A recent Law.com story by Brad Kutner, “Attorney Push Back on Proposed Camp Lejeune Act Attorney Fee Cap,” reports that bipartisan efforts in both the House and Senate aim to add a cap to attorneys fees on lawsuits linked to exposure to toxic chemicals at a North Carolina marine base.  But attorneys who are already working with clients to get some of the $6.1 billion made available via legislation passed last summer say the suggested caps are unreasonably low and the market will better police the process. 

“Passing the Camp Lejeune Justice Act was an important step toward providing long denied justice for veterans, their families, and civilian workers,” said Rep. Jerry Nadler, D-New York, when he announced the Protect Access to Justice for Veterans Act earlier this year.  He said “bad actors” looking to take advantage of elderly vets were to blame for the bill. 

The Camp Lejeune Justice Act signed by President Joe Biden in August, nixed the statute of limitations on claims related to hazardous chemical and water exposure at the North Carolina marine base from the 1950s until the late 80s.  It defined the illnesses that can be covered and superseded the Feres doctrine, which would otherwise preclude suits from military personnel against the government.  But it also lacked any cap on attorneys fees, an issue that has stirred debate among lawyers as much as elected officials.  

Nadler’s effort would cap attorneys fees between 17 and 33%, depending on the services and timeline for completion of a claim.  Another effort sponsored by Republicans in the Senate, the Protect Camp Lejeune VETS Act, caps fees at 12 or 17%.  “In my eight years in the U.S. Senate, there are few issues I’ve been involved with that more desperately cry out for a just resolution,” said Sen. Dan Sullivan, R-Alaska, about his effort, which includes Minority Leader Mitch McConnell, R-Kentucky, among its co-sponsors.  

Efforts to limit fees were also submitted last fall after the act was signed, but they failed to gain traction before the end of the 117th Congress.  Now in the 118th congressional session, both bills have only been introduced, but that’s enough for lawyers working in the space to start speaking up.  “These are individual cases; every one is unique,” said Baird Mandalas Brockstedt Federico & Cardea partner Philip Federico in a phone interview, about the effort his firm has already put in for the clients he’s representing in Camp Lejeune claims.

But, as Federico and other attorneys pointed out, the individual nature of every claimant and the law’s language precluding class action claims will require a lot of work.  “We prepare as though we’re trying the cases,” said Beasley Allen principal Rhon Jones. His firm, along with vet disability firm Bergmann & Moore, are representing over 10,000 vets in claims under the act.  Many are still in the administrative process, and he’s still weighing his options for those who may now file suit. 

“There’s a lot of unknowns there.  We want to be prepared to represent our clients,” he said.  Notably the bill created an administrative process, managed by the U.S. Navy Judge Advocate General’s Corps, for vets to file claims with before going to court.  But as the six-month window for responses has come to an end for the earliest filers, the lawsuits have started steaming in.

According to a Court Listener search, at least 47 such suits have been filed in the U.S. District Court for the Eastern District of North Carolina, where all such complaints must be filed.  But the number of claims could skyrocket, with hundreds of thousands of people possibly impacted, as the administrative process has so far yielded only denials for the lawyers the National Law Journal spoke to. 

In a statement, Patricia Babb, public affairs officer for the Office of the Judge Advocate General of the Navy. said the office intaking claims was “closely monitoring the number of CLJA claims it receives each week, and also continually assessing its adjudication procedures.”  When asked whether any administrative claims had received payouts yet, she said no claims had “been fully adjudicated.”

As for concerns about resources to address the demand, a theory posited by Federico, Babb said the office was “taking appropriate actions to address staffing issues … when needed.”  Steven German, managing partner with Scout Law firm, has about 160 clients with Camp Lejeune claims. He’s among those who’ve yet to see an approved administrative claim.  But even before that administrative process starts, German said his firm is putting in work that requires reasonable compensation. 

“Lots of victims are dead, so you’re working with family members.  And it gets trickery when you get into the succession of the victim,” German said.  He also said finding medical records, some destroyed after 10 years, can be another challenge.  “It’s harder than people think, and these are the things that keep me up at night,” he said. 

German also argued that concerns about unreasonable attorneys fees are overblown.  Liens, hospital bills, Medicaid-owed funds and reimbursement claims such as workers’ compensation claims and veterans disability claims, can all get taken out from any settlement.  “The government gets all their money back,” he said.  “And the liens come off the top.” 

