“An Alabama man who sued over being hit and kicked by police after leading them on a high-speed chase will get $1,000 in a settlement with the city of Birmingham, while his attorneys will take in $459,000, officials said Wednesday.” [Reuters/Yahoo] Readers may argue about whether this kind of outcome is fair, but note that it seems to happen more often, rather than less, in this country (with its putative “American Rule” that each side pays its own fees) than in other industrialized countries which tend more to follow “loser-pays” or “costs follow the event” fee principles. One reason for that is that the U.S. does not actually hew consistently to the so-called American Rule; across wide areas of litigation, including civil rights suits, it follows “one-way shift” principles in which prevailing plaintiffs but not prevailing defendants are entitled to fees, and whose encouragement to litigation is greater than either the American Rule or the loser-pays principle.
Related: The Pennsylvania legislature is moving to adopt a rule adopting one-way fees for some cases in which municipalities trample rights protected by the Bill of Rights’ Second Amendment, provoking peals of outrage (“dangerous,” “outrageous,” “threatens municipalities’ financial stability,” etc.) from elected officials few of whom seem to be on record objecting to one-way fee shifts when plaintiffs they like better are doing the suing. [Free Beacon]
Judge Frank Nervo in Manhattan used phrases like “simply intolerable” and “gross overreaching” in denying Mayer Brown’s “request for more than $126,000 in attorneys’ fees in a lawsuit over a $6,400 security deposit. Judge Nervo added that the firm spent ‘a grossly unnecessary amount of time’ on simple tasks, including ‘research on the most basic and banal legal principles.'” [Clozel v. Jalisi, Above the Law]
“Four law firms that submitted a “grossly inflated” $2.7 million fee request after winning $12,500 for their client should go away empty-handed, a federal judge has ruled. Eastern District Judge Joanna Seybert, sitting in Central Islip, condemned the fee application submitted by real estate investor Robert Toussie’s attorneys, including $2.65 million for Chadbourne & Parke, as ‘outrageously excessive’ and done in ‘bad faith.'” [NYLJ]
The San Jose Mercury-News has an investigative series. Among the highlights: “At some point, this endless wasting of Danny Reed’s trust assets must stop,” said Judge Franklin Bondonno, throwing out $30,000 in fees billed to the special needs trust of a 37-year-old brain-damaged man, and regretting that he could not reach $145,000 previously billed. The “judge — in a highly unusual gesture — implored a higher court to overturn his decision.” Among recurring problems: “fee on fee” billing in which lawyers charge fees to persons under conservatorship for the legal effort expended in defending earlier fee bills. [editorial and links to articles in the series]
Some law firms set up a separate business to run their conference rooms, enabling them to charge the rooms out for client meetings rather than treat them as overhead. And watch out for hefty charges for the time spent preparing the client’s bill itself. [Dan Fisher, Forbes]
Criticism continues to mount (“shameful,” “excessive”) over lawyers’ effort to nab $223 million in fees for representing Indian tribes’ interest in the long-running Cobell litigation over management of trust funds. [BLT (quoting former Sen. Byron Dorgan, D-N.D.), and more (DoJ); PoL; earlier here and here (Kilpatrick Stockton lawyer Keith Harper considered for Tenth Circuit appointment)]
Overlawyered readers are well aware of the sorry history of the fen-phen litigation; those that aren’t are advised to check out Professor Lester Brickman’s summary.
In April 2008, the Diet Drugs MDL district court awarded $567 million the class counsel in that case, basing the award in part on representations by class counsel about future class recovery. A year later, a plaintiff’s attorney requested the court reopen the question of the fee award because the class counsel had exaggerated those estimates. The district court refused, holding that the one-year delay in bringing the Rule 60(b) motion was not a “reasonable time.” There has been an appeal to the Third Circuit, and, today, the Center for Class Action Fairness filed an amicus brief in support of the appeal that itself provides a short overview of the history of the fen-phen MDL. Many thanks to Chris Arfaa for his generous help in filing the brief.
Massachusetts’s highest court thought it a bit much that fees and costs would eat up $800,000 from an estate valued at $1.2 million, or two-thirds of the value at stake. [Robert Ambrogi, Legal Blog Watch; Above the Law]
Incidentally, Robert Ambrogi is hanging up his keyboard after an impressive four-year tenure at Law.com’s Legal Blog Watch, but he’ll continue to maintain his other sites. He has kind words for this site as one to “follow religiously”, too.
The trial will consider whether the law firm is entitled to a $42 million contingency fee under circumstances criticized by Ted in this space two years ago and David Giacalone more recently. [NYLJ]
Critics including the Securities and Exchange Commission dispute whether receivers really deserve $27 million for their work through May in cleaning up after the collapse of Texas businessman R. Allen Stanford’s empire. [AP/USA Today; earlier]
Fees for receivers, administrators and other professionals are eating up too much of the remaining assets of Madoff and other collapsed investment ventures, critics charge: “in one recent $6.6 million fraud, the receiver distributed 43 percent of the assets to the victim — the rest went to professionals.” [NY Post]