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Category: Prevailing Party Issues

NALFA Welcomes Phillip Neiman, Esq., FCIArb

July 27, 2020

The National Association of Legal Fee Analysis (NALFA) is pleased to announce that Phillip Neiman, Esq., FCIArb has been named a Fellow of the association.

Mr. Neiman, a full-time neutral with JAMS in San Francisco, specializes in the resolution of complex business and commercial disputes.  He devotes much of his practice to securities and investment-related cases, including shareholder, partnership and M&A disputes, and has substantial experience in a range of other areas, including employment, insurance, IP, real property, professional liability, personal injury and privacy tort cases, as well as fintech and cannabis sector disputes.

Prior to establishing his ADR practice in 2004, Mr. Neiman spent a decade as CEO and General Counsel of a FINRA-registered investment bank.

Mr. Neiman has extensive experience resolving attorney fee disputes, both as an arbitrator ruling on contested fee petitions and as a mediator overseeing settlement negotiations with a fee component.  He has addressed a range of complex issues in contractual and statutory fee award cases, including lodestar adjustments, prevailing party determinations in partial success and disproportionate damages cases, multiparty apportionment, privilege claims related to billing records, Daubert challenges and assertions of bad faith litigation practices, among others.   

Mr. Neiman is a Fellow of the Chartered Institute of Arbitrators.

For more on Phillip Neiman, visit https://www.jamsadr.com/Neiman/

CA Appeals Court Affirms Fee Award with High Rate But No Multiplier

July 16, 2020

A recent Metropolitan News story, “C.A. Affirms Attorney-Fee Award Not Boosted by Multiplier reports that a California Court of Appeal has affirmed a decision by a Los Angeles Superior Court judge who declined to apply a multiplier to an attorney fee award in an action that produced a $1 million judgment for a plaintiff who sued his employer for racial harassment, saying it assumes that the high hourly rate that was applied takes into account that the case was taken on a contingency basis.  However, the judge who made the award—Victor E. Chavez—made no such indication, saying in his order that the attorneys were worth the rates they proclaimed for themselves, but the nature of the case did not warrant an enhancement.

Justice Dorothy Kim of Div. Five wrote the unpublished opinion.  It upholds a post-judgment order by Chavez assessing attorney fees in favor of the Law Offices of Kyle Todd, located in downtown Los Angeles, in the amount of $592,075, the total lodestar amount the firm claimed based on 1,392.5 hours of work on the case over a three-year period.  The award was made under Government Code §12965(b) which provides for attorney fees to a prevailing party in an action brought—as was the that of the Todd firm’s client, Tracy Scudder—under the state’s Fair Employment and Housing Act.

In particular, Chavez granted Todd the $500-per-hour figure he claimed as reasonable for the 904.3 hours he said he devoted to the case, rejecting the defendant’s protest that such a rate exceeded the $360.27 norm for lawyers in Los Angeles County during the relevant period, from 2015-18.  The judge also honored the rate of $400-per-hour which, it was contended, represented the value of services of an associate in the office, Maximilian Lee, who said he spent 250.5 hours pursuing the interests of the client.

Chavez said that $360.27-per-hour figure, contained in the United States Attorney’s Office fees matrix “is not sufficient to compensate Mr. Todd based on his experience and the facts showing that he is an exceptional attorney” and also found that $400-an-hour was “a reasonable rate to bill for the legal services” that Lee provided.  The amount sought by Todd’s firm, with a multiplier of 200 percent, was $1,184,150. The award which the defendant, the state Department of Transportation, asserted would be appropriate was $289,458.04.

Chavez, a former presiding judge of the Superior Court, said in his Sept. 11, 2018 order: “There is no evidence that the questions in this case were novel or difficult.  This case concerned workplace harassment and discrimination based on race and there were no unusual or complex issues that required exceptional skill to resolve.

“Further, a review of the Court file does not reveal any exceptional skill displayed by counsel that far exceeds the quality of representation that would have been provided by an attorney of comparable skill and experience.  The Plaintiff’s attorneys identify the time that they spent or the case and the above amount of $592,075 will compensate them for their legal services.”  The judge found that Todd “does not provide specific facts to demonstrate that his attorneys were precluded from other employment” by virtue of devoting their concerted efforts to Scrudder’s case. He viewed as inadequate a declaration from Victoria Rolon, a legal assistant in the firm, who said:

“This case took up a large portion of our firm’s time since I joined in early 2016, and by November 2017, as the first genuine trial date approached, our firm’s work on other matters went down significantly.  From then through the end of trial on March 9, 2018, our firm was almost exclusively engaged in work on this case, at the expense of taking in new cases.  For example, I typically provide the first-line intake of new case matters, and for the preparation of trial and during, we were telling prospective clients we were simply too busy to accept new cases at the firm.”

Chavez remarked: “[A]lthough Victoria Rolon states in paragraph 6 that, as the trial date approached, the Plaintiffs firm was telling prospective clients that it was too busy to accept new cases, Ms. Rolon provides no specific facts to show that the Plaintiff’s firm was precluded from accepting such a substantial amount of business that a multiplier should be applied.”

