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Volume 5, Issue 1

On January 16, the law firms involved in the city of Detroit’s bankruptcy filings, lead among them Jones Day and Dentons US LLP, filed disclosure statements defending the multi-million dollar fees charged to the city over the life of the case. This Chapter 9 bankruptcy (the statute under which municipalities, rather than individuals, may file) was commenced in July of 2013 and concluded in December of 2014 when the City’s “plan of adjustment” became effective. 

Early in the case, presiding judge Steven Rhodes, anticipating the size of the eventual legal spend, appointed a Fee Examiner to review some of the firms’ invoices contemporaneously, and made it clear that only necessary expenses would be compensated – no first class flights, luxury hotels, or alcoholic beverages. As the case progressed, other excessive charges were also reduced, such as non-working travel time, which was uniformly cut by 50% in line with prevailing billing practices. Nonetheless, once the restructuring plan was in place and the case wound down, Judge Rhodes ordered the law firms to justify the remainder of their fees.

In its disclosure statement, Jones Day raised the issue that payment of legal fees in a Chapter 9 filing is governed by different standards than in a Chapter 11 filing (the most common filing for individuals). Specifically, they note that Chapter 11 includes reference to the Bankruptcy Code sections governing what constitutes reasonable and necessary professional fees (11 U.S.C. 330). Section 330 requires the court to consider the value of legal services through a careful review of the time expended and rates charged (among other factors) before approving the payment of a firm’s fee request.

In contrast, Section 943 of the Bankruptcy Code does not incorporate Section 330, nor does it define its own standards for the reasonableness of professional fees. Rather, the only requirement is that any fees paid by the debtor for services in the case be “fully disclosed and reasonable.” Jones Day argues that this less stringent standard obviates any need for a Chapter 11 style “probing inquiry,” saying that nothing in the Chapter 9 case suggests that its fees were “irrational or overreaching.”

Indeed, Jones Day makes its case that given the complex nature of the litigation – this is by far the largest municipal bankruptcy case ever litigated – and its position as the lead firm, its post-petition fees and expenses of $53.7 million are in fact manifestly reasonable. The disclosure filing attempts to make this point in two ways: First, by pointing out that both the court-appointed Fee Examiner (who examined the firm’s invoices under a Chapter 11 standard) and the City of Detroit itself had opportunity to comment on and request fee reductions of the invoices during the pendency of the litigation. In such a manner, the firm says that nearly one-quarter of their usual fees and expenses have already been reduced. Second, the firm points to its success in completing work on the bankruptcy filing in “record-setting time” (16 months) and gaining the city a favorable result in the face of resistance from “sophisticated and well financed creditors.” In contrast, prior (smaller) municipal bankruptcies have lasted as long as two to three years, and the legal fees incurred have exceeded Jones Day’s both in the total cost and in the percentage of the restructured debt that it represents.

Dentons US LLP and the other retained firms made similar arguments in their disclosure statements, essentially arguing that fee reductions made during the course of the litigation were considerable enough to preclude the necessity of any further post-petition review, and that their contributions to the case were significant – and successful – enough to justify the fees charged.

Judge Rhodes is expected to issue an order soon on whether the fees in question will be paid in full or further reduced.

By: Sarah Mills-Dirlam

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Buzzanga v Life Insurance

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(Volume 4, Issue 8)

In a recent case, the United States District Court for the Eastern District of Missouri reduced an attorney fee award sought by a prevailing Plaintiff under the Employee Retirement Security Act (“ERISA”). The party sought to receive $159,352.85 in attorney’s fees and costs, which was reduced to $89,663.95 due to unreasonable hourly rates and hours expended.

First, the court evaluated whether the hourly rates charged were reasonable. One of the attorneys, who routinely handled ERISA litigation, charged an hourly rate of $350. The second attorney had twenty years’ experience practicing law, and charged an hourly rate of $450. To determine whether or not these rates were reasonable, the court looked at “the ordinary rate for similar work in the community where the case is being litigated,” as well as whether the attorneys had any “special skill or experience.”  The attorneys argued that the court should also take into account the fact that they represented the plaintiff on a contingency fee basis and “bore the risk of losing outright,” and that the firm bore the cost of expenses. For these reasons, the court decided that the plaintiff’s attorneys were justified in having higher hourly rates than those of the defense.  Nonetheless the court did reduce the hourly rates somewhat, to $275 for the first attorney and $375 for the second.

