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Billing Record Proves Defense Fees as Sanctions in Bad Faith Litigation

January 23, 2021 | Posted in : Billing Record / Entries, Defense Fees / Costs, Fee Award, Fee Issues on Appeal, Fees & Bad Faith, Fees as Sanctions, Hourly Rates, Lawyering

A recent Texas Lawyer story by Angela Morris, “$1.8M in Attorney Fees Awarded to Vinson & Elkins, Norton Rose Fulbright Clients,” reports that a plastic surgeon who has litigated a dispute for 14 years with a Houston hospital and medical school must pay over $1.81 million of their lawyers’ fees for sanctions for filing frivolous litigation.  The large fee award will go to lawyers at Vinson & Elkins and Norton Rose Fulbright, who since 2006 have defended Texas Children’s Hospital and Baylor College of Medicine against claims by Dr. Rahul Nath, in seemingly never-ending litigation that has twice landed on the Texas Supreme Court’s doorsteps.

During multiple appeals, the defense lawyers have succeeded in upholding the hefty sanctions, levied because the surgeon filed suit for an improper purpose and in bad faith.  Now, the Fourteenth Court of Appeals again affirmed the sanctions award: $644,500 for Baylor and for Texas Children’s Hospital, $726,000 in trial fees and nearly $439,500 in appellate fees.

The hospital’s attorneys in the trial court were Vinson & Elkins partners Pat Mizell and Stacey Vu and associate Brooke Noble, and the appellate lawyer was counsel Cathy Smith.  The medical school’s trial lawyers were Norton Rose Fulbright partners Shauna Clark and Jamila Mensah, and its appellate lawyer was of counsel Joy Soloway.

The Fourteenth Court opinion explained that Nath used to work for Baylor and he was affiliated with Texas Children’s Hospital.  The working relationship started deteriorating in 2003 because colleagues said Nath billed too much, did unnecessary procedures and was unprofessional.  He sued in 2006 for defamation and tortious interference with business relationships.  In addition to Baylor and Texas Children’s Hospital, another defendant was a plastic surgeon who had been Nath’s supervisor at work.  Later, Nath abandoned those claims and filed a new one for intentional infliction of emotional distress.

But the trial court granted the defendants a summary judgment win.  Later, the judge granted sanctions against Nath for filing the case with an improper purpose and bad faith, without having facts to back the claims.  Nath’s sanctions related to his pleadings against his former supervisor.

The sanctions award has been tied up in appeals ever since it came down.  Two times, his arguments went all the way to the Texas Supreme Court.  First in 2014, the high court found it was correct to sanction Nath for using litigation to uncover damaging personal information about his supervisor and put it into the public domain, just because he wanted for force a favorable settlement.  But the justices still sent the case back to the trial court to determine if the hospital and medical school’s litigation tactics had caused higher fees.  The trial court later ruled the defendants hadn’t done anything to bump up expenses.

Nath appealed again.  In 2019, the Supreme Court determined that even when a party must sanction for frivolous litigation, a trial court needs to have detailed evidence so that it can rule on how much of the fee was reasonable.  The case again went back down so the defendants could prove up their fees with more evidence.  The hospital and medical school filed new fee applications and attached 350 pages of billing records to back up the amounts.

Again appealed by Nath, the 14th Court found the hospital and medical school’s evidence of fees was good enough: the billing records had dates, times, descriptions and amounts for lawyers who who worked on the case.  The appellate court did change one thing.  As for future appellate fees, the hospital had evidence that based on the amount of time that various levels of Vinson & Elkins lawyers would spend, each billing between $420 and $850 per hour, the fees would come to $439,425.  For some reason the trial court awarded $489,800.  The Fourteenth Court determined the additional $50,375 wasn’t backed by evidence, and sent the case back to the trial court with a suggestion to cut that amount.