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Category: Expenses / Costs

Judge Trims Hours Billed in Copyright Infringement Action

August 17, 2017

A recent Law 360 story by Sophia Morris, “Judge Reinstates, Then Trims Fees Award to ‘Obstinate’ Attys,” reports that a Florida federal judge ruled that Yellow Pages Photos Inc. was entitled to attorneys’ fees and costs totaling more than $1.4 million in a copyright infringement suit following an Eleventh Circuit ruling in its favor, but revised the amount downward based on the conduct of the company's counsel at Shumaker Loop & Kendrick LLP.

U.S. District Court Judge Richard A. Lazzara was ruling on the fee request following the remand of YPPI’s infringement suit against subcontractor Ziplocal and Yellow Pages Group LLC from the Eleventh Circuit.  He found that while YPPI was the prevailing party and thus entitled to fees and costs, the amount must be reduced given its attorneys' conduct during the litigation.

“Obstructing the rhythm of a case by throwing up roadblocks of schedules too busy to calendar depositions, just for the sake of being disagreeable and obstinate, particularly in view of the multiple attorneys working on the case, does not bode well in finding the number of hours incurred was reasonable or acceptable in any sense of the word,” Judge Lazzara said.

Yellow Pages Photos filed the long-running infringement suit in 2012 over Ziplocal and Yellow Pages Group’s use of copyrighted photos.  In 2014 a federal jury awarded YPPI $123,000 in damages.  Yellow Pages Group appealed and YPPI cross-appealed, and the Eleventh Circuit affirmed the judgment in 2015.  YPPI then appealed the district court’s lowered fee award, and the Eleventh Circuit ruled in January that it was entitled to a revised fee determination given that it had requested $1.4 million in fees from Ziplocal and had been awarded $69,354.76. 

Now, on remand after the January ruling, YPPI requested fees and costs for both the district court action and the appeal process.  But Judge Lazzara said that given the stonewalling behavior of YPPI’s attorneys during the course of the district court proceedings he cannot award fees and costs in the amount requested.

The court found that the lodestar for the district court action should be $1,280,395.57, a 10 percent reduction “representative of the excessive, redundant and otherwise unnecessary number of hours expended,” Judge Lazzara said.  He then reduced this lodestar by another 10 percent to $1,152,356.01, saying that YPPI had requested an excessive amount of damages in what was a simple case.  The damages that were awarded were much lower than what was initially requested and the court found that the fee award should reflect this.

YPPI’s attorneys also made a fee request of $57,419.50 for work expended on the appeal.  The court said that while the hourly rate was reasonable, the amount of hours expended on the appeal was not.  Judge Lazzara said that the fee request was not detailed and it appeared that the attorneys were duplicating each other’s work.  He therefore reduced the fee award to $50,794,50.  “The time of 136 hours seems excessive and unnecessary for researching and briefing the issue of attorneys’ fees and nontaxable costs,” the court said.

Defense Fees Awarded in CEPA Claim Deemed Baseless

August 3, 2017

A recent New Jersey Law Journal story by Charles Toutant, “Hospital Award Fees After Plaintiff’s CEPA Claim Deemed Baseless,” reports that a federal judge has awarded legal fees to a hospital as the prevailing party in an ex-employee's whistleblower claim after the plaintiff could not name any laws or regulations broken by the defendant.

Capital Health Systems is entitled to fees for defending lab technician Janice Marrin's claims under the Conscientious Employee Protection Act (CEPA) because her claims about lax procedures at the defendant's microbiology lab are without basis in law or fact, U.S. District Judge Freda Wolfson ruled.  Wolfson said the plaintiff had failed to advance any argument to support her CEPA claims.  Wolfson said lack of support distinguished Marrin's CEPA claim from a situation where claims were merely not viable.

Capital Health sought reimbursement for efforts to oppose Marrin's whistleblower claim for more than three years, from the first filing of the complaint in March 2014, but Wolfson granted the defendant fees from after the close of discovery in September 2016 until the plaintiff withdrew the CEPA claim in November 2016.

