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Judge Increases Attorney Fees in New York Rent Contact Dispute

January 7, 2022

A recent Law 360 story by Max Jaeger, “Judge Ups Atty Fees in Wolf Haldenstein Rent Row,” reports that if anything is rising from the ashes of Wolf Haldenstein Adler Freeman & Herz LLP's "scorched earth" rent dispute, it's the firm's award for attorney fees, which a New York state judge more than doubled from $300,000 to $700,000.

The award, some $125,000 shy of what the Manhattan firm sought, was necessary "since the overwhelming majority of the tenant's attorneys' fees were generated in response to discovery demands from the landlord and/or the conduct of the bench trial," Justice Barry Ostrager wrote in an order, explaining that he had erroneously limited the potential award to $300,000 in November.

Wolf Haldenstein sued its longtime Madison Avenue landlord in April, alleging it was owed rent credits and damages because the landlord failed to complete office renovations required under a 2019 lease agreement.  While Justice Ostrager mostly sided with Wolf Haldenstein in November, he chided the parties for turning an "exquisitely simple" case into "scorched earth" litigation through protracted discovery.

"This case should have been resolved early," Wolf Haldenstein counsel Scott Mollen of Herrick Feinstein LLP told Law360 in a statement.  "Clearly Herrick's legal fees were a direct result of the scorched earth tactics of the landlord.  This highly respected plaintiffs class action firm sought to resolve this matter through negotiation or mediation.  However, a settlement requires that each side be reasonable."

Once the court resolved the rent dispute, the battleground shifted to fees.  Justice Ostrager said in November that Wolf Haldenstein could seek $300,000 to pay attorneys at Herrick Feinstein LLP but acknowledged in a Dec. 15 order that Wolf Haldenstein sought more and that he'd relied on incorrect numbers.  On Dec. 14, Wolf Haldenstein told the judge in a letter that the landlords had blown a deadline to oppose the full $827,000 request.  In a response that same day, the landlords claimed they thought the firm was only asking for $300,000.

That led Justice Ostrager to issue the Dec. 15 order clarifying himself the following day.  "Nothing is either simple or non-contentious in this case which could have been consensually resolved last April if reason and common sense had prevailed.  Regrettably, in describing the tenant's claim for attorneys' fees in its [Nov. 22] decision, the court referenced the amount of fees Wolf Haldenstein had paid Herrick Feinstein, rather than the amount of attorneys' fees Wolf Haldenstein had incurred," Justice Ostrager wrote, adding the landlord "knows full well [$300,000] is not the sum plaintiff requested."

In opposition papers filed Dec. 20, the landlord argued Wolf Haldenstein's request was excessive, because Herrick Feinstein LLP allegedly overstaffed hearings, inflated bills for what amounted to public relations work, and engaged in imprecise block-billing practices that should trigger "a substantial reduction" in the award.

Justice Ostrager agreed "that the tenant's fee application is excessive inasmuch as multiple tasks for which attorneys' fees are sought did not require the number of attorneys whose time was submitted to the court for approval," but again pointed out that none of the fees would have been generated had the landlord not dragged out litigation.

Herrick Feinstein charged its standard hourly rates, less a 10% courtesy discount, the justice said in his Dec. 15 order.  While he said it had no bearing on his ruling, the judge called it "telling" that the landlord's attorney fees were some 30% higher than Wolf Haldenstein's, at $1.2 million.

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.

NJ Law Firm Loses Challenge to Attorney Fee Reduction

December 13, 2021

A recent Law360 story by Nick Muscavage, “NJ Firm Loses Fee Cut Challenge in Walmart Injury Case,” reports that the Englewood Cliffs, New Jersey-based Law Offices of Andrew Park PC has lost its bid for a larger cut of the fees from a personal injury case against Walmart, after failing to submit a certificate of services detailing the work the firm put into the case.  A New Jersey Appellate Division panel found that the lower court correctly allocated to the Park firm one-third of the $41,666.66 contingency fee, or about $13,888, that was earned in the underlying slip-and-fall case against Walmart, which settled for $125,000 in 2017.

The other two-thirds of the award, which equaled about $27,777, was also correctly awarded to the plaintiff's former counsel, the Fort Lee, New Jersey-based Jae Lee Law PC, the appellate panel found.  The trial court, according to the appellate panel, rightly followed the principles in La Mantia v. Durst, a 1989 New Jersey Appellate Division opinion that laid out the principles that judges must follow when allocating fee awards.

In La Mantia, the court instructed trial judges to review the following circumstances when determining fee awards: the length of time each firm spent on the case relative to the total amount of time expended to conclude the case, the quality of the representation, the result of each of the firms' efforts, the reason why the client changed attorneys, the viability of the claim at counsel transfer and the amount of recovery resulting from the underlying lawsuit.  "Here, the trial court properly recognized that the allocation of the fee should be based on the principles enunciated in La Mantia as we directed," the appellate panel wrote in its Dec. 10 opinion.

As a result, the ruling by the trial court resulted from "appropriate findings of fact and conclusions of law" under La Mantia, the appellate panel added.  Additionally, the appellate panel noted that the Park firm did not submit a certification of services with supporting documents detailing the time the firm spent on the case, which was essential to the court's decision.  An affidavit or certification of services is required when a firm is seeking a fee allocation, according to the appellate panel.

Is Law School Relevant in Establishing Hourly Rates?