Next, the court looked to the reasonableness of the hours expended.  The first attorney expended 279.9 hours total, and the second attorney expended 56.1 hours. The court deemed some of these hours to have been spent on administrative tasks, such as “filing documents in the court’s electronic filing system and reviewing nonsubstantive orders.” Further, the court also disallowed some hours due to the work being duplicative in nature, such as instances in which both attorneys charged for attending meditation sessions or depositions. In these instances, the court only awarded fees for the lead attorney’s presence.Overall, the court deducted 9.4 hours from the first attorney and 20 hours from the second attorney.

Finally, the court decided the rate at which pre-judgment interest would be charged.  “The dispute centered on which interest rate would apply – the one that was in effect on January 18, 2008 (2.69%) or the one that was in effect on January 4, 2013 (.15%).”  The court decided to apply the 2008 interest rate of 2.69% because that was the year in which the Plaintiff’s benefits were denied.

Implications for Legal Billing: This court ruling affirms that adjustments can be made to hourly rates that are not in line with prevailing market rates in the community, although the special skill and experience of the attorney, and the existence of any contingency fee arrangements, may also be taken into account in determining a final award.

In addition, this case stands for the principle that courts will not reimburse for attorney’s fees that are administrative or duplicative in nature. If a task could have been performed by secretarial staff, or if two attorneys billed for tasks that only required one, the court may wholly deduct those hours. 

*Buzzanga v. Life Ins. Co. of N. Am., 4:09-CV-1353 CEJ, 2013 WL 784632 (E.D. Mo. Mar. 1, 2013). Full copies of court decisions may be available through counsel or through various internet or paid services.

By Nicole Della Ragione

Rodriguez v. Barrita, Inc.

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(Volume 4, Issue 7)

In a recent case, the United States District Court for the Northern District of California substantially reduced the amount of attorney’s fees sought by a prevailing party under the Americans with Disabilities Act and the California Disabled Persons Act.  The prevailing plaintiff sought to receive $1,444,513.84 in attorney’s fees, which was reduced by $686,359.95, or 47%, due to unreasonable hourly rates, overbilling, and limited success on certain claims, for an overall award of $758,153.89.

First, the court evaluated whether or not the “fee applicant produced satisfactory evidence that the requested rates are in line with those prevailing in the community.” The court found that the firm’s paralegals $200 hourly rate did not comply with the rates prevailing in the community, and reduced the rate to $175 per hour in spite of the plaintiff’s argument that the paralegal had attended a few semesters of law school.

Second, the court decided whether or not to apply the attorneys’ current hourly rate or the historical rates. The court stated that “nearly five years has passed since the commencement of the case, during which time plaintiff’s counsel received no payment for their services. Considering this lengthy delay, the fee award should not be based entirely on counsel’s historical rates at the time the work was performed.” However, the court also found that awarding the attorney’s current rate for all work performed during 2009-2014 would cause an unwarranted increase in the overall fee. Therefore, one attorney was awarded her “2013 rate of $495 for all hours worked during and before 2013 and her 2014 rate of $550 for all work performed in 2014.”

Third, the court examined whether overbilling occurred due to attendance at unrelated trials, time spent on alternative dispute resolution, and time spent on various motions. “On August 7, 2013, an attorney for the prevailing party spent 3.5 hours observing an unrelated trial in order to ‘evaluate and determine motions in limine and jury instructions.’” The court found it unreasonable for another party to pay for this time. Therefore, the court reduced the fee award by the entire 3.5 hours.  Then the court looked at the time spent on alternative dispute resolution.  The prevailing party’s law firm worked a total of 57.6 hours on the 2010 and 2012 mediations.  The court found that the presence of two attorneys at the mediations was reasonable, but that the presence of a paralegal was unnecessary. Therefore the court reduced the fee award by 10 hours. The court also examined the amount of time spent on various motions made by the prevailing party. The defense argued that because they spent significantly less time on motions than the plaintiff’s attorneys, the prevailing party’s hours should be reduced substantially. The court disagreed with this contention, stating, “By and large, the court should defer to the winning lawyer’s professional judgment as to how much time he was required to spend on the case; after all, he won, and might not have, had he been more of a slacker.” However, the court did reduce by 25 hours the original 123.5 hours spent on various motions post-judgment “Due to the vague and incomplete nature of the fee motion’s initial request for ‘fees on fees.’” 

