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Category: Interest on Fees

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.

Chancery Approves $75M Fee Award in Williams Merger Dispute

August 29, 2022

A recent Law 360 story by Jeff Montgomery, “Chancery Oks $75M Cravath Fee in Williams Merger Dispute” reports that Cravath Swaine & Moore LLP nailed a nearly $75 million fee after a Delaware vice chancellor upheld its 15% contingent pay agreement with The Williams Cos. during much of a long battle with Energy Transfer LP and its affiliates over a $410 million deal-termination damage claim.

Vice Chancellor Sam Glasscock III also upheld a provision of the agreement that shifted Cravath's fees to Energy Transfer — the losing side of a $410 million battle with Williams over a termination fee triggered when Williams abandoned an earlier deal with one of its affiliates to pursue an eventually doomed, $38 billion Energy Transfer merger.

Energy Transfer, already required to pay Williams' $410 million break fee, fought the reasonableness of Cravath's fee, the 15% contingent arrangement as well as the court's decision to allow quarterly compounding interest for the fee, including a multiyear span while the case was stayed.  According to the decision and a transcript of earlier arguments on the dispute, Cravath's average or "lodestar" rate was $47.1 million for the same hours, compared with $74.8 million under the contingent fee arrangement.

"It is worth pointing out that these sophisticated parties surely were aware that post-merger-agreement litigation, seeking a break fee, could likely include representation on a contingent basis." the vice chancellor wrote in a decision that upheld the Williams side on all points.  Energy Transfer "had every opportunity, therefore, to contract against use of a contingent fee to determine the amount of fees shifted, if they so desired. This they failed to do," the vice chancellor wrote.

"The merger agreement contains no limitation on what kinds of attorneys' fees and expenses may be shifted to the losing party, other than a requirement, which is already implied under Delaware law, that the shifted fees and expenses must be 'reasonable,'" the vice chancellor wrote.  Williams had argued that a new general counsel secured the contingent agreement with Cravath in mid-2017, after Delaware's Supreme Court let stand the vice chancellor's finding that failure of a required tax-treatment for the $1.38 billion merger allowed Energy Transfer to walk away.

Energy Transfer argued that interest should have been suspended during a two-year period between 2019 and 2021 when a Williams' discovery vendor's error brought litigation to a halt. They also argued that litigation time over the interest rate and fees should likewise not count.

The decision also provided for interest at 3.5%, compounded quarterly, with the court observing other decisions that found compound interest "the standard form of interest in the financial market."  In all, according to a court brief filed, Cravath earned $4,358,372.70 prior to the start of the contingent fee terms, $4 million under a contractual fixed fee and $74,846,161 under the contingent fee.

Fourth Circuit Mostly Upholds Fee Award in Fee Dispute

August 10, 2022

A recent Law 360 story by Rachel Rippetoe, “4th Circ. Mostly Backs Firm’s $1.5M Win in Napoli Fees Fight reports that the Fourth Circuit has mostly upheld a $1.5 million outcome for Maryland law firm Keyes Law Firm LLC against a dozen defunct law firms connected to New York plaintiffs attorney Paul Napoli, rejecting all but one challenge on appeal — a question concerning the appropriate interest rate on sanctions stemming from the parties' discovery fights.  The appeals court said in an opinion that it affirmed all of a Maryland district court's rulings in a fee-agreement battle between firms over the referral of asbestos clients, "with one small exception" — the verdict's application of Maryland's 10% post-judgement interest rate attached to the discovery sanctions inflicted on the defendants.

Among many other objections in their appeal of a December 2020 ruling that said Napoli and his many firms owed Keyes $1.5 million, the defendants argued that the district court gave no reason why the state interest rate should be applied instead of the federal rate.  On that point, the Fourth Circuit agreed.  The panel, including U.S. Circuit Judges Robert B. King, Allison J. Rushing and Eastern District of Virginia U.S. District Judge David J. Novak, who was sitting by designation, said that federal law trumps state law and no party had disputed this.

