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Category: Misconduct & Fees

Law Firms Tussle Over Share of $8.3M in Attorney Fees

October 12, 2020

A recent Law 360 story by Emillie Ruscoe, “Fee Bid is ‘Unseemly Mudslinging.’ ICO Suit Co-Counsel Says,” reports that part of a co-lead counsel team accused their counterparts of "unseemly mudslinging" in a dispute over distribution of the $8.3 million counsel fee they earned in a settlement of allegations that Swiss blockchain company Tezos Stiftung's 2017 initial coin offering violated federal securities laws.

Lawyers from Block & Leviton LLP and Hagens Berman Sobol Shapiro LLP told U.S. Magistrate Judge Joseph C. Spero to deny a September motion for counsel fees filed by attorneys from Hung G. Ta Esq. PLLC, LTL Attorneys LLP, the Restis Law Firm PC and Lite DePalma Greenberg LLC, telling the magistrate judge that the fee request "is devoted to unseemly mudslinging, inaccurate accusations of deceit, and unfounded claims of violations of the rules of professional conduct."

The Hung G. Ta Esq. PLLC-helmed attorney group filed their counsel fee request in September, asking U.S. District Judge Richard Seeborg to order Block & Leviton to put funds back into the escrow account holding $8.3 million that the plaintiffs' counsel team was awarded for its work on the case.  In a memo accompanying the counsel fee motion, the HGT Law group told Judge Seeborg that "Block & Leviton has proceeded, without HGT Law's authority, to distribute attorneys' fees to itself and several other firms with which it is aligned," asking the judge not to permit "such brazen misconduct."

HGT Law said the Block group had "proceeded to unilaterally distribute fees" so that Block & Leviton and Hagens Berman received 25% of the total fee, and 50% of the fee went to Robbins Geller, which is not docketed in the matter but was also involved in the case, according to the co-lead counsel team.  "This proposal is irrational and unreasonable," the HGT group contended, suggesting that Block & Leviton was trying to "maintain good relations with Robbins Geller and ensure favorable treatment from Robbins Geller in other cases."

Two days after the counsel fee motion was filed, court records show, Judge Seeborg referred the case to Judge Spero for resolution of the attorney fees dispute.  "This development is unwelcome, and its disposition ought not involve the intervention of this court," Judge Seeborg said in the same order vacating the Oct. 29 hearing on the motion that HGT had requested.

The Block group apologized to the court "that counsel were unable to work things out among themselves" and promised to work with the magistrate judge to resolve the issue in good faith.  "The court should not have to deal with this dispute.  It is always unseemly for lawyers to be squabbling over a multimillion-dollar award of attorneys' fees," the Block group said.

The Block group contended that HGT Law knew since December 2019 that it could expect to receive a quarter of the counsel fee.  "The [HGT Law group] never proposed a different fee allocation until after fees were awarded and sat on its hands until B&L sought to distribute the money consistent with [co-lead plaintiff] Trigon's allocation," the Block group claimed.

The Block group also said that "The Ta Group's wild accusation that 'Block & Leviton (and the other firms in the Block group) have attempted to deceive HGT Law, and have violated numerous ethical duties and guidelines of this district' is absolutely false."  The Block group also said that it "reiterates its willingness — if the Ta Group would like to withdraw its motion without prejudice — to resolve this dispute either through further informal discussions or through more formal [alternative dispute resolution] mechanisms."

Records show the parties to the case reached a $25 million cash settlement agreement in March, ending claims that the Tezos defendants held an unregistered securities offering in July 2017.  The $8.3 million counsel fee comprised a third of the settlement fund, and the attorneys who worked on the case on behalf of the proposed investor class would also get $300,000 to cover their litigation costs, according to the settlement terms.

Federal Circuit Grants Attorney Fees in ‘Demeaning’ Goat IP Case

September 10, 2020

A recent Law 360 story by Tiffany Hu, “Fed. Circ. Grants Atty Fees in ‘Demeaning’ Goat IP Case, reports that the Federal Circuit ordered a New York attorney to pay legal fees after the U.S. Supreme Court refused to take up his challenge to a restaurant's registered trade dress that he personally found "demeaning" to goats.  In a nonprecedential order, a three-judge panel found that Queens-based attorney Todd M. Bank owes $28,523 in attorney fees to Al Johnson's Swedish Restaurant & Butik in his attempt to invalidate the restaurant's trade dress for goats on a grass-covered roof.

The fee order comes after the high court in June denied a certiorari petition filed by Bank, in which he argued that the Federal Circuit incorrectly found that his personal concern that the mark was "demeaning" to goats did not give him standing to challenge the trade dress.  "What can I say when the same judges who wrongly sanctioned me proceed to ignore all of the arguments that I made in response to the defense counsel's fee application, and instead abuse their power by ruling by fiat?"  Bank, who represented himself, told Law360 in an email.

Katrina G. Hull of Markery Law LLC, an attorney for the restaurant, said in an email that she and her client were "pleased with the court's order."  Al Johnson's Swedish Restaurant, which is based in Sister Bay, Wisconsin, was issued a registration in 1996 for a trade dress that "consists of goats on grass roofs," according to filings.

In 2011 and 2012, Bank petitioned to cancel the registration on behalf of a previous client, a photographer named Robert Doyle.  The Trademark Trial and Appeal Board found both times that Doyle failed to establish standing, saying in 2012 that the photographer's alleged interest in "dining and shopping in such other restaurants and gift shops with goats on their roofs" was insufficient.

