CALIFORNIA ATTORNEY'S FEES

In The News . . . . Self-Defense Insurance Available For Criminal/Civil Cases Involving Guns, Costa Mesa Has Spent Over $457,000 On Marijuana Dispensary Lawsuits, And Napa County Judge Denies $1.3 Million Private Attorney General Fee Request In A Water La

 

USCCA Has Gun Self-Defense Insurance.

     Since the right to bear arms has seemingly gotten more constitutional/political oomph lately, we saw an interesting report that United Stated Concealed Carry Association (USCCA), an organization devoted to armed citizens who have decided to conceal and carry guns, has created a unique concealed carry insurance-backed membership benefit. A Self-Defense SHIELD insurance-backed, membership benefit will cover up to $300,000 in legal defense expenses should a concealed carrying member face criminal or civil charges for using a weapon in self-defense.

Costa Mesa Sought Federal Enforcement Help Due in Part to Mounting Legal Expenses in Marijuana Dispensary Lawsuits.

     Joseph Serna, in a February 8, 2012 post in the Daily Pilot, informs us that the City of Costa Mesa asked for federal authority enforcement help in attempts to shutter illegal marijuana dispensaries due in part to the City’s high legal costs in challenging the clinics. Mr. Serna reports that the City has spent $457,612 on such court costs.

San Diego Man’s Attorney Loses Request to Recoup $1.3 Million in Attorney’s Fees For Representing Client in Kimball Dam Water Dispute.

     A February 8, 2012 post from the Napa Valley Register informs us that Napa County Superior Court Judge Raymond A. Guadagni, on February 8, denied attorney William McKinnon’s request that Calistoga pay $1.3 million in attorney’s fees for his representation of San Diego’s Grant Reynolds, who had sued to force the City to release more water from behind the Kimball Dam to boost fish habitats downstream in the Napa River. The judge found that the fees were not recoverable under California’s private attorney general statute, with Calistoga mainly arguing that the ultimate decision to release more water downstream was the result of pressure from state regulator’s rather than Reynolds’ lawsuit. For its own part, Calistoga has spent at least $900,000 on its own lawyers in fighting this and other water rights lawsuits brought by Mr. Reynolds.

In The News . . . . California State Senate Approves Bill To Pay $13 Million In Settlement And Court-Ordered Fees In Legal Disputes By State

 

$1 Million of Proposed Appropriation Are Court-Ordered Fees to Winner in Violent Video Game Litigation.

     As reported in a January 31, 2012 post in The Sacramento Bee, the California State Assembly has approved Senate Bill 730, which in turn proposes payment of $13 million in settlements and court-ordered attorney’s fees in legal disputes by the State of California.

     Included in this amount was $1 million in court-ordered fees in Entertainment Merchant Association’s successful challenge of a California law banning sale of violent video games to minors--a dispute going all the way to the U.S. Supreme Court, who sided with the Association.

     Now, the bill will proceed to the State Assembly and, if passed, then goes to Governor Jerry Brown for signature, with Governor Brown ironically defending the California ban when he was Attorney General (although that it what AG’s typically do).

In The News . . . . MGA/Mattel Bratz Doll Litigation Keeps On Giving

 

Evanston Insurance Co./Markel Corp. Lose Two Summary Judgment Motions in January 27, 2012 Pair of Rulings.

     In this on-going litigation saga, Evanston Insurance Company and its parent corporation, Markel Corp. lost summary judgment motions on insurance coverage issues relating to their potential responsibility to MGA Entertainment Inc. in the case it won against Matell over the Bratz doll. U.S. District Judge David Carter found that Mattel’s fourth amended counterclaim did not extinguish all potential coverage and that Markel did not legally negate the theory that it might be the alter ego of Evanston with respect to insurance defense/coverage obligations to MGA.

     More insurance companies have motions pending in this case, so stay tuned.

Amanda Bronstad provides more details in her January 31, 2012 post at The National Law Journal website.

Wrong doll:  Talking Tina with Telly Savalas, from The Twilight Zone.

In The News . . . . Costa Mesa”s Legal Costs Soar In Outsourcing Union Lawsuit Fight

 

City Has Spent a Total of $1.05 Million on All Leal Expenses from July- November 2011, Almost $400,000 On Outsourcing Litigation.

     Sean Greene, in a January 30, 2012 article in The Orange County Register, has reported that the City of Costa Mesa’s total legal expenses for July-November 2011 tallied nearly $1.05 million. More than $400,000 of this was attributable to the City’s oursourcing litigation fight with the Costa Mesa City Employees Association, which reportedly expended 400% less than the city has spent so far. The law firms of Jones and Mayer as well as Jones Day seemed to be the recipients of a lot of the legal expenses paid by Costa Mesa during this time, according to the article. Obviously, some of the employees association representatives have chided the City for spending so much on litigation to save outsourcing costs that might be eaten up in legal fees, rather than go back to the table and try to negotiate the dispute out. (These totals do not even reflect Jones Days’ services for December 2011 and January 2012, amounts not yet billed according to the article.)

In The News . . . . Orange County Settles Federal Excessive Force Civil Rights Lawsuit For $375,000

 

Big Chunk of Settlement Went to Attorney’s Fees for Winning Plaintiff.

     As reported by Tony Saavedra in an article in the January 26, 2012 Orange County Register, Orange County has paid $375,000 to end a federal lawsuit alleging that sheriff’s deputies arrested the wrong man, ordered him to strip naked, and beat him while taking pictures with their camera phones—a successful excessive force civil rights lawsuit can result in plaintiff recovering mandatory fees under a fee-shifting statute (though the fees must be reasonable in nature).

     The actual lawsuit by plaintiff Jason Deats of Lake Forest went to trial before a Los Angeles federal jury, which concluded that excessive force was used by the deputies and that he was maliciously prosecuted by the Orange County District Attorney’s Office. Jurors did not buy that he was stripped and beaten, or that the conduct justified punitive damages. The jury did award Mr. Deats $49,451 in compensatory damages. Orange County was also ordered to pay Mr. Deats’ legal fees to the tune of $325,549. This meant the settlement was a $25,000 concession plus waiver of interest and additional costs/fees. A large part of the settlement was for reimbursement of attorney’s fees, with civil rights case law written to encourage fee shifting in favor of prevailing plaintiffs.

In The News . . . . Texas Contingency Plaintiffs’ Attorneys Garner Close To $22 Million Fee Award After Plaintiffs Unsuccessfully Challenge Contingency Arrangement

 

Plaintiffs’ Contingency Arrangement Was Valid and They Breached It.

     Here is an interesting one from a January 30, 2012 post in the Texas Lawyer.

     Thee Dallas firms -- Lisal Blue of Baron and Blue; Charla G. Aldous of the Aldous Law Firm; and Stephen F. Malouf of the Law Offices of Stephen F. Malouf (also designated as “BAM”) -- represented Albert G. Hill III, Erin Nance Hill and their minor children (“Hill III”) in a 2010 settlement pursuant to a contingent fee arrangement by which BAM was entitled to over $33.7 million. After unsuccessfully challenging the contingency fee agreement, Hill III were determined to have breached the fee agreement, but U.S. District Judge Reed O’Connor did reduce BAM’s fee recovery to a little under $22 million after sustaining some of Hill III’s objections regarding the contingent fee.

     Pretty nice recovery in the state boasting that everything is bigger in it, or “Texas-sized.” (“Even spiders know everything is bigger in Texas.”)

