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Archive: 2011

Plaintiffs Win Record Setting Fee Award

December 20, 2011

A recent Thomson Reuters story, “Plaintiffs Atty in So. Copper Case get $285M Fee” reports that plaintiffs’ attorneys in a shareholder suit involving Southern Copper Corp. won a blockbuster $285 million fee award from Delaware’s Chancery Court on Monday.  It is believed to be the biggest fee award ever by the court, one of the busiest venues in the United States for commercial litigation.

Leo Strine, the chief judge of the Chancery Court approved the fee award for two law firms, Kessler Topaz Meltzer & Check, LLP and Prickett Jones & Elliott.  The firms had requested $428.2 million in fees.  The defense attorneys for Southern Cooper and its board of directors had suggested a fee of less than $14 million.  Strine said he expected the defense to appeal the award to Delaware’s Supreme Court.

The fee award ranks among the largest in securities litigation.  Plaintiffs’ attorneys in lawsuits involving the collapse of Enron Corp. got $688 million in fees, while lawyers in Tyco International Ltd. litigation were awarded $492 million.

Some plaintiffs’ attorneys view Delaware as stingy in awarding attorney fees compared with some other states.  At a law conference last month in New York, Strine hit back that charge, telling the gathering that good cases will be awarded by the Chancery Court.

The case is In re Southern Peru Copper Corp. Shareholders Derivative Litigation.

Boutique Firm Sues Former Client for More Than $560K in Unpaid Legal Fees

December 13, 2011

A recently NLJ story, “IP Boutique Sues Former Client for More than $561K in Fees, Expenses”, reports that Lando & Anastasi, an intellectual property boutique, has sued former client Innovention Toys LLC for more than $560,000 in unpaid legal bills.  The Cambridge, Mass.-based firm filed the suit, Lando v. Innovention Toys LLC, in the District of Massachusetts.  The firm claims Innovention owes $561,439, including $528.985 in legal fees and $32,453 in expenses.

Innovention generally paid its legal bills from 2006 through 2009, but stopped paying in September 2009, according to the complaint.  Lando’s legal claims are breach of contract and quantum meruit.  The firm asks the court to award monetary damages, costs and interest.  Lando represented Innovention in an Eastern District of Louisiana case filed in 2007, Innovention Toys LLC v. MGA Entertainment Inc. Wal-Mart Stores Inc. and Toys “R” Us Inc. are also plaintiffs on the ongoing case.

Firm Can't Withdraw From Case Despite Unpaid Legal Bills

December 12, 2011

A recent NLJ story, “Defense Counsel May Not Pull out of Patent Case Despite Client’s Nonpayment” reports that a federal magistrate judge has denied a bid by a Minneapolis firm Leffert Jay & Polglaze to withdrawal from a patent case despite the fact that its client hasn’t paid nearly $278,000 in legal bills.  Magistrate Judge Jeanne Graham of the District of Minnesota denied Leffert’s motion to withdraw from representing Quest Optical Inc. in a case against it brought by Walman Optical Co.

In the underlying case, Walman sued Quest for infringing its patent for an abrasion-resistant coating for eyeglasses.  District Judge Patrick Schilitz entered a judgment in August, finding, finding that Quest infringed Walman’s patent and that Walman’s patent is valid and enforceable.  The injunction bars Quest from making, using, importing, offering to sell or selling in the U.S. any product that infringe Walman’s patent. 

According to court documents, Leffert claimed that Quest owes it $277,749 in legal fees.  Walman Optical opposed the motion to withdrawal on the ground that it would be prejudiced by Laffert’s withdrawal if Quest Optical fails to move forward with the discovery ordered by Schilitz.

Withdrawal of counsel without substitution requires “good cause,” or nonpayment of fees plus an additional aggravating circumstance such as showing that the client doesn’t want that lawyer’s representation, Graham wrote.  Graham added that the court is sympathetic to Laffert’s position that there’s a significant amount of money at stake, particularly since the firm only has seven lawyers.  “The case is so near completion, however, that the Court finds that continued representation by [Leffert] does not constitute an ‘unreasonable burden,’” Graham wrote.

Plaintiffs Counsel Lose on Attorney Fee Risk Multiplier Issue in Kia Class Action

December 9, 2011

A recent The Legal Intelligencer story, “Pa. Judges Uphold $5.6 Mil. Brake Class Action Against Kia” reports that the Supreme Court of Pennsylvania upheld a Philadelphia court class action verdict awarding $5.6 million to owners of Kia sedans with faulty braking systems, but class counsel lost on the attorney fee risk multiplier issue.  Philadelphia Common Pleas Court Judge Mark I. Bernstein had awarded a risk multiplier of 1.375 times the $3 million lodestar, for a total of $4.125 million. 

Chief Justice Ronald D. Castille wrote the federal statute under which the class won its verdict – the Magnuson-Moss Warranty Act – explicitly states that attorney fees are to be based on actual time expended and does not “provide for discretionary fee enhancement.”

“Pennsylvania generally adheres to the ‘American Rule,’ under which ‘a litigant cannot recover counsel fees from an adverse party unless there is express statutory authorization, a clear agreement of the parties or some other established exception,’” Castille said.

Class co-counsel include James A. Francis of Francis & Mailman and Alan M. Feldman of Feldman Shepherd Wohlgelernter Tanner Weinstock & Dodig.  Even with the fee reduction, Feldman said the attorney fees award would probably be close to the original award because of interest and the appellate work done by plaintiffs counsel.

Arguing on behalf of appellee, Michael D. Donovan of Donovan Axler said because the U.S. Supreme Court has ruled against multipliers in a class action case, the state Supreme Court’s ruling makes it unlikely that Kia could challenge the attorney fees because of a multiplier.

Wisconsin Governor Signs Bill Capping Attorney Fees into Law

December 8, 2011

Republican Governor Scott Walker signed a bill Wednesday designed to limit attorney compensation.  The law, 2011 Wisconsin Act 92 (pdf), would require judges to award attorney fees to no more than three times damages.  Plaintiffs’ attorneys point out that fee awards and monetary damages are often disproportional for good reason, especially in small tort cases.  According to the Wisconsin Association for Justice, Wisconsin will be the only state in the country that imposes factors judges must use when awarding attorney fees as well as creating a presumption that fee awards more than three times damages are unreasonble in fee-shifting cases.

"There is absolutely nothing wrong or unreasonable with fee awards being three times, four times, or even eight times that of monetary damages," explains Terry Jesse, Executive Director of NALFA.  "Caps on attorney fees is a solution to a problem that does not exist.  Plaintiffs' attorneys should be proud of earning big fee awards and proud when fees are several times that of damages, because that means they worked hard and did a great job on the case," Jesse conclued. 

Judge Reduces Fees in Patent Case

November 30, 2011

A recent Legal Intelligencer story, “Western District Judge Slashes Attorney Fees in Patent Case” reports that a federal judge awarded less than half of the requested attorney fees for the...

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