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Archive: 2021

Insurer Doesn’t Need to Cover Legal Fees in Dish Copyright Suits

December 22, 2021

A recent Reuters story by Barbara Grzincic, “Insurer Off the Hook for Legal Tab in Dish’s Copyright Battles,” reports that Dish Network Corp is stuck with the legal bills it ran up defending its Hopper and commercial-skipping “AutoHop” features in a four-year copyright battle with networks ABC, CBS, Fox and NBC, a federal appeals court held in a win for Ace American Insurance Co.  The 2nd U.S. Circuit Court of Appeals said Ace had no duty to defend Dish in the litigation because its policy clearly excluded coverage for copyright violations “committed by an insured whose business is ... broadcasting,” and under the “plain and ordinary meaning” of the term, broadcasting “is precisely the nature of Dish’s business.”

Dish’s legal team at Orrick, Herrington & Sutcliffe argued that regulatory and industry sources, including the Federal Communications Commission and the Federal Communications Act, do not consider it a “broadcaster” because users must buy a subscription and use special equipment to access its content.  However, “[i]f the parties had intended ‘broadcasting’ to take on a definition assigned by the FCC or the FCA, they could have easily pointed to those sources,” Circuit Judge Denny Chin wrote, joined by Circuit Judges John Walker Jr and Pierre Leval.

Adam Stein of Cozen O'Connor, who represented Ace along with Johnathan Hacker and others at O'Melveny & Myers, praised the court for its “straightforward” opinion.  The last of the suits settled in 2016.  Although none of the settlements required Dish to pay any money, the company then sued Ace in federal court in Manhattan to recover its legal fees.  The lower court ruled for Ace in 2019, adopting the reasoning of the 10th Circuit – the only other appeals court to have considered the question. Dish said the 10th Circuit had gotten it wrong.

Judge Reduces Hourly Rates Citing Lack of Evidence

December 21, 2021

A recent Law 360 story by Nathan Hale, Judge Backs $30K in Fees for Alan Parsons’ Contempt Effort,” reports that a Florida federal magistrate recommended trimming an attorney's fee request from Grammy Award–winning music veteran Alan Parsons to just under $30,000 to cover costs he incurred obtaining a civil contempt finding against his former promoter in a trademark infringement lawsuit.

In a report and recommendation, U.S. Magistrate Judge Leslie R. Hoffman approved of most of the request filed by lawyers from three firms that worked on Parsons' claim that defendants John Regna and World Entertainment Associates of America Inc. violated a preliminary injunction in the case, but she said two out-of-state attorneys failed to support the nearly four-figure hourly rates they submitted.  "[N]o further information about these attorneys' experience or expertise is discussed, and plaintiffs submit no further evidence suggesting that the hourly rates sought for these attorneys are reasonable," she said.

Despite a lack of objection from the defense, Judge Hoffman recommended the court calculate the fees award for Jeff Goldman and Rod S. Berman of California-based Jeffer Mangels Butler & Marmaro LLP at a rate of $375 an hour — equal to what another attorney requested and what courts in the Middle District of Florida have granted in similar cases — rather than the $945 per hour and $995 per hour that they had respectively requested. 

She recommended to U.S. District Judge Roy B. Dalton Jr. that he award the full amounts of $24,030.50 requested by attorneys from O'Connell & Crispin Ackal PLLC and $5,137.50 requested by attorney Brian P. Deeb, whose fee was specifically cited by Judge Hoffman.  And she recommended the court reimburse Goldman and Berman $825 for the 2.2 hours of work they said they contributed, instead of the $2,109 they requested.

Judge Upset Parties Discussed Attorney Fees in Apple Bag Check Settlement

December 20, 2021

A recent Law360 story by Hannah Albarazi, “Alsup Miffed at Fee Provision in Apple’s $30M Bag Check Deal,” reports that U.S. District Judge William Alsup said he'll preliminarily approve a $30 million class settlement resolving claims that Apple shorted California workers for bag check wait times but slammed counsel for including a "clear sailing agreement" under which Apple won't oppose a 25% plaintiff attorney fee award.  "It looks like this is a bonanza for the lawyers and that maybe the class will get something, too," Judge Alsup said of the fee provision agreement in the settlement — which came after he ruled that Apple Inc. owed its retail workers for the time they spent awaiting and undergoing security checks.

"First, that's a form of clear sailing agreement, which the Ninth Circuit says is a red flag and a form of collusion.  Secondly, I have a clear-cut order in this very case saying you should completely leave attorneys fees up to me.  Do not make any agreement on it," Judge Alsup told counsel on both sides.

Apple's attorney Julie Dunne of DLA Piper tried to assuage his concerns, saying, "All we said was we would not oppose, but we did not say we agreed to any amount."  "You should not have discussed it at all," Judge Alsup responded. "It looks collusive."  Class co-counsel Kimberly A. Kralowec of Kralowec Law PC told the judge that there had been no collusion and that the negotiations were done under the supervision of multiple respected mediators.

