Lawyers in Smuckers class action awarded mere 2.8% of 3.3 million dollar attorney’s fee request

Posted on April 9th, 2014 by Legal Fee Advisors

In a decision issued late February, a California district court reduced an attorneys’ fee award by 3.2 million dollars upon finding that a “grossly excessive” number of hours were billed by the two law firms throughout the 31 month class action litigation.[1]

The case Henderson v. J.M. Smucker Co. was originally brought by the plaintiff in 2010, alleging unfair competition and false advertising violations by the food company in marketing its products- Crisco and Uncrustables. In an earlier opinion, the Court had determined the plaintiff was entitled to attorneys’ fees and costs, as the suit served as a “catalyst” to the company’s removal of trans fat from Uncrustables, although the plaintiff’s individual claims were dismissed for lack of standing.

In assessing the reasonableness of the 3.3 million dollar request under a lodestar approach, the court first considered the number of hours billed during various phases of the litigation. After cutting 20 hours from time billed for drafting and editing the initial complaint, the judge questioned the 63 hours billed by partners working on oppositions to Defendants’ motions, citing “poor staffing and duplication of effort” as associates actually performed the majority of drafting. The partner hours were reduced by almost half.

The court also took issue with the excessive hours spent on discovery related tasks- 1,766 in all. Aside from drastically reducing 122 hours claimed preparing a single expert report and 149 hours billed by paralegals summarizing depositions, the judge also disallowed time spent on what he deemed administrative tasks- case management, reading emails and scanning/printing documents. Such administrative time was also cut for non-discovery related tasks performed by legal assistants.

Next, the court addressed the reasonableness of hourly rates- and found paralegal rates of $215 and $195/hour too high in comparison to market rates. The court allowed a more reasonable $150/hour billing rate.

But the biggest cut in fees (down to 10% of the lodestar amount) resulted from the fairly limited success of the claim, as the plaintiff only achieved a small fraction of the relief sought and the suit is still ongoing. The court ultimately rewarded only $92,000 in fees and costs.

The Henderson decision indicates that requests for attorneys’ fees should be especially conservative in cases where plaintiffs attain limited success. And although California’s broad interpretation of “successful party” allowed Henderson to recover fees under the catalyst theory, judges may continue to be vigilant in awarding fees for time only reasonably expended.