Articles Posted in Legal Ethics

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Plaintiff, a California-based dentist specializing in tooth implants, filed a class action complaint against Nobel alleging a defect in the NobelDirect implant. On appeal, Nobel challenges the district court's order awarding class counsel more than $2.3 million in attorneys’ fees. The court concluded that defendants have not waived their due process argument where the record demonstrates that defendants raised the issue with sufficient specificity and vigor. On the merits, the court concluded that the district court’s use over defendants’ objection of ex parte, in camera submissions to support its fee order violated defendants’ due process rights. The court remanded for the district court to allow defendants access to the information at issue, to allow plaintiffs to respond to defendants' objections and for defendants to reply, and then the district court can decide the appropriate fee award. The court concluded that the district court’s discount of the lodestar for lack of success was not erroneous because the district court concisely and clearly explained its reduction of the lodestar, and because there was sufficient support for its finding that plaintiffs' claims were related to a common goal. The court agreed that the district court likely overstated its monetary valuation of the settlement. But where, as here, classwide benefits are not easily monetized, a cross-check is entirely discretionary. The court vacated the fee order and remanded. View "Yamada v. Nobel Biocare Holding AG" on Justia Law

Posted in: Legal Ethics

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Plaintiff, a lawyer in California, filed suit challenging California’s procedures for attorney discipline. Plaintiff alleged that California violated her constitutional rights by not providing her meaningful judicial review in a fee dispute between herself and a client, and that the rules governing the California State Bar’s disciplinary procedures are facially unconstitutional. The court agreed with the State Bar that plaintiff's as-applied challenges are barred by the Rooker-Feldman doctrine. However, the court concluded that the State Bar misreads this Court’s statute-of-limitations decision in Action Apartment Ass’n, Inc. v. Santa Monica Rent Control Board, which only applies to facial challenges involving property rights. In this case, plaintiff's facial claims are not time-barred because she filed her claim well within the two-year statute of limitations. On the merits, the court concluded that plaintiff's facial claims based on California’s state constitution fail because they have already been rejected by the Supreme Court of California. The court concluded that, contrary to plaintiff's contentions, People v. Kelly did not overrule In re Rose, which stated that it is fundamental that state courts be left free and unfettered by the federal courts in interpreting their state constitutions. Plaintiff's First Amendment claims are unsupported because the court was aware of no case holding that the First Amendment provides a freestanding right for an individual to have a state court hear her dispute in the absence of some asserted state or federal cause of action, statutory or judge-made. Plaintiff's Fourteenth Amendment Due Process and Equal Protection claims also fail where California's change in its attorney discipline procedures are not so significant as to create a due process violation. While the regulation of lawyers in California is unlike California’s regulation of any other professionals, plaintiff has not demonstrated that this regulatory scheme violates Equal Protection. California’s decision to regulate lawyers principally via a judicially supervised administrative body attached to the State Bar of California, the organization of all state-licensed lawyers, is rational and so constitutional. Accordingly, the court affirmed the judgment. View "Scheer v. Kelly" on Justia Law

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Appellants and appellees are two teams of named plaintiffs and their respective lawyers who disagree over the proper direction for a consumer class action settlement. In Radcliffe I, the court held that appellees created a conflict of interest by conditioning incentive awards for the class representatives on their approval of the proposed settlement agreement. On remand, appellants moved the district court to disqualify appellees’ counsel from representing the class based on that conflict. The court agreed with the district court that California does not apply a rule of automatic disqualification for conflicts of simultaneous representation in the class action context, and concluded that the district court did not abuse its discretion in determining that appellees’ counsel will adequately represent the class. Accordingly, the court affirmed the district court's denial of the qualification motion. View "Radcliffe v. Experian Info. Solutions" on Justia Law

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Petitioner and her son prevailed at both hearings concerning their due process complaint against the District. At issue on appeal is the district court's award of attorney fees, pursuant to the Individuals with Disabilities Education Act (IDEA), 20 U.S.C. 1415, to petitioner's attorney, Tania Whiteleather. The district court awarded $7,780 in fees, substantially less than the $66,420 requested. The court concluded that the outcome of the administrative hearing was not more favorable to petitioner than the District's settlement offer and petitioner was not substantially justified in rejecting the settlement offer. The court concluded that it was not an abuse of discretion for the district court to apply the $400 rate without seeking additional rebuttal evidence from the District. Finally, the court concluded that petitioner's claim for paralegal fees was barred by collateral estoppel because the district court had already concluded that Dr. Susan Burnett was an education consultant in the expedited hearing appeal. Accordingly, the court affirmed the judgment. View "Beauchamp v. Anaheim Union High Sch. Dist." on Justia Law

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After the parties reached a settlement in a securities class action, the district court approved the settlement and awarded attorneys' fees. Class counsel appealed, contending that the fee award was arbitrary. The court concluded that the district court's choice to apply the lodestar method, rather than the percentage-of-fund method, was well within the district court’s discretion. However, the court vacated and remanded for recalculation of the fee, concluding that the district court's near total failure to explain the basis of its award was an abuse of discretion. View "McGee v. China Electric Motor, Inc." on Justia Law