On all other matters though, despite both parties raising 24 issues "claiming almost limitless error" in the district court's handling of the case, the Fourth Circuit affirmed the lower court.  "Judge Craven of our court once remarked that '[s]o many points of error suggest that none are valid.'" the opinion read.  "His observation applies with equal force here.  The defendants offer twenty-one grounds for reversal and [Keyes Law Firm] another three.  After carefully considering each one, we conclude that, with one minor exception, they all lack merit."

The underlying suit alleges that Napoli's initial law firm Napoli Bern Ripka Shkolnik LLP never made good on many of its 2,174 referral agreements with Keyes Law Firm, particularly after the firm divided in a drama-filled break up of partners Napoli and Marc Bern.  Before the breakup, Mary Keyes, founder of Keyes Law Firm, said she signed fee-sharing agreements with Napoli Bern and referred asbestos clients to the firm between 2012 and 2014.

Keyes Law Firm, which specializes in representing clients in asbestos cases, was working with bankruptcy firm David Law Firm, which is now Cooper Hart Leggiero & Whitehead PLLC.  The bankruptcy firm would send its asbestos clients that were not facing bankruptcy to Keyes for a small referral fee.  But soon Keyes was flush with clients and entered a partnership with Napoli Bern, referring some of its asbestos clients to the national plaintiffs firm, which had more trial resources.

Keyes eventually served as a "sort of middle man" between the bankruptcy firm and Napoli Bern, the opinion said, with Keyes Law Firm receiving 6% of the settlements, the bankruptcy firm receiving 10% and Napoli Bern receiving 24%.  All was going smoothly until the Napoli Bern breakup, Keyes said. Napoli and Bern together made tens of millions of dollars representing New York City workers injured during the cleanup after the Sept. 11, 2001, terror attacks.  But in 2014, the pair were embroiled in a battle over who would control the firm, following Napoli's battle with lymphoma.

The falling-out resulted in litigation on both sides, an even split of the firm's clients granted to both Napoli and Bern, and Napoli Bern being placed in a receivership, where it remains today.  But it had another side effect, according to Keyes — her payments from Napoli from the ongoing settlements in the asbestos cases dwindled, and eventually discontinued.  In 2017, Keyes sued 17 defendants, representing several offspring of Napoli Bern, who she claims were simply alter egos for the original firm and Napoli himself, claiming breach of the association agreements.

Robbins Geller Merit $13.5M in Fees in Puma Biotech Investor Suit

August 4, 2022

A recent Law 360 story by Sarah Jarvis, “Robbins Geller Nabs $13.5M in Puma Biotech Investor Suit reports that a California federal judge has granted lawyers with Robbins Geller Rudman & Dowd LLP more than $13.5 million in attorney fees along with final approval for a $54.2 million settlement for investors who alleged Puma Biotechnology Inc. misstated the effectiveness of a breast cancer treatment. 

In an order, U.S. District Judge David O. Carter also approved an award of $2.8 million in expenses, plus interest on that award and the attorney fee award.  The court also approved more than $64,000 for lead plaintiff Norfolk County Council, which administers the Norfolk Pension Fund.

Hagens Berman $31M Fee Objection Heads to Ninth Circuit

April 19, 2022

A recent Law 360 story by Dorothy Atkins, “Hagens Berman Must Forfeit $31M Fee Win, 9th Circuit Told” reports that an objector's counsel urged the Ninth Circuit to force Hagens Berman Sobol Shapiro LLP to forfeit or reduce a revised $31 million fee award for securing deals worth $205 million in multidistrict litigation over optical disk drive price-fixing, arguing that the law firm violated multiple professional rules of ethics.  During a hearing before a three-judge panel, objector Connor Erwin's counsel, Robert Clore of Bandas Law Firm PC, argued that Hagens Berman violated multiple California Rules of Professional Conduct in securing its eight-figure fee award before a trial court, including by never placing the disputed funds into a client trust account, despite class members' objections and appeals pending.

