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Archive: 2018

Top Attorney Fee News Headlines of 2018

December 28, 2018

NALFA is a non-profit organization specializing in attorney fees and legal billing.  Our members provide a range of services on attorney fee and legal billing matters.  We host CLE programs on attorney fee and legal billing topics.  Our news blog covers reporting on attorney fee issues from across the U.S.  Here are the top 10 news blog headlines of 2018:

Over $1B in Attorney Fees in Madoff-Related Matter
September 14, 2018

$503M in Attorney Fees in Syngenta GMO Corn Settlement
December 10, 2018

Attorneys Awarded $300M in Fees in Forex Price Fixing Settlement 
November 8, 2018

New Class Action Guidelines Address Attorney Fee Issues in N.D. Cal.
November 7, 2018

Firms Jockey for $159M in Fees in $577M CRT MDL Settlement
October 22, 2018

Law’s $1,000-Plus Hourly Rate Club
July 23, 2018

$112.5M Fee Award in $1B NFL Concussion Settlement
April 6, 2018

$105M in Attorney Fees Sought in Puerto Rico Restructuring
November 16, 2018

Judge Slashes Attorney Fees in Anthem Data Breach Class Action
August 17, 2018

Attorneys Defend $16M Fee Request in Securities Class Action
June 12, 2018

Federal Judge to Hear Attorney Fee Expert in Acacia Fee Dispute

December 27, 2018

A recent Law 360 story by Aaron Leibowitz, “Mass. Judge to Hear Expert in $1.75M Acacia Atty Fee Fight,” reports that a Boston federal judge said he wants to hear from an expert before deciding a dispute over a $1.75 million attorneys’ fee proposition from Acacia Communications Inc. shareholders, but approved a settlement between the shareholders and the fiber optics company in their insider trading case.  In putting forward that figure, the shareholders' attorneys said the internal reforms proposed in the settlement deal would increase stockholder value.  They filed a declaration by Harvard Law School scholar Matthew D. Cain, who estimated the changes would net between $68 million and $82 million for Acacia shareholders.

U.S. District Judge William G. Young said that he would like to hear from Cain directly as he tried to put a dollar value on work in a settlement that is not monetary, but rather involves changes to the oversight of insider trading at Acacia.  "I will be more comfortable having heard this expert," Judge Young said, noting that Acacia's attorneys would be allowed to cross-examine the expert.  He was skeptical of a request by Acacia to depose the scholar before he appears in court, but said he would consider it.

The consolidated cases set to be resolved allege that Acacia executives and private equity backers obtained early releases from insider trading agreements, allowing them to sell off their shares two weeks before announcements from the company's two largest customers led to a significant drop in Acacia's stock price.

"You say you are the catalyst that caused [these reforms] to be put in place," Judge Young said to the shareholders' attorneys.  "How are you gonna value it?"

Geoffrey Johnson of Scott & Scott Attorneys at Law LLP, representing the shareholders, said it's more of an art than a science, but he said the Harvard expert used "very conservative assumptions" on how the reforms would boost Acacia's worth.  In a court filing last month, the shareholders' attorneys said they expended nearly 1,690 hours on the case and used a multiplier of 1.72 to calculate the award.  They asked to be reimbursed for about $34,000 in expenses.

But Acacia has said the $1.75 million calculation is unreasonable, pointing to a settlement in a recent case involving internal reforms at Aveo Pharmaceuticals in which the plaintiffs requested over $800,000 in attorneys' fees, but were instead awarded about $200,000 by U.S. District Judge Denise J. Casper, also in Boston.  "The requested fee here is just way too high," Daniel Halston of WilmerHale, representing Acacia, told the judge. "It's just out of bounds."

Judge Young said he had no issue with the settlement itself.  He rescheduled an afternoon hearing to the morning so he could hear arguments on the fees first, but held the afternoon session in case anyone showed up to object to the deal.  When no one objected — the only people in the gallery were a lawyer and a reporter — the judge gave his formal approval.

The case is Tharp et al. v. Acacia Communications et al., case number 1:17-cv-11504, in the U.S. District Court for the District of Massachusetts.

