Fee Dispute Hotline
(312) 907-7275

Assisting with High-Stakes Attorney Fee Disputes

The NALFA

News Blog

Category: Lodestar Multiplier

Flint Water Crisis Law Firms Agree to End Fee Dispute

February 13, 2024

A recent Law 360 story by Aaron West, “Flint Water Crisis Firms Agree To End Settlement Fee Dispute”, reports that three law firms that negotiated a $626 million settlement related to the Flint, Michigan, water crisis reached a settlement of their own after McAlpine PC agreed to end claims that Cohen Milstein Sellers & Toll PC and Pitt McGehee Palmer Bonanni & Rivers PC unfairly cut it out of their original co-counsel agreement.

The Michigan-based firms agreed to dismiss the lawsuit without prejudice or costs, according to an order signed by U.S. District Judge Judith E. Levy.  The judge's order follows the defendant firms urging the court in October to dismiss McAlpine's lawsuit against them after it "sat on its hands for years" before bringing a claim over the settlement split, according to court documents.

The dispute, which McAlpine initially filed in state court, claimed that the Auburn Hills-based firm was only paid a paltry sum by its co-counsel for its contributions to the underlying litigation.  McAlpine argued its work was instrumental to the lawsuit, contributing about $16 million worth of labor, or about 24% of the total lodestar figure of $84.5 million.  But Cohen Milstein and Pitt McGehee offered to pay just $500,000, McAlpine said.

"Defendants breached the co-counsel agreement by failing to distribute an attorney fee award reflecting McAlpine's respective lodestar, in favor of distributing a greater share to themselves," the firm alleged in its complaint.  The defendants argued in a subsequent filing that McAlpine was too late in bringing its claims.  "McAlpine had a full and fair opportunity to litigate the amount of any attorneys fee award in the appropriate place to do so — the federal Flint class action," the defendants said.

The class action at the heart of the law firms' dispute was settled in 2021 when Judge Levy gave final approval to a $626 million settlement, a deal expected to provide payments to more than 100,000 people affected by lead-contaminated water.  Government officials were accused of switching the city's water supply to the Flint River despite information cautioning them against doing so, and working to cover up the ensuing public health crisis.

In December, McAlpine said that the court should deny the firms' request to toss the fees case because it wasn't suing for recovery from the common benefit award, as Cohen Milstein and Pitt McGehee argued. Rather, McAlpine's claims were centered on "breaches of obligations" between the firms that were independent of the Court's order, the firm said.  The defendants' reply said what McAlpine was requesting went against their original agreement.

"McAlpine's argument is not supported anywhere," the defendants wrote.  "To the contrary, McAlpine agreed to work under the supervision of Co-Lead Counsel and the Executive Committee, and never challenged Co-Lead Counsel's authority to apportion fees among class counsel based on their respective roles in the litigation and contributions to the settlement until after the common benefit fee was distributed."

Attorneys Seek Fees in $6M AMDI Med Tech Settlement

February 6, 2024

A recent Law 360 story by Jeff Montgomery, “Attys Seek $750K Fee in Del. For $6M Med Tech Co. Deal”, reports that, proposed class attorneys who secured a $6 million settlement from medical device company AMDI Inc. after a purportedly under-priced and conflicted stock sale to an interest of Oracle founder Larry Ellison have asked Delaware's Chancery Court to approve $750,000 in attorney fees for their work.

The proposal by Grant & Eisenhofer PA — made public after the lawyers filed a sealed version of the stipulation Jan. 29 in Chancery Court — would end a derivative suit filed by a minority stockholder of AMDI, a company formed to develop automated medical lab systems designed to hunt for pathogens, including the COVID-19 virus.

Ellison gained control of AMDI through a series of large investments dating to 2016 by Tako Ventures LLC, a venture capital firm he controls through a different LLC.  The investments gave Ellison the ability to oversee the appointment of three of the company's seven directors, in addition to other benefits he received as a controlling stockholder.

According to the complaint filed in October 2021, Ellison's stake in AMDI grew as the company worked to develop its "Autolab" system, which has faced rising costs and has yet to generate any revenue. When its lone big investor, Tako, stepped in with what became a $2 per-share $20 million additional stake, members of a board special committee began pressing for better terms and a larger investment.

If approved by the court, lawyers for the minority stockholders and special committee would receive $750,000, 12.5% of the $6 million settlement total, or about 56% of the amount called for under the lodestar multiplier ordinarily used in attorney fee calculations.  The multiplier calculates payments based on hours of work performed at an attorney's professional fee rates.  Attorneys for the minority stockholders "invested considerable time and effort in both developing and litigating this action," the proposal said. Given the stage of the litigation, the fee request "is well within, and often below, precedent awards."

Judge Says Attorney Fee Request ‘Way Too High’

January 18, 2024

A recent Law 360 story by Bonnie Eslinger, “Juniper Workers’ Atty Fee Bid ‘Way Too High,’” Says, reports that a California federal judge said he'll give final approval to Juniper Networks employees' $3 million deal over claims the marketing software company mismanaged their 401(k) plan, but called their attorneys' bid for $900,000 in fees "just way too high."  U.S. District Judge James Donato rejected the attorney fee ask during a hearing in San Francisco on the workers' motion for final approval on the $3 million deal, which the judge granted.

