CALIFORNIA ATTORNEY'S FEES

In The News . . . . Irvine Has Incurred About $1.3 Million In Irvine Business Complex “Vision Plan” Development Fights

     As reported by Sean Emery in “Irvine legal fees in development fight run $1.3 million” (available for reading in the February 6, 2010 edition of The Orange County Register), the City of Irvine has incurred about $1.3 million in various legal fights over the Irvine Business Complex “vision plan”—an urban revitalization project near the John Wayne Airport

made up of 43 million square feet of commercial space and 5,011 residential units. Although there have been some settlement with opponents, most of the battles involved City and Newport Beach, Tustin, and Allergan (although a total of 14 lawsuits have been filed in connection with this project). The fees are going to be roughly split between the City and the Irvine Business Complex developers based on provisions written into the developers’ original city approvals. (Actually, the developers will cover about $628,000, with the City picking up the remaining $674,000).

In The News . . . . Spammer Gets Whacked With Attorney’s Fees And O.C. Treasurer-Tax Collector Chriss Street Has Spent A Lot of Fees In Pending Bankruptcy Litigation Case

Tagged.com Wins Large Default Judgment Against Spammer, Plus Attorney’s Fees.

     Social networker Tagged.com has won a $151,975 default judgment against Erik Vogeler, who is alleged to have spammed thousands of Tagged members with unsolicited links to an adult dating website. A district judge in the Northern District of California ordered the default judgment, as well as ordered Mr. Vogeler to pay Tagged $50,000 in attorney’s fees.

     For more on this one, see Robin Wauters’ January 29, 2010 article, “Tagged.com Wins $201,975 In Default Judgment Against Spammer,” available for reading on The Washington Post’s website.

Chriss Street Has Run Up More Than $1 Million in Legal Fees Contesting Bankruptcy Lawsuit Scheduled For Trial This Week.

     This week, before U.S. Bankruptcy Judge Richard M. Neiter (of Los Angeles), Orange County Treasurer-Tax Collector Chriss Street will be on trial for his actions as trustee of the End of the Road Trust, successor to Fruehauf Trailer Corp. L.A. money manager Dan Harrow has sued Mr. Street for $7 million. The trial is scheduled to last three days. The price tag for Mr. Street? More than $1 million in legal bills, according to a January 31, 2010 article “Treasurer To Confront Fraud Accusations” by Ronald Campbell in The Orange County Register. What we do not know is whether these fees were paid by Mr. Street, an insurance carrier, or combinations of the two. Expensive, needless to say, no matter what person or entity paid.

In The News . . . . Orange County Settles San Juan Capistrano Pepper Gun Case For Almost $1.6 Million

$1,280,000 of Settlement is Attorney’s Fees and Litigation Costs.

     As reported by Jennifer Muir in a January 22, 2010 article in The Orange County Register (“Shooting by deputies gets costlier”), Orange County supervisors have approved a nearly $1.6 million settlement in a case involving deputies who allegedly shot a San Juan Capistrano man with pepper-filled gun pellets inside his home in July 2009.

     The County has agreed to pay $1,594,273.92, which includes paying $300,000 to the reported victim (following a federal jury verdict in the same amount), $1.2 million in attorney’s fees (divided between three attorneys), and $80,000 in litigation costs. Ms. Muir’s title to the article says it all.

    BONUS.  From Wikipedia’s article on the riot gun:

     “Pepper-spray projectiles, commonly called pepperballs, are direct-fire paintball-like capsules filled with a pepper spray solution of capsaicin. They provide a longer range, more user-friendly way to disperse pepper spray. Many sorts can be fired from paintball markers. Other sorts are designed to be fired from specially-designed pepperball guns whose muzzle velocity is greater than a paintball marker: if the velocity is not high enough the projectile will not break. As a paintball impact is mildly painful, it can discourage rioters by itself, but the pepper spray incapacitates and discourages a larger number of rioters with each shot.”

In The News . . . . January 2010 Issue Of The Orange County Lawyer Does Cover Some Fees Issues.

     The Orange County Bar Association’s Professionalism and Ethics Committee has, in the January 2010 issue of the Orange County Lawyer, published its “2009 Ethics Round-Up” that explores the following fee issues:

• Fee arbitration provisions in attorney-client retainer letters, discussing Schatz v. Allen Matkins Leck Gamble & Mallory LLP, 45 Cal.4^th 557 (2009) [contractual arbitration clause binding as long as MFAA rights preserved];
• Flat fee arrangements for appointed criminal defense counsel, discussing People v. Doolin, 45 Cal.4^th 390 (2009) [flat fee arrangement can be appropriate unless some type of prejudicial deficient performance can be shown]; and
• Incentive fee arrangements with class representatives in class actions, discussing Rodriguez v. West Publishing Corp., 563 F.3d 948 (9^th Cir. 2009) [incentive fee arrangements did create conflicts of interest between class counsel, the class representatives, and the other absent class members].

In The News . . . . City Of Long Beach Recoups Millions From AIG In Settlement/Fee Reimbursement Action

 

$7 Million Net Will Go Back Into the City’s Spending Fund.

     City of Long Beach recently won a lawsuit against insurer AIG for reimbursement of portions of a $20 million settlement paid to Shirley McClure in a case alleging a councilmen-planning director conspiracy to keep her from operating six groups of homes for Alzheimer’s patients in Bixby Knolls and California Heights. AIG argued it was not responsible for reimbursement for fees or costs spent on the McClure case because City’s acts were intentional in nature, a position apparently rejected by the Ninth Circuit Court of Appeals.

     City was awarded $10.2 million, although its cut will only be about $7 million after paying back outside counsel hired by the City.

     For more details on this story, see Paul Eakins’ January 20, 2010 post, “Inside City Hall: Long Beach Wins Suit Against AIG,” available for reading online at the Contra Costa Times’ website.

In the News . . . . Circuit Judge Posner Criticizes Lawyers Representing Suing Class Action Attorney For “Failing to Rein Him In” During Fee Fight With His Former Firm

     As reported by Debra Cassens Weiss in a January 14, 2010 post on the American Bar Association’s website, Seventh Circuit Judge Richard Posner recently chided lawyers for Rex Carr, a class action attorney who has sued his former firm for over $20 million in compensatory damages in connection with fee disputes, for “neglecting their duties as officers of the state and federal courts by failing to rein him in.” Mr. Carr apparently had brought a RICO-based action against his former firm, even though it was a rehash of claims made in prior 2004 suits that were resolved by a memorandum of understanding upheld by Illinois courts. Not only was the dismissal of the more recent federal suit upheld by the Seventh Circuit panel, but Judge Posner felt sanctions were in order for the commencement of this action.

Caroline Kennedy's pony, Macaroni

In The News and Family Law: Guardian Fees Appear To Have Been Avoided With Latest Dismissal of Guardianship Petition In Octuplets Case

Fourth District, Division 3 Finds Guardianship Petition Should Have Been Dismissed.

     In our May 9 and August 22, 2009 posts, we explored developments in a petition brought by Paul Petersen to undertake certain actions for the alleged benefit of the octuplets of Nadya Suleman. The main battle was Mr. Petersen’s efforts to obtain an appointment of a guardian over the octuplets’ estates. If granted, the guardian might have been entitled to recover fees, but that seems unlikely based a recent ruling from the Fourth District, Division 3.

     In the late afternoon of January 8, the Fourth District, Division 3’s decision in Suleman v. Superior Court (Petersen), Case No. G042509 (4^th Dist., Div. 3 Jan. 8, 2010) (certified for publication) was posted on the Internet. The appellate panel determined that Ms. Suleman’s motion to dismiss the guardianship petition should have been granted because Mr. Petersen did not show she had engaged in any financial misconduct for purposes of warranting appointment of a guardian under Probate Code section 1510.