Caption:  “Cattleman with his grandson at auction of beef steers and breeding stock at the San Angelo Fat Stock Show. San Angelo, Texas. The Stetson hat, leather coat and boots are standard everyday wear of ranchmen. There is an old saying in Texas that a man never buys but two Stetsons, one when he gets married and the other when his oldest son gets married.”  March 1940.  Lee Russell, photographer.  Library of Congress.

In The News/Retainer Agreements: ABA Journal Summarizes Results of Recent American Lawyer Report On Alternative Fee Arrangements

 

They Are Catching On, Along With Client Requests for Discounts.

     Co-contributor Mike, who is a member of the American Bar Association, found an interesting article by Debra Cassens Weiss dated January 17, 2012 in the ABA Journal Weekly Newsletter, where she summarized a recent American Lawyer report on alternative fee arrangements this way:

     “ . . . [in an] American Lawyer survey of leaders at large law firms[, . . . ] more than 81 percent said more clients are seeking discounts, and about 55 percent said clients are asking for deeper discounts. Of the law firms that used alternative or value-based fees in 2011, 92 percent had used flat fees, 88 percent had used blended rates, 83 percent used incentive or success fees, and 82 percent used collars or caps. ([. . .] a collar is an arrangement where there is an agreed-upon flat fee, and a discount when the bill exceeds the flat fee by a certain percentage.)”

Civil Rights/In The News . . . . Civil Rights Plaintiff Winning $500 Entitled To Fee Award Of $80,000

 

U.S. Magistrate Judge’s Recommendations Has Some Nice “Fees on Fees” Hints.

     In a January 13, 2012 post of the Courthouse News Service, we are informed that U.S. District Judge Jack Weinstein accepted U.S. Magistrate Judge Roanne L. Mann’s recommendation that a civil rights plaintiff should be awarded $80,000 in attorney’s fees for prevailing in the interesting civil rights case of Brown v. Starrett City Associates, Case No. 09-CV-3282 (JBW) (E.D.N.Y.).

     Civil rights plaintiff, a Brooklyn woman, was handcuffed by a policeperson after she adjusted the shoulder strap of a young woman who was earlier handcuffed in an altercation occurring outside plaintiff’s abode. Plaintiff allegedly told officers that she had existing wrist problems, but was cuffed very tightly and only had the pressure alleviated after her wrist became swollen from the cuffing. She filed a civil rights lawsuit against the police, with a jury awarding her $500 for excessive force.

     Recently, District Judge Weinstein accepted the magistrate judge’s recommendation that plaintiff be awarded $80,000 in attorney’s fees under the pro-plaintiff fee-shifting provision codified at 42 U.S.C. § 1988. See Judge Weinstein’s January 6, 2012 Order.  Plaintiff was found to have prevailed, with even the modest damages awarded supporting an affirmative fee order under the civil rights statutes. The magistrate judge rejected that plaintiff was limited to the 33 1/3% contingency fee bargain when it came to awarding reasonable fees under section 1988.

     The biggest reduction was registered in the “fees on fees” area--plaintiff’s counsel’s request for fees in preparing the fee motion itself. Counsel claimed 29 hours for this work, but the magistrate judge reduced it by 7 hours--observing, in the process, that the norm for fee application work in the E.D.N.Y. is 5-15 hours, citing Murray ex rel. Murray v. Mills, 354 F.Supp.2d 231, 241 (E.D.N.Y. 2005) as support for this generalized work effort with respect to “fees on fees.”

     For a copy of the magistrate judge’s recommendation (Doc. 89, filed on 10/27/11), see Courthouse News Service’s January 13, 2012 post for a link to the recommendation.

        BLAWG BONUS:  “Jack Bertrand Weinstein (born August 10, 1921) is a United States federal judge in the Eastern District of New York. Judge Weinstein was appointed in 1967 by President Lyndon Johnson. From 1980 to 1988, he served as chief judge of the district. On March 1, 1993, he took senior status; however, unlike some senior judges, he has maintained a full docket. He is the author of a leading treatise on evidence and numerous articles and books, and is widely regarded as one of the most respected and influential living judges in America.”  Source:  Wikipedia.

Retainer Agreements/In The News . . . . New York Voids Retainer Agreement Terms Discouraging Clients From Following An Exiting Attorney

 

Attorney Lien “Penalty” Provision Also Invalidated.

     As reported by both the American Bar Association Journal and Buffalo News in January 10, 2012 posts, New York Supreme Court Justice John A. Michalek voided two provisions in a retainer agreement apparently designed to encourage clients from following an exiting attorney to another legal firm. The ruling came in a lawsuit by Cellino & Barnes against departing attorney Paul B. Becker by which the firm sought a determination he had violated the retainer agreement.

     First, the justice found that a provision forbidding a departing lawyer from informing clients of his impending exit is unenforceable and violated governing attorney ethics rules.

     Second, the justice also voided a contract provision saying that the old firm could put a 43.56% lien on future work done for a client by the exiting lawyer who went elsewhere, labeling the provision a penalty. He noted that the percentage reserved to cover case acquisition costs had not changed since 2005 such that the percentage was a penalty because it bore no relationship to actual damages or expenses of the firm. Also, “[t]o the extent that a departing lawyer ... must continue to pay the firm’s overhead in the amount of 43.56 percent of the fees that he earns if he represents a former firm client, that penalty serves as a strong disincentive for him to represent any client who wishes to follow him.”

Above:  Prisoners in shackles.  1905 – 1915.  Photographer:  Sergeĭ Mikhaĭlovich Prokudin-Gorskiĭ (1863-1944).  Library of Congress.

In The News . . . . Federal Circuit Affirms $4.7 Million Fee/Expert Costs Award Against Losing Patent Infringement Litigant

 

Case Deemed Exceptional for Fee Award and Expert Fees/Costs Were Within Inherent Sanctioning Power of District Court.

     In MarcTec LLC v. Johnson & Johnson and Cordis Corp., Case No. 2010-1285 (Fed. Cir. Jan. 3, 2012), the Federal Circuit affirmed a Sourthern District of Illinois district judge’s rulings by which a $3,873,865.01 attorney’s fees award and a $809,788.02 expert fees/costs award to the defense were fashioned. The appeals court found that the case was indeed “exceptional” so as to trigger the patent fee-shifting statute (35 U.S.C. § 285) and that the expert fees/costs award was justified under the district judge’s inherent sanctioning power.

     We thank both NALFA’s fee blog and the Patently-O blog, in their January 4, 2012 post, for alerting to this decision. A copy of the Federal Circuit’s slip opinion can be accessed on the Patently-O blog’s post.

In The News . . . . San Francisco Consumer Group Plaintiff Denied Request For $96,200 In Attorney’s Fees For Interim Partial Win

Cool Response to Fee Request in Cell Phone Radiation Case

     As reported by Bob Egelko in a recent post at sfgate.com (home of the San Francisco Chronicle), CTIA-The Wireless Association--after earlier partially prevailing in a suit to narrow San Francisco’s novel law requiring cell phone dealers to warn about possible radiation dangers--was not successful in its move to recover $96,200 in attorney’s fees. U.S. District Judge William Alsup refused to award fees against the City of San Francisco because no final judgment had been reached and the plaintiff did not win a complete, permanent victory -- rather, the success must be “enduring rather than ephemeral,” something the jurist could not find at this incomplete juncture of the case.

