A recent Law 360 story by Beverly Bank, “’Vague’ Billing Justifies 10% Cut in Atty Fees, Judge Says”, reports that a federal magistrate judge recommended slashing an Iron Workers' benefits funds' request for attorney fees in a case over an employer's unpaid contributions, saying there are "vague" billing entries from the plaintiffs' counsel as part of a $2.2 million judgment.

U.S. Magistrate Judge Kimberly G. Altman issued a report and recommendation, suggesting the district court cut a nearly $111,000 attorney fee request from Iron Workers Local No. 25's benefit funds by 10%.  The attorney fees dispute is connected with U.S. District Judge Nancy G. Edmunds' order, requiring Next Century Rebar LLC to pay more than $2.2 million in unpaid contributions with interest and liquidated damages.  The company filed a notice of appeal to the Sixth Circuit.

"Portions of the trustees' itemized hourly work are described insufficiently to prove that the work 'was performed with reasonable diligence and efficiency,'" Judge Altman said.  The judge said many of the funds' billing entries linked to an audit are "vague," necessitating a drop in proposed attorney fees from around $110,900 to roughly $99,800.  Judge Altman did not disturb the funds' request for more than $18,200 in costs.

The judge pointed to billing entries connected with an audit, saying some entries about the correspondence and emails with the auditor "provide the court with little information as to the necessity of the work."  The benefit funds requested around $110,900 in October, saying the plaintiffs' counsel spent 388.8 attorney hours in pursuing the case.

Next Century Rebar called billing entries linked to the attorney fees request "excessive, duplicative, and vague" as part of the company's Oct. 30 response. The company challenged the funds' bid for fees over review of the audit.  "Excessive review of the audit is ongoing throughout the time entries of multiple persons without any detail or reason for the excessive amount of time spent reviewing, re-reviewing, and again revisiting the audit report," Next Century Rebar said.

The company said the funds were seeking fees for clerical work that could have been undertaken by a legal clerk or assistant to the plaintiffs' attorneys.  Judge Altman found that some of Next Century Rebar's complaints about the clerical work entries were valid and warranted lower attorney fees.  "Next Century has highlighted instances where parts or all of the described work was clerical in nature and could have been handled by paralegals or other staff at much lower rates," the judge said.

The judge took on arguments from Next Century that the request related to audit costs of about $13,000 was "outrageous," saying the company didn't raise evidence to back up this claim.  Judge Altman said an affidavit "from an attorney that worked closely on this case and on the review of the audit" corroborated the cost of the audit.

A recent Law 360 story by Dorothy Atkins, “’Alcon’s $1.2M Sanctions Fee Bid For Its MoFo Attys Slashed”, reports that a New York federal judge slashed Alcon Vision's $1.17 million fee request for its attorneys at Morrison Foerster LLP after securing sanctions against Lens.com over its bad faith counterclaims in a trademark dispute, instead awarding $227,000 after finding "glaring deficiencies" in the fee request.  In a 20-page opinion, U.S. District Judge Nina Gershon rejected Alcon Vision LLC's seven-figure request for attorney fees due to the numerous deficiencies and lack of supporting documentation provided by its legal team at Morrison Foerster.

Instead, the judge reduced the fee request as proposed by Lens.com, and she gave the company and its counsel 60 days to pay the fee award.  The sanctions award and fight over fees is the latest development in hotly contested intellectual property litigation that Texas-based Alcon, which was once owned by Novartis AG, kicked off in January 2018.  Alcon accused Las Vegas-based rival Lens.com of selling its trademarked products without permission and with outdated packaging in New York.

Lens.com hit back with antitrust counterclaims in February 2019, claiming Alcon was attacking it just to "ingratiate itself" with eye care providers that would "reward" Alcon by prescribing their customers its lenses.  But in July 2022, the judge slapped Lens.com Inc. and its attorneys with sanctions for filing bad faith counterclaims.  The judge found that the website's counterclaims served no legitimate purpose and were filed to "harass, and cause delay, expense and vexation to Alcon."  The judge ordered Lens.com and its counsel to pay Alcon's costs and attorney fees "caused by its bad faith and vexatious filing and maintaining" of its counterclaims, as well as fees arising from Lens.com's refusal to produce discovery.

The judge also called Lens.com's counterclaims in the dispute "problematic from the start," and ordered Alcon "to file an affidavit setting forth the costs and attorneys' fees for which I have found Lens.com and its counsel jointly and severally liable."  In response, Alcon's lead counsel of Morrison Foerster filed a seven-page declaration seeking $1.17 million in attorney fees for approximately 1,700 hours of work on behalf of 14 attorneys, including partners and associates, and four paralegals.