So what may start as a 40% fee on $60,000 win, $24,000, turns into $12,000 just as quickly.  “That’s a big haircut,” he said, also noting language in the bill can cause attorneys to forfeit up to one-third in fees.. 

Federico also expressed concern about reportedly high fees: “My father was an attorney and he always said ‘don’t tell me what you made, tell me what you ended up with,’” he said. To that end he’s promised to cap his firm’s handling of these cases at 25%, but he called the GOP-led effort to cap fees well below that “grossly unfair.”

One solution Federico offered was court intervention via a mediation process.  Once the court starts taking in complaints, a judge can make a matrix for awards and injuries and start sorting claims.  “We don’t need to take a decade to have this play out,” he said of the alternative.  Jones, meanwhile, is hoping once suits start rolling the system will work itself out. With his thousands of clients, he’s got plenty of work to do..  “We are in the process of preparing a lot of lawsuits,” he said.

Every year, NALFA conducts an hourly rate survey of civil litigation in the U.S.   Today, NALFA released the results from its 2021 hourly rate survey.  The survey results, published in The 2021 Litigation Hourly Rate Survey & Report, shows billing rate data on the very factors that correlate directly to hourly rates in litigation:

City / Geography
Years of Litigation Experience / Seniority
Position / Title
Practice Area / Complexity of Case
Law Firm / Law Office Size

This empirical survey and report provides micro and macro data of current hourly rate ranges for both defense and plaintiffs’ litigators, at various experience levels, from large law firms to solo shops, in regular and complex litigation, and in the nation’s largest markets.  This data-intensive survey contains hundreds of data sets and thousands of data points covering all relevant billing rate categories and variables.  This is the nation’s largest and most comprehensive survey or study on hourly billing rates in litigation.

This is the second year NALFA has conducted this survey on billing rates.  The 2021 Litigation Hourly Rate Survey & Report contains new cities, additional categories, and more accurate variables.  These updated features allow us to capture new and more precise billing rate data.  Through our propriety email database, NALFA surveyed thousands of litigators from across the U.S.  Over 8,400 qualified litigators fully participated in this hourly rate survey.  This data-rich survey was designed to aid litigators in proving their lodestar rates in court and comparing their rates to their litigation peers.

The 2021 Litigation Hourly Rate Survey & Report is now available for purchase.  For more on this survey, email NALFA Executive Director Terry Jesse at terry@thenalfa.org or call us at (312) 907-7275.

A recent article by John Connolly, “Can Texas Force Lawyers to Pay the Prevailing Party’s Legal Fees in Federal Litigation?,” reports on the new Texas legislation, SB 8 and its attorney fees provision.  This article was posted with permission.  The article reads:

The new Texas abortion law known as S.B. 8 has been the subject of extensive commentary for its “bounty” cause of action against abortion providers and “aiders and abettors.”  But the law creates a second cause of action that may infringe the right to counsel in federal courts and, as a result, may face its own judicial scrutiny.

The second modification to the Texas Code creates a cause of action against litigants and their lawyers who challenge the enforceability of any Texas law that regulates or restricts abortion, including but not limited to S.B. 8. See SB 8 § 4 (amending Texas Civ. Prac. & Remedies Code § 30.022).  The provision applies to cases filed in state or federal court.  If the party defending the Texas law prevails, that party can seek fees and costs in a new action filed in Texas state court within three years of final judgment in the underlying action. Id. § 30.022(c).  The lawyer is jointly and severally liable with the client for the fees and costs.  The fee-shifting provision, although somewhat ambiguous, appears to be entirely one-way; i.e., if the party challenging the law prevails, that party is not entitled (through § 30.022) to recover fees and costs from the opposing party or counsel.

Many other statutes and rules expose lawyers to attorney’s fees for misconduct during litigation, but as a few commentators have explained, S.B. 8 appears to be the first law that makes lawyers liable based solely on the issue they are litigating.  In view of other provisions in S.B. 8 that intentionally frustrate judicial challenges of the statute, it seems beyond doubt that one purpose of § 30.022(c) is to impede a litigant’s attempt to obtain counsel to challenge a Texas abortion law.

