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Category: Fee Reduction

Judge Cuts Fee Request in Half in Boston Cop Bias Action

October 26, 2020

A recent Law 360 story by Chris Villani, “Judge Halves Fee Bid in Boston Cop Bias Suit,” reports that Lichten & Liss-Riordan PC and Fair Work PC will receive nearly $1 million in fees and costs for their work representing Boston police officers in a discrimination suit, or less than half of the $2.3 million they sought, after a judge ruled they could not bill for hours spent litigating a similar case.

The Boston officers were awarded a $484,000 back pay judgment against the city after it was found that they missed out on promotions due to an exam twice found to be discriminatory, capping a case that was litigated for eight years.  The city skewered the initial bid for $2.3 million in fees as "beyond the pale" and called the hourly rates "egregiously high."

U.S. District Judge William G. Young scaled back the initial fee ask by more than 50%, siding with the city on a key point of contention: the officers' inclusion of nearly $1 million in legal fees and costs from an earlier, related lawsuit, Lopez v. City of Lawrence, which was litigated by the same lawyers.  "This court shares the Sixth Circuit's concern about the 'idea of ever permitting plaintiffs' counsel to receive fees for work performed in a completely separate case,'" Judge Young wrote, quoting the 2013 appellate ruling in Binta B. v. Gordon.

"Doing so could lead to all sorts of oddities, as illustrated by this case where counsel would be permitted to recover fees for thousands of hours of time spent litigating a case they lost," the judge added, again quoting from the Sixth Circuit ruling.

Nixing the hours spent by the firms in Lopez shaved $977,951 off the initial fee request.  Judge Young imposed another 20% "global reduction" on the hours billed by each attorney in the Smith case, ruling that the billing was overly vague.  "A more precise description of the topic researched or discussed, or a reference as to what documents were being reviewed would allow a court to determine whether the time spent during the litigation was reasonable," Judge Young wrote.  The deductions left a total of $607,272 in attorney fees and another $346,372 in costs.

"The plaintiffs in this case prevailed at two lengthy trials in 2014-2015 and 2019," Harold L. Lichten of Lichten & Liss-Riordan PC said in a statement.  "Thus, it is not surprising that plaintiffs' counsel has been awarded substantial fees and costs in connection with this litigation.  We respect the court's reasoned opinion."

The officers argued in their initial request in June, which sought $1.67 million in fees and $665,359 in costs, that the high tab was merited because the case, which began in 2012, will have a "profound" impact on police promotional examinations.  They also cited Boston's insistence on fighting even after a judge found years ago that the test in question was biased against minority candidates.

The city countered in August that the hourly rates listed for the attorneys who worked the case were far too high.  The city also argued there was no "legitimate basis" to include billing from the Lopez case, saying it dealt with "different exams, brought by different plaintiffs against different defendant cities … tried to a different judge, and which the plaintiffs indisputably lost at trial and on appeal."

Virgin Flight Attendants Defend $6M Fee Award in Ninth Circuit

October 21, 2020

A recent Law 360 story by Linda Chiem, “Virgin Flight Attendants Defend $6M Atty Fees in 9th Circ.,” reports that Virgin America Inc. flight attendants told the Ninth Circuit that their attorneys were properly awarded $6 million in fees and expenses after they won $77 million in a long-running dispute over California pay and rest breaks, saying their fees were already trimmed down.  The certified class of flight attendants, represented by Olivier Schreiber & Chao LLP, Kosinski & Thiagaraj LLP and Shepherd Finkelman Miller & Shah LLP, filed an answering brief urging the Ninth Circuit to affirm U.S. District Judge Jon S. Tigar's January order awarding them $5.75 million in attorney fees and $250,775.81 in expense reimbursements.

Virgin America Inc., which merged with Alaska Airlines Inc., had appealed the fee award by arguing that Judge Tigar didn't meaningfully assess or dig into whether the flight attendants' attorneys properly justified their hours and calculations.  But the flight attendants argued that Virgin is merely engaging in "rank speculation" and "conjecture" to push for more cuts to the class counsel fees even though the district court already imposed a "haircut" reduction in their hours and compensation after Virgin's earlier gripes.

"The fundamental problem with this attack is that it ignores that the district court upheld Virgin's specific objections below and, as a result, ultimately reduced class counsel's lodestar more than Virgin proposed," the flight attendants argued.  "It is thus judicially estopped from claiming error here."  The flight attendants argued that the district court acted well within its discretion after carefully and appropriately reviewing their submissions, Virgin's objections, and considering the court's own experience with the action and the relevant law in reaching its determination.