     Justice Fybel, writing for the 3-0 panel, also penned a scholarly discussion of section 1510(a) standing requirements.

     This likely should mean that any attorney’s fees battle on the guardianship front is over, except that the panel did award Ms. Suleman her costs for winning on appeal  

OCTAGON

                                                                                                                                                                          

Indemnity And In The News: Carl Sparks’ Bid To Recoup Attorney’s Fees In Kern County Lawsuit Comes To An End

 

His Failure to Present a Claim to the County Barred Fees Request.

     In our May 3, 2009 post, we discussed former Kern County Sheriff Carl Sparks’ battle in a lawsuit brought by Kern County to obtain an award of attorney’s fees under several theories, but mainly Government Code section 996.4 (a statute requiring a public entity to reimburse fees and costs to an employee/former employee retaining counsel following the public entity’s refusal to provide a defense in a civil action/proceeding brought against that employee on account of an act/omission in the scope of employment).

     Sparks v. Kern County Bd. of Supervisors, Case No. F057600 (5^th Dist. Jan. 6, 2010) (unpublished) might be the final intermediate appellate word on the subject. The lower court denied Mr. Sparks’ request for an award of attorney’s fees under section 996.4, after he had failed to appeal prior denial orders requesting fees under different theories (with these failures to appeal constituting a waiver). Because the Fifth District had earlier determined that Mr. Sparks’ claim for reimbursement was barred by his failure to comply with the governmental claims presentation requirement, that earlier ruling was also dispositive of his appeal of the latest fee denial order.

In The News …. City of Los Angeles Awarded $132,000 In Fees And Costs For Prevailing In Dispute Over Failed Soccer Field/Youth Center Project

 

     On January 5, 2010, the Los Angeles City Attorney’s Office collected $4.8 million for the sale of a 3-acre lot south of downtown that was never developed by Concerned Citizens of South Central Los Angeles (a nonprofit organization), with the lot never materializing into a soccer field/youth center for low-income families despite the grant of block grant moneys. The City had to file a 2008 lawsuit for breach of contract, with the lot eventually seized by the L.A. Unified School District through eminent domain. The city was awarded $4.8 million in the lawsuit against the nonprofit, consisting of the block grant money for the project and land appreciation for the site since 2008 lawsuit commencement. The City was also awarded $132,000 in attorney’s fees and costs.

     For more details on this story, see Louis Sahagun’s January 5, 2010 post “City of L.A. collects $4.8 million for sale of would-be soccer field” made on The Los Angeles Times’ website (Southern California region).

In The News . . . . Silverado District Is Ordered To Pay Developer $352,000 In CEQA Attorney’s Fees

District’s Entire Yearly Budget is Just $222,304 For 2009.

     We have reported on the sting that attorney’s fees award can bring to litigants. Unfortunately, this can also sting public agencies with shrinking or fairly small budgets.

     As reported by Teri Sforza in her December 22, 2009 post “Will Silverado-Modjeska go bankrupt paying developer’s legal bill?” in The Orange County Register, the Silverado Modjeska Recreation and Parks District—a small public agency collecting some local property taxes as well as grants, donations, and small rental fees to operate two one-acre parks and community centers—has been ordered to pay $352,000 to cover the legal fees of developer CCRC Farms/Anthony A. Marnell II in a CEQA lawsuit involving the developer’s efforts to build a dozen high-end homes near Silverado Park.

     Apparently, the fees were awarded in a CEQA suit that seemed to feature the endangered (and maybe now infamous) arroyo toad (Bufo
Californicus). The cruel twist of fate is that the District’s entire budget is just $222,304 for 2009 alone. District’s current president was quoted as saying that the amounts requested by the developer were almost ten times what was spent by plaintiff’s attorneys in the case. The fee award is on appeal, with opening briefs due early in 2010.

                     Left:  Madame Helena Modjeska                      Right:  Arroyo Toad

In The News . . . . DMV Has To Pay $69,400 In Attorney’s Fees To Non-Profit Organization in Medical Pot Users License Revocation Suit

     Sometime during the week of December 14, 2009, Merced County Superior Court Judge Brian L. McCabe ruled that the California Department of Motor Vehicles had to pay $69,400 in attorney’s fees to Americans for Safe Access, a non-profit group, in a lawsuit against the DMV for a policy of unjustly revoking derivers’ licenses of qualified medical marijuana patients. The fee award was based upon the private attorney general “catalyst” theory, with Judge McCabe finding that plaintiff’s efforts resulted in a change of DMV policy in the licensure of medical marijuana drivers. More details can be found in Brian Doherty’s December 21, 2009 post on reason.com, in an article entitled “California’s DMV Has to Pay Attorney’s Fees for Revoking Medical Pot Users License.” The article has a link to the superior court’s decision.

In The News: The Real McCoy . . . . Or Not!

 

McDonald’s Meeting With Lawyer and Client in Civil Rights Claim Lands Lawyer in Trouble with Federal District Judge.

     We know there is a popular saying “he is the real McCoy” and also know Sam Waterston’s portrayal of D.A. Jack McCoy on “Law and Order.” However, Bay Area attorney Waukeen McCoy has gained some press for his handling of a civil rights case before Northern California U.S. District Judge Susan Illston.

     Mr. McCoy—the real one, that is—represented plaintiffs in a civil rights claim against FedEx Corp., winning several nice verdicts and settling against the well-known corporation. However, Mr. McCoy allegedly solicited cash payments from three plaintiffs over and beyond his contractual fees, despite promising Judge Illston he had or would not do so. One plaintiff is quoted as saying that she took BART and met Mr. McCoy at a McDonald’s on Market Street in San Francisco, where she gave him $15,000 extra in cash. In all, Mr. McCoy apparently received more than $40,000 in cash payments, which Judge Illston ordered to be reimbursed in a ruling on December 18, 2009. Even with the pending orders by the judge, Mr. McCoy stands to still receive about $291,000 for his FedEx work.

     For more on this “real McCoy” saga, see Dan Levine’s December 22, 2009 post “In FedEx Fee Fight Case, Judge Finds Lawyer Solicited Cash From Clients,” available for reading at Law.com.

  Left:  Sam Waterston as Jack McCoy

                          Right:  Walter Brennan as Grandpa Amos McCoy

In The News . . . . Attorney’s Fees Awarded in Poway Tree-Cutting Case And University of Phoenix Recruiter Action Settlement

Judge Link Awards Only Half of Requested Fees to Prevailing Homeowners in Tree-Cutting Case.

     This next story contains some good clues to all attorney’s fees claimants about the type of issues that will bother a trial judge when a substantial fee request comes up for hearing.

     In January 2007, City of Poway workers cut down trees on two homeowners’ properties, using out-of-date maps, to gain access to reach manholes near a creek behind the properties. Two homeowners sued the City for the tree cutting, and were respectively awarded $144,763 and $84,328 by a jury (albeit reduced by 20% for homeowners’ comparative fault). Because a civil rights violation claim was involved, plaintiffs moved to recoup fees of $814,270 and costs of $103,000 from Poway.

     On December 18, 2009, San Diego County Superior Court Judge Frederic Link held a hearing on the fees/costs requests, eventually awarding only half of the requested fees and $42,000 of the requested costs.

     In doing so, Judge Link characterized the plaintiffs’ efforts in the case as “overkill,” although admitting Poway “should be hanging its head for what it did.” Besides finding the requested fees to be excessive, Judge Link said he was bothered by the fact that plaintiffs’ attorney did not try to work the matter out with the City (which had earlier offered to replace the trees).

     For more details on this one, see Gary Warth’s story “Poway: Judge reduces legal fees city must pay in tree-cutting case,” posted on December 18, 2009 at the North County (San Diego) Times website.

