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Category: Prevailing Party Issues

CSX Responds to $14M Fee Request in Norfolk Southern Case

May 18, 2023

A recent Law 360 by Piper Hudspeth Blackburn, “CSX Hits Back at $14M Atty Fee Bid in Norfolk Southern Case,” reports that CSX Transportation Inc. has urged a Virginia federal judge not to award Norfolk Southern Railway Co. and a smaller railroad $14 million in attorney fees for beating back its antitrust claims, arguing that Virginia's state law does not allow it.  In a memorandum, CSX also said that no contractual provision between the parties allows an award for attorney fees as Virginia law requires, and the Sherman Act does not mandate that a defendant obtain a fee award for prevailing on a suit.

According to CSX, Virginia law mandates that successful claims be supported by "a statutory or contractual right" to attorney fees.  Therefore, if at all possible, the only claims Norfolk Southern and Norfolk & Portsmouth Belt Line Railroad Co. can seek are those related to their defense of CSX's injunctive-relief request under the Virginia's business conspiracy law, CSX added.

However, CSX also noted that the railway companies did not cite "a single decision" in the history of the Virginia statute "in which a court has awarded a prevailing defendant attorneys' fees."  The years-long litigation ended in April, when U.S. District Judge Mark S. Davis sided with Norfolk Southern and Belt Line and dismissed the suit, finding that CSX's claims were time-barred.

The companies filed separate motions on May 3 in an effort to get the court to order CSX to pay their court costs and attorney fees.  While Norfolk Southern estimates its costs and fees at around $11 million, the Belt Line put forth a much lower estimate of $3 million.  Belt Line argued that CSX must pay because Virginia law says prevailing defendants in a conspiracy case where plaintiffs requested injunctive relief are entitled to costs and attorney fees.

"Whether CSX sought money damages or injunctive relief, its core set of facts was identical for all claims, and therefore the Belt Line's entitlement to costs and attorneys' fees encompasses its efforts to overcome them all," the interchange railroad said.  However, CSX disagreed Wednesday, claiming that the statute does not mandate that losing plaintiffs pay attorney fees.  Instead, CSX said, the law requires only "a potential discretionary fee award for those fees specifically attributable to the state-conspiracy injunctive-relief remedy."

Judge Rips Class Counsel’s ‘Overstated’ Fee Request

May 8, 2023

A recent Law 360 by Gina Kim, “Joint Juice Maker Rips Class Attys’ ‘Overstated’ $8.3M Fee Bid,” reports that Premier Nutrition asked a California federal judge to cut $2.4 million from class counsel's "bloated and unreasonable" $8.3 million fee request in litigation over allegedly misleading advertising claims about its Joint Juice, citing block billing, overstaffing, lavish hotel stays and fringe expenses for "boba and coffee runs dating back to 2013."  In a 33-page opposition, Premier Nutrition's attorney Steven E. Swaney of Venable LLP accused class counsel, except for Iredale & Yoo, of presenting to the court "a bloated and unreasonable application asking this court to award $8,274,516" in combined fees, expenses and costs.

Premier argued the lodestar calculation of the two other class counsel firms, Blood Hurst & O'Reardon and Lynch Carpenter "betray a lack of 'billing judgment,'" as they propose a fee award that doesn't approximate what a paying client is willing to approve.  Their lodestar calculation is "massively overstated" since it includes time spent for other related Joint Juice class actions, Premier argued, pointing out the plaintiffs only prevailed in one of 11 related cases but are now submitting a fee bid as if they prevailed on all of them.

Excluding Eugene Iredale and Grace June of Iredale & Yoo, Premier complained that Blood Hurst and Lynch Carpenter's billing records are riddled with inefficiencies, including "top-heavy administration of work," block billing, billing in quarter-hour increments, overstaffing, nontravel work billing and other things.  Examples include Blood Hurst lawyers billing 24 or more hours per day and submitting several duplicative entries on a single day, staffing six lawyers on the trial, "two of whom sat passively in the gallery of the courtroom" and charging $575 per hour for a contract attorney, Craig Straub, doing document review, the opposition states.

