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Judge Cuts $424,000 From Beveridge Fee Application

September 15, 2010 | Posted in : Billing Practices, Expenses / Costs, Fee Award, Fee Reduction, Fee Request, Legal Bills / Legal Costs, Litigation Management

A recent law.com story, “Departures From Billing Standards Lead to Loss of $424,000 in Fees” reports that U.S. District Judge Susan Wigenton in New Jersey slashed $424,332 from a $2.9 million fee request of Beveridge & Diamond in Washington, DC.  Beveridge represented Sun Pipe Line Co. during nine years of litigation over who would pay tens of millions to clean up a New Jersey Superfund site.  Sun and Sheehan Pipe Line Construction Co. were third-party defendants in the underlying case, U.S. v. NCH Corp.  Wigenton held that Sun should get only $2,425,605 plus an additional $506,197 in expenses and expert charges, for a total of $2,931,802 compared with the $3,399,499 sought.

Beveridge filed a motion asking Wigenton to seal the fee application to keep its billing practices from the eyes of competitors.  Sheehan opposed the motion, arguing that limited redaction might be appropriate but sealing everything went too far and Beveridge was really trying to squelch scrutiny of the excessive work it did in the case.  Sun and Sheehan later agreed to a consent order that sealed only the 750 pages of invoices detailing Beveridge’s work.  Those details were not enough for Wigenton.  The biggest reduction she made was a 12.5 percent across-the-board cut because Beveridge billed in 15-minute increments rather than what she called the “industry standard” of six minutes.

Wigenton also sliced off time because of Beveridge’s block billing, which bunches different tasks together rather than breaking down the time to show how much was spent on each task.  It’s a common practice that saves time spent on billing because lawyers can summarize activities rather than detailing every task, she said.  While line-item billing is preferred, block billing is allowed and fees billed by that method “will be upheld as reasonable of the listed activities reasonably correspond to the number of hours billed,” she added.  Citing 3rd Circuit Court of Appeals precedent that a party block bills “at his own peril,” Wigenton split the difference between the numbers calculated by each side, eliminating a total of $121,131.

Wigenton dismissed Beveridge’s efforts to reconstruct the block billing discrepancies, calling it “virtually impossible” for anyone to do so.  Wigenton also refused to allow fees for preparing the fee application, blaming the inability to agree on the amount of fees “on confusion arising out of [Beveridge] billing practices.”  She wrote, “[t]his Court will not reward any ambiguity associated with [Beveridge’s] invoices by awarding fees and costs for this application.”

CLICK HERE to read Judge Wigenton's unpublished opinion (pdf)