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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

EEOC v. Autozone

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(Volume 3, Issue 4)

In January 2013, the United States District Court for the Eastern District of Tennessee reduced a fee award by approximately 20 percent. The Court reduced the requested fees from $98,074.00 to $80,499.14 and awarded $5,706.01 for costs incurred in the litigation, for a total award of $86,205.15. Among the reductions, the Court applied a 4 percent across the board reduction for unreasonable hourly rates. The Court also applied an additional 10 percent reduction for excessive billing entries and a 5 percent reduction for billing at an attorney’s full hourly rate for travel time.

First, the Court stated that the lodestar analysis should be used to determine the reasonableness of legal fees in this case. The Court further explained that to determine the appropriate hourly rate, courts must consider “the prevailing market rate in the relevant community.” In this case, the Court found that the hourly rate of $440 charged by one of the attorneys was unreasonable.  According to the Court, charging at that rate was inconsistent with the prevailing market rate in Knoxville, Tennessee. The Court reasoned that the attorney has failed to show a valid reason as to why his $440 rate was reasonable in light of the services provided. Accordingly, the Court applied an overall 4 percent reduction.

Second, the Court found that a further reduction was warranted due to excessive billing for a number of components in the litigation. First, the Court found that spending 27.9 hours researching and drafting an eleven page document was excessive. Second, the Court stated that spending 92.4 hours preparing for a trial that lasted approximately 5.5 hours was also excessive. Third, the Court found equally troubling the amount of time spent in preparation for post-trial (118.4 hours spent drafting a thirty-two page document). Thus, to redress these excessive entries, the Court applied an additional 10 percent reduction.

Finally, the Court held that a reduction for billing for travel time at an attorney’s full hourly rate was also appropriate in this case. The Court explained that courts “regularly reduce travel compensation to fifty-percent of the reasonable hourly rate for counsel.” Here, 10 percent of the hours originally submitted were compensation for travel time billed at the attorney’s full hourly rates. Accordingly, the Court found that reducing the total award by 5 percent would adequately discount for the travel time entries billed at the full hourly rate.

Implications for Legal Billing:

This case addresses a number of important billing issues. First, it illustrates the importance of charging reasonable hourly rates. Unless an exception applies, attorneys are expected to charge hourly rates that are consistent with the prevailing rates in the relevant market. Courts have full discretion to reduce hourly rates to an amount that they find reasonable.

In addition, this case also illustrates that courts have the discretion to make across the board reductions for time excessively spent on a task. To avoid these types of reductions, attorneys should use their billing judgment and voluntarily reduce legal fees where the time spent on any given task seems excessive in relation to the task performed.

Finally, the Court again emphasized that travel time should not be billed at an attorney’s full hourly rate. Attorneys should be aware that the prevailing standard is to bill half of their hourly rate, at most, for time spent traveling when no legal services are performed during travel.  

* Grant v. Shaw Environmental, Inc., 2013 WL 1305599 (E.D. Tenn.2013). Full copies of court decisions may be available through counsel or through various Internet links or paid services.

By Enkelena Gjuka

EEOC v. Autozone

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(Volume 3, Issue 3)

In May 2013, the United States District Court for the Western District of Oklahoma made a $116,148.15 reduction to the $145,148.50 fee request by plaintiff’s attorneys in a Title VII work-place discrimination suit.  This 80 percent reduction in fees was, in part, the result of the court’s determination that counsel failed to exercise billing judgment by overstaffing and by filing inconsequential appeals.  A substantial portion of the reduction reflected a downward adjustment to the lodestar amount due to a relative lack of success on the underlying claims. 

The court first addressed the possibility of overstaffing and duplicative billing considering that “[v]irtually all of the tasks undertaken by [P]laintiff’s counsel involved the substantial involvement of at least two attorneys.”  Although the court suggested that the use of more than one attorney is unremarkable, at instant, the court took exception with the substantial review and revision of documents undertaken by multiple attorneys and the substantial amount of time spent in “interoffice conferences between counsel,” given the purported experience of counsel.  The court also reduced the award for the use of a second lawyer at trial when the record showed that the second lawyer had little to no participation over the short duration of the trial.  Lastly, the court reduced the award in light of counsel’s decision to staff a third lawyer, unfamiliar with the case at hand, to prepare the response to Defendant’s summary judgment motion when two other lawyers had handled all of the pretrial proceedings. In light of Plaintiff’s Counsel’s use of block billing, which prevented an accurate culling of the duplicative hours, the court reduced the total hours expended by 30 percent to reflect the excess time spent on matters above, reducing the initial lodestar amount to $101,603.95.

