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Category: Fee Reduction

Fourth Circuit Affirms Fee Award for Abortion Protestors

November 2, 2022

A recent Law 360 story by Hayley Fowler, “Abortion Protesters Keep Atty Fees in 4th Circ. Picketing Row,reports that the Fourth Circuit affirmed an attorney fee award for abortion protesters in a suit challenging the constitutionality of a North Carolina city's picketing ordinance, finding the sidewalk ministry had notched some semblance of a win in the parties' consent agreement.  In a published opinion, a three-judge panel said the consent decree allows Cities4Life Inc. to hand out pamphlets at an abortion clinic where they were previously banned from doing so, meaning the legal relationship between them and the city of Charlotte altered in such a way that Cities4Life was a "prevailing party" under the agreement.

The Fourth Circuit's decision allows the ministry to keep its $39,811 in attorney fees awarded by the district court.  "Contrary to the city's assertion at oral argument, this was no 'technical victory' — plaintiffs' previous inability to distribute literature to vehicles at the center was central to their claim," U.S. Circuit Judge Albert Diaz wrote.  "Thus, we hold that the consent judgment here granted plaintiffs 'some relief on the merits' sufficient to establish this prerequisite for fee shifting."

Cities4Life had accused Charlotte police in 2019 of enforcing the city's picketing ordinance too liberally outside an abortion clinic that the Fourth Circuit said "performs the most abortions in the southeastern United States," where anti-abortion volunteers were allegedly inundated with citations.

One of the activities under scrutiny involved protesters stepping into the road to give literature to patients visiting the clinic. Police said it was a safety hazard that violated a city ordinance barring disrupting, blocking, obstructing or otherwise interfering with traffic.  But Cities4Life had argued police were infringing on their volunteers' First Amendment rights.  The parties reached a consent decree 17 days before the case was set to go to trial in 2020, the Fourth Circuit said.

Under the agreement, Cities4Life could approach cars with some caveats and would be issued an initial warning instead of an immediate citation if any of those conditions were violated.  The parties did not, however, settle the issue of attorney fees, which was decided at a later date by the district court.  Cities4Life had sought more than $150,000 in fees, which the judge ultimately slashed by 75% to land at the $39,000 figure.

On appeal, Charlotte argued the agreement had been a "practical resolution." Counsel for the city specifically said during oral arguments that the consent decree went "out of its way" to dismiss all the ministry's claims with prejudice, which he argued was a win for Charlotte — not the other way around.  But the Fourth Circuit said dismissing the claims with prejudice is typical of parties wanting to "ward off future litigation" and is a "poor indicator" of which one prevailed.

The panel found the decree "easily passes" its four-part test for determining fee awards, saying the parties had reached a consent decree that grants Cities4Life some relief, materially alters their legal relationship and is enforceable by the court.  In doing so, the Fourth Circuit dismantled the city's claim that an admission of liability is necessary to award attorney fees, which wasn't present in the consent decree, saying such an admission is not always necessary because judges have a "special degree" of oversight.

Ninth Circuit: Minimal Fee Award Upheld in ‘Abusive’ ADA Suits

October 25, 2022

A recent Law 360 story by Hanna Albarazi, “9th Circ. Slams ‘Abusive’ ADA Suits in Upholding Atty Fee Cut” reports that a Ninth Circuit panel on upheld a decision to slash attorney fees in an Americans with Disabilities Act lawsuit over a lack of accessible parking, suggesting in a scathing published opinion that the suit amounted to "abusive ADA litigation" by a serial litigant.  The circuit panel held that a California federal judge had not abused his discretion in reducing the attorney fees in an open-and-shut case over a lack of accessible parking spaces at a Los Angeles County shopping center, but the panel also used its opinion as an opportunity to rail against a perceived blight caused by serial ADA plaintiffs.

"The ADA satisfied the need for meaningful legislation for the protection of individuals with disabilities; however, one of the unforeseen consequences of this statute was the widespread abuse taking form due to the actions of serial ADA plaintiffs," wrote U.S. Circuit Judge Milan D. Smith Jr., who penned the unanimous opinion.  Smith wrote that the ability to recover attorney fees in ADA cases "has given rise to a wave of 'get-money quick' lawsuits brought by a small number of professional, serial plaintiffs."

However, enforcement of the ADA falls on persons with disabilities.  As a result, disabilities rights advocates frequently contend that bringing suit against violators increases accessibility.  Plaintiff James Shayler, who has physical disabilities that make walking and standing difficult, sued property owner 1310 PCH LLC in California federal court in November 2020, claiming its property in Hermosa Beach was in violation of the ADA and California's Unruh Civil Rights Act.