For cases litigated in federal court, § 30.022 violates at least the spirit of 28 U.S.C. § 1654, which provides that “In all courts of the United States the parties may plead and conduct their own cases personally or by counsel as, by the rules of such courts, respectively, are permitted to manage and conduct causes therein.” Section 1654 traces back to the Judiciary Act of 1789. See 1 Stat. 73, § 35 (Sep. 24, 1789). Thus, the right to private (or retained) counsel in federal judicial proceedings is older than the Sixth Amendment and the rest of the Bill of Rights, and the right to retained counsel is so accepted that case law defining its limits in federal civil cases is sparse. Most case law under § 1654 relates to the right to proceed pro se, but the statute also codifies a right to proceed with private counsel of one’s choice. See Texas Catastrophe Property Ins. Ass’n v. Morales, 975 F.2d 1178, 1181 (5th Cir. 1992); McCuin v. Texas Power & Light Co., 714 F.2d 1255, 1262 & n.24 (5th Cir. 1983); Bottaro v. Hatton Assocs., 680 F.2d 895, 897 (2d Cir. 1982). As the text of the statute provides, the right is subject to reasonable rules “of such [i.e., United States] courts.” A body of precedent makes clear that the right to counsel does not override, for instance, the requirement that an attorney hold a valid license, which typically is conferred and regulated in the first instance by state law. E.g., Eagle Assocs. v. Bank of Montreal, 926 F.2d 1305, 1308 (2d Cir. 1991). But ethics and licensing requirements are laws of general applicability, and federal courts usually adopt them through their own local rules. As far as I can tell, no state law seeks to impede access to counsel in federal courts more clearly and directly than S.B. 8.

Nevertheless, it is hard to predict whether a federal (or state) court would strike down § 30.022 under § 1654 or some other doctrine protecting the right to counsel in federal courts. In the criminal context, where the Sixth Amendment protects a right to appointed counsel for indigent defendant and to retained counsel of one’s choice for others, see Powell v. Alabama, 287 U.S. 45, 53 (1932), the Supreme Court has upheld a federal statute prohibiting the use of forfeitable funds to retain defense counsel. Caplin & Drysdale, Chartered v. United States, 491 U.S. 617 (1989). The four dissenting justices observed that “the reluctance of any attorney to represent the defendant in the face of the forfeiture threat effectively strips the defendant of the right to retain counsel.” Id. at 654 (Blackmun, J., dissenting). The majority nevertheless concluded that the government had a substantial property interest in the forfeitable funds. Id. at 627-28. That rationale would not apply to § 30.022, of course, as the federal government has no competing interest in the Texas fee-shifting scheme.

Because the right to counsel at issue here is primarily statutory rather than constitutional, the argument would be pre-emption rather than unconstitutionality under the Sixth Amendment. The most pertinent pre-emption doctrine is “obstacle pre-emption,” which applies when a state law imposes obstacles to the purposes and objectives of Congress. E.g., Hines v. Davidowitz, 312 U.S. 52, 67 (1941). In Felder v. Casey, 487 U.S. 131 (1988), for instance, the Court held that state-law requirements that prospective plaintiffs notify government officials before filing suit were pre-empted when applied to federal civil rights claims under 42 U.S.C. § 1983. See also El-Tabech v. Clarke, 616 F.3d 834, 840 (8th Cir. 2010) (although state law establishing procedure for payment of federally awarded attorney’s fees was not completely pre-empted, if state claims board rejected an attorney’s fee award “that specific executive or legislative action would almost surely be conflict preempted”). Although these cases are not directly on point, it seems intuitive that a state law requiring lawyers to pay attorney’s fees for unsuccessful federal claims filed in federal courts is a serious obstacle to the federal right to counsel. By all appearances, that is exactly what the Texas legislature intended it to be.

Whether the “obstacle” to retained counsel imposed by S.B. 8 would lead a federal (or state) court to strike it down is a novel question that may itself evade judicial resolution³.  But the question deserves its day in court. Like the bounty cause of action that S.B. 8 creates against abortion providers or aiders and abettors, the fee-shifting cause of action against federal litigants and their lawyers is transportable to other states and other rights. The right to counsel in civil proceedings is not as prominent as the right to abortion, but it is an important right nonetheless, and federal courts should have the last word on whether states can impede the right through legislation like S.B. 8.

¹A second basis for pre-emption might be the Texas law’s incompatibility with 42 U.S.C. § 1988, which allows reasonable attorney’s fees to the prevailing party in actions to enforce provisions of the federal civil rights statutes, including 42 U.S.C. § 1983. But § 1988 does not allow recovery of fees from opposing counsel. Roadway Express, Inc. v. Piper, 447 U.S. 752, 761 (1980). 

