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Category: Fee Award Factors

Equifax Class Counsel Defend $77.5M Fee Request

December 6, 2019

A recent Daily Report story by R. Robin McDonald, “Equifax Class Counsel Defend $77.5M Fee Request, Calling Settlement ‘Unprecedented’,” reports that lawyers representing the class of 147 million people whose personal information was compromised in a 2017 Equifax data breach are asking a federal judge in Atlanta to give final approval to a $1.4 billion settlement agreement, contending it exceeds the value of all previous consumer data breach settlements combined.  They also defended their request for $77.5 million in legal fees in court filings.

Calling it the largest recovery in a data breach in U.S. history, class attorneys said the benefits available to consumers meet or substantially exceed those that have been obtained in similar cases.  The attorneys also said people with valid out-of-pocket claims tied to the breach will be fully reimbursed, and all class members may claim credit monitoring.  Calling their fee request “well-justified and equivalent to or below typical awards,” class counsel said people objecting to the $1.4 billion proposal significantly undervalue the settlement and the risks associated with bringing a data breach case.

“By any measure—the size of the cash fund, the minimum cost to Equifax of $1.38 billion, or the total value to the class when considering the value of the available credit monitoring services—this settlement is unprecedented, exceeding the value of all previous consumer data breach settlements combined,” consumer class attorneys argued in the pleading.

Class lawyers also said their settlement negotiations were complicated by separate negotiations Equifax conducted with the U.S. Consumer Financial Protection Bureau, the U.S. Federal Trade Commission and 50 state attorneys general.  Equifax refused to execute the settlement class counsel carved out until it also reached separate agreements with the regulators that included a “take-it-or-leave-it package of proposed changes” and $70.5 million in extra money “but also potentially made class members worse off,” class counsel contended.

“Counsel spent months negotiating with Equifax on these changes and then with both Equifax and the regulators, so that the increased funds could be incorporated without adversely impacting the class,” class lawyers said.  “Successfully resolving those problems did not ensure that the extra money would be available … because Equifax refused to execute the settlement until and unless it also reached separate agreements with the regulators, which it wanted to announce as part of a ‘global resolution,’” class lawyers contended.  But Equifax had difficulty finalizing those agreements, they said.

Class counsel “forced the issue” by setting a hard deadline and threatening to move to enforce a binding settlement deal they reached separately with Equifax that didn’t include federal regulators or the states.  Equifax signed the global deal shortly before the deadline.  Citing class action case law when the government piggybacks off of class counsel’s work, additional fees are justified, class counsel said in their filing.  The filing stated they shared responsibility with federal regulators for increasing the size of the settlement fund “and should be compensated for their effort.”

Under the terms of the consumer settlement, Equifax will pay $380.5 million earmarked for class benefits, fees, expenses and service awards, as well as notice and administration costs.  Equifax also will pay up to an additional $125 million, if needed, to satisfy claims for consumers’ out-of-pocket losses from efforts to defend against identity theft and $1 billion designated to upgrade the company’s data security and technology.  Because there is no cap on the settlement, Equifax could pay as much as $2 billion more if all 147.4 million class members sign up for credit monitoring, the class lawyers said.  No settlement funds will revert to Equifax.

Class counsel also pushed back against an objection filed by Ted Frank and other objectors who said the legal fees are excessive.  The U.S. Court of Appeals for the Eleventh Circuit has approved class action settlements that typically range from 20-30% with a suggested benchmark of 25%, the class counsel said.

Class counsel also contended that claims their fees are disproportionate are “based on a misunderstanding of the settlement.”  Class counsel said it was rather an “historic achievement” to require Equifax to spend $1 billion on data security and related technology.

“That Equifax may also benefit makes no difference. Defendants almost always benefit by doing the right thing. … The key question is whether the class is better off. In this case, that is undeniable as the business practice changes will immediately benefit all class members by reducing the risk of another breach.  And, according to a top cybersecurity expert, Equifax’s commitment to spend $1 billion will ensure adequate funding to secure class members’ personal information long after this case is resolved.”

