When U.S. District Judge Sam Sparks awarded Jerad Najvar’s clients $137,074 in attorney fees—only slightly more than half of the $236,544 they had proposed—the Houston lawyer took it in stride.
“Judges have a lot of leeway,” Najvar said about the fee award, issued Jan. 30.
Lawyers statewide spend countless hours head-scratching about how to maximize fee awards given such judicial “leeway.” A recent sampling of Texas federal courts’ fee rulings shows that even when a legal team wins a $300 million final judgment for a client, the judge can slash a proposed fee award by more than half.
The same outcome proportionally took place when one attorney’s client proposed $3,000 in fees. In that instance, a federal judge issued a 21-page ruling, cutting the award to $1,000 and using the word “perjury” in connection with assertions made in the fee request.
“It’s complicated, and it leaves a lot of discretion to judges,” Najvar said about fee awards.
Najvar’s clients, plaintiffs in a lawsuit against state agencies and officials, had initially challenged, in 2012, provisions of the Texas Election Code as unconstitutional. On Nov. 14, 2014, Sparks, of the Western District of Texas, Austin division, issued a final judgment. With that ruling, Najvar’s clients prevailed on some—but not all—of their challenges to the election code. Early in the litigation, Najvar’s clients had failed to win a preliminary injunction to prevent enforcement of the disputed provisions of the election code.
Noting the plaintiffs’ failed attempt to win a pre-election injunction, the state defendants argued that the court should award Najvar’s clients no attorney fees. The state defendants argued that the plaintiffs had failed to prevail entirely and that the election in question had already come and gone. The final judgment offered “no material benefits” to Najvar’s clients, the state defendants argued, therefore they failed to qualify as prevailing and be eligible for fees.
Najvar, who has his own firm in Houston, said he had responded “forcefully” to the defendant’s objections to the fee award. His clients’ victory was not moot and therefore they deserved attorney fees, he said.
“My clients had standing to get judicial relief at the time that relief was granted,” he said, and that was all that was necessary to qualify as prevailing for the purposes of eligibility for a fee award.
In his Jan. 30 ruling, Sparks sided with Najvar. But Sparks cut $99,000 from plaintiffs’ proposed fee award and described some of their requests as “excessive.”
11.2 Million in Fees
When Roy Hardin’s client requested a fee award from an East Texas federal court, it also faced opposition from a defendant. Hardin represents Retractable Industries (RTI), which won an $11.2 million fee award on Jan. 15 by U.S. District Judge Leonard Davis of the Eastern District of Texas in Marshall.
RTI had alleged that Becton Dickinson and Company engaged in anticompetitive conduct and false advertising, barred under the Lanham Act.
Hardin, a partner in Dallas’ Locke Lord, led a team that secured last year a $113 million jury verdict for RTI, which makes syringes.
On Jan. 15, Davis issued the fee award as well as a $340 million final judgment, based on the jury verdict and additional awards allowed under the antitrust laws.
However, in an earlier ruling, on Nov. 10, 2014, Davis had rejected an initial $36 million fee request made by RTI. In his denial of that first fee request, Davis said that RTI had failed to show that it had presented an exceptional case under the Lanham Act, and therefore qualified for additional fees. He also ruled that RTI was entitled to only 50 percent of the fees it had sought for the work its lawyers had done prosecuting previous related claims.
His team used Davis’ order denying the $36 million proposed fees as a road map for recalculating a new fee request, Hardin said.
“We redacted and retracted and came up with a number,” Hardin said.
Also, following instructions from the judge, Hardin said, his team conferred with the defendant’s counsel about the request. BD’s lawyers didn’t dispute the particular calculations RTI lawyers used; rather, they objected to the notion that RTI was eligible for any award, Hardin said.
On Dec. 23, 2014, RTI filed under seal a motion for reduced fees in accordance with Davis’ order. In a response filed Jan. 7, BD, represented by Sam Baxter, shareholder in the Marshall office of McKool Smith, argued that RTI was not entitled to attorney fees because it had not prevailed on any of their claims as a matter of law.
“I’m sure they are going to appeal” both the final judgment and the fee award, predicted Hardin about BD and its lawyers.
21 Pages To Cut Fees
U.S. District Judge Frank Montalvo for the Western District of Texas in El Paso issued a 21-page ruling on Jan. 21 with copious details about why he had reduced by more than half the $2,775 in fees sought by Francisco Ortega’s corporate client. Ortega’s client had requested the fee-award for work that Ortega, as a shareholder in El Paso’s ScottHulse, had done related to its motion to compel discovery. Notably, Montalvo had asked Ortega’s client to submit the pretrial fee request for his work on the motion.
Ortega declined to comment for this story.
Montalvo’s ruling raised multiple questions about the fees proposed for work performed by Ortega, a former law clerk for the Supreme Court of Texas.
In his ruling, Montalvo noted that Ortega “affirms under penalty of perjury that he spent approximately 11.10 hours performing activities” on his motion and related documents at an hourly rate of $250. Montalvo, however, concluded that Ortega worked only five hours on those tasks and could only charge $200 an hour, for a total of a $1,000 fee award.
In the pages of his ruling before he reaches that conclusion, Montalvo provided what he calls “a line-by-line analysis” of Ortega’s invoice. The judge deemed 0.30 hours spent on communications about unanswered discovery requests and 0.40 hours reviewing answers to interrogatories to be excessive. Both of those tasks should have consumed half the amount of time requested, the judge concluded. With the “universal adoption of email, forwarding expeditious information is ubiquitous,” Montalvo wrote, to explain why he slashed by 50 percent the time alleged in forwarding discovery requests and providing status updates. As to the time Ortega spent researching, drafting and finalizing his motion to compel, the judge expressed skepticism. He noted that the ScottHulse shareholder has practiced for seven years. Given the “simplicity” of the legal standards for the work, and Ortega’s “caliber” as an attorney, the judge concluded, the creation of the seven-page document couldn’t have taken Ortega long to produce.