September 12, 2023
A recent Law 360 story by Hailey Konnath, “Feds Question $23M Fee Request in PACER Overcharge Spat”, reports that the U.S. government urged a Washington, D.C., federal judge to "carefully examine" nonprofits' $23 million attorney fee request in long-running litigation challenging PACER charges, saying the review is needed "to ensure that class members' rights and recovery are appropriately safeguarded.
The government said that the court should indeed grant final approval to the $125 million deal but that it should also "exercise its discretion" in determining the attorney fees and costs requested by lawyers with appellate boutique Gupta Wessler LLP and plaintiffs litigation firm Motley Rice LLC. In particular, the government said the attorneys calculated their fee request using their 2023 hourly rates but didn't account for the fact that the litigation began in 2016, when those rates were likely lower.
And they've apparently calculated the request without consulting the D.C. U.S. Attorney's Office's Fitzpatrick Matrix, a table that breaks down the hourly rates for legal fees in complex federal litigation in the District of Columbia based on attorneys' years of experience, according to the filing. That's evident because both firms have laid out rates that are significantly above those in the Fitzpatrick Matrix, the government said in its response.
"In light of plaintiffs' failure to satisfy their burden to establish that above-market rates are appropriate in this case, the court may wish to inquire as to the basis for counsels' rates, and determine whether a reduction in line with prevailing market rates pursuant to the Fitzpatrick Matrix rate is appropriate," it said.
The government agreed to pay $125 million to resolve the dispute last year. In their suit, the National Veterans Legal Services Program, the National Consumer Law Center and the Alliance for Justice alleged that PACER fees paid by the public exceeded limits under the E-Government Act of 2002. The Public Access to Court Electronic Records system provides public access to federal court records. Under the deal, settlement class members would receive up to $350 for PACER fees they paid between April 21, 2010, and May 31, 2018, with those who paid more than $350 receiving an additional pro rata share of the remaining settlement funds.
The court has already preliminarily approved the agreement, and the class has been notified. The nonprofits asked the court for final approval of the settlement and their fee request last month. According to the nonprofits, the roughly $23 million represents about 19.1% of the settlement fund and is "below the average percentage fee awarded for funds of this size."
But the government said that the fee request includes approximately $900,000 in work that "has not yet occurred and may not occur." The court may want to ask the nonprofits' counsel how they reached that number, it said, adding that their declarations "provide little, if any, explanation of those estimates." The nonprofits have also requested a $1 million payment to the class administrator, a request that includes $100,000 for work that hasn't yet been done, according to the motion.
"Defendant does not take issue with the general approach of awarding plaintiffs' counsel a percentage of the common fund in this case, but here are indicia – including above-market hourly rates that plaintiffs' counsel have not shown to be reasonable and inadequately explained predictions of future work — that the common fund may be excessively depleted, to the detriment of class members, if plaintiffs' counsel are awarded the percentage of the common fund that they have requested," the government said.