Fourth, the court determined whether or not this case was covered under the California Disabled Persons Act and Unruh Act as “involving a contingent risk or requiring extraordinary legal skill” so as to warrant a 1.5x multiplier to the attorney fee award. The court found that no fee enhancement was warranted because the skill of the counsel, the difficulty and novelty of the underlying legal issues, and the contingent nature of the fee award were already included in the attorney fee award. In fact, the court actually decreased the award by 20% under the Acts because a sizeable portion of the parties’ motions were for claims that were deemed irrelevant or unsuccessful.

Finally, the court examined the $248,671.84 in litigation expenses that were requested by the prevailing party. A majority of the litigation expenses, $197,976.11, were attributed to witness fees. The court reduced one of the expert witness fees by 25%, from $111,133.82, due to inaccuracies in billing time and overbilling for travel time. Further, the court reduced the rest of the witness fee expenses to again account for the limited success achieved in this case. The court then looked at the other expenses incurred by the prevailing party, holding that a losing party should not be obligated to pay for all of the prevailing party’s travel costs because such expenses are “not normally charged to a fee paying client.”  The court also found that $5,131.08 of the charges for deposition video recording was unreasonable and reduced the award accordingly. Finally, the court reduced the total amount of litigation expenses by another 20% due to the partial success of the claim. Overall, the court reduced the requested litigation expenses from $248,671.84 to $155,356.51, a 37% reduction.

Implications for Legal Billing:  This case demonstrates the importance of using the appropriate number of attorneys to staff depositions, meditations and hearings. Overstaffing can lead a court to determine that overbilling occurred and it may adjust the fee award based upon the number of attorneys deemed appropriate.

Additionally, this decision highlights the discretion the court has in reducing a fee award based upon success on the merits of the case, as both the legal fee award and the litigation expense award were reduced here because the prevailing party only achieved partial success on the merits.

*Rodriguez v. Barrita, Inc., C 09-04057 RS, 2014 WL 2967925 (N.D. Cal. July 1, 2014). Full copies of court decisions may be available through counsel or through various internet or paid services.

By Nicole Della Ragione

Jacobs v. Memphis Convention and Visitors Bureau

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(Volume 4, Issue 6)

In July 2012, the United States District Court, Western Division of Tennessee, reduced a prevailing party’s fee petition due to objectionable billing practices. Although the adjustment was proportionally minimal, Judge Charmaine G. Claxton provided a detailed explanation behind his decision that can serve as a guiding light for future fee disputes. Judge Glaxton relied on the Lodestar method to calculate reasonable attorney fees and ultimately awarded $171,698.75 after deducting $3,150 for unnecessary mediation preparation and attendance by more than one attorney, and $29,485 for efforts spent on unsuccessful claims not central to the lawsuit.  

The lawsuit arose when Plaintiff, a photographer, sued Defendants, including Memphis Convention and Visitors Bureau (“MCVB”), for copyright infringement related to their alleged “unauthorized reproduction, distribution, and/or display of his photographs through multiple internet websites and print media.” The plaintiff’s allegations included direct copyright infringement, contributory copyright infringement, vicarious copyright infringement, and breach of contract. Plaintiff sought damages, injunctive relief, legal expenses, and compensation for “Defendant’s indirect profits from the infringement.” The jury held that MCVB infringed upon Plaintiff’s copyright for four of his photographs, awarding $17,500 and $7,000 for two photographs, and $15,000 each for the other two, where MCVB’s infringement was willful.

Soon after the decision, Plaintiff filed a motion requesting $199,657.50 in attorneys’ fees and $4,676.25 in costs and expenses pursuant to 17 U.S.C. § 505. The statute requires that the party must prevail in order to be awarded attorneys’ fees. The Court concluded that Plaintiff did prevail in accordance with the statute and used the Lodestar method to determine the reasonableness of the requested fees. The Lodestar method multiplies “the proven number of hours reasonably expended on the case by an attorney, multiplied by a reasonable hourly rate.”  The reasonableness is determined by looking at twelve factors including the skill, time, and labor needed to litigate the claim, as well as other relevant factors such as the outcome of the case, awards in similar suits, and the attorney’s reputation.

