A recent Law 360 story by Dorothy Atkins, “’Alcon’s $1.2M Sanctions Fee Bid For Its MoFo Attys Slashed”, reports that a New York federal judge slashed Alcon Vision's $1.17 million fee request for its attorneys at Morrison Foerster LLP after securing sanctions against Lens.com over its bad faith counterclaims in a trademark dispute, instead awarding $227,000 after finding "glaring deficiencies" in the fee request.  In a 20-page opinion, U.S. District Judge Nina Gershon rejected Alcon Vision LLC's seven-figure request for attorney fees due to the numerous deficiencies and lack of supporting documentation provided by its legal team at Morrison Foerster.

Instead, the judge reduced the fee request as proposed by Lens.com, and she gave the company and its counsel 60 days to pay the fee award.  The sanctions award and fight over fees is the latest development in hotly contested intellectual property litigation that Texas-based Alcon, which was once owned by Novartis AG, kicked off in January 2018.  Alcon accused Las Vegas-based rival Lens.com of selling its trademarked products without permission and with outdated packaging in New York.

Lens.com hit back with antitrust counterclaims in February 2019, claiming Alcon was attacking it just to "ingratiate itself" with eye care providers that would "reward" Alcon by prescribing their customers its lenses.  But in July 2022, the judge slapped Lens.com Inc. and its attorneys with sanctions for filing bad faith counterclaims.  The judge found that the website's counterclaims served no legitimate purpose and were filed to "harass, and cause delay, expense and vexation to Alcon."  The judge ordered Lens.com and its counsel to pay Alcon's costs and attorney fees "caused by its bad faith and vexatious filing and maintaining" of its counterclaims, as well as fees arising from Lens.com's refusal to produce discovery.

The judge also called Lens.com's counterclaims in the dispute "problematic from the start," and ordered Alcon "to file an affidavit setting forth the costs and attorneys' fees for which I have found Lens.com and its counsel jointly and severally liable."  In response, Alcon's lead counsel of Morrison Foerster filed a seven-page declaration seeking $1.17 million in attorney fees for approximately 1,700 hours of work on behalf of 14 attorneys, including partners and associates, and four paralegals.

But Lens.com fired back, arguing that the fee request is excessive, unsupported and doesn't include time records or invoices.  Lens.com also argued that the declaration improperly seeks a single blended rate for its attorneys and an unidentified "standard hourly rate" for its paralegals, rather than the prevailing rate in the district, among other purported deficiencies.  Lens.com argued that it shouldn't have to pay anything in fees due to the legally deficient fee bid, but at most, Alcon should only be entitled to $227,000 in fees.

Judge Gershon mostly sided with Lens.com on the matter.  Her order noted that Morrison Foerster's declaration had "no supporting documentation and little detail" to support the fee calculation.  She rejected Alcon's assumption in the declaration that it is entitled to recover fees that it already paid to Morrison Foerster in connection with the sanctioned conduct, regardless of whether those fees were reasonable.  The judge concluded that ultimately Alcon's fee bid has "glaring deficiencies," including "vague" billing entries, and hundreds of hours of work invoiced in impermissible block billing, or lumping multiple distinct tasks into a single billing entry.

"Here, Alcon has not even attempted to justify, let alone sufficiently justified, as reasonable the hours or rates sought," the order says.  Although the judge noted that she could deny the fee request in its entirety due to the declaration's lack of support, she declined to do so.  However, she also refused to let Alcon submit additional support for its fee request, because the company didn't request permission to supplement the record, and it would require another round of briefing.

Instead, Judge Gershon agreed to adopt Lens.com's proposal to reduce the billable hours across the board by 62.4% and use a blended hourly rate of $355 for all attorneys and paralegals.  "Lens.com's proposal is well within the range of percentage reductions other courts have applied to requested hours for similar fee application deficiencies," the judge wrote, citing a New York federal judge's decision to slash a fee request by 80% earlier this year in Williamsburg Climbing Gym Co. v. Ronit Realty LLC.

