Fee Dispute Hotline
(312) 907-7275

Assisting with High-Stakes Attorney Fee Disputes


News Blog

Category: Interest on Fees

Former Client Owes $1M in Unpaid Legal Bills, Jury Finds

July 25, 2023

A recent Law 360 story by Brian Steele, “Ex-Client Owes McCarter & English $1M For Bills, Jury Finds”, reports that McCarter & English LLP won a clean sweep of a multiparty verdict in Hartford federal court when a jury awarded the law firm more than $1 million in its suit against a former client, which failed to pay a batch of legal bills after an adverse outcome in a trade secrets case in Kentucky.

A 10-person jury found that the California-based dietary supplement company Jarrow Formulas Inc. breached its contract with the law firm when it withheld payment on five invoices after the Kentucky federal trial ended in 2019, along with unrelated bills for intellectual property work.  Jarrow countersued, claiming that the bills were improperly inflated by undisclosed rate hikes and that McCarter & English botched the trade secrets suit, but the jury rejected each of the counterclaims.

The firm, which has offices in Hartford and Stamford, Connecticut, also should be awarded prejudgment interest and does not have to pay Jarrow anything, the verdict said.  The jury determined that Jarrow's breach of contract was willful and malicious, while McCarter & English's billing practices were the product of fair dealing.  After the courtroom deputy polled the jury, U.S. District Judge Michael P. Shea praised jurors for their punctuality and attentiveness throughout the trial.  "I can't remember a better jury that I've had," the judge said.

Caudill Seed & Warehouse Co. Inc. sued Jarrow in Kentucky in 2013 for misappropriation of trade secrets, and Jarrow was ordered to pay $2.4 million for willful and malicious misappropriation in July 2019.  A judge later added more damages and attorney fees.  Company founder and namesake Jarrow Rogovin testified in the Hartford case that he decided to fire McCarter & English and refused to pay outstanding bills, for which the firm quickly sued in the District of Connecticut.  Jarrow's insurer declined to provide coverage for McCarter & English's bills in the Kentucky case.  The firm's second amended complaint alleged that Jarrow owed $2.04 million.

Judge Shea had already granted partial summary judgment to McCarter & English and nearly $1 million in damages based on disbursements and the original hourly attorney rates before they rose, but left open the possibility of Jarrow receiving a refund after trial.  That ruling in March 2021 noted that rates rose early on in the Kentucky case, but Jarrow paid the bills for six years.

The jury's verdict awarded McCarter & English another $1,057,173.93, and the judge asked the parties for briefs on the issues of prejudgment interest and punitive damages.  The jury found in favor of the firm on Jarrow's claim under the Connecticut Unfair Trade Practices Act and on its legal malpractice claim, which sprung from McCarter & English's decision not to call Rogovin to testify live during the trial in Kentucky.

Rogovin first hired McCarter & English partner Mark D. Giarratana when the attorney worked at a different firm in 1996, and they maintained a professional relationship and friendship for 23 years, according to trial testimony from each.  Giarratana said Rogovin paid all the Kentucky bills without complaint until after the verdict, while Rogovin said he did not read them thoroughly and failed to notice when the rates rose.

Michigan Says $5M Fee Request is ‘Overreach’ in Flint Water Case

July 18, 2023

A recent Law 360 story by Carolyn Muyskens, “Mich. Blasts $5M Fee Ask in Flint Water Case as ‘Overreach’”, reports that the state of Michigan is urging the judge presiding over Flint water crisis litigation to deny residents' request for $5 million in settlement funds to be set aside for the future litigation expenses, with the state saying the settlement "was never intended to be a litigation fund for plaintiffs' counsel."  In a filing, the state opposed plaintiffs' requests for fee distributions from the $626 million settlement, which resolved claims against the state government and the city of Flint for their roles in the disaster set off when the city, under a state-appointed manager, changed its water source to save money.

The state said attorneys' new batch of fee requests, which follows their first payout from the settlement fund, were either premature or not authorized by the agreement.  Class counsel and liaison attorneys got the first payment from the settlement fund approved in May, when U.S. District Judge Judith E. Levy ordered a distribution of $40 million as a common benefit award to the attorneys, with an additional $7 million for litigation expenses.  Although the settlement was approved in November 2021, appeals have held up distribution of the funds until recently.

In June, the attorneys filed a motion for additional fees and expenses. The motion seeks reimbursement for post-settlement litigation expenses, a $5 million fund for future litigation expenses, and interest that had accumulated on the $47 million already disbursed — as well as on any awards moving forward.  It also seeks the disbursement of an already-approved fee award of 10% of the programmatic relief fund, which is a subcategory of money to be used for special education services for school children exposed to lead.

The state blasted the request, calling it an "egregious overreach" and saying settlement dollars should not be put toward the plaintiffs' litigation against the remaining defendants in the case — Veolia North America and Lockwood Andrews & Newnam PC. LAN said last week it had reached a tentative settlement with the plaintiffs.  The settlement is "not a litigation fund for plaintiffs' counsel's expenses pursuing non-settling defendants," the state said.