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Plaintiff was awarded nominal damages on three of his four as-applied claims in a 42 U.S.C. 1983 suit to invalidate aspects of Laguna Beach's ordinances prohibiting the use of sound-amplification devices on public sidewalks. Plaintiff then moved for attorneys' fees. The district court concluded that plaintiff was a prevailing party under 42 U.S.C. 1983, but denied attorneys' fees pursuant to Farrar v. Hobby. Farrar held that a prevailing party who seeks a large compensatory award but receives only nominal damages may not be entitled to fees. The court affirmed the district court’s order denying fees under California law. However, under federal law, the court held that because plaintiff's lawsuit achieved its future-oriented goals and plaintiff never attempted to secure compensatory damages under section 1983, the Farrar exception does not apply. Consequently, the district court erred by not considering plaintiff's entitlement to fees under the standard framework. The court vacated and remanded for further proceedings. View "Klein v. City of Laguna Beach" on Justia Law

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Petitioner was awarded benefits under the Longshore and Harbor Workers’ Compensation Act, 33 U.S.C. 928(a), for injuries he sustained while working for PacificRim. On appeal, petitioner challenged the Board's decision affirming an ALJ's award of attorney's fees under the Act. The court concluded that the proxy market rate relied upon by the ALJ does not adequately reflect market rates for Portland, Oregon, the relevant community, because it is based entirely on data not tailored to Portland, even though reliable information about attorney billing rates in Portland was readily available. Therefore, the court held that the Board erred in affirming the attorney’s-fee award based on a proxy market rate not tailored to the “relevant community.” Accordingly, the court granted the petition for review, vacated the judgment, and remanded for further proceedings. View "Shirrod v. OWCP" on Justia Law

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Plaintiff, convicted for sexually assaulting the 13-year-old daughter of his girlfriend, filed a number of civil suits against various federal and state officers and institutions, and some private persons alleging a governmental conspiracy to persecute plaintiff and violation of his constitutional rights. In this case, plaintiff filed eight causes of action against 19 defendants, including District Judge Donald W. Molloy and Magistrate Judge Jeremiah C. Lynch. When plaintiff filed the action, the case was assigned to the same judges who had presided over his earlier case, Judge Molloy and Magistrate Judge Lynch. Principally at issue on appeal is plaintiff's contention that District Judge Molloy and Magistrate Judge Lynch abused their discretion when they declined to recuse themselves from presiding over plaintiff's claims, despite being named as defendants. The court held that the rule of necessity applies where every judge of a tribunal would otherwise be disqualified. Therefore, the rule of necessity permits a district judge to hear a case in which he is named as a defendant where a litigant sues all the judges of the district. Accordingly, Judges Molloy and Lynch did not abuse their discretion when they declined to recuse themselves, though named as defendants in this action. The court affirmed the judgment. View "Glick v. Edwards" on Justia Law

Posted in: Legal Ethics

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Claimant appealed the district court's fee award after he prevailed against the federal government in a civil asset forfeiture action and became entitled to an award of attorney’s fees under the Civil Asset Forfeiture Reform Act of 2000 (CAFRA), 28 U.S.C. 2465(b)(1)(A). The court concluded that the district court correctly noted that the the lodestar method, which calculates a fee award by multiplying the market billing rate by the hours reasonably expended, applies to CAFRA awards even when there is a contingency agreement. The court concluded that the fee target has, through its inaction in the district court, waived any right on appeal to present new evidence to challenge the district court’s factual finding of reasonableness; nor can the target challenge the absence of an evidentiary hearing in the district court. The court concluded that the district court erred in several respects: it failed to afford claimant's rate of presumption of reasonableness; the district court entirely ignored the hourly rates discussed in the three declarations from forfeiture experts; the district court erred in finding that forfeiture work resembled criminal defense litigation; the district court erred in finding that the claimed hourly fee should be lowered because much of the work could have been delegated to associates with lower billing rates at a large law firm; and the district court erred by relying on an award almost nine years old in determining the prevailing market hourly rate. Further, the district court erred by reducing the hours claimed by over forty percent where the district court only identified 6.75 hours that it found objectionable. Finally, the district court also erred by reducing the lodestar because of the contingency fee. Accordingly, the court vacated the fee award and remanded for recalculation. View "United States v. Moser" on Justia Law

Posted in: Legal Ethics

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Kaass Law challenged the district court's grant of Wells Fargo's motion for sanctions against it under 28 U.S.C. 1927. The district court ruled that “Kaass Law acted in bad faith by knowingly raising frivolous arguments against Wells Fargo and other defendants[.]” The court reversed and vacated the district court's order, holding that section 1927 does not permit the imposition of sanctions against a law firm. View "Kaass Law v. Wells Fargo" on Justia Law

Posted in: Legal Ethics