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Category: Litigation Tactics / Strategy

Judge Increases Attorney Fees in New York Rent Contact Dispute

January 7, 2022

A recent Law 360 story by Max Jaeger, “Judge Ups Atty Fees in Wolf Haldenstein Rent Row,” reports that if anything is rising from the ashes of Wolf Haldenstein Adler Freeman & Herz LLP's "scorched earth" rent dispute, it's the firm's award for attorney fees, which a New York state judge more than doubled from $300,000 to $700,000.

The award, some $125,000 shy of what the Manhattan firm sought, was necessary "since the overwhelming majority of the tenant's attorneys' fees were generated in response to discovery demands from the landlord and/or the conduct of the bench trial," Justice Barry Ostrager wrote in an order, explaining that he had erroneously limited the potential award to $300,000 in November.

Wolf Haldenstein sued its longtime Madison Avenue landlord in April, alleging it was owed rent credits and damages because the landlord failed to complete office renovations required under a 2019 lease agreement.  While Justice Ostrager mostly sided with Wolf Haldenstein in November, he chided the parties for turning an "exquisitely simple" case into "scorched earth" litigation through protracted discovery.

"This case should have been resolved early," Wolf Haldenstein counsel Scott Mollen of Herrick Feinstein LLP told Law360 in a statement.  "Clearly Herrick's legal fees were a direct result of the scorched earth tactics of the landlord.  This highly respected plaintiffs class action firm sought to resolve this matter through negotiation or mediation.  However, a settlement requires that each side be reasonable."

Once the court resolved the rent dispute, the battleground shifted to fees.  Justice Ostrager said in November that Wolf Haldenstein could seek $300,000 to pay attorneys at Herrick Feinstein LLP but acknowledged in a Dec. 15 order that Wolf Haldenstein sought more and that he'd relied on incorrect numbers.  On Dec. 14, Wolf Haldenstein told the judge in a letter that the landlords had blown a deadline to oppose the full $827,000 request.  In a response that same day, the landlords claimed they thought the firm was only asking for $300,000.

That led Justice Ostrager to issue the Dec. 15 order clarifying himself the following day.  "Nothing is either simple or non-contentious in this case which could have been consensually resolved last April if reason and common sense had prevailed.  Regrettably, in describing the tenant's claim for attorneys' fees in its [Nov. 22] decision, the court referenced the amount of fees Wolf Haldenstein had paid Herrick Feinstein, rather than the amount of attorneys' fees Wolf Haldenstein had incurred," Justice Ostrager wrote, adding the landlord "knows full well [$300,000] is not the sum plaintiff requested."

In opposition papers filed Dec. 20, the landlord argued Wolf Haldenstein's request was excessive, because Herrick Feinstein LLP allegedly overstaffed hearings, inflated bills for what amounted to public relations work, and engaged in imprecise block-billing practices that should trigger "a substantial reduction" in the award.

Justice Ostrager agreed "that the tenant's fee application is excessive inasmuch as multiple tasks for which attorneys' fees are sought did not require the number of attorneys whose time was submitted to the court for approval," but again pointed out that none of the fees would have been generated had the landlord not dragged out litigation.

Herrick Feinstein charged its standard hourly rates, less a 10% courtesy discount, the justice said in his Dec. 15 order.  While he said it had no bearing on his ruling, the judge called it "telling" that the landlord's attorney fees were some 30% higher than Wolf Haldenstein's, at $1.2 million.

Attorney Fee Dispute in ‘Friday the 13th’ Copyright Action

December 6, 2021

A recent Law360 story by Sameer Rao, “Judge Told to Slash ‘Friday The 13th’ Writer’s $1.2M Atty Fees,” reports that the fees that screenwriter Victor Miller seeks for the prominent copyright attorney who secured his win for the rights to his "Friday the 13th" script are needlessly high and based on improper tactics, according to opposition counsel's memorandum.  The filing that calls for the fee bid's rejection drew from some of the accusations that Horror Inc., the Massachusetts company that owns the successful slasher film franchise that grew from Miller's 1980 screenplay, and co-plaintiff Manny Co. made against Miller's lawyer Marc Toberoff of Malibu, California-based Toberoff & Associates PC.

