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Category: Hourly Billing

Ninth Circuit: $260K Fee Award Proper Where Damages Were $2500

April 26, 2022

A recent Metropolitan News story, “$260,000 Fee Award Proper Though Damages Were $2,500” reports that the Ninth U.S. Circuit Court of Appeals has affirmed an attorney fee award of nearly $260,000 in a case in which a prison inmate was awarded $2,500 based on ill-effects from a chemical grenade having accidentally been discharged, with fumes seeping into the area of the cells.  District Court Judge Haywood S. Gilliam Jr. of the Northern District of California made the award under California’s private attorney general statute, Code of Civil Procedure §1021.5, ruling that the statutory criteria were met, including a benefit to the public that overshadows the personal benefit to the prisoner, Daniel Manriquez.

The incident underlying Manriquez’s suit occurred on June 4, 2015.  According to allegations of the operative complaint, two employees at Pelican Bay State Prison, defendants Justin Vangilder and Juan Vasquez, while inside a control booth, were “horse playing” with a “military-grade” grenade which is “designed to quickly release oleoresin capsicum (‘OC’) into the air.”  One of them dropped the grenade, it went off, and the employees “opened the windows to the control booth, allowing a fog of OC to quickly fill the surrounding space.”

The inmate prevailed at trial and his lawyers sought an award of a fee in the amount of $467,425, arguing that the California Department of Corrections and Rehabilitation had “insisted on using this case as a ‘test case’ for prisoners who have been indirectly exposed to oleoresin capsicum,” had rejected reasonable settlement offers, and “forced Plaintiff to heavily litigate this case for going on three years now.”  Gilliam awarded $259,237.50.

 A three-judge panel—composed of Judge M. Margaret McKeown and Senior Judges A. Wallace Tashima and Sidney Thomas—upheld the award, saying that there was, as Gilliam found, a “significant benefit” conferred on the general public. Their memorandum opinion declares: “To be sure, the primary effect of Manriquez’s $2,500 judgment is arguably an enforcement of his personal interests against two correctional officers for an isolated incident, as there was no injunction or statewide policy changes.  But we hold that the district court did not clearly err* in its determination that Manriquez’s verdict has “larger implications” beyond his individual case. The district court explicitly took into consideration the fact that indirect exposure to chemical agents is not uncommon among inmates and that Defendants’ own witnesses testified at trial about the frequency with which chemical agents are used in prison facilities.  Moreover, the district court highlighted that there are approximately 95.000 men and women incarcerated in California, including approximately 1.900 inmates in Pelican Bay, where Manriquez was in custody.”

The Ninth Circuit judges also agreed with Gilliam that the public benefit transcends Manriquez’s personal interests, saying: “In the end, Manriquez was awarded a total of $2,500 while his counsel requested a total of $467,425 in attorneys’ fees for over 1,100 hours of work.  Had counsel not agreed to represent Manriquez on contingency, the value of the recovery for Manriquez’s pain and panic would not have justified the costs in litigating this case.  For the same reason—comparing the modest sum of the total damages to the attorneys’ fee requested—we agree with the district court that the interests of justice require the fees to not be paid out of Plaintiffs’ recovery.”

The defendants argued that even though Gilliam awarded less in fees than was sought, the amount is 84 times that allowed by the Prison Litigation Reform Act (“PLRA”).  The PLRA caps attorney fees 150 percent of any monetary which would mean a maximum award of $3,750.

The panel responded: “[T]he PLRA cannot be used as a basis to limit the attorneys’ fees granted under California Code of Civil Procedure § 1021.5.  In this case. Manriquez prevailed on both his state law negligence claim as well as his Eighth Amendment claim against Defendants.  The state law claim thus served as an independent basis for awarding attorneys’ fees, the amount of which is not governed or limited by the PLRA….Moreover, the district court is not required to apportion the work between Manriquez’s Eighth Amendment claim and his negligence claim because his claims are intertwined and based on the same common core of facts.”

