Personal Credibility is the Key to Success

Posted on March 24, 2009 by Gary A. Bresee

Two recent cases illustrate the fact that very often, the most important asset available to an attorney seeking her fees is her personal credibility. 

For example, in the Anti-SLAPP suit context (Strategic Lawsuit Against Public Participation), the California Court of Appeal recently reduced an attorney fee award requesting 600 hours down to only 71 hours.  The appellate court, in Christian Research Institute v. Alnor, 165 Cal. App. 4th 1315 (2008) stated that the billing entries were padded and vague, and therefore the request for compensation was not credible.  Some of the appellate court’s comments are instructive for counsel submitting a fee request, not only under the SLAPP statute, but at any other time:

“An attorney’s chief asset in submitting a fee request is his/her credibility, and where vague, blocked billed time entries inflated with non compensable hours destroy an attorney’s credibility with the trial court, we have no power on appeal to restore it.” Alnor at 1326. 

Another example was published just yesterday, when Federal Judge Susan Illston of the Northern District of California sanctioned plaintiff's counsel $25,000 for submitting false fee application information in certain civil rights cases.  According to Dan Levine of Cal Law (www.callaw.com), Judge Illston felt the fee applications raised too many questions; they may not have been based upon contemporaneous time records, and certain time records may not have been produced.

The observations by these two courts highlight the need for counsel to submit scrupulous bills in support of fee applications.  If the court feels that the billing entries are sloppy or are not reflective of actual work performed, this will work to the submitting parties’ disadvantage.  If the fee application raises enough concern that the court begins to question counsel's credibility, the court may slash the fees down to a minimun, may deny any fees whatsoever, and may even sanction the attorney for submitting questionable information.  

Fee Shifting Statutes Under California Law

Posted on March 17, 2009 by David J. McMahon

Under California Law numerous exceptions exist to the traditional “American Rule” wherein each party is required to pay their own attorneys’ fees in litigation. The exceptions exist in three general categories.

  • Provisions provided by contract authorizing the award of fees
  • State statutes which authorize fee awards in particular actions including but not limited to CCP § 1021.5. The statute is known as the Private Attorney General Rule
  • Theories rooted in equity and fee awards for wrongful conduct

The potential for a fee award is a critical consideration for a party to consider when initiating or defending litigation. Obviously, the cost of litigation including a fee award, can become a substantial factor in developing litigation strategy. Therefore, in the initial planning for litigation, it is important to determine whether a statute, a common law theory, or a contractual provision might provide for some form of fee shifting. 

There are literally hundreds of California statues which provide for fee shifting in numerous areas including but not limited to the Government Code, civil rights, consumer protection, employment, general civil procedure, immigration and real property.

An important consideration on the topic of fee shifting is that such awards are constrained by ethical considerations. For example, California Rule of Professional Conduct 4-200 provides as follows:

A.     A member should not enter into an agreement for, charge, or collect an illegal or unconscionable fee.

B.      Unconscionability of a fee shall be determined on the basis of all the facts and circumstances existing at the time the agreement is entered into . . . The following factors are considered:

1.        The amount of the fee in proportion to the value of the services performed.

2.        The relevant sophistication of the member and the client.

3.        The novelty and difficulty of the question involved and the skill required to perform the legal services properly.

4.        The likelihood, if apparent to the client, that the acceptance of a particular employment will preclude other employment by the member.

5.        The amount involved and the results obtained.

6.        The time limitations imposed by the client or by the circumstances.

7.        The nature and length of the professional relationship with the client

8.        The experience, reputation, and the ability of the attorneys performing the services.

9.        Whether the fee is fixed or contingent.

10.     The time and labor required.

11.     The informed consent of the client to the fee.

All of the factors noted here are important in calculating the amount of fee award. Counsel should also use care to avoid conflicts of interest when an attorney is settling the merits of a case and the fee award simultaneously. That scenario can create a situation creating adversity between the lawyer and the client.

Practice Pointer: Have You Appealed Both the Final Judgment and the Fee Award?

Posted on March 6, 2009 by Gary A. Bresee

Very often the final judgment is issued by the trial court, which triggers the deadline for appealing the decision.  In the interim, the trial court has yet to decide the fee application filed by the prevailing party.  The fee award can then be issued after expiration of the deadline to appeal the final judgment.  As a practitioner, if you wish to claim error in the fee award, what do you do?  The answer is either appeal, separately, the fees decision, or appeal both rulings in the same Notice of Appeal.  Failing to do so may result in your inability to claim error in the fee application ruling.  

In Colachis v. Salazar, a recent unpublished opinion by the California Court of Appeal, Second District, a pro per plaintiff received an unfavorable judgment in September 2007.  His subsequent motion to vacate the judgment was also denied.  Plaintiff then received a $58,104 attorney fee award issued against him in November 2007.  However, Plaintiff's Notice of Appeal only mentioned the "judgment and order denying motion to vacate judgment.”  When Plaintiff attempted to challenge the fee order, the court concluded Plaintiff’s failure to expressly appeal the postjudgment fees order was fatal.  Although the Colachis decision is unpublished, the court relied upon Colony Hill v. Chamaty, 143 Cal.App.4th 1156 (2006) -- which is a published opinion -- to conclude that appellant’s failure to appeal from the postjudgment attorney fees award had deprived the court of jurisdiction to consider the issue. 