Top NALFA News Blog Headlines of 2018

December 26, 2018

NALFA is a non-profit organization specializing in attorney fees and legal billing.  Our members provide a range of services on attorney fee and legal billing matters.  We host CLE programs on attorney fee and legal billing topics.  Our news blog covers reporting on attorney fee issues from across the U.S.  Here are the top NALFA news blog headlines of 2018:

Law 360 Covers NALFA CLE Program
October 25, 2018

The Nation’s Top Attorney Fee Experts of 2018
May 10, 2018

NALFA Featured in ALM Article on Billing Rates
March 20, 2018

NALFA: The Case Against Serial Class Action Objectors
January 8, 2018

NALFA Honors Bruce R. Meckler
January 2, 2018

GA Appeals Court: The Reasonableness of Rejected Settlement Offer Key to Fee Request

December 24, 2018

A recent Daily Report story by Greg Land, “Appeals Court: ‘Reasonableness’ of Rejected Settlement Offer Key to Fee Demand,” reports that the Georgia Court of Appeals has ruled that a trial judge should not have summarily dismissed as bad faith a bank’s rejected settlement offer, which the bank later wanted to use to collect attorney fees.  The opinion noted that it addresses “a recurrent issue: what constitutes good faith under Georgia’s offer of settlement statute."  Although the spurned offer was far less than the settlement the other parties finally agreed to, Coastal Bank credibly argued that its offer was “reasonable,” said the opinion released Monday.

While the trial court made a “passing reference” to Coastal Bank’s arguments in challenging a lawsuit naming it as a party in a dispute over a dead man’s estate, the judge “failed to consider and weigh [the] objective factors against whether Coastal’s position was reasonable at the time the offer was made,” said the opinion, authored by Judge Carla Wong McMillian with the concurrence of Presiding Judge Anne Elizabeth Barnes and Judge Clyde Reese.

As detailed in the order, the dispute involved the estate of Willard “W.R.” Rawlins, who died in 2008.  Rawlins’ heirs included Constance Ellis and Larry Rawlins Jr. and his wife.  Prior to his death, Rawlings had presigned blank checks on his Coastal Bank account. After Rawlings died, Ellis took some of the checks and wrote about $40,000 to herself, her children and her grandchildren, and Coastal “mistakenly honored those checks,” the opinion said.

The Rawlinses found out and sued Ellis and Coastal in Chatham County Superior Court.  The case was transferred to the county’s probate court, and Ellis “evened up” the distribution by giving the Rawlinses $40,000 to the estate, and the “executor determined that any damages to the estate had been corrected.”  Coastal moved for summary judgment, arguing the Rawlinses lacked standing to assert any claims against it and had suffered no damages. The probate court denied the motion.

Coastal then sent the Rawlinses an offer to settle the case for $3,000 under Georgia’s offer of settlement statute.  That provision states that a plaintiff who declines an offer to settle a claim and then is awarded no more than 75 percent of that offer may be held liable for the opposing party’s attorney fees and expenses dating from the date of the rejected offer.  But the law also allows a judge to deny a fee award, if the offer “was not made in good faith.”

The Rawlinses declined Coastal’s offer and later settled with Ellis for 2 acres of property worth about $40,000 or $50,000.  They dismissed their claims against Ellis with prejudice and against Coastal without prejudice.  The Rawlinses subsequently sued Coastal again in Chatham County State Court, and the bank again moved for summary judgment, arguing that the plaintiffs did not have standing “either in their individual capacities or on behalf of W.R.’s estate to maintain an action against Coastal for mishandling W.R.’s checking account and that they had no damages because Ellis had evened up the estate distribution,” the opinion said.

State Court Chief Judge H. Gregory Fowler denied the motion, but the Court of Appeals reversed him in 2016.  Fowler entered a final judgment in favor of Coastal on remand.  Coastal then moved for attorney fees and expenses under the offer of settlement statute.  The Rawlinses’ argued that the motion should be denied because, among other things, it “had not been made in good faith because the $3,000 offer to settle all claims was low compared to the alleged damages.”