University of Phoenix Settles Recruiter Lawsuit For $78.5 Million, Including $11 Million for Fees and Costs.

     Some University of Phoenix recruiters apparently filed a class action against the University of Phoenix based on the Higher Education Act, which prohibits schools receiving federal financial aid from paying their recruiters based on the number of students they enroll (creating a risk of encouraging recruitment of unqualified students which, in turn, results in higher default rates that are ultimately borne by taxpayers). The recruiters charged that the University of Phoenix violated federal law by ranking counselors by their sign-ups and giving the highest recruiting producers bigger salaries, benefits and incentives (including DVD players or special spa trips).

     Recently, the parties settled for $78.5 million, which included $11 million in attorney’s fees and costs. The bulk of the award goes to the federal government. The settlement is pending for final approval by a federal district judge. This settlement comes after newly released government statistics show a much higher default rate for students enrolled in for-profit programs as opposed to community college/state funded not-for-profit schools.

     See more in Lisa M. Krieger’s December 15, 2009-posted story “University of Phoenix settles lawsuit filed by San Jose-based recruiters,” available for reading on-line at The Mercury News website.

In The News . . . . R. Allen Stanford And His Counsel Found In Contempt By Texas Federal Judge

Contempt Citation Issued For Failing to File Suit Before Same Judge.

     As reported to Martha Neil in her article “Billionaire Stanford & His Lawyers Held in Contempt Over Legal Fees Suit” as published on December 16, 2009 on the ABA Website, U.S. District Judge David Godbey issued a contempt citation against billionaire/defendant R. Allen Stanford and his counsel for filing an attorney’s fees collection suit against Lloyd’s to collect under a directors’ and officers’ insurance policy. The apparent basis of the citation was that Mr. Stanford and his counsel violated a prior court order that all related disputes should be filed with District Judge Godbey, even though the Lloyd’s suit was apparently filed elsewhere in Texas federal court. Lloyd’s earlier had agreed to pay a limited amount of defense costs, although it is relying on the “dishonesty/criminal acts” exclusion among others to support a likely coverage denial decision.

In The News . . . . U.S. District Judge James Selna Sustains Tentative In Denying Fees To James Corbett’s Defense Team

District Judge Selna Does Not Find Chad Farnan’s Lawsuit to be Baseless or Vexatious in Nature.

     On November 11, 2009, we reported that U.S. District Judge James Selna had issued a tentative ruling to deny an award of attorney’s fees to the defense teams for San Juan Capistrano high school teacher James Corbett in the long-running First Amendment case brought on behalf of Chad Farnan (referred to as C.F. in the litigation). The defense team had sought $391,150 in fees and court-related costs. District Judge Selna sustained his tentative in a December 14, 2009 decision and also overturned an October 2009 decision by the federal court clerk in the case to assess costs of $12,631 against plaintiff.

     For more on this recent development, see Scott Martindale’s article “No attorney fees for teacher defense,” published in the December 15, 2009 edition of The Orange County Register.

In The News . . . . Lots Of Fees At Issue in Greenberg-AIG Litigation And Veoh-Universal Music Group Copyright Dispute

AIG-Hank Greenberg Fee Battle.

     AIG has announced that it has settled long-standing legal disputes with its former chairman, Maurice “Hank” Greenberg. The parties have also agreed to release each other from all claims, including Mr. Greenberg’s claims against AIG for payments of future legal fees and expenses. The settlement also covers AIG’s former CFO Howard Smith as well as two of Mr. Greenberg’s two privately-held companies.

    

     That Hank Greenberg:                This Hank Greenberg:

       

     Here is the attorney’s fees rub. The two sides have agreed to mediate what amount AIG must pay for Messrs. Greenberg’s and Smith’s past legal fees before Layn Phillips of Irell & Manella, although the amount cannot exceed a “capped” $150 million (wow!).

     For more on this story, see Hibah Yousuf’s article “AIG settles legal battle with Hank Greenberg,” available for reading at a November 25, 2009 post on CNNMoney.com.

     BLOG OBSERVATION—Co-contributors Marc and Mike have mediated before Mr. Phillips, who is a superb mediator and a former Oklahoma federal district court judge. He works out of Irell & Manella’s Newport Beach, CA office.

Veoh-IoGroup/Universal Music Group Copyright Infringement Disputes.

     Recently, Veoh has won important court rulings in its defense of copyright infringement claims brought by Io Group and Universal Music Group (UMG).

     Veoh won based on the ground that section 512(c) of the Digital Millennium Copyright Act gives “safe harbor” to websites who enact strong take-down measures.

     UMG apparently refused to participate in the “safe harbor” take-down procedures, and Veoh defeated UMG’s argument that it was Veoh’s burden to figure out what alleged UMG rights might have been infringed.

     Now, here comes the attorney’s fees angle to the whole controversy. On December 21, 2009, Veoh is seeking to recoup nearly $3 million in attorney’s fees from UMG in a motion scheduled before U.S. District Judge A. Howard Matz of the Central District of California. So, we will keep you posted, although Google is making use of the “safe harbor” in defending YouTube from copyright charges by Viacom and others. Sounds like fertile grounds for litigation—and, of course, fee battles for the winners.

     See Eriq Gardner’s December 2, 2009 post “Veoh seeks $3 mil in attorneys fees from Universal Music.".

In The News . . . . Medical Malpractice Damage And Attorney’s Fees Caps May Figure Into National Health Care Reforms

 

California’s MICRA Reforms Figure Into National Debate on Health Care Issues.

     Dan Walters, a columnist with The Sacramento Bee, has penned an interesting column for the November 29, 2009 edition indicating how attorney’s fees may play a role in the national health care debate going on in Congress right now. His article is entitled “California plays role in health debate.”

     Over 30 years ago, then (and possibly future) Governor Jerry Brown signed into law California’s Medical Injury Compensation Act (MICRA), which is codified at Civil Code section 3333.2 and put a $250,000 cap on recovery of “noneconomic damages” (pain and suffering) by plaintiffs in most medical malpractice cases. Also, MICRA put limits on plaintiffs’ attorneys’ contingency fee recoveries in these types of cases. (See Bus. & Prof. Code, sec. 6146, which enacted a “sliding scale” system.) Now, these species of “caps” are being bandied around in the debate over national health care reforms.

     Advocates of these caps believe they should be a part of the national health care package, because they are estimated to save at least $54 billion over a decade. The MICRA caps have indeed lowered medical malpractice insurance premiums and limited recovery of contingency fee awards by plaintiffs’ attorneys in California.

     President Barack Obama has been noncommittal on whether these types of caps should be included in the national health care package. Democratic House Speaker Nancy Pelosi has pushed through the House of Representatives a provision in the national health care bill that provides “incentive payments” to any state that adopts a “fair resolution” process for medical malpractice claims but only if the state does not limit attorney’s fees or impose caps on damages.

     So, stay tuned on what happens on these bitterly contested questions. There is a lot of lobby money being spent on both sides of the issues.

In The News . . . . California State Officials Spent Over $42,000 In Attorney’s Fees And Expenses Fighting San Onofre Nudists

Orange County Register So Reports In Recent Article.

     As reported by Cindy Carcamo in her article “Records detail nudity fight” in the November 27, 2009 edition of The Orange County Register, state officials (mainly from the California Department of Parks and Recreation) spent more than $42,000 in attorney’s fees battling a group of nudists wanting to preserve a clothing-optional beach in San Onofre, California. The nudists have questioned the expenses, given that there were only two written complaints. In response, state officials claim there were a lot more verbal complaints and the money was a necessary expenditure to make sure all visitors felt comfortable in the park. Recently, the California Supreme Court denied nudists’ petition for review, closing the fight in favor of the state.

