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Archive: 2015

NALFA Year in Review: Top NALFA Stories of 2015

December 29, 2015

Lexis Nexis Publishes NALFA’s Best Practices in Legal Fee Analysis
September 9, 2015

Meet the Nation’s Top Rated Attorney Fee Experts
June 19, 2015

Bloomberg New Covers NALFA Webinar
August 3, 2015

NALFA to Rate Legal Bill Review Programs

June 23, 2015

Solo Methodology vs. Professional Methodology in Legal Fee Analysis
August 17, 2015

NALFA: Three Types of Attorney Fee Disputes

February 5, 2015

NALFA: Without Qualified Fee Expert, NCAA Loses $46M Fee Challenge

July 14, 2015

Fee Award Tossed on Untimeliness of Motion

December 18, 2015

A recent Metropolitan News story, “Fee Award Tossed, Based on Untimeliness of Motion” reports that a Los Angeles Superior Court judge correctly denied an award of attorney fees but for the wrong reason, and later granted the fees when they should have been denied for a different reason, the Court of Appeal for this district has ruled.

Seeking the attorney fees was consumer Daniel Campbell who sued Hyundai Motor America under the Song-Beverly Consumer Warranty Act, commonly dubbed the “lemon law.”  Under a settlement, he got a new 2012 Hyundai Elantra to replace his defective 2011 Elantra.

The agreement said Campbell could move for attorney fees, which are authorized by the act, but that Hyundai could oppose an award of them.

On April 10, 2013, Campbell filed a request for dismissal with prejudice; five days later, he filed a memorandum of costs which the Clerk’s Office rejected on the ground that he was “not a prevailing party” because the case was dismissed; on Oct. 23, 2013, he moved for fees in the amount of $37,687.50.

The fees were denied by Los Angeles Superior Court Judge Maureen Duffy-Lewis on Feb. 13, 2014.  She reasoned that the court lacked jurisdiction because the case had been dismissed.

Campbell on June 13, 2014 filed a motion, seeking mandatory relief pursuant to Code of Civil Procedure §473(b), to set aside the dismissal based on an attorney’s admitted “mistake.”  The motion was accompanied by the affidavit of fault by David N. Barry—whose practice is restricted to lemon law cases—declaring that he dismissed the case without Campbell’s consent.

On June 30, 2014, Duffy-Lewis granted the motion, observing that the dismissal was “obviously a mistake.”

Next, on Aug. 28, 2014, Campbell made a new motion for attorney fees.  His request for fees, coupled with costs, amounted to $45,474.75.  Duffy-Lewis, on Sept. 22, 2014, awarded him $36,606.

Presiding Justice Dennis Perluss of Div. Seven said Wednesday, in an unpublished opinion, that the award must be reversed.  Any relief from the April 10, 2013 dismissal, he explained, had to be made, under §473, within sixth months.

Campbell sought relief, he noted, “more than 16 months after the dismissal of the action.”

Although the untimeliness of the §473(b) motion disposed of the issue before the appeals court, Perluss made note that Duffy-Lewis “erred in ruling” that the court “had no jurisdiction to hear the initial fee motion.”  He pointed out that following a voluntary dismissal, the trial court retains jurisdiction over “the right to statutory costs and attorneys fees.”

Nonetheless, denial of the motion was appropriate, the jurist declared, because the motion was untimely, having been filed more than 180 days after judgment, with the dismissal viewed as a judgment.

Attachments to Campbell’s motion for relief under §473(b) reflect that Hyundai offered to pay attorney fees even after the request to enter dismissal was filed, but before the motion to vacate the dismissal was filed.

Maija Olivia of the Long Beach law firm of Beany & Myers, LLP on May 7, 2014, said in an email to Barry:

“Fees of $22,000 cannot be justified for the work performed on this case.  My client is willing to offer $12,025, the amount it suggested for the court’s ruling on the fee motion but this is HMA’s final and best offer to resolve the fees and costs.”

Barry responded:

“I have tried to resolve the fee dispute with you in good faith.  However, I do not believe that my efforts have been reciprocated.

“As such, please advise by 2 PM tomorrow, Friday, if your client will stipulate to setting aside the dismissal in order to avoid plaintiff having to file a motion.

“Please be advised that should you be unwilling to stipulate and my motion for relief be unsuccessful then I will initiate a breach of contract and fraud action against both your client and your law firm.”

The case is Campbell v. Hyundai Motor America, B260298.

The New Yorker: Lawyer for Martin Shkreli Hikes Fees Five Thousand Percent

December 17, 2015

A recent humor piece in The New Yorker, “Lawyer for Martin Shkreli Hikes Fees Five Thousand Percent,” New York Times best-selling author Andy Borowitz writes about the recent arrest of Martin Shkreli.  He writes:

A criminal lawyer representing Turing Pharmaceuticals chief Martin Shkreli has informed his client that he is raising his hourly legal fees by five thousand per cent, the lawyer has confirmed.

Minutes after Shkreli’s arrest on charges of securities fraud, the attorney, Harland Dorrinson, announced that he was hiking his fees from twelve hundred dollars an hour to sixty thousand dollars.

Shkreli, who reportedly received the news about the price hike while he was being fingerprinted, cried foul and accused his attorney of “outrageous and inhumane price gouging.”

“This is the behavior of a sociopath,” Shkreli was heard screaming.

For his part, Shkreli’s lawyer was unmoved by his client’s complaint.  “Compared to what he pays for an hour of Wu-Tang Clan, sixty thou is a bargain,” he said.

