Shortly after Virginia Governor Robert McDonnell (R) announced plans last June to remove a board member of the Metropolitan Washington Airports Authority, the group found itself in a sticky situation.
Dennis Martire, the now-former board member, sued the airports authority and the governor and challenged his removal in U.S. District Court for the District of Columbia. Thanks to an indemnification policy requiring the authority to pay board members’ attorney fees, the authority was suddenly not only on the hook for its own legal bills, but Martire’s — and any other board member pulled into the case — as well.
The final tab of $1.5 million in total prompted the authority to re-evaluate its policy on legal fees. Invoices and other documents recently obtained through a public-records request showed how those fees racked up, and offered a rare look at the billing practices of two law firms involved, Hunton & Williams and DLA Piper.
The case, which was transferred to the U.S. District Court for the Eastern District of Virginia and involved a detour to Fairfax County Circuit Court, settled in September. Besides Hunton and DLA, the authority paid fees to Williams & Connolly and Troutman Sanders.
According to numbers provided by the airports authority, Williams & Connolly took home the most in fees, earning $855,000. Hunton received $360,000, DLA Piper received $186,000 and Troutman Sanders received $102,000.
Detailed invoices from DLA and Hunton highlighted differences in how the firms handled billing. For example, on average, the records show that DLA charged more per hour for the work of its associates than Hunton did for its partners managing the case. Hunton billed in 15-minute increments, while DLA broke it down to the 10-minute level.Hunton partner Stuart Raphael, lead counsel for the airports authority, billed a little more than 191 hours during the four months of litigation, charging an hourly rate of $640 (10 percent less than his standard rate of $710, according to the engagement letter). In addition to the 10 percent discount, the firm agreed to what’s referred to in an invoice as a “courtesy discount” of $18,000.DLA partner David Clarke Jr., lead counsel for three board members who were subpoenaed, billed about 38 hours at an hourly rate of $860. The firm agreed to a 10 percent discount at the end, according to an invoice. Raphael declined to comment and Clarke did not return requests.The hourly rates charged by both firms fell above the median partner ($502) and associate ($319) rates in The National Law Journal‘s 2012 Law Firm Billing Survey.
Williams & Connolly’s invoices were not made available because the airports authority and the firm agreed that a third party would review them to determine whether they were reasonable. Troutman Sanders’ invoices were protected by a confidentiality agreement, according to the airports authority.
Philip Sunderland, general counsel for the airports authority, said it is reviewing the indemnification policy in light of what happened last year. “Everybody recognized that having an indemnification policy that runs essentially three to four sentences is not sufficient,” he said.
Zuckerman Spaeder counsel William Schreiner Jr. said the authority’s indemnification policy wasn’t unusual; it’s just that the Martire litigation presented a unique set of circumstances. “The idea of indemnification is protecting against outside threats, not within itself,” he said.
Martire was appointed to the board in late 2008 by former Virginia governor Timothy Kaine, a Democrat. The airports authority, which includes representatives from Virginia, Maryland, the District of Columbia and the federal government, oversees operations at Washington Dulles International and Ronald Reagan Washington National airports. It also manages the Dulles Toll Road and an ongoing project to extend Metrorail service to Dulles.
Martire, a regional labor union leader, claimed that McDonnell’s efforts to oust him were motivated by the governor’s anti-union sentiments. He had come under scrutiny at the time for his authority-related travel expenses.
Shortly before Martire filed suit, the authority hired Hunton. Sunderland said he had worked with the firm before and was happy with the quality of its work and what it charged. He said he preferred using a competitive process for legal services work, but that the Martire situation left the authority scrambling for counsel right away. It has been soliciting bids for legal services in the hopes of having firms readily on hand in the future, he added.
Including Raphael, six Hunton attorneys — two partners, two counsel and two associates — logged a little more than 639 hours on the case, according to invoices. Hourly rates, taking into account the 10 percent discount, ranged from $540 to $640 for partners, $510 to $515 for counsel, and $375 to $420 for associates. A third partner briefly entered the case, logging 45 minutes at a rate of $675 per hour.
Sunderland said that, although the authority was responsible for paying “reasonable” attorney fees, he wasn’t involved in Martire’s decision to hire Williams & Connolly. He said the two sides agreed they would let a third party go through the firm’s invoices and decide what the authority should pay. Martire’s lead counsel, Williams & Connolly partner Kevin Hodges, declined to comment.
DLA represented three subpoenaed board members: former Virginia congressman Thomas Davis III, DLA’s Washington managing partner Frank “Rusty” Conner III and Todd Stottlemyer, chief executive officer of Acentia, an information-technology company. The two DLA partners and three associates working on the case billed about 250 hours of work from late July until the case settled in September. Hourly rates, before a 10 percent discount at the end, ranged from $740 to $860 for partners and $590 to $725 for associates.
Troutman Sanders partner Bradfute Davenport Jr. served as lead counsel for Caren Merrick, the current board member McDonnell tapped to replace Martire. Davenport did not return requests for comment. Sunderland said Troutman agreed to certain fee reductions.
The terms of the settlement were confidential, but McDonnell did announce at the time that Martire agreed to resign as of October 17.
Zoe Tillman can be reached at email@example.com.