A recent Law.com story by Allison Dunn, “Judge Rejects Quinn Emanuel’s $1700 Hourly Rate Request, Slashing Fees for Virginia Settlement By Nearly 80%”, reports that a federal judge in Virginia drastically reduced Quinn Emanuel attorneys’ requested fees related to enforcing a $6 million settlement agreement they successfully obtained for a client over a fraud scheme involving the Model Tobacco Building in Richmond, Virginia.  Some of the rates requested by Quinn Emanuel—$1,690 per hour for a lead partner or $1,385 per hour for associates—were unrealistic for the Richmond market in the present case, the court found.

Quinn Emanuel attorneys based out of Washington, D.C., who served as plaintiffs’ counsel, sought prejudgment interest at a rate of 6%, as well as $236,641.18 attorney fees and costs relating to enforcing a $6 million settlement agreement between the plaintiffs, SS Richmond and MK Richmond, against Christopher A. Harrison, the owner and manager of several entities including, The C.A. Harrison Cos., CAH Model Tobacco and the McKenzie Blake Development Co.  Under the settlement agreement, the Harrison defendants were obligated to pay the $6 million payment by June 8, but the plaintiffs maintain that they have failed to do so, according to the district court’s opinion.

The plaintiffs had accused the defendants of “‘a pattern of bank fraud, wire fraud, mail fraud and money laundering in an effort to seize control and interest in a project to purchase and refurbish’” the Model Tobacco Building, which previously served as a factory for the United States Tobacco Co.  Harrison’s counsel from midsize firms Mahdavi Bacon Halfhill & Young, as well as Fraim & Fiorella, opposed the plaintiffs’ request.  The defendants argue that the plaintiffs failed to establish the reasonableness for such hourly rates.

The judge agreed in part with the plaintiffs that, in addition to the prejudgment interest, they were also entitled to attorney fees and costs, but Novak also sided with the defendants in finding Quinn Emanuel’s more than $1,000-per-hour rates for both partners and associates in post-settlement motions were ”not reasonable in accordance with the Court’s prior decisions and the Richmond legal market,” the opinion said.  Considering the reasonable rates for attorneys in Richmond with comparable skills, experience, reputation, as well as other factors, Novak reduced Quinn Emanuel’s total fee award to $50,380.

“Our client is focused on the Model Tobacco project.  As to fees, we don’t agree with everything the judge wrote, but Judge Novak obviously took the time to write a thoughtful opinion,” said George R. A. Doumar, an attorney with Mahdavi Bacon, representing the defendants.  “The local market dictates hourly rates awarded, and Quinn Emanuel was seeking rates far higher than I’ve encountered for fee awards in Virginia courts.  The lawyers I see day in and day out are billing at much lower rates.  The judge also seemed to be aware of law firm billing practices such as block billing and multiple reviews, and took that into account.”

Novak concluded that a rate of $650 for the lead partner and $400 for associates was a reasonable rate based 12 factors such as time and labor expended; the novelty and difficulty of the questions raised; the customary fee for like work; the amount in controversy and the results obtained; the experience, reputation, and ability of the attorney; attorney fee awards in similar cases and more.

“Here, Plaintiffs have failed to rebut the presumption that the hourly rates should be derived from the community in which the court sits. While Plaintiffs argue that this case has factual connections to Washington, D.C., and that the underlying case involved ‘complicated, high-stakes claims in financial fraud and RICO claims,’ … they present no evidence that a local attorney could not have provided competent representation,” Novak wrote, citing Rehabilitation Association of Virginia, Inc. v. Metcalf (1998).  “Because Plaintiffs have not made the requisite showing to apply out-of-town rates, the Court will consider the proper market from which to determine reasonable hourly rates as the market where the Court sits—Richmond, Virginia.”

The plaintiffs failed to file any affidavits from other law firms regarding “the prevailing market rates in Richmond for similar work,” and said Quinn Emanuel proffered no cases concerning fee awards within the district, Novak held.  Additionally, the law firm cited a news article from Law.com publication The American Lawyer titled, “What $1,000 an Hour Gets You in the AM 200 Today.”  The judge, however, said the article didn’t weigh in the law firm’s favor since it “cut against the reasonableness of the Plaintiff’s requested fees.”