Judge Calls Out Hourly Rate Gender Disparity in Fee Award

April 25, 2022

A recent Law 360 story by Matthew Santoni, “Judge Calls Out Atty Gender Pay Gap in $760K Fee Award reports that Console Mattiacci Law LLC will collect almost $765,000 in fees for winning a $2.3 million age-bias suit against AT&T Mobility Services, after a Pennsylvania federal judge slightly trimmed the firm's requested hours and rates but noted that a less-experienced female shareholder deserved the same hourly rate as her older male co-counsel.

U.S. Magistrate Judge Timothy R. Rice noted the legal industry's gender pay gap in his opinion awarding Laura Mattiacci and Susan Saint-Antoine the same $700-per-hour rate as firm founder Stephen Console for their work in securing a jury verdict for Alison Ray, saying they hadn't shown why the court should have awarded Console the requested $900 per hour and the others $730 per hour.

"Saint-Antoine and Mattiacci are entitled to the same rate as fellow shareholder, Console, who served solely as a consultant on the case.  Historically, women in law earn less than their male counterparts, a discrepancy that may reflect hidden bias.  Saint-Antoine's experience and expertise on several of the pre-trial motions was critical in allowing the case to move to trial and Mattiacci's courtroom skills were pivotal to Ray's successful verdict," Judge Rice wrote.  "Attorneys of comparable skill and ability merit equal compensation without regard to gender or age."

The court's order trimmed Ray's request for $847,945 in fees to $764,825 by cutting the lead attorneys' hourly rates to the top level recommended by Community Legal Services, and also by cutting out hours spent on unsuccessful motions and work representing Ray in another plaintiff's age-discrimination case against AT&T.  The court awarded nearly $39,000 for costs, which AT&T did not contest.  Ray, a former sales director at AT&T Mobility Services, won $2.3 million in December 2021 after a jury found the company's "Workplace 2020" restructuring plan targeted older employees as "surplus," cut their positions and forced them to apply for different jobs if they wanted to keep working. Ray was 49 when she was laid off.

AT&T challenged many of the hours that Console Mattiacci said it had put into the case, but the judge generally supported charging for most of the work the attorneys had put in.  Factual distinctions between Ray's case and those of other AT&T employees that the firm represented in other cases meant that attorneys didn't get to reuse parts of the other employees' complaints, or recycle arguments and hours spent on their motion for summary judgment, Judge Rice said.  The attorneys' work on "mock trial" versions of the opening and closing arguments were also justified, Judge Rice said, even if the practice versions were done by another attorney on the case and had come before motions for summary judgment that could have precluded the need for trial.

"Mock trial preparation is an indispensable part of litigation.  Sharpening advocacy skills in advance of trial is as important as effective legal research and writing.  One cannot exist without the other in a courtroom. ... This is often overlooked or underestimated in fee litigation," Judge Rice wrote.  Although Ray's team took a risk in conducting the mock trial that early, he wrote, it worked in their favor because they ultimately prevailed over AT&T's motion for summary judgment, making the trial preparation necessary.

He did cut out an hour spent by a fifth attorney at the mock arguments, and cut down Console's time charged for the arguments down to an hour and a half to be consistent with the other attorneys on the case. He made other cuts for time spent on motions for protective orders or class treatment that were unsuccessful.  The attorneys' requested hourly rates were higher than what was recommended by CLS for typical Philadelphia-area lawyers with their experience, and the affidavits they submitted to support their higher request didn't convince Judge Rice, he said.

"Although Ray contends that the rates requested by Console, Mattiacci, and Saint-Antoine are the same or less than the regular rates charged for their services in non-contingent matters, she fails to present any evidence showing that any client has willingly agreed to pay such rates," the judge wrote.  And although both Console and Saint-Antoine would be worth up to $700 per hour on the CLS' recommended scale, Judge Rice praised Mattiacci's work on the case and said she'd earned more than what her experience alone would indicate.