A recent Law 360 story by Alex Wittenberg, “6^th Circ. Says Bankruptcy Court’s Atty Fee Cut Denied Rights”, reports that a Tennessee bankruptcy court violated two attorneys' due process rights by slashing their fees by more than $60,000 without proper notice or an opportunity for a hearing, a Sixth Circuit bankruptcy appellate panel ruled, saying the move functioned as a sanction. 

The panel said in its opinion that a hearing on the fees held by the U.S. Bankruptcy Court for the Western District of Tennessee was unfairly sprung on an unsuspecting Glankler Brown PLLC lawyer, who wasn't prepared to answer questions about the fee application because there were no objections filed to it.  Local rule and the express language of the hearing suggested that no hearing would be held on a matter to which no party had objected, the panel said.

Yet the court proceeded with a hearing anyway, telling the Glankler Brown attorney, Michael P. Coury — who was only in the courtroom for a separate matter heard earlier — that it would consider the issue despite the absence of objections.  "There is no reason to think that anyone other than the bankruptcy court expected a hearing to occur when Glankler had already submitted its certification that no objection was filed," the Sixth Circuit panel said.  "Glankler simply had no reason to suspect there might be a hearing on the fee application."

The court had decided to cut the fees for Glankler by 25% in part because its client's earlier bankruptcy case was dismissed for bad faith, a move that amounted to a sua sponte sanction for which Glankler received no notice or hearing – violating due process, the panel found.  The panel moved to vacate the bankruptcy court's order on the fee reduction.

The decision stems from a bankruptcy case involving debtor Island Industries Inc., for which Glankler served as counsel. Island Industries filed for Chapter 11 in February 2022.  Shortly after, a separate company, Sigma Corp. brought forth an adversary action alleging Island violated trade secret acts, according to the opinion.  A U.S. District Court then withdrew the reference to that action from the bankruptcy court, assuming jurisdiction over the trade secrets dispute.  Sigma then moved to dismiss Island's bankruptcy case, arguing it was filed in bad faith, and the bankruptcy court dismissed it in November 2022.

A month later, Glankler filed its final application related to compensation, with about $249,000 for fees and $7,800 for expenses, according to the opinion.  The law firm said roughly $100,000 of the fees related to its work on the bankruptcy case, while $150,000 were for the trade secrets case.

A recent Law 360 story by Piper Hudspeth Blackburn, “Judge Wants Sabre to Pay Fees in Airline’s $1 Antitrust Win,” reports that a federal magistrate judge has recommended that airline booking giant Sabre should cover the costs of attorney fees for US Airways, which pursued antitrust claims that ultimately resulted in a mere $1 jury award after more than a decade of litigation.  In a report, U.S. Magistrate Judge James L. Cott determined that the airline is entitled to fees because of the "plain language" of federal antitrust law despite the nominal damages award. Judge Cott also noted that the amount could be reduced after looking at billing records.

Because a jury returned a verdict for US Airways on its monopolization claim under Section 2 of the Sherman Act, "a plain reading" of Section 4 of the Clayton Act allows US Airways to recover the cost of the suit, "including a reasonable attorney's fee," the report stated.  In 2022, a Manhattan federal jury found, after a three-week trial, that Sabre willfully maintained monopoly power through exclusionary conduct. It was a redo of a 2016 trial that had awarded US Airways $15 million in damages before the Second Circuit scrapped the verdict on technical legal grounds.

Sabre has argued that U.S. Supreme Court precedent shows that when a party recovers only nominal damages, the only reasonable fee is "usually no fee at all."  However, US Airways insists that the damages it received shouldn't affect its ability to recover costs and attorney fees.  According to Judge Cott, Sabre's argument fails because the precedent the booking company pointed towards, Farrar v. Hobby, doesn't apply to this case but rather to the reasonableness of fee awards in civil rights cases. Farrar holds that the reasonableness of a fee award is indicated by the size of damages awarded.

"Farrar concerned the entitlement to fees under § 1988 of the U.S. Code, not the Clayton Act or any other mandatory fee statute, and there is no suggestion in the opinion itself that its holding extended beyond § 1988," the report stated.  Judge Cott pointed toward a Second Circuit decision on "an identical issue" to this one, United States Football League v. National Football League, instead.  In that case, the court had to determine whether a plaintiff is entitled to reasonable attorney fees "after decade-long antitrust litigation resulting in a $1 jury verdict only on Sherman Act Section 2 grounds."