The Court’s Lodestar calculation only took into account the reasonableness of the hours billed, as the parties did not dispute the reasonableness of the hourly rates. In disputing the fee petition, MCVB identified three categories of objectionable billing entries: “(1) duplicative time entries for two attorneys at depositions, mediation, and trial; (2) hours spent on unsuccessful claims; (3) hours spent litigating against other defendants.” Regarding the first objection, the Court reduced the fees by $3,150 because Plaintiff failed to demonstrate why both attorneys were needed for preparation for and attendance at the mediation.  Regarding MCVB’s second objection, the court held that “the multiple copyright-infringement claims were not sufficiently distinct to render Plaintiff’s request for attorneys’ fees unreasonable” because “much of the preparation would have been the same regardless of precisely which photos were at issue.” However, the Court did reduce the Plaintiff’s requested fees by $29,485. This amount represented the portion of the fees billed pertaining only to the claims for the photos where no copyright infringement was found.  Regarding MCVB’s third and final objection, the court removed $8,905, or half the total fees related to the motion for summary judgment.

Implications for Legal Billing: Judge Claxton’s ruling reaffirms industry standards regardingobjectionable billing practices such as having multiple attorneys prepare for and attend depositions, hearing, and mediations. The ruling also demonstrates an effective use of the Lodestar method to calculate reasonable attorney fees.

In addition, a key point of interest in this case is the Court’s discussion of how to award attorney fees when the party does not prevail on every claim alleged. Here, the judge deducted numerous hours billed for unsuccessful claims, specifically, time dedicated to claims for the two photographs where no copyright infringement was found. Accordingly, this decision, and others like it, should encourage attorneys to avoid frivolous allegations, and dedicate the bulk of their time to claims more likely to be meritorious.

*Jacobs v. Memphis Convention and Visitors Bureau, 2012 WL 4468500 (W.D. Tenn. 2012). Full copies of court decisions may be available through counsel or through various internet or paid services. 

By Melissa Sterling

Castellano v. Charter Commc'ns, LLC

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(Volume 4, Issue 5)

In a recent case, the United States District Court for the Eastern Division of Virginia awarded plaintiff Andrea Jones $22,880.56 in attorneys’ fees for a wrongful termination suit against SouthPeak Interactive Corporation of Delaware (“Southpeak”), a 10% reduction from the original fee petition, due to block billing. 

First, the Court determined an appropriate hourly rate for one of Jones’ attorneys, Mr. Thorsen, based on the prevailing market rates within the Richmond Division for similar services.  For a fee petition, the burden is on the petitioning party to provide evidence that their requested fees are reasonable. To that end, Jones offered two affidavits from well-established lawyers with great expertise in this type of litigation.  In contrast, the Defendants offered no competing evidence of what they believed to be the market rate.  The Fourth Circuit’s McAfee[1] decision clearly states that evidence “deemed competent to show prevailing market rates includes ‘affidavits of other local lawyers who are familiar both with the skills of the fee applicants and more generally with the type of work in the relevant community.’”   Therefore, after evaluating the affidavits and the record as a whole, the Court concluded that an appropriate rate for Thorsen was $420.00 per hour, only five dollars less than what Jones requested.

The defendants also objected to the number of hours (539.45) of work allegedly provided by Thorsen.  Specifically, two isolated objections were raised: one for billing for administrative tasks and the other for “inputting and categorizing additional billing.” The Court found that such entries lacked billing judgment and therefore reduced the total time by 4.8 hours.  The Defendants also objected to 103.43 hours spent on depositions and an additional 34.41 hours spent reviewing those depositions.  However, no explanation was provided for this objection, and the Court found the time charged to be reasonable, citing the importance of reviewing depositions in order to prepare for trial.

Next, the Court considered whether the amount of hours billed by Jones’ other attorneys was reasonable.  Specifically, Jones sought compensation for 201.3 hours of services provided by Sands Anderson PC, which had already been reduced by the firm from the original total of 262.7 hours due to possibly duplicative charges. The defendants still contested the new total, arguing that “nearly every time entry has been improperly ‘block billed.’”  The Court agreed and applied a 10% across-the-board reduction to account for the improperly block billed entries. 

Finally, the Court evaluated the distribution of fees. The analysis began by recognizing that all three defendants were “liable on a single count of unlawful retaliation in violation of 18 U.S.C. §1514A.” Additionally, Jones’ termination of employment was considered a single injury incurred by all of the defendants’ actions.  Therefore, the Court finds it appropriate to award attorneys’ fees jointly and severally.

