A lateral move to a firm with roots in a more expensive city doesn’t mean a judge is going to award that lawyer a bump in attorney fees in litigation, even if some of the work then gets done in that pricier hub, a recent court ruling shows.
Ruling on a fee request by Arent Fox after a $130,000 settlement with the U.S. government on behalf of a group of Florida landowners, U.S. Court of Federal Claims Judge Patricia Campbell-Smith held that the firm deserves attorney fees based on the St. Louis market rates the lead attorney initially charged while working out of St. Louis-based Lathrop Gage’s headquarters. She rejected the argument that he should earn the higher rates charged by Washington, D.C.-based Arent Fox after the lawyer switched to that firm’s St. Louis office. Arent Fox had sought more than $1.1 million in fees plus more than $14,000 in costs.
As the judge explained in her opinion, the fee issue arose in a “rails to trails” lawsuit that dates back to 2009.
A team from Lathrop Gage, led by Mark “Thor” Hearne II, served as plaintiffs lawyers in the suit, representing a group of Florida landholders whose property included railway tracks formerly used by CSX Transportation Inc. CSX stopped using the railroad lines in 2004, and soon after, a federal agency proposed to set aside a strip of land near the tracks for recreational trails. The landowners alleged that amounted to an unlawful seizure of their land and sought compensation, according to court documents.
Shortly after the suit was filed, Hearne and his team moved to the Arent Fox, still working primarily from that firm’s St. Louis outpost. The litigation started as a putative class action, but was winnowed down to a smaller case with some 14 landholder plaintiffs. Following a summary judgment ruling in the government’s favor, the case was narrowed further to claims from three plaintiffs. In 2013, the two sides struck the $130,000 settlement.
Since then, they’ve been litigating Arent Fox’s potential fees in light of a settlement in favor of its clients. The firm has argued for an award based on current market rates in Washington, D.C., while the government has urged lower St. Louis rates, adjusted to take account of the years in which the work was actually performed.
Campbell-Smith awarded $14,362 in costs to Arent Fox. But her ruling, made public on Aug. 1, faults the firm’s fee request for $1.1 million in part because it relied on the legal market rates in Washington, D.C.—where the firm is based and the federal claims litigation took place.
Instead, the judge ruled, most of the lawyers’ work happened in St. Louis, and since there’s a significant difference between billing rates in Washington and St. Louis, the St. Louis rates should win out. To illustrate the differences in billing rates between the two cities, Campbell-Smith pointed to the proposed hourly rate for the lead partner in the case, Hearne. Arent Fox sought an hourly rate of $826 for Hearne, while the likely St. Louis market rate would be more like $504 per hour for a partner with Hearne’s amount of experience, the judge wrote.
Campbell-Smith detailed several reductions she would impose when figuring out what to award Arent Fox in the case, according to her decision. Still, she didn’t set a final fee award, concluding that the firm and the government needed to provide more information about the average St. Louis market rates for lawyers at different seniority levels, as laid out in billing rate surveys conducted by the publication “Missouri Lawyers Weekly.”
The Federal Claims judge also sided with the government on another key issue related to Arent Fox’s fee request—whether the award should be based on current or historical market rates for legal services.
“The attorney billing rates shall be calculated based on the average hourly rates as reflected in the ‘Missouri Lawyers Weekly’ surveys, and shall be awarded historically,” Campbell-Smith wrote.