Should judges award lower fees to lawyers who have lower overhead? Not according to U.S. Magistrate Judge Andrew W. Austin of the Western District of Texas, who referred to “the pomposity” of the defendants’ arguments in a recent order.
Austin awarded $340,000 in attorney’s fees and costs to the plaintiffs in a Fair Labor Standards Act case, Ransom, et al. v. M. Patel Enterprises, et al. Edmond Moreland, a partner in Wimberley’s two-lawyer Floreani & Moreland, represents the plaintiffs.
In a May 9 order, Austin wrote that the defendants had argued that “it is inappropriate to award fees for Moreland based on a rate by a large firm with a large overhead, given that Moreland is a small practitioner officing in ‘roughly 600 square foot free-standing-frame building in the rural town of Wimberley, Texas.’ “
Both sides have filed notices of appeal of a Feb. 15 judgment in Ransom, in which Austin awarded $135,000 in damages to the 16 plaintiffs. The defendants filed their notice on May 30 and the plaintiffs on June 18.
Justin Welch, who represents the three defendants, says he drafted the objections to the plaintiffs’ fee request that were submitted to Austin. Austin “wasn’t too happy about my arguments,” says Welch, a partner in Austin’s Blazier, Christensen, Bigelow & Virr.
Moreland notes that even an attorney who offices in a tent should receive fees commensurate with what lawyers with similar experience and success receive in the community where the litigation takes place, and he has 5th Circuit precedent to prove it.
Austin’s May 9 order approved an hourly billable rate of $325 for Moreland’s fees, which the plaintiffs had proposed and supported with comparisons to the $389 hourly fees allegedly received by lawyers in the Austin office of the employment-defense firm Ogletree, Deakins, Nash, Smoak & Stewart. (Ryan King, a spokesman for Ogletree, Deakins, did not return a call seeking comment.)
Austin noted the defendants’ specific objections to the $325 rate and to the plaintiffs’ comparison to Ogletree, Deakins. Austin wrote that the defendants argued that their own lawyers charged them $225-$250 an hour, even though Blazier, Christensen is housed in a ” ‘downtown high rise two blocks from the federal court house.’ “
In a footnote in his May 9 order, Austin noted that the defendants offer “no evidence of Mr. Moreland’s actual space overhead cost, but simply rather assume that the lease costs of their office space are higher per lawyer than the space costs Moreland incurs.” He continued, “[T]he Court is unwilling to indulge in that assumption.”
In the body of the order, Austin noted that the defendants did not “cite a single authority for this argument, likely because there are none.”
Prior to submitting his arguments opposing the plaintiffs’ fee request, Welch says he “road-tested them” by asking other lawyers what they thought and he received positive reactions.
Welch believes that a lawyer’s hourly billing rates shouldn’t be calculated without factoring in overhead.
“I was a little skeptical that a judge who works on the taxpayers’ dime would understand,” Welch says.
Welch says he developed his arguments about the overhead in response to Moreland’s reference to Ogletree, Deakins’ rates. “I’ve been to Moreland’s offices; he isn’t paying more than $500 a month for that.”
Welch says his clients are indirectly fighting the fee award. In their appeal of Austin’s final judgment in Ransom, Welch says the defendants will argue that the damages calculation is incorrect. When corrected, the final damages will be much less than what the plaintiffs sought, which means the plaintiffs’ attorneys’ fees also should be less.
Moreland says he doesn’t believe Welch will succeed in reducing the damages or the attorneys’ fees.