Bank filed the third and latest petition "as attorney and client" last October, the restaurant said.  In asking to cancel the mark, Bank argued that the mark was offensive for being "demeaning" to goats and that the registration harms the "respect, dignity and worth of animals."

But siding with the TTAB, a Federal Circuit panel in December ruled that Bank's concern for the animals did not give him standing because he had no other interest in the trade dress.  Bank was ordered to pay the restaurant's legal fees for filing a "frivolous" appeal, with the panel noting that the TTAB has thrice dismissed his petitions to cancel the trade dress for the same reason.

Federal Circuit Not Sure Court Botched Patent Fee Award

September 1, 2020

A recent Law 360 story by Nadia Dreid, “Fed. Circ. Not Sure Court Muddled Fee Award in Patent Fight,” reports that the Federal Circuit seemed wary of overturning a decision awarding attorney fees to HP Inc. and SAP America after they emerged victorious from a patent dust-up with software maker Big Baboon Inc. that a lower court declared was unfairly waged.  While Big Baboon worked to convince a three-judge panel that the California federal court that handled the patent dispute "basically awarded fees based on some arbitrary line in the sand," U.S. Circuit Judge Kathleen O'Malley wasn't sure about that — particularly the company's contention that it couldn't be forced to shell out attorney fees without evidence of misconduct.

"I don't understand your statement that litigation misconduct is required before fees can be awarded," she said.  "What the court found was that the pursuit of litigation was objectively unreasonable, right?"  The parties were before the court to argue two different appeals: whether the lower court flubbed when it threw out the software maker's case and whether it was within its rights to order Big Baboon to pay $188,000 in attorney fees.

On one side, patent holder Big Baboon, which has been battling with HP and SAP America for a while over claims that a product they sold in 1996 infringed one of its e-commerce patents, argues that the lower court ignored contradictory testimony from the tech companies when it threw out its case and that it unfairly ordered it to pony up attorney fees without evidence of misconduct.

On the other side, HP and SAP America say they're owed the $188,000 in attorney bills that they ran up preparing for the discovery that Big Baboon was refusing to delay — even though the suing software maker had evidence that showed that the allegedly infringing product existed before the e-commerce design at issue.

"This case is exceptional because Big Baboon doesn't know when to stop, no matter how weak its position," counsel for HP and SAP America told the court.  The tech companies accused the software company of "abusively [filing] serial suits," pointing toward a suit against HP's predecessor in 2009 over the same patent, albeit with different claims.

Past Misconduct is Relevant in Awarding Attorney Fees

July 11, 2020

In Electronic Communication Technologies, LLC v. SHOPPERSCHOICE.COM, LLC, [2019-2087] (July 1, 2020) the Federal Circuit vacated and remanded the district court’s denial of an award of defendant’s attorneys’ fees.

After its motion for judgment on the pleadings that the asserted claim of U.S. Patent No. 9,373,261 was not patent eligible, defendant filed a motion for an award of its attorneys fees. In “considering the totality of the circumstances,” the District Court determined the case was not exceptional, citing the Lanham Act, 15 U.S.C. § 1117), and denied the motion.

The Federal Circuit agreed with defendant that the district court abused its discretion in weighing relevant factors, and by applying the incorrect attorney fee statute. The Federal Circuit held that the District Court clearly erred by failing to address ECT’s manner of litigation and the broader context of ECT’s lawsuit against ShoppersChoice. The Federal Circuit pointed out that there was evidence that ECT sent standardized demand letters and filed repeat patent infringement actions to obtain low-value “license fees” and force settlements. Further, ECT, under its former name Eclipse, filed lawsuits against at least 150 defendants, alleging infringement of claims in the ’261 patent and in other patents in the ’261 patent’s family. ECT’s demand for a low-value settlement ranging from $15,000 to $30,000 and subsequent steps — such as failure to proceed in litigation past claim construction hearings — indicates the use of litigation to achieve a quick settlement with no intention of testing the strength of the patent or its allegations of infringement. The Federal Circuit also pointed to a prior California district court decision awarding attorneys fees against ECT, for its in terrorem enforcement tactics, and the fact that the principals of ECT were also associated with “one of the most prolific” non-practicing entity plaintiffs in the United States.

The Federal Circuit complained that there was no mention of the manner in which ECT litigated the case or its broader litigation conduct, saying “[s]uch conduct is a relevant consideration.” While a district court need not reveal its assessment of every consideration of § 285 motions, it must actually assess the totality of the circumstances, and by not addressing the adequate evidence of an abusive pattern of ECT’s litigation, the District Court failed to conduct an adequate inquiry and so abused its discretion. The Federal Circuit instructed that a pattern of litigation abuses characterized by the repeated filing of patent infringement actions for the sole purpose of forcing settlements, with no intention of testing the merits of one’s claims, is relevant to a district court’s exceptional case determination under § 285.

The Federal Circuit also said that the district court failed to sufficiently address the objective weakness of Claim 11.

The Federal Circuit vacated and remanded the case for the district court to consider, in a manner consistent with its opinion, ECT’s manner of litigation, and the objective unreasonableness of ECT’s infringement claims, and further reference the correct attorneys’ fees provision (35 U.S.C. § 285), rather than the parallel statute for trademark cases (15 U.S.C. § 1117).

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 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