IN ATTORNEYS’ FEES DISPUTE, XEROX ORDERED TO DISCLOSE WHAT IT PAYS ATTORNEYS

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A federal judge recently ordered Xerox to tell the court how much it paid its attorneys in a long-running ERISA lawsuit. 

Takeaway:  If defendants get too aggressive in challenging plaintiffs’ fee request, they may invite closer examination of their own fees and work. 

In Frommert v. Conkright, 2016 BL 347641, W.D.N.Y., No. 6:00-cv-06311-DGL-JWF, 10/19/16, Judge David G. Larimer ordered Xerox, in a 16-year-long lawsuit brought by Xerox workers challenging the way Xerox calculated their pension benefits, to disclose in a sealed statement to the court the hourly rates it paid its attorneys. The judge said this was to help the court determine if the contested amount the plaintiffs requested in fees was reasonable. 

In January, the court ordered Xerox to recalculate the workers’ benefits after a case that went through the district court, Second Circuit Court of Appeals and the U.S. Supreme Court. 

Xerox subsequently objected to the workers’ request for attorneys’ fees based on hourly rates of between $250 and $675, arguing that an hourly rate of more than $300 for partners and $200 for associates would be unreasonable. 

However, Robert W. Rachal, a defense-side ERISA attorney with Proskauer Rose LLP in New Orleans, told Bloomberg BNA Oct. 21, “Defense work is not always a good comparison because of the difference in work involved, e.g., defendants typically have far more burdensome obligations in discovery.” 

The plaintiffs argued that the rates charged by the defense firms that have worked on the case—Nixon Peabody, Littler Mendelson and Covington & Burling—far exceeded the $300 per hour rate that Xerox contended was the proper top rate for plaintiffs’ attorneys. 

Defendants criticized the plaintiffs for using law firms outside of the Rochester, N.Y. area, but the judge said in his order, “It does not appear to be unreasonable for plaintiffs to have used a `national’ firm with particular experience in ERISA litigation, considering the issues involved and the legal expertise arrayed against them on the other side. Plaintiffs contend that they sought Rochester-area lawyers, and that not one attorney or firm was willing to take their case.” 

In ordering this disclosure, the court said that information regarding attorney's fees and fee arrangements is generally not privileged. 

The court ended its order by saying that if Xerox chooses not to provide this information within the required 15 days, the court may proceed with the evidence that has already been presented, coupled with the court's own understanding of legal billing rates based on its 30 years' experience in dealing with such issues. According to the court, the evidence of fees presented to the court includes a report by the National Law Journal concerning fees billed by the largest law firms in the country. “This is a well-known publication that is recognized throughout the legal profession,” the court said, indicating that it could go by those rates. In the article, Littler Mendelson had told the National Law Journal that the average billing rate of its partners was $550 per hour, with some partners charging as much as $615 per hour. In that same article, Covington & Burling stated that its average rate for partners was $780 per hour.

See related story, Xerox Asked to Disclose What It Pays ERISA Lawyers.

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