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Category: Lawyering

‘Superb’ Juul MDL Attorneys Earn $76.5M in Attorney Fees

December 22, 2023

A recent Law 360 story by Bonnie Eslinger, “’Superb’ Juul MDL Attys Get $76.5M, But Diversity Issue Noted”, reports that a California federal judge approved an attorney fee award of $76.5 million in multidistrict litigation alleging Juul marketed its nicotine products to adolescents, saying the plaintiffs' lawyers did a "superb job," while also expressing concern about the lack of Black and Latino attorneys involved.

During a hearing in San Francisco held over Zoom, U.S. District Judge William Orrick was full of praise for the work done by co-counsel for the plaintiffs, which he said obtained an "excellent" result.  Ruling from the bench, he awarded the lawyers 30% of the $255 million settlement, $76.5 million.

Before issuing that ruling, however, Judge Orrick said he wished there had been more Black and Latino lawyers working on the MDL.  Pointing at a report put together by the plaintiffs about the demographics of their lawyers, the judge applauded the gender diversity, in particular with the four co-lead counsel he selected in 2019, which includes three women.

During the hearing, the court heard from one objector to the requested fee amount and a second against the proposed allocation of the fees.  The latter was filed by the Law Offices of Esfand Nafisi, who said lawyers who worked for the common benefit of all plaintiffs in the litigation were getting shortchanged.  "This was an extraordinary result that required a lot of hard work and a lot of hard lawyering," Nafisi said.  "We think that the fruits of those results and hard work ought to be proportionally distributed."

Judge Orrick overruled the objection, noting that Nafisi's was the lone objection to the work of the fee committee, which was assisted by a court-appointed special master.  "I agree ... I think the work that was done really was excellent, and the result obtained was also excellent," the judge said. 

The other objector, Juul purchaser Reilly Stephens, told the court that a nearly one-third cut of the settlement was too high.  His lawyer, Neville Hedley of the Hamilton Lincoln Law Institute, called the 30 percent proposed a "windfall."

Judge Orrick rejected the assertion.  "I think this was an excellent result for the class; the legal risks were significant and it took good and creative lawyering to get there," Judge Orrick said.

The fee committee noted in a Dec. 13 memo to the court that the settlement followed a little more than three years after the MDL was formed in October 2019.  "A little more than three years later, defendant Juul Labs Inc. agreed to four global settlement programs: personal injury, government entity, tribal entity, and class.  While the amounts and terms of the non-class settlements are confidential, the aim of the settlements is to resolve virtually all cases pending in either the MDL or [Judicial Council Coordination Proceedings] and to fund solutions to the youth vaping epidemic," the memo adds.

The settlements include all claims pending against Juul Labs Inc., its officers and directors, as well as its suppliers and retailers.  "These remarkable results happened at remarkable speed, particularly in the context of a global pandemic that could have, but did not, grind this litigation to a halt," the fee committee states.

In September, Judge Orrick signed off on the Juul deal, but held off on the attorney fees and expense request to consider the determinations made by the fee committee.  The approval came nearly a year after Juul announced it struck an agreement with the plaintiffs, which include adolescents, school districts and municipalities —  just as the litigation was heading to bellwether trials led by California schools.  Juul and the class later unveiled details of the proposed settlement, which Judge Orrick preliminarily approved in late January.

Judge Settles $21M Attorney Fee Allocation Dispute

December 20, 2023

A recent Law 360 story by Micah Danney, “Judge Divvies Up Atty Fees From $785M FCA Deal”, reports that a Massachusetts federal judge issued a more than 70-page finding of facts settling an attorney fee dispute over $21 million from a seven-year-old judgment, saying two firms earned portions of what they sought for their early work on the case.  U.S. District Judge Douglas P. Woodlock held that Sakla Law Firm in New Orleans gets 55% while the two firms, Vezina & Gattuso of Louisiana and Boone & Stone of Georgia, pushed out before a Pfizer subsidiary's $785 settlement, get 30% and 15% respectively. 

While Sakla had argued the firms were absent from eight years of litigation that followed their exit, the judge determined their efforts contributed to the federal government's intervention on behalf of one of the qui tam case's relators.  "In this respect, the work performed here to get the government to intervene, particularly after an initial declination when the original complaint was filed, was a significant and important development to the overall success of the case," Judge Woodlock said.