Not only did the court decide that the plaintiff could recover attorney fees, it "further explained that civil rights cases are inapposite as they concern discretionary awards of fees, while Section 4 mandates them," the report continued.  Judge Cott also rejected Sabre's argument that in the event it must pay attorney fees, the amount should be reduced by 99% because US Airways only "obtain[ed] .0000003% of its alleged damages ... and no injunctive relief."

While no legal rule requires that fees be proportional to the requested amount and the recovered damages, Judge Cott, wrote that the court can reduce the requested fees after analyzing billing records.  While "a downward adjustment is undoubtedly warranted" in this case, Judge Cott noted that the court couldn't determine the amount without first calculating the lodestar.

"The court's eventual reduction will be guided by comparable cases in this circuit, which do not necessarily dictate the extreme slashing that Sabre seeks," the report stated.  The litigation began in 2011, when US Airways sued Sabre, alleging that the company had monopolized the market for systems that connect airlines to travel agents and violated federal antitrust laws.

A recent Law 360 story by Ben Zigterman, “6th Circ. Won’t Rehear Attorney Fee Coverage Decision” reports that the Sixth Circuit declined to rehear an appeal decided earlier this month against two attorneys seeking coverage of attorney fee awards that Wesco Insurance Co. said were excluded "sanctions."  After the July 1 decision, Ohio attorneys Jason Wallace and Daniel Bache asked to have the full circuit rehear the appeal, arguing that a three-judge panel improperly interpreted the policy from an average attorney's perspective, rather than whether it was subject to multiple interpretations.

"The original panel has reviewed the petition for rehearing and concludes that the issues raised in the petition were fully considered upon the original submission and decision of the case," the order said.  "The petition then was circulated to the full court.  No judge has requested a vote on the suggestion for rehearing en banc."  In its decision, the panel found that the attorney fee award qualified as sanctions because the Individuals with Disabilities Education Act the claims were brought under make attorney misconduct a prerequisite for an attorney fee award.

Because Wesco's policy included an exclusion for sanctions under federal law, the panel said the insurer didn't owe coverage.  The case stems from suits filed by four northern Ohio school districts seeking to recover what they spent on attorney fees fighting litigation filed on behalf of parents and children under IDEA, according to court documents.

"This misconduct element makes clear that any awarded fees would constitute a 'sanction' under the ordinary meaning of that term (and so under Wesco's policy)," the panel wrote.  In their petition for a rehearing, Wallace and Bache argued that the panel should have interpreted the policy's terms liberally in its favor, not under their ordinary meaning or as an average attorney would define them.

Every year, NALFA conducts an hourly rate survey of civil litigation in the U.S.   Today, NALFA released the results from its 2021 hourly rate survey.  The survey results, published in The 2021 Litigation Hourly Rate Survey & Report, shows billing rate data on the very factors that correlate directly to hourly rates in litigation:

City / Geography
Years of Litigation Experience / Seniority
Position / Title
Practice Area / Complexity of Case
Law Firm / Law Office Size

This empirical survey and report provides micro and macro data of current hourly rate ranges for both defense and plaintiffs’ litigators, at various experience levels, from large law firms to solo shops, in regular and complex litigation, and in the nation’s largest markets.  This data-intensive survey contains hundreds of data sets and thousands of data points covering all relevant billing rate categories and variables.  This is the nation’s largest and most comprehensive survey or study on hourly billing rates in litigation.

This is the second year NALFA has conducted this survey on billing rates.  The 2021 Litigation Hourly Rate Survey & Report contains new cities, additional categories, and more accurate variables.  These updated features allow us to capture new and more precise billing rate data.  Through our propriety email database, NALFA surveyed thousands of litigators from across the U.S.  Over 8,400 qualified litigators fully participated in this hourly rate survey.  This data-rich survey was designed to aid litigators in proving their lodestar rates in court and comparing their rates to their litigation peers.

The 2021 Litigation Hourly Rate Survey & Report is now available for purchase.  For more on this survey, email NALFA Executive Director Terry Jesse at terry@thenalfa.org or call us at (312) 907-7275.

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