Blending of Claims and Vague Billing: South Dakota Court Cuts Fee Award by 45%
Posted on October 12th, 2017 by Legal Fee Advisors
By Jillians Robbins.
The victorious Plaintiff in a breach of contract and breach of warranty case against a piping company requested $352,283.14 in attorney’s fees and costs. The District of South Dakota found that because some of the firm’s invoices were too vague, and that the firm failed to segregate time for the state law claim from the federal law claim, a reduction was warranted. The Court further found that some of the costs requested were either unrecoverable under statute or too vague to determine. Due to these circumstances, the Court only awarded a total of $188,723.44 in attorney’s fees and costs. In determining the lodestar calculation, the Court did a step-by-step analysis of each lodestar factor, which is unusual, since courts tend to do an overall analysis without specifying each factor.
The Court first found that while it was normal for some of the time requested for the state law and federal law claims to overlap since they arose from the same facts, the plaintiff’s law firm did not “make a good faith effort to separate the time, even when instructed to by the Court.” The Court thus determined that splitting the 1,600 hours requested in half was warranted. Based on this lack of segregation, the Court also awarded only two-thirds of the time spent in mediation regarding these claims. Additionally, in reviewing the 90 pages of billings, the Court determined that some entries “lack detail, are redundant, or are unrelated to the present action.” The Court noted that since the plaintiff and plaintiff’s counsel have an ongoing attorney-client relationship, some of the billings appeared to reflect a different matter, or were too vague for the Court to determine the exact work that was done. The Court, after making these initial reductions, made a further adjustment of 35% because the plaintiff was not successful on one of its claims. The Court agreed with the defendant that the plaintiff made “no attempt to distinguish between attorney’s fees for claims it alleges it prevailed on . . . versus claims it undeniably did not.”
Next, the Court awarded only $14,413.82 of the $50,097.89 in costs requested for several stated reasons. First, the Court explained that the costs plaintiff requested for postage, Pacer, travel, meals, lodging, and long distance phone calls are not recoverable because they are “administrative expenses that are normally absorbed by the law firm and included in attorneys’ fees.” Next, the Court explained that the plaintiff could not recover for parking tickets, medical records, or refunds because those costs are not enumerated in the statute that the plaintiff sought to recover under. Based on this determination, the Court determined that $22,175.11 was technically recoverable, but since the invoices did not distinguish between the state law and federal law claims, the Court held that an additional reduction was warranted, awarding only $14,413.82 in costs.
In conclusion, it should be kept in mind that if there are multiple claims arising under the same set of facts, firms should very clearly distinguish between the claims in their invoices, or risk a major reduction in attorney’s fees and costs. Additionally, when creating invoices, firms should be as specific as possible in explaining the tasks that were performed by each attorney. This will ensure that the court can make the most accurate determination of a possible fee award, and can lessen the likelihood of a reduction in the amount of fees requested.
Highmark, Inc. v. Northwest Pipe Co., No. CIV 10-5089, 2016 WL 7017260 (D.S.D. Nov. 30, 2016), appeal filed, No. 17-1040 (8th Cir. Jan. 6, 2017).
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