In The News . . . . Nanny/Chauffer Of Indiana Pacer Owner Herb Simons Must Pay Fees To Him And His Wife After Losing Employment Lawsuit And Delaware Chancery Court $300 Million Fee Award Is 15% Of the Judgment Against Losing Defendant

 

Simons Garner $122,000 Fee Award After Winning Employment Litigation Brought By Nanny and Chauffer.

     As reported by an AP release of December 28, 2011 in The Sacramento Bee, nanny Claudia Leite and chauffer Robert Young (formers, we would surmise) lost their employment discrimination/wage-hour suit against Indiana Pacers owner Herb Simon and his wife. That is not all. They were recently ordered to pay $122,000 in attorney’s fees to the Mr. Simon and his wife, because the judge did not believe much of their testimony. Attorneys for Mr. Simon have said the couple spent $1.4 million defending against the case.

$300 Million Fee Award in Southern Copper Derivative Suit Was About 15% Of Total Judgment.

     On December 24, 2011, we reported on a Delaware Chancery Court’s $300 million award of attorney’s fees to Southern Copper shareholders’ attorneys, likely to be the third largest fee award after the Enron and Tyco fee awards. However, a December 28, 2011 article by Joe Palazzolo in The Wall Street Journal does give some perspective to the award: it was about 15% of the total judgment entered against Grupo Mexico (a judgment which is now up to $2 billion once interest is included). Many federal courts utilize a 25% percentage-of-recovery benchmark in federal securities cases for determining the reasonableness of a fee award, although we did a post on September 21, 2011 reporting that fee awards in derivative shareholder cases have been scrutinized more closely and scaled back in some instances.

In the News – City of Vernon’s Legal Bills: Big

In The News . . . . L.A. Times Article Talks About City Of Vernon’s Legal Bills

     Sam Allen and Hector Becerra, in a December 28, 2011 article in the Los Angeles Times, report that the City of Vernon has paid $7 million to Latham & Watkins LLP in 2011, with another $2 million being paid to other lawyers and lobbyists--with a lot going to Vernon’s fight against disincorporation. According to records for a longer time frame in the past, Vernon paid about $40 million on outside law firms between 2006-2010.

In The News . . . . Tri-City Healthcare District Hit With SLAPP Fee Award; Lehman Bros. Bankruptcy Fees Mount Up; Capistrano Unified School District’s Appeal Of IDEA Fee Award Sustained; And City Of Fontana Hit With Fees In Civil Rights Case After F

 

Tri-City Healthcare District Ordered to Pay $29,000 in Fees for Partially Successful SLAPP Motion by Director Kathleen Sterling.

     As reported by Nathan Scharn in a December 23, 2011 post at SignOnSanDiego.com, Tri-City Healthcare District has been ordered to pay $29,000 to director Kathleen Sterling for her partially successful SLAPP motion against claims in a Tri-City lawsuit involving certain incidents at a board meeting. Ms. Sterling’s attorneys had sought $65,000 in fees (based on a multiplier), but San Diego County Superior Court Judge Earl H. Maas, III apparently did not award a multiplier and reduced some requested “fees on fees” (fees spent requesting fees as the SLAPP winner). He did approve an hourly rate averaging about $383.94.

Lehman Bros. Bankruptcy Fees Incurred Top $1.5 Billion To Date.

     Bloomberg.com/news, in a December 28, 2011 post, informs us that Lehman Brothers Holdings Inc. has spent about $1.5 billion in attorney’s fees relating to its bankruptcy proceeding. It already has paid almost half a billion dollars in fees to the restructuring firm of Alvarez & Marsal LLC during the reorganization efforts.

In The News . . . . Wisconsin Enacts Fee Caps Legislation; PA Supreme Court Decides Multipliers Are Not Allowable In Magnuson-Moss Cases; And Delaware Chancery Court Approves Third Highest Shareholder Fee Award

 

Wisconsin Passes into Law Presumptive Three Times Fee Cap.

     Effective December 20, 2011, Wisconsin recently enacted legislation requiring judges to award attorney’s fees no more than 3 times damages in many cases. (2011 Wisconsin Act 92.) Although this cap establishes a presumptively reasonable fee award, a court can award a greater amount after examining a panoply of lodestar factors.

Pennsylvania Supreme Court Nixes Multipliers For M-M Claims.

     In Samuel-Bassett v. Kia Motors America, Inc., Nos. 22 EAP 2008 et al. (Pa.Sup.Ct. Dec. 2, 2011), the Pennsylvania Supreme Court denied a 1.3 multiplier on a requested lodestar in the Kia braking system class action. The reason? The Magnuson-Moss Warranty Act does not provide for discretionary fee enhancement.

Delaware Chancery Court Approves Monster $285 Million Fee Recovery in Southern Cooper Shareholder Action.

     A judge of the Delaware Chancery Court on December 19, 2011 approved a $285 million fee award to plaintiffs’ counsel in a shareholder lawsuit against Southern Cooper. Plaintiffs’ counsel had requested $428.2 million in fees, and defendant suggested that fees of less than $14 million were justified. This one comes in at number three on the shareholder fee recovery list, compared to $688 million in fees awarded in the Enron litigation and $492 million in the Tyco litigation.

In The News . . . . Loser Pay/Capped Damages Update, In-House Lawyers Balking At Paying For Novice Lawyer Use, Best Cities For First Year Attorney Buying Power, And Impact of Court Budget Cuts

 

     Co-contributor Mike’s relative Tom Basehart has loaded us up with some more year-of-the-end articles having some interesting discussions on attorney’s fees, lawyer compensation, and impact of state court budget cuts. So, we share some of the highlights with you now.

Tort Reform: Losers Pay, Capped Damages, and Other Reform Updates.

     As reported in the December 10, 2011 edition of The Economist, loser-pays proposals have only really caught on in foreign countries such as England, Canada, and Germany, mainly because of the existence of fairly reasonable legal insurance after an alleged loss but before suit is filed. For example, the much publicized losers pay legislation enacted in Texas only applies to suits “that have no basis in law or in fact,” a frivolousness standard that probably does not apply to a vast majority of cases. (BLOG NOTE--The only real comparable “legal insurance” covering an attorney’s fees loss that we know of is underwritten through Sonoma Risk, and only covers contract disputes. Use our search feature, input “Sonoma Risk” to find out about this product.) Capping damages did cause medical-malpractice claims to fall sharply in number and limit the amount of any awards. However, overall Medicare costs, a key indicator of medical costs generally, have not fallen, which shows why health care costs are no cheaper. Giving jury guidelines for damages in similar cases may help trim expectations of bigger payouts. Nonetheless, each of these proposals seems to have drawbacks and caveats in the attempt to implement tort reform, concludes the article.

Lots of In-House Clients Balk At Paying Novice Lawyers.

     An October 11, 2011 article in The Wall Street Journal informs us that more than 20% of the 366 in-house legal departments responding in a September 2011 survey by the Association of Corporate Counsel said they are refusing to pay for the work of first- or second-year attorneys in at least some matters. This has raised the specter that some firms may have to remassage their organizational model, maybe adopting an apprenticeship program similar to that utilized in the U.K.--where prospective solicitors take a one-year course on legal practice followed by an apprenticeship at much reduced (or sometimes free) compensation levels.

Dallas, Houston and Atlanta Top the Cities With Greatest Buying Power For First Year Associates.

     The Wall Street Journal, in an October 31, 2011 article, tells us that Dallas, Houston, and Atlanta rank 1, 2, and 3 for giving first year associates the greatest “buying power” when comparing starting salaries with the costs of living. Albany, N.Y. was at the bottom of the list.