"As explained in the declaration of Premier's fee expert Steven Tasher, a 40% across-the-board percentage reduction to BHO's and Lynch Carpenter's lodestar is warranted to account for these inefficiencies," Premier said.  "The total lodestar for class counsel should be reduced to $2,406,809.  This constitutes approximately 29% of the judgment amount, which aligns with the Ninth Circuit's 25% benchmark for reasonable fees."

Premier balked at class counsel's suggestion for the court to apply a multiplier to pump their fee award if their lodestar is reduced, and also took issue with their "extravagant expenses" that it said warrants an across-the-board cut in their claimed charges.

"Class counsel also seek reimbursement from Premier for every sundry or fringe expense they encountered over this decade-long litigation, including boba and coffee runs dating back to 2013," the opposition states. "Class counsel even tries to bill Premier for hundreds of dollars in laundry expenses incurred during trial — even though they apparently traveled back home to San Diego that same day."

The opposition references defense's expert, Tasher, who reviewed the billing entries and opined the class counsel's requests costs also reveal "a 'spare no expense' approach" to the case along with double billing and "phantom charges."  "In my opinion, while the dollar value for many of these items may seem small, they reflect a big attitude of no cost being too great to throw onto the bill and eat, drink and be merry on someone else's dime," Tasher wrote.  "No paying client would tolerate class counsel's lifestyle expenses or lavishness."

Premier said that Blood Hurst and Lynch Carpenter's proposed lodestar figure was grossly inflated and warrants dramatic cuts across the board, arguing that the firms can't include time spent on class representative depositions in other related actions in their calculation.  Blood Hurst's proposed lodestar also includes nearly 1,000 hours for trial prep spent in Mullins, which Premier said should be removed since the Mullins trial never occurred.  It's inappropriate for Blood Hurst to get 100% of the fees for work common to the related cases based on the successful outcome of just one case, the opposition states.

Premier also sought a 40% cut to Blood Hurst's remaining lodestar account for several deficiencies in their billing practices, noting that  the firm's Timothy Blood and Thomas Joseph O'Reardon billed for work done in 2013 at their current hourly rate, which is significantly higher.

While Blood, partner Paula Brown and Straub billed 1,000 hours for trial prep, Blood was the only one who had an active role at trial, and O'Reardon and Straub "sat passively in the gallery," Premier alleged.  Premier also accused Straub and O'Reardon of billing extra hours after trial each day and erroneously adding entries that exceed 24 hours a day "or are obvious duplicates," totaling $62,207.50.

Premier also attacked Lynch Carpenter's fee bid of $392,392.50, arguing the billed work was entirely spent on Mullins.  The fee should be apportioned among the related cases and then cut by 40% due to excessive time and top-heavy administration work, Premier said.  That should leave Lynch Carpenter with $20,842.77.  "As an initial matter, in what can only be described as a shocking act of chutzpah, Mr. Carpenter — who has not worked on these cases since 2020 — includes in his fee petition 13.7 hours to fly to San Francisco to observe one day of trial on May 25, 2022," the opposition states.

Nor should class counsel recover fees and deposition costs for experts that weren't used in the Montera suit, Premier said.  Furthermore, several charges from the two firms weren't only lavish and extravagant, but also "purely wasteful," Tasher said.

"Each of these issues is exacerbated by the level of staffing," Tasher wrote. "Had the trial been staffed with attorneys Iredale, Jun and Blood, (the three attorneys who actually appeared on the record to try the case), the expenses would also have been much more modest.  However, given the excessive staffing (and related trial expenses) of attorneys [Todd] Carpenter, O'Reardon and Straub, the costs grew exponentially, considering the additional flights, Uber/taxi charges, meals/alcohol, and snacks brought about by these three additional timekeepers (essentially double the trial team.)"