Among the memo's allegations is that about 15% of the $1.18 million attorney fees request is based on Toberoff's "procedurally improper motion" that used California's law prohibiting strategic lawsuits against public participation, or SLAAPs — a motion made invalid by the companies' Massachusetts and Connecticut bases and the trial's federal district court setting, the memo argued.  The two plaintiffs also argued that Toberoff's repeated accusations of frivolous arguments and litigation misconduct by the companies' counsel, ranging from filing a supposedly retaliatory copyright action to using "scorched-earth tactics," were "unfounded" and "preposterous."

"Miller now argues that plaintiffs have misrepresented legal authority in their briefs," the filing continued. "Each of Miller's baseless accusations are belied by the actual content of plaintiffs' summary judgment briefs and the text of the authorities themselves. Miller's accusations are nothing more than an attempt to create a basis to award attorneys' fees where none exists."

The long-running trial in Connecticut's federal district court seemingly hit its climax this September, when an appeal to the Second Circuit ended in Miller being allowed to use a "termination right," which allows artists to regain rights to works they had previously signed over.  The appellate ruling largely substantiated an earlier ruling by Connecticut U.S. District Judge Stefan R. Underhill, who granted Miller a summary judgment and agreed with his argument that the production companies did not sufficiently prove that he was their employee.  The cases' implications for copyright law, termination rights, artists' obligations to producers and the "Friday the 13th" movies' future led to them being closely watched by entertainment industry observers.

Horror Inc. argued from the district court case's start that Miller had worked as a term employee and thus had no rights to his screenplay.  Despite losing that battle, they argued in the memo that there was no guarantee of attorney fees under the Copyright Act because they raised "novel questions of law" regarding Miller's rights as both a Writers Guild of America member and contractor.  They also said that the summary judgment made for a quick enough case, with limited discovery, that the fees were especially steep.  "When a case raises a "novel and unsettled question of copyright law," an award of attorney's fees on the basis of purported unreasonableness is not warranted," the companies said.  Horror Inc. and Manny Co., via their counsel from the Los Angeles law firm Greenberg Glusker Fields Claman & Machtinger LLP, seek to have the fees either thrown out or reduced to eliminate the time spent on the anti-SLAAP motion.

Reached Thursday, Toberoff said that he had not read the new opposition to his renewed fees bid.  When its claims were described to him, he reiterated his justification of the anti-SLAPP invocation, given its applicability in a California federal district court case where he helped late musician Ray Charles' children get copyrights to his songs.  He also rejected the characterization of his actions as misconduct and fees as excessive, citing a study of attorney fees from his motion that compared his to other firms' calculations.

"Their accusations are attempts at deflection," he told Law360 Pulse.  "There's no basis for it, whereas there is a basis for what we say because it's documented in a declaration, which is attached as evidence."  "Our fees were actually below the top average in [major U.S. cities," he added. "I would submit that are lower than what our opposing counsel charges."

Judge Slams Attorney For Waste in Deepwater MDL

August 2, 2021

A recent Law 360 story by Mike Curley, “Judge Slams Atty For ‘Shameful’ Waste in Deepwater MDL”, reports that a Louisiana federal judge has sanctioned a plaintiff attorney involved in a sprawling multidistrict litigation over the 2010 Deepwater Horizon spill, calling his multiple lawsuits, duplicative motions and other actions "a colossal waste of time" intended to harass others and get around the court's previous orders.  U.S. District Judge Carl Barbier also required Brian J. Donovan of The Donovan Law Group PLLC to post the sanction on his website.

In a scathing written opinion, Judge Barbier barred Donovan from filing any further suits against other plaintiff attorneys Stephen J. Herman of Herman Herman & Katz LLC and James P. Roy of Domengeaux Wright Roy & Edwards LLC, as well as Patrick A. Juneau of Juneau David APLC, claims administrator for the MDL's economic settlement.