²Some courts hold that the right to retained counsel in civil cases is implicit in the due process clause. See, e.g., Morales, 975 F.2d at 1180; contra Kentucky W. Va. Gas Co. v. Pennsylvania Public Util. Comm’n, 837 F.2d 600, 618 (3d Cir. 1988). Like most rights, it is not absolute, and may be overridden for compelling reasons. See 975 F.2d at 1181.

The bounty statute may fall before the fee-shifting provision is tested; the United States’ complaint against Texas, for instance, does not clearly challenge the fee-shifting provision. In addition, because the prevailing party can file the attorney’s fee claim in a new case in state court, that claim might evade judicial review by federal courts. See Bill Johnson’s Restaurants, Inc. v. NLRB, 461 U.S. 731 (1983) (party had First Amendment right to file nonfrivolous claim in state court and NLRB could not order party do dismiss the claim before determination of its merits in state court); 28 U.S.C. § 2283 (anti-injunction act). Nevertheless, state courts would have authority to consider the pre-emption argument, and the Supreme Court ultimately could decide the issue on discretionary review.

A recent article by Lauren A. Taylor and Melodie Khosrovani, “Written Disclosure Requirements for Attorney Fees in Trust and Estate Administrations,” reports on written disclosure requirements for trust and estate administrations in Florida.  This article was posted with permission.  The article reads:

House Bill 625 (2021), sponsored by Representative Clay Yarborough, R–Jacksonville, amends Sections 733.6167 and 736.1007 of the Florida Statutes to provide that if an attorney intends to charge a fee for an estate or initial trust administration based on the Florida statutory fee schedules, then the attorney must make the following written disclosures to the personal representative or trustee:

• There is no mandatory statutory attorney fee for an estate or trust administration;
• The attorney fee is not required to be based on the size of the estate or trust, and the presumed reasonable fee schedule may not be appropriate in all estate or trust administrations;
• The fee is subject to negotiation between the personal representative or trustee and the attorney;
• The selection of the attorney is made at the discretion of the personal representative or trustee, who is not required to select the attorney who prepared the will or trust; and
• The fiduciary shall be entitled to a summary of ordinary and extraordinary services rendered for the fees agreed upon at the conclusion of the representation, which shall consist of the total hours devoted to the representation or a detailed summary of the services performed during the same.

The Bill requires the attorney to obtain the fiduciary’s signature acknowledging receipt of the disclosures above. Importantly, if an attorney fails to make the required disclosures, then the attorney cannot be paid for legal services without prior court approval of the fees or the written consent of all interested parties in an estate administration or the trustee and qualified beneficiaries in an initial trust administration.

The Bill adds, among other things, that when a court is determining reasonable compensation of an attorney, the court is required to consider any fee agreements and if the attorney made the required written disclosures. Further, the Bill adds that the complexity of the estate and trust should be considered, rather than just its size, when determining additional reasonable compensation for an attorney’s extraordinary services.

The Bill was passed by the Senate (39-0) on April 22, 2021. The same was passed by the House of Representatives (113-1) on April 29, 2021. As it stands, the Bill is pending action by Governor Ron DeSantis. If signed by Governor DeSantis, the Bill provides for an effective date of October 1, 2021. If vetoed, legislators can override the veto with a two-thirds vote of both the House and Senate.

The Bill is likely to have a positive impact on both attorneys and clients. The required disclosures, set forth above, ensure that attorneys communicate effectively and transparently with clients and promote a mutually acceptable and appropriate fee under the circumstances.

A recent Bloomberg Law story by Matthew Bultman, “Doubts Deepen if ‘Exceptional’ Patent Fees Include PTAB Work,” reports that companies that win an “exceptional” patent lawsuit can be reimbursed for their attorneys’ fees—but they can’t count on recouping money spent fighting at the Patent Trial and Appeal Board.  Patent law allows the winning side to collect fees from the losing side when a district court judge finds that the lawsuit is “exceptional,” as outlined in Section 285 of the Patent Act.  Courts are split on how the law applies to PTAB expenses.

Some courts have found the fees can include money companies spent challenging a patent at the PTAB after being sued.  Recently, however, other judges, including a magistrate judge in Delaware, have indicated those are likely sunk costs.  The U.S. Court of Appeals for the Federal Circuit has yet to provide a definitive answer, but “it is pointing in the direction, perhaps, that awards are not going to be given for proceedings that are outside of the district court case,” Akin Gump Strauss Hauer & Feld LLP attorney Rubén Muñoz said.

