Fee Dispute Hotline
(312) 907-7275

Assisting with High-Stakes Attorney Fee Disputes

The NALFA

News Blog

Category: Fee Reduction

NJ Judge Wrongly Used Past Private Practice to Cut Attorney Fees

July 29, 2020

A recent Law 360 story by Bill Wichert, “NJ Judge Wrongly Used Private Practice Past to Cut Atty Fees” reports that a New Jersey state judge improperly relied on unpublished decisions and her own private practice experience when she gave class counsel a lower attorney fee award than class counsel asked for when it settled a suit against a car dealership, a state appellate panel said Wednesday in nixing the ruling.  The panel concluded in a published opinion that Superior Court Judge Mara Zazzali-Hogan — formerly with Gibbons PC — was wrong to cut the requested hourly rates for attorney Christopher J. McGinn and lawyers and a paralegal at the Wolf Law Firm LLC to about $120,772 in fees and costs, which undercut their request by more than $40,000.

"In rejecting class counsel's submissions and reducing the hourly rate for all the attorneys and the paralegal, the judge relied on her personal experience in private practice, a methodology rejected in Walker ... and considered four unpublished decisions," the three-judge panel said, citing the New Jersey Supreme Court's 2012 opinion in Walker v. Giuffre.  As for Judge Zazzali-Hogan's reliance on the unpublished decisions, the panel pointed to the state Supreme Court's 2008 opinion in Brundage v. Estate of Carambio, which acknowledged that "[state court] rule 1:36-3 'provides that "[n]o unpublished opinion shall constitute precedent or be binding upon any court."'"

"Under these circumstances, we are persuaded that the judge's reduction of the hourly rates was based upon consideration of inappropriate factors, and thus reflects a mistaken exercise of discretion," the panel said, adding in a footnote: "In remanding this matter, we make no finding or suggestion about what hourly rates ultimately should be deemed reasonable for this kind of case."  McGinn and the Wolf Law Firm, representing plaintiff Nina Seigelstein, appealed the judge's decision in the suit against Shrewsbury Motors Inc. and its principal, which claimed the dealership unlawfully charged customers documentary fees that were not itemized, court documents state.

Under the settlement in the case, the defendants agreed to pay $125 to each member of a 2,883-member class, court documents state.  The attorneys sought roughly $162,000 in fees and costs, with hourly rates ranging from $165 for the paralegal to $500 for McGinn and $765 for fellow lead attorney Andrew R. Wolf, court documents state.

To back up the proposed hourly rates, the attorneys submitted certifications from Wolf, McGinn and three other lawyers who didn't work on the case, as well as two state court decisions, court documents state.  Citing the unpublished cases and her "fifteen years of private practice," Judge Zazzali-Hogan in March 2019 reduced the hourly rates, which set McGinn's and Wolf's at $475 and $575, respectively.  The judge also reduced the billable hours and used a smaller contingency fee enhancement percentage than what the attorneys requested.

$23M in Attorney Fees in Yahoo Data Breach MDL

July 22, 2020

A recent Law 360 story by Dorothy Atkins, “Yahoo Data Breach MDL Attys Get $23M in Cut Fee Award” reports that a California federal judge approved a $117.5 million deal to resolve multidistrict litigation involving 194 million class members over Yahoo's multiple data breaches and awarded class counsel $23 million in fees, declining to award the full $30 million they requested.  In an 86-page opinion, U.S. District Judge Lucy Koh signed off on the settlement allotting class counsel $23 million in fees and $1.48 million in costs, while class representatives received between $2,500 and $7,500 in service awards.

In rejecting class counsel's bid for $30 million in fees, Judge Koh recognized that their requested fee amount met the 25% benchmark typically awarded in class action settlements.  But the judge said calculating fees based on a percentage of the total deal isn't appropriate in this "megafund" case involving more than a hundred million class members.  "Having overseen this case for four years, the court finds that justice would be best served by applying the lodestar method — i.e., tying the fee awards for class counsel to the actual hours they reasonably expended on this litigation and then selecting a multiplier," the order says.

During a hearing held via Zoom last month, Judge Koh heard multiple objections to the settlement and fee request.  At the time, the judge told class counsel she wanted more detailed billing information — including the "markup" on work by first-year law students — on the 31 law firms and 204 attorneys and paralegals who worked on the MDL and related litigation consolidated in state court, as well as total costs for hiring experts.  After reviewing the supplemental information, Judge Koh said in her order that class counsel's hourly billing rates — which ranged from $450 to $900 for partners, $160 to $850 for non-partner attorneys and $200 for summer associates — is reasonable.

