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Archive: 2012

NALFA's Top 10 News Stories of 2012

December 31, 2012

New Proposed Guidelines for Bankruptcy Fees in Large Cases

Judge Approves $144M in Fees in Avandia MDL

Plaintiffs’ Lawyers Seek $4.95M in Moody’s Shareholder Class Action

First Circuit Tosses $30M in Fee Award in Volkswagen Case

Ninth Circuit Rejects Attorney Fees in Kellogg Case

NALFA’s New Attorney Fee Dispute Mediation Program

Plaintiffs’ Lawyers Defend Fee Award in Southern Peru Shareholder Litigation

Mattel Challenges Largest Copyright Fee Award in U.S. History

Attorney Fee Analysis Shows Plaintiffs’ Fee Request Under-Valued in Bluetooth MDL

House GOP Targets Contingency Fees in State AGs Contracts

Plaintiffs' Fees Will Not Exceed $200M in Toyota MDL Settlement

December 28, 2012

Toyota Motor Corp. has agreed to pay more than $1 billion to settle litigation over claims that its vehicles suddenly and unintentionally accelerated, according to court filings made public.  Toyota has recalled more than 14 million vehicles worldwide due to acceleration problems in several models and brake defects with the Prius hybrid.

The settlement, pending approval from U.S. District Judge James V. Selna, is valued between $1.2 and $1.4 billion, which includes direct payments to consumers as well as the installation of a brake-override system in an estimated 3.25 million vehicles.  The total value of the settlement amounts to the largest settlement of this type in U.S. history in terms of dollars paid out and number of vehicles involved.

Toyota will pay no more than $200 million in attorney fees and $27 million in expenses to plaintiffs’ lawyers, pending final court approval.  The total will be paid out to 25 law firms and about 85 attorneys.

The case is In re Toyota Motor Corp. Unintended Acceleration Marketing, Sales Practices and Products Liability Litigation, U.S. District Court, Central District of California (Santa Ana).

For more information, visit http://www.toyotaelsettlement.com/.

NALFA: State AGs Should Be Allowed to Hire Contingency Fee Lawyers

December 21, 2012

A recent Thomson Reuters Legal story, “Should State AGs be Allowed to Use Contingency Fee Lawyers?” reported on the relationship between state AGs and outside counsel in public interest litigation.  The article cites “tort reform” sources (i.e. U.S. Chamber of Commerce) who think this is a huge problem and are challenging the use of contingency fee lawyers in court.  In fact, the tort reform lobby is even considering federal legislation to regulate states’ ability to hire contingency fee lawyers.

In a report, “Contingency Fee Plaintiffs’ Counsel and the Public Good? (pdf),” published by Husch Blackwell, reports that 10 states have passed legislation addressing AGs’ use of contingency fee lawyers – and six of them (Texas, Wyoming, Arkansas, Kansas, North Dakota and Alabama) have imposed limits on the use of contingency fee counsel.  And judges in the half-dozen cases in which defendants challenged state governments’ use of outside counsel have overwhelmingly rejected arguments that defendants’ due process rights violated by such arrangements.

But the tort reform lobby is challenging the use of outside contingency fee lawyers in court.  In Kentucky, tort reform advocates are challenging Democratic Kentucky Attorney General Jack Conway’s authority to hire contingency fee lawyers in Commonwealth of Kentucky ex rel. Conway v. Merck & Co., Inc.  In that case, Kentucky had entered into a contract (pdf) with Garmer & Prather to investigate and litigate any Vioxx-related claims the state might have against Merck under its consumer protection act.  Merck claimed the AG violated his duty to serve the public interest by ceding control of the case to private lawyers incentivized to maximize the recovery against Merck.  As a result, Merck claimed its due process rights were compromised.  Merck is represented by John Beisner of Skadden Arps, a noted tort reform advocate.

"The private attorney general doctrine is a fundamental principle in American jurisprudence.  We need the plaintiffs' bar to take on these important public interest cases.  This is a pure partisan effort to weaken the doctrine and serve corporate interests.  Of course state AGs should be allowed to use outside contingency fee lawyers.  In fact, with state budgets stretched thin it makes economic sense to only hire outside lawyers who work on a contingency fee basis,” said Terry Jesse, Executive Director of NALFA.  “Working on a contingency fee basis saves taxpayers millions of dollars and ensures the people are protected against corporate wrongdoers,” Jesse concluded.

NALFA also reported on these issues in “House GOP Targets Contingency Fees in State AGs Contracts” and "Mississippi Bill Limits Fees for Outside Lawyers and AG's Powers"

Judge Reduces Fees in FTC Case that Settled Without Liability Admission

December 19, 2012

A recent New Jersey Law Journal story, Venable’s Fees Slashed in FTC Suit Settled Without Liability Admission” reports that a judge who balked at $2 million Federal Trade Commission settlement that included no admission of wrongdoing by the defendant, and then approved it with unusual conditions, has ordered that some of the money go to defense counsel Venable for fees.  But U.S. District Judge Renee Bumb slashed the fee request by almost half, finding misplaced the firm’s reliance on a National Law Journal survey of billing rates to show its fees were reasonable, rather than submitting affidavits from lawyers practicing in the relevant market: southern New Jersey.