The judge cited U.S. Department of Justice statistics showing a 90% success rate for cases where the government intervenes, taking primary responsibility for the litigation, compared to a success rate of 25-30% without its intervention.  Vezina & Gattuso and Boone & Stone had accused Sakla of trying to take credit for the initial research and legal foundation they provided, saying they were promised a three-way fee split in a contract that was still enforceable.

Sakla had countered that it was solely responsible for convincing Wyeth Pharmaceuticals Inc. of its exposure, and said it "pinned down" witnesses, argued and won motions in court, and calculated damages in a tedious endeavor that required hospital invoices to be individually analyzed.  Relator William St. John LaCorte, a hospital physician, fired Vezina & Gattuso and Boone & Stone in 2008.

LaCorte had claimed that Wyeth overbilled Medicare and Medicaid from 2001 to 2006 in violation of the government's "best price" provisions.  Pfizer acquired Wyeth in 2009 and took over its defense and settlement.  The companies argued that Wyeth reasonably interpreted the law and believed that its rebate program was legal.

The federal government and 36 states intervened in LaCorte's suit as well as a similar claim from a hospital sales representative, Lauren Kieff. Their claims ended in the 2016 settlement, of which nearly $120 million went to the whistleblowers and about $24 million has already been paid to attorneys.  The government had initially declined to intervene in support of LaCorte's allegations but was always on board with Kieff's claims, Judge Woodland said. He also noted that the complaints were "not fighting in the same weight class."

"Nevertheless, I find Dr. LaCorte's team, including V&G and B&S, was eventually able to capture the government's attention and sufficiently present the merits of the case so that the government intervened largely because of their efforts," the judge said.

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."

Late Fee Request Cost Defense Over $130K

October 27, 2023

A recent Law.com story by Aleeza Furman, “Defendants’ Late Motion Costs Them An Over $130K Attorney Fees Award”, reports that a late motion in a long-running contract dispute lost defendants $130,620 in attorney fees.  The Pennsylvania Superior Court threw out an order granting the fees because the defendants had filed their motion more than 30 days after the trial court entered its final order in the matter.

The three-judge panel rejected the argument that the plaintiff’s pursuit of an appeal extended the window in which the defense could seek attorney fees.  “The lesson is to file for fees early and often,” solo practitioner Joseph Caprara said.  Caprara represented the defendants, Skippack Building Corp. and its shareholders, BS Trust, EB Trust, JE Trust and SJ Trust.

Plaintiff Blue Haven Pools, represented by Hamburg, Rubin, Mullin, Maxwell & Lupin’s Mark Himsworth, argued that the trial court had lacked jurisdiction to grant the attorney fees because the defendants’ motion was untimely filed.  Blue Haven contended that the defendants filed their motion approximately three months after the court entered its judgment in a garnishment action between the two parties.

The defendants, however, argued the time limit to seek fees had not yet expired because an appeal had been in the works.  While the trial court entered its judgment in the garnishment action Jan. 23, 2017, the Superior Court ruled on the matter April 3, 2017, and Skippack Building filed its motion April 20, 2017, according to the opinion.  “When we sought counsel fees our argument was, ‘it wasn’t over,’” Caprara said.  “Theoretically, it’s possible for Blue Haven to file another appeal.”

But the Superior Court ruled otherwise.  “Skippack had 30 days from the date of the final order to file a motion for counsel fees, and an appeal does not extend the time period for the motion to be filed,” Judge Megan Sullivan wrote.  The court held that it was constrained to reverse the trial court’s order granting attorney fees.

Former Twitter Executives Seek Coverage of Legal Expenses

August 22, 2023

A recent Law 360 story by Rose Krebs, “X Corp. Accused of ‘Shirking’ Its Obligations in Legal Fee Row”, reports that three former top Twitter executives continue to urge the Delaware Chancery Court to order the Elon Musk-owned social media giant, now called X Corp., to reimburse them for at least $1.1 million in legal costs, accusing the company of "perpetually making excuses" for not meeting its obligations.  In a brief, former Twitter CEO Parag Agrawal, former Chief Legal Officer Vijaya Gadde and former Chief Financial Officer Ned Segal told the court that the company is "gaining a well-earned reputation for shirking its commitments."

