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9th Circuit considers whether size matters in attorney fee

awards

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Contract shows defense lawyers' rates in Charlie Kirk case

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Firms get $19 million after antitrust win

By Mike Scarcella and David Thomas

Oct 2 (Reuters) - (Billable Hours is Reuters' weekly

report on lawyers and money. Please send tips or suggestions to

[email protected].)

A U.S. appeals court is weighing whether law firm size

should factor into attorney fee awards, after a judge refused to

grant Big Law-caliber rates to lawyers at a small firm for fear

of setting a precedent for other cases.

The San Francisco-based 9th U.S. Circuit Court of Appeals

heard arguments this summer and may rule any day in the case,

which could affect future fee awards in California and other

western states.

Last year, five-lawyer firm Gaw Poe won a jury verdict that

Clear Eyes manufacturer Prestige Consumer Healthcare ( PBH ) violated

antitrust law by charging wholesalers higher prices than

retailer Costco for its eye drops.

The case put a spotlight on a seldom-invoked U.S. antitrust

law provision called the Robinson-Patman Act, which restricts

when companies can offer discounts to some buyers and not

others.

Prestige is contesting the jury's verdict, and San

Francisco-based Gaw Poe is appealing a $3.1 million fee award it

says undervalued its work in the case.

Gaw Poe, whose founders Randolph Gaw and Mark Poe once

practiced at 1,000-lawyer firms, had sought more than $7.6

million in fees in the Los Angeles case. Because antitrust law

includes mandatory fee-shifting, Prestige would be responsible

for the payment.

Prestige objected to the requested fee amount at the

district court. Its lawyers at Duane Morris argued that Gaw Poe

"is not a large firm" but that the rates it submitted - $1,314

for top partners and $1,000 for junior lawyers - were "similar

to what certain large Los Angeles firms charge."

U.S. District Judge Michael Fitzgerald agreed, citing lower fees

previously awarded to Gaw Poe in an unrelated contract case and

awarding hourly rates from $975 to $1,070. Granting a higher

rate risked creating "a new benchmark for Plaintiffs' fee

requests in the future," Fitzgerald said.

"Notwithstanding Plaintiffs' counsel's background,

accolades, and expertise in this area of the law, it is simply

unreasonable to award big law rates to a four-person firm

representing mom-and-pop warehouses," the judge wrote.

At the 9th Circuit arguments in July, some appellate judges

questioned whether firm size should influence fee awards, noting

that the standard focuses on lawyers' skill, experience, and

reputation.

"Logically, why would firm size make a difference?" asked

Circuit Judge Kim McLane Wardlaw.

Prestige defended the trial judge's approach, saying he was

trying to assess what rates the plaintiffs' lawyers could

actually command.

Poe, arguing for his wholesaler clients, said many

plaintiffs-side antitrust lawyers work at smaller firms.

"If we say that firm size is relevant, then there will be a

directional disparity between what the defendants are being paid

by the hour versus what the plaintiffs are being paid by the

hour," Poe said.

Gaw Poe declined to comment. Prestige did not immediately

respond to a request for comment.

Nancy Rapoport, a fee examiner and law professor at the

University of Nevada who is not involved in the case, said large

firms usually charge higher rates than smaller, so-called

"boutique" litigation firms because they have higher overhead.

But there are exceptions, she said, and other experts told

Reuters that law firm size should have no bearing on fee awards.

"I see no reason why we would vary the fees based on the

size of the firms," said Jessica Erickson, who teaches corporate

and securities law and civil procedure at the University of

Richmond.

Law firms are organized in all kinds of ways, said Adam

Levitin, a bankruptcy and commercial law professor at Georgetown

University. "Fees should reflect the skill, experience, and

reputation of the attorneys and the particular challenges of a

case, not the details of the attorneys' business organization,"

he said.

-- The Utah County Commission is paying criminal defense

attorney Kathryn Nester $295 an hour to defend Charlie Kirk's

alleged assassin against capital murder charges, according to a

contract obtained by Reuters.

The commission said last week that Nester, a former top

public defender in Salt Lake City and San Diego, had been hired

to defend Tyler Robinson, who was charged with one count of

aggravated murder after he allegedly shot Kirk in the neck

during a campus event at Utah Valley University on September 10.

The county contract shows that two California-based criminal

defense attorneys - Richard Novak and Michael Burt - will serve

as co-counsel to Nester. They will also be paid $295 an hour for

their work.

Burt declined to comment. Nester and Novak did not

immediately respond to requests for comment.

Robinson made a brief court appearance on Monday, where Nester

said her team will seek a preliminary hearing to determine

whether there is enough evidence to proceed to a trial.

-- Law firms Cohen Milstein, Farella Braun and Quinn Emanuel

were awarded more than $19 million in legal fees for their work

on an antitrust suit for Pacific Steel Group, which won a

damages award of more than $330 million after prevailing in a

trial in California last year against Commercial Metals Company ( CMC )

.

U.S. District Judge Haywood Gilliam Jr said in an order on

September 29 that the three firms' rate request for 23,153 hours

of work was reasonable. Gilliam in addition to ordering fees

denied Commercial Metals' ( CMC ) request for a new trial.

In a statement, Commercial Metals ( CMC ) said it planned to appeal.

The company said it "stands by the strong integrity of its

business practices and will vigorously defend its position."

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