US District Court Reduces Attorney’s Fees by $894,000

Posted on May 14th, 2014 by Legal Fee Advisors

In a March 2014 decision of an insurance coverage dispute, the U.S. District Court for the District of Oregon awarded attorney fees in the amount of $1,029,511.76.  This constitutes a 46.5% reduction from the $1,924,107.06 amount originally requested by the Plaintiff.  The Court set forth a variety of different reasons for the reduction including, inter alia, excessive staffing for certain activities, vague billing entries, unbillable clerical tasks, and unnecessary peer review.  (Ash Grove Cement Co. v Liberty Mut. Ins. Co., 3:09-CV-00239-HZ, 2014 WL 837389 [D Or Mar. 3, 2014]).

The Court established that there were many instances where multiple attorneys were billing for the same activity and found “unnecessary duplication of effort among the attorneys hired by Plaintiff.”  Ash Grove, 2014 WL 837389.  These activities included attendance at inter-office and intra-firm conferences, hearings, depositions, and trial-planning meetings.  For such excessively staffed activity, the U.S. District Court allowed fees for only the attorney with the highest billing rate and removed all other attorneys’ hours.  This resulted in an overall reduction of 315 hours.

The U.S. District Court also found that vague invoice narratives warranted an additional reduction in attorney fees.  It found that some of the billing entries were ambiguous, “such that the reasonableness of the time spent is difficult to ascertain.”  Citing such examples as “work on email production,” “work on discovery,” “document review project,” “review selected documents,” and “work on privilege log,” the Court refused to allow any vaguely described fees whatsoever and reduced the award by an additional 279.1 hours.  Ash Grove, 2014 WL 837389.

Tasks that were clerical in nature and billed at attorney or paralegal rates were also removed from the fees awarded.  The Ash Grove court held that clerical tasks should not be billed as fees but should be “overhead expenses absorbed by counsel.”  Ash Grove, 2014 WL 837389.  Such activities included printing documents, putting data on disks, Bates stamping, and sending emails that do not require any legal judgment or training.  In addition, the Court refused to allow any attorney to bill for time spent instructing others on performing clerical activities.  Overall, the U.S. District Court determined the fees included 70.9 hours for clerical work and reduced the award accordingly.

The Court found an additional reduction of fees warranted for attorneys spending time reviewing and revising each other’s work.  The opinion conceded that in certain instances it is reasonable and necessary for a supervising attorney to review the work performed by a junior lawyer.  However, the Ash Grove court was “concerned by needless peer review, particularly between experienced outside and local counsel” and felt the “billing entries are replete with such examples.”  Ash Grove, 2014 WL 837389.  As a result, the court reduced the attorney fee award by an additional 30%.

Overall, this decisions illustrates the courts’ willingness to review legal invoices in detail in order to determine what is reasonable and proper when seeking attorney’s fees.

M. Racanelli

Legal Fee Advisors © 2014

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