Next, the court addressed whether the relative lack of success on the merits warranted a reduction from the initial lodestar amount.  Given the almost nominal recovery in this case—especially when compared to what Plaintiff sought at the pleading stage—the Court determined that a two-thirds reduction was necessary based on the results obtained.  This adjustment, tentatively, reduced the fee award to $33,868. 

Finally, the court addressed whether the time spent on post-judgment motions by Plaintiff’s counsel, with regards to both a motion for pre- and post-judgment interest and the motion for attorneys’ fees, was reasonable given the low level of recovery at issue.  Given that the applicable interest rates would have resulted in an award of $1.79 in pre-judgment interest, the court was not impressed by counsel’s motion for interest and, ultimately, held that any entries billed in connection with the motion for interest would be excluded.  Additionally, the court took exception with counsel’s fee motion, which generated a fee request exceeding the Plaintiff’s recovery, and excluded any hours expended on this motion as well.  Again due to counsel’s practice of block billing, the court elected to exclude all entries that included any time attributable to either motion since it was impossible to effectively parse the block-billed entries.  Overall, this exclusion amounted to a $5,332.50 adjustment in the overall fee awards.

In sum, the court awarded only 20% of the legal fees requested, a total of $29,000.35 in fees and costs, for a case that resulted in a $2,984 jury award following a two-day trial. 

Implications for Legal Billing: This decision highlights that attorneys must staff judiciously and work to eliminate inefficiencies created by the use of multiple attorneys.  Whether a case requires the work of two or more attorneys is case-specific, but prevailing counsel that does not effectively monitor its hours throughout the process risks facing large reductions for inefficient work.

The court’s decision also highlights that success on the merits is a necessary factor when adjusting the initial lodestar amount.  An attorney who seeks a substantial fee for a relatively nominal award risks large deductions, or possibly the denial of attorneys’ fees altogether.

Finally, the decision demonstrates that when block billing impedes the court’s meaningful review of the billing entries the court is more apt to apply an across the board percentage reduction to the block billed entries.   

* Cox v. Council for Developmental Disabilities, Inc., 2013 WL 1915066 (W.D. Okla. 2013). Full copies of court decisions may be available through counsel or through various Internet links or paid services.

By Riley Orloff

EEOC v. Autozone

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(Volume 3, Issue 2)

In March 2013, the United States District Court for the District of Massachusetts made a $100,155.90 reduction to the $220,355.50 fee request by plaintiff’s attorneys in a Title VII work-place discrimination suit. This 45% reduction in fees was the result of the court’s determination that neither the amount of hours expended nor the hourly rates requested were an accurate reflection of the services actually provided. Within the amount of hours expended, the court raised concerns with the practices of overstaffing, excessive time spent on tangential tasks, and a lack of billing judgment, including billing for clerical tasks and block billing.

The court first addressed the possibility of overstaffing and duplicative billing given that the underlying action was being litigated by both the Equal Employment Opportunity Commission (EEOC) and the individual claimant as joint plaintiffs. Although the employer asserted that the EEOC had “sufficiently represented [the claimant’s] rights,” the court held that the language of the Title VII fee-shifting statute clearly recognizes both the claimants “right to intervene in such a lawsuit to protect his individual rights” and that “attorney’s fees are due to any prevailing party.” However, the court did take exception to the claimant’s use of five attorneys, in addition to those of the EEOC, to work on his behalf. After parsing the time entries of all five attorneys, the court deducted 134.95 hours of the 734.5 total hours expended in order to remedy the inefficiencies of overstaffing. In addition to the reductions due to overstaffing, the court deducted an additional 19.5 hours which it determined constituted excessive conferencing and supervision due to the participation of too many attorneys.

Next, the court addressed hours expended that were clearly not in furtherance of the litigation, including time expended on media relations and time expended for the claimant’s personal affairs. The court held that, even in matters of great public interest, time spent by counsel “interfacing with the press” is not recoverable. Therefore, the court elected to deduct 3.2 hours that one attorney spent “counseling [claimant] and other individuals on how to handle media inquiries.” The court also took exception to time expended on claimant’s personal affairs, not sufficiently related to the litigation. Even though the majority of the hours spent on personal affairs was either to counsel claimant on “how to deal with threatening telephone calls” as a result of the litigation or to seek a “religious accommodation” so claimant could carry a ceremonial weapon into the federal courthouse for official litigation proceedings, the court held that these issues were not sufficiently related to the litigation itself and therefore not properly recoverable in an action for attorney’s fees. A total of 22.9 hours were deducted for counsel’s efforts in furtherance of these two issues.