Marrin first worked in the defendant's hospital in Trenton and later was transferred to its hospital in Hopewell.  Her suit claimed she was terminated for complaining to supervisors about improper procedures in the lab.  She met with Capital Health's director of human resources in February 2013 to discuss her concerns about her co-workers' deficient procedures.  In April 2013 she was terminated for failure to cooperate with an internal investigation into how she obtained emails between her supervisors and the human resources department that discussed her but were not addressed to her.

Besides the CEPA claim, Marrin's suit brought claims under the state Law Against Discrimination and the Family and Medical Leave Act.  Wolfson dismissed the remainder of the claims this May.  Capital Health sought fees for the entire duration of the litigation because it claimed Marrin admitted during the August 2015 deposition that she lacked a basis for her CEPA claim when she filed the suit, but Wolfson called that assertion "highly speculative."

"Plaintiff was entitled at the pleading stage to maintain both her CEPA and NJLAD retaliation claims, and defendants chose to wait until after the close of discovery to move on all of plaintiff's claims, rather than moving on the CEPA claim as soon as Defendants contend it became apparent that the claim lacked merit.  This Court, considering the foregoing and looking to the parameters of CEPA's safe harbor provision … finds that an appropriate threshold for the imposition of fees and costs in this case was the close of discovery," Wolfson said.

The lawyer for Capital Health, Kelly Bunting of Greenberg Traurig in Philadelphia, said she and her client were both "thrilled" with the decision, given the difficulty of winning motions for fees.  Bunting said she had yet to calculate how much she will seek on the CEPA issue, adding that her motions for legal fees under the LAD and for a bill of costs are still pending. Bunting said she had no disagreement with the court's limits on the scope of her CEPA fee award, which was based on a finding that some time spent on that motion could also apply to the plaintiff's LAD claim.

Investor Rips Fee Request in $100M Halliburton Settlement

August 1, 2017

A recent Law 360 story by Jon Hill, “Investor Rips Atty Fee Requests to $100M Halliburton Deal,” reports that an investor representing Halliburton Co. shareholders in a $100 million settlement with the company over its asbestos liability disclosures has slammed attorneys’ fees requests from two law firms previously involved in the case, telling a Texas federal court that their work provided no meaningful benefit.

Former co-liaison counsel Federman & Sherwood and Kilgore & Kilgore PLLC have asked the court to award them attorneys’ fees of more than $333,000 combined, but lead plaintiff The Erica P. John Fund Inc. argued that the firms do not deserve to be compensated.  “Neither Federman nor Kilgore conferred any independent benefit upon the class and both firms had a role in work that was detrimental to the class,” the fund said.

The court granted preliminary approval in March of the $100 million settlement with oil services company Halliburton, marking the beginning of the end for what had become one of the longest-running class actions in U.S. history.  In connection with the settlement, class counsel Boies Schiller Flexner LLP and Kahn Swick & Foti LLC told the court that they would seek a combined fees award equivalent to a third of the settlement fund — more than $33 million — plus reimbursement for nearly $6.3 million in expenses for their decade of work litigating the suit.

But before that request was formalized in a motion filed by the EPJ Fund earlier this month, Federman and Kilgore filed their own bids for attorneys’ fees of more than $200,000 and $132,000, respectively.  The amounts were reasonable for the more than 300 hours that each firm clocked in efforts on behalf of the class since 2002, the firms argued. Both had served as co-liaison counsel to Schiffrin & Barroway LLP until that firm withdrew as lead counsel in 2005, at which point Kilgore continued on as local counsel for another two years.

But the EPJ Fund has opposed these fee requests, contending that both firms were supporting players and have not met the high burden of proof necessary for non-lead counsel to demonstrate the benefits they created for the class and overcome a lead plaintiff’s objections.

