Posts Tagged ‘feeing frenzy’

Wilkes & McHugh sued over alleged Tenn. fee grab

Tampa-based Wilkes & McHugh, which has enjoyed much success filing suits against nursing homes in many states, “is now on the defense end of a suit that contends the firm knowingly violated Tennessee law regarding contingency fees.” Former client Debbie Howard, who hired the firm to sue a Memphis nursing home, says it “engaged in an unlawful scheme to collect 40 percent or 45 percent in contingency fees of settlement amounts, although Tennessee law caps fees to 33 and 1/3 percent in medical malpractice cases. The complaint says the law firm charged the higher and unlawful contingency fee to hundreds of clients in Tennessee.” In its response, the law firm says the complaint is “scurrilous” and based on falsehoods, and says Howard never appealed a Tennessee court order approving the fees. (Liz Freeman, “Tampa law firm faces contingency fees lawsuit”, Naples (Fla.) News, Jan. 14; Scott Barancik, “Firm gets a taste of dish it serves”, St. Petersburg Times, Feb. 17). For more on the law firm, see Mar. 13-14, 2001, Jul. 6, 2005, and Jun. 22, 2006, as well as Scott Barancik, “Law firm’s success against nursing homes has a price”, St. Petersburg Times, Jul. 24, 2004.

Bountiful bankruptcies, cont’d: UAL

Kirkland & Ellis, counsel to bankrupt United Air Lines, has thus far run up a tab of $84,892,637.50 handling the matter. Ten other law firms are also in on the action; for example, Sonnenschein Nath & Rosenthal, which represents United’s unsecured creditors, has billed some $38 million in fees. (Eric Herman, “Lawyers fly high on United bankruptcy”, Chicago Sun-Times, Jan. 23). Lattman and Ribstein comment (both Jan. 23).

“$16.3 million in lawyer fees OK”

Waving big fees through the gate:

A Denver District Court judge overseeing a $50 million class-action settlement from Qwest Communications shot down a shareholder group’s request to limit plaintiff attorney fees to $10 million.

Judge John Coughlin gave short shrift to arguments presented by the Association of U S West Retirees, which asked the court — at the very least — to delay settlement approval until attorneys submitted detailed documentation of their hours and expenses.

At a fairness hearing [Aug. 30], the judge ruled the class counsel, led by Los Angeles law firm Lerach Coughlin, was entitled to $15 million, or 30 percent of the settlement, plus an additional $1.3 million in out-of-pocket expenses….

[The retiree association] wanted proof of each firm’s time records and questioned several six-figure expenses, including $176,000 for meals, hotel and travel and $105,000 for photocopying.

“That’s 25 cents a page using your own office copy machine,” Denver attorney Curtis Kennedy, representing the retirees, said Tuesday after the hearing. “Don’t we at least get a discount for volume? Why not 5 cents a page?”

…[L]ast month, the association filed its objections over attorney fees, complaining that the more than $16.3 million Lerach had requested would leave just $33 million to be distributed among the thousands of plaintiff shareholders they represented….

[Kennedy] said the blanket $15 million contingency award represented 2.3 times what the plaintiff lawyers actually put into the case. Paralegal time alone would be compensated at the rate of more than $400 an hour.

“Times are changing,” he told the judge. “Shareholders are beginning to feel they need to step up and object…that these attorney fees are getting out of hand.”

How often will they feel it worth objecting if, as here, they get the back of the judge’s hand for their troubles? (John Accola, Rocky Mountain News, Aug. 31).

Update: NY Fen-Phen Fee Fracas

Parker & Waichman referred fen-phen cases to Napoli Bern; Napoli Bern negotiated a fen-phen settlement with the manufacturer. Now, Parker & Waichman is charging that Napoli Bern’s lump-sum settlement was distributed in such a way to favor Napoli Bern’s direct clients, thus increasing the total attorney fee take for Napoli Bern and decreasing the amount it would have to share with referring law firms. Napoli Bern denies the allegations. (Jonathan Glater, “When Law Firms Collide, Things Sometimes Get Ugly”, NY Times, Feb. 12) (via Bashman). Previous coverage: Dec. 28, 2001.