But Lens.com fired back, arguing that the fee request is excessive, unsupported and doesn't include time records or invoices.  Lens.com also argued that the declaration improperly seeks a single blended rate for its attorneys and an unidentified "standard hourly rate" for its paralegals, rather than the prevailing rate in the district, among other purported deficiencies.  Lens.com argued that it shouldn't have to pay anything in fees due to the legally deficient fee bid, but at most, Alcon should only be entitled to $227,000 in fees.

Judge Gershon mostly sided with Lens.com on the matter.  Her order noted that Morrison Foerster's declaration had "no supporting documentation and little detail" to support the fee calculation.  She rejected Alcon's assumption in the declaration that it is entitled to recover fees that it already paid to Morrison Foerster in connection with the sanctioned conduct, regardless of whether those fees were reasonable.  The judge concluded that ultimately Alcon's fee bid has "glaring deficiencies," including "vague" billing entries, and hundreds of hours of work invoiced in impermissible block billing, or lumping multiple distinct tasks into a single billing entry.

"Here, Alcon has not even attempted to justify, let alone sufficiently justified, as reasonable the hours or rates sought," the order says.  Although the judge noted that she could deny the fee request in its entirety due to the declaration's lack of support, she declined to do so.  However, she also refused to let Alcon submit additional support for its fee request, because the company didn't request permission to supplement the record, and it would require another round of briefing.

Instead, Judge Gershon agreed to adopt Lens.com's proposal to reduce the billable hours across the board by 62.4% and use a blended hourly rate of $355 for all attorneys and paralegals.  "Lens.com's proposal is well within the range of percentage reductions other courts have applied to requested hours for similar fee application deficiencies," the judge wrote, citing a New York federal judge's decision to slash a fee request by 80% earlier this year in Williamsburg Climbing Gym Co. v. Ronit Realty LLC.

A recent Law 360 story by Bonnie Eslinger, “Meta Tracking Class Lowers Atty Fee Bid After Judge Criticism”, reports that counsel for Facebook users took another shot at getting approval for the fees they'll receive from Meta's $37.5 million deal settling class claims that it tracked 70 million users' locations, dropping the request by $500,000 since the judge said their $9.3 million request is "not going to happen."  In a renewed motion for attorney fees and expenses filed, class counsel noted that while they initially asked for a 25% cut of the settlement, at the court's urging, they've reduced their request to 23.5%.

The request argues, however, that in light of class counsel's "tremendous effort" and "tremendous recovery" compared to similar class settlements, they shouldn't have to deviate from the one-quarter award that's usually considered a benchmark for such cases.  "But, to demonstrate their unflagging commitment to the interests of the class and their respect for the court, class counsel now request only 23.5% of the common fund," the motion states, later adding that the percentage calculates out to $8.8 million.  The five-year case was not easy to litigate, the plaintiffs' lawyers told the court.

Beyond the briefing to fight Meta's motions to dismiss in the case, "counsel faced a formidable opponent that resisted discovery at every turn," the motion states.  The lawyers for the class invested considerable time and effort to get the evidence they sought from Meta, which was represented by "two of the top defense firms in the world," Gibson Dunn & Crutcher LLP and previously Munger Tolles & Olson LLP, the motion underscores.  Last month, the judge overseeing the case held off giving final approval to the deal, criticizing the 1.3% claims rate as too low and saying the $9.3 million attorney fee request is "just not going to happen."

In the revised attorney fee request, the lawyers for the class also addressed the court's concerns about the fact that time spent on a related case that was dismissed was included in the attorney fee calculation, that the fees of too many lawyers were included in the request, and that additional support was needed to justify counsel's hourly rates.

As to the first concern, class counsel said the two cases "were inextricably intertwined" as of December 2019, when the lawyers who filed each complaint agreed to work together and the cases were related for purposes of coordination.  A significant portion of the discovery requests were done by the lawyers in the dismissed case, the filing adds.  In addition, "numerous factual and legal theories developed" in the dismissed case were used in the case that settled, now before the court, the motion states.

However, in light of the court's comments at the hearing, class counsel told the court that it removed some of the hours specifically associated with the now-dismissed complaint, although it kept some of the time associated with the discovery.  With regard to the court's second concern about the billing including too many lawyers, the motion states that it removed all hours from the tab for attorneys who billed for under 40 hours of work.  The cuts resulted in 1,307 fewer hours and removed from the original fee motion, class counsel told the court.

