CALIFORNIA ATTORNEY'S FEES

Block Billing, Special Fee Shifting Statute: Nike Is Awarded About $260,000 In Attorney’s Fees Against Michael Avenatti Under The Mandatory Victims Restitution Act

Block Billing Hampered Apportionment Of Fees, With District Judge Only Awarding About A Third Of The Ask.

            It is not often that we post on a criminal case, but the publicity generated and interesting fee-shifting statute involved in USA v. Avenatti, Case No. (SI) 19 Cr. 373 (PGG) (S.D.N.Y. Doc. 34, Mem. and Order Feb. 14, 2022) invited a post on this decision.

            Under the Mandatory Victims Restitution Act (MVRA), 18 U.S.C. § 3663A(b)(4), attorney’s fees can be paid to a criminal victim where that victim’s attorneys render assistance at the request or inducement of a governmental criminal case.  However, only governmentally-related work can be awarded, with the need to apportion out private investigation by the victim such as analyzing court pleadings or attending motion hearings.  (Lagos v. U.S., 132 S.Ct. 1684, 1690 (2018).) 

            Nike was found to be a victim in the criminal extortion case brought by the U.S. against attorney Michael Avenatti.  Nike’s attorneys Boies Schiller sought $856,162 in attorney’s fees for helping federal prosecutors bring charges against Mr. Avenatti.

            U.S. District Judge Paul G. Gardephe agreed Nike was entitled to fees under MVRA, but he found the need to segregate out compensable and noncompensable work efforts.  The problem which handicapped apportionment was block billing by Boies Schiller.  So, District Judge Gardephe disregarded entirely all block billed entries which contained one or more noncompensable entries.  When that was done, $259,800.50 was the fee award, around a third of the request.

Block Billing, Substantiation Of Reasonableness Of Fees: Where Attorney’s Fee Request Was Modest, An Attorney In A Firm Can Substantiate His Firm’s Fees And Block Billing Was Not An Issue Where Fee Request Was Not Substantial

However, Block Billing Is A Problem In A Complex Case With Multiple Billing Attorneys Involved.

            In Minser v. Collect Access, LLC, Case Nos. B318325/B321996 (2d Dist., Div. 1 May 24, 2023) (unpublished), plaintiff prevailed on a Rosenthal Act debt collector claim, which has a fee shifting provision under Civil Code section 1788.30(c).  The lower court awarded plaintiff $12,100.50 in fees and $1,097.23 in costs.  On appeal, defendant argued that plaintiff’s fee substantiation was inadequate.  Not at all, said the Court of Appeal.  An attorney working on a case in a firm, if involved, can verify the firm’s work effort from a synergistic perspective.  Although there was some block billing, the fee request was so modest such that the transgression did not require a reduction, although the appellate court did note that the result would be different in a complex case with many attorneys billing hundreds of hours on a case.  Fee award affirmed. 

Block Billing, Reasonableness Of Fees: Even With Block Billing, $170,000 Fee Award—After A $64,000 Reduction—Was No Abuse Of Discretion

Block Billing Criticisms Are Fair, Depending On The Circumstances.

            Simons v. Superior Court, Case No. B309885 (2d Dist., Div. 3 Mar. 25, 2022) (unpublished) is a situation where the appellate court affirmed a Civil Code section 1717 fee award, even with high hourly rates and block billing, when the fee factual finder awarded $170,000 after reducing the requested fees by $64,000.  The appellate court confirmed that criticisms of block billing were justified, but its application depends on the nature of the billings.  The fee finder’s reductions were ample such that nothing more needed to change.