Nov 7 (Reuters) - A fee fight is brewing between the

state of California and Sullivan & Cromwell over the law firm's

work for bankrupt fire safety company Kidde-Fenwal Inc.

Sullivan & Cromwell has already earned at least $17 million

as debtor's counsel for the company, which is saddled with

lawsuits claiming its products caused toxic soil and water

contamination, charging up to $2,375 an hour for its top

partners in the case.

California Attorney General Rob Bonta wants a bankruptcy

judge to reject a portion of the fees, arguing that the

prominent New York firm is overcharging the estate by using its

highest-priced partners to do repetitive or ministerial tasks.

Sullivan & Cromwell "should not be allowed to continue

profligate practices unchecked and drain the estate" of funds,

the state told Delaware U.S. Bankruptcy Judge Laurie Selber

Silverstein in an Oct. 21 filing.

The law firm fired back on Friday, calling California's

objections a "blatant collateral attack" on a proposed $730

million settlement that Kidde-Fenwal parent Carrier Global ( CARR )

reached last month with claimants that sued over PFAS

"forever chemicals" in its firefighting foam products.

California's attempt "to punish the debtor because it may

not currently support the plan by attacking professionals who

have worked tirelessly to progress this case over the last 17

months is inappropriate," Sullivan & Cromwell said.

California specifically objected to Sullivan & Cromwell's

most recent July and August fee statements as Kidde-Fenwal's

debtors counsel.

The firm staffed too many of its top billers to do the same

job, the state said. For instance, five Sullivan & Cromwell

partners, who each charge $2,375 an hour, each billed one hour

for an internal meeting that took place on July 29.

In August, the firm had partners who charge between $2,160

and $2,375 an hour bill more than two hours reviewing past fee

applications, the state said.

All told, California is objecting to $50,325 in fees, or

2.8% of the total $1.745 million Sullivan & Cromwell is seeking

for July and August.

A Sullivan & Cromwell spokesperson said the firm's filings

speak for themselves, and that Kidde-Fenwal expects the Delaware

bankruptcy court to consider the settlement sometime during the

first quarter of 2025.

A spokesperson for the California Department of Justice said

in a statement that the state seeks to hold Kidde-Fenwal and

Carrier "fully accountable for their unconscionable conduct."

Kidde-Fenwal filed for bankruptcy in May 2023, after being

named as a defendant in more than 4,400 PFAS lawsuits that have

been centralized in federal court in South Carolina.

Bonta's office and other California municipalities,

including Los Angeles, are among those that sued. The cases

allege that chemical firefighting foam products that the company

sold from 2007 to 2013 used at airports and military bases

caused extensive contamination of drinking water and soil.

-- In other legal news, the U.S. government has appealed a

Florida federal judge's ruling that threatens to wipe out part

of a Civil War-era statute designed to combat fraud against the

government and reward whistleblowers who help uncover it.

U.S. District Judge Kathryn Mizelle ruled in September that

the False Claims Act's whistleblower, or qui tam, provisions are

unconstitutional, finding that they improperly allow

whistleblowers to exercise federal executive power without

accountability to the president.

The law's whistleblower provisions have fueled a lucrative

practice for a segment of the U.S. plaintiffs bar --

whistleblowers and their lawyers collected about $350 million in

awards for bringing successful cases on the government's behalf

last year.

The U.S. has appealed Mizelle's ruling to the 11th Circuit

U.S. Court of Appeals.

(Legal Fee Tracker is a weekly feature exploring attorney

compensation awards and disputes in class actions, bankruptcies

and other matters. Please send tips or suggestions to

[email protected].)

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