In The News . . . . California Lawyer Files Suit Claiming He Was Fired For Not Billing 3,000 Hours Per Year

Situation Normal?

      In a suit that may satisfy or send shudders to our readers (depending on what size practice you have and the hour requirements that are set for associates), a California lawyer--former associate Richard Unitan--has sued his ex-law firm because he could not meet an annual 3,000 hour quota. The basis of the suit is apparently employment bias, reports an American Bar Association on-line article posted on December 12, 2011 by Debra Cassens Weiss. Mr. Unitan has alleged that his ex-firm required him to bill every task in six minute increments, no matter how short. The law firm was “truly shocked” to hear of the claims and rebuts that they are “completely false.” According to Ms. Weiss, the quota requires working about eight hours a day, every day of the year. As a famous Latin phrase “tempus fugit” reminds us, how time will fly.

     Bonus:  “The phrase ‘when will pigs fly’ is an adynaton—a figure of speech so hyperbolic that it describes an impossibility.”  Source:  Wikipedia, “Flying Pig.”

In The News: Indio Olive Farmers Avoid Private Attorney General Fee Exposure; Sgt. Sarver Hit With SLAPP Fees Of $187,000 Against Hurt Locker Film Participants; Milwaukee Lawyer Derides Lemon Law Fee Capping Amendment; And Minnesota Lawyer Faces Possible

 

Indio Olive Farmers Sidestep Fee Award in Hot-Air Balloonist Dispute.

     As reported in a December 8, 2011 post by The Indio Sun, Indio olive farm owners do not have to pay more than $330,000 in attorney’s fees to hot-air balloonists they fought for two years based on the claims that the balloonists flew too low over their farms--creasing an alleged invasion of privacy and nuisance. Balloonists, after they apparently won the merits of the dispute, sought fees under California’s private attorney general statute. However, Riverside County Superior Court Judge Randall D. White recently ruled that the balloonists’ efforts did not rise to the level of protecting the public’s interest or rights. Fee exposure avoided by the Indio farmers, at least for now.

Sgt. Jeffrey Sarver Does Not Fare As Well When Hurt Locker Film Team Wins $187,000 in SLAPP Fees Against Him After Dismissal of False Light/Defamation Suit.

     Matthew Belloni, in a December 8, 2011 post for The Hollywood Reporter, informs us that Sgt. Jeffrey Sarver did not do so well when U.S. District Judge Jacqueline Nguyen (C.D.Cal.) SLAPPed a false light/defamation suit he brought against Hurt Locker’s filmmakers, producers, and distributor. He claimed the Jeremy Renner character in the movie parlayed on his bomb disposal expert experiences and cast him in a false light. The First Amendment transformative use defense primarily prevailed as the winning argument for defendants. We know that winning defendants on SLAPP motions are entitled to mandatory fees, and the district judge did just that: awarding $187,000 in fees to the three set of defendants.

Oh the pain

Milwaukee Lemon Law Attorney Blasts New State Law Capping Fees Awardable to Consumers.

     According to Debra Cassens Weiss’ December 8, 2011 post in The American Bar Association Journal online version, Milwaukee lawyer Vince Megna, who calls himself the “lemon law king,” is hopping mad about a new Wisconsin law that establishes a presumption that a reasonable attorney’s fee is no more than three times the damages awarded to winning consumers in lemon law cases. Mr. Megna states it was unfair to cap fees for consumer attorneys, but not for corporations seeking to prolong lawsuits.

Lawyer May Be Sanctioned For Calling A Bankruptcy Judge a “Catholic Knight Witch Hunter” in a Legal Memorandum She Signed.

 

     Ms. Weiss also reports on Minesota lawyer Rebekah Nett, who is facing possible sanctions for conduct referenced in our subtitle. After signing a document that said the courts “were composed of a bunch of ignoramus, bigoted Catholic beasts that carry the sword of the church,” U.S. Bankrupty Judge Nancy Dreher issued an OSC why Ms. Nett and her client shouldn’t be fined $10,000.

In The News/Class Action/Civil Rights: Gulf Oil Spill Class Action Steering Committee Request Garners Controversy And Civil Rights Attorney Awarded $1.50 (Actually, $1.40) Despite Winning Prisoner’s Civil Rights Case

 

Gulf Oil Spill Class Action Request Stirs Up Some Emotions on Both Sides.

     As reported by John Schwartz in a December 3, 2011 article in The New York Times, attorney members of the Deepwater Horizon (Gulf) oil spill class action multidistrict litigation against BP have requested a New Orleans federal district judge to create a fund to cover litigation costs, specifically requesting 6% of all judgments and settlement received after November 7, 2011, including those for people who have dropped out of the lawsuits and negotiated their own recoveries from the $20 billion Gulf Coast Claims Facility administered by Kenneth R. Feinberg. The request does not apply to damages already paid out of the Feinerg fund (more than $5.7 billion). However, the request has drawn outrage from outside attorneys, who argue that it is a “fee grab” by lawyers who have done nothing for numerous claimants and are claiming fees in a fund that is subject to “no fault” allocations. The other side argues that they spent a lot of time establishing the fund and putting pressure on BP to settle rather than litigate.

Winning Prisoner Civil Rights’ Attorney Gets a Whopping $1.40 As Fee Award.

     Who says that all civil rights attorneys get rich? Well, not all by any means, as reported by a recent Wall Street Journal article.

     Attorney Harrison Williams requested nearly $100,000 in fees ($75,000 lodestar plus an apparent multiplier) after winning a civil rights lawsuit for a prisoner claiming that his Rastafarian religious rights were violated when his dreadlocks were touched and “slightly” toren by guards. The prisoner was awarded $1 after trial. Attorney was awarded $1.50 (but actually $1.40 because 10% of the dollar paid to his client was required to come from the fees).

     The Second Circuit determined that the small fee award was correct. Although admitting that the Prison Litigation Reform Act (1997) was not a model of clarity, the federal appeals court decided that Congress limited attorney’s fees to 150% of a jury award--whether meritorious (winning prisoner) or frivolous (losing prisoner, with bad faith being shown in addition to a loss).

     Plaintiff attorneys have opined that this decision is the death knell of civil rights representation in the prisoner area. The appeals court did agree that the small award was the “practical equivalent of no fee award at all,” but ruled that the statutory language was clear and “permits no exception for minimal or nominal monetary judgments”--citing numerous decisions to support its conclusion.

     For you purists out there, the decision is Shepherd v. Goord, Docket No. 10-4821-pr (2d Cir. Nov. 15, 2011) and the fee entitlement provision is 42 U.S.C. § 1997e(d)(2).

In The News . . . . San Diego Superior Court State Judge Denies Without Prejudice A $756,132 Fee Request To Winner In San Diego Fireworks Permitting Dispute

 

Fee Request Was Ruled To Be Premature In Nature.

     In a follow-up to our post of October 25, 2011, San Diego Superior Court Judge Linda Quinn denied a requested $756,132 in attorney’s fees under California’s private attorney statute by attorney Mario Gonzalez for winning a case challenging San Diego’s fireworks permitting process. She ruled that the request was premature because not all of the related litigation had been resolved. The La Jolla Community Fireworks Foundation called the request “grossly excessive.” Mr. Gonzalez liked the judge’s ruling, because she indicated the fee claim may increase over time and may have been inviting the parties to settle up the fee request.