In The News . . . . George Jaramillo’s Contingency Attorneys May Get Nothing

 

U.S. District Judge Guilford’s Ruling Puts Fee Recovery in Doubt.

     As reported in two articles in today’s The Orange County Register (Larry Welborn’s article “Jaramillo won’t be paid by county” and Frank Mickadeit’s column “George’s lawyers: $845K or $0?”), a recent ruling by U.S. District Judge Andrew J. Guilford may mean that Mr. Jaramillo’s contingency lawyers could have a problematic time recovering fees for their successful efforts in an Orange County Superior Court bench trial.

     Earlier, former assistant Orange County sheriff George Jaramillo won a $362,000 civil judgment in a wrongful termination case brought against the county. His attorneys took the case on a 40% contingency basis, which means they could seek fee recovery of between $150,000-$845,000 depending on where there is some doubling of certain fee components given that Orange County Superior Court Judge Andrew Banks found the county acted maliciously.

     However, here is the rub. District Judge Guilford recently found that Mr. Jaramillo is not entitled to any money from the judgment because he was convicted for tax evasion and mail fraud. Judge Guilford agreed with the U.S. government’s position that Mr. Jaramillo should not receive any additional funds from the county he victimized. This ruling may well have ripple effects on the fee recovery sought by Mr. Jaramillo’s winning civil attorneys, because Judge Guilford indicated that any fees and costs awarded to Mr. Jaramillo’s attorneys must be approved by him in order to comport with his restitution order. Judge Guilford agreed that it was not his role to deal with the fees, but did indicate that he would take supervisory control over any award coming from Judge Banks.

     So, we will update you on this continuing fee saga between two different court venues. Stay tuned for upcoming developments.

In The News . . . . CALA Releases Latest Study On California Local Government Legal Costs And Votings Right Act Cases Are Beginning To Proliferate

 

Local Government Legal Spending For 2007 and 2008 Fiscal Years.

     As reported by Teri Sforza in the November 13, 2009 edition of The Orange County Register, California’s Citizens Against Lawsuit Abuse (CALA) has released its study of local government spending on litigation for the fiscal years 2007 and 2008. The study tallied money spent on verdicts, settlements, and outside counsel is fiscal years 2007 and 2008, although it does not cover all of California’s 58 counties or 480 cities.

     For the areas surveyed, $504.1 million was spent in total for the 2007 and 2008 fiscal years. Here is how County spending broke down: (1) Los Angeles -- $ 190 million; (2) San Francisco -- $37.7 million; (3) Sacramento -- $22.3 million; (4) Orange -$14.2 million; (5) Alameda -- $12.2 million; (6) Santa Clara -- $8.3 million; (7) San Diego -- $3.9 million; (8) Fresno -- $2.7 million; and (9) Kern -- $2.4 million. With respect to Orange County cities, Anaheim spent $4.4 million for fiscal years 2007 and 2008.

2002 Votings Rights Act.

     Michael R. Blood, in his recent November 15, 2009 article “Jackpot: Lawyers earn fees from law they wrote”, has an interesting discussion about California’s Votings Right Act, which has a one-way fee-shifting provision which works only in favor of prevailing plaintiffs.

     Seattle law professor Joaquin Avila, with advice from California attorney Robert Rubin, helped draft the Votings Right Act, which empowers state courts to create smaller election districts favoring minority candidates for “at large” elections. Messrs. Avila and Rubin, or lawyers working with them, have collected or billed local governments about $4.3 million in three cases that have settled (including a $1.2 million fee request under consideration in an action brought against the Madera Unified School District). A couple of more cases are still pending, and the article seems to hint that more lawsuits likely will proliferate under this statute.

Above:  No vote. D.C. ballot boxes draped in black. Washington, D.C., Nov. 8, 1938. Election day was just another day for voteless District of Columbia. To impress upon Washingtonians what they are missing, ballot boxes draped in black were places on the busiest corners of downtown. Members of the District League of Women's Voters attended the boxes but instead of receiving votes they handed out information on what it means to the citizens of Washington not to be able to vote. Left to right we see--Mrs.. Karl Bradford, Mrs. R. Shull, and Mrs. Henry Chalmers, 11/8/38

In the News . . . . Federal Judge’s Tentative Is To Deny Fees to School Defendants and Union Intervenor in Farnan-Corbett First Amendment Controversy

November 9, 2009 Tentative Was to Deny $378,519 in Total Requested Fees.

     In our category “In the News,” we have been following the costs and fees development in the Farnan-Corbett First Amendment controversy arising out of south Orange County. Here is the next development.

     Earlier this week, U.S. District Judge James Selna of the Central District of California issued a 6-page tentative decision denying requested fees totaling $378,519 to the Capistrano Unified School District and Dr. Corbett (School Defendants, who asked for $154,781.50) and intervenor California Teachers Association (Union, which asked for $223,737.50) as the prevailing parties in the dispute.

     The request was based on 42 U.S.C. section 1988(b), which allows an award of attorney’s fees against an unsuccessful civil rights plaintiff, but only where plaintiff’s claim was frivolous, unreasonable, or groundless or plaintiff continued to litigate after the claim clearly became so. (Thomas v. City of Tacoma, 410 F.3d 644, 647 (9^th Cir. 2005).)

     Judge Selna tentatively found that although School Defendants and Union prevailed, plaintiff’s claim was never frivolous as against Dr. Corbett. After all, he did prove one constitutional violation and was only spared liability due to the district judge’s application of the defense of qualified immunity. With regard to the School District, plaintiff did not prove his case but did present evidence that the District received complaints about Dr. Corbett’s teaching so as to show some basis for a civil rights claim. Union was not entitled to fees because, as an intervenor, it failed to show that its role was significant or nonduplicative of School Defendants’ efforts.

     For more details on this ruling and the overall litigation, see Scott Martindale’s November 9, 2009 article “Judge tentatively denies awarding $378,519 to teacher’s defense team” at The Orange County Register website (with the article also having a link to Judge Selna’s written tentative decision).

In The News . . . . Jon Voight And Parents of His Manager Hit With Paying $100,000 In Fees For Dismissing Malicious Prosecution Suit Against Opposing Attorneys

Should We Add a New Category to Our Sidebar?

     Once again, we consider (but resist) the need to add a new category to our sidebar, "celebrities and attorney's fees."

     As reported in a November 5, 2009 update on the Daily News Wire Services, Academy Award-winning actor John Voight as well as Hank and Dorothy Paul, the parents of Mr. Voight’s manager Steven Paul, were ordered by Santa Monica Superior Court Judge Elizabeth Grimes to pay $100,000 in fees incurred by attorneys in a malicious prosecution suit that Mr. Voight and the Pauls dismissed in late August 2009.

     Two producers sued Voight, the Pauls, and others in federal court in February 2006, claiming fraud and breach of contract for millions of dollars over failed film projects that were inspired based on allegations that Mr. Voight touted the Paul family as being people of integrity. The producers were awarded a $630,000 judgment in federal court, but the judgment was not against Mr. Voight and the Pauls. In turn, these exonerated defendants filed a malicious prosecution suit in Santa Monica Superior Court against the two producers and their attorneys, claiming they had no reasonable grounds for suing Mr. Voight and the Pauls. On August 10, 2009, Judge Grimes dismissed the malicious prosecution suit against one attorney representing the two producers. Later in August 2009, Mr. Voight and the Pauls filed papers dropping their case against other attorneys representing the two producers.

     However, some set of the attorneys representing the two producers moved to recover attorney’s fees from Mr. Voight and the Pauls. (We presume they were as prevailing anti-SLAPP defendants or because they were prevailing parties after the dismissal.) Anyway, Judge Grimes did order that Mr. Voight and the Pauls, jointly and severally (apparently), must reimburse about $100,000 in fees claimed to have been incurred by the former attorneys that were dismissed in the malicious prosecution suit.