The flight attendants' attorneys had initially requested $13.2 million but were awarded less than half that.  They said Judge Tigar cut down the 5,128 hours of billable time that was compensable to 4,723.345 hours, adjusted some of the hourly rates the class counsel had claimed, and reduced their lodestar, according to the brief.  "The record reveals no grounds to disturb the district court's order," the flight attendants said.  "The court, intimately familiar with this multiyear class action litigation marked by Virgin's own litigation choices that 'undoubtedly contributed to its length and its tone,' was in the best position to assess the fees and expenses to which plaintiffs are entitled under California's fee-shifting statutes."

Named plaintiff Julia Bernstein and flight attendants spearheading the long-running dispute have alleged that Virgin America flouted California labor laws by not paying them for all hours worked, including overtime, and denying them state-mandated meal and rest breaks.

Virgin's appeal of the class counsel fees is separate from its ongoing Ninth Circuit appeal seeking to vacate the $77 million damages the flight attendants won in January 2019.  The Ninth Circuit is considering scheduling oral arguments in that appeal for early 2021, court records show.

Judge Tigar, who rebuffed Virgin's earlier attempts to dismiss the litigation, granted the flight attendants summary judgment on most of their claims in 2018, setting the stage for the subsequent fight over damages.  The judge found that California labor law applied to all work that happened in California and in situations where employment policies were decided from Virgin's previous headquarters in the Golden State.  Seattle-based Alaska Airlines acquired Virgin in 2016.

In his order on the class counsel fees earlier this year, Judge Tigar had acknowledged that the plaintiffs' attorney fee application was too vague, saying "the level of specificity at which plaintiffs have documented their time makes it difficult or impossible for Virgin to raise certain challenges that courts have found justified partial reductions in other cases."  Virgin had argued on appeal that despite that critical flaw, the judge accepted all of the hours that the plaintiffs' counsel claimed and awarded a $5.7 million fee award that was subject to only a 5% general reduction in hours.

But the flight attendants said in their answering brief that they provided the court with detailed charts and summaries of their work.  "In light of the detailed records provided, Virgin's claim that plaintiffs' submissions were 'threadbare' is disingenuous at best," they said.  "This documentation was more than sufficient evidence for the district court to address, as Virgin contends is 'critical,' 'whether the case was overstaffed, how much time the attorneys spent on particular claims, and whether the hours were reasonably expended.'"

Moreover, Virgin argued that the class counsel's flawed lodestar consisted of nearly 4,500 hours of billable time — most of which was billed at an absolute "top of the market" rate of $750 per hour — and the $251,000 in court-related expenses wasn't justified.

"Most of the expenses that the district court awarded were for 'expert fees,' which are not recoverable under black-letter California law," the airline said.  "In addition, the district court erred by ignoring the rule that a party cannot recover expenses without submitting an itemized list and accompanying receipts.  The district court did not identify any exception to this rule, and it candidly acknowledged that plaintiffs' counsel failed to comply with it.  But the court awarded expenses anyway."

But the flight attendants rejected the airline's arguments, saying in the brief that Virgin never raised that argument in the district court so it cannot raise it on appeal.  On top of that, there is no such prohibition on expert fees under California law, they said.

If Virgin wants to play that game concerning attorneys' purportedly inflated hours, then the plaintiffs can "likewise, speculate as to Virgin's reticence to submit its counsel's hours as a benchmark," the flight attendants said, noting Virgin took a "gratuitously contentious approach toward litigation, including unnecessary motion practice."

"Perhaps its counsel assigns partners to do simple tasks; perhaps a significant amount of time was spent pursuing questionable strategies; perhaps its counsel's hourly rates are significantly above its peers in the market," they said.  "Regardless, that Virgin refuses to provide a clear reference point of the expense of litigating this action — which it can easily do — speaks volumes as to the [lack of] merits of its objections."

Court Resolves $4M Attorney Fee Dispute with Law Firms

October 1, 2020

A recent Law.com story by Raychel Lean, “Court Chides Morgan & Morgan as Holland & Knight Prevails in $4 Million Attorney Fee Dispute,” reports that a federal breach of contract lawsuit which saw Holland & Knight litigators take on Morgan & Morgan came to a head when U.S. District Judge K. Michael Moore awarded more than $4.1 million in fees and costs to one side and just $550,000 to the other.  Now more than seven years in, the litigation itself has proved more costly for the plaintiffs than the actual judgment it obtained.

The dispute began in 2013, when the plaintiffs — Miami construction companies Architectural Ingenieria Siglo XXI LLC and Sun Land & RGITC LLC — sued over a failed irrigation construction contract worth $51.8 million.  Their lawsuit accused the Dominican Republic and its water resource agency, Instituto Nacional De Recursos Hidraulicos, or INDRHI, of breaching its contract by terminating the deal under force majeure, citing financial hardship.