But Judge Alsup said he views private mediation as a red flag, not a signal that the deal is non-collusive.  "In fact, private mediators have told me how they work, and I'm shocked to hear it's the art of what's possible and it's not the art of what's fair.  So please don't go there.  I don't buy that argument," Judge Alsup said.  "I feel the lawyers ought to know my rules by now, and you just thumbed your nose in my face," he said.  Judge Alsup said he would preliminarily approve the deal but stressed that attorney fees are his call "and not for you to negotiate over."

The proposed settlement would resolve claims Apple retail employees made in a July 2013 lawsuit, which alleged that the company illegally required them to clock out before two daily required bag checks that resulted in about 90 minutes of unpaid work each week.  The workers included a claim under the Private Attorneys General Act, the California law that allows workers to file labor claims on behalf of the state with the state Labor and Workforce Development Agency.

Last month, the workers struck a deal with Apple for $29.9 million.  After a slew of deductions, including attorney fees and costs, the net settlement amount would be distributed among the class members based on the number of shifts they worked at an Apple store in California between July 25, 2009, and Dec. 31, 2015.  On average, each class member is expected to receive $1,300, according to the workers.

Houston Attorneys Sued for $5M Over Altered Fee Agreement

December 19, 2021

A recent Law360 story by Jessica Corso, “Houston Attorneys Sued for $5M Over Altered Fee Agreement,” reports that three Houston-based attorneys are being sued for around $5 million by a former client who claims that they deceived her into changing their fee agreement during a legal fight over her late father's will.  Caroline Allison sued Jorge Borunda, Nicholas Abaza and Michael Trevino in Harris County District Court on Nov. 9, arguing that the attorneys should return most of the money she paid them to represent her in a probate dispute involving the will of her father, who died in 2017.

Allison claims that she agreed in 2019 to hire the lawyers on an hourly basis but, a year later, they asked for a change to a contingency fee agreement whereby they would get 35% of any money or assets she collected from her father's estate.  According to the lawsuit, the lawyers made Allison believe that the case would go to trial and end up costing a lot of money.  In reality, they knew that her father's second wife, with whom Allison was fighting over the estate, was close to a settlement at the time they asked for the 35% fee, according to the lawsuit.

"By October of 2020, the lawyers determined that the estate was worth more than $18 million," according to the complaint. "Unsatisfied with their current arrangement with Caroline, and with dollar signs in their eyes, the lawyers set upon a course of conduct to fraudulently induce Caroline to change her agreement from an hourly rate to a contingency fee."  Six months after signing the new contingency agreement, the case settled, with Allison and her brother, who had also hired Borunda and Abaza, together receiving around $9.5 million, according to the lawsuit.

Allison claims that she ended up paying the lawyers $1.65 million more than she would have had she stuck to an hourly rate.  She is suing for that money back, plus treble damages she said she was owed under the Texas Deceptive Trade Practices Act.  She is alleging violations of the Texas law, as well as negligence, breach of fiduciary duty and fraud.

Dentons Wants Out of Japanese Billionaire’s $50M Fee Dispute

December 18, 2021

A recent Law360 story by David Thomas, “Dentons Wants Out of Japanese Billionaire’s $50M Fee Fight With Law Firm,” reports that Global law firm Dentons asked to withdraw from representing a Japanese pachinko billionaire in a $50 million legal fee fight with Chicago-based litigation firm Bartlit Beck.  Dentons partners Alex Gude, Meaghan Klem Haller and Robert Richards told U.S. District Judge John Kness in Chicago that there was "an irretrievable breakdown" in their attorney relationship with client Kazuo Okada.

They did not say why the relationship soured but said Okada consents to the firm's withdrawal.  They asked for deadlines in the case to be extended by two months so Okada can find new counsel.  The Chicago-based 7th U.S. Court of Appeals last month appeared skeptical of Dentons' arguments that Okada shouldn't be forced to pay $50 million in legal fees to Bartlit Beck stemming from an earlier court fight with Wynn Resorts Ltd.

Okada hired Bartlit Beck to represent him in a lawsuit against Wynn Resorts after the U.S. casino giant forced Okada's Universal Entertainment Corp to sell back its stake in the company at a discount following an internal anti-corruption investigation.  That case settled in March 2018 for $2.6 billion.

Bartlit Beck, a firm specializing in high-stakes litigation founded by ex-Kirkland & Ellis partners, took Okada to arbitration after he failed to pay $50 million it claimed he owed in legal fees.  Okada withdrew from the arbitration proceedings days before a U.S.-based evidentiary hearing in October 2019, arguing his engagement agreement with the firm was invalid.  Okada also said he was unable to travel due to his health.  The arbitration panel awarded Bartlit Beck $50 million by default in 2019.  Kness ordered Okada to pay Bartlit Beck in March, sparking the appeal.  The 7th Circuit's decision is still pending.