In The News . . . . Wal-Mart Settles Many Federal Unpaid Wages Lawsuits For Between $65-85 Million

Plaintiffs’ Attorneys Stand To Be Awarded One-Third of Final Recovery Up to An Estimated $28 Million Ceiling.

     Wal-Mart Stores Inc., the world’s largest retailer, recently won approval of a settlement of over 30 federal lawsuits alleging the retailer did not pay all required wages to workers. The settlement, which was blessed on November 2, 2009 by U.S. District Judge Philip M. Pro in Las Vegas, calls for a settlement payment of between $65-85 million.

     What about the plaintiffs’ attorneys? Not a bad recovery either. As reported in Bloomberg.com, the attorneys will be paid one third of the recovery up to an estimated ceiling of $28 million depending on the claims actually made by class members.

     The settled cases were combined in In re Wal-Mart Wage & Hour Employment Practices Litig., MDL 1735 (U.S. Dist. Ct., D. Nev.). For more reaction on this settlement, see Margaret Cronin Fisk’s November 3, 2009 article “Wal-Mart Wins Final Approval of Workers’ Wage Suit Settlement,” available for reading at Bloomberg.com.

In The News . . . . Jamie McCourt Wants Ex-Husband Dodgers Owner To Pay For Her Estimated $2 Million In Attorney’s Fees

She Also Wants Another $500,000 for An Accountant.

     Jamie and Frank McCourt (with Frank or Frank or Jamie being owner/owners of the L.A. Dodgers) have been in the news a lot lately. Jamie McCourt has hired well-known attorney Bert Fields, while Frank McCourt has retained equally well-known attorney Marshall Grossman as the divorce proceeding heats up.

     Aside from seeking 50% ownership in the Dodgers and reinstatement as the team’s CEO (and of perks such as travel by private jet and use of the Dodgers owners’ suite), Jamie McCourt apparently has requested that Frank pay her estimated $2 million in attorney’s fees and $500,000 in accountant fees.

     Mr. Fields has been quoted as saying that the divorce case “is going to be a battle.”

     Sounds like a past episode from “Dynasty.”

     For more details on this brewing “battle,” see Anthony McCartney and Greg Risling’s October 28, 2009 article “Jamie McCourt files for divorce from Dodgers owner,” available for reading at the Associated Press website hosted by Google.

In The News . . . . Capistrano Unified School District Hires Attorney Phillip Greer To Aid Efforts To Delay Ballot Initiative Trustee Vote

School District Has Already Spent $49,960 In Fees Over Three-Month Period.

     As reported in the Octdober 30, 2009 online edition of the The Orange County Register (in a story penned by Scott Martindale), the Capistrano Unified School District has hired well-known election law attorney Phillip Greer to aid its efforts to delay the scheduled June 2010 vote on a parent-led ballot initiative about the way school trustees are elected. The school district wants to push the vote forward to November 2010 because it will save up to $487,500 in election-related expenses.

     Over a three-month period ending September 30, 2009, the school district has spent $49,960 in attorney’s fees to research legal issues relating to the proposed trustee election changes. One San Juan Capistrano parent was quoted as saying that this was “an extraordinary amount of money to be spending” when the questions could have been answered by school district staff and the Orange County Department of Education.

In The News …. Orly Taitz’s “Birther” Lawsuit In Santa Ana Federal District Court Dismissed By U.S. District Judge Carter

Follows on the Heels of Sanctions by Georgia Federal Judge.

     In our October 19, 2009 post, we reported on a Georgia federal judge’s imposition of sanctions on local Orange County attorney Orly Taitz in a “birther” lawsuit challenging President Obama’s ineligibility for the presidency.

     Now, we can report that U.S. District Judge David O. Carter has dismissed a pending lawsuit in the Santa Ana federal court brought on the same issue by Ms. Taitz.

     As reported by Martin Wisckol in an article in the October 30, 2009 edition of The Orange County Register, District Judge Carter dismissed the locally-venued “birther” action (even though Ms. Taitz finds “birther” to be a derogatory description). Judge Carter found that federal courts do not have the constitutional power to remove a sitting president and also rebuked Ms. Taitz for what he believed were efforts by her to encourage supporters to influence his decision. Mr. Taitz is quoted as saying that she will appeal the dismissal to the Ninth Circuit Court of Appeals.

              Tilting at Windmills.  Gustav Dore.  Wikipedia Commons.

In The News . . . . Nonprofit Hit With $19,688 In Routine Costs In Farnan-Corbett Litigation

Costs Awarded to Capistrano Unified School District and California Teacher Association; Separate Fee Motions Pending Against Nonprofit.

     In our September 18, 2009 post, we chronicled the end of the lawsuit brought by Murrieta-based Advocates for Faith & Freedom, a Christian legal group representing student Chad Farnan on a pro bono basis, where high school teacher James Corbett was found to have violated the First Amendment rights of Mr. Farnan but was found not financially liable under the qualified immunity defense. However, Capistrano Unified School District and California Teachers Association were found not liable at all without resort to any immunities.

     Now, in a strange twist of fate, the school district and teachers’ union recently were awarded $19,688 in routine costs as the prevailing parties in the action. Pending later, on November 9, 2009, are the attorneys’ fees motions brought by the two groups seeking a combined $378,519 in fees. That will be heard before U.S. District Judge James V. Selna, who sits in the Santa Ana division of the U.S. District Court for the Central District of California. Advocates for Faith have indicated that it plans to appeal the entire case to the Ninth Circuit Court of Appeals.

     For more details on this story, see Scott Martindale’s article “Fees awarded to legal team of teacher sued over remarks” that is available for reading in the October 25, 2009 issue of The Orange County Register.

In The News . . . . Orly Taitz Of Mission Viejo Sanctioned $20,000 By Georgia Federal District Judge Under Federal Rules of Civil Procedure, Rule 11

District Judge Clay D. Land Issues Sanction in 43-Page Opinion.

Mission Viejo attorney/dentist Orly Taitz—who heads the "birther" movement (trying to oust President Obama from the presidency based on the allegation that he did failed to produce a satisfactory birth certificate)—has been in the news frequently for her filing of federal court actions on the "birther" issue. She now is in the news based on a sanctions order assessed against her by U.S. District Judge Clay D. Land of the Middle District of Georgia.

District Judge Land found that certain of her actions in Rhodes v. Macdonald, Case No. 4: 09-CV-106 (CDL) (M.D.Ga.) were sanctionable under Federal Rules of Civil Procedure, rule 11. He imposed sanctions of $20,000 on Ms. Taitz, payable to the Georgia district court clerk. The opinion does have a scholarly review of Rule 11 and the sua sponte authority that it gives to district judges to impose sanctions under the right circumstances.

A full copy of the District Judge Land's opinion can be found at an October 14, 2009 post of the Mountain Sage Blog. For more details on this sanctions order and Ms. Taitz's efforts before U.S. District Judge David O. Carter in the local Santa Ana federal court on the "birther" issue, see Martin Wisckol's article "Court fines 'birther' $20,000" in the October 19, 2009 edition of The Orange County Register.

BONUS.  From Slate.com, August 3, 2009, The Explainer: 

Obama is not the first to face these allegations. President Chester Arthur endured years of unsubstantiated rumors that he was born on the wrong side of the Vermont-Canada border. Some opponents questioned Herbert Hoover's eligibility as well. Hoover met the Constitutional requirement of having been a resident within the United States for 14 years, but those years were not consecutive, and the Founding Fathers weren't clear on whether the distinction matters. Neither case made it to court.

In The News . . . . Estate of James Joyce Settles Copyright Action By Paying $240,000 In Attorney’s Fees to Professor Schloss And Her Counsel

     In a long-running dispute between the Estate of James Joyce (James Joyce being the celebrated author of Ulysses and Finnegans Wake) and Stanford University Consulting Professor Carol Shloss, the Estate finally agreed to pay Professor Schloss $240,000 in attorney’s fees she incurred in a successful copyright action against the estate.

