Defendant Unilever Pleads the Court to Cut Over 50% of Plaintiff’s Attorneys’ Fees Claiming Unjustifiable Windfall

Posted on September 17th, 2014 by Legal Fee Advisors

As reported in a National Law Journal article of August 14, 2014, Unilever settled a class action brought by plaintiffs in the United States District Court, Northern District of Illinois, alleging that they suffered hair loss and scalp injury as a result of a product, Suave Professionals Keratin Infusion 30 day smoothing kit, which was recalled in May 2012.  As part of the settlement, Unilever agreed to pay Class Counsel its attorneys’ fees and expenses “approved by the Court after the Court’s consideration of a fee petition for the work Class Counsel performed on behalf of the Named Plaintiffs and Settlement Class.” 

Unilever filed a motion in opposition to plaintiff’s motion for an award of attorney’s fees claiming that Plaintiff’s fee demand of $3.4 million is “wholly unwarranted” due to, among other things, the actual time spent, unreasonable attorney rates, and the results obtained in the action.  Unilever points out that the amount sought was actually three times the amount Unilever incurred in the case.  Unilever is asking the court to apply the lodestar calculation[1] and award plaintiff no more than $1.1 million in “justifiable” fees, which was the amount that Unilever actually spent on legal fees. 

In a line by line review of plaintiff’s charges, Unilever found that time records claiming nearly $500,000 were so heavily redacted that the category of work allegedly performed could not be easily discerned.  For example, in billing for research, all references to the purpose or subject matter of the research was redacted.  Even though defendant Unilever admits research was necessary to this litigation, they alleged that if the redactions were removed, the lodestar calculation would still reflect roughly the same amount of hours spent by the defendant.    Unilever also found many instances of excessive lawyer charges, duplicative billing and inflated attorney rates.   In its brief, the defendant pointed out the rare occurrence when a call or a meeting was attended by fewer than two or three of the Class Counsel, or emails that were not sent to all the lawyers on the case.  Several billing entries revealed overbilling when three or four lawyers would attend negotiations, mediations, or court appearances, without any justification for why multiple attorneys were needed (in this regard over $280,000 – or 462 hours – the defendant claims was not “’reasonably expended’ on the tasks performed.”)    Moreover, defendant found many instances where attorneys and paralegals billed for clerical and secretarial tasks. One of the law firms’ paralegals billed 42 hours for tasks like “review, analyze and manage documents during month of November” and again the same task appeared verbatim for the month of December.   Paralegals also billed for shipping boxes, “waiting around for a brief” (charging $875, billing at $220/hour) and creating a PDF file.    Defendant found that more than 90% of the hours claimed were billed at law firm partners’ and principals’ rates.

While asking a Court to cut $2 million in fees from a $3.4 million award may seem a bit extreme, the defendant seems to have plenty of support for its arguments.  The billing practices complained of clearly run afoul of reasonable commercial billing standards and practices and, unfortunately, are all too common these days.  In particular, attorneys and paralegals billing for clerical and secretarial tasks, which in this case, amounted to over 109 hours of billing or approximately $28,000, a practice all firms should recognize as unacceptable.   Unilever asked the court to defer its decision on the fee motion until all claims are received and payments have been made to claimants.  It will be interesting to see how the court rules.

R. Rosenberg