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Category: Fee Denial

CA Appeals Court Rejects Attorney Fees in Property Tax Case

January 5, 2021

A recent Law 360 story by Asha Glover, “Calf. Appeals Court Rejects Atty Fees for LA Theater in Tax Row” reports that a Los Angeles theater isn't entitled to attorney fees after successfully challenging its property taxes, a California appeals court said, overturning a decision from a lower court.  A lower California court erred in awarding attorney fees to Chinese Theatres LLC, a California appeals court said in a published decision.  The court rejected Chinese Theatre's argument that state law allows an award of attorney fees in any case where a court finds that the county board's findings are deficient or arbitrary, regardless of whether the court remands the measure to the local assessment appeals board with directions to make new findings.

The court said that Chinese Theatre's argument ignores an entire phrase of the statute requiring the case to be remanded and essentially asks the court to rewrite the statute.  The court rejected the theater company's contention that the Los Angeles County Assessment Appeals Board failed to make the finding that it was required to make.  The court pointed to the board's finding that half of the theater naming rights agreement granting the right to name the theater the TCL Chinese Theatre was an intangible asset — a finding that was one of the primary reasons the company filed the lawsuit.

The court also said that the lower court's sole purpose of remanding the case to the board was to excise the taxable value of the agreement from the property's assessment and to make necessary corrections to the tax roll.  The board did not need to make any new findings to explain how it valued the property once the revenue generated by the agreement was deducted from the tax assessment, according to the opinion.

Judge Tosses Suit Seeking Coverage of Defense Fees

November 23, 2020

A recent Law 360 story by Rachel O’Brien, “Judge Nixes Suit For Crypto Co. Investor’s $728K Atty Fees,” reports that a New York federal judge tossed a lawsuit by an alleged pump-and-dump scheme mastermind asking for his attorney fees to be paid by a cryptocurrency company involved in the alleged scheme, ordering the man to pay the company's fees instead.  While Barry Honig and his business GRQ Consultants Inc. point to indemnification clauses in agreements with Riot Blockchain as proof that his legal fees should be paid, U.S. District Judge Naomi Reice Buchwald said the clauses say the opposite.

Honig, at one time the largest shareholder in Riot Blockchain, spearheaded a $27 million pump-and-dump scheme involving 10 individuals and 10 associated corporate entities, the U.S. Securities and Exchange Commission alleged in September 2018.  Honig and others, including former Teva Pharmaceutical Industries Ltd. chairman Phillip Frost and Riot Blockchain CEO John O'Rourke, manipulated stock prices in three microcap companies and left investors holding "virtually worthless shares," the SEC said.

In July 2019, Honig settled the SEC claims without admitted any wrongdoing, submitting to an injunction barring him from future violations of federal securities laws, a penny stock ban and further restrictions.  Honig was named in several other suits, including in five shareholder derivative actions which alleged Riot, its directors and officers and Honig violated securities laws, and that Honig bought stock from Riot to gain "control" over the company so he could violate the securities laws.

A February 2018 class action from shareholder Creighton Takata in New Jersey federal court alleged that Honig's purchase of securities was part of a "fraudulent scheme consisting of misrepresentations, omissions, and actions that deceived the investing public in violation of securities laws."  He called those allegations "a house of cards" in his October 2019 motion to dismiss, which was granted in April because the shareholders didn't show how the defendants violated anti-fraud provisions of federal securities law, the judge said then.

In the case tossed, Honig had argued that the security purchase agreements he entered into with Riot in 2017 to buy convertible promissory notes and common stock purchase warrants guaranteed that if Honig was a defendant in a lawsuit, Riot would pay his legal fees.  The indemnification clauses in the agreements, Honig argued in the April suit, meant Riot must pay the $728,000 attorney fees he incurred fighting securities fraud allegations by the SEC and in class actions.

Riot argued that Honig's claim fails because Riot isn't obligated to pay when the litigation is connected with actions "based upon ... any violations by [Honig] of securities laws or any conduct by [Honig] which constitutes fraud, gross negligence, willful misconduct or malfeasance by [Honig]."  But Honig said the carveout in the indemnification clause only applies to actual securities violations, and since some of the lawsuits are ongoing, he's entitled to advancement of legal costs.

