A recent Law 360 story by Jack Queen, “UBS Whistleblower Naps $1.8M in Atty Fees on $1M Jury Win,” reports that a Manhattan federal court awarded a former UBS Securities analyst who won a $1 million retaliatory firing verdict $1.77 million in attorney fees and costs, granting half the sum requested by his lawyers at Stulberg & Walsh LLP and Herbst Law PLLC. U.S. District Judge Katherine Polk Failla said the case was one of the "closest [her] court has ever observed" in her 74-page order, which parsed seven years of tenacious litigation between Trevor Murray and UBS in two separate cases that yielded five published opinions and a $3.2 million request for fees that the investment bank pilloried as "jaw-dropping" and "excessive."
Judge Failla slashed Murray's fee request for both of his firms, finding that while he notched a victory in a developing area of the law against a well-armed opponent, there were "enormous disparities" between what Murray sought, what he got and what his attorneys ultimately asked for. "Putting to the side the policy goals ostensibly vindicated by the jury's verdict, the fact remains that plaintiff obtained significantly less relief, quantitatively and qualitatively, than he sought," Judge Failla said.
Murray sought $14 million in damages under the Sarbanes-Oxley Act in a case Judge Failla described as "far from a slam dunk." Jurors awarded the former mortgage-backed securities analyst about $1 million in 2017, finding he was fired for refusing to skew his research to impress investors but concluding he wasn't entitled to damages for future wages. Murray argued that substantial fees were warranted because he secured an extremely rare trial win on a Sarbanes-Oxley retaliation claim after weathering a years-long onslaught from UBS' legal team. Healthy compensation for his attorneys would encourage other lawyers to represent whistleblowers, he said.
UBS countered that Murray's lawyers "wasted countless hours in pursuing losing positions" and won only a "'success' worse than defeat" after years of fighting. Murray won $653,300 in back pay and $250,000 in noneconomic damages plus interest while striking out on future pay and reinstatement, UBS noted. Judge Failla found merit in both positions but still trimmed Murray's hours significantly, pointing to the gulf between his demand and award, the "top-heavy" billing practices of his lawyers and their litigation and staffing strategies, which she said led to wasted effort.
Murray waited until the eve of trial to hire Herbst Law because Stulberg & Walsh had inadequate trial experience to argue the case, which Judge Failla said led to duplicative billing. Murray also mothballed his initial claim under the Dodd-Frank Act when it went to arbitration only to see it gutted by the U.S. Supreme Court's decision in Digital Realty Trust Inc. v. Somers , which found plaintiffs can only qualify as whistleblowers under Dodd-Frank if they go directly to the U.S. Securities and Exchange Commission.
"The court does not fault plaintiff or his counsel for not being prescient," Judge Failla wrote. "That said, plaintiff and his counsel made strategic litigation decisions that had dramatic impact on his legal bills." In a statement to Law360, Murray's attorney Robert L. Herbst said the "huge reduction disincentivizes civil rights lawyers and their clients to take on these difficult and protracted legal struggles against major law firms whose billings and hourly rates are double ours." Robert Stulberg concurred, adding that "if courts do not believe that vindication of a whistleblower's rights, and a million-dollar judgment, are a 'success,' then the reason for fee-shifting in civil rights statutes has not been served."