     More information on this overall dispute and the recent fee request ruling can be found in Mike Lee’s November 18, 2011 post at signonsandiego.com.

Class Actions/In The News: Prof. Fitzpatrick, At A Recent Washington, D.C. Panel Seminar, Contends That Class Action Lawyers Get “A Bad Rap” On Fee Awards

 

He Has Empirical Evidence to Support His Position.

     In Washington, D.C., there was an interesting recent panel discussion at the National Lawyers Convention of the Federalist Society, discussing whether attorney’s fees in class actions are too low, too high, or just right. Some panelists cited class action abuses, but an unlikely panelist for some--Professor Brian T. Fitzpatrick of Vanderbilt University Law School--had a more empirical perspective that somewhat indicated class action attorneys may be getting a “bad rap” when it comes to fee awards.

     Professor Fitzpatrick was somewhat of a surprising spokesman with such a view, given his clerkships with such conservative leaning jurists as Ninth Circuit Judge Diarmuid O’Scannlain and U.S. Supreme Court Justice Antonin Scalia, as well as his status as a Federalist Society favorite. (The Federalist Society is an organization of conservatives seeking reform of the current American legal society according to a textualist and/or originalist interpretation of the U.S. Constitution, according to Wikipedia.)

     Based on his empirical study of the class action world in the past few years, Professor Fitzpatrick’s conclusion is that “class action lawyers get a bad rap.” Instances of misconduct should not be viewed as representative of the entire class action bar, Professor Fitzpatrick opined during the panel discussion.

     On the whole, class action lawyers do not receive excessive compensation, he concluded. Professor Fitzpatrick reviewed two years of class action settlements and found that the plaintiffs’ lawyers received fees equal to approximately 15 percent of the total settlement money — an amount that is “not that opulent” in quotes made to public sources reporting on the panel. Of the $33 billion in settlement value for this two-year period, only 4 percent was attributable to the value of injunctions, and well over 75 percent of the amount was distributed to class members (e.g., pro rata distribution in shareholder class action suits).

In The News . . . . Eastern District of Pennsylvania Federal Court Awards $6.5 Million In Fees And Costs In Favor Of Defense In Exceptional Patent Infringement Litigation

 

Even Fees/Costs Spent On Lost Claims Were Recoverable.

     35 U.S.C. § 285 does allow district judges discretion to award attorney’s fees and costs in a patent infringement case that is “exceptional,” which usually means a determination that the litigation was brought and/or prosecuted in bad faith. This provision was used to award a hefty fees/costs award in Checkpoint v. All-Tag Security, E.D.Pa. Case No. 01-CV-2223 (Nov. 2, 2011 attorney’s fees order).

     Plaintiff lost a patent infringement action against defendants Sensormatic Electronics Corp. and All-Tag Security. U.S. District Judge Petrese B. Tucker decided the defense should be awarded a cumulative total of $6.5 million in attorney’s fees and costs under the patent “exceptional” fee-shifting provision. The district judge disallowed a litigation fee bonus owed by defendant Sensormatic to its attorneys. However, she did not exclude $1.1 million in fees and costs for claims that defendants lost, citing cases indicating that no allocation needed to be made where the fees were incurred under a statute like this shifting fees due to plaintiff’s inequitable conduct in pursuing the infringement litigation in the first place.

In The News . . . . Ventura County Must Pay $30,855 To Taxpayers Group In California Public Records Act Dispute

 

     As reported by Kathleen Wilson in a November 3, 2011 post at vcstar.com, Ventura County Superior Court Judge Henry Walsh granted the Ventura County Taxpayers Association’s request for fees, awarding it $30,855 (with a slight reduction of only about $2,500) for obtaining release of the names of six-figure county pensioners from the Board of Retirement. The California Public Records Act does have a fee-shifting provision. The fee award was assessed against the Board, which was found to not have made a commitment to release documents despite appellate rulings on the issue. The County spent $35,000 defending the suit and has no insurance to cover the fee award.

     BLOG UNDERVIEW--Co-contributor Mike and his former colleage Greg Regier at Jackson DeMarco Tidus & Peckenpaugh had the pleasure to try a lengthy case before Judge Walsh over a trespass/nuisance citrus flooding dispute.

In The News . . . . Steve Pappas To Appeal Private Attorney General Fee Award Against Him In Farr Lawsuit

 

     Steve Pappas, who lost to Doreen Farr in his quest for Santa Barbara’s 3rd District Supervisorial seat by a slim number of votes, was hit with attorney’s fees of around $525,000 (after factoring in an arithmetic error) for losing a case against her. Now, Mr. Pappas is appealing the amount of the award to the Second District, Division 6 Court of Appeal. Earlier, as we reported in our December 22, 2010 post, the same appellate court reversed a lower court’s refusal to award fees against Mr. Pappas under the private attorney general statute, which led to the substantial lower court award now being appealed.

     Ms. Farr, thus far, was reported by Chris Meagher in a November 2, 2011 Santa Barbara Independent article to have paid about $228,600 in fees to two attorneys from her campaign fund, apparently much of this going to defend the suit. Expensive, expensive, which again reinforces our mantra that you have to think carefully when bringing a suit as an individual if there is fee-shifting exposure--especially when it involves a non-section 1717 fee shifting where you cannot even buy insurance protection like that provided by Sonoma Risk for 1717 fee exposure.

In The News . . . . Newspaper Copyright Infringer Filer Righthaven, LLC Hit With Approximate $120,000 Fee Award in Case Against Thomas DiBiase

Rough Weather:  No Safe Haven for Righthaven in Legal Shit Storms.

     In our September 30, 2011 post, we talked about Righthaven, LLC of Las Vegas, which is a newspaper copyright infringer filer that files suits against persons for using stories or photographs published in certain papers.

     Well, it was recently ordered to pay $119,488 in attorney’s fees and costs in its failed lawsuit against former federal prosecutor Thomas DiBiase. The fees were awarded under the federal Copyright Act.

     Earlier, Righthaven was hit with a $34,045 fee award, but the current one was much, much larger--even though Righthaven has said it is having problems bonding or coming to terms with the much smaller previous award.

     For more on Righthaven and this award, see Steve Green’s October 26, 2011 post on the Las Vegas Sun.

In The News . . . . Environmental Lawyer Marco Gonzalez Seeks $756,132 In Fees From City Of San Diego In Fireworks Pollution Suit

     As reported by Mike Lee in an October 20, 2011 post on SignOnSanDiego.com, environmental lawyer Marco Gonzalez recently filed a motion with the San Diego County Superior Court to be awarded $756,132 in attorney’s fees by the City of San Diego for winning a CEQA lawsuit over the fireworks-related pollution of last summer’s July 4th fireworks.

     The basis for the fee claim is California’s private attorney general statute, which allows attorneys to obtain fees for vindicating public interest issues under certain circumstances.

     The City will be opposing the fee request at a November 18, 2011 hearing, claiming that the request is unreasonable.

     Opponents see this as a shakedown request, while others believe that taking away fee recovery in CEQA suits would “essentially take away the enforcement” altogether. (Apparently, a 2.0 multiplier is being requested in this dispute, so it should be interesting no matter which side you take.)

In The News . . . . One Piece of the MGA Entertainment Puzzle May Be Settled

 

MGA and Its Former Law Firm O’Melveny & Myers Have Reached Tentative Settlement.