In its motion seeking expenses incurred since February 2021 and the $5 million fund, the residents said the settlement agreement stated plaintiffs' counsel "shall be reimbursed and paid solely out of the FWC qualified settlement fund for all expenses and fees, including but not limited to: attorneys' fees [and] past, current or future litigation and administration expenses," highlighting that the deal explicitly provided for future expenses.

The plaintiffs cited an Eastern District of Michigan case, In re Packaged Ice Antitrust Litig., in which the court "authorized class counsel to utilize up to $750,000 of the settlement fund to pay expenses incurred in the litigation going forward, including 'in prosecuting the claims against the remaining non-settling defendants.'"  The Flint plaintiffs said the judge would have oversight to approve any disbursements from the $5 million fund and that any money leftover that wasn't used for litigation expenses would revert to the settlement fund.

"Plaintiffs' counsel have incurred millions in additional lodestar in continuing to prosecute this case but are not presently seeking any additional award of attorneys' fees, nor requesting a disbursement related to future reasonable litigation expenses," the lawyers said.  "When additional common benefit expenses are incurred and become known, and in consultation with the special master, plaintiffs' counsel may make further applications for disbursements from the $5 million portion of the FWC qualified settlement fund requested herein to be set aside for continuing reasonable litigation expenses," they added.

The state also opposed the request for a 10% fee award from the special education services fund, arguing it can't be calculated until the claims administrator finalizes the list of claimants and the value of the main qualified settlement fund is determined.

The state also said the attorneys aren't entitled to interest on their fee awards, pointing to a provision in the settlement agreement that "requires that all interest earned by the FWC qualified settlement fund or the sub-qualified settlement funds become and remain part of each such fund and may be used to pay any fees and expenses incurred to implement this settlement agreement."

The state argued this provision means interest that accrues in the settlement fund should be put toward the costs of the administration process, not attorneys.  "If any interest remains after implementation of the settlement is complete, then those funds should enure to the benefit of the claimaints," the state argued.  Lawyers for the class are ultimately expected to receive about $200 million for their work on the case.

$76M Attorney Fee Request in $255M Juul Class Settlement

June 29, 2023

A recent Law 360 story by Ali Sullivan, “Attys Want $76M After $255M Juul Settlement”, reports that lawyers who secured a $255 million deal to settle claims over Juul Labs Inc.'s vape marketing practices have asked a California federal court for $76.5 million in attorney fees plus a proportional share of interest, saying the novelty and complexity of the litigation warrant exceeding the typical 25% benchmark for fee awards.

Co-lead counsel representing the plaintiffs said their suit against Juul Labs Inc. was not a "garden-variety consumer class action."  Adding to the notoriously expensive and protracted nature of tobacco litigation was the serious possibility that Juul Labs would file for bankruptcy following scrutiny by the U.S. Food and Drug Administration, the attorneys said.  Still, co-lead counsel Dena C. Sharp of Girard Sharp LLP wrote in the motion, the plaintiffs' attorneys navigated those headwinds and pursued novel legal theories to obtain the "excellent result," warranting 30% of the Juul settlement fund plus interest.

"The result obtained for the settlement class — a settlement of $255M funded by some, but not all, of the defendants — is exceptional and warrants an upward adjustment," the motion said.  The motion also seeks up to $4.1 million for reimbursing out-of-pocket expenses and awards for the 86 class representatives plaintiffs ranging from $5,000 to $33,000.

Juul Labs told the court in December it had reached a settlement with the plaintiffs in the litigation, which include adolescents, school districts, municipalities and Native American tribes, to resolve economic loss claims nationwide.  Seeking preliminary approval of the deal, the plaintiffs in December said that Juul separately but concurrently agreed to resolve individual plaintiffs' personal injury claims and government entities' public nuisance claims.

Class Counsel Seek $18M in Fees in $54M Flight Attendants’ Settlement

May 17, 2023

A recent Law 360 by Abby Wargo, “United Flight Attendants’ Attys Seek $18.1M Cut of $54M Deal,reports that counsel for a class of United Airlines flight attendants who accused the airline of issuing deficient wage statements asked a California federal judge to approve an $18.1 million fee award after an "intense battle" that led to a $54 million settlement.  Kirk D. Hanson and Jeffrey C. Jackson of Jackson Hanson LLP, who are representing the flight attendants, called the eight-year wage suit "an intense battle from beginning to end," according to their motion for attorney fees, and they should be properly compensated considering the difficulty of achieving success.  They also requested an additional $90,000 in expenses.

A federal judge in February had preliminarily approved the $53.5 million settlement, which the motion says has since accrued interest and now totals $54.4 million, but asked the flight attendants' attorneys to justify their request for a third of the settlement, as it exceeds the state benchmark.  The final approval hearing will be in June.