Implications for Legal Billing: Attorneys are obligated to exercise care and judgment when billing their clients, and to provide an efficient and clear billing record that allows the client to understand each service and cost provided.  Block billing makes it difficult to ascertain how much time was spent on each individual task, which is key in determining an award for legal fees. This case emphasizes that even where an attorney has already voluntarily reduced their fees due to other billing concerns, block billing alone may cause a court to make significant across the board reductions.

[1] McAfee v. Boczar, 738 F. 3d 81 (4th Cir. 2013) 


*Jones v. Southpeak Interactive Corp. of Delaware, 2014 WL 2993443 (E.D. Va. 2014). Full copies of court decisions may be available through counsel or through various internet or paid services.


By Sophia Arzoumanidis

Castellano v. Charter Commc'ns, LLC

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(Volume 4, Issue 4)

In a recent case, the United States District Court for the Western District of Washington reduced the attorney’s fee award of a prevailing party under Washington’s Freedom from Discrimination law (RCW The prevailing party sought to receive a fee award for litigation expenses equaling $70,041.85.  Under Washington Law, “a party requesting legal fees must establish that the amount of fees requested is reasonable.” The court found that many of the expenses requested did not meet the reasonableness standard and the award was reduced to $16,232.32, a 76% reduction.

First, the court examined the client expenses requested within the fee award. The court stated that, “a motion for attorney’s fees is to recoup fees and counsel’s expenses of litigation,” and that personal expenses, such as meals, parking and mileage “incurred by the plaintiff as an individual” are not reimbursable. Furthermore, the court held that a chair purchased by the attorney does not count as a litigation expense because the chair would be kept by the attorney for their personal use.

Second, the court evaluated whether the mileage reimbursement sought by the attorney was necessary. The court found that in many instances the attorney sought reimbursement for unnecessary mileage. Under 28 U.S.C.A §1821, witnesses are entitled to be reimbursed for their mileage expenses for traveling to court. However, this entitlement does not apply to attorneys and their staff. One instance in which the court found the mileage unnecessary was when the attorney charged for 18 miles to meet a witness, and 146 miles for the return.  The court found this to be excessive and warranted the exclusion of the requested mileage from the award.

Third, the court examined expenses that were deemed to be overhead or unreasonable. The court found that the attorney sought reimbursement for overhead expense items such as “postage, binder tabs, and parking.” Because these items are a cost of running a law firm, the court stated that it does not believe that “the court should pay the expenses of counsel for coming to work.”  Furthermore, the court found the $9.95 “miscellaneous expense” for a “Starbucks meeting” to be unreasonable because “an expensive latte is not an expense of litigation.” Therefore, the court excluded these expenses from the attorney fee award.  

Finally, the court examined the paralegal billing rate. The prevailing attorney sought $6,820 in paralegalfees. The court found that paralegal fees are proper expenses of litigation, but should be considered an expense and not a part of reimbursable attorney’s fees. Furthermore, the court found the $125-150 hourly rate of the paralegal to be unreasonable and unsupported by evidence.  Therefore, the court reduced the hourly rate of the paralegal to $21.63 per hour, the actual hourly rate paid by the attorney.

Implications for Legal Billing:   This case highlights the importance of attorneys only charging for expenses that are reasonable costs of litigation. A court will often reduce an attorney fee award because the expense sought to be reimbursed is considered overhead or unreasonable and is therefore not reimbursable.

Additionally, the court will not reimburse for paralegal work that is billed at a high rate if that rate is unsupported by evidence.  If the court does not find convincing evidence for an award of a high rate for a paralegal, it will reduce the award to what is found reasonable within the geographic and practice area.

*Castellano v. Charter Commc’ns, LLC, C12-5845 RJB, 2014 WL 1569242 (W.D. Wash. Apr. 17, 2014). Full copies of court decisions may be available through counsel or through various internet or paid services.


By, Nicole Della Ragione

Scott v. City of Denver

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(Volume 4, Issue 3)

In January 2014, the United States District Court for the District of Colorado ruled on a fee request made by plaintiff’s attorneys in a claim asserting that Denver violated the Rehabilitation Act and Americans with Disabilities Act by failing to provide plaintiff with a sign language interpreter during his incarceration. Although the case was settled pre-trial for $15,000 and reasonable attorney fees, the plaintiff’s attorneys initially sought compensatory damages, equitable relief for himself and others, $60,000 in damages, $240,000 in attorney fees, and the ability to participate in the drafting of new city policies. After applying the “Lodestar” method, the court ultimately reduced the attorney fee request by 66% from $427,372.50 to $141,032.

