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Category: Lodestar / Multiplier

No Fee Enhancement in Prolonged Med Mal Case

November 10, 2017

A recent New York Law Journal story by Jason Grant, “Morelli Denied Enhanced Fee in Seven-Year Long Med Mal Case” reports that the Manhattan-based firm, led by famed civil litigator Benedict Morelli, was sufficiently compensated when it was paid $376,198.50 for 970 hours of legal services, in accordance with Judiciary Law § 474-a(2), which sets out a schedule for contingency fees earned by lawyers in medical, dental or podiatric malpractice actions.

The Morelli Law Firm is not due an increased contingency fee award based on alleged “extraordinary circumstances” in representing a client in a medical malpractice lawsuit for 7½ years, a state appeals court has ruled.  A unanimous Appellate Division, Second Department, panel ruled that, while the statute provides for higher fees based on extraordinary circumstances, Morelli had not made a “threshold showing” that the money collected by his firm was inadequate.

“The law firm expended approximately 970 hours, that included 9 days of trial, over the course of the 7½ years it represented the plaintiffs in this medical malpractice action,” wrote Justices John Leventhal, Betsy Barros, Valerie Brathwaite Nelson and Linda Christopher.  “The record is devoid of any evidence that the amount of time spent on the representation of the plaintiffs resulted in an exceptionally low hourly rate of compensation, or that it caused the law firm any financial detriment.”

“Inasmuch as the law firm failed to make the threshold showing that compensation in this case was inadequate, it is not necessary to reach the issue of whether extraordinary circumstances existed,” the panel added in a terse opinion issued Nov. 1, in Siu Kiu Lam v. Nelly Loo, et al.; Morelli Law Firm, PLLC, nonparty-appellant, 20028/09.  The panel’s opinion affirmed the June 2016 decision of Kings County Supreme Court Justice Bert Bunyan, who had denied the Morelli firm’s motion under Judiciary Law § 474-a for an increased contingency fee award.

CA Court: No Fee Multiplier for “Fees for Fees” in Private Attorney General Action

November 8, 2017

A recent Met News story, “Enhancement Based on ‘Risk’ Inapplicable in Seeking ‘Fees on Fees’ Award—C.A.” reports that an attorney fee award in connection with work done in securing fees in a private attorney general action would logically not be enhanced based on “risk,” the Court of Appeal for this district held.  The decision came in a case in which trial court ordered the state to pay $836,211.25 in attorney fees to lawyers for work they did in defending previous attorney fee awards in the case, a case which stretches back to the filing of a complaint on June 20, 1978, and includes a decision by the California Supreme Court.  It was alleged in the class action that the state unconstitutionally collected higher vehicle license fees and use taxes on vehicles purchased out of state.

The state appealed the latest fee awards, divided among three firms and one sole practitioner, now located in Houston; the sole practitioner and plaintiff, Patrick G. Woosley, cross appealed.  Broken down, the awards were: $14,332.50 to Jones, Bell, Abbott, Fleming & Fitzgerald L.L.P, $80,010 to the Gansinger Firm, $15,600 to the Law Offices of John F. Busetti, and $70,000 to Woosley.

Writing for Div. Five, Justice Lamar Baker said Los Angeles Superior Court Judge Stephanie M. Bowick did not abuse her discretion in making the awards.  With respect to the enhancements Woolsey sought in connection with the risk a lawyer in a private attorney general action takes that no fees will be ordered, should there be a lack of success, and based on a delay in payment, Baker wrote:

“[W]e conclude the trial court’s decision not to enhance Woosley’s fee award for risk and delay was not error.  By the time Plaintiffs’ Counsel applied for the attorney fees at issue here, their entitlement to an award of some amount was all but inevitable (notwithstanding the State’s arguments to the contrary) based on their success in the underlying litigation and their earlier fee award…. Thus, the trial court did not abuse its discretion in failing to enhance Woosley’s award for risk.”