Based on the total fees racked up to date — $142,232 — the $900,000 request means the court is being asked to multiply the lodestar amount by 6.33, nothing he has ever awarded, the judge said.  Even in an "exemplary" $650 million settlement in his court, resolving a "groundbreaking class action" alleging Facebook's facial recognition technology violated users' biometric privacy rights, the attorney fees "didn't get anything close to a 6.33 multiplier," Judge Donato said.  The Juniper Networks Inc. case, by comparison, was small and fairly straightforward, he added.

A lawyer for the workers, Paul Secunda of Walcheske & Luzi LLC, told the court that there are cases where the fee award was up to five times higher than the lodestar.  Further, the 30% fee award is in line with others approved in complex Employee Retirement Income Security Act class actions, he said.

In addition, the $3 million settlement represents about 44% of the total estimated losses that the class members could have recovered if the case had been successfully litigated through trial on all counts, Secunda told the court.

Judge Donato said the litigation wasn't complicated.  "Occasionally, we'll get what I call sweat equity [when] plaintiffs worked relentlessly," the judge said. "That didn't happen."  Judge Donato said he might consider doubling the total projected amount that plaintiffs say they'll spend in fees, including $187,000.  But the $900,000 request is "just way too high," he added.

The judge also asked Secunda to file an additional written brief to the court explaining why the plaintiffs were also seeking $36,000 in expenses, on top of nearly $40,000 in settlement administration expenses and $15,000 for independent fiduciary fees.

Secunda said the $36,000 in expenses was used to pay outside consultants due to the complexity of the case, which required significant research and pouring over complex finance and employee benefit documents.  "You've got to tell me who they are and why they deserve it and why it was in the best interest of the class," the judge said, adding that he wasn't ready to approve that amount.

Judge Donato also called proposed awards of $5,000 each to the two named plaintiffs in the case out of line.  "They're not going to get five grand each, particularly as the average recovery is approximately $100, that's completely disproportionate," the judge said.

Judge Says Attorney Fee Request ‘Way Too High’

January 18, 2024

A recent Law 360 story by Bonnie Eslinger, “Juniper Workers’ Atty Fee Bid ‘Way Too High,’” Says, reports that a California federal judge said he'll give final approval to Juniper Networks employees' $3 million deal over claims the marketing software company mismanaged their 401(k) plan, but called their attorneys' bid for $900,000 in fees "just way too high."  U.S. District Judge James Donato rejected the attorney fee ask during a hearing in San Francisco on the workers' motion for final approval on the $3 million deal, which the judge granted.

Based on the total fees racked up to date — $142,232 — the $900,000 request means the court is being asked to multiply the lodestar amount by 6.33, nothing he has ever awarded, the judge said.  Even in an "exemplary" $650 million settlement in his court, resolving a "groundbreaking class action" alleging Facebook's facial recognition technology violated users' biometric privacy rights, the attorney fees "didn't get anything close to a 6.33 multiplier," Judge Donato said.  The Juniper Networks Inc. case, by comparison, was small and fairly straightforward, he added.

A lawyer for the workers, Paul Secunda of Walcheske & Luzi LLC, told the court that there are cases where the fee award was up to five times higher than the lodestar.  Further, the 30% fee award is in line with others approved in complex Employee Retirement Income Security Act class actions, he said.

In addition, the $3 million settlement represents about 44% of the total estimated losses that the class members could have recovered if the case had been successfully litigated through trial on all counts, Secunda told the court.

Judge Donato said the litigation wasn't complicated.  "Occasionally, we'll get what I call sweat equity [when] plaintiffs worked relentlessly," the judge said. "That didn't happen."  Judge Donato said he might consider doubling the total projected amount that plaintiffs say they'll spend in fees, including $187,000.  But the $900,000 request is "just way too high," he added.

The judge also asked Secunda to file an additional written brief to the court explaining why the plaintiffs were also seeking $36,000 in expenses, on top of nearly $40,000 in settlement administration expenses and $15,000 for independent fiduciary fees.

Secunda said the $36,000 in expenses was used to pay outside consultants due to the complexity of the case, which required significant research and pouring over complex finance and employee benefit documents.  "You've got to tell me who they are and why they deserve it and why it was in the best interest of the class," the judge said, adding that he wasn't ready to approve that amount.

Judge Donato also called proposed awards of $5,000 each to the two named plaintiffs in the case out of line.  "They're not going to get five grand each, particularly as the average recovery is approximately $100, that's completely disproportionate," the judge said.

NALFA Releases 2023 Litigation Hourly Rate Survey & Report

December 27, 2023

Every year, NALFA conducts a survey of prevailing market rates in civil litigation in the U.S.  Today, NALFA has released the results from its 2023 hourly rate survey.  The survey results, published in the 2023 Litigation Hourly Rate Survey & Report, shows billing rate data on the factors that correlate 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 of hourly billing rates in litigation.

This is the fourth year in a row NALFA has conducted this hourly rate survey.  The 2023 Litigation Hourly Rate Survey & Report contains additional categories and more accurate variables.  These updated features allow NALFA to capture new and more precise billing rate data.

Through its propriety email database and digital infrastructure, NALFA surveyed over 495,000 attorneys from thousands of law firms and law offices from across the U.S.  Over 24,800 qualified litigators participated in this hourly rate survey over a 10-month period.  This data-rich survey was designed to aid litigators in proving prevailing market rates in court and comparing their billing rates to their litigation peers.