Before applying the Lodestar method, the court discussed the gross disparity between the attorney fee request, approximately $427,000 and the plaintiff’s pre-trial settlement, $15,000, explaining that although they need not be completely proportional, the large disparity mandates a higher standard of scrutiny.

The Lodestar method finds a reasonable fee award by “multiplying a reasonable hourly rate by the reasonable number of hours expended, and adjusting that figure upward or downward to account for any extraordinary circumstances.” In applying the Lodestar method, the court found a number of objectionable fee entries that justified altering the award.  Objectionable entries included unreasonable attorney hourly rates, excessive time for task, overstaffing, and billing attorney hourly rates for clerical tasks and unproductive travel time.

The court provided a plethora of examples of these objectionable charges. Regarding unreasonable attorney rates, the court found the attorneys’ hourly rates, $440 and $290, were well outside its calculation of the reasonable market rates, $375 and $200, for each attorney’s practice level. The court also found that the attorneys billed twice as many hours as reasonably necessary to prepare for depositions. One example included billing 85 hours in preparation for a six hour deposition. The court also reduced attorneys’ fees for billing for discussions with each other and with paralegals and billing for unnecessary attendance at depositions for which only one attorney had prepared. The court also refused to compensate attorneys for time spent on “tactical decisions” that had unclear significance to the action. Finally, the court reduced the fee award when the attorneys’ billed their hourly rate for unproductive travel time and for clerical tasks including “several hours relating to preparation of a ‘video outreach letter to potential witnesses,’ including recording the video, posting it to You Tube, and burning 90 DVDs.”

Finally, in determining the extent of the award reduction, the court also considered the plaintiff’s attorneys’ obtainment of “fairly little in return for his enormous expenditure of attorney fees,” observing that the attorneys’ fees would have been substantially less had they initially limited their scope to collecting the $15,000 settlement instead of seeking and failing to attain multiple other forms of relief.

Implications for Legal Billing: This case identifies many common objectionable charges that may be excluded from a fee award via the application of the Lodestar method. Here, the objectionable charges include unreasonable hourly rates, excessive time for task, overstaffing, and billing attorney rates for clerical tasks and unproductive travel time and resulted in a 66% reduction in the fee award.

The severity of this reduction indicates that courts may adopt heightened scrutiny when a large discrepancy exists between a settlement amount and a fee request.  Additionally, this case highlights the fact that courts may take into account the overall success of the claim when adjusting a fee award via the Lodestar method. 

*Scott v. City and County of Denver, 2014 WL 287558 (D. Col. 2014). Full copies of court decisions may be               available through counsel or through various internet or paid services.

By Melissa Sterling

Viveros v. Donahue

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(Volume 4, Issue 2)

In March 2013, the United States District Court, Central District of California reduced the hours billed by Plaintiff’s counsel from 1,236 to 740.6. This 40 percent reduction was a result of excessive billing and “padding” and/or duplicative billing. The Court concluded that 740.6 hours was a reasonable amount of time found similarly by other district courts in analogous cases.

The Court used the “lodestar” method in determining the amount of attorney fees to award. This method entails multiplying the number of hours “reasonably expended on the litigation by a reasonable hourly rate.” The reasonable hourly rate is typically found by referring to the prevailing market rate for similar services provided. The burden is on the requesting party to provide evidence that the requested fees are reasonable compared to the prevailing rates within the community for similar services of lawyers with equal skill and experience. Therefore, the Plaintiff had the burden of producing such evidence, which he failed to do. Plaintiff claimed $500 was an appropriate hourly rate yet only provided evidence to suggest that such an hourly rate was appropriate for attorneys with significantly more experience than his attorneys. The Court concluded an hourly rate of $350 was more appropriate based on the defendant’s evidence and published data indicating the prevailing rate within the community is lower than $500.

Once the hourly rate was established, the Court determined whether the number of hours billed by Plaintiff’s counsel was excessive. The Defendant’s fees expert argued that one efficient attorney could have successfully completed all the work that the Plaintiff’s three attorneys completed in approximately 600 billable hours. The Court agreed with the opposing side and concluded the hours were indeed excessive. Some examples that the court pointed to demonstrate this conclusion: one attorney reported that she spent 1.2 hours filling out a one-page substitution of counsel request form and another attorney reported spending 4.2 hours preparing for a telephonic conference that generally lasts only 5-15 minutes. The Court also discovered some duplicative billing. For example, one attorney billed four hours to draft the Plaintiff’s opposition to defendant’s motion to dismiss even though he was not the “managing partner” assigned to the matter. In the end, the actual managing partner drafted the final opposition, but both attorneys still billed for their time. The court held that the first attorney’s preparation of the pleading was duplicative.

