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Judge Cuts Fee Request in 9/11 MDL

November 11, 2015 | Posted in : Billing Record / Entries, Contingency Fees / POF, Fee Award, Fee Award Factors, Fee Dispute, Fee Reduction, Fee Request, Hourly Rates, Lodestar

A recent New York Law Journal story, “Firms’ Discovery Fee Request is Trimmed on 9/11 Litigation” reports that in a sanctions award over defendants’ failure to comply with discovery orders in a case stemming from the Sept. 11, 2001 terrorist attacks, a Southern District magistrate judge has awarded three law firms about $311,000—down from the more than $1 million the firms requested—while denying fees to a fourth firm.

The four law firms seeking fees were Anderson Kill, Cozen O’Connor, Kreindler & Kreindler and Motley Rice.  Law firms have pursued the case for Sept. 11 victims on a contingency fee basis for about 12 years and have collectively invested tens of millions of dollars in the matter with on end in sight.

In In re Terrorist Attack on Sept. 11, 2001, 03-md-1570, Magistrate Judge Frank Maas awarded about $31,594 to Anderson Kill, about $133,013 to Cozen O’Connor and about $146,824 to Motley Rice.  Maas declined to award fees to the Kreindler firm due to inadequate billing records.

In his ruling, Maas emphasized the difficulty of deciding fee requests and the imprecise nature of the exercise.  “There are, frankly, few tasks that judge dislike more than reviewing applications for attorneys’ fees,” he said.  “Even when a court can avail itself of prior decisions setting rates for certain classes of litigation and types of law firms in a locality, the findings often are backward-looking, and thus potentially not fully in line with current market rates.”

The judge said it was equally difficult to determine how many hours counsel should have spent on a matter.  "Ultimately, the goal is to achieve rough justice for both sides, without engendering a second round of protracted litigation," Maas said.  In this case, the plaintiff firms requested that the court enhance their fee totals by a 1.5 multiplier, which would produce more than $1 million in legal fees, Maas said.

But he said permitting out of state firms to bill at New York rates, rather than the rates prevailing in the communities where the firms' principal offices are based, "would mean that those lawyers and their clients would receive a windfall."  Awards for out-of-town counsel would be calculated with the prevailing rates in their home communities in mind, the judge said, adding that he would consider that the cost of litigating in the Southern District imposes an additional burden on out-of-town lawyers.

For Philadelphia-based Cozen O'Connor with 600 attorneys, Maas cut shareholder hourly rates to $500 from a requested $750.  For Motley Rice, a Charleston, South Carolina, firm with 70 attorneys, he lowered hourly rates to $450, down from a peak of $800.  And he reduced Anderson Kill shareholder hourly rates to $600, down from a requested $800, and a former associates' rates to $375, from $475.

Maas said he recognized that the plaintiffs' firms in the multi-district litigation are working on a contingency fee basis "in the hope that some deep-pocket defendants—such as banks, state actors, or large charitable organizations—will eventually be found liable."  Thus, standard billing rates at 80-attorney New York-based Anderson Kill "cannot be considered dispositive, since there is no suggestion that any of the plaintiffs has actually paid the firm that amount," Maas said.

He denied an award to 25-attorney boutique Kreindler & Kreindler in New York, which sought $40,100 in fees, on the grounds it had not made an adequate showing of billing entries.

"There simply are no records, incomplete or otherwise, reflecting any contemporaneous time entries that Kreindler & Kreindler attorneys made in relation to the discovery issues," Maas said. "As is true of many contingency fee firms, Kreindler & Kreindler simply chose, for business reasons, not to require its attorneys to keep track of their time."