He went on to say that while a small enhancement based on delay in payment is permissible, being akin to interest, the award is discretionary.  Woosley contested deductions Bowick made from the amount he requested, but Baker declared:  “The court’s method and results were both sound.”

Bowick rebuffed the state’s contention that the attorneys were entitled to no further fees.  She cited the California Supreme Court’s 1982 decision in Serrano v. Unruh (Serrano IV) for the proposition if a party has received attorney fees in a private attorney general action, pursuant to Code of Civil Procedure §1021.5, entitlement to fees in connection with gaining fees follows.

In that decision, the high court said: “We conclude that, absent circumstances rendering an award unjust, the fee should ordinarily include compensation for all hours reasonably spent, including those relating solely to the fee.”

Woosley initially scored a victory in the trial court.  Then-Los Angeles Superior Court Judge Lester M. Olson awarded $13.7 million to class counsel and $1 million in fees to Woosley “for services rendered as class representative.”  The state appealed from a judgment in favor of the two classes Olson certified, and Woosley appealed from the denial of fees for his legal services.  The Court of Appeal affirmed the judgment for the classes and reversed the denial of fees for Woosley’s legal work.

The California Supreme Court in 1992 affirmed and reversed the Court of Appeal.  Then-Chief Justice Ronald George (now retired) wrote: “[W]e hold the state violated the commerce clause of the United States Constitution by imposing vehicle license fees and use taxes on vehicles originally sold outside California that were higher than the fees and taxes charged on similar vehicles first sold within the state….

“[W]e hold the class claim filed in this case was not authorized by statute. That claim is valid only as to Woosley in his individual capacity.  Although our ruling does not automatically preclude continuation of this suit as a class action, the class may include only persons who timely filed valid claims for refunds.”  George noted that under the judgment as it stood, refunds, according to the state’s reckoning, would amount to more than $1 billion.  He also noted that the state had ceased its discriminatory practice on 1976.

The chief justice added: “Because our opinion will result in a substantial reduction in the amount of the judgment, the trial court shall reconsider the amount of its award of attorney fees to counsel for the class and the amount of its award to Woosley ‘as fees for services rendered as class representative.’”

On remand, there came a $23 million attorney fee award, with costs, which the Court of Appeal in 2010 reversed because consideration had not given “any consideration to the lack of success.” In 2014, the trial court pared the award to $2.8 million, and the lawyers appealed.

The case is Woosley v. State of California, B275402.

Ninth Circuit Remands BAR/BRI Fee Award for Second Time

November 1, 2017

A recent MetNews story, “Ninth Circuit Vetoes Attorney Fee Award for Second Time” reports that the Ninth U.S. Court of Appeals has, for a second time, remanded a case to the District Court for the Central District of California for a determination as to how much of a $9.5 million settlement fund in a class action against West Publishing Corporation will go to the plaintiffs’ attorneys.

The lawsuit alleged that BAR/BRI, a bar exam preparatory course then owned by West, conspired with Kaplan, Inc. to limit competition in the field. U.S. District Court Judge R. Gary Klausner awarded class counsel attorney fees in the amount of $883,475.50 and $20,734.89 in costs.

Six class members had protested the $1.9 million in fees and $49,934.89 in cost being sought.  Klausner granted the objectors attorney fees in the amount of $7,354.90 based on their success in getting the award pared, and provided for incentive awards of $500 to each of the objectors.  Class members were those who purchased the BAR/BRI course at any time from Aug. 1, 2006 to March 21, 2011.

A three-judge panel, composed of Judges Stephen Reinhardt, Richard Paez and Milan Smith, found in their memorandum opinion that Judge R. Gary Klausner correctly used the lodestar method of calculating the award—multiplying the number of hours reasonably expended by the prevailing rate for attorney fees—as Judge Manuel L. Real had last year when he presided over the case.  An alternative method would have been a percentage of the settlement.

However, the judges said that Klausner, to whom the case was assigned following a reversal of Real’s award, failed “to update the lodestar calculation to compensate for the delayed payment.”  He used the 2016 calculations, without either taking into account the increase between then and now in the prevailing rates or applying a “prime-rate enhancement,” the opinion says.  The judges also faulted him for not using a multiplier based on the risk factor in undertaking a case without certainty of an award.