     In the fallout from the MGA-Mattel battle, MGA Entertainment’s former counsel O’Melveny & Myers had sued MGA to collect $10.2 million in disputed billings for O’Melveny’s former role in the Mattel litigation (representing MGA from 2007 to 2007). MGA had launched a malpractice countersuit against O’Melveny. O’Melveny had moved for discovery sanctions against MGA in the suit pending before Los Angeles County Superior Court Judge Elizabeth White. Judge White was leaning toward sanctioning MGA, and MGA dropped the malpractice claims on August 26, 2011 (soon after O’Melveny moved for sanctions, apparently trying to moot the sanctions request).

     Now, the parties recently indicated to Judge White that they had reached a tentative settlement and needed more time to iron out the details, a request obliged by Judge White in setting a November 7 further status conference.

     More details can be found in Amanda Bronstad’s October 12, 2011 post at The National Law Journal website.

In The News . . . . Winklevoss Twins Lose Malpractice Claim Against Quinn Emanuel And Bill Lerach Made Up To $70 Million In Enron Case

 

Quinn Emanuel Entitled to $13 Million Contingency Fee For Settlement With Facebook.

     Ever seen the film “The Social Network”? It deals with the dispute between the Winklevoss twins and social-media giant Facebook. Quinn Emanuel Urquhart & Sullivan, a well-known Los Angeles trial firm, helped the twins reach a $65 million settlement in a dispute between Facebook and ConnectU, the twins’ network website. Brothers fought giving Quinn Emanuel’s its agreed-upon $13 million contingency fee for the settlement, bringing a malpractice suit that claimed Quinn Emanuel miscalculated Facebook’s stock value during the settlement negotiations. An arbitration had earlier decided that the $13 million fee should be paid, a determination confirmed by a trial judge. On October 6, 2011, New York’s Appellate Division dismissed the twins’ malpractice suit against Quinn Emanuel, which is now $13 million richer. We thank an October 11, 2011 post by Thomson Reuters News & Insight for this part of our post.

Bill Lerach Made Up to $70 Million in the Enron Federal Securities Case.

     Remember Bill Lerach, the famous federal securities class action attorney who was convicted of a felony under a plea deal and spent about 19 months in prison? Well, he's out and doing gardening as well as a lot of traveling lately. As reported in an October 12, 2011 post by SFGate.com, Mr. Lerach earned about $10.3 million a year between 1990-1998, although he had to pay about $8 million in fines and penalties under his guilty plea arrangement. However, even while he was incarcerated, Mr. Lerach’s former firm convinced a Houston district court judge to award fees of $688 million plus interest to the class action attorneys involved in the case. It is reported that the firm even helped Mr. Lerach get a reported share of $70 million for Enron work. Zowee!

In The News . . . . Various Articles Talk About Attorney Pay, Per Partner Compensation, Use Of Alternative Fee Arrangements, And Use Of Contract Attorneys.

     We thank co-contributor Mike’s father-in-law Tom Basehart for sending him a folder of articles to review for possible inclusion as a posting in the blog. He was right to send these articles, because they share valuable information and trends for all of us.

American Lawyer Survey About Per Partner Profits Going Up By 8.4% in 2010 May Not Be As It Seems.

     According to the American Lawyer, profit per partner at America’s 100 biggest firms rose by 8.4% in 2010, after having fallen by 4.8% in 2008 and only going up by a measly 0.3% in 2009. (That after the 250 biggest firms in the National Law Journal’s annual surveys shed more than 9,500 lawyers in 2009 and 2010, nearly 8%.)

     Well, according to an analysis by Citi Private Bank Law Firm Group, some of those firms may have overstated a key measure of profitability. A person briefed on Citi’s analysis, as reported by a 2011 article in The Wall Street Journal, reported that roughly 22% of the top 50 firms overstated their profits per partner by more than 20% in 2010, an additional 16% inflated their numbers by 10-20%, and an additional 15% of the firms had profits-per-partner figures that were inflated by 5-10%.

Legal Services Spending As Percentage of America’s GDP and Growth of Alternative Fee Arrangements.

     A May 7, 2011 article in The Economist reports two important statistics:

     *Spending on legal services grew from 0.4% of America’s gross domestic product (GDP) in 1987 to 1.8% in 2003, four times faster than the economy; and

     *Alternative fee arrangements to the traditional hourly rate paradigm have continued to grow in importance, accounting for 16% of big firms’ revenue in 2010.

     The article had a cute photo of a homemade billboard saying this (apparently from the Midwest): “Mamas don’t let your babies grow up to be lawyers; let them be farmers or loggers and such.”

Average Law Firm Lawyer Salary Versus Other Countries.

     According to a September 2, 2011 article in The Economist, the average American law-firm lawyer made $191,000 in 2000, compared to an average salary for all Canadian lawyers of $64,000 in 2002 and to an average salary for Australian lawyers of $90,000 in 2000. A Brookings study found that of the $170 billion spent on lawyers every year in America, some $64 billion is a “premium” produced by “market distortions.”

Contract Lawyer Staffing Is Growing, But Leading to Suits.

     The Wall Street Journal, in an August 2, 2011 article, reports that temporary legal staffing in the U.S. is projected to increase by 25% cumulatively over the near two years, according to a recent estimate by research group Staffing Industry Analysts. However, it describes a lawsuit against McDermott Will & Emory LLP for using temp lawyers who allegedly turned over privileged or irrelevant documents to the U.S. Attorney’s L.A. office. McDermott has denied the allegations.

Non-Partner Associate Lawyer Salaries Rise.

     In an August 12, 2011 article in The Wall Street Journal, it is reported that the average hourly rate for a non-partner associate lawyer at a law firm (and we assume this is the hourly rate for larger firms) rose to $378 in the second quarter of this year, up from $338 three years earlier, all according to data from Peer Monitor, a unit of Thomson Reuters. The current average hourly rate for first-year associates at such law firms is $283, Peer Monitor says.

In The News . . . . Orange County Will Pay $1.3 Million In Legal Fees To Deputies Union After County Loses Challenge To 3% At 50 Pension Benefit

 

Orange County Also Bore More Than $2 Million of Legal Fees During Unsuccessful Battle.

     As reported by Kimberly Edds in an October 6, 2011 article in The Orange County Register, the Orange County Board of Supervisors has approved a settlement with the Association of Orange County Deputy Sheriffs after losing a challenge to the 3% at 50 pension benefit, when the Second District Court of Appeal sided in January 2011 with the deputies. Under the settlement, the County will pay the Association $1.3 million to cover some portion of its legal fees, after County itself incurred more than $2 million in the unsuccessful lawsuit. The settlement also includes $312,000 for the Orange County Employees Retirement System to reimburse its portion of lawsuit costs. The settlement was the result of mediation sessions presided over by Retired Justice Howard B. Wiener (who used to sit on the Fourth District, Division 1 and has acted as a retired neutral for a number of years).

In The News . . . . Righthaven Has To Reimburse Opponent’s Fees, U.S. Treasury Audit Criticizes Four Law Firm’s Fee Bills, And Insurers Lose Intervention Request In MGA-Mattel Ongoing Litigation

 

Righthaven Lacked Standing and Ordered to Pay Opponent’s Fees in Copyright Suit.

