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

March 1, 2012 | Posted in : Billing Practices, Expenses / Costs, Fee Reduction, Fee Request, Hourly Rates, Lodestar

A recent NLJ story, “Dispute Bluetooth Settlement Actually Underpays Plaintiffs’ Team, Defense Says” reports that plaintiffs’ attorneys in the Motorola Bluetooth headset litigation – in which a federal appeals court rejected a settlement last year on the grounds that the $800,000 award might be excessive – performed more than $1.3 million in justifiable work, according to a document filed by the defense.  A defense team led by Ann Tria of McBreen & Senior in Los Angeles reviewed the plaintiffs’ billing at the request of U.S. District Judge Dale Fischer after the U.S. Court of Appeals for the Ninth Circuit tossed out the deal.  A three judge panel said that Fischer had failed to adequately test whether the attorney fees were excessive.

Both sides filed briefs on Feb. 13 defending the fees.  As part of their argument, the defendants detailed a proposed “lodestar” figure, calculated by multiplying the number of hours reasonably spent on the case by a reasonable hourly rate.  After conducting that analysis, the defense didn’t accept all the $1.7 million in fees billed by plaintiffs’ counsel, attributing more than $333,000 to inappropriate “block billing” and unreasonable amounts of time or numbers of people devoted to certain work.

The filing took issue with other fees and expenses, however, recommending cutting $79,794 in work it said should have been done at lower rates.  Pearson Simon raised billing rates “several times” for two partners, from $500 to $750 per hour, the document said.  The document proposed slashing another $11,805 in legal fees charged for “clerical and administrative tasks” – of the 58.8 hours billed for that work, 51 involved a Segal MeCambridge associate inserting comments into a Power Point presentation.  Segal McCambridge charged $13,600 for unnecessary travel time, it said.

The team also said it found $77,193 in “block billing,” the practice of lumping multiple tasks into a single billing entry.  All but one firm participated in a total of 586.6 hours of block-billed time entries.  It proposed reducing $33,679 billed for preparing motions and declarations concerning attorney fees, noting that the firms “presumably had little more to do than recycle standard forms.”

Still, the plaintiffs’ team was pleased.  “After the audit by defense counsel, the lodestar they requested still substantially exceeded the $800,000 fee we requested by $500,000,” said Daniel Warshaw, a partner at Pearson, Simons, Warshaw & Penny in Sherman Oaks, Calif.  At the time, Fischer concluded that the lodestar amount would “substantially” exceed $800,000.  The defense fee analysis appeared to support that conclusion.  It found seven plaintiffs’ firms billed $1,330,185 in reasonable attorney fees between April 1, 2006, and July 31, 2009.