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Attorney Defends Well-Earned Fee Request in Consumer Law Win

March 1, 2022 | Posted in : Fee / Rate Economics, Fee Award Factors, Fee Issues on Appeal, Fee Jurisprudence, Fee Request, Fee Shifting, Fees & Judicial Discretion, Fees by Tiers / Scale, Hourly Rates

A recent Law 360 story by Matthew Santoni, “Atty Says Win’s Effect on Pa. Consumer Law Earned High Fee” reports that winning an appeal to the Supreme Court of Pennsylvania that expanded consumers' power to sue over deceptive business practices should have been worth the high end of a scale for attorney fees, a consumer protection lawyer told an appellate court in Pittsburgh.  Attorney Kenneth Behrend, whose February 2021 win for Gary and Mary Gregg established that a consumer didn't have to show fraud or negligence in order to prove an Unfair Trade Practices and Consumer Protection Law claim, told a Superior Court panel he'd shown his work was worth up to $700 per hour, given the time spent on the case, his experience and the impact of the ruling, but a judge had erroneously followed the defense's expert and awarded him $550 per hour.

"The trial court did decide that for an attorney as experienced as I am on consumer law cases ... the rate can be between $500 and $700 an hour," Behrend told the panel.  "If you're dealing with a decision that has changed the legal landscape, should that not be at the high end of the scale?"

Behrend was appealing an Allegheny County judge's award of attorney fees for his appellate work on Gregg v. Ameriprise Financial, which had been filed more than 20 years earlier over an Ameriprise agent who allegedly sold the Greggs insurance products that he made a commission on, but cost them significantly more.

While the Greggs could not prove fraud or negligence, the trial judge had said they had a valid unfair trade practices claim.  That set up appeals over whether deceptive business practices had to include an element of fraud, with a split Supreme Court eventually finding that the law's catchall provision meant that consumers didn't have to show an intent to deceive in order to sustain their claims.  The trial court had already awarded the Greggs more than $52,000 for their losses plus interest, and it had ordered Ameriprise to pay the Greggs' legal fees to Behrend and his co-counsel.

But when considering Behrend's petition for additional fees to account for the time spent on the Supreme Court appeal, the county judge said Behrend "did not adequately explain or justify the significant increase in the fees requested over a relatively short period of time since the last fee petition presented to this court in 2015," according to the trial court's April 2021 opinion.  Behrend had previously been awarded $400 per hour in fees, so the court's $550 per hour award increased that and went above what Ameriprise's expert recommended, but did not top out the $500-$700 scale that Behrend and his experts had presented.

Behrend argued to the Superior Court panel that winning his case before the state Supreme Court and setting a precedent expanding consumers' rights should have been worth more, noting that he'd been awarded $600 an hour for a different case against Ameriprise, and had taken both cases on contingency.  "If you end up being paid less than the highest rate ... what case does it take to get to the highest rate?" he asked the panel.  "It discourages experienced, skilled attorneys from taking fee-shifting cases."

Joshua Snyder of Babst Calland, representing Ameriprise, said Behrend had already gotten paid $192,000 in the 2015 fee award and could claim another $337,000 if he accepted the court's ruling.  But an attorney disagreeing with the rate the court set did not mean the judge had abused his discretion, which should be the standard the Superior Court should apply, Snyder said.

"The court considered all the arguments Mr. Behrend is making today," Snyder told the panel.  "There's no error of law.  The court applied the correct test; it just reached a conclusion Mr. Behrend is unhappy with ... As long as there's factual, record support, the abuse-of-discretion standard requires the decision to be affirmed."