Coastal countered that the offer was reasonable, “because it believed that its arguments of no standing and no damages were strong, a belief borne out by Coastal’s success on appeal.”  Fowler denied Coastal’s fee request after finding the offer was not made in good faith.

Citing prior court precedent, McMillian wrote that the issue of good faith rests on whether it was based on a “reasonable foundation,” a decision governed “solely on the offerer’s own subjective motivations and beliefs.”  In considering a “nominal offer,” McMillian wrote, a trial judge can can weigh objective factors, including whether it “bore no relationship to the amount of damages,” whether it reflects a “realistic assessment of liability” and if the offerer “lacked intent to settle the claim.”

But, the opinion said, a trial judge’s ruling cannot be based “exclusively on the objective factors” and must include consideration of the offerer’s “subjectively reasonable belief” of its merits.  Although Fowler’s order “contains a passing reference to Coastal’s lack-of-standing argument,” the opinion said, it failed to weigh whether Coastal’s offer was reasonable when it was made.

18 Law Firms Ask Ninth Circuit for Share of $175M Fee Award in VW MDL

December 21, 2018

A recent Law 360 story by Dorothy Akins, “18 Firms Ask 9th Circ. For Cut of $175M Fees in VW MDL,” reports that an attorney representing 18 law firms told the Ninth Circuit they're owed part of $175 million in fees and costs awarded in multidistrict litigation over Volkswagen’s emissions cheating and were wrongfully cut from the award shared among approximately 100 firms simply because they weren't the "chosen ones."

During a hearing in San Francisco, Bruce Nagel of Nagel Rice LLP told a three-judge panel that U.S. District Judge Charles R. Breyer improperly concluded that work done by his law firm and 17 others before Lieff Cabraser was appointed as lead counsel was worthless.  As a result, paralegals at the "chosen" law firms are earning over $1,300 per hour for their work on the litigation and senior attorneys are earning $4,200 per hour, while the 18 law firms appealing the order have received nothing for what amounts to identical work, Nagel argued.  "The district court found … the identical work to be worthless," he said.

Although Nagel was arguing on behalf of all 18 law firms, he noted that his law firm was the second or third to file a complaint against the automaker and led a "press blitz" following Volkswagen's 2015 announcement that the company deliberately installed software designed to cheat federal and state emissions tests in nearly 600,000 2009-2015 vehicles.  In March 2017, Judge Breyer issued a nine-page order granting class counsel’s request for $167 million in attorneys' fees and $8 million in costs, which represented roughly 1.7 percent of the $10 billion class settlement fund that was set up to resolve the 2.0-liter class action claims.

But Nagel argued that Judge Breyer's order never compared the work done by the different law firms and his ruling was based on "bald assertions" and on a "finding of fact not supported by anything."  Nagel said if the ruling is allowed to stand, the order would require some class representatives to have to pay their own lawyers, while other class representatives don't have to, because their attorneys happen to be lead counsel and are effectively the "chosen ones." That sets up a bad precedent and bad public policy, Nagel argued.

But Samuel Issacharoff, who represents the plaintiffs' steering committee and class counsel, pushed back, arguing that the 18 law firms appealing the order didn't follow the process required to submit their hours in order to receive a cut of the $175 million.  Ultimately, Issacharoff said there were 99 non-lead counsel firms that cooperated with lead counsel and went through auditing.  Those 99 firms received a portion of the award, Issacharoff said.

On rebuttal, Nagel argued that his firm submitted multiple letters to lead counsel regarding their work on the litigation but never received a response.  Another appellant, attorney James B. Feinman who represented himself, also argued that he would file a lien against the automaker in Virginia state court to recover the outstanding attorneys' fees.  But counsel for VW, Sharon Nelles of Sullivan & Cromwell LLP, argued that any outstanding attorneys' fees must come out of the $175 million award.  Nelles said the automaker isn't responsible for any additional fees based on the terms of the $10 billion class action settlement, and the company would fight any liens against it filed in state court.