Reputation for Excessive Billing Costs Lawyer Over $1 Million in Fees

Posted on April 10th, 2018 by Legal Fee Advisors

By Zachary Kalmbach.

The 7th Circuit affirmed a lower court’s decision to cut a fee request by over 70%, and in so doing held that lower courts can consult a lawyer’s history of poor performance and excessive billing when determining fee awards. A police officer won a $30,000 verdict in a workplace discrimination suit, and subsequently requested $1,496,930 in fees. Plaintiff’s counsel submitted 3,742 hours at an hourly rate of $395. However, as the attorney billed for unnecessary and frivolous work and had a reputation for poor billing practices, the magistrate reduced the hours to 2,878 and the hourly rate to $300. Then, to account for plaintiff’s limited degree of success, the magistrate cut the request in half, resulting in a final fee award of $430,000. Plaintiff appealed, and the 7th Circuit affirmed.

A line-by-line review of plaintiff’s billing records convinced the magistrate that 864 hours were spent on unnecessary or frivolous work. For example, plaintiff’s counsel billed excessively for drafting correspondence, telephone calls, research, and reviewing his own written work. The Court of Appeals observed that the magistrate judge “scrupulously followed the proper procedure for determining attorney’s fees” and thus agreed with the reduction of 864 hours.

The Court also rejected plaintiff’s challenge to the magistrate’s choice of a $300 hourly rate. The Court was most swayed by plaintiff’s counsel’s “poor performance over the years consumed by the litigation.” Plaintiff complained that the magistrate ignored several affidavits from other lawyers supporting a $395 rate. In the Court’s view, however, the magistrate “simply put less weight on the affidavits than [plaintiff’s counsel] would have liked.” The Court noted that some of the affiants did not practice in the same region or practice area as plaintiff’s counsel, nor were they all familiar with his performance in the case.

Interestingly, the magistrate judge discussed plaintiff’s counsel’s history of poor performance and excessive billing practices at length. For example, the magistrate stated that counsel was “no stranger to…substantially exaggerated and inflated fee petitions from conduct that needlessly proliferated work and dilated proceedings.” Further, the magistrate pointed to the Seventh Circuit’s previous “extraordinary castigation of [plaintiff’s counsel],” where the Court found that his “wholly unsuccessful efforts to conduct class actions have drawn unusually pointed criticism from Illinois state judges.” Plaintiff argued that it was improper for the magistrate to consider counsel’s past performance, but the Court held that judges are allowed to consider attorneys’ “experience, reputation, and ability” in determining fee awards.

Finally, the Court of Appeals affirmed the magistrate’s halving of the fee award based on limited success, noting that plaintiff asked for $1.5 million verdict but only received $30,000. Because a $1.5 million fee award would be a 5000% markup on the verdict, the magistrate determined that the fee request should be cut in half, and the Court of Appeals had no problem with this.

The reductions and adjustment for limited success resulted in a $430,000 fee award, less than 30% of plaintiff’s request. While providing examples of excessive hourly rates and improper billing practices, this case also shows that a history of excessive billing can persuade courts to significantly reduce fee awards. Future fee petition challengers should take note of this case, ensuring petitioning attorneys do not have a history of improper billing practices or poor performance.

Sommerfield v. City of Chicago, 863 F.3d 645 (7th Cir. 2017)

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