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$3.2M Attorney Fee Award Affirmed Against Philip Morris

January 24, 2022 | Posted in : Expenses / Costs, Fee Award, Fee Award Factors, Fee Dispute, Fee Issues on Appeal, Fee Jurisprudence, Fees & Judicial Discretion, Hourly Rates, Hours Billled

A recent Law 360 story by Nathan Hale, “Split Panel Affirms $3.2M Fees Award Against Philip Morris,” reports that a Florida state appeals court affirmed a $3.2 million attorney fee for a plaintiff in an Engle progeny tobacco case against Philip Morris USA Inc., but the judges split sharply, like the parties, over one factor for determining a reasonable hourly rate.  In a 2-1 decision, the majority of the First District panel found that a Jacksonville trial court had not abused its discretion when it found the hourly rates requested by plaintiff Elaine Jordan's attorneys were reasonable and awarded her $3.2 million to cover their fees, plus more than $288,000 for legal costs.

Jordan's case is one of thousands stemming from the landmark Engle class action against several tobacco companies.  The Florida Supreme Court decertified the class in 2006 and overturned a $145 billion verdict, but it allowed up to 700,000 people who could have won judgments to rely on the jury's findings to file suits of their own.  These findings include conclusions that smoking causes certain diseases and that tobacco companies hid smoking's dangers.

The parties in this case stipulated as to the amount of time to credit Jordan's attorneys for their work on behalf of the former smoker, to whom a jury awarded $11 million in compensatory and punitive damages following a 2015 trial.  But they disagreed over the meaning of a rate factor set out in case law that calls for looking at "the fee customarily charged in the locality for similar legal services."

The majority, consisting of Judges Joseph Lewis Jr. and Ross L. Bilbrey, agreed with Jordan that for Engle progeny cases, that factor should be interpreted as covering litigators who regularly try Engle progeny cases in Jacksonville, regardless of whether their practices are based in Jacksonville or elsewhere.  Philip Morris had argued for the relevant community to be limited to attorneys who try complex product liability cases primarily in Jacksonville, the opinion said.  The majority said it agreed with two prior district court rulings that found it appropriate to consider several unique challenges posed by Engle progeny litigation as well as the fact that the "vast majority" of attorneys who try these cases in Jacksonville are not primarily based in the area.

"If 'similar' legal services in Jacksonville (i.e., Engle litigation occurring in Jacksonville) are provided almost exclusively by attorneys who reside elsewhere, then it logically follows that their hourly rates are the most relevant (rather than the rate of lawyers who happen to reside in Jacksonville but perform inherently dissimilar work)," the opinion said.

Among the factors the majority cited as distinguishing Engle progeny cases were the extensive technical, scientific, medical and historical information over which the attorneys must gain command, the fierce advocacy and seemingly unlimited resources of the tobacco companies, and the complex factual and legal issues in play, as well as the age and poor health of many Engle plaintiffs.

In the dissent, however, Judge Bradford L. Thomas held that Philip Morris was correct in arguing that "nothing about the Engle progeny cases justifies a departure from established fee-setting principles."  He said it might be understandable for a trial court to enhance the fee award in an Engle progeny case given the typical length of such litigation, but he said that determination goes to the number of hours worked, not the fair rate.

Judge Thomas held that what makes Engle progeny cases unique is not their complexity or other challenges but the fact that they are "easier to prove" compared to other complex civil actions because of the prior judgments the plaintiffs are allowed to rely upon.  "Thus, the trial court committed reversible error by awarding appellee's counsel excessive fees based on its mistaken analysis that local market rates are irrelevant because Engle cases were purportedly more difficult," he said.  "Again, as [Eleventh Circuit] Judge [Gerald Bard] Tjoflat noted, 'the one theme that remains constant throughout — with a few exceptions — is that Engle-progeny courts have rested their thumbs on the scales to the detriment of the unpopular Engle defendants.'"

"Placing the thumb of the law on the scale of justice is no justification to reward the party benefiting from the unbalanced scale with an excessive attorney-fee award," he added.  In a concurring opinion, Judge Bilbrey pushed back on the dissent's arguments, noting in part that the trial court in Jordan's case heard expert testimony that the trial involved "complex and novel legal issues and factual issues" and had evidence before it that the defense had spent almost $3.6 million on its case.