The attorneys said the settlement, which will provide each class member with an average of $3,230 even after attorney fees and costs are deducted, is an exceptional outcome for the plaintiffs, as it exceeds 80% of the highest recovery they could have received through trial.  The typical individual recovery range in a wage and hour class action is 10% to 27%, they said.  Additionally, they said other state and federal courts routinely approve attorney fees equaling one-third of settlement funds.

Also proper are the $20,000 service awards for each named plaintiff, Felicia Vidrio and Paul Bradley, the attorneys said, because they took on significant risks in representing the class and would have been on the hook for attorney fees had they lost.  Their time and effort in assisting their attorneys should be recognized, according to the motion.

Even more important than the monetary awards, the attorneys said, is that United changed the format of its wage statements for California-based flight attendants to comply with state statute.  The wage statements now show all hours worked during a pay period and the hourly pay rate, the motion says.  "This is arguably the most important win in this case because it will continue on indefinitely and allow the flight attendants to quickly and easily verify the correct payment of their wages," the attorneys said in the motion.

These outcomes would never have been possible if the plaintiffs and their attorneys had given up, the motion says, because "at every turn in this litigation United mounted a vigorous defense."  The workers and their attorneys said that by reversing summary judgment and reviving their case after trips to both the Ninth Circuit and California Supreme Court, they set precedent clarifying how state labor law applies to interstate transportation workers.

Under the terms of the settlement, the non-reversionary $54 million fund includes attorney fees, $20,000 service awards for both class representatives, and a Private Attorneys General Act settlement of $300,000, with about $35 million going to the settlement class on a pro rata basis.  Members of the class are defined as all flight attendants employed by United and based at a California airport between August 2014 and March 31, 2023. Any remaining funds will be given to a cy pres recipient, Legal Aid at Work, according to the deal.

Additional $3.4M in Fees Sought in Excessive Force Trail Win

October 17, 2022

A recent Law 360 story by Rosie Manins, “$40M Excessive Force Judgment Winner Wants Extra $3.4M reports that the winner of a $100 million excessive force verdict has asked a Georgia federal court to add $3.4 million in attorney fees, litigation costs and interest to the final $40 million judgment against an Atlanta police officer.  Keith Edwards, as the guardian and conservator for Jerry Blasingame, said in a motion that post-judgment interest on the court's final judgment against officer Jon Grubbs is accumulating at a rate of almost $19,000 a day.

A jury awarded Edwards $100 million in late August at the end of an eight-day trial, apportioning $60 million in damages against the city of Atlanta and $40 million against Grubbs.  U.S. District Judge Steve C. Jones then scrapped the award against the city, granting its motion for a judgment as a matter of law that Grubbs' tasing of Blasingame — which rendered the 69-year-old a quadriplegic — was not the result of a city policy, custom or practice.

Edwards said the $60 million reduction in damages should not affect his bid for reasonable attorney fees, litigation costs, and pre-and-post-judgment interest.  "Plaintiff is still entitled to fees and costs on all the work completed," Edwards said.  "The fees and costs should not be reduced because the court set aside part of the jury's verdict award."

The team of plaintiff attorneys spent about 455 hours on the case, in addition to the extensive work of three paralegals, per the motion. Based on hourly rates between $350 and $1,000, the attorneys sought just over $300,000 in fees.  They also asked to be reimbursed nearly $60,000 for the paralegals' work, based on an hourly rate of $125, and for just over $50,000 in litigation expenses.  Edwards said he is additionally entitled to $2.7 million in prejudgment interest, as well as almost $300,000 in post-judgment interest as of Oct. 6.

The jury found that Grubbs used excessive or unreasonable force, and that Blasingame's injuries were a reasonably foreseeable consequence of the officer's conduct and would not have happened otherwise. The jurors also found that Grubbs' actions in attempting to arrest Blasingame were "under color" of law and that an official policy or custom of the city of Atlanta was the "moving force" behind Blasingame's injuries.  Grubbs is appealing the judgment against him to the Eleventh Circuit.

Edwards' lead counsel, Vernon "Ven" R. Johnson of Johnson Law PLC, is a litigator with 38 years of experience who in the last 12 years has racked up more than $650 million in verdicts and settlements, per the motion.  He charged $1,000 per hour for the 160 hours he spent on the case, the motion notes.  Ayanna D. Hatchett of Johnson's law firm assisted on the case and also spent about 160 hours, at an hourly rate of $500.  Darren M. Tobin of Tobin Injury Law also worked on the case for about 77 hours, at an hourly rate of $510.

Edwards' former counsel, Solomon M. Radner of Radner Law Group PLLC and Madeline Sinkovich of Mike Morse Law Firm spent about 58 hours on the case and both worked at Johnson's firm as well as Excolo Law during the relevant time frame, the motion notes.  The plaintiff's team, including paralegals, spent more than 830 hours on the case in total, per the motion.