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Category: Hours Billled

Judge: Vague Billing Justifies 10 Percent Cut in Attorney Fees

November 29, 2023

A recent Law 360 story by Beverly Bank, “’Vague’ Billing Justifies 10% Cut in Atty Fees, Judge Says”, reports that a federal magistrate judge recommended slashing an Iron Workers' benefits funds' request for attorney fees in a case over an employer's unpaid contributions, saying there are "vague" billing entries from the plaintiffs' counsel as part of a $2.2 million judgment.

U.S. Magistrate Judge Kimberly G. Altman issued a report and recommendation, suggesting the district court cut a nearly $111,000 attorney fee request from Iron Workers Local No. 25's benefit funds by 10%.  The attorney fees dispute is connected with U.S. District Judge Nancy G. Edmunds' order, requiring Next Century Rebar LLC to pay more than $2.2 million in unpaid contributions with interest and liquidated damages.  The company filed a notice of appeal to the Sixth Circuit.

"Portions of the trustees' itemized hourly work are described insufficiently to prove that the work 'was performed with reasonable diligence and efficiency,'" Judge Altman said.  The judge said many of the funds' billing entries linked to an audit are "vague," necessitating a drop in proposed attorney fees from around $110,900 to roughly $99,800.  Judge Altman did not disturb the funds' request for more than $18,200 in costs.

The judge pointed to billing entries connected with an audit, saying some entries about the correspondence and emails with the auditor "provide the court with little information as to the necessity of the work."  The benefit funds requested around $110,900 in October, saying the plaintiffs' counsel spent 388.8 attorney hours in pursuing the case.

Next Century Rebar called billing entries linked to the attorney fees request "excessive, duplicative, and vague" as part of the company's Oct. 30 response. The company challenged the funds' bid for fees over review of the audit.  "Excessive review of the audit is ongoing throughout the time entries of multiple persons without any detail or reason for the excessive amount of time spent reviewing, re-reviewing, and again revisiting the audit report," Next Century Rebar said.

The company said the funds were seeking fees for clerical work that could have been undertaken by a legal clerk or assistant to the plaintiffs' attorneys.  Judge Altman found that some of Next Century Rebar's complaints about the clerical work entries were valid and warranted lower attorney fees.  "Next Century has highlighted instances where parts or all of the described work was clerical in nature and could have been handled by paralegals or other staff at much lower rates," the judge said.

The judge took on arguments from Next Century that the request related to audit costs of about $13,000 was "outrageous," saying the company didn't raise evidence to back up this claim.  Judge Altman said an affidavit "from an attorney that worked closely on this case and on the review of the audit" corroborated the cost of the audit.

Deep Attorney Fee Cuts, Judge Citing Billing Deficiencies

November 21, 2023

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.

NJ Law Firm Seeks $29K in Fees in $10K Settlement

November 7, 2023

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."

Meta Class Counsel Lowers Fee Request Amid Judicial Criticism

November 6, 2023

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.

Software Investor Wins Mootness Fees in Delaware

October 31, 2023

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."