Shayler's suit went largely uncontested, resulting in summary judgment in his favor on the ADA claim and an award of injunctive relief. The court, however, declined to exercise supplemental jurisdiction over the Unruh Act.  Shayler then moved for over $34,000 in attorney fees and costs.

But U.S. District Judge George H. Wu concluded that the hourly rates and the time spent by his attorneys on the case were unreasonable given that the nature of the legal work was routine and because there had been a lack of meaningful opposition by the defendant.  Judge Wu adopted a $300 per hour blended billing rate for the work performed by Shayler's four attorneys and reduced the overall fee total by 65%.  In September 2021, Judge Wu ultimately awarded just under $10,000 in attorney fees and costs to Shayler.

Shayler quickly appealed the award, arguing that the downward reduction was unjustified.  The appellate panel affirmed the lower court's ruling.  "Given the repetitive nature of high-frequency ADA litigation, there was nothing irrational about the district court's conclusions that, in effect, much of the work here could have been performed by junior associates or even paralegals, or that much of the motion practice in the case was superfluous," Judge Smith wrote.

Judge Smith said the district court's choice of a $300 per hour blended billing rate was largely based on its finding that this was "a run-of-the-mill repeat-player ADA case lacking in legal, factual, or procedural complexity."  The district court cited decisions determining that serial ADA litigation, such as Shayler's, does not involve particularly complex work justifying partner-level billing rates, the panel said.  "A hallmark of abusive ADA litigation is the use of form complaints containing a multitude of boilerplate allegations of varying merit," the panel wrote.

Seventh Circuit Rules Reduced Attorney Fees in FLSA Case

October 19, 2022

A recent Indiana Lawyer story by Marilyn Odendahl, “7th Circuit Rules Victory Merits Reduced Attorney Fees” reports that the 7th Circuit Court of Appeals has affirmed a reduction in attorney fees of more than 50% for an Indiana attorney who had been previously admonished by the appellate court for trying to up his compensation.  Ronald Weldy represented a group of drivers against Jerry W. Bailey Trucking Inc.  The plaintiffs claimed the company and its owners violated the Fair Labor Standards Act and Indiana wage laws by not paying drivers for time spent working before and after hauling jobs.

After the litigation began, the U.S. District Court for the Northern District of Indiana asked Weldy for additional information as to whether he could adequately perform as class counsel.  The court noted he had only recently gotten his law license reinstated following a disciplinary suspension.  Weldy was able to convince the court once he provided examples of his work as class counsel following his reinstatement.

However, although the district court conditionally certified an FLSA collective and certified a Rule 23 class, the drivers were only able to identify less than 20 individuals who met the class definition.  Subsequently, the court granted the defendants’ motion to decertify the class and collective.

The two drivers who initiated the lawsuit were able to win a partial summary judgment, successfully arguing the company had violated federal and state wage laws.  Later, the employees were able to negotiate settlements for each of the remaining plaintiffs.  Once the court approved the settlements, the drivers petitioned for an award of attorney fees of more than $200,000.  Their request reflected a billing rate of $450 per hour for about 416 hours of work performed by Weldy, plus additional hours billed by Weldy’s associate at $200 per hour and his paralegal at $150 per hour.

The district court disagreed with the calculations and made three modifications.  First, the court found a $350 per hour rate was more reasonable.  Second, the court struck some of the time Weldy billed, finding the attorney should not be able to recover fees for the time he had to spend showing he was capable of handling the case.

Finally, the court reduced the fee because Weldy achieved only partial success in litigating the case.  The court noted he failed on the suit’s primary objective of obtaining a judgment on behalf of a class and collective.  The district court thus cut the fee to $70,000.

In response to the fees order, the defendants mailed a check to Weldy and filed a satisfaction of judgment with Weldy’s approval.  The drivers responded by filing a motion for reconsideration, but the court concluded the employees had waived any objection to the fee award.  The drivers then appealed to the 7th Circuit, which affirmed the ruling in Daniel Koch, et al. v. Jerry W. Bailey Trucking, Inc., and Estate of Jerry W. Bailey, 21-2952.

The 7th Circuit’s opinion concluded the district court had reasonably cut the counsel’s billable hours and had reasonably determined the employees obtained only a partial victory.  In reviewing the drivers’ damages, the appellate panel noted not only did they receive significantly less than they originally sought, but also, their attorney wanted sought a healthy fee.

“Altogether, the employees recovered about $60,600 of the $103,500 they claimed in damages, with each individual plaintiff receiving between 17% and 73% of that plaintiff’s claim.  This limited recovery was particularly striking when compared against Weldy’s request for more than $200,000 in fees, about triple what his clients received.  A district court assessing a plaintiff’s degree of success may consider how the size of the final recovery stacks up against the amount plaintiff originally sought,” Judge Candace Jackson-Akiwumi wrote for the court, citing Spegon v. Cath. Bishop of Chi., 175 F.3d 544, 558 (7th Cir. 1999).