In one of the cases cited by the plaintiffs, Proofpoint v. Vade Secure, a 2020 opinion by the U.S. District Court for the Northern District of California, the requested hourly rates ranged from $590 to $675 per hour for associates, and $880 to $915 per hour for more senior attorneys, the opinion said.

“Here, in contrast, Plaintiffs charged $1,305 per hour (Paul Henderson) and $1,385 per hour (Nicholas Inns) for the associates who performed most of the work and $1,690 per hour (Keith H. Forst) for the lead partner. … Even after accounting for inflation and the 15 percent discount applied here, Proofpoint does not support the hourly rates requested in this case,” Novak wrote, further concluding no fee would be awarded for paralegal work because the plaintiffs failed to present evidence of the customary rates billed in Richmond.  Novak concluded that the majority of the plaintiffs’ expenses were reasonable and included them in the award, bringing the total to $51,271.86 in fees and costs.

A recent Law 360 story by Chart Riggall, “NJ Firm Wants $29K Fees in Debt Suit That Settled For $10K”, reports that a New Jersey law firm that recently negotiated a settlement on behalf of the victim of an alleged predatory debt collection scheme asked a federal judge to award it $29,000 in attorney fees, nearly three times the $10,000 settlement amount.  Marcus & Zelman LLP, which successfully represented Anne Hameed in the suit that settled last month, said Monday in its fee request that while the litigation "was relatively simple and straightforward, a significant amount of litigation and attorney involvement was required."

On top of the $29,000 in fees — tabulated from over 59 hours of work by two attorneys — the firm said it should recoup another roughly $1,600 in filing and transcription costs, bringing the total tab to over $30,000.

Filed in August 2022, Hameed's suit accused a Parsippany, New Jersey, firm, Fein Such Kahn & Shepard PC, of attempting to prey on her through a bogus medical debt collection scheme.  The firm had tried to collect thousands of dollars in medical debt that Hameed said her insurance had covered, at one point suing her and placing a levy on her finances that cleaned out her bank account, according to Hameed's complaint. Hameed sued under the Fair Debt Collection Practices Act,

Hameed and Fein Such settled the case on Oct. 5 for $10,000, with the court giving Marcus & Zelman a month to request fees.  In its filing, the firm said it was clear its client, Hameed, was the victorious party.  "Here, the plaintiff was awarded $10,000 in damages, despite statutory damages being capped at $1,000 in any action brought under the FDCPA," Marcus & Zelman said.  "Accordingly, it is indisputable that plaintiff 'prevailed' on her FDCPA claim in every sense of the word."

Though the requested fees far exceeded the baseline settlement amount, the firm said its billings would stand up to court scrutiny.  "Plaintiff's counsel do not double-bill or assign multiple counsel to review the same document," the firm said, later adding: "It is respectfully submitted that the attorneys' fees sought by plaintiff is reasonable, considering the amount of time and attention the litigation of this action required.  Plaintiff's counsel skillfully enabled the plaintiff to prevail in this action, despite the numerous hurdles and dilatory tactics utilized by the defendant."

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 Rose Krebs, “Software Investor Gets $100K ‘Mootness’ Fee For Attys in Del.”, reports that a vice chancellor in Delaware's Chancery Court has awarded $100,000 in attorney fees and expenses to a Unity Software Inc. investor who filed a lawsuit over disclosures related to the company's $4.4 billion merger with ironSource Ltd., far less than the $850,000 sought.  In a letter decision, Vice Chancellor Lori W. Will awarded a "mootness fee" to investor plaintiff George Assad, represented by Block & Leviton LLP and Friedman Oster & Tejtel PLLC, saying his suit led to "minimally helpful rather than material" disclosures about a transaction intended to help finance the merger.

Initially, Assad sued to enjoin the merger "because of purportedly deficient disclosures," but a proxy statement was then filed that mooted the suit, according to the vice chancellor's opinion.  Assad then filed an amended suit with "additional disclosure challenges" but "supplemental disclosures were then issued to moot the amended claims," the vice chancellor said.  Assad asked for an $850,000 attorney fee and expense award, arguing that two supplemental disclosures the company issued in response to his litigation conferred a "substantial benefit" to Unity's stockholders.