     The dispute arose when the estate allegedly pressured the publisher of Ms. Schloss’s book, Lucia Joyce: To Dance in the Wake (2003), to excise a substantial amount of source material that the estate claimed was protected by the estate’s copyright. (Ms. Shloss tried to put a different spin on James Joyce’s observations about his daughter Lucia in her book, arguing he did not see her as mentally deranged but having an attractive adolescent appeal.) Ms. Shloss commenced a declaratory relief action asking for a declaration that she had a right to publish the excised material, beating back the estate’s motion to dismiss the suit. In 2007, a settlement was reached between the parties by which Ms. Shloss was allowed to publish the excised material on the Internet and in print in the United States. However, the issue of attorney’s fees was not covered in that settlement.

     Ms. Shloss, who was represented by Stanford Law School’s Fair Use Project (spearheaded by executive director Anthony Falzone) and two private law firms, moved to recoup more than $400,000 in fees from the estate. The district judge ordered the estate to pay about $326,000 in fees, a determination appealed to the Ninth Circuit. Before the appeal was decided, Professor Shloss and the estate reached a settlement by which the estate agreed to pay $240,000 to Ms. Shloss. Under the settlement, Schloss’s lawyers will split the fees and Shloss will retain a portion for a research fund.

     For more on this story, see the September 28, 2009 post on Business Wire and Cynthia Haven’s article on the September 28, 2009 Stanford Record post.

     To hear James Joyce reading from Finnegan's Wake, click here.

In The News . . . . Final Tab Is In On Great Park Dispute—Over $200,000 In Fees Expended

The Orange County Register Obtains Final Numbers from City of Irvine.

     We have reported in past posts—see our July 1 and August 22, 2009 posts--about Great Park board members Christina Shea and Steven Choi’s lawsuit to obtain documents about the search for a Great Park CEO.

     The final attorney’s fees tab is in! Sean Emery, in an article entitled “The cost of secrecy,” published in the September 23, 2009 The Orange County Register, reports that the City of Irvine spent $126,472 defending the lawsuit and then paid an additional $75,000 to the attorneys for Ms. Shea and Mr. Choi. You can do the math—over $200,000 for this exercise in secrecy that drew a fairly strident opinion from the Santa Ana Court of Appeal in reversing a lower court who found the Board members did not prevail in their lawsuit.

In the News: Kopits Ordered To Pay $47,157.50 In Attorney’s Fees To City Of Yorba Linda

 

Horse Trail Blocking Incident Draws Criminal Sentence As Well As Fee Assessment.

     Yorba Linda couple Todd and Deborah Kopit were in the local Orange County news after being found guilty of blocking a horse trail behind their home. The Kopits had claimed that the wooden gates were necessary to protect their property. The jury apparently rejected this defense.

     Recently, Orange County Superior Court Judge Daniel T. Brice imposed a criminal sanction on them (including 90 days jail time for Mr. Kopit that could be suspended if he does manual work for Caltrans), fined them the maximum amount of $1,000, and ordered the couple to pay $47,157.50 in attorney’s fees to the City as restitution for expenses incurred in prosecuting the case. Jamie Raymond, a City attorney, was quoted as saying that the fees ordered to be paid were about half the amount of what the Kopits’ trial cost the city.

     For more on this story and a photograph of the pertinent horse trail, see Jessica Terrell’s Yorba-gate story published in the September 18, 2009 online issue of The Orange County Register.

 

In the News . . . U.S. District Judge Selna Grants Qualified Immunity To James C. Corbett In Farnan First Amendment Case

 

Ruling Immunizes Dr. Corbett and Brings the Matter to a Close.

     Plaintiff/student C.F., by and through his parents Bill and Teresa Farnan, filed a suit for violation of C.F.’s First Amendment rights by the Capistrano United School District and Dr. James C. Corbett arising out of Dr. Corbett’s alleged hostile religious remarks in an Advanced Placement European History class. This case has been in the news frequently in Orange County in various forms of media.

     There had been a fear that Dr. Corbett might face substantial fee exposure to plaintiff’s attorneys after U.S. District Judge James V. Selna ruled that there was merit to Plaintiff’s claim based on one statement made by Dr. Corbett. However, that fear did not materialize after a September 15, 2009 ruling on District Judge Selna.

     He ruled that Dr. Corbett had qualified immunity. Here is how he eloquently put it in his order although clearly reminding everyone that a First Amendment violation had been previously found:

     “. . . today’s application of the doctrine of qualified immunity recognizes that public officials operate in an environment not shared by their colleagues in the private sector. Public officials have no choice about interacting with the public; that is their job. Unlike interactions in the private sector, every interaction brings into play potential Constitutional rights and the possibility of infringement of those rights. Perhaps this is most clearly seen in the context of law enforcement where advisements of Constitutional rights, search and seizure issues, and the use of lawful force are a part of a police officer’s daily responsibilities. But the same is true of a teacher presenting a challenging subject such as Advanced Placement European History which cannot be fairly treated without discussing religion, just as Corbett was doing during the fall of 2007. Public officials must be able to do their jobs without fear that every misstep, however slight, will subject them to liability and the paralysis which goes with such a fear. Thus, the doctrine of qualified immunity looks to whether there was a clearly established right in issue. Here, the Court has found that there was not, and thus Corbett is shielded from liability—not because he did not violate the Constitution, but because of the balance which must be struck to allow public officials to perform their duties. The law as it existed in the fall of 2007 did not make clear that a single statement in an area of the law which lacks precision could violate the Constitution. The decision here on the merits advances the clarity of Farnan’s right to be free of anti-religious comments, but the extent of the advance and the results of future applications of the doctrine of qualified immunity in this area are for another day and another court.”

In The News: Hulk Hogan Likely To Sue Attorneys For Fee Billings In His Defense Of Personal Injury Case Arising Out Of Son's Street Racing Fallout

Superhero Confronts Attorney's Fees Issue.

     It is not just normal folks that sometimes have issues with attorney's fees . . . celebrities are not above the fray.

     Hulk Hogan, whose real name is Terry Bollea, has claimed to have paid more than $1.5 million to a law firm defending him in a personal injury action arising out of his son's street racing activities in downtown Clearwater, which resulted in injuries to son's friend who was a passenger in the car at the time. Lawsuits proliferated, but Mr. Hogan claims that he learned way too late that his insurance company had offered to provide insurer-paid counsel. According to a recent newspaper article, the attorneys that he had paid never informed Mr. Hogan about the insurance company's offer. Now, a legal malpractice action has been filed by Mr. Hogan against the attorneys, in a case that we will try to follow in the aftermath of this attorney's fees donnybrook. Stay tuned, although Mr. Hogan's adversaries in the case (his former attorneys) have denied the claims as being baseless in nature.

     For more details on this story, see Curtis Krueger's September 14, 2009 story "Hogan sues lawyers over fees" in the St. Petersburg Times, available for reading at tampabay.com.

In The News: Settlements, Settlements, Settlements Abound … With Large Attorney’s Fees Being Sought or Paid

Also, Co-Contributor Marc Wins 3-Day Jury Trial.

U.S. Navy Sonar Whale Settlement.

     In our September 16, 2008 post, we reported on the Ninth Circuit’s decision in National Resources Defense Council, Inc. (NRDC) v. Winter, where Irell & Manella was awarded $437,584.24 in fees in the dispute to protect whales from U.S. Navy sonar use off the California coast. The case worked its way to the Ninth Circuit, where Irell won another battle in its efforts to obtain fees for its pro bono work on the case. Now, the Blawter (the Los Angeles Daily Journal’s blog) has reported that the Navy has agreed to pay Irell & Manella $1.1 million in attorney’s fees in an approval request pending before U.S. District Judge Florence Marie Cooper.

