November 24, 2023
A recent Law.com story by Allison Dunn, “Judge Rejects Quinn Emanuel’s $1700 Hourly Rate Request, Slashing Fees for Virginia Settlement By Nearly 80%”, reports that a federal judge in Virginia drastically reduced Quinn Emanuel attorneys’ requested fees related to enforcing a $6 million settlement agreement they successfully obtained for a client over a fraud scheme involving the Model Tobacco Building in Richmond, Virginia. Some of the rates requested by Quinn Emanuel—$1,690 per hour for a lead partner or $1,385 per hour for associates—were unrealistic for the Richmond market in the present case, the court found.
Quinn Emanuel attorneys based out of Washington, D.C., who served as plaintiffs’ counsel, sought prejudgment interest at a rate of 6%, as well as $236,641.18 attorney fees and costs relating to enforcing a $6 million settlement agreement between the plaintiffs, SS Richmond and MK Richmond, against Christopher A. Harrison, the owner and manager of several entities including, The C.A. Harrison Cos., CAH Model Tobacco and the McKenzie Blake Development Co. Under the settlement agreement, the Harrison defendants were obligated to pay the $6 million payment by June 8, but the plaintiffs maintain that they have failed to do so, according to the district court’s opinion.
The plaintiffs had accused the defendants of “‘a pattern of bank fraud, wire fraud, mail fraud and money laundering in an effort to seize control and interest in a project to purchase and refurbish’” the Model Tobacco Building, which previously served as a factory for the United States Tobacco Co. Harrison’s counsel from midsize firms Mahdavi Bacon Halfhill & Young, as well as Fraim & Fiorella, opposed the plaintiffs’ request. The defendants argue that the plaintiffs failed to establish the reasonableness for such hourly rates.
The judge agreed in part with the plaintiffs that, in addition to the prejudgment interest, they were also entitled to attorney fees and costs, but Novak also sided with the defendants in finding Quinn Emanuel’s more than $1,000-per-hour rates for both partners and associates in post-settlement motions were ”not reasonable in accordance with the Court’s prior decisions and the Richmond legal market,” the opinion said. Considering the reasonable rates for attorneys in Richmond with comparable skills, experience, reputation, as well as other factors, Novak reduced Quinn Emanuel’s total fee award to $50,380.
“Our client is focused on the Model Tobacco project. As to fees, we don’t agree with everything the judge wrote, but Judge Novak obviously took the time to write a thoughtful opinion,” said George R. A. Doumar, an attorney with Mahdavi Bacon, representing the defendants. “The local market dictates hourly rates awarded, and Quinn Emanuel was seeking rates far higher than I’ve encountered for fee awards in Virginia courts. The lawyers I see day in and day out are billing at much lower rates. The judge also seemed to be aware of law firm billing practices such as block billing and multiple reviews, and took that into account.”
Novak concluded that a rate of $650 for the lead partner and $400 for associates was a reasonable rate based 12 factors such as time and labor expended; the novelty and difficulty of the questions raised; the customary fee for like work; the amount in controversy and the results obtained; the experience, reputation, and ability of the attorney; attorney fee awards in similar cases and more.
“Here, Plaintiffs have failed to rebut the presumption that the hourly rates should be derived from the community in which the court sits. While Plaintiffs argue that this case has factual connections to Washington, D.C., and that the underlying case involved ‘complicated, high-stakes claims in financial fraud and RICO claims,’ … they present no evidence that a local attorney could not have provided competent representation,” Novak wrote, citing Rehabilitation Association of Virginia, Inc. v. Metcalf (1998). “Because Plaintiffs have not made the requisite showing to apply out-of-town rates, the Court will consider the proper market from which to determine reasonable hourly rates as the market where the Court sits—Richmond, Virginia.”
The plaintiffs failed to file any affidavits from other law firms regarding “the prevailing market rates in Richmond for similar work,” and said Quinn Emanuel proffered no cases concerning fee awards within the district, Novak held. Additionally, the law firm cited a news article from Law.com publication The American Lawyer titled, “What $1,000 an Hour Gets You in the AM 200 Today.” The judge, however, said the article didn’t weigh in the law firm’s favor since it “cut against the reasonableness of the Plaintiff’s requested fees.”
In one of the cases cited by the plaintiffs, Proofpoint v. Vade Secure, a 2020 opinion by the U.S. District Court for the Northern District of California, the requested hourly rates ranged from $590 to $675 per hour for associates, and $880 to $915 per hour for more senior attorneys, the opinion said.
“Here, in contrast, Plaintiffs charged $1,305 per hour (Paul Henderson) and $1,385 per hour (Nicholas Inns) for the associates who performed most of the work and $1,690 per hour (Keith H. Forst) for the lead partner. … Even after accounting for inflation and the 15 percent discount applied here, Proofpoint does not support the hourly rates requested in this case,” Novak wrote, further concluding no fee would be awarded for paralegal work because the plaintiffs failed to present evidence of the customary rates billed in Richmond. Novak concluded that the majority of the plaintiffs’ expenses were reasonable and included them in the award, bringing the total to $51,271.86 in fees and costs.