The class lawyers also took issue with Frank’s attempts to brush aside the value of credit monitoring services.  “The high quality credit monitoring offered here is far better than the free or low-cost services typically available.  Moreover, courts have often recognized the benefit of credit monitoring, use its retail cost as evidence of value, and consider that value in awarding fees,” their filing said.  They also contended that affected consumers have already signed up for an estimated $6 billion in credit monitoring, based on the retail price.

Class lawyers said that, to date, more than 15 million class members—or over 10% of the class—already have filed claims for credit monitoring, and every class member who submits a valid, out-of-pocket loss claim is expected to be completely reimbursed for losses fairly traceable to the data breach.  “If class counsel were awarded 10% of those benefits, the fee would be much larger than requested,” they said.

DOJ Asks Federal Circuit to Toss $7M Fee Award

December 5, 2019

A recent Law 360 story by Tiffany Hu, “DOJ Asks Fed. Circ. To Scrap Dentons’ $7M Fee Award,” reports that the U.S. Department of Justice is asking the Federal Circuit to wipe out $7.4 million in attorney fees secured by Dentons in a lawsuit accusing the Navy of infringing a company’s patents in a combat ship, saying the lower court went “too far” in its analysis.  In an opening brief, the DOJ said that the U.S. Court of Federal Claims in July incorrectly awarded attorney fees to Dentons for its work on behalf of FastShip LLC, which claimed that some of the Navy’s combat ships infringed two of its patents.

Among other things, Judge Charles F. Lettow had found that the federal government’s opposition to FastShip’s lawsuit was not “substantially justified” under a federal provision governing the amount that can be recovered in a lawsuit against the government.  That provision says a patent owner can get reasonable compensation in a suit against the government unless the government's position was substantially justified.

The DOJ argued that Judge Lettow erred in considering the government’s conduct before litigation, as the provision in question restricts the patent owners’ compensation to costs incurred “in pursuing the action,” the department said in its brief.  But even if pre-litigation conduct could be considered, the DOJ said, the judge went “too far” when he relied on certain allegations that either had nothing to do with the present lawsuit or the claimed use of the invention.

“This construct is unduly broad even if some pre-litigation conduct could be considered,” the DOJ wrote.  “The CFC’s definition goes well beyond the ‘claim’ — i.e., the facts necessary to establish infringement — and into some ill-defined totality of facts that include the procurement actions of contractors in which the government was not involved.”  The department urged the Federal Circuit to toss the lower court’s award of fees and costs and to send the case back to the court to reconsider whether the government’s position in the present action was “substantially justified.”

Judge Lettow ruled partly in favor of FastShip in 2017, finding that one ship, LCS-1, had infringed, but that a second, LCS-3, and any that followed in the class had not because they were still being manufactured when the patents expired.  The Federal Circuit in June 2018 upheld Judge Lettow’s ruling and raised the damages award slightly to $7.1 million. FastShip ultimately recovered $12.36 million for the infringement, including delay damages, Judge Lettow wrote in his July order.

Judge Lettow’s July ruling said that the “conduct of the government, both before and throughout this litigation, belies its argument that it was ‘substantially justified.’”  The judge said that among his reasons for awarding the fees and costs was that FastShip met with Lockheed during the procurement process and shared its patent technology, but that FastShip was ultimately not included as a part of the team.

“Lockheed Martin would go on to manufacture the Freedom class of ships for the government, with a completion and infringement date for LCS-1, of September 26, 2006,” Judge Lettow wrote.  The judge also questioned if the government had done a proper investigation after FastShip filed an administrative claim with the Navy in 2008.  The Navy said it did a “thorough analysis” and found no infringement after the claim was filed, although it did not share the analysis with FastShip when it wrote the company a letter after it “sat” on the claim for two years, he wrote.

“At best, this was a perfunctory response to the concerns of FastShip that ultimately proved legitimate.  At worst, it may have delayed FastShip’s filing of its claim in this court by two years,” Judge Lettow wrote.  The judge made partial adjustments to the $8.72 million of fees and costs requested by FastShip, ultimately awarding more than $7.4 million, including over $6.17 million in attorney fees and related expenses, and over $1.2 million in costs.