While PTAB reviews are a less expensive way to challenge a patent’s validity, the proceedings can still cost hundreds of thousands of dollars. In the Delaware case, a judge said PTAB fees may account for a significant portion of the $1.1 million and $1.5 million Dish Network LLC and Sirius XM Radio Inc. spent in the litigation, respectively.  For smaller businesses, in particular, that’s not an insignificant expense.  A bar on recovering those fees could be a consideration in their litigation strategies.

‘Optional’ Proceedings

Questions about whether Section 285 allows companies to recover costs at the patent office predate the 2011 America Invents Act, the law that created the popular inter partes reviews at the PTAB.  In 1988, the Federal Circuit ruled Celanese Polymer Specialties Co. could recoup fees spent opposing PPG Industries Inc.’s reissue patent applications at the agency.  Celanese had been sued for infringement, and the court said its participation in the agency proceeding wasn’t optional.  The court also said the patent office proceeding “substituted for the district court litigation” on certain issues.

How the Federal Circuit views “the relevance of that case may drive its ultimate decision on whether or not fees can be awarded for PTAB work,” said Sandip Patel, an attorney at Marshall Gerstein & Borun LLP.  Without deciding the question, the Federal Circuit said last year in the Dish and Sirius cases it saw “no basis in the Patent Act for awarding fees under § 285 for work incurred in inter partes review proceedings that the Appellants voluntarily undertook.”

While the statement wasn’t binding, Magistrate Judge Jennifer Hall in the District of Delaware agreed. In a recent report, the judge emphasized Dish and Sirius weren’t required to challenge Dragon Intellectual Property LLC’s patent at the PTAB, but rather that they chose to do so.

Some attorneys say the realities of patent litigation mean PTAB reviews aren’t that optional.  Most of the patents challenged at the PTAB are brought by a defendant that has been sued in district court on the patent, a 2016 study found.  “Because most IPRs are filed because there’s a parallel district court action and because it’s common sense to have an inexpensive determination of validity, rather than a ridiculously expensive evaluation of it, it’s not so voluntary,” Patel said.  “It’s practical,” Patel said, “and that’s the way people proceed.  That’s the way business is conducted in patent litigation after the AIA passed.”

Substituting Work

Some district courts have been more willing to allow defendants to recover fees spent at the patent office.  A judge in the Eastern District of Texas, for example, said in 2017 that My Health Inc. owed companies almost $60,000 for work on an IPR petition because the “defendants never would have sought IPR if they had not been sued for allegedly infringing.”  In another case involving Southwest Airlines Co., a judge in the Southern District of California said the airline could recover fees for reexamination proceedings at the patent office because the proceeding “essentially substituted for work that would otherwise have been done before this court.”

Hall acknowledged the My Health and Southwest cases, but said their reasoning wasn’t persuasive.  While Dish and Sirius argued they were effectively being punished for choosing the more “efficient route,” Hall said to take it up with Congress.  “Federal courts don’t make policy,” Hall wrote, recommending the companies’ fee award be limited to what they spent in the district court.

Dish and Sirius XM have objected to Hall’s report, which will be reviewed by a district court judge.  The companies argue, among other things, that inter partes reviews aren’t optional because defendants sued for infringement have one year to file for inter partes review - “a non-extendable deadline to act.”

Revisiting PPG

Questions about PTAB fees have put a spotlight on the Federal Circuit’s decision in PPG. Some legal scholars say the court took a wrong turn in its decision, and skipped an important step by looking at whether the proceedings were optional.  Megan La Belle, a law professor at Catholic University of America who studied the subject, said the U.S. Supreme Court has established a clear framework for recovering fees for work in administrative tribunals.

The first step is to look at the language of the relevant statute.  Section 285 states that courts “in exceptional cases may award reasonable attorney fees to the prevailing party.”  Administrative proceedings, like PTAB reviews, generally aren’t viewed as “cases,” La Belle said.  “You only get to that second step if there’s an argument that administrative proceedings are captured by the language of the statute,” La Belle said.  “I think clearly they’re not under 285.”

Another avenue for companies could be to pursue fees directly at the patent office.  The PTAB has the power to sanction a party for misconduct at the board, which can include frivolous arguments.  But La Belle suggested in a 2016 article that Congress pass legislation allowing for recovery of PTAB fees in exceptional cases in district court.  “From a policy perspective, to me it seems obvious that the Congress that passed the AIA, if they thought about this and if they were asked the question, ‘Can you recover fees for AIA proceedings?,’ I don’t see why they would ever say ‘No,’” La Belle said.

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