In 2015, the 7th Circuit ruled in a different case that involved Weldy’s fees for representing a class.  That panel blocked the attorney’s attempt to increase his fee of $302,780 by claiming a share of the compensation that clients received.

Chancery Approves Attorney Fees in Biopharma Co. Settlement

October 14, 2022

A recent Law 360 story by Leslie Pappas, “Chancery Awards $900K Fee For Biopharma Co. Settlementreports that a shareholder who negotiated a settlement with Sage Therapeutics Inc. after suing in Delaware Chancery Court over alleged "grossly excessive" director pay was awarded $900,000 for his efforts, nearly three times what the company wanted but shy of the $1.25 million he sought.

In a bench ruling at the end of a virtual hearing, Delaware Chancellor Kathaleen St. J. McCormick approved the settlement that ended investor John Solak's derivative suit, but found that the benefits he achieved for the company were worth about $8.5 million, not the $9.5 million to $13.1 million his expert estimated.

Sage and the eight company directors who were named as defendants in Solak's suit identified enough problems with his expert's analysis to "merit some reduction" in the fee award, but arriving at a final number was "actually quite hard" because of the interplay of many different elements in the calculation, the Chancellor said.  "So I'm just going to administer some rough justice" and cut the fee award by 25%, she said.

The Massachusetts-based clinical-stage biopharmaceutical company, which develops treatments for brain disorders, had argued that the benefits to the company ranged from $2.4 million to $3.2 million and that Solak deserved an attorney fee award of no more than $350,000.

The plaintiff's analysis includes flaws that make the final number "wholly unreliable," such as using 2019 compensation figures instead of more recent ones, the company's attorney, Megan Barriger of WilmerHale, argued.  "You need to use the right set of data," she added.

Solak's attorney, Jeffrey M. Norton of Newman Ferrara LLP, told the court that the expert used standard forms of analysis and the plaintiff had spent nearly 600 hours prosecuting the case.  The settlement's unique solutions could be used as a template in future cases, he said.

Solak sued Sage in August 2020, alleging that the average pay for its non-employee directors far outpaced that of larger and more profitable companies. He accused the company's directors and others of unjust enrichment, fiduciary duty failures and corporate waste, and sought corporate governance reforms.

In her bench ruling, Chancellor McCormick concluded that Solak, represented by Cooch and Taylor PA, Newman Ferrara LLP and Kranenburg, deserved 10% of the $8.5 million estimated benefit he achieved for the company.  She bumped the total award to $900,000 to account for the fact that the settlement also secured the possibility of a stockholder vote on the new pay scheme.

Apple Urges Judge to Cut Fees in iPhone Class Settlement

August 26, 2022

A recent Law 360 story by Piper Hudspeth Blackburn, “Apple Urges Judge To Trim IPhone Class Atty Fees” reports that Apple Inc. has asked a New York federal judge to lower a $6.6 million fee request from attorneys who helped secure a $20 million class settlement for iPhone users over device updates, insisting that there is a lack of documentation supporting the price tag.  While attorneys from Pomerantz LLP and Bronstein Gewirtz & Grossman LLC have asked for one-third of the payout for their services, Apple wants the award shaved by $666,000 to 30% of the total settlement, or exactly $6 million. The reduction, Apple argued in a brief, would provide an additional $600,000 to the class and give each member a payment of $68.56, up from $62.94 at the current number of claims.

Apple also took aim at the plaintiff's counsel's billable hours, calling their submission "insufficient."  According to Apple's memorandum, the class's counsel failed to submit any documentation that "substantiates" the over 10,000 hours they billed for the suit that lasted more than six years.  "Class Counsel merely provide a chart listing the names of billers, their requested hourly rate, and an aggregate number of hours each worked, with no elucidation as to whom did what," the motion said.

In an Aug. 12 motion for attorney fees, the plaintiff's attorneys said the fee is warranted given the number of hours they spent working on the suit and the expenses they incurred in the process – as well as the favorable outcome they achieved.  "From the outset, class counsel understood they were embarking on a complex, expensive, and likely lengthy litigation with no guarantee of ever being compensated for the substantial investment of time and money the case would require," the attorneys wrote.

Apple also asked the court to reduce the requested $2.8 million in litigation expenses and service awards of $15,000 for each named plaintiff.  Apple contends that a reduction of the amount of the plaintiff's service award is warranted because the plaintiffs would receive an award one hundred times greater than the maximum recovery afforded to class members.  Apple also took issue with the reported costs for meals, taxis and online research, which they said were not recoverable.