Judge Reice Buchwald agreed with Riot that "the allegations of the underlying action — not the merits of the action — govern Riot's obligations."  Since it's the nature of the allegations that trigger the obligation to indemnify, the clauses clearly side with Riot, Judge Reice Buchwald said.  "If there were any ambiguity, which there is not, about when the obligation to indemnify is determined (and thus whether allegations or merits control), the next sentence of Section 4.8 confirms the court's conclusion," she said.  She pointed to the section that states if an action is brought wherein the indemnity clause might be implemented, Honig must notify Riot in writing and Riot "shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to [Honig]."

"The logic of Section 4.8's structure is apparent," the judge said.  "The first sentence informs the parties as to whether indemnification is required.  If and when those conditions are satisfied, Honig would notify Riot, which then has the option to assume the defense.  The provision presupposes that the parties can determine, prior to that notice, whether an obligation to indemnify exists."

Judge Reice Buchwald also granted Riot's motion that Honig pay its reasonable attorney fees for this action.  Scott Carlton of Paul Hastings LLP, counsel for Riot Blockchain, told Law360 in a statement, "We are pleased with the court's careful consideration in this matter, including the awarding of attorneys' fees for Riot Blockchain as the prevailing party."

Law Firm Urges Eighth Circuit to Reverse $1 Fee Award

September 25, 2020

A recent Law.com story by Tim Ryan, “Firm Urges 8th Circ. To Ax $1 Award Over Judge’s ‘Disdain’, reports that an Arkansas law firm that received $1 in attorney fees after settling an overtime collective action against a pipe manufacturer reinforced its request for the Eighth Circuit to reconsider the trial court's fee award, accusing the judge of having "disdain" for the firm.  Three months after being on the receiving end of a scathing opinion from U.S. District Judge Billy Roy Wilson that labeled the firm "incorrigible," attorneys with the Sanford Law Firm returned fire in a filing that called the judge's decision to slash the fees "illegal" and claimed he is waging a personal campaign against the firm.

"The district court has expressed such animosity toward SLF such that a reasonable person would question the district court's ability to make decisions regarding appellants, who SLF represents, in an impartial manner," the firm's brief said.  For its work to win the $270,000 settlement in a wage and hour dispute with Welspun Inc, the Sanford Law Firm was supposed to receive $96,000, according to court filings.  However, Judge Wilson rejected that amount in a June decision that accused the firm of "attempted extortion" because of how it staffed and billed the case.  Judge Wilson also previously rejected a settlement offer that would have given the firm $89,000 and asked for the law firm's billing records.

The Sanford Law Firm initially petitioned the Eight Circuit to review the fee award in June, arguing it was unfairly low. Welspun defended Judge Wilson's decision earlier this month, saying the fee award was reasonable because it followed the Eighth Circuit's decision in Barbee v. Big River Steel LLC.

The firm's Wednesday reply brief, which largely focuses on the lower court judge's motivations, urged the Eighth Circuit to strike down the $1 award and send the case back to a different judge.  It claims Judge Wilson has in the past month criticized the Sanford Law Firm's billing in passing while approving other settlements the firm has worked on.  He also has accused attorneys at the firm of filing motions just to run up their bills in other cases, at one point even suggesting a summary judgment motion was unnecessary because the attorneys could have accomplished the same thing with an email to opposing counsel, according to the brief.

"Such insults are unnecessary, especially where the parties fully applied the standard imposed by the District Court," the brief said.  "They are made only to show the District Court's disdain for SLF that impacts the District Court's ability to make obviously impartial decisions in cases involving SLF."  The brief further argued judges are supposed to be deferential to the settlement agreements parties strike and that Judge Wilson was not permitted to consider the attorney fees Welspun agreed to pay when deciding whether the separate award to the employees who brought the suit was fair.

The firm's brief said Judge Wilson misinterpreted the Barbee decision as requiring parties negotiating a settlement agreement to keep their talks over attorney fees and damages separate.  Because attorney fees often far outstrip the value of an individual workers' claim, such a reading would upend the settlement negotiation process because it would prevent attorneys from bargaining with the fee award and incentivize companies to take their chances at trial, the brief said.