"No party should have had to respond to any of these suits, and no court should have had to entertain them," Judge Barbier wrote. "Donovan has weaponized civil litigation to harass those with whom he disagrees.  His behavior has been a constant drain on judicial resources.  The waste Donovan creates is shameful and appalling."

Donovan had initially represented plaintiffs in a suit over the spill that was rolled into the MDL, but after some of his clients were denied claims, he sued other attorneys and Judge Barbier, saying Barbier should recuse himself over his past ownership of Halliburton Co. and Transocean Ltd. assets and that the other attorneys had colluded on the settlement to the detriment of class members and the benefit of BP PLC, which had operated the oil platform where an explosion started the spill.  Judge Barbier refused to recuse himself in November 2019 and scolded Donovan over his recusal motions but didn't levy sanctions at the time, instead referring his briefs, as well as Herman's opposition to the motion, to the clerk of the court to start a disciplinary proceeding against Donovan.

That suit, which named Herman as a defendant, was dismissed in March 2020, and Donovan filed two more, making the same allegations but adding the judge, Roy and Juneau as defendants, and both were voluntarily dismissed before Herman, Roy and Juneau moved for sanctions earlier this year, and at a hearing July 23, Judge Barbier granted the motions.

In the written order, Judge Barbier held little back, slamming Donovan's suits, as well as response briefs that came with more than 1,000 pages of exhibits, as repetitive and baseless, and attempts to harass those in the suit he disagreed with.  "Throughout the life of this MDL Donovan has inundated the court with wave after wave of motions that often do no more than repeat previous arguments," the judge wrote. "These practices have wasted the court's time and that of his opponents."

The judge further added that neither Donovan nor his clients have standing to assert many of the arguments he makes, as he's never argued that he or his clients are class members and his objections to the settlement are far too late.  "The fact that Donovan lacks standing to press his arguments makes every moment spent addressing them — whether by the parties, this court, or any other judicial body — a colossal waste of time," Judge Barbier wrote.

He added that it's "telling" that Donovan never sued BP, even though his filings point out that BP is liable for damages from the oil spill, and if he had he might have had a chance of recovering money for his clients, but instead he's only shown that his purpose in bringing the suits was to harass others.  Thus, Judge Barbier found it proper to block Donovan from filing yet another suit against Herman and the others over the same allegations, and further ordered Donovan to pay Herman's, Roy's and Juneau's attorney fees.

While Judge Barbier stopped short of fining Donovan for his behavior, he ordered Donovan to post a copy of the order on his website, as well as any other websites or blogs he owns, operates or maintains, and to provide the court with proof that he has given a copy of the order to his clients from his initial suit in the MDL.

Federal Circuit Backs $4.2M Fee Award in IP Case

May 11, 2021

A recent Law 360 story by Adam Lidgett, “Fed. Circ. Backs Apple and Cisco’s $4.2M Fee Win in IP Case,” reports that the Federal Circuit has refused to undo a lower court order allowing Apple and Cisco to collect $4.2 million in attorney fees from tech company Straight Path in a patent case, despite arguments that a California federal judge wrongly found the case was exceptional.  In a short order, a three-judge appellate panel affirmed the California federal court's decision handing Cisco $1.9 million and Apple $2.3 million in fees from Straight Path in a dispute over internet phone patents.  The panel gave no reason behind its decision.

The order came just days after oral arguments in which the panel had a hard time believing that U.S. District Judge William Alsup — who delivered the fee award almost a year ago — lacked the discretion to do so.  Judge Alsup declared the case exceptional since Straight Path's infringement claims contradicted a position it had advocated at the Federal Circuit in appealing a Patent Trial and Appeal Board decision.