Then, to remedy issues with billing for clerical tasks and block billing, the court imposed a twenty percent global reduction to the four attorneys’ with entries in question.

Finally, the court addressed the reasonableness of the rates requested by the two highest billing attorneys. The court determined that affidavits asserting that the attorney was of comparable skill and experience to large-firm commercial litigators were insufficient evidence to warrant the lead attorney’s requested rate for individual civil rights cases. The court also refused to accept the attorney’s argument that, despite insufficient documentation, his rate was still reasonable when compared to the Laffey Matrix—an annual rate schedule used by the US Attorney’s office for the District of Columbia—because evidence of reasonableness in comparison to rates in Washington, D.C. cannot be used as evidence of reasonableness in Boston, MA. Accordingly, the court reduced the lead attorney’s rate from $425 to $350, which still exceeded the rate awarded to the same attorney by the same court in a different civil rights matter.

In sum, the court awarded only 55% of the legal fees requested, along with the full amount of expenses requested, for a total of $120,199.60 in fees and $2,623.15 in costs for a case that settled for injunctive relief, $75,000 in monetary relief, and reasonable attorney’s fees.

Implications for Legal Billing: This decision highlights that attorneys must staff judiciously and work to eliminate inefficiencies created by the use of multiple attorneys. Whether a case requires the work of two or more attorneys is case-specific, but prevailing counsel that does not effectively monitor its hours throughout the process risks facing large reductions for inefficient work.
The court’s decision also highlights that it is unreasonable to seek recovery for affairs that are tangential or lack sufficient relation to the litigation itself. The time expended by attorneys should reasonably be in furtherance of the litigation at-hand.
Finally, the decision demonstrates that counsel should not bill for clerical tasks nor describe the time spent in blocks of time as opposed to billing each discrete task separately, as such practices may subject counsel’s time to a percentage global reduction, as was applied in this case.

*EEOC v. Autozone, Inc., 2013 WL 1277873 (D.Mass. 2013). Full copies of court decisions may be available through counsel or through various Internet links or paid services.

By Riley Orloff

Carter v. Wolf

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(Volume 3, Issue 1)

In May 2013, the United States District Court for the District of Connecticut reduced a fee award from $388,270.11 to $229,942.20.  The court, deducting $158,327.91, awarded $219,672.16 in attorney fees but awarded the full amount of costs and expenses totaling $10,270.04. Among the deductions, the Court denied recovery of $20,000 for one attorney’s services, who failed to provide billing records for his work. In addition, the Court applied a 15 percent across the board deduction for vague billing and travel time  that had been billed improperly at full rate.

First, the Court denied the request of $20,000 in fees for one attorney’s failure to produce billing records. The Court did not question the attorney’s services but found that his statements alone were insufficient to allow the Court “to meaningfully review the reasonableness of the fee requested.” Therefore, the Court denied recovery for services rendered by that Attorney.

Second, the Court applied a 15 percent across the board deduction for vague billing. The Court, citing Conn. Hosp. Ass’n v. O’Neil, stated that “[f]ees should not be awarded for time entries when the corresponding description of work performed is ‘vague and therefore not susceptible to a determination of whether the time [billed] was reasonably expended.’” The Court further provided that entries such as “review file,” “review of correspondence,” “conference with client,” “preparation of brief,” and “research” do not provide an adequate basis to evaluate the reasonableness of services and time spent on a matter.

In addition, the Court explained that although a court may attempt to clarify vague entries by looking at the context of the other entries, it is “‘neither practical nor desirable to review each entry in a massive case.” Thus, in consistence with other courts, the Court applied a percentage reduction method. The Court stated that, although they had no reason to believe that work was not done, “without more detail the Court cannot fairly evaluate the reasonableness of the services and hours rendered.” Accordingly, the Court found that a 15 percent reduction was warranted.

Finally, the Court agreed that travel time should not be billed at an attorney’s full hourly rate. Nevertheless, no further reductions for travel time were made because the Court found that the overall 15 percent deductions fairly accounted for the work reasonably completed by the attorneys.

Implications for Legal Billing:

This case illustrates the importance of recording services and maintaining contemporaneous billing records. In the absence of billing records, the court has discretion to not only reduce the amount of legal fees but also deny an award altogether.