But U.S. Circuit Court Judges Morgan Christen and Carlos T. Bea asked how class members have been harmed by the firm's failure to hold the funds in a client trust account.  "What harm, what foul?" Judge Bea asked.  Clore replied that as a result, the class has been denied up to $600,000 in interest that would have been collected on the disputed money.  At least a portion of that interest should have gone back to the class when a Ninth Circuit panel vacated Hagens Berman's previous $52.8 million fee and expense award, the attorney said.

"Why should they be entitled to interest on fees that don't belong to them?" Clore asked the panel.  The trip to the Ninth Circuit is the latest chapter in a decade-old multidistrict litigation claiming that Samsung Electronics Co. Ltd., Toshiba Corp. and other disk drive makers participated in an industry-wide conspiracy to fix optical disk drive prices.

Hagens Berman beat out other firms for lead class counsel in 2010, and the firm later struck multimillion-dollar deals to resolve the disputes.  After U.S. District Judge Richard Seeborg took over the case from U.S. District Court Judge Vaughn Walker, Judge Seeborg awarded the law firm $47.8 million in attorney fees for securing the settlements.  But in May 2020, a pair of Ninth Circuit panels vacated the fee awards after Clore argued before the appellate court that Judge Seeborg erred by keeping Hagens Berman's initial proposal for lead class counsel under seal and not properly taking it into account in awarding fees, among other objections.

On remand, in July, Judge Seeborg awarded Hagens Berman a revised $31 million fee, finding that the firm was entitled to a 20% premium on top of the $25.9 million it would be allotted under the firm's interpretation of the fee grid in its initial class counsel proposal.  Judge Seeborg also awarded Erwin's counsel $1.5 million in fees in September for their work helping to convince the Ninth Circuit to throw out the initial fee award.

But Erwin again challenged the fee award, with Clore arguing before the appellate court that Hagens Berman took too long to return the fees after the previous panel vacated the award, and did not place the funds in a client trust account, as required by professional rules of conduct.  Clore added that the trial court also erred in miscalculating the "starting point" for setting reasonable attorney fees on remand by using a flat rate instead of the sliding scale specified in the firm's initial proposal, resulting in an adjusted $25.9 million for the firm.  That amount should be $22.2 million, he said.

In light of the alleged violations, Clore asked the Ninth Circuit to send a message that class counsel are not immune to the California state bar's professional rules, and require the law firm to either forfeit its fees, or at the very least reduce the fees to keep in line with the firm's initial $22.2 million fee proposal.  As support, Clore cited the Ninth Circuit's 2012 decision in Rodriguez v. Disner, which held that a court has "broad equitable powers to … require an attorney to disgorge fees already received" for a serious ethical violation.

But class counsel Shana E. Scarlett, of Hagens Berman Sobol Shapiro LLP, argued that $31 million in fees is justified given the length of litigation and how fiercely the litigation was fought.  She also argued that the judge properly awarded additional fees on top of the initial $25.9 million proposal based on his discretion and understanding of the case.

But Judge Bea asked why the trial judge used a flat rate instead of the sliding scale methodology specified in the firm's initial bid proposal.  "Why isn't Judge Seeborg wrong in using a flat basis rather than a sliding scale basis based on the schedule we have before us?" the judge asked the attorney.  Scarlett replied that the firm's initial bid proposal was just one part of what informed the trial judge's decision. But Judge Bea appeared skeptical.

"You're talking about extrinsic evidence that was used by Judge Seeborg to interpret the writing, which we have before us?" Judge Bea asked.  "What factual evidence was there?  Are you saying that the written document is ambiguous and requires factual findings interpreted?"  Scarlett replied that the initial proposal was clear that the fees should use a flat rate, and not a sliding scale, but Judge Seeborg "went further and made the finding that we intended to be flat rate structure."