However, the judges said Klausner was correct in finding the case was not a rare one in which the fee needed to be adjusted up or down to meet the test of reasonableness, and that he was justified in excluding expert fees that were not properly documented.

Fee Allocation Dispute in NFL Concussion Litigation

October 30, 2017

A recent Legal Intelligencer story by Max Mitchell, “NFL Concussion Lawyers Pile on Seeger’s $70M Fee Request” reports that nearly 20 attorneys and firms involved in the NFL concussion litigation are challenging a lead attorney’s proposal for divvying up $112 million in attorney fees, which had allocated the lion’s share to his firm.  According to court filings, 16 firms and one former member of the plaintiff’s steering committee have filed objections to the proposal that Christopher Seeger submitted to the court in mid-October.  That proposal had included more than $70 million for his firm, Seeger Weiss.  Among the firms that submitted objections to the proposal are Anapol Weiss, home to Sol Weiss, who is co-lead counsel with Seeger in the litigation.

Anapol’s response proposed an alternative methodology for the court to use in dividing up the fees.  The suggested formula would not rely as heavily on lodestar multipliers and would accounted for hours spent working toward significant benchmarks in the litigation, rather than applying a “straight-line mathematical computation” that treated all hours equally, the filing said.

The 15-page alternative proposal, which was filed by Pietragallo Gordon Alfano Bosick & Raspanti attorney Gaetan Alfano, said it would more adequately account for Anapol’s role in developing the litigation and hammering out the settlement agreement.

“While Seeger and Anapol shared the role of co-lead class counsel, the Seeger firm’s proposed apportionment would leave one co-lead class counsel firm (Seeger) with 65.4 percent of the attorneys’ fees and the other (Anapol) with 4.3 percent of the attorneys’ fees,” the filing said in a footnote.  “The Seeger firm requests that this court award it over 15 times the fees that it allocated to its co-lead counsel, Anapol.  On its face, Mr. Seeger’s proposed apportionment is grossly inequitable, given, inter alia, Anapol’s extensive contributions to the case.”

In an emailed statement to the press, Seeger said, “We believe this allocation is reasonable and well within the precedent set in similar cases. Judge [Anita] Brody will ultimately determine the final allocation, and we appreciate her consideration of this matter.”

On Oct. 10, Seeger filed a 22-page declaration to the U.S. District Court for the Eastern District of Pennsylvania, asking the court to award his firm $70.4 million.  The money, according to the request, would compensate Seeger Weiss for a total of 21,044 hours that his firm spent on the litigation since he was appointed to represent the class in 2012.

Although many of the responses took issue with the lodestar multipliers Seeger used to develop his proposal, some contended that a neutral special master needed to be appointed to handle the fees and others said the proposal was premature.

“To avoid even the appearance of placing their own financial interests ahead of the retired NFL players’ needs, class counsel is urged to join this motion and voluntarily seek to defer any ruling on payment of claimed attorneys’ fees until after at least the majority of the players have been paid,” Tampa-based attorney Steven Yerrid of the Yerrid Law Firm said in his firm’s response.  “With all respect, the undersigned submits this case must first be about the players’ well-deserved compensation and not the compensation of the lawyers representing them.”

Florida Supreme Court Rules on Fee Issue in Insurance Coverage Litigation

October 24, 2017

A recent FC&S Legal article by Steven Meyerowitz, “The Florida Supreme Court Just Made It Easier for Insureds’ Attorneys to get Big Fee Awards,” reports on a recent decision by the Florida Supreme Court in Joyce v. Federated National Ins. Co.  The article reads:

The Florida Supreme Court, in an insurance coverage dispute, has rejected appellate court rulings that trial courts may apply a contingency fee multiplier to an award of legal fees to a prevailing party only in “rare” and “exceptional” circumstances.

