Federal Judge Railroads Million Dollar Fee Request

Posted on January 16th, 2019 by Legal Fee Advisors

By Zachary Kalmbach.

A plethora of improprieties in a million-dollar fee petition led a federal judge to slash the request in half. Owners of property along a 3-mile railroad right-of-way in Missouri sued the government for compensation under the Takings Clause after the government issued a notice that the property would be used as a trail once the railroad was abandoned. The parties settled, after which the property owners requested $1,072,455.40 in fees and $95,668.81 in expenses. The Court found a number of problems with the request, and reduced fees by more than half and expenses by nearly a third.

First, the Court determined that the fact that plaintiffs were only successful on approximately half of their claims warranted a reduction to both plaintiff’s fees and expenses, noting plaintiff had voluntarily agreed to the dismissal of approximately 50% of their claims during trial. As plaintiffs’ records did not specify the exact claims to which recorded hours and expenses pertained, the Court determined that a 40%  reduction to both fees and expenses was appropriate, considering that some issues may have overlapped between successful and unsuccessful claims.

Moreover, the government sought a reduction in hours for what it characterized as “questionable billings.” For example, the government challenged the reasonableness of 11.4 hours billed by a partner for reviewing pleadings and addressing “expert matters.” The Court found that the amount of time claimed for such work appeared excessive for such a routine case, especially considering the work was performed by a senior partner. Accordingly, the Court reduced hours claimed for such work by 70%.

The Court also reduced the hours claimed for travel time, excessive research, and clerical tasks. The Court found that two attorneys billed for airline travel without indicating any work performed on the plane or, if work was performed, that the attorneys failed to identify the nature of the work. Accordingly, air travel time was reduced by 20%. The Court also reduced hours spent researching certain issues by 50%, finding that the number of hours requested for such work was excessive in light of counsel’s expertise on the issues. Moreover, the Court determined that plaintiffs failed to establish that tasks such as “reviewing and managing client data” were not clerical in nature. Thus, hours spent on such tasks were not compensable.

The government also challenged more than 100 hours counsel claimed was spent preparing their motion for fees. The Court agreed, finding that several of counsel’s arguments were rejected, and that a number of passages in plaintiffs’ motion did not represent original work, but were instead cut and pasted from other fee applications. Thus, the Court reduced the hours billed for the fee litigation by 50%.

Next, the Court addressed hourly rates. Plaintiffs requested hourly rates ranging from $540 to $895 for attorneys and $210 to $355 for paralegals. Plaintiff based the rates on typical rates in Washington, D.C., which was the forum of the litigation. The Court, however, held that St. Louis rates should apply because the bulk of the work was performed there. Accordingly, the Court set hourly rates ranging from $275 to $475 for attorneys and applied a $150 hourly rate to all paralegals.

Finally, the Court made a number of reductions to plaintiffs’ expense request; over 100 FedEx charges were excluded because no explanations were given for the purpose of the charges, Westlaw charges were excluded as they should have been included in the firm’s overhead, and first-class flight upgrades and an $11,000 conference room cancellation fee were also excluded by the Court.

In sum, the Court awarded $523,786.98 in fees and $76,667.76 in expenses. This represented a 51% fee reduction and 28% reduction in expenses. Excessive hours, travel time, excessive research, clerical work, segregation of successful and unsuccessful claims, and a number of improper fees all contributed to a massive reduction. Attorneys should keep cases like this close at hand when structuring and challenging fee petitions.

Bratcher v. United States, 136 Fed. Cl. 786, reconsideration denied sub nom. Michael A. v. United States, 137 Fed. Cl. 645 (2018)

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