"Although Mattiacci has been practicing law for fewer years than Console and Saint-Antoine and would warrant a rate of $530.00 based on her experience according to the CLS fee schedule, she is entitled to the same $700.00 rate as her fellow shareholder and partner given her expertise and skill as a trial lawyer," he wrote.  "Her exceptional advocacy skills helped to persuade the jury to award a significant verdict for Ray in a complex case. ... Even though the CLS fee schedule serves as a useful guide on setting hourly rates, its reference to experience should not serve as a cap that precludes exceptionally talented trial lawyers from receiving fair compensation simply because of age or gender."

Judge Recalculates Billing Rates in Patent Action

April 21, 2022

A recent Law 360 story by Bill Wichert, “ArentFox Schiff Largely Keeps $870K Fee Award in Patent Suit” reports that, a more than $870,000 fee award for ArentFox Schiff LLP in patent litigation has largely remained unchanged even though a New Jersey federal judge rejected its bid to use rates from its home base in Washington, and instead applied rates from the area around where the dispute has unfolded.   After U.S. District Judge Robert B. Kugler called for a recalculation of the firm's roughly $879,724 award, U.S. Magistrate Judge Sharon A. King approved about $878,548 in fees for the firm over purported misconduct by Prakruti Products Pvt. Ltd. with respect to discovery in a suit brought by the firm's client, Sabinsa Corp.

In his Nov. 22 decision, Judge Kugler said then-U.S. Magistrate Karen M. Williams — who granted the initial award before becoming a district judge — improperly applied Washington rates without considering the rule set forth in the Third Circuit's 2005 decision in Interfaith Community v. Honeywell International, which held that fees should be calculated based on the forum of the action.  On remand, Judge King rejected Sabinsa's claim that its fees bid fell under an exception to the Interfaith rule that applies to "the need for special expertise of counsel from a distant district."

Citing Interfaith, the judge said the "'record is devoid of any evidence that [Sabinsa] conducted' a search, let alone, 'a significant search for counsel [in the forum] with the ability to handle this case.'"

"The failure to submit any such evidence is Sabinsa's fatal flaw," Judge King said. "As a result, the court finds Sabinsa fails to establish that an exception to the forum-rate rule applies."

Following that rule, the judge used rates for patent litigation in the area of Philadelphia; Camden, New Jersey; and Wilmington, Delaware, as outlined in the 2020 Real Rate Report midyear update from Wolters Kluwer ELM Solutions. Prakruti had urged the judge to apply first quartile rates, but she said higher rates from the third quartile were more appropriate.

In reaching that conclusion, the judge cited "the complex and lengthy nature of the litigation, the misconduct underlying Sabinsa's right to recovery, and the successful result reached on its motion for sanctions."

Since the adjusted rate for ArentFox Schiff partner James H. Hulme is "the only rate to exceed the fee schedule's caps, only his billing rate will be reduced," the judge said. She said she "will not disturb the other attorneys' rates or fees."

The case deals with Sabinsa's claims that Prakruti infringed a patent related to curcuminoids, which are components found in turmeric rhizomes, in connection with nutritional products, court documents state.

The fee award relates to what was uncovered in a "contentious" discovery process, during which Judge Williams found that "Prakruti had withheld certain information from Sabinsa and also spoliated pertinent evidence," according to court documents. She sanctioned Prakruti with an adverse inference, finding that Sabinsa's legal efforts to prove Prakruti's misconduct warranted an award of attorney fees against Prakruti.

Law Firm Accessed of Overbilling in New Jersey Litigation

December 12, 2021

A recent Law360 story by Jeannie O’Sullivan, Sills Cummis Accused of Overbilling in Rock Musician Suit,” reports that the former manager for Nile Rodgers has accused Sills Cummis & Gross PC of overbilling him in connection with contract claims against the musician and then abandoning the case, according to an amended complaint filed in New Jersey state court.  In a filing, Peter Herman said Sills Cummis and firm member Joseph B. Fiorenzo failed to honor negotiated bill corrections, charged "patently unreasonable fees" for unnecessary outside work and then withdrew from the matter, leaving him to fend for himself in court.

