Quote of the Day - Ignorance of the law must not prevent the losing attorney from collecting his fee.
New California Attorney General Edmund G. Brown signed this May 11, 2007 letter to the plaintiff's law firm of Hirst Chanler questioning that firm's process of collecting attorneys fees as part of Proposition 65 settlements. Here's the AG's opening paragraph, just to give you a taste of what follows: "We are writing to express our concern about the manner in which you and your clients have pursued Proposition 65 matters concerning lead in the surface coatings of glassware and ceramicware. It needs to change. While these matters generally invohe lead exposures that exceed Proposition 65 standards, and which need to be corrected, your manner of pursuing them does not appear to be in the public interest."
One recent settlement of some interest to the AG was the San Francisco case of Brimer v. The Boelter Companies filed by Hirst Chanler. That case involved lead and cadmium allegedly present in ceramic glassware. In his letter, the AG questioned the fees earned by Chanler.
AG Brown and Supervising Deputy Attorney General Ed Weil wrote, "According to that report (and our records), the [settlement] program generated total payments of over $9 million, including $5.3 million in attorney fees to your firm and penalty payments of over $2.8 million ($700,000 of which is given to plaintiffs by statute)."
Let's see how the AG broke down those fees.
The AG continued, "This equals over $26,000 in fees per defendant, which assuming all time was attorney time at $400 per hour, would equal over 65 hours of attorney time per company. This, as we understand it, is for companies that did not contest liability, but instead sought to resolve the matter immediately."
Chanler largely disagreed, and was quick to respond with this 27-page, June 6, 2007 letter in defense of his fees, in part noting that some of the fee identified by the AG went to another law firm. Chanler compares his work to that of others to justify his fees: "Between 2000 and 2005, for every $1.00 of civil penalties generated, our clients collected $2.85 in fees and costs on average. Between 2000 and 2005, for every $1.00 of civil penalties generated, all other private enforcers collected $14.49 in fees and costs on average."
Equally noted by the AG was the manner defense counsel collected its fees from businesses it defended. Again, the AG wrote: "[according to] Morrison & Foerster, [defense] counsel, as of November 3, 2006, 205 companies had opted in to the Boelter settlement under the auspices of that firm's representation. This generated $1.018 million in fees for the administering defense counsel, who concluded that this amount exceeded the reasonable fee for the services by over $350,000, and donated that amount to various charitable activities."
Wow. An attorney who donated an excessive fee to charity. Why not just give it back to the businesses that paid it or the consumers who had to pay these extra costs to the businesses? Or simply not charge that much in the first place?
But the AG didn't stop at pointing out defense counsel's "charity." His words pointed at both sides, here speaking to Hirst Chanler: "Our primary concern at this point is the manner in which your clients have collected significant sums of money from businesses that have little or no liability for past violations, and an amount of attorney fees that appears to exceed a reasonable amount."
Chanler's letter defended his actions and claimed overall success in prosecuting Prop 65 actions, and to some degree poked back at the AG for not objecting earlier, "It is only now, 18 months after the court approved the agreement and well after your office had an opportunity to review and object to the terms of the agreement, that your office is raising questions about the fairness of the agreement. In light of the unquestioned success of the Boelter cases, we see little purpose in questioning them at this late date."
But it's clear to this writer what's going on here. Someone other than the Court of Appeal is starting to pay attention to the bounty hunters on both sides of this equation, and protect California's businesses and consumers, which is really what Proposition 65 is all about - not perhaps disproportionate fees collected by attorneys on both sides of the fence.
It's about time, in my opinion.