The Case

William and Judith Joyce, an elderly retired couple, filed a claim for insurance benefits with their homeowners’ insurance carrier, Federated National Insurance Company, following water damage to their home. Federated National denied coverage on the basis of alleged material misrepresentations made by the Joyces in the application process – namely, that the Joyces had failed to disclose certain losses they had with their previous carrier.

The Joyces hired an attorney on a contingency fee basis and sued Federated National, alleging that the insurer had wrongfully denied their claim. After months of litigation, Federated National finally agreed to settle.  The parties stipulated that the Joyces were entitled to recover reasonable legal fees under Florida Statutes Section 627.428.

At the fee hearing, the trial court heard testimony from the Joyces’ attorney and fee expert and Federated National’s fee expert.  The trial court also examined certain evidence exhibits, including time records for the Joyces’ attorney and a copy of the contingency fee agreement.

After the hearing, the trial court awarded the Joyces $76,300 in attorneys’ fees, using a two-step process.  First, the court calculated the “lodestar” amount – the number of hours reasonably incurred by the Joyces’ attorney, multiplied by a reasonable hourly rate – as being $38,150, or 109 hours reasonably expended at a reasonable hourly rate of $350.  Second, the trial court applied a contingency fee multiplier of 2.0 to the lodestar amount.

Federated National appealed both the trial court’s calculation of the lodestar amount and its use of the contingency fee multiplier.  The appellate court affirmed the lodestar amount but reversed the trial court’s use of a contingency fee multiplier, concluding that the lodestar approach included a “strong presumption” that the lodestar represented the “reasonable fee.”

Florida Law

Section 627.428, Florida Statutes provides:

(1) Upon the rendition of a judgment or decree by any of the courts of this state against an insurer and in favor of any named or omnibus insured or the named beneficiary under a policy or contract executed by the insurer, the trial court or, in the event of an appeal in which the insured or beneficiary prevails, the appellate court shall adjudge or decree against the insurer and in favor of the insured or beneficiary a reasonable sum as fees or compensation for the insured’s or beneficiary’s attorney prosecuting the suit in which the recovery is had.

The Florida Supreme Court’s Decision

The court quashed the appellate court’s decision.  First, the court reviewed its precedent regarding contingency fee multipliers and declared that it was “clear” that it had “never limited the use of contingency fee multipliers to only ‘rare’ and ‘exceptional’ circumstances.”

In fact, the court said, it had recognized “the importance of contingency fee multipliers to those in need of legal counsel” and it had made clear that trial courts “could consider contingency fee multipliers any time the requirements for a multiplier were met.”

In the court’s opinion, the contingency fee multiplier provided trial courts with the “flexibility” to ensure that lawyers who took a difficult case on a contingency fee basis were “adequately compensated.”The court rejected the argument that a contingency fee multiplier encouraged “nonmeritorious claims” and said, instead, that solely because a case was “difficult” or “complicated” did not mean that the case was nonmeritorious.  “Indeed, without the option of a contingency fee multiplier, those with difficult and complicated cases will likely be unable or find it difficult to obtain counsel willing to represent them,” the court said.

The court then disagreed that the possibility of receiving a contingency fee multiplier amounted to a “windfall.”  The court concluded that there was not a “rare” and “exceptional” circumstances requirement before a contingency fee multiplier could be applied.  It decided that the trial court’s findings, “which properly considered the complexity of these types of cases and this case in particular,” were not in error, and it ordered the appellate court to reinstate the reinstate the attorneys’ fees award.

National Law Journal Cites NALFA Program

September 11, 2017

A recent NLJ article by Amanda Bronstad, “Judges Look to Profs in Awarding Lower Percentage Fees in Biggest Class Actions,” quotes NALFA’s CLE program, “View From the Bench: Awarding Attorney...

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Seventh Circuit Cuts Fee Award in Half

August 18, 2017

A recent NLJ story by Amanda Bronstad, “Fees in Class Action Over Moldy Washing Machines Nearly Halved,” reports that a federal appeals court has slashed plaintiffs' attorney fees by nearly half...

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