Law Students Show Fee-Shifting Cases Can Be Fee-Generating Cases

December 14, 2015

A recent ABA Journal story, “These Law Students Combine Technology With Fee-Generating Casesreports that some law students at Suffolk University are getting real-life experience on how to make money handling fee-shifting with the help of technology.  Six law students, working under the supervision of seasoned lawyers, are participating in a so-called Accelerator Practice, an in-house practice representing average income individual in mostly fee-shifting cases.

In fee-shifting cases, Suffolk Law’s Associate Dean for Academic Affairs and Clinical Professor of Law Ilene Seidman explains, the winning lawyer’s fees are paid by the losing side.  In addition to donations from alumni and others, those collected fees will help run the Accelerator Program.

The Accelerator Practice takes as a given that there is a large group of moderate-income individuals who can’t afford an expensive firm, but whose cases are strong enough to merit the attention of a small practice whose attorneys can make a decent living handling mostly fee-shifting cases.

The ready availability of such cases makes sense.  The American Bar Association and the Legal Services Corporation estimate that 85 percent of people in civil cases lack legal representation.  It’s a nationally recognized problem called the “justice gap,” and the Accelerator helps address it.

“The statistics show the work is there,” says law student Michael Eidlin, “but a firm taking on fee-shifting cases needs to be efficient and smart about how it chooses cases and in the systems by which those cases are managed.  If we’re efficient, we can take more cases and it becomes a numbers game.  The result is that you process enough cases to make a career by tapping into a large and mostly ignored market.  And for me, I’m in the sweet spot if I can build a career that’s based around helping others.”

Chapter 13 Debtor’s Attorney Not Entitled to Fees, Costs

December 11, 2015

A recent Bloomberg BNA story, “Ch. 13 Debtor’s Attorneys Can’t Get Costs, Fees Paid” reports that a debtor’s attorney isn’t entitled to costs and fees in the absence of any proven injury to the debtor when the City of Philadelphia, through another entity, violated the Bankruptcy Code’s automatic stay by attempting to collect overdue real estate taxes after the debtor filed for bankruptcy, a district court in Pennsylvania ruled.

Reversing the judgment of the bankruptcy court, Judge Gerald J. Pappert of the U.S. District Court for the Eastern District of Pennsylvania concluded that the bankruptcy court failed to apply the proper legal standard when it awarded the debtor’s attorneys’ fees and costs.

Under the Bankruptcy Code Section 362(k)(1), an “individual injured by an willful violation of a stay provided by this section shall recover actual damages, including costs and attorneys’ fees, and, in appropriate circumstances, may recover punitive damages.”  The statute is straightforward, the court said, and requires the debtor to prove “(1) the offending party violated the automatic stay; (2) the violation was willful; and (3) that the willful violation caused the debtor an injury.”

The City of Philadelphia doesn’t contest that it willfully violated the stay, but argued that debtor Norman L. Walker failed to prove that the willful violation of the stay caused him any injury, the court said.  According to the court, it is the debtor’s burden to prove injury.

Even if the debtor had proven some form of injury, the U.S. Supreme Court in Baker Botts LLP v. ASARCO LLC, 135 S. Ct. 2158 (2015) (27 BBLR 861, 6/18/15) has prohibited bankruptcy courts from awarding attorneys' fees to counsel for work performed in defending a fee application.  The court noted that Baker Botts was decided three months after the bankruptcy court's decision in this case.

The Supreme Court concluded that “[i]n our legal system, no attorneys, regardless of whether they practice in bankruptcy, are entitled to receive fees for fee-defense litigation absent express statutory authorization,” the court said.  Baker Botts expressly disallows any award of costs of attorneys' fees to Robin A. Feeney, who represented Walker's counsel, Ronald McNeil, in the hearing on attorneys' fees, the court said.

The debtor filed for Chapter 13 protection, which allows individuals receiving regular income to obtain debt relief while retaining their property.  At the time of filing his Chapter 13 petition, the debtor hadn't paid his 2012 real estate taxes on the property.

The City of Philadelphia referred the matter to Goehring Rutter & Boehm (GRB), who made two telephone calls and mailed two notices to the debtor regarding the unpaid taxes.

The debtor filed a complaint against the City and GRB in the bankruptcy court seeking damages for an alleged violation of the automatic stay under Section 362(a).

The bankruptcy court found that the City willfully violated the automatic stay, but dismissed the debtor's claims for emotional distress and punitive damages.

The debtor filed an application for attorneys' fees, and the City objected.

Ultimately, the bankruptcy court awarded debtor's counsel (McNeil) $8,674 in attorneys' fees and $652 in costs for a total of $9,326, and counsel for debtor's counsel (Feeney) attorneys' fees of $2,750.

According to the bankruptcy court, the debtor should recover fees even though he did not recover other damages.  The bankruptcy court also found that Feeney's fees were “reasonable and necessary under the circumstances.”

Big Patent Fee Awards May Be Short-Lived

December 10, 2015

A recent Legal Intelligencer story, “Big Fee Awards in Patent Cases May Be Short-Lived” reports that a federal judge's decision to up the attorney fees awarded to the defense in a patent...

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SCOTUS to Hear EEOC Fee Award Dispute

December 4, 2015

A recent NLJ story, “Justices Will Resolve Feud Over Jenner & Block’s Fee Award” reports the U.S. Supreme Court agreed to referee a long-running dispute between Jenner & Block and the...

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