According to the fund, Federman has identified no specific beneficial tasks in its fee application and has even incorporated in its tally the time it spent on a previous fee application to accompany a rejected 2004 settlement proposal of $6 million that it supported.  This proposed settlement was a “disaster” that delayed recovery for the class by more than a year, the fund claimed.

“By including fee-related work pertaining to the failed $6 million settlement in its requested lodestar, Federman undermines the credibility of its entire fee application,” the fund said.  Kilgore’s request fared no better in the estimation of the fund, which noted that the firm “unbelievably” counted in its fee request the time it spent helping to oppose the fund’s effort in 2006 to replace the then-co-lead counsel.  These former co-lead counsel have “tellingly” not asked the court for fees, the fund said.

“That Kilgore seeks compensation for work that was indisputably detrimental to lead plaintiff and the class speaks volumes regarding its fee request,” the fund told the court.  The fund said it is not opposed to reimbursement of reasonable expenses incurred by either Federman or Kilgore, which are seeking to recover expenses of more than $18,000 combined.

In a separate filing, Federman objected to the class counsel’s attorney fee application on the grounds that Boies Schiller and Kahn Swick have not provided their “contemporaneous and detailed time and expense records” despite a request sent by both certified mail and email.

Such records are necessary so that the court and all parties involved “can make an informed and complete evaluation as to the reasonableness of the fee and expense award requested by class counsel,” Federman argued, urging the court to require disclosure of these reports before making any final decision on their award application.

But the EPJ Fund shot back in a footnote in its filing Monday, saying, “Federman’s request, like the firm’s fee quest, is without basis.”  The court will determine whether to approve the attorneys’ fee and expense award applications at or after a settlement fairness hearing scheduled for July 31.

Attorneys Garner $125M in Second VW Settlement

July 26, 2017

A recent Courthouse News story by Nicholas Iovino, “Attorneys Awarded $125 Million for Second VW Settlement’,” reports that a federal judge awarded $125 million in fees and costs to lawyers who secured a second settlement in Volkswagen’s diesel emissions cheating scandal.

U.S. District Judge Charles Breyer approved the $1.2 billion settlement in May, one of two deals worth nearly $16 billion, to settle claims in Volkswagen’s installation of emissions test cheating software in some 580,000 diesel-powered vehicles sold in the United States.

“The settlement not only provides class members with significant value, but class counsel obtained the settlement swiftly,” Breyer wrote in his 7-page ruling.  He noted that the second deal was approved less than 18 months after lead class counsel Lieff Cabraser Heimann & Bernstein was appointed by the court.

It was the second big payday for attorneys in the multidistrict consumer class action.  Breyer in March awarded counsel $175 million for securing a $14.7 billion deal for 500,000 2.0-liter engine vehicles.  In that settlement, Volkswagen agreed to spend $10 billion on vehicle buybacks and emissions-reducing repairs, and $4.7 billion to regulators for air quality improvement programs.

The 3.0-liter engine deal approved in May comes with a value of at least $902 million for consumers, along with payouts to U.S. and California for air pollution mitigation.  Under the settlement, Volkswagen could have to pay an extra $4 billion if it can’t come up with regulator-approved, emissions-reducing repairs for 58,000 newer-model cars by deadlines in October, November and December this year.

The requested $121 million in attorneys’ fees accounts for 13.4 percent of the estimated $902 million value of the settlement, “well below the Ninth Circuit’s 25 percent benchmark for common fund cases,” Breyer wrote in the Friday ruling.  He found the attorneys’ request for an additional $4 million in expenses was reasonable and granted it.

Volkswagen has paid more than $20 billion in U.S. civil settlements and criminal fines so far for installing of emissions-cheating software in some 11 million vehicles worldwide, and U.S. prosecutors have criminally charged six of its executives with conspiracy and obstruction of justice.

Also, Breyer approved a third partial consent decree in which Volkswagen agreed to pay a $93.8 million fine to California’s air quality regulator, the California Air Resources Board.  That money will go to the state’s Air Pollution Control Fund, according to the consent decree.