“[T]his court affords no value to that value to the survey because it (1) is unsworn and based on self-reported figures by firms; (2) provides only a broad range of attorney’s fees, without regard to the nature of the work performed or experience or skill of those performing it; and (3) contains no information as to reasonable rates for non-attorney personnel,” Bumb said in a decision handed down Monday.  She held Venable was entitled to $129,095 in fees, a bit more than half the $250,077 it sought, on top of the $150,000 in retainer fees already paid.

The case, FTC v, Circa Direct, accused Circa Direct and its principal, Andrew Davidson, of using fake online news sites to market acai berry diet products.  The sites, with addresses like onlinenews6.com, were designed to resemble legitimate news portals, featuring purportedly objective reports by fictional reporters and commentators about dramatic weight loss achieved using acai berry.

In February, the FTC asked Bumb to approve a settlement that would make an injunction permanent and impose an $11.5 million judgment, which would be suspended if the defendants provided honest information about their financial condition and turned over assets valued at more than $2 million.  The settlement said it was without admission or finding of wrongdoing or liability.  Although judges routinely approve settlements where no one admits doing anything wrong, Bumb balked.

On Sept 11, Bumb approved the Circa Direct settlement, swayed by the FTC’s argument that otherwise it would have to spend a lot of time and money trying the case.  But she conditioned approval on the FTC creating a web page by Oct. 12 that would put the allegations “before the public for evaluation and discussion.”  The settlement said a portion of the client funds Venable was then holding in escrow could be used to pay its “fees and costs reasonably incurred” for work in the case, contingent on FTC approval or court order.

The fee request included charges for Edwin Larkin, who typically bills at $800 per hour, fellow partner Thomas Cohn, $650, and associate Heather Maly, $416, all of them in New York.  Venable discounted those rates to $600 for partners and $300 for associates, but they were still too high for Bumb.  Saying she was exercising her discretion, she set rates of $400 an hour for Larkin and Cohn, $375 for a less-experienced partner, and $275 for Maly and another fourth-year associate.

She called those rates reasonable in light of other fee applications granted in the district and what the FTC conceded was reasonable in declarations it submitted opposing Venable’s fee request.  She concluded that Venable was entitled to a total of $279,095, $150,000 of which had already been paid, resulting in the $129,095 award.

Judge Approves $7.5M in Attorney Fees in Antitrust MDL

December 17, 2012

A recent Penn Record story, Judge Awards $7.5 Million in Lawyers’ Fees in Processed Egg Products Antitrust MDL,” reports that the federal judge in Philadelphia who is overseeing the Processed Egg Products Antitrust Litigation has granted a plaintiffs’ motion seeking $7.5 million in lawyers’ fees and nearly a half-million dollars in costs and expenses tied to the multi-litigation, class action litigation.  In a Nov. 9 memorandum and order, U.S. District Judge Gene E. K. Pratter, sitting in the Eastern District of Pennsylvania, awarded counsel representing the direct purchaser plaintiffs in the case $7.5 million along with accrued interest, and also awarded reimbursement of expenses in the amount of $443,944, along with accrued interest.

The plaintiffs in the litigation, director purchasers such as grocery stores, commercial food manufactures, restaurants and other food service providers, alleged a conspiracy among egg producers and trade groups to manipulate the supply of egg producers, thereby affecting the domestic prices of those goods.  The attorneys’ fees represent 30 percent of the common fund created by the settlement agreement between the direct purchaser and defendants Moark, LLC, Norco Ranch Inc. and Land O’ Lakes Inc.

Final approval of the settlement was given by the court about four months later, with the agreement providing $25 million in monetary relief to the class members, and obligating Moark to cooperate with the plaintiffs’ preparation for and prosecution of their case, the judicial memorandum states.

The judicial ruling states that the antitrust litigation has been exceedingly complex, expensive and lengthy.  The memorandum states that the court determined that lawyers with 35 different firms spent a collective 22,772.81 hours working on the litigation through Fed. 28, 2011, which was the day the court held a final fairness hearing on the Moark settlement.

“Given the complexity that necessarily accompanies consolidated antitrust litigation and the duration of the case, the Court finds that this factor favors granting the motion,” for attorneys’ fees, the judge wrote.  “The amount of time spent on this case prior to final approval of the settlement most likely reflects the complexity of Plaintiffs’ claims, not the inefficiency of their counsel.  “Presumably, the thousands of hours counsel spent working on this matter prevented those individuals from litigating other cases.” The judge continued.  “This factor thus strongly favors granting the motion for attorneys’ fees.”