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Category: Fee Request

Missing Word Sinks $2.65M Attorney Fee Request

September 28, 2023

A recent Law 360 story by Travis Bland, “Missing Word Sinks $2.65M Honeywell Fee Bid in Royalty Row”, reports that Honeywell lost out on $2.65 million in attorney fees following a win in a scanner royalties dispute with a Japanese competitor in part because an agreement between the two companies didn't use the word "attorney" in a provision the American company invoked to try to receive the award.

In an order, a North Carolina federal court told Honeywell Wednesday that it would not be awarding the attorney fees after the company prevailed in a jury trial against OPTO Electronics Co., reasoning that while other parts of the partners' contract referenced attorney fees, the part Honeywell cited to try to recover the money only says "fees."

"That provision, drafted by sophisticated counsel, does not mention 'attorney fees' (like every other case under governing Delaware law that has awarded attorney fees under a contract)," U.S. District Judge Kenneth D. Bell wrote in his order.

Judge Bell also reasoned that the provision doesn't have the "prevailing party" language that is the "hallmark" of contracts under Delaware law for a winning litigant to force an opponent to pay attorney fees.

The provision Honeywell cited might not even apply to court actions, Judge Bell said.

Evidence in the case made it clear that Honeywell knew how to craft a contract so that attorney fees would be awarded when it won a case, but it didn't do that in the agreement with OPTO Electronics, according to Judge Bell.

OPTO Electronics was also let down by Judge Bell's order. He punted the Japanese company's requests to throw out the jury verdict, award it a victory or, at least, to grant a new trial.

OPTO Electronics had a "full and fair opportunity to present its evidence and arguments to the jury and the court," Judge Bell said. "While OPTO's arguments were potentially persuasive and the court would have upheld a jury verdict in OPTO's favor, the court finds that there was sufficient evidence to support the jury's and the court's verdicts."

In denying the company a new trial, Judge Bell also rejected arguments that the court made an error when it did not allow certain evidence that OPTO Electronic asserted was favorable to it.

The dispute is rooted in barcode scanner technology that can decode 1D barcodes — such as UPC codes commonly found on items in a grocery store that are scanned at checkout — and can decode 2D barcodes, such as QR codes frequently used by restaurants for online menus.

Honeywell had previously accused OPTO of infringing its patents for 2D products, resulting in a 2020 settlement agreement under which OPTO consented to pay Honeywell 7% royalties for the continued use of that technology.

But in the present case, Honeywell said OPTO tried to skirt that contract by not paying royalties on all of its 2D products, namely those that can read both 1D barcodes and a specific subset of 2D barcodes known as stacked barcodes. A common stacked barcode is PDF417, which is seen on driver's licenses and printed boarding passes at airports.

An eight-person jury sided with Honeywell in a July 19 verdict, finding OPTO scanners that can read both 1D and some 2D barcodes fall within the licensing agreement.

Southwest Airlines Calls Fee Request ‘Excessive’

September 27, 2023

A recent Law 360 story by Lynn LaRowe, “Southwest Slams ‘Excessive’ Fee Bid in Religious Bias Case”, reports that Southwest Airlines has called on a Texas federal court to reduce the nearly $180,000 in fees sought by a flight attendant in connection with contempt proceedings that followed her victory in a religious bias suit against the airline, saying the requested amount is "excessive rather than reasonable."

In a brief filed Monday, the airline said that while it "previously agreed to pay plaintiff's reasonable attorney's fees in connection with her contempt motion," the amount requested should be cut to about $83,000.

"However, Southwest respectfully submits that [Carter's] fee request is, in substantial part, excessive rather than reasonable," the airline said.

U.S. District Judge Brantley Starr sanctioned Southwest and in-house lawyers Kerrie Forbes, Kevin Minchey and Chris Maberry in August, saying they "didn't come close to complying with the court's order" in posting a notice of nondiscrimination over religious beliefs, and that the three attorneys "were at the root of the problem." The judge ordered them to attend training given by Alliance Defending Freedom, which advocates against abortion, and LGBTQ and similar causes.