Neil Harvey Will Get Paid $1.45 Million from City of Newport Beach.

     In our May 18, 2009 and June 16, 2009 posts, we discussed Newport Beach police sergeant Neil Harvey’s win over the City of Newport Beach in a gay slurs case. Mr. Harvey won about $2 million after a jury trial and postjudgment proceedings, $706,755 of the amount being attorney’s fees recoupment. Now, the City’s insurer have agreed to pay $1.45 million to settle the matter, an amount apparently accepted by Mr. Harvey. For more details, see Jeff Overley’s story “Sergeant to get $1.45 million” in the September 11, 2009 issue of The Orange County Register.

IPO Securities Litigation Settlement--$195 Million in Fees and $50 Million in Expenses Being Sought.

     Lawyers representing plaintiff investors in the IPO Securities Litigation will be requesting $195 million in attorney’s fees and $50 million in expenses as part of a settlement package that will be the subject of an approval hearing on September 10, 2009 before U.S. District Judge Shira Scheindlin of the Southern District of New York federal court. Because the case settled for $586 million, plaintiffs’ lawyers are seeking one-third of that amount, plus expenses. (Judge Scheindlin is well known for her excellent opinions on issues relating to spoliation in the electronic discovery area.)  See Reuters report.

Wal-Mart Settles Meal/Rest Break Class Action in Alameda County Superior Court.

     As reported by Kate Moser in a Legal Pad post on September 11, 2009, Wal-Mart has agreed to settle an Alameda County Superior Court class action involving claimed denials of meal/rest breaks for certain employees. Wal-Mart agreed to a $77 million-$152 million settlement, less than the $172 million awarded by a jury to the class in 2005. Fred Furth, one of the lead California attorneys on the case, indicated he would seek more than $50 million in attorney’s fees (first filed in 2001) and stating he invested millions in the case. It will be up the trial judge to decide the fees that will be awarded under the settlement.

Co-Contributor Marc Wins Jury Trial.

     Co-contributor Mike sends hearty congratulations to co-contributor Marc. He recently won a 3-day jury trial for three defendants in a case tried in front of Orange County Superior Court Judge Derek Hunt. Way to go Marc!

In The News … Attorney’s Fees Are The Main Attraction In L.A. Audit Dispute and Broadcom Securities Settlement, And … “Remoras On the Loose” Punctuates Denial of Objectors’ Fee Request In UnitedHealth Group Securities

City Council’s Fee Request May Impede Settlement over Audit Power Dispute.

     City of Los Angeles and the City Controller have been locked in a lawsuit battle over whether the controller’s office can audit the City’s workers’ compensation program. Early on in the lawsuit, Los Angeles County Superior Court Judge Mark V. Mooney issued a preliminary injunction based on his view that the city charter did not give the controller the power to audit the program in the city attorney’s office.

     The parties, especially with new personalities involved on both sides, seem like they want to settle the lawsuit. The stumbling block? City controller’s desire to recoup $100,000 in incurred legal fees, a demand that city does not want to accede to in dismissing the case. The matter is still in the talking stages and apparently not yet resolved.

     For more information on this dispute, see Maeve Reston’s September 2, 2009 article “L.A. councilman wants to halt former officials’ legal fight and ask voters to set power of city controller,” available for reading on the latimes.com website.

Broadcom Backdating Settlement Proceeds May Be Eaten Up In Attorneys’ Fees By Both Sides.

     We synopsize a report by Susan Beck in an article entitled “Broadcom Settles Backdating Case For $118 Million; Lawyers’ Fees Exceed Amount,” available for reading on the American Lawyer.com website.

     Broadcom announced that it recently settled a stock option backdating derivative lawsuit for $118 million (to be funded by Broadcom’s D & O insurers). However, Ms. Beck makes the case that most of the moneys will go to lawyers--$11.5 million for the plaintiffs’ lawyers and $130 million-plus to the defense attorneys representing the 19 officers and directors.

     David Siegel of Irell & Manella, which represents Broadcom, has a different take: the D & O insurers had said they owed nothing, but at least $43.3 million of the defense tab is included in the $118 million being shelled out by insurers. He also characterized the $118 million insurance payment as “a payment to Broadcom for its benefit.”

(Co-contributors Marc and Mike are alumni of Irell & Manella, and enjoyed their time with the firm and the lawyers they practiced with.)

Securities Settlement Objectors – “Remoras On The Loose Again” – Lose Their Request For A Fee Award of $225,000.

     This last one is a story that we cannot resist sharing with you readers out there.

     In our August 12, 2009 post, we reported on the status of the UnitedHealth Group securities lawsuit. We now have an update, but with a twist we think you will enjoy.

     Late last year, U.S. District Judge James M. Rosenbaum approved a settlement in the securities class action lawsuit (which we believe was a stock option backdating case).

     Several weeks later, four attorneys filed a late objection on behalf of objectors, arguing that the requested class counsel fees of $110 million was excessive in nature. Ultimately, Judge Rosenbaum approved the settlement and awarded class counsel nearly $68.4 million in fees (a reduction of nearly $42 million). Taking credit for this reduction, objectors then filed their own fee request for some $225,000.

     Judge Rosenbaum was not amused, but emphatically denied the request in amusing language.

     He started out by stating that “The remoras are loose again.” Judge Rosenbaum found that the objectors contributed nothing to his reduction decision, expressly rejecting the lion’s share of objectors’ arguments directed to the use of paralegals and contract attorneys. Not only was their eight-page-long objection two weeks late, it raised no argument upon which the Court relied in its deliberation or ruling concerning class counsel’s fees motion. He ended on this note: “Objectors’ Counsel are entitled to an award equal to their contribution … nothing.”

     Judge Rosenbaum also defined “remora” based on a dictionary definition. A remora is “any of a family (Echeneidae) of marine bony fishes that have the anterior dorsal fin modified into a suctorial disk on the head by means of which they adhere especially to other fishes.” In other words, suckerfish, fish that attach themselves to bigger sea-dwellers, like sharks, in order to gain transportation and protection.

 

In The News and Follow Up On Past Posts Of Interest: Suleman Action And Choi/Great Park Updates . . . Plus, A Look At the New Court of Appeal Building in Santa Ana

Suleman Case—Guardian Ad Litem Appointment Reversed and Superior Court Judge Allows Petersen Suit to Continue.

     On May 9, 2009, we reported on an action filed by child rights activist Paul Petersen, who had an objective to get a guardian appointed for the octuplets of Nadya Suleman. We have some updates for you on this case.

     The Fourth District, Division 3, in a 3-0 unpublished decision authored by Justice Fybel, issued a mandate/prohibition writ overturning the earlier appointment of a guardian ad litem to represent the octuplet minors’ interests. In Suleman v. Superior Court, Case No. G042399 (Aug. 11, 2009) (unpublished), the appellate court found that the guardian ad litem appointment was infirm because there was no admissible evidence indicating mother’s representation of the minors was inadequate (as required under Probate Code section 1003(a)(1)) and mother was not given notice of the guardian ad litem appointment request.

     On August 21, 2009, Orange County Superior Court Judge Gerald Johnston rejected Ms. Suleman’s motion to dismiss the Petersen lawsuit, determining that there is no statutory requirement that a petitioner must be an “interested person” or enjoy any type of relationship with the minors named in the petition.

     One of the brewing potential upshots will be attorney’s fees—if a guardian is appointed, the amount of any fees which will be awarded to the guardian’s attorneys.

     If you want more details on these recent developments, see Rachanee Srisavasdi’s article, “Judge refuses to throw out octuplets guardian suit,” published in the August 22, 2009 edition of The Orange County Register.