After reviewing the time entries, the Court also discovered that the Plaintiff’s attorneys billed for paralegal and/or clerical work at attorney rates. For example, one attorney billed five hours preparing for a deposition, which included “organizing exhibits.” Such a task is more appropriately completed by a paralegal. The same attorney also billed an hour to prepare subpoenas, even though this is a task that is typically completed by a paralegal or secretary. Such instances of ineffective billing authorize a reduction in fees.

Implications for Legal Billing: The Court’s decision emphasizes the importance of accuracy when attorneys bill their hours. Attorneys are responsible for billing work that is appropriate for someone of their experience and level of expertise. Additionally, unless there is an exception, lawyers should only charge what is considered a comparable and reasonable hourly rate within the relevant market.

Excessive and redundant billing can easily be avoided by attorneys, as well as billing for secretarial and/or clerical tasks which are included in the firm’s overhead costs. Lawyers must aim to bill efficiently and in doing so they will be more productive and accurate in their performance of the work.

* Viveros v. Donahoe, 2013 WL 1224848 (C.D Cal. 2013). Full copies of court decisions may be available through counsel or through various Internet links or paid services.

By Sophia Arzoumanidis

EEOC v. Autozone

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(Volume 4, Issue 1)

In a recent case, the United States District Court for the Eastern Division of Missouri substantially reduced the requested attorney’s fees of a prevailing party under Missouri Industrial Maintenance and Construction Power Equipment Act (“MCPEA”). The party sought to receive an award of attorney’s fees and costs equaling $950,327.90. The District Court reduced this request to $130,229.06 due to “inadequate billing records, overlawyering, and because of the result obtained.” 

First, the court evaluated what would be deemed a reasonable amount of time expended for the tasks required in the matter. The attorneys billed a total of 2364.50 hours for the matter which amounted to a total fee of $728,861.00. While the Courts evaluation states that this would be considered a reasonable amount of time spent on a matter of this magnitude, the way in which the billing was done would make it impossible for the Court to deem the total amount of hours as valid. The Court stated that “’block billing’ made it difficult for the Court to determine the reasonableness of the attorney’s time expenditures.”  Since block billing occurs when an attorney lists several activities under one time entry, it makes it nearly impossible for the Court to determine how much time was spent on the each individual activity. For this reason, the Court removed all time entries that reflected block billing and subtracted the dollar amount from the request award, which resulted in a deduction of $109,975.00.

Next, the court evaluated the amount of attorney’s that billed for a specific task to see if overlawyering occurred. The court deemed that there were multiple instances in which overlawyering, or overstaffing, occurred in the context of several attorneys working redundantly on the same project, as well as duplicative deposition attendances. The court deemed these billing actions to be unreasonable overlawyering and removed each entry that reflected billing in this manner, resulting in a reduction in the amount of $220,562.50 from the amount of attorney’s fees requested.

The final factor that the court deemed required a substantial reduction is due to the result ultimately achieved by the attorneys.  The attorneys were seeking an award for their clients in the amount of $6 million dollars in damages. The jury ultimately awarded the clients a damage award in the amount of $50,000.00. The Court found that this outcome warranted a substantial reduction in the amount of attorney fees that could be awarded.  The court found that a 75% reduction was appropriate since that attorney only recovered 0.08% of the amount they sought. The Court therefore, ultimately reduced the attorney’s fees award to $86,364.88.

The Court then looked to the costs that the party was seeking for reimbursement. The Court deemed that the court lacked sufficient proof in the areas of Trial Support Costs and for Electronic Discovery management.  Since the attorney’s did not provide sufficient proof to establish that services were reasonable, the Court deemed that the attorney could not recover any of the requested amount of $49,942.80. Furthermore, the court reduced the amount of Expert Witness fee’s that could be recovered due to the lack of clear legal billing and because of the ultimate result achieved by the attorneys. The court reduced the Expert Witness fee’s from $148,861.26 to $22,437.30.