Moreover, this case also illustrates that courts have the discretion to, and often do, reduce legal fees when work cannot be identified with sufficient certainty. Specific billing entries allow clients and the court to determine whether charges fairly reflect the work described. Since Vague billing entries gives courts the discretion to apply an across the board percentage  reduction, this further highlights the importance of billing services with specificity to avoid significant deductions.

Finally, the Court again reiterated that travel time should not be billed at an attorney’s full hourly rate. While no further deductions were taken in this case based on travel time, counsel should be cautioned to avoid billing their travel time at their full hourly rate, especially when no services are being performed during travel.

*Carter v. Wolf, 2013 WL 1946827 (D.Conn. May 9, 2013). Full copies of court decisions may be available through counsel or through various Internet links or paid services.

By Enkelena Gjuka

CDC Launch

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(January 28, 2013)

Today, Sterling Analytics has taken the first step in delivering legal fee advisory services to individuals who are overwhelmed with the issues involving spiraling legal costs in a divorce.

Controlling Divorce Costs is a completely new approach that Sterling Analytics developed to help individuals control legal fees for individuals:

ControllingDivorceCosts.com is a website that:

              1. Gives individuals free information regarding how they can take action to control the legal fees and costs of a typical divorce; and
              2. Allows them an opportunity to obtain low cost consultation with an attorney trained to advise individuals on such topics as:
                • proper billing methods;
                • client-friendly retainer agreements;
                • standards for proper vs. improper expenses; and
                • attorneys’ ethical responsibility for the efficient conduct of litigation

 

We are excited about this new approach.

Take a look: controllingdivorcecosts.com

English v. Comm'r of Soc. Sec.

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(Volume 2, Issue 34)

In a recent case, the United States District Court for the Northern District of Ohio rejected a $5,100 stipulation for attorney’s fees in an Equal Access to Justice Act (EAJA) case and instead awarded only $2,088.50 in fees because of the attorney’s questionable behavior and questionable billing practices. The court’s focus in this case was mostly directed at an attorney whose fee from generating the fee application itself represented 47.5%, or $2,808.20, of the overall fee requested.

First, the court evaluated the number of hours expended by the attorney on the case. Of the 17.1 hours billed, 15.2 of them were spent researching and drafting the request for attorney’s fees. At a hearing the court inquired whether the work was new or if any work had been taken from previous cases. The court ultimately discovered that nearly 65% of the fee application was directly copied and pasted verbatim from prior filings and a majority of the arguments revolved around the issue of counsel’s hourly rate under the EAJA. The court also researched previous filings and discovered that 96.8% of the attorney’s argument revolved around his hourly rate, and that the argument was not new or novel. The court also found the attorney’s behavior ethically questionable because he claimed to the court that a stipulation with opposing counsel was not achievable, when in reality, the Commissioner did enter into a stipulation for fees. Plaintiff’s attorney failed to follow up and billed for the application for fees instead. As a result, the court reduced the attorney’s hours from 17.1 hours to 1.9 hours for the actual substantive work that was performed in the case.

Next the court evaluated the reasonable hourly rate, which in an EAJA action is $125 per hour, unless a cost of living adjustment or special factor showing is made. Plaintiff sought an increase in their fees based upon inflation. However, the court decided not to exercise discretion to grant this request in order to send a message to the attorney about his behavior and billing practices. The court found it unreasonable that counsel attempted to spend government money by billing for the same work repeatedly and attempting to deceive the court when asked how much of the work was recycled from previous filings.

Implications for Legal Billing: This case highlights that courts will not rubber stamp a stipulation for fees merely because the parties agree. A court will often dissect and research the fees requested, especially when they are not proportional to the underlying award of fees sought in the case.

If a court finds work unnecessary, duplicative, or otherwise questionable, an attorney may pay the price in his or her compensation.

* English v. Comm’r of Soc. Sec., 2012 U.S. Dist. LEXIS 124085 (N.D. Ohio). Full copies of court decisions may be available through counsel or through various Internet links or paid services.

By Lisa Belrose

Dubose v. County of LA

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(Volume 2, Issue 33)

In June 2012 the United States District Court for the Central District of California granted an award of $62,836 in attorney fees, $538,782.50 less than the amount initially requested. The court reduced the award based on an unreasonable rate charged by the attorney, time billed for work done on unrelated/unsuccessful claims, as well as excessive billing, vague entries, and a minimal award recovery on the claims.