And though the defendants were initially slapped with a $50 million default judgment for failing to respond, that was reversed when it retained Holland & Knight attorneys, who argued service hadn’t been properly handled.  Then, an eight-day bench trial resulted in a comparatively low $576,000 judgment against the water resource agency, while the Dominican Republic was absolved of liability.

Both sides moved for prevailing party fees and costs.  And after a report from U.S. Magistrate Judge Honorable Chris M. McAliley, Moore found plaintiff AIS was entitled to fees from the water resource agency; the Dominican Republic was entitled to fees from both plaintiffs; and the water resource agency was entitled to fees from plaintiff Sun Land.  In the order, Moore adopted McAliley’s findings on how much each side could recover.  And it was good news for defense attorneys Gregory Baldwin, Eduardo Ramos and Ilene Pabian of Holland & Knight’s Miami office, who’d sought more than $3.6 million in fees, along with $629,450 in non-taxable costs and $33,000 in taxable costs.

Though the plaintiffs argued those numbers were unreasonably high and moved for a 50% to 75% reduction, Moore approved the magistrate’s 15% haircut instead, shaving $144,600 off their fees.  It was a satisfying result for a case that Baldwin said “took a lot of patience, a lot of dedication and a great deal of time.”  “We’re very pleased and satisfied with the result.  We think, overall, it’s a just and fair result,” Baldwin said.  “The Dominican Republic was completely vindicated, and INDRHI received a damages award against it in an amount that we think was reasonable.”

But the ruling was bad news for plaintiff AIS, which sought $2.7 million in fees under a 2.5x contingency fee multiplier, and asked for $438,203 in nontaxable costs.  But Moore only awarded about $248,000 in fees and $302,000 in nontaxable costs — thanks to a bruising 75% reduction in fees recommended by the magistrate.

McAiley’s report levied some criticism at Morgan & Morgan, which “substantially frustrated the court’s task of working through the issues.”  The report said the firm caused extra work and delay by failing to initially disclose certain fee information, demonstrated a “lack of care” in its filings, kept unreliable records and had mixed some non-recoverable appellate costs up with trial costs.

“Obvious examples include the several entries where single timekeepers claim to have worked nearly, or more than, 24 hours in one day,” McAiley’s report said. “For instance, Morgan & Morgan maintains that one of its attorneys worked 32.7 hours in one day.”  McAiley denied Morgan & Morgan’s request for a fee multiplier and reduced its fees by 10% for failure to keep proper time records, 15% for block billing and 50% after factoring in the plaintiffs’ “very limited success” in the underlying case.  But they argued the reduction was “too much given the significant amount of work it took to litigate this case,” according to the ruling.

Moore said he wasn’t swayed by the plaintiff’s objections.  “Here, in objecting to the 75% fee reduction, plaintiffs fail to identify any factual finding in the R&R to which plaintiffs object,” Moore’s ruling said. “Rather, plaintiffs take issue with Magistrate Judge McAliley’s reasoning by arguing not that plaintiffs accurately recorded their hours worked and avoided block billing, but that the hours requested were reasonable and their success was greater in context than Magistrate Judge McAliley found it to be.”

The plaintiffs team also requested $237,400 to cover work performed by GrayRobinson.  But Moore rejected that, accepting McAiley’s finding that the retainer agreement said Morgan & Morgan was obligated to pay GrayRobinson, not that the client was

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.

Retired Players Blast Holdback Fees in NFL Concussion Case

August 1, 2020

A recent Law 360 story by Ryan Boysen, “Ex-NFLers Blast Seeger Weiss for Concussion Holdback Fees,” reports that retired NFL players and law firms active in the historic concussion settlement are raising alarms over Seeger Weiss LLP's request to levy a 5% fee on injured players' payouts to fund its future work on the case, calling it a cynical cash grab that's unsupported by facts.  Seeger Weiss has already faced years of attacks accusing the firm of burning through the lion's share of a $112 million attorney fee fund with hardly any oversight.  A series of opposition briefs filed reiterated concerns over an alleged lack of transparency in Seeger Weiss' billing practices and argued the stakes of the latest request are even higher than the previous ones.

The $112 million fund was paid for by the NFL, but the money Seeger Weiss is now requesting would come from the injured players themselves, as well as their lawyers, in the form of a 5% haircut levied on the awards of all players who successfully get paid from the uncapped settlement program.  That haircut has already been applied to the roughly 1,150 players who've had $788 million worth of claims approved thus far, resulting in $37 million sitting in an account and awaiting a decision by U.S. District Judge Anita B. Brody.  If she grants Seeger Weiss' request, that money would be released and the haircut would also be applied to all players who get paid in the future.  Seeger Weiss said it anticipates it will need between $2 million and $2.5 million per year to cover the costs of its settlement-related work.