Last month, plaintiff Charlene Carter urged the court to order Southwest to pay roughly $176,000 in attorney fees, $3,000 in expenses and $600 in other costs to the National Right to Work Legal Defense Foundation Inc., which represents her.

The airline pointed out in its brief Monday that the court held "approximately 9 hours of hearing (approximately 3 hours of which occurred ex parte without plaintiff's participation) during which [Bobby G. Pryor] examined four members of Southwest's legal team, [Matthew B. Gilliam] made a closing argument, and [Matthew D. Hill] displayed exhibits," referring to members of Carter's legal team.

Southwest is asking Judge Starr to cut Carter's lawyers' request to be paid for "nearly 500 hours of attorney time" and reduce the total award to just over $83,000. The airline argues that Carter's team used "block billing" for a large portion of their attorney fees, "making it impossible to assess how much time counsel spent on each specified task, and whether that time was reasonable." Southwest also noted that the court had reduced a previous fee award request from Carter's team by 30% that included block billing.

The airline further argued that each of the three lawyers who attended the contempt hearing had more than a decade of experience, and each could have handled the matter solo.

"Mr. Pryor handled all of the witness examinations," the airline said Monday. "In contrast, Mr. Hill's role was limited to displaying exhibits from his computer, a task that a non-lawyer could have handled; and Mr. Gilliam's role was to make a brief closing argument at the conclusion of the contempt hearing."

Southwest also said Carter's lawyers spent a lot of time filing pretrial motions related to the contempt proceeding, which were "unnecessary and minimally successful," and that Carter's attorneys have shown "a failure to exercise billing judgment."

The brief includes a detailed chart outlining the reasons for the more than $90,000 in reductions sought by the airline to Carter's fee bid.

The case underlying the sanctions dates back to August 2017, when Carter sued Transport Workers Union of America Local 556, alleging she was fired because of messages she sent to the flight attendant union's president opposing the use of union funds to help members attend the Planned Parenthood-sponsored Women's March in January 2017.

Carter had sent multiple messages on social media to the union president expressing outrage over that person's beliefs about abortion. Some messages contained graphic images of aborted fetuses.

Southwest fired Carter after determining she had violated a policy that directs all airline employees to "treat each other with civility and respect." Carter sued both Southwest and TWUA Local 556, claiming she was expressing protected religious views and alleging Title VII retaliation.

In July 2022, Carter won a jury trial and damages of $5 million, but that amount was revised to $800,000 in December. A court order at that time also compelled Southwest to rehire Carter, despite the airline's concerns over Facebook comments she made criticizing the airline and claiming TWUA used union dues to cover up sex trafficking and organ harvesting.

In his Aug. 7 order, the judge sanctioned Southwest and its lawyers for altering the language of a court-ordered message to inform employees of their Title VII rights. Title VII protects employees from discrimination on the basis of race, color, religion or sex, among other things. At trial, the jury had found Southwest had violated Carter's rights under both Title VII and the Railway Labor Act.

Judge Starr has given the airlines' lawyers until Sept. 26 to complete the religious liberty training, rejecting a request to stay the order pending appeal.

Class Counsel Seek 33 Percent in CVS Lidocaine Label Case

September 26, 2023

A recent Law 360 story by Mike Curley, “Class Seeks $1.1M Atty Fees in CVS Lidocaine Label Suit”, reports that plaintiffs in a class action against CVS Pharmacy Inc. over its labeling of lidocaine products are asking a New York federal court to award $1.1 million in attorney fees out of a $3.8 million settlement, saying attorneys' work and the scope of the settlement warrant the payout.

In a memorandum, named plaintiffs Monique Bell, Tree Anderson and Melissa Conklin said the fee request amounts to just over a quarter of the settlement's total value when the $3.8 million for the class is added to an estimated $500,000 for notice and administration costs, putting it well within the typical 33% benchmark.