Attorney Fee Entitlement Dispute in $1 US Airways Antitrust Win

April 26, 2023

A recent Law 360 by Piper Hudspeth Blackburn, “Sabre Says US Airways Not Entitled to Fees For $1 Win,” reports that Sabre urged a New York federal court to reject a magistrate judge's recommendation that the airline booking giant cover attorney fees for US Airways after a decade of antitrust litigation that resulted in a $1 jury award to the airline.  Sabre claims that U.S. Judge James L. Cott made a series of errors in his April 10 report, particularly in applying the Supreme Court's decision in Farrar v. Hobby, which established the standard for deciding whether a plaintiff prevailed in a civil rights case.  According to the report, Farrar applies only to the reasonableness of fee awards in civil rights cases and not mandatory fee statutes.

However, Sabre argued that the Supreme Court ruling shows that the "reasonable attorney's fee" due when a plaintiff obtains only nominal damages is no fee at all.  Courts have continued to apply this ruling in cases that include fee awards under the Clayton Act, Sabre continued.  US Airways, now owned by American Airlines, has insisted that the small amount of damages it received shouldn't affect its ability to recover costs and attorney fees.  Sabre also asked the court to reject Judge Cott's finding "that the meaning of 'reasonable attorney's fee' in the civil rights fee statute differs from the meaning of identical language in the Clayton Act."

In his report, Judge Cott pointed toward a Second Circuit decision on United States Football League v. National Football League because it contained issues nearly "identical" to this one.  In that case, the court had to determine whether a plaintiff is entitled to reasonable attorney fees "after decade-long antitrust litigation resulting in a $1 jury verdict only on Sherman Act Section 2 grounds."  Not only did the court decide that the plaintiff could recover attorney fees, it "further explained that civil rights cases are inapposite as they concern discretionary awards of fees, while Section 4 mandates them," the report continued.

However, Sabre said that the USFL decision is actually in line with its position, claiming that it bolsters the argument that Congress intended that the amount of fees awarded under "the civil rights statute 'be governed by the same standards which prevail in other types of equally complex Federal litigation, such as antitrust cases.'"

Ninth Circuit Rejects Fee Entitlement in Tribes’ Gambling Case

April 25, 2023

A recent Law 360 story by Dorothy Atkins, “9th Circ. Won’t Award $1.1M Atty Fee in Tribes’ Gambling Case,” reports that the Ninth Circuit rejected a request by five Native American tribes for $1.1 million in attorney fees for recently winning a federal Indian Gaming Regulatory Act suit against California for the state's bad faith negotiation tactics, finding that the federal statute does not authorize fee-shifting.  In a 14-page opinion written by U.S. Circuit Judge Daniel A. Bress, a three-judge panel rejected the tribes' argument that their suit, which only asserted federal claims under the IGRA, implicates "substantial and significant issues of state law" and entitles them to fees.

"We hold that because the plaintiffs prevailed on a federal cause of action, they are entitled to attorneys' fees only if federal law allows them," the opinion says.  "Because it does not, we deny the tribes' fee request."  The opinion noted that although the tribes "creatively" argue that the case is "highly unusual" because state law was supposedly "central and essential" to win its dispute, the tribes aren't entitled to fees because they only asserted and prevailed on a federal claim.

The panel additionally rejected the tribes' arguments that their position is supported by the Ninth Circuit's 2018 decision in Independent Living Center of Southern California Inc. v. Kent, which awarded attorney fees notwithstanding the fact that the action was not based on a state law cause of action.  The opinion pointed out that the facts of Kent were "somewhat knotty" and distinct from this litigation.

"Kent did not suggest that the prevalence of a state law backdrop could somehow justify applying a state law attorneys' fees provision to a purely federal claim," the opinion says.  "It did not create some kind of 'exception' to the usual rules, as the tribes maintain."