$14.1M Fee Award in Airline Price-Fixing Class Action

November 29, 2019

A recent Law 360 story by Matt Bernardini, “Flyers’ Attys Win $14.1M Award in Airline Price-Fixing Suit,” reports that a California federal judge has awarded attorneys for a group of passengers $14.1 million in fees for their work on a $58 million settlement with All Nippon Airways, which was one of several airlines accused of conspiring to fix the prices of trans-Pacific flights.

U.S. District Judge Charles Breyer granted the attorneys about 25% of the final settlement fund, which was slightly lower than the 33% that the attorneys originally asked for.  In his order, Judge Breyer noted that because this was the final settlement after two previous rounds of settlements with the airline companies, the value should be lowered slightly because the financial risk to the attorneys was lower in this phase.

Nonetheless, Judge Breyer noted that during the 12-year-long litigation, counsel for the passengers did exceptional work and that must be factored into the current fee award.  "Because it was not possible to know, in earlier rounds, that counsel's work with respect to ANA would result in the settlement ultimately achieved, it probably makes sense to consider the strength of all work retroactively," Judge Breyer said.  "It is also the case that counsel achieved excellent results for the class — this last settlement, with one defendant, was the single largest settlement in the entire litigation."

The long-running dispute dates back to 2007 when a class of flyers accused a group of airlines of conspiring to fix prices on long-haul trans-Pacific flights to several Pacific nations.  In 2014 multiple airlines including Air France, Japan Airlines International Co. and Vietnam Airlines Co. agreed to settle in deals totaling $29.6 million.  Qantas Airways and Singapore Airlines Ltd. followed suit and settled for a total of $9.8 million later that same year.

PA Appeals Court: No ‘Fees for Fees’ in Trust’s $2.9M Fee Request

November 27, 2019

A recent Law 360 story by Matthew Santoni, “Pa. Appeals Court Snuffs Trust’s $2.9M Bid for ‘Fees on Fees’,” reports that a trust that sought $4 million in legal fees over a $9,000 property condemnation was not entitled to another $2.85 million in "fees on fees" to cover the cost of fighting for the first fee award, a Pennsylvania appellate court ruled.  A Pennsylvania Commonwealth Court panel said an Erie County judge was right to slash the Angela Cres Trust's request for fees by 90% because the trust had not sufficiently justified its 2015 request for the $2.85 million, and state law said property owners were not guaranteed to have their legal bills paid in condemnation proceedings if they were not justified.

"The Eminent Domain Code does not require that a condemnee be made whole, as the trust seems to presume," wrote President Judge Mary Hannah Leavitt for the unanimous panel.  "It was the trust's burden to prove that its fees and costs in litigating the fee petition were reasonable, and it did not do so."

The panel upheld the Erie County Court of Common Pleas' award of $285,000 in costs and fees, agreeing that winning just $682,000 of the underlying $4 million request for fees and costs was a "limited success" for the trust, and ruling that there had been no error in the judge's findings that the large request for fees-on-fees had not been fully supported.

Millcreek, Pennsylvania, had sought to condemn a piece of trust-owned property valued at $9,000 in 2005, but after four years the court sustained the trust's preliminary objections on the grounds that the township lacked authority to condemn the land for a water channel.  Appeals and an amended declaration of taking kept the underlying dispute going through 2012, and by 2014, the trust sought to make the township pay $3.4 million in attorney fees and costs and another $650,000 for its experts' testimony and reports.  The trial court awarded only $682,000 in total, which the Commonwealth Court affirmed in 2016.  While that appeal had been pending, the trust made its request for the fees-on-fees in 2015, according to the opinion.

After a three-day hearing on the trust's petition for the additional fees, the court awarded just $285,000, citing work that was allegedly duplicated or done by expensive partners when it could have been handled by less expensive attorneys; hourly rates for attorneys and paralegals that were higher than the market rate for Erie County; and vague "block billing" where a single time entry on the record covered multiple tasks.  The trust had claimed the trial court's award of 10% of its request was arbitrary and capricious, but the appellate court disagreed.

