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Category: Fee Award Factors

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.

Federal Circuit Rejects Use of Laffey Matrix in Calculating Fee Award

May 21, 2019

A recent Law 360 story by Kevin Penton, “DC Circ. Vacates $7M Atty Fee Award in Civil Right Row,” reports that a split D.C. Circuit panel tossed a nearly $7 million fee award in a long-running civil rights class action in Washington, D.C., finding a lower court used a matrix for calculating fees that improperly included attorneys based outside of the district and specialized in irrelevant legal areas.  A majority of the three-judge appellate panel held that the federal court in the District of Columbia erred by relying on a new fee calculation matrix proposed by the district that included attorneys practicing in rural Virginia and West Virginia as well as those who worked in areas of law such as real estate and wills, rather than focusing on attorneys practicing complex federal litigation within the district.

The new matrix runs counter to statutory requirements that those who file and prevail in civil rights cases should be able to collect attorney fees based on "rates prevailing in the community" for the "kind and quality of services furnished," according to the majority opinion.  The plaintiffs in the case had sought $9.76 million in fees under a different matrix, according to court documents.  "It is obvious that the rates charged for, say, simple wills are lower than those for complex federal litigation," the panel majority wrote, which vacated the award and remanded it to the lower court for a recalculation.  "Worse still, nothing in the record reveals what percentage of respondents in the ... custom cross-section of ... data were litigators."

The plaintiffs — parents of children in Washington who fit within the class — sought the fees after prevailing in a class action they initiated in July 2005, claiming that the district violated the Individuals with Disabilities Education Act by failing to identify disabled children and to deliver adequate and timely education to a broader set of minors, according to the opinion.  The lower court in August 2017 awarded the plaintiffs $6.96 million in attorneys' fees, finding that the matrix proposed by Washington had a "statistically significant sample size" and "'more narrowly defined' experience categories," according to the opinion.

U.S. Circuit Judge David B. Sentelle dissented, holding that the appellate court could only toss the fee calculation matrix used by the lower court had it abused its discretion or clearly misapplied legal principles or demonstrated a "disregard" for the evidence entered in the case.  "The district court found another matrix to be more factually appropriate," Judge Sentelle wrote.  "The making of that factual determination, under the law in general and under the governing statute in particular, is the district court's province."

The case is DL et al. v. District of Columbia et al., case number 18-7004, in the U.S. Court of Appeals for the District of Columbia.

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.

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.

Judge Slashes Attorney Fee Request for Unnecessary Delays

May 7, 2019

A recent Law 360 story by Carolina Bolado, “Fla. Judge Slashes Atty Fee Request For Unnecessary Delays,” reports that a Florida federal judge slashed in half a request for over $130,000 in attorney fees, finding that a defendant's attorneys needlessly delayed ending litigation after they learned that their client had been wrongly sued by porn producer Malibu Media LLC for copyright infringement.  U.S. District Judge James S. Moody Jr. said defendant Roberto Roldan was entitled to some attorney fees and awarded him $69,084 after he was incorrectly named as a defendant in the case, which accused him of downloading copyrighted videos.

But the fees award was just over half of the $130,651 that Roldan’s attorneys had requested because the judge found that the number of hours they worked on the case was unreasonable.  Judge Moody determined that Roldan’s counsel collected information from their client and his friends, including affidavits making clear that he wasn’t a proper defendant in the case, but continued to litigate the lawsuit instead of revealing the information and ending the litigation against their client.

And when Malibu Media expressed concern to Roldan’s attorneys that he may not be a proper defendant in the lawsuit and asked to depose him, they objected and instead filed a motion for summary judgment a few days later, according to the order.  “None of these actions, among others discussed, demonstrate a good faith effort to resolve the case on the merits,” Judge Moody said.

The judge stood by a prior conclusion that Malibu Media bears some responsibility for failing to investigate simple facts about Roldan that would have ruled him out as a defendant.  But it was Roldan’s counsel that caused delays, he said.  “Ultimately, much of the work done in this case was unnecessary, and costly,” Judge Moody said.

Frequent litigant Malibu Media filed its copyright suit, one of many against users of file-sharing service BitTorrent, in November 2013.  The porn producer alleges the defendants downloaded at least 40 of its copyrighted videos.  Malibu Media asked for sanctions against Roldan’s attorneys, claiming they withheld key information, namely that Roldan, the person suspected of infringement, wasn’t home when it happened and that his father was.  The porn producer said the attorneys did it to drive up the company’s litigation costs in chasing the wrong target and said they filed a frivolous 281-page motion to dismiss.

In his order, Judge Moody declined to sanction Roldan’s attorneys, pointing out that he had already made an “across-the-board cut” in the attorney fees award and that further reduction was unnecessary.