 

Prevailing Parties Only Entitled to Fees Reasonably Incurred: Beware the Duplication of Efforts

Posted on March 6, 2009 by Gary A. Bresee

Last fall I served as an expert in a case which analyzed the loadstar claimed by the prevailing parties in City of Los Angeles v. County of Kern, Case No. CV 06-5094 GAF (VBKx) (September 3, 2008).  The written opinion by U.S. District Judge Gary Allen Feess has been cited as "must reading" on the methodology that can be used by a federal district judge to reduce the lodestar in civil rights cases.  See California Attorneys' Fees website.  The decision illustrates more than a few pitfalls which should be avoided by litigation counsel, particularly when there are multiple lawfirms billing to the file and the duplication of efforts that can result therefrom.  The decision also outlines an approach which can be utilized by anyone interested in how best to evaluate the reasonableness of attorney invoices before paying.  To read the full decision, click here, or click on the column to the left under "Links."  

Qualitative Versus Quantitative Audits: Two Different Approaches

Posted on March 6, 2009 by David J. McMahon

A litigation management audit can reveal several different categories of information, depending upon the type of inquiry undertaken. The audit inquiry most typically utilized by insurance carriers is the quantitative audit, which examines the amount and breakdown of time that attorneys have invoiced. The goal of this type of audit is to determine whether the law firm has substantially complied with the billing guidelines imposed by the carrier. Such an approach identifies permissible payment deductions for invoice entries that deviate from the carrier’s guidelines, or from generally accepted billing practices. This approach can fairly be characterized as a “procedural” review of the billings involved. 

A different audit approach, one that perhaps is ultimately even more meaningful, entails a qualitative assessment of the actual work reflected in the bills. This inquiry seeks to determine whether the bills incurred in the litigation and submitted for payment were in fact both reasonable and necessary,  which is the dual standard required of legal billings articulated by the U.S. Supreme Court. This audit approach can fairly be characterized as a “substantive” review of the billings involved.

The ultimate goal of the qualitative litigation management audit is to ensure that attorneys hired to conduct litigation and other legal activities do so in a goal-directed, streamlined, and thus cost-effective manner. Through poor planning or neglect, attorneys can inadvertently bill for activities which increase litigation costs while doing little to resolve the litigation. A comprehensive qualitative audit is designed to analyze the strategy, staffing and overall approach utilized in the case. When we conduct a qualitative audit, we typically review the available work product, including the pleadings, motions, discovery requests and correspondence to identify wasteful practices and opportunities to increase efficiency. 

The qualitative and quantitative audits are not mutually exclusive, but are complementary to each other. While it makes sense to compare and contrast the two approaches individually, a combined approach is perhaps the best way to achieve a fully comprehensive audit. We often start with a quantitative examination of a law firm’s invoices, while keeping an eye out for anomalies or troubling entries that raise more qualitative concerns. Such a holistic process can result in significant cost savings to the client, although it is more time intensive than relying on only a single approach.  The combined approach accordingly must be justified under the particular case circumstances, both practically and economically.

The San Francisco Attorney Fee Dispute Program: "Attorney Fee Disputes in a Volatile and Uncertain Economy"

Posted on March 3, 2009 by Gary A. Bresee

Welcome to Our Blog

Posted on March 3, 2009 by Gary A. Bresee

Welcome and thanks for visiting Barger & Wolen's new Litigation Management and Attorneys' Fees Blog.  Our firm assists our clients -- which include lawyers, insurers, governmental entities and fee auditors -- in analyzing the reasonableness and necessity of costs and fees incurred in complex litigation.  We have testified as legal fee experts in the independent evaluation of hundreds of millions of dollars incurred in national mass tort cases, prevailing party situations, complex construction disputes and environmental cleanup and coverage cases.  We also help implement billing guidelines for insurers and implement cost controls in ongoing complex litigation.

As such, we recognize the importance of staying up-to-date on the latest decisions and news in this area.  We therefore naturally thought the creation of a blog would not only assist our clients, but help others stay in touch with the cutting edge of this rapidly growing area of the law.  We'll discuss the newest court decisions -- both published and unpublished -- as well as the latest editorial articles and books on the subject of attorneys' fees.  We also hope to create a forum, for you the readers, to express your opinions on these issues.

So join us.  We encourage comments, and please feel free to send us messages if you'd rather not have your question published.

Let us know what's on your mind (as long as it deals with litigation management, of course).

 

Know Your Relevant Community and Prevailing Market Rates

Posted on March 3, 2009 by Gary A. Bresee

Do you know your community's prevailing market rates? 