Implications for Legal Billing: This decision highlights the importance of attorneys keeping detailed billing records. Additionally, attorneys must utilize billing judgment to ensure that the correct amounts of attorneys are assigned to a given task. A court will often reduce the amount of attorney’s fees requested where the billing is unclear and does not allow them to adequately assess if the amount of time billed would be reasonable for a certain task.

Additionally, the court will not award attorney’s fees for costs that do not have adequate proof that the cost was necessary to the matter or if it is unclear if the cost was billed correctly. The court will not reimburse for costs if the court cannot deem the costs reasonable. Alternatively, the court may lower the amount reimbursed if it is not proportional to the amount of damages won at trial.

*Mach. Maint., Inc. v. Generac Power Sys., Inc., 4:12-CV-793-JCH, 2014 WL 1725833 (E.D. Mo. Apr. 29, 2014) Full copies of court decisions may be available through counsel or through various Internet links or paid services.

By Nicole Della Ragione

EEOC v. Autozone

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(Volume 3, Issue 5)

In June 2013, the United States District Court for the Northern District of California made a $41,059.93 reduction to the $187,020 fee request by plaintiff’s attorneys in an action enforcing accessibility requirements set forth in the Americans with Disabilities Act of 1990. This 22% reduction in fees was the result of the court’s determination that Plaintiff’s attorneys expended an excessive amount of time meeting with co-counsel as well as in preparation for motions submitted after a settlement had been reached. In addition to the fee reduction, the Court also excluded $3,619.50 of the expenses requested for lack of documentation and lack of billing judgment. Despite the large overall reduction, the Court failed to adopt several of the defense expert’s assertions, including that the attorneys’ billing rates were unreasonable and that Plaintiff’s attorneys used block-billing practices.

Addressing the excessive conferencing, the Court noted that 21% of the lead attorney’s time and 47 % of a co-counsel’s time was billed for internal conferences. While Defendant’s expert recommended that a 4% limit should be imposed for each timekeeper, the Court refused to take such a stringent approach, relying rather on a case by case analysis. Ultimately, the Court determined that the amount of conferencing was excessive, and reduced each amount to reflect 10% of the time billed, an 11% and 37% reduction respectively.

Next, the court addressed the number of hours expended by Plaintiff’s counsel on its opposition to Defendant’s motion to continue the consent decree, Plaintiff’s motion for fees, and Plaintiff’s reply brief and motion to strike regarding its motion for fees. Despite acknowledging that Plaintiff’s opposition was reasonable under the circumstances, the Court held that the 40.3 hours expended to draft Plaintiff’s opposition was excessive given the uncomplicated nature of the issues. With respect to the 30.8 hours billed for the fee motion, the Court took exception to the fact that 18.3 hours, nearly 60% of the work, was billed by the attorney with the highest rate. Lastly, the Court addressed the motion to strike and reply brief. The court disallowed all of the hours billed for the motion to strike the Defendant’s fee expert because it failed to comply with the court rules. In addition, the court found the 23.9 hours expended on the reply brief to be excessive in light of the issues raised and counsel’s experience even though counsel had already reduced the amount sought by 10% as an exercise of billing judgment. For all of the hours billed on the three motions above, the Court reduced the fees requested by 50% to reflect the excessive time spent on the tasks.

Finally, the court addressed expenses submitted in relation to the case. Noting a distinct lack of documentation to support either the per-item cost or the end-product of the copying and researching expenses, the Court declined to allow recovery in any amount, a reduction of $1,431.18 and $1,286.69 respectively. Furthermore, the Court disallowed several miscellaneous expenses, including local travel, due to the fact that Plaintiff’s attorneys could not cite any authority indicating that these expenses were reasonable.

In sum, the court awarded $149,920.57 in fees and expenses for a case that settled for injunctive relief and $43,000 in statutory damages.

Implications for Legal Billing:

This decision highlights that attorneys must observe billing judgment and work to minimize the time expended when faced with familiar issues. Whether a case requires significant work subsequent to settlement is case-specific, but prevailing counsel that does not effectively monitor its hours throughout the process risks facing large reductions for inefficient work.
Finally, the decision demonstrates that it is unreasonable to seek recovery for expenses that are either unsupported by documentation or not reasonably recoverable under common law. The costs related to litigation should be reasonably necessary and well documented in order to be recoverable.

* Cruz v. Starbucks Corp., 2013 WL 2447862 (N.D. Cal. 2013). Full copies of court decisions may be available through counsel or through various Internet links or paid services.

By Riley Orloff

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