N.Y. tobacco fee fracas

Attorney H. Neal Conolly quit the firm of Thuillez, Ford, Gold & Conolly shortly before it won the right to be part of the team of law firms representing the state of New York in the tobacco litigation. He argues, though, that having been involved in a “work in progress” he’s entitled to a share of the $84.3 million in fees payable to his former partners. “Six firms, including the politically connected Thuillez partnership, received a total of $625 million in fees for their role in negotiating the tobacco settlement. Thuillez Ford has had close ties to the Pataki administration and the administration of then New York Attorney General Dennis C. Vacco.” The fees work out to about $13,000 an hour. (John Caher, “Attorney’s Bid for Share of $84.3 Million Fee Moves Forward”, New York Law Journal, Jan. 12). More on N.Y. tobacco fees: see, among other posts, May 11-13, 2001, Jul. 30-31, 2002, and Aug. 10, 2003.

Massachusetts tobacco fees: “Greed on Trial”

“The question before the jurors was not whether legal fees amounting to $7,700 an hour were ‘unreasonable.’ It was whether the lawyer-plaintiffs should get $1.3 billion more.” Detailed account of tobacco-fee buccaneering and the resulting courtroom antics (complete with “trained-seal” expert witnesses) in one state. When contemplating the tobacco crusade, the chief of litigation at Brown Rudnick said, “I had dollar signs in my eyes, even back at that early stage. And I know that they were large dollar signs.” (Alex Beam, The Atlantic, Jun.). For our coverage of Massachusetts tobacco fees, see Nov. 4 and links from there.

Fee catfight in Microsoft case

Class-actioneers Michael Hausfeld and Stanley Chesley, already in line to collect $10.5 million in fees under Microsoft’s settlement of one of its antitrust cases filed in federal court, “say they are entitled to share in $50 million for helping lay the groundwork for the state claims [filed by other law firms].” Hausfeld and Chesley say many lawyers who filed state claims were happy to rely on the work they did in advancing the federal case, but “‘Memories are short and gratitude fleeting when attorneys’ fees are at issue.’ … In a reply brief, the law firms of Milberg, Weiss and Lieff, Cabraser, and Kirby, McInerney & Squire argue that assistance provided by Hausfeld and Chesley ‘was spotty and sometimes non-existent.’ ‘To put it most charitably, rather than being a resource to various state court counsel throughout these proceedings, Hausfeld-Chesley looked out for their own clients (and fees) in their own cases, which of course is completely proper,’ the lawyers in the state cases replied. ‘Such behavior, however, does not give rise to an entitlement for fees for other plaintiffs in other cases.'” (James Rowley, “Legal-fee fight erupts over Microsoft case”, Bloomberg/Seattle Times, Jan. 7)

Tobacco lawyers to Mass.: we’ll sue for the whole $2 billion

Law firms Brown Rudnick Berlack & Israels and Lieff, Cabraser, Heimann & Bernstein now say they’ll sue the state of Massachusetts for the whole $2 billion they say they’re entitled to — a 25 percent contingency share of the state’s $8 billion tobacco-settlement booty — rather than accept the measly $775 million they’ve been awarded in arbitration. The Associated Press says the firms “risk becoming poster children for attorney greed at a time when the profession is already under attack for high damage awards. ‘This lawsuit is about greed and it’s about selfishness. They should be ashamed of themselves,’ said former Maine Attorney General James Tierney, who worked with attorneys general from around the country to help negotiate the $246 billion master settlement.” (“Law firms go to court to make Massachusetts pay full tobacco legal fee”, AP/San Francisco Chronicle, Nov. 3; Steve Bailey, “Pigs at the trough”, Boston Globe, Oct. 10) For earlier coverage of the Massachusetts fees, see May 19; Jan. 2-3, 2002; Aug. 13-14, 2001; Dec. 22, 1999. (& see Dec. 17)

$550 million? We’re worth it

Or was it the miles? “Lawyers who represented millions of retailers in their suit against Visa and MasterCard on debit card processing costs said on Tuesday they are seeking among the highest class action legal fees ever for nailing down $3 billion in combined settlements.” Plaintiffs’ lawyers led by New York’s Constantine & Partners want $550 million plus expenses, per Reuters (“Retailers’ Lawyers Want $550 Mln in Fees”, Reuters, Aug. 19); $609 million plus expenses, per the New York Times (Jennifer Bayot, “Lawyers Seek Big Fee for Negotiating Credit Card Deal”, New York Times, Aug. 19). The lawyers have hired well-known Columbia law professor John Coffee to review(/defend) their fee. According to a press release from the lawyers, the deadline for class members to object is Sept. 5, and the fairness hearing in federal court in Brooklyn is scheduled for Sept. 25. (settlement website)

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