The firm has since demanded that the $315,000 settlement in the underlying matter be held in escrow to settle its claim against Herman for fees, according to the complaint, filed in Essex County Superior Court.  "As of the date of this complaint, Herman has received nothing of the settlement proceeds," the complaint said.  Herman hired Sills Cummis under a $20,000 retainer agreement that set forth hourly fees for the lawyers assigned to the case, according to the complaint.  Herman claimed he informed the firm that he only had $100,000 for legal fees.

The firm charged Herman "in excess of" $618,000 in connection with the civil matter and sought to collect on the whole amount, despite an agreement in which the parties had negotiated reductions, the complaint said.  The rates charged "far exceeded rates for similarly situated New Jersey based law firms," the complaint said.  Herman alleged that Fiorenzo informed him that the firm would no longer work on his file and would move to withdraw, forcing Herman "to negotiate directly with Nile Rodgers and accept a settlement far less than what was reasonable."  That settlement is now tied up in escrow, the complaint said.

The seven-count complaint says that the firm violated professional conduct rules requiring attorneys "to charge fair and reasonable fees and disbursements," and that the retainer agreement, which includes an arbitration clause, is "null, void and of no force and effect."  The fact that the settlement is escrowed constitutes a breach of the firm's agreement with Herman, and the firm's failure to cap its fees amounts to converting Herman's assets for its own benefit, the complaint says.

Herman also claimed that Fiorenzo made false statements "regarding his extensive experience and personal involvement" with the matter. The bills showed Fiorenzo "spent little time on the matter," the complaint said.  The complaint goes on to say that a conflict of interest arose when the defendants demanded Herman pay the fees or face a motion to withdraw.  Their service to Herman would be "materially affected by defendants' interest in their fee claim," the complaint said.  Herman wants compensatory and punitive damages, release of the escrow funds, and attorney fees and other costs. 

Compare & Prove Hourly Billing Rates with NALFA Survey

December 4, 2021

NALFA conducts custom hourly rate surveys for clients such as law firms, corporate legal departments, and government agencies.  Our hourly rate surveys provide accurate data on hourly rates within a given geography market and/or practice area(s).  Our hourly rates surveys have been cited by litigators in court documents and referenced by court adjuncts in court proceedings.  Our surveys can also be used for internal purposes, such as rate comparisons.  Some of our recent hourly rate survey engagements include:

  • A boutique law firm in Boston engaged NALFA to conduct a survey of associate and partner level billing rates in litigation in the greater Boston area.
  • A large Miami law firm hired NALFA to conduct a survey of plaintiffs’ and defense rates in commercial litigation in South Florida.
  • A small plaintiffs’ law firm in Dallas engaged NALFA to conduct a survey and report of hourly rates in consumer class actions in the Dallas-Fort Worth area. This survey was cited by a federal judge in his attorney fee award.
  • An insurer hired NALFA to conduct a survey of billing rates of defense counsel in insurance coverage litigation throughout California.
  • A large law firm in Seattle engaged NALFA to conduct a survey of hourly billing rates in regular and complex litigation in the U.S. District Court for the Western District of Washington jurisdiction.
  • A small law office in Albany hired NALFA to conduct a national survey of billing rates in public interest and civil rights litigation in federal court.
  • A technology firm engaged NALFA to conduct a survey of hourly rates in large and mid-size law firms in patent litigation in the San Francisco and Silicon Valley region.
  • A defense law firm with offices throughout North Carolina hired NALFA to conduct an hourly rate survey of similarly sized law firms in the Charlotte area so they could compare billing rates with their litigation peers.
  • A government agency engaged NALFA to conduct a survey of hourly rates in large Chapter 11 bankruptcy cases, nationwide.
  • A mid-size law firm in Atlanta hired NALFA to conduct a survey of hourly rates in IP litigation in several major markets.

Article: What is a Legal Fee Audit?

October 7, 2021

A recent article by Jacqueline Vinaccia of Vanst Law LLP in San Diego “What is a Legal Fee Audit?,” reports on legal fee audits.  This article was posted with permission.  The article...

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