The plaintiffs added that the requested amount represents about 800 hours of work so far. With a blended hourly rate of $620 an hour, it comes to a lodestar multiplier of about 2.29 — a multiplier that will go down, as the plaintiffs' attorneys estimate they have about 50 more hours of work ahead in administering the deal.

In addition, the plaintiffs argued that the result for the class was very good, considering the risks that the case could have been dismissed or that they could have lost at trial. They added that the injunctive relief requiring CVS to change its labeling further warrants a significant payment.

The suit was filed in December 2021, alleging that CVS tricked consumers into thinking that the labeling of "maximum strength" on its lidocaine patches referred to the maximum strength often prescribed by doctors and made false claims regarding how long the patches stay on the body.

The suit alleged violations of state consumer protection statutes, state warranty acts, the federal Magnuson-Moss Warranty Act and New York's General Business Law, as well as a claim of unjust enrichment. The class sought preliminary approval for the $3.8 million settlement in April.

CVS sold more than 9.5 million units of lidocaine products from December 2017 through January 2023, and the class is defined as all persons who purchased products during that time.

Under the agreement, CVS will provide consumers recovery of up to $4.50 per purchased unit and change product labels to clarify that "maximum strength" refers to lidocaine available over the counter. The settlement also requires CVS to remove any language referring to the length of time that the patches stick to the body.

In Friday's memorandum, Bell also asked the court for a $3,000 service award for the three named plaintiffs, arguing that they have spent significant time helping the class by investigating the claims, providing information and keeping in contact to discuss the progress and strategy of the case.

Judge Cuts Gibson Dunn’s Fee Request in Half

September 22, 2023

A recent Law 360 story by Ryan Boysen, “Gibson Dunn Fees Halved in NY Eviction Law Dispute”, reports that attorneys from Gibson Dunn & Crutcher LLP can recover $385,000 in fees for successfully blocking a pandemic-era anti-eviction law on behalf of New York landlords, after a federal judge rejected arguments that they should not be paid at all, but found their initial request of $735,000 "unreasonably excessive."

In a 26-page ruling, U.S. District Judge Gary R. Brown said the Gibson Dunn team in question deserves credit for four months of frenzied work that finally led the U.S. Supreme Court to enjoin New York's COVID-19 Emergency Eviction and Foreclosure Prevention Act, or CEEFPA, in August 2021 — even though a new, nearly identical law was then passed shortly thereafter.

Judge Brown slashed the initial $735,000 fee request nearly in half after finding the 10-attorney team was too big, too "top-heavy" and billed too many hours, some of them at too-high hourly rates.  That decision came even though the Gibson Dunn attorneys had argued the $735,000 figure already reflected "significantly discounted" rates and some pro bono hours for which they did not bill at all.  "Upon review of the billing records, the court … finds that the number of hours expended by Gibson Dunn on this litigation to be unreasonably excessive for several reasons," Judge Brown said.

In civil rights cases the "prevailing party" is able to seek legal fees from their opponent, on the grounds that when a plaintiff "succeeds in remedying a civil rights violation," the benefits of doing so inure to the rest of society as well, according to the ruling.  Judge Marks, the defendant in the landlords' initial lawsuit, had argued that the Gibson Dunn team should not receive any fees because its efforts only resulted in enjoining a law that had been set to lapse just days later.

"The stark truth is that plaintiffs failed to recover a judgment against [Marks] at all, rendering this fee application null," Judge Marks said in a brief opposing Gibson Dunn's fee request.  Judge Brown said that analysis was not quite on the money, however.  Even if a party receives only a stay or preliminary injunction, and never obtains a final judgment in its favor, it can still be considered a "prevailing party" if the court ruled in its favor on the merits, the ruling said.

"Moreover, 'a party prevails under [Section 1988 of the Federal Rules of Civil Procedure] where it obtains a preliminary injunction against enforcement of a law that is later amended or repealed,'" Judge Brown said, quoting the 2021 ruling in HomeAway.com Inc. v. City of New York.  Nonetheless, Judge Brown declined to award the Gibson Dunn team the entirety of the fees it asked for.