Fifth Circuit Says Fee Entitlement Needs Reconsideration

July 13, 2020

A recent Law 360 story by Michelle Casady, “5th Circ. Says $1M Atty Fee Request Needs Reconsideration” reports that the Fifth Circuit has determined that drilling data company Petrolink Services Inc. will get another chance to prove it's entitled to about $1 million in attorney fees for a lawsuit in which it beat back copyright infringement claims but was found by a jury to have unjustly enriched itself.  In an opinion, a three-judge panel agreed with Petrolink that a trial court had wrongly denied its request for fees without consideration in the lawsuit brought by competitor Digital Drilling Data Systems LLC, or Digidrill.  Digidrill accused Petrolink of hacking into its software at various oil rig sites in order to "scrape" valuable drilling data in real time.

Both companies appealed the trial court's judgment in early 2019.  After granting summary judgment dismissal on Digidrill's claims that Petrolink violated the Copyright Act and the Digital Millennium Copyright Act, the trial court denied Petrolink's request for about $1 million in attorney fees.  On appeal, Petrolink argued it was entitled to the award as the prevailing party on those claims.

Quoting the district court, the Fifth Circuit wrote that the lower court declined to award costs or fees to either side, because "both prevailed on different issues."  "It is difficult to make sense of this language in light of the fact that Petrolink only sought fees related to Digidrill's copyright and DMCA claims, on which Petrolink clearly and solely prevailed," the panel wrote.  "It matters not whether Digidrill ultimately prevailed on its state law unjust enrichment claim."  The Fifth Circuit sent the case back to the trial court for it to "properly analyze the motion" for attorney fees.

The Nation’s Top Attorney Fee Experts of 2020

June 24, 2020

NALFA, a non-profit group, is building a worldwide network of attorney fee expertise. Our network includes members, faculty, and fellows with expertise on the reasonableness of attorney fees.  We help organize and recognize qualified attorney fee experts from across the U.S. and around the globe.  Our attorney fee experts also include court adjuncts such as bankruptcy fee examiners, special fee masters, and fee dispute neutrals.

Every year, we announce the nation's top attorney fee experts.  Attorney fee experts are retained by fee-seeking or fee-challenging parties in litigation to independently prove reasonable attorney fees and expenses in court or arbitration.  The following NALFA profile quotes are based on bio, CV, case summaries and case materials submitted to and verified by us.  Here are the nation's top attorney fee experts of 2020:

"The Nation's Top Attorney Fee Expert"
John D. O'Connor
O'Connor & Associates
San Francisco, CA
 
"Over 30 Years of Legal Fee Audit Expertise"
Andre E. Jardini
KPC Legal Audit Services, Inc.
Glendale, CA

"The Nation's Top Bankruptcy Fee Examiner"
Robert M. Fishman
Cozen O'Connor
Chicago, IL

"Widely Respected as an Attorney Fee Expert"
Elise S. Frejka
Frejka PLLC
New York, NY
 
"Experienced on Analyzing Fees, Billing Entries for Fee Awards"
Robert L. Kaufman
Woodruff Spradlin & Smart
Costa Mesa, CA

"Highly Skilled on a Range of Fee and Billing Issues"
Daniel M. White
White Amundson APC
San Diego, CA
 
"Extensive Expertise on Attorney Fee Matters in Common Fund Litigation"
Craig W. Smith
Robbins LLP
San Diego, CA
 
"Highly Experienced in Dealing with Fee Issues Arising in Complex Litigation"
Marc M. Seltzer
Susman Godfrey LLP
Los Angeles, CA

"Total Mastery in Resolving Complex Attorney Fee Disputes"
Peter K. Rosen
JAMS
Los Angeles, CA
 
"Understands Fees, Funding, and Billing Issues in Cross Border Matters"
Glenn Newberry
Eversheds Sutherland
London, UK
 
"Solid Expertise with Fee and Billing Matters in Complex Litigation"
Bruce C. Fox
Obermayer Rebmann LLP
Pittsburgh, PA
 
"Excellent on Attorney Fee Issues in Florida"
Debra L. Feit
Stratford Law Group LLC
Fort Lauderdale, FL
 
"Nation's Top Scholar on Attorney Fees in Class Actions"
Brian T. Fitzpatrick
Vanderbilt Law School
Nashville, TN
 
"Great Leader in Analyzing Legal Bills for Insurers"
Richard Zujac
Liberty Mutual Insurance
Philadelphia, PA