Entire Fee Motion Denied For Misconduct And Inflated Fees, A Companion To Our Post On The Clemens Decision.
While co-contributor Mike was out on a short vacation, his legal assistant Shanna Strader was kind enough to post on Clemens v. New York Cent. Mut. Fire Ins. Co., No. 17-3150 (3d Cir. Sept. 12, 2018) [see our September 15, 2018 post], where the Third Circuit affirmed a district court’s entire denial of a fee petition where it was outrageously excessive in nature and was chock full of numerous substantiation flaws. That decision occurred under a discretionary Pennsylvania consumer statute, but its basic reasoning has now been extended to the federal civil rights arena.
In Young v. Smith, Nos. 17-3190 & 17-3201 (3d Cir. Sept. 25, 2018) (precedential) [opinion linked here], attorney represented a group of students in civil rights claims against a school district and a teacher, obtaining an initial jury verdict but with the resultant judgment vacated based on her misconduct. The second trial, only against the school district, resulted in a complete defense verdict. The third trial schedule against teacher was settled when plaintiffs accepted a Rule 68 $25,000 offer of judgment, with the settlement allowing fees and costs against teacher only up until the date of the offer. However, attorney submitted a fee petition for all work against both defendants, requesting $733,002.23 in fees!
No one was impressed. The district judge ordered an OSC as to why attorney should not be sanctioned for requesting such an excessive fee, with some of the requested fees connected to her vexatious conduct. The district judge denied the entire fee request and sanctioned attorney $25,000 for presenting such a fee petition (including doing so through pleadings with an inconsiderably small font size), finding that even a line-by-line review of entries was unproductive and not tied to nonvexatious work as limited by the settlement with the teacher. The district court also found that hundreds of entries in the fee petition were fraudulent.
The Third Circuit affirmed. The fee petition was not honest and was not accurate in nature, allowing for a denial of a request in entirety under the federal civil rights fee-shifting statute where the fee petition sought outrageously excessive fees in egregious fashion. Just the fact that $733,002.23 was sought in a $25,000 settled case confounded the Court of Appeals as much as the district court. So, the reasoning in Clemens was extended to civil rights fee petitions, and the $25,000 sanctions was sustained too.