Kim said that some of the assaults by the Todd firm on Chavez’s ruling cannot be addressed owing to the lack of a transcript of the fee-hearing before the judge.  But, she declared, based on the record that was presented, it is clear that the firm is in error in asserting that Chavez “refused to consider the relevant ‘contingency and delay factors’ present in this case” in declining to apply a multiplier.

She wrote: “[W]e…reject any argument by plaintiff that the trial court did not adjust the fee amount in any ‘manner to reflect the fact that the fair market value of legal services provided on [a contingent basis] is greater than the equivalent non-contingent hourly rate.’…The court rejected defendant’s request to lower counsel’s fees to the Los Angeles market rate as calculated by an attorney fee matrix, finding that the full rates sought by plaintiff’s counsel were reasonable.  Further, the court found that counsel, who worked on a contingency basis, would be ‘fully compensated’ by the lodestar amount.  We presume the court concluded that its lodestar calculation already accounted for the contingent nature of the fee award.”

It was conceded by the Todd firm, Kim noted, that Chavez did allude in his order to the contingency-fee arrangement.  He said in his order: “[A]lthough the Plaintiffs attorneys took this case based on a contingent fee retainer agreement, the above analysis of the Plaintiffs fee request demonstrates that the Plaintiff’s attorneys will be fully compensated for the time they spent on this case and this offers no grounds to award a multiplier.”

Kim said the Todd firm is in error in asserting that Chavez was legally obliged to apply a multiplier, and remarked: “The trial court was in the best position to evaluate the reasonableness of plaintiff’s requested attorney fees.  We find the court did not abuse its discretion.”

Fifth Circuit Says Fee Entitlement Needs Reconsideration

July 13, 2020

A recent Law 360 story by Michelle Casady, “5th Circ. Says $1M Atty Fee Request Needs Reconsideration” reports that the Fifth Circuit has determined that drilling data company Petrolink Services Inc. will get another chance to prove it's entitled to about $1 million in attorney fees for a lawsuit in which it beat back copyright infringement claims but was found by a jury to have unjustly enriched itself.  In an opinion, a three-judge panel agreed with Petrolink that a trial court had wrongly denied its request for fees without consideration in the lawsuit brought by competitor Digital Drilling Data Systems LLC, or Digidrill.  Digidrill accused Petrolink of hacking into its software at various oil rig sites in order to "scrape" valuable drilling data in real time.

Both companies appealed the trial court's judgment in early 2019.  After granting summary judgment dismissal on Digidrill's claims that Petrolink violated the Copyright Act and the Digital Millennium Copyright Act, the trial court denied Petrolink's request for about $1 million in attorney fees.  On appeal, Petrolink argued it was entitled to the award as the prevailing party on those claims.

Quoting the district court, the Fifth Circuit wrote that the lower court declined to award costs or fees to either side, because "both prevailed on different issues."  "It is difficult to make sense of this language in light of the fact that Petrolink only sought fees related to Digidrill's copyright and DMCA claims, on which Petrolink clearly and solely prevailed," the panel wrote.  "It matters not whether Digidrill ultimately prevailed on its state law unjust enrichment claim."  The Fifth Circuit sent the case back to the trial court for it to "properly analyze the motion" for attorney fees.

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

SCOTUS Stays Out of Fee Dispute in Humana ERISA Suit

June 22, 2020

A recent Law 360 story by Adam Lidgett, “High Court Stays Out of Fee Fight in Humana ERISA Suit” reports that the U.S. Supreme Court said it won't review the Fifth Circuit's finding that health insurer Humana doesn't have to foot a patient's six-figure attorney fees tab incurred in a suit over eating disorder treatment coverage.  The high court denied a petition from a plan beneficiary only referred to as Ariana M. that had asked the justices to review an appellate ruling that she wasn't entitled to attorney fees after she ultimately lost her attempt to get full coverage for a stay at a Utah treatment center.

A Texas federal court initially ruled in favor of Humana in the Employee Retirement Income Security Act case, and a Fifth Circuit panel later affirmed that decision.  Then in March 2018, a majority of the full Fifth Circuit breathed new life into the case when it adopted a lower standard for reviewing decisions by benefits plan administrators to deny coverage to workers.

Specifically, eight of 14 judges said in that 2018 decision that courts should apply de novo review — analyze a denial of benefits anew — unless the plan's documents explicitly give its administrator sole discretion to consider claims.  They overturned the court's 1991 Pierre v. Connecticut General Life Insurance Co. ruling, which held that de novo review applies to appeals challenging an administrator's interpretation of plan language but only lets courts analyze an administrator's interpretations of facts for abuse of discretion.

But even after Ariana M.'s case was kicked back down, Humana won summary judgment when the district court again said the insurer's denial was correct.  After she lost her bid to get about $140,000 in attorney fees, she again appealed to the Fifth Circuit.  The appellate court affirmed the second summary judgment ruling in Humana's favor, and also affirmed the denial of Ariana M.'s attorney fees bid.

She asked the high court for review earlier this year, arguing she could collect attorney fees under ERISA.  Ariana M.'s petition said the Supreme Court has already found that "an applicant need not be a 'prevailing party'" to be able to collect attorney fees under the applicable provision of ERISA.  She said she "need only achieve 'some success on the merits'" to be eligible for such fees.