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Miami law firm Stearns Weaver Miller Weissler Alhadeff & Sitterson scored a dream payday Thursday when a Miami federal judge awarded the law firm $249 million in fees for its successful representation of gas station owners in a $1.1 billion class action case against ExxonMobil. The ruling by U.S. District Judge Alan S. Gold ends a ferocious fee battle between various attorneys who represented the plaintiffs, including Pertnoy Solowsky & Allen in Miami. Gold’s ruling represents one of the largest fee awards on record. “I can’t think of a higher fee award ever,” said Ervin Gonzalez, a prominent plaintiff attorney with Colson Hicks Eidson in Coral Gables. “This certainly confirms the reputation of Gene Stearns as one of the best lawyers in town.” Under Gold’s ruling, the attorneys as a whole are entitled to 31.3 percent of the total award, which the plaintiffs won from a federal jury in Miami in 2001. That amounts to $325 million in total fees. Gold awarded Stearns Weaver 75 percent of the total fees, or $249 million, while Pertnoy Solowsky gets 16.3 percent, or $53 million. Pertnoy was pushing for enforcement of a 1996 fee split agreement, which entitled the firm to 47 percent of total fees. Three other law firms will split the remaining 8.7 percent. Stearns Weaver had sought 82 percent of attorney fees, claiming ExxonMobil would have prevailed if the firm hadn’t entered the case. “In the trenches of this case, we were alone,” Eugene Stearns wrote in his fee application to the court last year. The dispute, he wrote, “pits the lawyers who worked to achieve the recovery for the class … against lawyers who mostly sat by and watched.” Pertnoy Solowski argued that it worked hard behind the scenes. It labeled Stearns’ allegations “blatant untruths.” But Gold wrote that simply enforcing the 1996 fee agreement would “result in a grossly disproportionate award among the five law firms in relation to services actually rendered.” The $325 million total award of attorney fees is one of the largest on record in class action lawsuits, certainly for Miami law firms. In the recently concluded federal class action fraud case in Miami against the nation’s largest health insurers, class attorneys collected a total of $310 million. In a big antitrust case in North Dakota against prescription drug manufacturers in 2000, the plaintiffs attorneys collected $696 million. Eugene Stearns, who was the lead trial counsel and public face during the ExxonMobil case, said the fee victory is bittersweet since one of his partners on the case, Tony Menendez, died two years ago and won’t share in the jackpot. Stearns said, however, that his firm would share the fees with Menendez’s widow and daughter. Stearns partners Mark Dikeman and Mona Markus also worked on the case. “While we will no doubt celebrate, this victory is tempered by the fact that Tony is not here to share it with us,” Stearns said. “It’s been a long struggle. I think this is an appropriate outcome.” Sidney Pertnoy, of Pertnoy Solowsky, did not return calls for comment by deadline Thursday. His firm has 30 days to appeal. Bitterly contested The class action lawsuit against Exxon, alleging breach of contract, was filed in 1991 on behalf of 11,000 Exxon gas station owners around the country. The plaintiffs alleged that Exxon had operated a fraudulent discount-for-cash program. In 1996, as the case was faltering, Stearns Weaver signed on as lead trial counsel and kicked the case into high gear, hiring a team of experts and putting together a high-tech jury presentation in preparation for the 1999 trial. After a deadlocked jury led to a mistrial in 1999, a second federal jury in Miami in 2001 awarded the plaintiff class $500 million plus interest after a three-week trial before Judge Gold. Exxon, which merged with Mobil in 1999, fought the claims vigorously and appealed the jury verdict and various Gold rulings. Last year, the U.S. Supreme Court upheld the verdict. ExxonMobil has already paid the $1.1 billion verdict, which is being doled out to the station owners. The attorney fee issue, the last outstanding issue in the case, was bitterly contested by the plaintiffs law firms involved. Pertnoy Solowsky fought hard to enforce the original fee split agreement. Other firms that worked on the case, including Virginia solo practitioner Gerald Bowen — who first found the case and left shortly after Stearns started — also moved for a piece of the gigantic slab of fees. Eugene Stearns said he found when he came on the case that thousands of pages of documents were still unread with only three months left in the allowed discovery period. No experts had been hired. Most alarming, Stearns wrote, was that the legal strategy was deeply flawed for proving that Exxon had fraudulently operated the discount program that allegedly overcharged 11,000 gas station owners around the country for gasoline. In a hearing on fees in May 2005, Stearns claimed that Pertnoy Solowsky had misrepresented the condition of the case, and their contributions to it. “Would I have signed on to this knowing what I know now? Heck, no,” Stearns said. Pertnoy Solowksy pointed out that it launched the case, absorbed a great deal of the risk involved in taking on the case initially, and was the only firm to see the case through from start to finish. The firm said the case took a personal toll on its lawyers — causing missed holidays, family events and paychecks. 112-page ruling In his 112-page ruling, Gold sided with Stearns Weaver. First, he explained his decision to give the team of attorneys 31.3 percent of the total award to the plaintiff class. “A casual observer … may readily conclude that the attorneys’ fees and incentive awards are too high,” Gold wrote. “This is not a situation where a class action is brought, soon settled and class members receive an insignificant award and the lawyers get millions. This is a case that has lasted 15 years, resulted in two trials, extensive appeals including before the United States Supreme Court, a hotly contested claims administration process and a settlement whereby class members will receive their full compensatory damages and nearly all of their prejudgment interest.” Gold repeatedly complimented Stearns Weaver’s performance, calling the firm’s work “groundbreaking” and “highly skilled.” He also praised the firm’s “cutting edge” trial techniques that helped the jury understand the complex financial case, including providing individual juror notebooks and digitalized videotape depositions. In making his fee award, Gold acknowledged that Stearns Weaver lost out on substantial revenue due to the large amount of time spent on the ExxonMobil case. Stearns Weaver estimated that it spent the equivalent of $26 million, or $500,000 a month, in billable hours on the case. Gold also awarded the nine class representatives, gas station operators who brought the suit, a total of $16 million. Firms criticized Gold criticized Pertnoy Solowsky, which he said concentrated mainly on obtaining “public recognition” and protecting its claim to a “disproportionate fee.” Gold said the firm contributed just 5 percent to the case once Stearns Weaver entered the case. The 1996 fee agreement, Gold wrote, should be put aside because Bowen and Pertnoy Solowski “significantly underestimated what was required to effectively proceed to trial and beyond.” Stearns Weaver, he wrote, was told when it entered the case that it only had to take some depositions and then try the case. That was far from true. He also criticized Bowen for secretly entering into a fee agreement with one of the class representatives and being more concerned with protecting his fee percentage under the 1996 fee deal than in acting in the best interest of the class. Still, Gold awarded Bowen — who previously complained to the court that he had no money to feed himself or his dog — $14 million, enough for plenty of high-class dog chow. He also awarded Grutman Greene & Humphrey in New York $2.5 million. The late Roy Grutman, a famed New York City litigator, was the original trial counsel in the case before he had to withdraw due to illness. Gold denied the application of two petitioners, Farrell & La Mantia in North Carolina and Grutman’s widow, Jewel Grutman, saying they “contributed nothing of substance to this case.” Stearns said he and his firm may wait to celebrate until they actually get the fee money in their hands. “We’ve had many opportunities to celebrate along the way but no paycheck yet,” he said with a laugh. Stearns Weaver’s work on the case isn’t over yet. The firm — the last law firm left on the case — will continue as claims administrators, doling out an average of $130,000 each to the 11,000 gas stations in the class.

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