In the meantime, the U.S. Court of Appeals for the Second Circuit had stayed Rakoff's decision, finding that the SEC and Citigroup, which both appealed the settlement's rejection, had shown a likelihood of success on the merits.
On Sept. 11, Bumb approved the Circa Direct settlement, swayed by the FTC's argument that otherwise it would have to spend a lot of time and money trying the case. But she conditioned approval on the FTC creating a web page by Oct. 12 that would put the allegations "before the public for evaluation and discussion."
The FTC questioned her authority to do so but complied by the deadline, setting up a page, www.ftc.gov/os/caselist/1123059/notice.shtm, that summarizes the allegations and links to the complaint, supporting documents and the case record.
The settlement said a portion of the client funds Venable was then holding in escrow could be used to pay its "fees and costs reasonably incurred" for work in the case, contingent on FTC approval or court order.
The firm tried to justify its tab of more than $400,000 by claiming the FTC took a more aggressive approach than usual and that it encountered difficulty in complying with discovery requests.
Venable reviewed more than 21,500 documents and had to gather material from scores of third-party web hosts that carried the defendants' advertising and in some instances, had deleted it or denied access when Circa Direct stopped paying or provided it in an unworkable form, the firm contended.
The fee request included charges for Edwin Larkin, who typically bills at $800 per hour, fellow partner Thomas Cohn, $650, and associate Heather Maly, $415, all of them in New York. Venable, based in Washington, D.C., has offices in four states, but none in New Jersey.
Venable discounted those rates to $600 for partners and $300 for associates, but they were still too high for Bumb. Saying she was exercising her discretion, she set rates of $400 an hour for Larkin and Cohn, $375 for a less-experienced partner, and $275 for Maly and another fourth-year associate.
She called those rates reasonable in light of other fee applications granted in the district and what the FTC conceded was reasonable in declarations it submitted opposing Venable's request.
She concluded that Venable was entitled to a total of $279,095, $150,000 of which had already been paid, resulting in the $129,095 award.
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