First, the court analyzed the “prevailing market rate factors” to determine the reasonable hourly rate. The court noted, that the rate is “calculated according to the prevailing market rates in the relevant community, regardless of whether plaintiff is represented by private or nonprofit counsel.” The burden is on the fee applicant to submit evidence along with affidavits from the attorney to support the hourly rate.  The court found that the plaintiff submitted no evidence concerning the “rate for attorneys of comparable skill, experience, and reputation” and found the fee applicant relied specifically on the exact rate used in a prior case. The court indicated that fee applicants should rely on the same standards for fee recovery set forth in similar cases, not exact rates. The court reduced the plaintiff’s hourly rate from $425 to $315.  They based their analysis on a fee rewarded in recent similar litigation along with the plaintiffs overall experience, experience litigating matters similar to the case, and the complexity of the issues.

Next, the court determined the fee request included time spent on claims unrelated to the plaintiff’s successful claim against the defendant. The court indicated, “time spent on unsuccessful or unrelated claims may be excluded from the lodestar calculation.” Since the plaintiff failed to distinguish between time spent on the successful claim against the defendant and time spent on other claims brought in the same litigation, the court deferred to the trial record. Upon review of the record, the Court found only 1/3 of the initial trial, discovery, and pretrial motion practice was dedicated to plaintiff’s successful claim and subsequently reduced the claimed hours by approximately 67%. Of the remaining hours (1/3 of the initial total) the court further reduced the hours by 75% as the plaintiff was successful on only one of four claims brought against the defendant. The court also found a duplication of effort for work performed on the second trial which provided further support for the reduction.

Finally, the court found that excessive billing and inadequate documentation justified a further reduction of hours. The plaintiff’s time log contained overbilling for numerous tasks including more than 8 hours spent on a 4 page ex parte application and 162 hours spent on the motion for fees. Furthermore, the time log included numerous vague entries including a failure to describe research performed.  The court also instituted a $25,000 reduction in legal fees based on the minimal recovery in the action.

Implications for Legal Billing: This case reinforces the importance of providing evidence along with affidavits to support hourly rates charged. In the current case a reduction of $90 per hour was applied for failure to provide evidence of attorney experience, experience litigating similar matters, as well as complexity of the issues.

Failing to delineate time spent on successful versus unsuccessful claims or time spent on claims unrelated to the action can also lead to a significant decrease in the fee award. When the fee applicant fails to partition the claims, the court can rely on the trial record to determine the percentage of time spent on each claim and reduce the award accordingly. Multiple trials on the same issue can also result in a reduction if a duplication of effort is found.

Finally this case illustrates the importance of billing judgment. Excessive time spent on tasks and vague billing entries can result in a reduction of fees.

* Dubose v. County of Los Angeles, 2012 WL 2135293 (C.D. Cal. 2012). Full copies of court decisions may be available through counsel or through various Internet links or paid services.

By Keith Langlais

Hiscox v. Matrix

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(Volume 2, Issue 32)

In June 2012 the United States District Court for the Middle District of Florida, reduced an attorney fee award from $2,811,304.50 to $2,218,671.60 which included a $37,965 reduction for overhead charges followed by a 20% reduction of the remaining award. The court based the 20% reduction on the defense counsel’s use of block billing as the court was unable to identify specific time increments spent on each task. Contributing to the 20% reduction were entries of imprecise billing, discrete unsuccessful litigation strategies, overstaffing, and lack of support for hourly rates. The court chose to lower the award by 20%, as an hour by hour review of fee records was “impractical and a waste of judicial resources.”

First, the court reduced the award by $37,965 for overhead charges included on the fee ledger. Clerical and administrative work performed by “legal specialists” (employees not considered attorneys or paralegals) is considered overhead and cannot be included in the fee ledger. Moreover, the court identified numerous occasions in which an attorney or paralegal billed for clerical tasks, including a charge by an attorney for transportation of documents to the courthouse.

Next the court found that every one of defense counsel’s time sheets, which included hundreds of pages of bills and thousands of billing entries, included block billed entries. Furthermore, the court determined many of the entries were vague and imprecise, such as “Deposition preparation; strategy; review file; meeting with expert; meeting with client.” The defense counsel consistently used the same description for billing entries, including a single description used for 33 distinct and “nearly consecutive entries.”