     As reported by Steven Green in a September 27, 2011 post at vegasinc.com, Righthaven LLC of Las Vegas lacked standing to file copyright infringement lawsuits in Colorado in a dispute concerning the Denver Post’s publication of a Transportation Security Administration Agent performing an enhanced pat-down search at the Denver International Airport. Righthaven lacked standing because it only had a bare right to sue not actual ownership under a transfer from the Denver Post’s parent company. Also, under Copyright Act section 505, Senior U.S. District Judge John L. Kane of the District of Colorado ordered that Righthaven reimburse the defendant for full defense costs, including attorney’s fees. Defendant’s attorneys want Righthaven to post a $25,000 bond to ensure payment.

Sigtarp Audit Report Criticizes Fee Billings of Four Law Firms.

     A September 29, 2011 post on the Blog of Times informs us that a new audit report by the special inspector general for the Troubled Asset Relief Program (“sigtarp”) says that four law firms failed to justify $8.1 million in legal fees they charged the U.S. Treasury Department for work related to the financial crisis. Mainly, the report criticized the lack of adequate detail or substantiation for the sought-after fees. However, the report did blame Treasury for not giving enough directions about the level of fee detail and for giving conflicting directives at different points of time.

District Judge Rebuffs Insurers’ Intervention Request in MGA-Mattel Litigation.

     Amanda Bronstad, in her September 28, 2011 article in The National Law Journal, reports that U.S. District Judge David O. Carter (C.D. Cal.) denied insurers’ request to intervene in the MGA-Mattel suit to snag part of the $141 million in fees/costs awarded to MGA. Judge Carter reasoned that the intervention request was untimely and should have been made before MGA applied for fees and costs. Insurers have claimed that they have already paid $80 million for MGA’s defense in the Mattel dispute.

In The News . . . . Orrick Law Firm Seeks To Withdraw As MGA Entertainment’s Attorney In Mattel Litigation

 

Hearing Scheduled for October 24, 2011, With Unpaid Fees Being The Catalyst.

     This is “the gift that keeps on giving.”

     The latest in the MGA Entertainment-Mattel litigation, aside from Mattel’s likely upcoming appeal, is that Orrick, Herrington & Sutcliffe (MGA’s law firm in the case) has moved to withdraw from representing MGA, citing $3.5 million in unpaid legal fees and expenses. Orrick claims that MGA failed to meet its interim agreement to pay a fixed monthly amount of $550,000 beginning December 2010 and to turn over certain insurance proceeds, with Orrick stating that this interim agreement was breached. MGA, in turn, has stated that it already has paid Orrick more than $35 million in fees to date and its resources have been severely depleted from the Mattel litigation struggle. Over $20 million might be the final fee tally owed, according to Orrick in its withdrawal papers. The hearing on the withdrawal motion has been scheduled for October 24 of this year.

     MGA has filed an arbitration action against Orrick, seeking more than $10 million.

     As if all this was not enough, O’Melveny & Myers has sued MGA for $10.2 million in unpaid fees, with San Francisco and Orange County lawyers involved in the litigation over fees.

     More details can be found in Amanda Bronstad’s September 27, 2011 article in The National Law Journal.

The gift that keeps on giving the whole year round . . . .

In The News . . . . California and FTC Are Cracking Down On “Mass Joinder” Lawsuit Invitations For Residential Loan Modification Services

A “Mass Joinder” Lawsuit Is Not the Same as a “Class Action” Lawsuit.

     In our March 11, 2010 post, we explored California attorney ethical prohibitions against taking advance fees for residential loan modification services, attempting to protect vulnerable homeowners from doing whatever they need to prevent impending foreclosures during the on-going economic recession. We now have an update for you on both the national and California sectors.

     Lew Sichelman, in his September 25, 2011 article in The Los Angeles Times, reports that California’s Department of Justice (through the Attorney General) has sued 14 entities, including several law firms and individual attorneys, for alleged deceptive marketing to solicit residential owners facing foreclosure to join “mass joinder” lawsuits (individualized lawsuits with a lot of plaintiffs rather than a class action). The perceived problem is that owners could be charged up to $10,000 in retainers to join the action, with millions in dollars at issue even though the attorneys have not done any work or have very little chance of achieving success with lenders. Although there is nothing illegal per se with “mass joinders,” the California suit alleges that defendants preyed on desperate homeowners by “selling” them “participations” in lawsuits against lenders. At least one law firm using this “mass joinder” lawsuit method has been put into receivership.

     Earlier this year, the Federal Trade Commission (FTC) prohibited providers of mortgage assistance relief from collecting or even requesting fees in advance from homeowners, although there are some narrow and conditional carve-outs for attorneys who are licensed, have practices including mortgage assistance relief, who place upfront fees collected in a separate client trust account, and who comply with state laws. In California, of course, the more restrictive rules do not even allow collection of any advanced fees.

In The News . . . . California and FTC Are Cracking Down On “Mass Joinder” Lawsuit Invitations For Residential Loan Modification Services

A “Mass Joinder” Lawsuit Is Not the Same as a “Class Action” Lawsuit.

     In our March 11, 2010 post, we explored California attorney ethical prohibitions against taking advance fees for residential loan modification services, attempting to protect vulnerable homeowners from doing whatever they need to prevent impending foreclosures during the on-going economic recession. We now have an update for you on both the national and California sectors.

     Lew Sichelman, in his September 25, 2011 article in The Los Angeles Times, reports that California’s Department of Justice (through the Attorney General) has sued 14 entities, including several law firms and individual attorneys, for alleged deceptive marketing to solicit residential owners facing foreclosure to join “mass joinder” lawsuits (individualized lawsuits with a lot of plaintiffs rather than a class action). The perceived problem is that owners could be charged up to $10,000 in retainers to join the action, with millions in dollars at issue even though the attorneys have not done any work or have very little chance of achieving success with lenders. Although there is nothing illegal per se with “mass joinders,” the California suit alleges that defendants preyed on desperate homeowners by “selling” them “participations” in lawsuits against lenders. At least one law firm using this “mass joinder” lawsuit method has been put into receivership.

     Earlier this year, the Federal Trade Commission (FTC) prohibited providers of mortgage assistance relief from collecting or even requesting fees in advance from homeowners, although there are some narrow and conditional carve-outs for attorneys who are licensed, have practices including mortgage assistance relief, who place upfront fees collected in a separate client trust account, and who comply with state laws. In California, of course, the more restrictive rules do not even allow collection of any advanced fees.

In The News . . . . Siegfried & Roy Awarded $37,415 In Fees/Costs In Defending Against Frivolous Sexual Harassment Lawsuit

 

Lions, and Tigers, and Bears -- Oh My!

     Well, this one will get all of us engrossed, or should.

     Las Vegas entertainers Siegfried (Fischbacher) and Roy (Horn) have been awarded $37,415 in attorney’s fees and court costs when U.S. District Judge Roger Hunt determined that a sexual harassment suit brought against them was frivolous in nature.

     Plaintiff Oliver Preiss had sued Siegfried and Roy, and a related company of Roy, for sexual overtures that he claimed led to his firing by Roy and his company. The defense claimed, among other things, that plaintiff earlier had admitted he quit, rather than being fired. Siegfried and Roy had at first sought to recoup $109,000 in fees/court costs after dismissal of the federal suit on March 17, 2011, but reduced the claim down to $37,415. (Apparently, certain supplemental state law claims were dismissed by the federal judge without prejudice, such that plaintiff has re-filed them in Clark County Superior Court in Las Vegas.)

     More on this saga can be found at Steve Green’s September 22, 2011 post on the Las Vegas Sun’s website.

     As Dorothy of Wizard of Oz fame put it well, “Lions and Tigers and Bears, oh my!”