The fee dispute between the parties has been a lively one, sparking fireworks in the courtroom during a May 2020 hearing when Judge Alsup scolded Apple and Cisco for initially requesting $10 million in fees after beating the suit.  The judge said the tech giants "played games," used "abusive" tactics and were motivated by "greed, G-R-E-E-D."  He required them to resubmit their fee bids and appointed a special master to determine a reasonable amount of fees and costs.  In May of last year, the court awarded Cisco $1.9 million — half of its initial request — while Apple netted $2.3 million of its initial $3.9 million ask.

Straight Path argued that as a result, Federal Circuit precedent required it to reverse Judge Alsup's finding of exceptionality, which is required for a prevailing party in a patent dispute to get fees.  Desmarais LLP attorney Justin P.D. Wilcox, an attorney for Cisco, told Law360 that his team was "pleased with the Federal Circuit's ruling and that the Federal Circuit affirmed Judge Alsup, who down at the district court had ruled that Cisco was entitled to attorneys' fees for the exceptional case that Straight Path had brought."

Quinn Emanuel Wins $14M in Attorney Fees in $5M Trial Case

April 30, 2021

A recent Law.com story by Nate Robson, “Quinn Emanuel Wins $14M in Legal Fees for Client’s $5M Case,” reports that Quinn Emanuel Urquhart & Sullivan landed nearly $14 million in legal fees and costs for a client, nearly three times the $5.4 million in damages awarded at trial in the underlying dispute.  The fees, granted by a federal judge in Minnesota, cap off an especially litigious case that came after most other parties settled once another defendant mortgage lender was hit with a $28 million verdict in 2018.

The recent trial involved ResCap Liquidating Trust, which was created in the wake of the 2012 bankruptcy of Residential Funding Corp. after it faced billions of dollars in liabilities tied to residential mortgage-backed securities it sold leading up to the 2008 housing collapse.  ResCap was formed to sue banks and mortgage lenders that sold the loans bundled into those mortgage-backed securities.

In the ruling against mortgage lender Primary Residential Mortgage Inc., U.S. District Judge Susan Richard Nelson repeatedly noted that PRMI’s litigation tactics were responsible for inflating ResCap’s legal fees as the case went to trial.  The judge said PRMI was aware “the parties would not ‘split the tab’ or ‘go Dutch’ on attorney’s fees and costs,” given its contractual agreement at issue in the case and the legal fees awarded in the first trial.  “Given all of this notice, PRMI cannot credibly express indignation now,” Nelson wrote.  “Its own poor judgment in relitigating settled issues throughout this litigation significantly drove up ResCap’s attorney’s fees and costs.”

Nelson said PRMI, represented by a team from Williams & Connolly, challenged relatively miniscule claims for damages and reargued items that were handled in the first trial against another lender.  Nelson pointed to one claim on a loan involving $30,000 in damages as an example.  PRMI’s stance on that loan required discovery, motion practice, expert and fact witness deposition testimony, and then trial testimony.  “While PRMI argues that ResCap’s fee request is out of proportion to its damages award, PRMI overlooks its own practice of litigating aspects of plaintiff’s damages claim in ways that were out of proportion to the amounts at issue, thereby driving up ResCap’s attorney’s fees,” Nelson wrote.

Nelson also rejected PRMI’s claim that paying nearly $14 million in legal fees and costs on a $5.4 million award is disproportionate, noting ResCap was also granted nearly $2 million in prejudgement interest, bringing the total to $7.4 million in damages.  The ruling, granting $10.5 million in attorney fees and $3.5 million in costs, also notes that fees don’t have to be proportional to the award.

Isaac Nesser, the lead attorney on the case for Quinn Emanuel, said neither side had cited a similar instance where legal fees so outpaced the award given.  Nesser said a key to landing the fees was building a record during court appearances of how much work was going into the case because of PRMI’s litigation strategy.

“It was important to us to build a record that we were being forced to spend time and money litigating issues that seemed disproportionate to the actual amount of damages in the dispute,” Nesser said.  “As a result, we came to the view that it was important for us to communicate that information clearly to PRMI and Judge Nelson.  And so we made a record of that any chance we could.”