On top of that, Volkswagen will pay California another $60 million, in $10 million installments over six years, to reimburse it for the costs of securing three consent decrees.  The third consent decree also requires Volkswagen make changes to its corporate governance structure, maintain an approved whistleblower system, and hire third-party testers and auditors to evaluate its emissions compliance.

The plaintiffs’ steering committee said in a statement that it appreciated the court’s consideration of its fee request and was “gratified” to be implementing the two class-action settlements.

More than 10,000 of 30,000 filed claims have been paid for the 3.0-liter settlement in less than two months, and more than $540 million in payment offers have been made, according to class attorneys.

“We negotiated these agreements to hold Volkswagen accountable for its breach of consumer trust, and we hope that all class members choose to take advantage of the benefits detailed in these settlements,” the class attorneys said in a statement.  “These legal fees are in addition to the compensation Volkswagen has already agreed to pay under the terms of the settlement, and will not be deducted from any class member’s recovery amount.”

Attorneys Earn $18.5M in Fees in Dole Securities Action

July 21, 2017

A recent Law 360 story by Jeff Montgomery, “Dole Shareholders Garner $18.5M in Fees in Securities Cases, reports that attorneys for a Dole Food Co. stockholder class secured an $18.5 million fee award as part of a $74 million settlement in a Delaware federal securities suit targeting insider efforts that artificially depressed Dole’s stock price in 2013.

The fee, along with about $694,000 for expenses and costs, went to lead counsel Bernstein Litowitz Berger & Grossmann LLP and Entwistle & Cappucci LLP and liaison counsel Friedlander & Gorris LLP, in a case focused on damage to those who relinquished their shares before Dole sold the company into private ownership for $1.6 billion.

U.S. District Court Judge Leonard P. Stark said the uncontested settlement terms were both fair and reasonable, and reflected the significant risk taken by attorneys in pursuing damages to former investors unable to receive shares of a separate, $101 million Chancery Court award in a related Dole stockholder case.

“The claims on behalf of persons who sold stock before the closing were going to be released, but they were not going to receive any consideration,” class attorney Vincent R. Cappucci of Entwistle & Cappucci said.  He added later that suit required “tremendous work by experts in analytics.”

In August 2015, Vice Chancellor J. Travis Laster found that Dole CEO David Murdock and General Counsel C. Michael Carter breached their fiduciary duties to shareholders in connection with the take-private deal.  Both were said by Vice Chancellor Laster to have acted in “intentional bad faith,” with Carter alleged to have engaged in fraud and the two found jointly and severally liable for $148.19 million in damages.  The award covered both holders of stock in the run-up to the go-private closing and parties who launched a separate suit challenging Dole’s appraised value.

In the August opinion, Vice Chancellor Laster concluded that Murdock and Carter’s effort to drive down Dole’s share price and their alleged misrepresentations during negotiations reduced the company deal price by 16.9 percent, or $2.74 per share.

Judge Stark said the subsequent $74 million federal court settlement was large “not only in the abstract, but more importantly it represents a substantial percentage of what the plaintiffs believe is the maximum possible recovery — right around a third of the best scenario in the plaintiffs' estimate.”

Class attorney Katherine M. Sinderson of Bernstein Litowitz said interest also will be applied to both the fee award and the class payment, which will be distributed proportionally to investors.  The $639,000 in legal expenses approved by the court, Sinderson said, were well below the $1.3 million possible for the case.

Judge Stark said the case involved many complex issues, some novel or unprecedented, as well as statute of limitation concerns.  The complications in the contingent fee case created a significant risk that the stockholders and attorneys “may have had nothing had the case proceeded all the way through trial and an inevitable appeal,” the judge said.

The case is San Antonio Fire and Police Pension Fund et al. v. Dole Food Co. Inc. et al., case number 1:15-cv-01140, in the U.S. District Court for the District of Delaware.