They took aim at a cross-motion for summary judgment and accompanying brief X Corp. filed last month, after Agrawal, Gadde and Segal had already sought to have Chancellor Kathaleen St. J. McCormick summarily order the company to pay legal fees they have incurred in connection with Twitter-focused lawsuits and regulatory inquiries.

The three assert that, in their summary judgment bid, they established "beyond any doubt that Twitter has breached its advancement obligations."  "From the beginning of this dispute, plaintiffs have operated by the book — making timely demands for advancement, providing undertakings, and submitting good faith certifications from counsel attesting to the reasonableness of plaintiffs' attorneys' fees," their brief said.  "Plaintiffs have done everything prescribed by Delaware law to obtain advancement from Twitter."

They accuse the company of causing months of delays and "perpetually making excuses for its failure to meet its advancement obligations."  "Although Twitter would like to pretend it is a party that dutifully pays its contractual obligations as they come due, it is in fact perpetually delinquent and is gaining a well-earned reputation for shirking its commitments," they contend.

In a filing last month, they said the social media giant had advanced them roughly $575,000 for their legal costs, but is still "wrongfully" withholding about $1.1 million owed, along with roughly $270,000 in interest and "fees-on-fees" for having to litigate the Chancery suit.  The three sued the social media giant in Chancery Court in April, saying they incurred significant expenses after becoming involved in several legal proceedings because of their former roles as Twitter executives.

They contend that per company bylaws and indemnification agreements, X Corp., as Twitter's successor, is obligated to advance their legal expenses.  Musk fired the three when he took ownership and control of the business in October 2022.  Indemnification agreements covering them, however, remain in effect for proceedings related to their former position as officers, the complaint said.  In a filing last month, the three argued: "Put simply, the world's richest person does not pay his bills."

But, its own filing, X Corp. has called into question the reasonableness of fees related to Gadde's appearance before the House Committee on Oversight and Reform during the committee's investigation into the influence of social media on U.S. elections.  In its own summary judgment filing last month, X Corp. called Gadde's request for fees excessive.

"Unlike many advancement actions, here, X Corp. does not challenge Gadde's entitlement to advancement of reasonable expenses — the company does not dispute that her testimony was required by reason of Gadde's role as former CLO of Twitter," the filing said. "Rather, the company here is challenging only the reasonableness of the fees for which Gadde seeks advancement with respect to the Congressional Inquiry."

X Corp. said Gadde is asking the company to advance "over $1.1 million" for fees incurred by her counsel, Sidley Austin LLP, "in connection with testifying for a single day."  That amount is "nearly 1,100%" what was incurred by two other former Twitter executives who also testified at the same hearing and were "similarly situated witnesses," X Corp. contended.

"The extreme delta between Gadde's legal fees and those of not one, but two separately represented, similarly situated, former Twitter executives who engaged similarly reputable law firms, is on its own sufficiently shocking to require that the reasonableness of Gadde's fees be thoroughly addressed now," the company argues.

X Corp. asked the court to "reduce any advancement award related to Gadde's representation in the congressional inquiry from $1,153,540.81 to $106,203.28 because Gadde failed to prove that all the fees and expenses were reasonably incurred."

But, ina filing, Gadde, Agrawal and Segal fired back.  "Twitter's challenge to these fees is particularly troubling given that Twitter's owner, Elon Musk, contributed to the exposure and complexity of the oversight inquiry when he publicly and repeatedly focused on Gadde and personally toured Capitol Hill to incite Republican lawmakers leading the oversight inquiry," their filing said.  They argued that "the record demonstrates that Gadde's fees incurred in the oversight inquiry are reasonable."

The three criticized the company for venting "invective at Gadde's counsel," including asserting that it engaged in "over-lawyering" and "extensive duplication of effort."  Gadde’s attorneys spent many hours prepping her for the committee’s questions, using five partners with hourly rates from $1,300 to $1,825, two associates charging more than $1,200 an hour and non-lawyer “policy adviser” Tracey LaTurner, who billed at $665 an hour.

"Aside from its invective, the only basis for Twitter's cross-motion is a false comparison between Gadde's attorneys' fees and the attorneys' fees of two other witnesses who testified in the same oversight inquiry," they said.