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.

A recent Law 360 story by Thy Vo, “Colo. Judge Cuts Condo Developer’s Atty Fee Award to $2.3M”, reports that a Colorado federal judge has pared down a condominium developer's attorney fee award to $2.3 million after it secured a verdict against its insurer in a construction coverage dispute, with the judge finding that the developer requested hourly rates higher than the prevailing rate in Denver's legal market.

U.S. District Judge Charlotte N. Sweeney on cut Curtis Park Group LLC's fee award from the $2.77 million requested by the developer down to $2.35 million, writing in her order that the requested rates, ranging from $350 to $1,175 an hour, were "excessive" compared with similar legal services in the region.  "At bottom, Curtis Park's repeated emphasis on its counsel's status as an AmLaw 100 firm does not make its requested hourly rates reasonable," Judge Sweeney wrote.

But the judge declined to cut into the developer's fee award as steeply as defendant Allied World Specialty Insurance Co. insisted, finding it would be "inappropriate" given the "excellent skills, experience and reputations" of Curtis Park's attorneys from Haynes and Boone LLP.  "Moreover, even though this insurance dispute case did not rise to the level of a 'niche practice,' it certainly was a complex insurance dispute with high stakes, as both parties have acknowledged," Judge Sweeney wrote in her order.

The fee award comes after a jury in April found that more than $2.5 million in covered benefits related to Curtis Park's condo project in Denver was improperly delayed or denied by Allied World's bad faith conduct.  Curtis Park sued the insurer in federal court in February 2020, alleging Allied World improperly denied coverage for losses resulting from an unexpected amount of "downward deflection" in a concrete podium deck beneath four of the development's five buildings.

Judge Sweeney's order also cut the amount of travel time Curtis Park's attorneys could recover in half, citing decisions by other courts.  But the judge rejected other claims by Allied World that the developer's fees should be reduced even further.  "Allied World fails to persuade, based on the case file and evidentiary record, that Curtis Park impermissibly 'hid' Pat Casey's involvement at various stages of litigation," Judge Sweeney said.  "And notably, as Allied World states, Curtis Park does not seek to recover fees for Mr. Casey's time."

A recent Bloomberg Law story by Bernie Pazanowski, “’Fitzpatrick Matrix Adopted for Setting DC Attorneys’ Fees Awards”, reports that a government employee in Washington, who settled a discrimination lawsuit against the federal agency for which she worked, is entitled to an award of $526,101 in attorneys’ fees, a federal court in Washington said.

The correct method for establishing prevailing market rates for attorneys’ fees in the Washington area is the Fitzpatrick Matrix, which lays out a “finely tuned rate schedule that lists a different market rate for each additional year of experience a lawyer brings instead of bundling experience levels into bands,” Judge James E. Boasberg of the US District Court for the District of Columbia said.

Cindy Brackett, who worked for the Federal Emergency Management Agency, said that the court should use the Legal Services Index Matrix to compute the fees, which is a general schedule of hourly fees based on years of attorney experience.  But Boasberg rejected that method, saying that there were problems with the age of the data it used, with the sample of federal litigators it used, and the way it groups attorneys into just five experience bands.

• District precedent established that the Fitzpatrick Matrix was more reliable than the LSI Matrix because it’s limited to the Washington market, Boasberg said
• Fitzpatrick also employed lessons from an economics rather than a legal textbook to blend data from the cases he reviewed into a linear model that reflects common economic practice, he said
• Computing the rates here, Boasberg noted that both parties caused delays in the case that started in 2017 and said that using the 2022 version of the Fitzpatrick Matrix was proper
• The final award included fees for the time Brackett’s attorneys spent litigating the fee dispute

A recent ABA Journal story by Debra Cassens Weiss, “Big Law Firm Partners Awarded Fraction of Their $1,500-Plus Hourly Legal Fees”, reports that two Gibson, Dunn & Crutcher partners usually bill more than $1,500 per hour, but they trimmed the amount to only $950 per hour in a request for an award of attorney fees following successful litigation in the Southern District of Florida.  Even that amount was too much for a federal judge, who adopted a magistrate judge’s conclusion that $700 was a reasonable hourly fee for partners in Miami, Reuters reports.

Gibson Dunn had successfully represented defendant Peak One Opportunity Fund in a lawsuit alleging that the lender harmed startup Social Life Network Inc. when it exercised an option to obtain stock at a discount and then resold it.  Gibson Dunn was entitled to fees and expenses under a contractual agreement between the two litigants. Gibson Dunn sought to recover more than $237,000.  Chief U.S. Magistrate Judge Edwin G. Torres recommended an award of nearly $158,000 in fees and expenses, a recommendation adopted by U.S. District Judge Darrin P. Gayles of Miami.

The award included only $700 per hour for the “high-level partner work” of Gibson Dunn partners Helgi Walker and Barry Goldsmith. Walker, co-chair of Gibson Dunn’s litigation practice, is based in Washington, D.C., while Goldsmith is in New York, Reuters reports.

Torres said he had no trouble understanding why Walker and Goldsmith charge more than $1,500 per hour for their services.  But when awarding fees to a prevailing party, “this court has long recognized that it cannot force the loser to pay for the luxury of unusually well-qualified counsel when the standard the court must apply is designed to ensure nothing more than competent legal representation,” Torres said, quoting from another decision.

Walker provided a statement to Reuters.  It is “not surprising that a national firm’s rates might be slightly reduced in a context where local market comparisons are being made,” she said.  “The headline here is that we were successful in getting our client awarded almost $150,000 in fees for the plaintiff’s inappropriate and meritless suit,” she said.

A recent Law 360 story by Sue Reisinger, “GC Cheat Sheet: The Hottest Corporate News of the Week,” reports that, as several law firms have significantly increased their rates over the past year amid a slowing economy, the relative silence from corporate clients has been deafening.  Law 360 columnist Aebra Coe writes that based on her experience covering the legal industry during the fallout of the last economic downturn, the level of "meh" reactions around the increases is a major shift from the volume of outcry we heard from in-house legal during the 2010s.

So fast-forward to today.  Released at the end of May, the LexisNexis CounselLink 2023 trends report found that timekeeper rates grew on average 4.5% in 2022, the highest level the enterprise legal management platform had recorded since it first produced the report in 2013.  According to CounselLink, average partner billing rates at law firms with 750 or more lawyers increased from $656 in 2015 to $895 at the end of 2021, an increase of 36%.

And yet, Coe doesn't think we've seen the same revolutionary spirit in-house that we saw a decade ago.  Some structural changes are at play, including reducing the number of outside counsel used by legal departments, adopting alternative fee arrangements, using legal technology, outsourcing some lower-level tasks to alternative service providers, taking some work in-house, and making use of data to ensure outside counsel are performing to a high standard and providing value for the money.

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