmark in California, with a possibility for attorneys to receive up to 30% of the settlement fund, depending on the circumstances.  But Cotchett Pitre won't get all those funds yet.  A quarter of the $8.3 million in attorney fees will be held back until the firm has finished up its post-distribution accounting, Judge Donato said in his order.

The fee approval was smooth sailing for the indirect purchaser attorneys compared to the ordeal faced by their colleagues representing direct purchasers of the resistors.  Judge Donato ripped into their $10 million fee bid for being "insufficient" in a September order, scolding Hagens Berman Sobol Shapiro LLP and Cohen Milstein Sellers & Toll PLLC for failing to provide enough detail and reasoning in their fee request in what he called a "disservice to the class and the court."  The judge did eventually greenlight the $10 million in attorney fees at a second hearing, after receiving billing charts that assured him everything was on the up-and-up.

Judge Reduces Attorney Fees in Target Class Action

March 24, 2020

A recent Law 360 story by Brian Dowling, “Target Class Settlement Doesn’t Merit Hefty Fee, Judge Says,” reports that a Massachusetts federal judge has slashed a plaintiffs' firm's cut of a $2.3 million class action settlement with Target over harassing debt collections calls by nearly a third, saying the case wasn't as risky as lawyers claimed and not complex enough to warrant the $758,333 requested.  Approving the settlement, U.S. District Judge Timothy S. Hillman trimmed back the fees requested by Lemberg Law LLC, citing the quick six months it took to settle.  Judge Hillman also rejected the firm's arguments that the "high risk" case warranted taking 33% of the settlement fund.

"The mere fact that there was some risk does not justify a fee request of such magnitude when contrasted with the lack of complexity of the present case and the relatively short time between the filing of the complaint and a negotiated settlement in principle," Judge Hillman wrote.  Instead, the judge awarded $523,250 to the attorneys, representing 23% of the total settlement, plus about $7,000 for expenses.  The judge gave the named plaintiff, Gabrielle Carlson, an incentive award of $7,500.  With about 5,500 claims filed as of December, that leaves enough in the settlement funds for about $315 per claim.

Lemberg said in a statement to Law360 the firm is happy the state's consumer protection statute is being enforced and "thousands of people will receive money" from the settlement.  The finalized settlement wraps up the class action that Carlson filed against Target Enterprises Inc. in 2018, claiming the retailer violated debt collection regulations and the state's consumer protection laws by calling Massachusetts residents more than twice in a single week.

Judge Hillman held the Target settlement up against a handful of others that lawyers took on contingency but still resulted in lower than a 33% cut from the overall fund.  Lemberg attorneys Sergei Lemberg and Stephen Taylor, and one paralegal, together filed for 570 hours in the case, at rates ranging from $650 for Lemberg to $125 for the paralegal, according to the order.

In addition to the case being less complicated, the firm didn't offer the court "full and specific accounting of the tasks performed by each attorney, the dates of performance, [and] a breakdown of the number of hours spent on specific tasks," Judge Hillman said, another factor that led to the court reducing the attorneys' cut.