December 9, 2021

A recent Metropolitan News story, “Law School Attorney Attended Is Relevant to Fee Award,” reports that a judge was not off base in commenting at a hearing on the setting of attorney fees that a lawyer who graduated from Glendale College of Law did not rate the same hourly fee as one who earned a J.D. at Harvard or Yale, the Court of Appeal for this district held.  Santa Clara Superior Court Judge Audra Ibarra, sitting on assignment to Div. Seven, authored the opinion which was not certified for publication. 

It upholds Los Angeles Superior Court Judge William F. Fahey’s award of $320,000 in attorney fees to the plaintiff in an action under the Fair Employment and Housing Act, but reverses a $28,472 cost award because the judge mistakenly thought that recompense was available only for services of experts who were court appointed.  Of the $320,000, $200,000 was to compensate the plaintiff, James Herron, for services performed by Encino attorney Darryl M. Lucien. Herron recovered $200,000 in an action against the County of Los Angeles.

Lucien has set his hourly rate at $600; Fahey awarded fees at $500 an hour.  At the hearing on the motion, Fahey commented that attorneys “who went to Harvard or Yale typically are paid at a much higher level” than those who attended less prestigious institutions, saying that this “reflects, perhaps, an intelligence level beyond this court’s intelligence level and a dedication and a drive and a capability” that he does not “otherwise see with some other lawyers.”  (Fahey graduated from the law school at UCLA.)

Ibarra wrote: “But Herron takes the court’s comment out of context.  The court was comparing Lucien’s background and experience with other attorneys in the legal market as it was allowed to do.  The court explained, ‘Background, experience, number of years, approval by judges of those hourly rates, et cetera.  All of those are factors that this court has in mind.”  Fahey said in the order for fees: “In calculating the reasonable value of plaintiffs counsel’s services, the Court notes that it has resolved more than 100 fee motions in over 15 years….

“In this case, Lucien is a sole practitioner and is requesting $600 per hour.  However, he admits that no judge has ever approved this rate.  He graduated from Glendale University College of Law in 2002, but provides no information about his achievements there.  He conducted one misdemeanor trial while a clerk with the District Attorney’s office and 15 civil trials thereafter. He has spoken at three CLE seminars.  “This Court has seen and approved hourly rates of $400-550 for attorneys with Lucien’s background and trial experience.  Given Lucien’s pre-trial and trial skills, the Court concludes that a rate of $500/hour is reasonable.”

The judge made note that “plaintiff prevailed on only two claims and received only about 10% of the amount he sought from the jury” and his lawyers “grossly over-litigated this case prior to trial.”  Herron had sought $2,148,440 in fees based on $600 per hour for Lucien, $400 for Maximilian Lee, with a multiplier of two.  Fahey pared the number of hours as well as lowering the rate for Lucien.  The judge commented in a footnote: “Plaintiff Herron no doubt would be shocked and outraged if he was asked to pay over $2 million to his attorneys who managed to obtain a judgment of only $200,000.”

Ibarra found no abuse of discretion by Fahey, saying: “Although the trial court awarded Herron attorney fees for fewer hours than requested, we do not find the court abused its discretion based on the record before us.  Having presided over the entire case, including discovery disputes, the experienced court was well-positioned to determine if Herron’s attorneys overlitigated or padded their hours.”

Class Counsel Earn $9.4M in Attorney Fees in Securities Action

December 8, 2021

A recent Law360 story by Clark Mindock, “Quinn Emanuel, Others Get $9.4M Atty Fee in Securities Suit,” reports that a Delaware federal judge has awarded $9.4 million in attorney fees to Quinn Emanuel and others representing energy management software company C3 Inc. in a shareholder suit alleging fraud in a stock-swap deal, trimming an originally requested amount.  U.S. District Judge Colm Connolly awarded the attorney fees after receiving recommendations from a special master overseeing the case who found just two out of five arguments raised by the investors against the award had merit.

The judge agreed with the special master that it was appropriate to trim $1 million from the original $10.1 million requested since the award for attorney fees shouldn't include fees related to litigated holdback claims.  Judge Connolly also determined that a further reduction of 3% was appropriate after the special master suggested the court consider whether block billing and redactions in the request were indicative of potential bad faith.  "I agree that defendants' block billing could obscure bad-faith expenditures related to the holdback claim," Judge Connolly said, before adding he was exercising his discretion to reduce the fee beyond the $1 million by 3%.

The C3 firms sought the fees after fending off a suit brought by investors accusing the company of securities fraud and breach of contract.  Seeking reimbursement for the attorney work, C3 said its lead counsel Quinn Emanuel Urquhart & Sullivan LLP billed 11,197 hours over five years, accounting for $9.7 million in fees.  Four other firms — Cooley LLP, Morris Nichols Arsht & Tunnell LLP, Potter Anderson & Corroon LLP and Parkowski Guerke & Swayze PA — accounted for another $400,000, they said.

In March, Judge Connolly rejected an initial attorney fee bid for the $10.1 million, saying an outside observer may need to review the matter.  He then punted the case to the special master who made the recommendations that have now been accepted by the court.

Article: What is a Legal Fee Audit?

October 7, 2021

A recent article by Jacqueline Vinaccia of Vanst Law LLP in San Diego “What is a Legal Fee Audit?,” reports on legal fee audits.  This article was posted with permission.  The article...

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