Corporate Lawyers Scratch Their Heads Over Citi Class-Action Fees
Forbes reports on how Center for Class Action Fairness’s Ted Frank discovered the plaintiff’s lawyers, in a class action suit against Citigroup, charged exorbitant billing hours.
Activist and fee opponent Ted Frank, meanwhile, filed an analysis with the court that shows Kirby McInerney racked up much of the work it wants its clients to pay for after both sides had accepted a mediator’s settlement proposal. The frenzy of activity after the settlement had been reached, Frank said in his filing, is consistent with “a strategy of maximizing billable hours rather than effective litigation management.”
In the Citigroup case, Kirby McInerney is seeking a judge’s approval to bill class members for 87,000 hours of attorney time it says are worth some $50 million plus a “multiplier” to reflect the risk it took of earning nothing. Its costs include charges of $550 an hour for contract attorneys who are recent law-school graduates and likely were paid as little as $32 an hour by temp agencies. In response to an objection by Frank’s Center for Class Action Fairness, U.S. District Judge Sidney Stein ordered the firm to provide detailed billing records.
Frank analyzed those records and found that more than $17 million of the time entries were labeled simply “document review,” and timekeepers at the temp firm, Hudson Legal, only noted hours on a daily basis.
Kirby McInerney is also seeking $7 million for contract attorney hours billed after the settlement was agreed to, including some eyebrow-raising entries such as the 239 hours India A. — presumably the part-time model Frank identified in an earlier filing — spent analyzing a 400-page deposition at two pages per hour. “Class counsel claims a $90,000 lodestar for this work normally provided by paralegals, and normally done in less than a tenth of that time for a one-day transcript of that size,” Frank said.
“The 16.5% fee request here reflects the failure of the class representative to discipline their attorneys,” Frank concludes. The plaintiffs in this case include the Tennessee Consolidated Retirement Systems and the Public Employees’ Retirement System of Colorado.
Read the full article at Forbes.