"Simply, the award of 10 percent of the actual fee incurred was the best the trial court could do given the block billing practice of the trust's attorneys and its inability to provide the court with the expected 'amplification,'" the court said, referring to a term used by the township's expert in the trial phase.  "Because the trust's witnesses did not provide a clarification of each task and the time spent, the trial court lacked the evidence needed to conclude that the fees and costs paid by the trust were reasonable."

The trial court had also found that the trust was billed for a "speculative" motion for reconsideration, a "superfluous" post-trial motion and a mediation process that dealt with stormwater problems, not the underlying condemnation or fee dispute, so the Commonwealth Court deferred to the lower court's judgment on those proceedings being unnecessary and ineligible to be charged to the township.

"We agree with the trust that the Eminent Domain Code should be given a broad reading when determining whether a particular legal task was caused by the condemnor's action," the appellate court said.  "However, causation is a matter for the trial court to decide. It decides whether certain tasks constitute a reasonable legal response to a condemnor's action or have an attenuated relation to the condemnation."

The Commonwealth Court also said the Erie County judge made no error in giving more credit to the township's expert on legal billing than the trust's expert and had properly considered the factors for whether a fee request is reasonable as set forth by the Supreme Court of Pennsylvania's 1968 ruling In re: LaRocca's Trust Estate.

The trust complained that the court improperly weighed the trustee's wealth as part of the "client's ability to pay," one of the 11 LaRocca factors that also include the amount of work done, the complexity of the task and the amount of money or property value in question.  The Commonwealth Court said that factor was ultimately irrelevant to the finding that the fee request was not adequately supported.

"In the end, it was not the trustee's wealth that caused the trial court to reduce the trust's request ... it was the trial court's holding that the trust did not prove that any specific part of that $2.85 million was reasonable," according to the opinion.  "The real point is that not every LaRocca factor is relevant and required to be considered by the court."

The appellate court noted that while the township claimed the trust wasn't entitled to any fees at all for litigating its earlier fee petition, the trial court disagreed and gave the trust its 10% award.  "The trust was entitled to pursue all means and any cost to save its land and recover its attorney fees.  It does not follow, however, that all those fees, costs and expenses were reasonable, as required by the Eminent Domain Code before the condemnor must reimburse the condemnee for fees and costs," the court said.

Apple, Cisco Must Redo Fee Requests in ‘Reckless’ IP Actions

November 22, 2019

A recent Law 360 story by Tiffany Hu, “Apple, Cisco Must Redo Fee Request in ‘Reckless’ IP Fight,” reports that U.S. District Judge William Alsup is ordering Apple and Cisco to resubmit their bids for attorney fees from a tech company they say dragged them into “recklessly litigated” patent disputes, warning that he may deny relief entirely if the new calculations are unreasonable.  In an order, the California federal judge partially granted Apple and Cisco’s motions for attorney fees after they defeated patent lawsuits brought by Straight Path IP Group Inc. over internet voice and video calling technology, finding Straight Path’s “duplicitous machinations” rendered the cases exceptional and thus warrant such fees.

But Judge Alsup refused to approve the $10 million in attorney fees the tech giants sought after their summary judgment win against Straight Path. Apple sought $4.6 million in fees and litigation costs, while Cisco asked for $5.3 million, with the latter saying the lawsuit was "recklessly litigated" and "the poster child" for exceptional cases meriting such large fees.  Specifically, the judge said Apple’s request improperly included fees relating to an ex-parte reexamination for one of the patents at issue.  While the reexamination had put all proceedings involving that patent on hold, it was held in a separate forum and had “nothing to do with” Straight Path’s litigation misconduct, he found.

“Apple’s fee request well illustrates the evil of satellite litigation over attorney’s fees motions,” the judge’s order states.  “The court would be inclined to deny Apple’s request altogether on account of this overreaching.”  Judge Alsup said he would give the tech giants until Dec. 5 to resubmit their fee bids, adding that any items “unreasonably” included may lead to a deduction of up to three times the amount of that item from the total figure.  The court “may possibly deny relief altogether,” he added.