In their motion, class counsel also argues that the $37.5 million deal is "substantial" and compares to similar data privacy settlements, for which the lawyers were given at least 25% of the fund.  The attorney fee request also highlights the fact that class counsel worked on a contingent basis.  "With no guarantee of recovering anything for their efforts, plaintiffs' counsel advanced 9,839.5 hours and $309,524.79 in expenses, while facing unusually heightened risks of no recovery, for over four years," the motion states.

The filing also argues to the court that class counsel's hourly rates are consistent with market rates.  Documents submitted to the court showed hourly rates for the highest paid lawyers at each class counsel firm that included $997 per hour for Sabita Soneji, a partner with Tycko & Zavareei LLP; $1,050 for Barrett Vahle, a partner with Stueve Siegel Hanson LLP; $1,000 for Franklin Azar of Azar Firm; and $940 for Ivy Ngo of the Law Office of Ivy T. Ngo.

A recent Law 360 story by Daniel Connolh, “US Trustee Moves to Reverse ‘Tainted’ Jackson Walker Fees”, reports that, in the ethics fallout involving former U.S. Bankruptcy Judge David R. Jones of the Southern District of Texas and his undisclosed intimate relationship with a Jackson Walker LLP bankruptcy partner, the federal agency that oversees the bankruptcy court system filed multiple motions to strip millions of dollars in fee awards from the firm.  Writing that "all orders awarding fees and expenses are tainted and should be set aside," the U.S. Trustee's Office for the region that covers the Southern District filed motions to undo fee awards in at least 11 cases, including the bankruptcies of J.C. Penney Co. and Neiman Marcus.

The trustee, Kevin Epstein, cited Jones' cohabitation with Elizabeth Freeman, a former Jackson Walker bankruptcy partner who now leads her own small firm.  The relationship was recently revealed through litigation and media reports, and led to a formal ethics complaint filed Oct. 13 against Jones, who has resigned.  "Judge Jones' secret relationship with Ms. Freeman created an unlevel 'playing field' for every party in interest in every case Jackson Walker had before Judge Jones, including this one, and in Jackson Walker cases mediated by Judge Jones," Epstein wrote in Thursday's motion in the J.C. Penney case.

In the J.C. Penney bankruptcy alone, Judge Jones had signed orders compensating Jackson Walker for its work as debtor's local counsel and awarded about $14,000 in expenses and about $1.1 million in fees, including about $286,000 billed by Freeman, according to a summary compiled by the U.S. Trustee's Office.  The precise dollar amounts of all the proposed fee reversals weren't immediately clear, but one section of Epstein's motion describes the general scope.

"Judge Jones presided over at least 26 cases, and perhaps more, where he awarded Jackson Walker approximately $13 million in compensation and expenses while Ms. Freeman was both a Jackson Walker partner and living with him in an intimate relationship.  This includes approximately $1 million in fees billed by Ms. Freeman herself in 17 of those cases."  The U.S. Trustee's Office has filed proposed orders that call for the previous orders approving Jackson Walker's fees and expenses to be vacated.  If approved, parties would have 120 days to object to Jackson Walker's fees and expenses, and a hearing would take place.

The U.S. Trustee's Office has also moved to block a $1.3 million fee award to Jackson Walker in at least one case — the GWG Holdings Inc. bankruptcy — in which Judge Jones acted not as presiding judge, but as a mediator.  A recent document filed by the trustee highlights several other cases in which Judge Jones acted as mediator, rather than as judge.  Property records show that Judge Jones and Freeman had jointly owned a house in Houston since 2017. Earlier, Freeman had served as Judge Jones' law clerk.

In a previous interview, Wilkinson said the law firm first learned about a potential relationship between Freeman and Jones in March 2021, and took steps including consulting outside ethics counsel.  Wilkinson had forwarded an emailed statement: "Our firm acted in a timely fashion once we learned of this issue, including conducting a full inquiry and consulting independent outside ethics counsel for their guidance.  From the time we first learned of this allegation Ms. Freeman was instructed not to work or bill on any cases before Judge Jones.  We are confident that we acted responsibly."

The U.S. Trustee's recent filings say Jackson Walker didn't act responsibly.  "Notwithstanding Jackson Walker's admitted knowledge of the secret relationship between its partner, Ms. Freeman, and Judge Jones no later than March 2021, Jackson Walker never disclosed that relationship in any pending or subsequently filed case during the following 21 months while Ms. Freeman was a partner — or thereafter when she was working as a Jackson Walker contract attorney on bankruptcy cases after leaving Jackson Walker," Epstein wrote in the motion, which was signed by Millie Aponte Sall, assistant U.S. trustee.