     Note:  the octuplets were born January 26.  They are called: Nariah, Makai, Jeremiah, Jonah, Josiah, Noah, Isaiah, and Maliah.

Choi/Great Park Action—City of Irvine Agrees to Pay $75,000 In Attorney’s Fees Incurred by Council Members Shea and Choi.

     On July 1, 2009, we did a post on Choi v. Orange County Great Park, where the Fourth District, Division 3 overturned a decision refusing to award Irvine council members Shea and Choi attorney’s fees under the private attorney general statute for prevailing in a dispute over getting documents relating to the Great Park’s CEO search.

     Now, we can report that the City of Irvine has agreed to cover $75,000 in attorney’s fees incurred by the council members as part of a settlement in which the members have already been allowed to inspect and copy relevant documents during a closed-door meeting. Apparently, Irvine has not revealed to the press how much it spent in defending the lawsuit.

     See Sean Emery’s article, “Irvine pays $75,000 in suit over Great Park,” if you want more details. The article is published in the August 22, 2009 edition of The Orange County Register.

Fourth District, Division 3 Moves Into New Quarters.

     Co-contributors Marc and Mike, as well as colleague Rob Stein, were treated to a look at sections of the new quarters of the Fourth District, Division 3 Court of Appeal. The appellate court recently relocated from its former base on Spurgeon Street to a new building located at 601 W. Santa Ana Boulevard, Santa Ana, California. The new quarters are impressive and allow consolidation of all the justices; earlier, because of space limitations, the justices were spread out over two different locations. We should like to thank the Orange County Bar’s Appellate Section for the look at the new appellate quarters. Below, co-contributor Marc shows you a picture he took while the building was under construction and a recent picture showing the completed building.

 

Photo of courthouse under construction.  Photographer:  Marc Alexander

Photo of completed courthouse.  Source: court website.

Attorney's Fees in the News: WSJ Law Blog Reports Next Weil Gotshal Request in Lehman Bankruptcy is $45.2 Million

 

A Long, Lonely Summer for Attorneys at Weil Gotshal.

     In an April 18, 2009 post, we reported that Weil Gotshal was seeking $55,000,000 in fees in the Lehman bankruptcy for work done from September 15, 2008, to January 31, 2009.  That was then, this is now. 

     Ashby Jones reports for the WSJ Law Blog that Weil is now seeking $45.2 M for the period from February through May, 2009:

     "Weil said it worked more than 86,000 hours on Lehman’s case in the latest four-month request period and had to deal with more than 1,030 legal motions, notice, applications, objections, briefs, orders and other pleadings in the matter. The firm said it ultimately reviewed three million documents related to requests from the examiner in the case."

     Erin Geiger Smith for The Business Insider writes, "one thing cannot be denied:  there are a whole lot of attorneys at 767 Fifth Avenue who have no idea it's summer."  This is all a build-up to our video link below:

Sealed with a kiss -- 1962 -- Brian Hyland

Attorney's Fees in the News: Political Football? -- Senate Bill S437 If Passed Would Allow for Deduction of Attorney-Advanced Expenses and Court Costs in Contingency Fee Cases.

 

Obscure Wedge Issue in the Making?

     Have we managed to identify a minor political wedge issue involving the very obscure issue of tax breaks for expenses in contingency cases?  Read on, and make up your own mind.

     David Freddoso and Kevin Mooney have an opinion piece in the San Francisco Examiner under the headline, "Trial lawyers seek return on contributions to Senate Democrats."  The subject is S437, introduced by Senator Arlen Specter (Dem., PA) earlier this year, two months before he switched parties.  The authors explain that the bill, if it becomes law, will allow trial attorneys in contingency cases to get an immediate tax deduction for upfront expenses invested in contingency fee cases.  "The tax break," claim Freddoso and Mooney, "is reportedly worth $1.6 billion to trial lawyers."

      David Freddoso is the author of a book entitled, "The Case Against Barack Obama: The Unlikely Rise and Unexamined Agenda of the Media's Favorite Candidate," which title discloses the author's bias.

      Kevin Mooney describes himself as an investigative reporter who writes for The Washington Examiner.

     While singling out Sen. Arlen Specter, who was still a Republican at the time he sponsored the bill, the two authors fail to point out that the co-sponsors included Sen. Mike Crapo, (Rep., ID), Sen. Mary L. Landrieu (Dem., LA), Sen. Ron Wyden (Dem., OR), Sen. Lindsey Graham (Rep., S. CAR.), Sen. Patrick T. Leahy (Dem., VT), and Sen. Debbie Stabenow (Dem., MI).  (Sen. Martinez announced on August 7 that he will be resigning from the Senate).

     According to our ever useful and often reliable source, Wikipedia, the San Francisco Examiner is currently run by a subsidiary of Philip Anschutz, SF Newspaper Company.  Mr. Anschutz is a Republican donor and supporter of former Pres. George W. Bush.  Also, the parent company of The Washington Examiner, Journal Newspapers Inc., was purchased by Philip Anschutz in October 2004.

In the News: Corporate Lawsuits Are Down, But Not The Expense of Prosecuting Or Defending The Ones That Are Brought

2008 Fulbright Litigation Trends Survey Confirms the Reality of the Situation.

Fulbright & Jaworski has come out with its 2008 Litigation Trends Survey.

     This survey shows that companies having at least one lawsuit filed against them in 2008 fell to 79%, as compared to 83% in 2007. Likewise, companies bringing at least one legal action tallied only 56% of surveyed companies, a large drop from the 88% number that did so in 2004. The survey also showed that there was an increase in 2008 multi-plaintiff suits involving wage-hour claims. (27% of the surveyed companies had more than 20 new lawsuits commenced against them in 2008, while 18% had more than 50 new lawsuits to defend.)

     Interestingly enough, even with the downturn in cases being prosecuted or defended by companies, the litigation costs have not stemmed. Rather, 45% of American companies are spending at least $1 million annually on litigation in 2008, up 1% from 2007.

     For more statistics from this survey, see “Corporations at the Courthouse,” a synopsis contained in the August 2009 edition of California Lawyer (at page 11).

Attorney's Fees in the News: Coughlin Stoia Geller Rudman & Robbins Awarded $65M for Work on Securities Class Action Against UnitedHealth Group

 

But Federal Judge in Minnesota is Not a Happy Camper.

     Half empty or half full?

     "According to one very irate federal judge in Minnesota," reports Dan Levine for The Recorder, "jailed plaintiffs lawyer William Lerach just helped his former colleagues lose about $45 million in fees."  Still, Coughlin Stoia Geller Rudman & Robbins did get a fee award of $65M.

     The problem, according to U.S. District Judge James Rosenbaum, was that the "previous first-named partner neglected a significant obligation to the class:  He failed to timely and fully inform the court of his role in the Milberg Weiss debacle."  The judge probably wouldn't have appointed Lerach's firm as lead counsel, had he known all the facts.  But apparently the firm did a pretty good job after all, as the court approved a $925M settlement against UnitedHealth and former executives resulting from backdating of options.  Coughlin Stoia name partner Patrick Coughlin explained that the government told Lerach that he was not a target, then changed its mind.

     An interesting side point is that Coughlin Stoia asked the judge to defer to the firm's deal with its lead plaintiff, because a report from a professor opined that the fee arrangement was reached in a free market.  Said the judge:

     "Seldom have the groves of academe and the ivory towers sheltered within their leafy bowers seemed farther from reality.  A lecture on the virtues of the unrestrained free market sounds a bit hollow in light of the parties', this Nation's, and indeed the world's, experience with the beauties of self-regulated financial markets during a period remarkably coterminous with the existence of this case."  Evidently, the judge and Gordon Gekko do not see eye-to-eye.