Fee Dispute Hotline
(312) 907-7275

Assisting with High-Stakes Attorney Fee Disputes

The NALFA

News Blog

Virgin Flight Attendants Defend $6M Fee Award in Ninth Circuit

October 21, 2020 | Posted in : Billing Record / Entries, Expenses / Costs, Fee Award, Fee Award Factors, Fee Dispute, Fee Issues on Appeal, Fee Reduction, Fee Request, Hourly Billing, Hourly Rates, Lawyering / Litigation Tactics, Litigation Management, Lodestar, Practice Area: Class Action / Mass Tort / MDL

A recent Law 360 story by Linda Chiem, “Virgin Flight Attendants Defend $6M Atty Fees in 9th Circ.,” reports that Virgin America Inc. flight attendants told the Ninth Circuit that their attorneys were properly awarded $6 million in fees and expenses after they won $77 million in a long-running dispute over California pay and rest breaks, saying their fees were already trimmed down.  The certified class of flight attendants, represented by Olivier Schreiber & Chao LLP, Kosinski & Thiagaraj LLP and Shepherd Finkelman Miller & Shah LLP, filed an answering brief urging the Ninth Circuit to affirm U.S. District Judge Jon S. Tigar's January order awarding them $5.75 million in attorney fees and $250,775.81 in expense reimbursements.

Virgin America Inc., which merged with Alaska Airlines Inc., had appealed the fee award by arguing that Judge Tigar didn't meaningfully assess or dig into whether the flight attendants' attorneys properly justified their hours and calculations.  But the flight attendants argued that Virgin is merely engaging in "rank speculation" and "conjecture" to push for more cuts to the class counsel fees even though the district court already imposed a "haircut" reduction in their hours and compensation after Virgin's earlier gripes.

"The fundamental problem with this attack is that it ignores that the district court upheld Virgin's specific objections below and, as a result, ultimately reduced class counsel's lodestar more than Virgin proposed," the flight attendants argued.  "It is thus judicially estopped from claiming error here."  The flight attendants argued that the district court acted well within its discretion after carefully and appropriately reviewing their submissions, Virgin's objections, and considering the court's own experience with the action and the relevant law in reaching its determination.

The flight attendants' attorneys had initially requested $13.2 million but were awarded less than half that.  They said Judge Tigar cut down the 5,128 hours of billable time that was compensable to 4,723.345 hours, adjusted some of the hourly rates the class counsel had claimed, and reduced their lodestar, according to the brief.  "The record reveals no grounds to disturb the district court's order," the flight attendants said.  "The court, intimately familiar with this multiyear class action litigation marked by Virgin's own litigation choices that 'undoubtedly contributed to its length and its tone,' was in the best position to assess the fees and expenses to which plaintiffs are entitled under California's fee-shifting statutes."

Named plaintiff Julia Bernstein and flight attendants spearheading the long-running dispute have alleged that Virgin America flouted California labor laws by not paying them for all hours worked, including overtime, and denying them state-mandated meal and rest breaks.

Virgin's appeal of the class counsel fees is separate from its ongoing Ninth Circuit appeal seeking to vacate the $77 million damages the flight attendants won in January 2019.  The Ninth Circuit is considering scheduling oral arguments in that appeal for early 2021, court records show.

Judge Tigar, who rebuffed Virgin's earlier attempts to dismiss the litigation, granted the flight attendants summary judgment on most of their claims in 2018, setting the stage for the subsequent fight over damages.  The judge found that California labor law applied to all work that happened in California and in situations where employment policies were decided from Virgin's previous headquarters in the Golden State.  Seattle-based Alaska Airlines acquired Virgin in 2016.

In his order on the class counsel fees earlier this year, Judge Tigar had acknowledged that the plaintiffs' attorney fee application was too vague, saying "the level of specificity at which plaintiffs have documented their time makes it difficult or impossible for Virgin to raise certain challenges that courts have found justified partial reductions in other cases."  Virgin had argued on appeal that despite that critical flaw, the judge accepted all of the hours that the plaintiffs' counsel claimed and awarded a $5.7 million fee award that was subject to only a 5% general reduction in hours.

But the flight attendants said in their answering brief that they provided the court with detailed charts and summaries of their work.  "In light of the detailed records provided, Virgin's claim that plaintiffs' submissions were 'threadbare' is disingenuous at best," they said.  "This documentation was more than sufficient evidence for the district court to address, as Virgin contends is 'critical,' 'whether the case was overstaffed, how much time the attorneys spent on particular claims, and whether the hours were reasonably expended.'"

Moreover, Virgin argued that the class counsel's flawed lodestar consisted of nearly 4,500 hours of billable time — most of which was billed at an absolute "top of the market" rate of $750 per hour — and the $251,000 in court-related expenses wasn't justified.

"Most of the expenses that the district court awarded were for 'expert fees,' which are not recoverable under black-letter California law," the airline said.  "In addition, the district court erred by ignoring the rule that a party cannot recover expenses without submitting an itemized list and accompanying receipts.  The district court did not identify any exception to this rule, and it candidly acknowledged that plaintiffs' counsel failed to comply with it.  But the court awarded expenses anyway."

But the flight attendants rejected the airline's arguments, saying in the brief that Virgin never raised that argument in the district court so it cannot raise it on appeal.  On top of that, there is no such prohibition on expert fees under California law, they said.

If Virgin wants to play that game concerning attorneys' purportedly inflated hours, then the plaintiffs can "likewise, speculate as to Virgin's reticence to submit its counsel's hours as a benchmark," the flight attendants said, noting Virgin took a "gratuitously contentious approach toward litigation, including unnecessary motion practice."

"Perhaps its counsel assigns partners to do simple tasks; perhaps a significant amount of time was spent pursuing questionable strategies; perhaps its counsel's hourly rates are significantly above its peers in the market," they said.  "Regardless, that Virgin refuses to provide a clear reference point of the expense of litigating this action — which it can easily do — speaks volumes as to the [lack of] merits of its objections."