     Or, to borrow Siegried and Roy’s magic word, “SARMOTI.  Siegried and Roy, Masters of the Impossible!”

In The News . . . . Delaware Chancery Judges Heavily Scutinizing Fee Requests In Shareholder Derivative Actions

 

Fee Awards Have Been Rejected or Reduced in Recent String of Cases.

     As reported by Sheri Qualters in a September 19, 2011 post at The National Law Journal, Delaware Chancery judges are putting shareholder derivative plaintiffs’ fee requests “under the microscope” in recent cases challenging corporate deals where the shareholders reap minimal benefits from the suits.

     For example, in In re Sauer-Danfoss Inc. Shareholders Litig., Vice Chancellor J. Travis Laster awarded plaintiffs’ lawyers $75,000 rather than their requested $750,000, finding the lawyers “never engaged in meaningful litigation activity.” Only one of the 12 disclosures at issue in the settlement merited a fee award, with the article surveying other decisions where fee requests have been slashed greatly when the deal disclosures did not bring value of the overall corporate derivative picture. However, Vice Chancellor Laster did award interim fees of $2.75 million to plaintiffs’ lawyers in June of this year for the disclosures in In re Del Monte Foods Co. Shareholders Litig., although a more hefty $12 million fee request is still pending in that case.

     Although $400,000 was thought to be a past “benchmark” for a disclosures only settlements in the derivative area, that sort of predictability seems to have disappeared in the wake of these recent Delaware decisions. In contrast, Professor Michael Perino of St. John’s University School of Law was quoted as saying that lawyers usually get what they want in the vast majority of federal securities fee proceedings, unlike what apparently is going on in the Delaware chancery courts. However, there are exceptions, with U.S. District Judge Sidney Stein of the Southern District of New York nixing a $180-200,000 fee request in a tender offer case, Stevens v. Sembcorp Utilities Pte. Ltd.

     There also is a huge difference in the status of fee proceedings as between federal securities and derivative actions. Although it is common to have agreements between counsel for some level of fee awards in securities cases, counsel in derivative cases seldom head into settlement hearings with any agreement on plaintiffs’ fees, which means more of these proceedings are contested in nature.

     The “bottom line” for one quoted lawyer in derivative cases is that the settlements must have worth in order to justify substantial fee awards to plaintiffs’ counsel.

In The News . . . . McCourt Divorce Fees

. . .  May Top $35 Million

     Boy, oh boy, talk about attorney’s fees. We all have been following the news of the McCourt divorce battle, the family law judge’s decision that the team was not just Frank’s, the bankruptcy, and the problems plaguing the L.A. Dodgers (which, nonetheless, have been doing better lately at the close of the baseball season).

     Well, the topper is a recent article indicating that the Frank-Jamie McCourt divorce battle may result in the expenditure of attorney’s fees topping $35 million by both sides. The family law judge presiding over the matter has scheduled November 17-18, 2011 hearings on spousal support and attorney’s fees, so reports Bill Shaikin in a September 14, 2011 post at latimes.com. Holy smokes, Batman!

     BLAWG BONUS:  Danny Kaye sings the Dodgers Song.  Click here.

In The News . . . Newspaperman Tim Crews Hit With Over $56,000 In Fees And Costs For Bringing What Trial Judge Believed To Be Frivolous California Public Records Act Petition

Update from our 11/24/10 Post on Crews v. City of Willows.

     In our November 24, 2010 post, we discussed Crews v. City of Willows, a Third District decision which affirmed a rejection of newspaperman Tim Crews’ attempt to obtain attorney’s fees against the City of Willows under a California Publics Record Act proceeding. Mr. Crews claimed that the City was not producing (or was too slow in producing) requested public documents, but both the lower and intermediate appellate courts determined that he had “jumped the gun” given that the City was producing documents on a rolling basis. Now, we have an update for you readers.

     Recently, Glenn County Superior Court Judge Peter Twede ruled that Mr. Crews’ suit was frivolous, which allows the lower court to impose fees and court costs against the litigant seeking public records disclosure. That is what Judge Twede did, awarding more than $56,000 in fees and court costs against Mr. Crews and in favor of the City. (This is a risk that a litigant faces when the fee-shifting statute is mutual and allows fees to the “prevailing party,” no matter whether prosecuting or defending a suit/proceeding.  See photograph below.)

     Earlier, Mr. Crews was awarded more than $100,000 in court costs in a similar disclosure proceeding against the Glenn County Office of Education. Interestingly enough, Mr. Crews claimed that he was a pauper in his opposition to the City of Willows’ recent fees/costs motion, a claim that Judge Twede disregarded because it was extremely self-serving in nature. Looks like we will be reporting on this some more, because Mr. Crews’ most recent attorney is planning to appeal the recent fee award to the Third District. For more on this story, see Tom Gascoyne’s September 15, 2011 article at newsreview.com.

Above:  “Boomerang throwing is hobby of Secretary of Agriculture. Washington, D.C., July 13. Favorite exercise and hobby of Secretary of Agriculture Henry A. Wallace is boomerang throwing. He practices daily with a number of his cronies in Potomac Park and has become quite adept in the handling of the weapon which was originated by the Australian Aborigines.”  July 13, 1939.  Library of Congress.

In The News . . . . Nonhourly Fee Arrangements On The Rise In California And Midsize Firms In California Have Increased Salaries Somewhat

 

     As reported in a couple of articles in the August 2011 California Lawyer, we see how the recent economic downturn has affected fee arrangements and law firm employment in California.

     Looks like nonhourly billing arrangements are on the increase in California. Nonhourly fee arrangements have increased by a percentage of 43% of all California firms in 2010, compared with an overall firm nationwide increase of 58%. What about the profitability of these arrangements? Mixed results. For firms proactively offering nonhourly arrangement flexibility, more than 70% said the approach was at least as profitable as hourly billing. However, for firms capitulating to client requests for nonhourly arrangement flexibility, 38% said the the requests were as profitable whereas 42% said they were less profitable.

     Now, that brings us to employment and compensation trends for relatively young California lawyers. Midsized firms (35-75 lawyers) increased salaries “somewhat” since the economic downturn. However, the top pay for attorneys at top law firms mostly “wobbled” (the article’s characterization, not ours). In yet another twist, most of the attorney hiring is made by small firms, particularly with attorneys having less than seven years of experience.

In The News . . . . Four Insurers Want A Piece of Attorney’s Fees/Costs Award To MGA In Mattel Bratz Doll Litigation

 

Satellite Insurance Litigation is Heating Up, With 4 Insurers Wanting to Get $80 Million of the $141 Million Fees/Costs Award to MGA.

     In a case presenting an “endless story,” we report on the next piece of the evolving saga in the MGA Entertainment-Mattel case, one in which U.S. District Judge David O. Carter recently awarded MGA $141 million in fees and costs as against Mattel on a copyright infringement claim won by MGA after a jury trial.

     The latest development is that four insurance companies have moved to intervene for purposes of sharing in the MGA fees/costs recovery, with all four companies seeking to recoup a total of about $80 million in fees and costs paid to MGA for defending against Mattel’s copyright infringement claim.

     All of the insurance company cases were consolidated before Judge Carter, who has scheduled a February 7, 2012 trial. We don’t have to say it, but “stay tuned” for more updates.

     More information on this Hydra-headed struggle can be found by reading Amanda Bronstad’s August 30, 2011 post on the on-line version of The National Law Journal.