The lawyers behind the filings said that, if granted, the 5% haircut would essentially reward Seeger Weiss for spending the NFL's money as quickly as possible by allowing the firm to collect millions of dollars from the concussion settlement annually for the rest of the program's lifespan, 61 years, even as the work required to oversee the case declines precipitously going forward.

The objecting firms are Locks Law Firm, Langfitt Garner PLLC, Girardi Keese, Lubel Voyles LLP and Goldberg Persky & White PC, as well as a handful of retired players who are not represented by counsel and are led by Mary Andrie-Brooks.  An outspoken critic of the settlement, Brooks is the daughter of famed defensive end George Andrie, a member of the Dallas Cowboys' legendary Doomsday Defense who died in 2018.

Gene Locks of Locks Law Firm served alongside Seeger Weiss' Chris Seeger as co-lead class counsel in the case until last year, when Judge Brody abruptly terminated Locks and all of the other lawyers in that role except for Seeger.  In an interview, Locks said Seeger's latest request makes no sense.  "Chris Seeger has submitted no budget for this whatsoever," Locks said.  "It's an open-ended annuity for his firm for the next 61 years."  "Ninety-eight percent of the work in this case is done," Locks added. "It's outrageous to continue to bill for whatever's left at the rates he's seeking, while providing no details whatsoever as to why it's actually necessary."

Seeger has vehemently denied all the allegations in previous attacks on his fee requests, saying his detractors fail to appreciate the immense amount of work it takes to oversee the complicated and contentious settlement.  Touting the nearly $800 million paid out by the program thus far, Seeger said in a statement that the haircut is "appropriate as it will ensure work performed by any firm over the settlement's 65-year life is compensated fairly."

Any money generated by the haircut would almost certainly be available only to class counsel, however.  That means only Seeger Weiss would have access to the money because it is the only remaining class counsel firm, although Seeger Weiss said in its request that it may hand off that role to another firm at some point.  The settlement was approved in 2015 and put to rest claims that the NFL knew for decades about the long-term dangers of repeated concussions, but did nothing to warn its players.

The uncapped program covers a class of about 20,000 retired NFL players, all of whom are potentially eligible for payments ranging from a few thousand dollars to $5 million, depending on their age and the severity of their football-related brain injuries.  The $112 million common benefit fund was set up to pay attorneys for work that broadly benefits the class as a whole, as opposed to work that involves shepherding a single player's claim through the Byzantine program.

After the settlement was finalized, mass tort fee expert William B. Rubenstein of Harvard Law School said the $112 million fund should be enough to cover class counsel fees for the program's 65-year lifespan, which began counting down in 2017.  But just three years into that timeline, only $13 million remains in the fund.  That number will be further reduced to $6 million if Seeger Weiss' pending fee requests for about $7 million are granted.

Seeger Weiss has already taken home roughly $66 million from the fund, while about 20 other firms split approximately $33 million for their work on bringing the deal to fruition.  The 5% haircut fee was conceived of as a Plan B, something that could be tapped into if class counsel costs exceeded Rubenstein's predictions.

In his request, Seeger said Rubenstein's predictions were unrealistic and estimated that he will continue to spend between $2 million and $2.5 million per year on concussion settlement-related work for the foreseeable future.  The 5% haircut, he said, is the only way to make sure he's paid for that work.

The firms that filed opposition briefs, however, said Seeger has presented no evidence whatsoever to back up that assertion.  Seeger's request runs 51 pages, but nearly all of that space is spent rehashing the work he's already done on the settlement.  The firms opposing the 5% haircut said that's highly misleading because the number of new claims being submitted by players has slowed "to a trickle," and all of the major issues that initially sparked major battles between players' attorneys and the NFL have now been settled, for better or for worse.

"Seeger continues to bill hours upon hours for work that seems to be making no impact on the greater good," Locks Law wrote.  The attorneys that oppose Seeger also said an analysis of his previous fee requests seems to indicate he's dramatically marking up the hourly rates charged by his attorneys.  Langfitt Garner said Seeger appears to be charging $260 an hour for paralegals and about $485 an hour for associates, roughly 10 times the going rate for both roles in Manhattan, one of the nation's priciest legal markets.

"These numbers suggest mark-ups that are no longer reasonable in light of the fact that class counsel has already received fees in excess of $63 million, and the fact that class counsel now demands that pro se players and counsel to players pay its fees and expenses," Langfitt Garner wrote in its opposition.

Langfitt Garner said Seeger Weiss should only receive 20% of the $37 million that's currently been collected from the 5% haircut, and the rest should be returned to players.  Going forward, Seeger Weiss should only receive a 1% haircut rather than 5%, Langfitt Garner said, and even that should only be done as a last resort.  The firm added that Seeger Weiss should be required to submit a detailed budget plan if it wants to access any of that money, a request echoed by other firms that filed opposition briefs.