A recent New York Law Journal story by Christine Simmons, “Blasting Greenberg Traurig Request, Judge Says Fees ‘Zooming Out of Control’,” reports that a Manhattan judge has slashed Greenberg Traurig’s $464,164 fee request by 62 percent in a co-op-tenant lawsuit, writing he was “troubled, almost haunted, by the idea of awarding almost half a million dollars to attorneys who simply prevailed upon a court to dismiss an untimely proceeding.” In a decision punctuated with feisty commentary, such as writing the fee request could be viewed as “highway robbery without the six-gun,” Manhattan Supreme Court Justice Arthur Engoron called on the legal profession and fellow judges to cut down on astronomical fee awards.
“Fees are zooming out of control, and courts should not be complacent; rather, we should be on the front line, not the sideline, leading the charge to keep them reasonable (keeping in mind the considerable costs of running a law practice),” the judge said, in the decision. “To focus solely on [Greenberg Traurig’s] rates and hours would be to miss the forest for the trees.” The judge’s comments arose in a suit brought by five residents of a housing complex on the Lower East Side, Seward Park Housing Corp., who were upset over a decision by the co-op’s board to switch to a valet parking system. The residents filed an Article 78 Petition, seeking to annul the board’s decision.
After dueling motions, Engoron in July 2017 dismissed the case for untimeliness, while addressing other arguments raised by Greenberg Traurig, representing the co-op. Afterward, a special referee, Louis Crespo, recommended that the co-op parties be awarded $161,000 in legal fees, reflecting deductions for alleged double billing, lack of complexity, and failure to use more associates rather than partners. In deciding to award just slightly more than Crespo’s recommendation, Engoron first contemplated the dueling ”perspectives” inspired by the firm’s request.
On one hand, it “is shocking and disturbing,” he wrote, “that a law firm is asking for the staggering sum of $464,164 to have prevailed upon a court to dismiss as untimely a relatively straightforward” petition filed by middle-class tenants. He added, “Such an outrageous figure sounds like a typographical error or an April Fool’s joke; if it is not, it merits ‘fee shaming,’ public humiliation, and possible sanctions. For such egregious overreaching, a court could, and maybe should, award nothing.”
After all, he said, these days, $464,164—more than twice the salary of a New York State Supreme Court justice—could buy a one-bedroom co-op apartment on the Upper East Side with a doorman and onsite parking garage; a one-bedroom co-op in Bay Ridge with a live-in super and high ceilings; or “your very own private house in suburban Elmont, Nassau County, just over the Queens border.” “The point being that we are not talking mere Monopoly money here!” Engoron wrote.
From another perspective, Engoron wrote that Greenberg’s papers are “beautiful: well-organized, well-written, and well-reasoned.” And Greenberg “argued just what you would expect, just what it had to, and just how it had to,” he said. “Fish gotta swim, birds gotta fly, and lawyers gotta litigate. Arguments made in moving papers could also be found in reply papers, ad nauseum, etc., but that is how lawyers usually argue, and sometimes win, cases,” Engoron said. “In short, [Greenberg] did what lawyers do, submitted excellent papers, and prevailed.”
Risking the ’Golden Egg’?
In his analysis in Cruz v. Seward Park Housing, the judge confirmed the referee’s findings that Greenberg’s hourly rates, some of which topped $1,000 per hour, were reasonable and that its attorneys performed the work they claimed. He rejected the findings that Greenberg should have used more associate time. “Experienced partners charge more but work quicker,” he wrote.
But Engoron took issue with Greenberg’s time on its dismissal motion, outside of the time spent on the statute of limitations argument. The co-op would have achieved the same result—dismissal with prejudice—had the timeliness defense been its only argument, the judge said. “There was no need to make a double-barreled motion,” he said. He added that the nearly half-million-dollar fee request was not in the context of “industrial or technological behemoths battling each other for market supremacy, but in the context of a handful of middle-class cooperators upset with a board of directors’ decision.”
Engoron pointed to larger issues from outsized fee requests and aggressive litigation tactics. “By requesting astronomical fees, attorneys are in danger of killing the goose that laid the golden egg,” the judge said, noting a recent New York City Bar Association report that asked attorneys to eschew litigation tactics like asserting defenses that could burden the parties. “Cultural change may be in the offing.”
This case should have been litigated, and would have been dismissed, solely on statute of limitations grounds, the judge said. “Gold-plated lawyering was not needed. [Greenberg] probably needed two partners to do everything it did as well as it did. But another approach could have achieved the same result: The partner in charge could have walked out into the hallway, grabbed the first mid-level litigation associate that walked by, and said, ‘Our client is being sued; it’s untimely; get it dismissed,’” the judge wrote. Such an approach, the judge found, would have resulted in fees, including disbursements, of no more than $175,000—the figure Engoron ultimately awarded to the co-op.
That amount, the judge said, “may not seem like an awful lot of money, but could buy you a 55-foot yacht, equipped with multiple staterooms; a salon/galley/dining area; a washer-dryer; and stall showers.” He added, “To this court, that’s reasonable.”