His reductions began with the hourly rates sought by the Gibson Dunn team.  Randy M. Mastro and Akiva Shapiro billed $550 each per hour; senior associates Jessica C, Benvenisty and William J. Moccia billed $375; midlevel associates Erich A. Bruhn, Lauren K. Myers and Seton Hartnett O'Brien $287.50; and junior associates Lavi M. Ben Dor, Bina Nayee and Maxwell A. Peck $200.  These are the rates Gibson Dunn said had already been "significantly discounted" from the firm's "customary rates," the ruling said.

Judge Brown gave Mastro his $550 an hour rate given his widely acknowledged status as a towering figure of the New York Bar and his extensive experience with civil rights litigation, but reduced Shapiro's rate to $450 an hour.  Judge Brown also reduced the senior associates' rates to $325 an hour, the midlevel associates' rates to $250 an hour, and the junior associates' rates to $150 an hour.  Most of the reduction in the overall dollar amount received by the Gibson Dunn team came in the form of hours, however.

The attorneys claimed they spent nearly 2,000 hours on the CEEFPA case, but Judge Brown said that after he reviewed their billing records it seemed to him that Mastro, Shapiro and the senior associates spent too much time doing work that could have been done by lower-level associates, too much time in meetings, and too much time on "vague and block-billed" entries.

The entries with which he took issue included items such as "conference with team," "various correspondence with team members," "participate in team strategy call," "work on various issues going forward," "emails regarding status," and "work on various issues."  "In sum … the court finds that an across-the-board reduction of 50% of the hours billed by plaintiffs' counsel is appropriate," Judge Brown wrote.

$90M in Fees in Kraft-Heinz Shareholder Class Settlement

September 20, 2023

A recent Law 360 story by Ryan Harroff, “Kraft-Heinz Shareholder Class Counsel Gets $90M in Fees”, reports that an Illinois federal judge awarded $90 million in fees to class counsel for the Kraft Heinz Co. investors who accused the company and a Brazilian private equity firm of hiding the snack food maker's cost-cutting measures after a merger to cover up a $15.4 billion goodwill impairment.

U.S. District Judge Jorge L. Alonso said in his order that the investor class' counsel from Kessler Topaz Meltzer & Check LLP, Bernstein Litowitz Berger & Grossmann LLP and other firms worked with "skill, perseverance, and diligent advocacy" to secure the $450 million total settlement that their clients agreed to with Kraft Heinz and 3G Capital Partners, the private equity firm that guided the 2015 merger between H.J. Heinz Co. and Kraft Foods Group Inc.  According to Judge Alonso's order, class counsel will also receive $2.6 million to cover litigation expenses on top of its 20% cut of the settlement fund.

The settlement is believed to be one of the largest pretrial securities deals in history and is the largest deal of its kind in the Seventh Circuit. Judge Alonso gave his preliminary approval to the agreement in May and issued final approval in a minute order Sept. 12.

Investors first filed suit in 2019, alleging Kraft Heinz engaged in shady accounting practices and cost-saving strategies that harmed its own supply chain, lost it customers and made potential new investors too nervous to buy in to the company, all while publicly stating it was saving money because of "synergies" from the 2015 merger.

3G Capital — which according to the suit owned 24% of Kraft Heinz and installed seven of its own partners as the new company's senior executives or board members — had directed Kraft Heinz's actions and overseen its belt-tightening moves, the investors had said.  Those cost-cutting measures lost shareholders a net $12.6 billion after the resulting supply chain and customer issues caused the company to write down the value of its own brands by $15.4 billion, they alleged.

Attorneys for the shareholders had asked the court in August for the $90 million they have now been awarded, estimating that their firms had collectively spent over 112,000 hours working on behalf of their clients to get the settlement on the books.  Judge Alonso also noted the substantial time investment in his order granting their request.