Third, the court identified numerous unsuccessful litigation strategies pursued by the defense counsel, including 94 separate time entries by seven different timekeepers dedicated to an unsuccessful motion for summary judgment.  Again, due to the prevalence of block billing, the court was unable to identify the precise number of hours spent on unsuccessful strategies.

Additionally, the defense counsel lacked support for the hourly rates charged.  The party that seeks to recover attorney fees has the burden of establishing the reasonableness of rates charged by the attorneys. The defense failed to provide relevant information about the experience and background of the timekeepers. In addition, the court identified overstaffing, as eight different timekeepers, attorneys, and paralegals viewed the same video surveillance multiple times. The court identified over 100 entries totaling 444.95 hours related to viewing the video surveillance.

Finally, the court analyzed the defense counsel’s use of a fee multiplier. The court looked at whether the multiplier was required to obtain competent counsel, whether the risk of non-payment was mitigated in another way and considered the amount involved, the results obtained, and fee arrangement between the attorney and client.  There is a “strong presumption” that the lodestar is sufficient to attract competent counsel, therefore the court found the use of a fee multiplier unreasonable.  Furthermore the defense counsel mitigated the risk of non-payment by charging high hourly rates and the fee awarded exceeded the agreed upon contingency fee amount of $815,538.35.

Implications for Legal Billing: The court’s application of the 20% reduction illustrates the effect of pervasive block billing.  When a court is unable to parse out the hours spent on a task, the court is more likely to significantly reduce the fee as a whole, instead of simply removing an impermissible charge from the fee.

This case also reinforces the importance of accurately staffing employees.  When an employee is overstaffed on a task or an employee is overqualified for a task, courts can use their discretion to reduce the award.

The attorney seeking to recover fees is responsible for providing evidence that establishes the reasonableness of the rate charged including information about the experience and background of the timekeepers.

Finally, fee multipliers will be scrutinized as the lodestar method of calculating legal fees is the preferred method.

* Hiscox Dedicated Corporate Member v. Matrix Group, 2012 WL 2226441 (M.D. Fla. 2012). Full copies of court decisions may be available through counsel or through various Internet links or paid services.

By Keith Langlais

Jablonski v. Portfolio Recovery Asssociates

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(Volume 2, Issue 31)

In a recent case, the United States District Court for the Northern District of Ohio made a $2,422.80 reduction in the $6,371 of fees requested by the plaintiff’s attorneys. The court reduced the requested amount after reviewing the bills and finding the hourly rate charged by the attorneys was not reasonable for the location in which services were rendered, and that the firm charged fees for work that was clerical in nature.

The court first determined what a reasonable hourly rate would be, by the “prevailing market rates in the local community.” The market in the case was Toledo, Ohio, and the firm charged rates from $225 to $425 per hour for attorney services, and from $60 to $165 per hour for paralegal services. The firm argued that their experience and prior awards justified the fees. The court utilized rates in line with the Ohio State Bar Association’s 2010 Economics of Law Practice Study, the work involved in the case, the attorney’s experience in the subject matter, and the necessity of rates in an FDCPA action that would garner competent counsel. As a result, the court found the fees charged were excessive and reduced the hourly rates of attorneys from $425 to $300 per hour, $300 to $200 per hour and $225 to $175 per hour. Paralegal fees were also reduced from $165 to $110 per hour.

Next, the court evaluated the type of work that was performed during the 22.4 hours billed. The court found that internal administrative tasks and that review of e-mails from the electronic court filing system were purely clerical work and did not justify compensation under the fee-shifting statute in the case.

Implications for Legal Billing: This decision highlights that attorneys must charge a reasonable fee in light of the locality in which they are billing. Whether a rate is “reasonable” is based on local standards of the community. An attorney’s past performance or awards are no indication of future results or fees that will be awarded.

The court’s decision also highlights that is unreasonable to charge mere clerical tasks as part of a client’s legal fee. And on a related note, the court also noted that document preparation must be performed within a reasonable amount of time in order to be reasonable.

Lastly, it is unusual that a court would be so deferential to block billing procedures. Block billing is ethically objectionable because it may lead to excessive charges and overbilling. What seemed to save the law firm in this case was that they charged in minimum units of time of one-tenth of an hour blocks. The court indicated that because this was done and there was a pattern to the sporadic block billing, it was permissible to do so.

* Jablonski v. Portfolio Recovery Associates, 2012 WL 1552462 (N.D. Ohio). Full copies of court decisions may be available through counsel or through various Internet links or paid services.

By Lisa Belrose

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