It has become increasingly important to be familiar with your relevant community and its current market rates when applying for attorneys' fees.  For example, the Ninth Circuit recently held that in attorneys' fees awards under the Longshore and Harbor Workers’ Compensation Act ("LHWCA"), the Benefits Review Board ("BRB") should have made findings regarding the relevant community and the current prevailing rates.  Christensen v. Stevedoring Services of America (9th Cir., March 2, 2009); and Van Skike v. Director, Office of Workers' Compensation Programs (9th Cir., March 2, 2009).   

In two separate BRB cases counsel requested $350 per hour for their fees.  After reviewing the evidence submitted by both parties as to what hourly rate was appropriate, and after accounting for the applicable attorney-fee regulation, 20 C.F.R. §702.132(a), the BRB found that a $250 per hour rate was appropriate in the general geographic region of Portland, Oregon.  Both plaintiffs appealed and their cases were consolidated for that purpose. 

Plaintiffs argued on appeal that the BRB abused its discretion and committed legal error when it rejected the market indicators submitted by counsel, and instead relied on other decisions in previous cases, when the judges in those previous cases failed to base their fee awards on market rates.  The Ninth Circuit remanded, holding that BRB’s findings had to reflect the relevant community and current prevailing market rate.  The court of appeals observed that reasonable attorney fees are to be calculated according to the prevailing market rates in the relevant community, and that use of the lodestar method in calculating attorney fees under the LHWCA was proper.  The relevant community typically is defined as the forum in which the district court sits. 

However, the court felt the BRB's definition of the relevant community -- by looking solely to what other administrative law judges and the BRB had awarded in other LHWCA cases in the same geographic region -- was too limited.  The BRB had to determine the relevant community and the reasonable hourly rate so that its awards were based on current rather than merely historical market conditions.

What is your community's prevailing market rate? 

Conference for the Council on Litigation Management on March 12th and 13th, 2009

Posted on March 2, 2009 by David J. McMahon

 

David McMahon and Jack Pierce are speaking at the Conference for the Council on
Litigation Management in Phoenix, Arizona on March 12 and 13, 2009.

We are pleased to announce that David McMahon and Jack Pierce will be speaking at the conference for the Council on Litigation Management in Phoenix, Arizona on March 12 and 13, 2009.

Mr. McMahon will be speaking on the topic of legal auditing during the conference. A typical goal of a litigation management audit is to ensure that the lawyers hired to conduct litigation and other legal activities do so in a goal-directed, efficient and cost effective manner. Mr. McMahon’s presentation will provide helpful tips for conducting a cost effective and thorough legal audit and will identify some new and creative approaches for legal auditing.

Jack Pierce will be speaking on the topic of billing guidelines and the history of the litigation surrounding the use of these tools at the conference. During the past 10 years mounting litigation fees and costs have led to the imposition of litigation cost management programs by carriers and other consumers of legal services. These programs utilize a wide range of tools calculated to reduce unreasonable fees and costs and the inefficient handling of litigation. One of the most effective tools is the use of billing guidelines. Mr. Pierce will provide useful tips on how to draft guidelines that are enforceable and which do not give rise to ethical problems and concerns. For further details, please visit the website for the Council on Litigation Management attached below.

  • www.litmgmt.org

Winterrowd v. American General Annuity Insurance Company

Posted on March 2, 2009 by David J. McMahon

 

Winterrowd v. American General Annuity Insurance Company, 2009 DJDAR 2241 (2009).

Plaintiff's May Recover Fees Generated By Non-Admitted Attorney
Who Assists California Attorney in California-Based Litigation

In a divided opinion, the Ninth Circuit recently held that a lawyer who was not admitted to practice law in California was still eligible to recover fees generated in the case, under limited circumstances. A member of the Oregon Bar, assisted a California lawyer in a breach of a contract action against an insurance company. The insurance company ultimately agreed to settle the matter, and the plaintiff sought to recover its attorneys’ fee including the fee incurred by its Oregon Counsel. The District Court concluded that the Oregon counsel could not recover attorneys’ fees for work performed while the case was pending before the California District Court. The plaintiffs appealed to the Ninth Circuit and the court reversed in part and remanded for further proceedings. 

The Ninth Circuit stated that an attorney may not recover counsel fees for engaging in the “unauthorized law practice” in California. The Ninth Circuit noted however that the Oregon lawyer was retained by a member of the California State Bar to provide assistance in prosecuting the action. The attorney performed services entirely in Oregon under an arrangement that was analogous to a “partnership.” The Court stated that counsel did not appear before the District Court but played only a supporting role. For these reasons the Ninth Circuit held that the lawyer was entitled to recover reasonable fees for the work. The case was thus remanded to determine the amount due to the plaintiff, for the work performed by the Oregon lawyer.

In a sharply worded dissent, Justice Pamela Rymer disagreed with the majority’s conclusion. She disagreed that fees were properly awarded to the non-admitted counsel as in her view, the work constituted the practice of law. In her view, without being admitted to practice, the applicant’s petition for fees was properly rejected.

The ruling by the Ninth Circuit may provide some guidance when, and under what circumstances, an out of state lawyer may recover attorneys’ fees for work conducted in California litigation. We note however, that as pointed out by the dissent, this issue may be further scrutinized by other courts and the outcome is far from certain.