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After a Manhattan firm’s request for $7,000 in attorney fees on a $10,000 federal labor law case was denied by Eastern District Judge Arthur D. Spatt, the firm appealed. Then, armed with a favorable ruling from the 2nd U.S. Circuit Court of Appeals, the firm returned to the judge with a different request: the original $7,000 they sought, plus an additional $93,000 in fees for the appeal. “Looking into the future,” Spatt wrote last week in LaBarbera v. J.E.T. Resources, No. CV01-4039, “it is conceivable that there may be a motion filed for attorneys’ fees for the appeal of the reduction of attorneys’ fees on the appeal of the decision not to grant attorneys’ fees. “This invariably leads to the question, when will these multiplicitous request for attorneys’ fees come to an end?” Spatt asked. Spatt concluded that the firm, Friedman & Wolf, was indeed entitled to its original $7,033 fee. But finding that the hourly rates charged by the firm for the appeal fell outside “the acceptable range of reasonableness considering the facts and circumstances of the appeal” and were “unreasonably high for legal services in the Eastern District of New York,” he reduced them by 67 percent. He did so in part by halving the value of the hourly fees incurred by each of the four lawyers and three support staff working on the case. The two senior lawyers had asked for $250 per hour, the junior lawyers requested $150 an hour and the staff, $60. In all, Friedman & Wolf came away with a total of $37,811.75 for its work on the original case and the appeal, plus $4,913 in costs. Gerald Zisholtz of Mineola, N.Y.’s Zisholtz & Zisholtz, the lawyer for the defunct defendant in the case, J.E.T., a Long Island general contracting firm, called the fee application “an abuse of the system.” Zisholtz said that J.E.T. has been out of business almost since the inception of the suit and the case had long ago been abandoned. Neither the appeal nor the most recent fee application was opposed. “We did nothing,” Zisholtz said. In light of J.E.T.’s demise, just how the winning firm is going to collect the award is “a good question,” Friedman & Wolf partner William Wolf said Tuesday. Wolf was not identified in the ruling as one of the lawyers who worked on the case. He had not seen the latest decision before being contacted and said he could not comment further. Underlying Friedman & Wolf’s petition was a dispute between the firm’s client, Gary LaBarbera, and six other individuals who were trustees of the union Local 282 benefit fund. Four years ago, they sued J.E.T. to compel it to post a $10,000 surety bond, pursuant to the parties’ collective bargaining agreement, to secure the benefits it owed it unionized employees. According to the plaintiffs, Judge Spatt wrote, J.E.T. had been posting bonds for the union’s benefit until May 2000, when the last one expired and was not renewed. Three years ago, J.E.T.’s lawyers told U.S. Magistrate Judge E. Thomas Boyle that the company was out of business and that there would be no more bonds. The case nevertheless went to trial before Spatt, who granted a default judgment for the trustees, and directed that the bond be posted. Moving under 29 U.S.C. 1132(g) — which governs civil enforcement actions filed under the Employee Retirement Income Security Act — Friedman & Wolf made its initial fee application. The statute stated that an application for a fee award can be made in cases involving delinquent contributions by participants, beneficiaries or fiduciaries, and that whether or not to grant that fee was up to the court. JUDGE’S DISCRETION In January 2003, Spatt denied that motion, ruling that the statute did not support the attorneys’ request because the posting of a bond was not the same as hiring labor or paying benefits. On appeal, the 2nd Circuit held that the statute unambiguously authorizes the district court, “in its discretion,” Judge Spatt noted, to award those fees. The appellate panel also said that the trial court should be mindful of the five-factor inquiry it set forth in Chambless v. Masters, Mates & Pilots Pension Plan, 815 F.2d 869, a 1987 case. Applying the Chambless criteria, which include the offending party’s culpability, its ability to satisfy an award and whether the making of an award would deter similar behavior by others, Spatt ruled that while the plaintiffs may be entitled to some recompense, “the court is of the view that a portion of the time spent by plaintiffs’ counsel was unnecessary and that the fee was excessive.” Thus, he reduced the fees incurred by the firm in appealing his original decision.

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