And at least one court document suggests that Freeman was still indirectly participating in cases for Jackson Walker that were pending before Judge Jones after March 2021, by consulting with other attorneys.  A Fifth Circuit ethics complaint said that whether or not Freeman directly participated in a case before Judge Jones, she still stood to gain money.  The U.S. Trustee's Office has filed motions seeking to undo Jackson Walker's fees and expenses in the following cases, all in the U.S. Bankruptcy Court for the Southern District of Texas:

J.C. Penney Co. Inc., et al., case number 20-20184
Neiman Marcus Group Ltd. LLC, case number 20-32519
Westmoreland Coal Co. et al., case number 18-35672
Whiting Petroleum Corp., case number 20-32021
Stage Stores Inc., case number 20-32564
Chesapeake Energy Corp., case number 20-33233
Covia Holdings Corp., case number 20-33295
Tug Robert J. Bouchard Corp., case number 20-34758
Mule Sky LLC, case number 20-35561
Seadrill Partners LLC, case number 20-35740
Katerra Inc. et al., case number 21-31861

A recent Law 360 story by Chart Riggall, “Colo. Judge Calls Out Enviro Attys For ‘Egregious’ Billing”, reports that a Colorado federal judge chided a group of environmental attorneys who successfully sued a gold-mining company for polluting the South Platte River over their "egregious" billing practices, slashing their request for fees by nearly two-thirds.  U.S. District Judge William J. Martinez of the District of Colorado — who in a 2022 bench trial ordered the Wyoming-based High Mountain Mining Co. LLC to pay $500,000 in penalties for violations of the federal Clean Water Act — said spotty record-keeping produced a fee request the court "cannot condone."

"These issues make the court seriously doubt counsel's billing judgment," Judge Martinez wrote in an order.  The judge ultimately awarded over $295,000 in fees and $77,000 to the attorneys representing Park County residents Pamela Stone, Twyla Rusan and M. Jamie Morrow, along with a pair of nonprofit groups, the South Park Coalition Inc. and Be the Change USA.  The groups also sued James R. Murray, a managing member and part owner of High Mountain.

That fell far short of the plaintiffs' request of nearly $1 million, which Judge Martinez pinned not only on their billing records but also on their "unprecedented" request for attorney fees in two separate, earlier lawsuits that were dismissed.

Stone and the other plaintiffs had argued that those two earlier cases yielded information directly bearing on the ultimately victorious lawsuit, but Judge Martinez disagreed, saying they pointed to "no case law supporting the proposition that a court may award fees for work done in earlier, failed actions at the conclusion of a later, successful action."

Filed in 2019, the residents' lawsuit took aim at a High Mountain mine near Alma, Colorado — mere steps from a fork of the South Platte River — that was allegedly leaking pollutants into the waterway.  The source of the contamination, according to the lawsuit and expert witnesses, was a series of unlined settling ponds containing mine waste that allowed chemicals to leach into the groundwater and then the river.

Judge Martinez used the factors laid out in the U.S. Supreme Court's 2020 decision in County of Maui v. Hawaii Wildlife Fund to determine whether the company was required to obtain a permit for its discharges, which plaintiffs' attorneys said was one of the first applications of the Maui precedent.  The judge relied primarily on two factors: the distance the pollution has to travel to get to the river and the time it takes to get there.

The final $500,000 judgment was based on Judge Martinez's calculations of how much the company had saved by failing to line the ponds, as he declined to award an additional $500,000 sought by the plaintiffs absent evidence of serious environmental damage.

Because the plaintiffs didn't succeed on all their claims, High Mountain argued that the case was, in effect, only 25% successful and that the fee award should be slashed accordingly.  But Judge Martinez said he wanted to avoid having to disentangle the fee requests from the prior actions and elected to split the baby by cutting the fee request by 50%.

More problematic, he continued, were a number of billing line items where the work reportedly done wasn't fully documented, or the plaintiffs' attorneys had put apparently frivolous tasks down for billing.  In one such case, an attorney billed 0.02 hours for reading court transcripts, "rather than writing off 72 seconds of work during which he could not have possibly accomplished anything for his client," Judge Martinez said. 

High Mountain had also tried to argue that opposing counsel had charged exorbitantly high rates for their work, but that argument ultimately fell short.  "The court concludes that plaintiffs' requested hourly billing rates are very much on the high end, but ultimately accepts them as reasonable for environmental law attorneys of comparable skill and experience in the Denver area," Judge Martinez said.

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