AIG Unit Can Recover Attorney Fees in Coverage Litigation

July 21, 2020

A recent Law 360 story by Mike LaSusa, “AIG Unit Nabs $212K in Atty Fees After Coverage Row” reports that AIG unit National Union can collect nearly $212,000 in attorney fees after fending off a medical services company's coverage claims stemming from a pair of employee harassment complaints, with a Florida federal judge shooting down several objections to the final fee figure.  U.S. District Judge Roy B. Dalton Jr. accepted a magistrate judge's recommendation to order TMH Medical Services LLC to pay $211,720.50 in attorney fees to National Union Fire Insurance Co. of Pittsburgh, Pa. — a slight reduction from National Union's request for $223,143.50 in fees.

Judge Dalton swept aside TMH's argument that National Union couldn't collect fees for litigation that happened after July 17, 2019, when the judge issued an order saying National Union would be entitled to attorney fees while leaving the amount undetermined.  TMH had argued that Florida law doesn't allow litigants to collect attorney fees racked up while fighting over the amount of attorney fees owed.  But Judge Dalton said his order last year didn't specify an amount and didn't end the battle over whether National Union was entitled to fees.

Judge Dalton noted that TMH had asked the court to reconsider its decision.  The judge rejected that request on March 20, meaning that date — not July 2019 — marked the end of litigation over entitlement to fees and start of the litigation over the final amount, he said.  The judge also wasn't convinced by TMH's arguments that the rates offered by National Union were unreasonable.  He said the rates of $285 per hour for of counsel and $355 for partners seemed reasonable, citing similar cases in which attorneys were paid as much as $550 per hour.

Attorneys Stuck With Slashed Attorney Fees After USAA Trial Win

July 20, 2020

A recent Law 360 story by Daniel Siegal, “Atty Stuck With Slashed Fees After USAA Bad Faith Trial Win” reports that an Oregon federal judge refused to reconsider his ruling awarding only $179,000 of the $715,000 in fees requested by lawyers who helped a woman convince the court that USAA had acted in bad faith when it refused to cover her crash with an uninsured driver.  In a two-page order, U.S. District Judge Michael H. Simon did not go into the details of the arguments made by plaintiff Peggy Foraker's attorneys, but simply stated the legal standard for a motion for reconsideration and said having reviewed the motion and associated briefing, he found "no basis for reconsideration."

Foraker attorney Stephen Hendricks of Hendricks Law Firm told Law360 via email that his client intends to appeal the attorney fee ruling in addition to other matters going to the merits of the suit.  Foraker, who was hurt when a suspect fleeing from police crashed into her, won two bench trials in her suit against her insurer, which had refused to pay out an uninsured motorist policy.  In the first phase, Foraker obtained a ruling that USAA Casualty Insurance Co. owed her the full $1 million limit of that policy, and in the second phase, Judge Simon found USAA acted in bad faith and awarded Foraker $323,000.

Last month, however, Judge Simon ruled that Foraker's lawyers deserved much less in legal fees than the $715,000 lodestar they requested, because their wins in the second phase were limited — unlike the first phase, where they got $1.31 million in fees.  Judge Simon wrote that roughly three-quarters of the attorneys' time went to unsuccessful arguments and that this was "consistent with the results," and thus it made sense to award them one-quarter of their lodestar figure.  Judge Simon also called the attorneys' 340-page sheaf of submitted bills "massive but poorly organized."

In their motion for reconsideration and supporting briefing, Foraker's attorneys said they understood the case had been "exhausting" and that the court is "weary of this case," but pressed their case that the reduced attorney fee award would have a chilling effect on future bad faith insurance cases under Oregon law.  "As the first publicly watched case on the subject, the court's fee award sends a clear message that all such cases should be abandoned, as even the very successful trial outcome of such a case will be compensated at the rate of 25% of hours incurred," Foraker's attorneys wrote.  "This ignores the mandates of Oregon law and strongly disincentivizes similar plaintiffs from pursuing other meritorious claims."

The attorneys also argued that the supposedly poorly organized time records were organized the same way as the ones submitted for the phase one trial, which were accepted by the court.  Finally, in their reply brief filed on July 13, Foraker's lawyers drew a comparison between their bid for attorney fees and the recent protests for racial justice in Portland.

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
Fox Rothschild LLP
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 Arroyo 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