The Ninth Circuit's decision is the latest development in a lawsuit that was filed in January 2019 by the Chicken Ranch Rancheria, Chemehuevi Indian Tribe, Blue Lake Rancheria, Hopland Band of Pomo Indians and Robinson Rancheria, claiming that the state of California had acted in bad faith when the state allegedly insisted that the tribes negotiate unrelated topics for their soon-to-expire gambling agreements, which are required to operate games.

In the wake of that decision, in September, tribal leaders sought to recoup $1.1 million they estimated spending on the litigation, noting that the attorney fee estimate was based on reduced rates and reflected a proper "lodestar" amount, or the number of hours reasonably spent on the litigation and a reasonable hourly rate for the attorneys.  That calculation, on the high end, proposes $980 per hour for Lester J. Marston of Rapport and Marston, which represents all the tribes except the Blue Lake Rancheria.  At the low end, it proposes $300 per hour for Marston's son, a law clerk at the same firm, the tribes argued.

But California fired back in October, arguing that the tribes are ineligible to recover fees under the IGRA, because the federal statute contains no provision for recovering such expenses.  Even if the tribes were eligible to recoup such expenses, the state argued that it is immune from furnishing those funds under the 11th Amendment of the U.S. Constitution because it never waived its sovereign immunity in the litigation.

In the opinion, the panel concluded that the tribes aren't entitled to fees but also noted that the prior panel decision also found that California explicitly consented to the federal court's jurisdiction over the dispute, and therefore the state can't now invoke its sovereign immunity defense in avoiding fees if they had been allowed under the IGRA.

Shook Hardy Doubles Down on Fee Request in $189M Verdict

April 21, 2023

A recent Law 360 story by Hayley Fowler, “Shook Hardy Fee Bid Defense Pans ‘Massive’ Vivint Trial Team,reports that Shook Hardy & Bacon LLP attorneys have doubled down on their $3 million fee bid after nabbing a $189 million jury verdict against Vivint Smart Home Inc., quipping its staff of three and corresponding rates were far more reasonable than the smart home security company's use of five law firms and a "massive trial team."

Shook Hardy, representing CPI Security Systems Inc. in a trademark infringement suit in which Vivint was found to have tricked customers into switching home security providers, fired back at Vivint's attempts to whittle down the attorney fee award in a reply brief.  The law firm said the fees it's seeking are both reasonable given its staffing model and relevant to the claims on which CPI succeeded under the Lanham Act and North Carolina's Unfair and Deceptive Trade Practices Act.

In attacking the fee bid, Vivint had accused Shook Hardy of charging excessive hourly rates and overusing partners for work that could have been done by associates.  But Shook Hardy said that CPI was represented for the duration of the suit by just three partners, whose hourly billing rates were at or below the average for western North Carolina.  "These allegations are startlingly ironic in light of Vivint's four-partner-per-deposition staffing model, Vivint's massive trial team, and the rates Vivint's own lawyers charge in commercial litigation matters," the reply brief states.

CPI first filed its request for $3 million in attorney fees earlier this month, noting that Vivint was found to have willfully engaged in a deceptive trade practice and didn't try to settle the case until the trial was well underway.  In its response, Vivint asked the court to delay ruling on the motion until after its own motion for a new trial is addressed.  If the award is granted, the fees should be significantly reduced, the smart home security company has argued, saying CPI failed to distinguish on which claims it's seeking to recover fees.

Vivint also slammed how CPI classified its billing rates and corresponding time entries, as well as its request to recover fees associated with a delay in the trial date.  But Shook Hardy countered that all of the work it performed leading up to and during the trial related to CPI's trademark and unfair business practices claims, under which the prevailing party can recover attorney fees. It also argued the billing entries were "adequately detailed."

The firm similarly rebuffed Vivint's criticism of its staffing model as "vague," saying in its reply brief that its smaller legal team was far more efficient than the five law firms working for Vivint, "one of which is one of the top five largest law firms in the country."  Finally, Shook Hardy said the work it did preparing for the original trial date last year was used for the actual trial in February, noting it was "careful to preserve work product to ensure that it would not need to be recreated."