"Plaintiff's counsel expended meaningful time and effort to achieve the benefit provided by the initial and second supplemental disclosures, including fully briefing a preliminary injunction motion, which was not mooted until the eve of the hearing," the fee request said.  Assad filed suit in August 2022 against the company's directors, alleging that they had failed to disclose conflicts of interest surrounding a proposed $1 billion issuance of convertible notes to the company's two largest stockholders, Silver Lake and Sequoia Capital Fund LP.

Silver Lake and Sequoia's proposed investment in Unity, structured as a "private interest in public equity" deal, was intended to help finance the ironSource merger.  Stockholders were not asked to vote on the PIPE deal itself, but were asked to approve an issuance of Unity common stock in connection with the transaction.  Assad alleged that Unity failed to provide sufficient details in a proxy to stockholders about how Morgan Stanley & Co. LLC and Goldman Sachs & Co. LLC were involved in the deal and how they had been paid. Both companies provided financial advice to Unity about the merger and the PIPE deal.

A few weeks after Assad sought to expedite the Chancery Court case, Unity amended the proxy, partly mooting the complaint by disclosing that Unity had agreed to pay Goldman Sachs $2 million on consummation of the deal, the fee request said.  After discovery produced documents "revealing additional, undisclosed banker conflicts," Assad amended the complaint, his fee request said.

Then, on the day before a preliminary injunction hearing was scheduled to take place, Unity filed a second supplemental disclosure, fully mooting the plaintiffs' claims.  Vice Chancellor Will dismissed the case as being moot last year.  Unity disclosed three categories of information in the second supplemental disclosures that rendered the case moot, Assad's fee application said.

First, Unity disclosed that Morgan Stanley had been concurrently representing Silver Lake, Sequoia and ironSource's largest stockholder, CVC Capital Partners and its affiliates.  Unity also disclosed millions in fees that Morgan Stanley and Goldman Sachs received for their work with ironSource, CVC, Sequoia and Silver Lake in the two years prior to the merger.  Unity also disclosed what Assad called a "fair summary" of Morgan Stanley's financial analyses of the convertible note transaction.

Assad's attorneys spent 271.55 hours on the case and incurred almost $10,000 in expenses, the fee request said.  The $850,000 fee award was an all-in request that includes both fee and expenses.  The defendants had argued that the supplemental disclosures "were immaterial," and that the attorney fee awarded shouldn't exceed $75,000, Vice Chancellor Will's ruling said.

"They largely relate to a separate transaction that was not the subject of a stockholder vote," the decision said.  "There are two exceptions.  It is reasonably conceivable that omissions of the compensation paid to and a potential conflict of one of the company's financial advisers would give rise to a meritorious claim.  A mootness fee of $100,000 is awarded for these material — and unremarkable — disclosures."

A recent Law 360 story by Emillie Ruscoe, “Susman Godfrey, Hausfeld Split $22M Fee in Libor Case”, reports that Susman Godfrey LLP and Hausfeld LLP will receive a nearly $22 million fee for brokering a $90 million settlement deal with MUFG Bank Ltd., the Norinchukin Bank and Société Générale in sprawling multidistrict litigation against numerous financial services giants over their alleged manipulation of the London interbank offered rate.  In an order, U.S. District Judge Naomi Reice Buchwald granted the two-firm legal team's requested fee and said they could also have more than $2.5 million to reimburse litigation expenses and that their five lead plaintiffs could each have a $100,000 service award.

The order comes after the plaintiffs' counsel in September requested a fee that would be a quarter of the $90 million settlement deal they had recently negotiated, minus litigation costs.  The latest settlement brings the action's "tremendous" recovery total to $781 million, according to the proposed class of those who had purchased Libor-based instruments from the allegedly involved banks during the period of the alleged rate manipulation.

Over the course of the litigation, which now dates back nearly 12 years, Barclays has settled the proposed class' claims for $120 million, Citibank for $130 million, HSBC for $100 million and Deutsche Bank for $240 million.  And, after the latest deal was reached, the plaintiff class reached a separate $101 million settlement that ends claims against Lloyds, Rabobank, RBC and Portigon, the plaintiffs said in their September fee bid.

The plaintiffs also said their requested interim fee award was comparable to awards in other multi-defendant antitrust class actions, and the percentage is the same as attorneys representing a separate plaintiff class received in other settlements.  The plaintiffs' counsel also said the requested fee would "fairly compensate class counsel for the excellent result they have obtained" on behalf of the proposed class.  The order awarding attorney fees was entered alongside a final judgment against the three settling banks.

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