please the court my name is richard shore and i am here on behalf of the appellant gilbert l l p your honour's gilbert l l p handled the underlying case on behalf of alpha from the inception of the case through trial  copley alpha elected to discharge gilbert l l p without cause and retain the new firm which mainly pursued collection efforts and ultimately entered at least two settlements with the defendant effected alpha's recovery to use the words of the huntsman case is not only fully consistent with virginia law we submit it is the result of virginia law requires the district court's decision limiting gilbert l a p s fee to a small fraction of the hourly basis fees on a deeply discounted hours times rates lodestar formula is clear legal air under control in virginia authority subject to the nova review the district court's decision also is contrary to important public policy in virginia in the fourth circuit because if affirmed by the court it would curtail if not effectively eliminate clients access to contingency fee counsel  case well i think in this case you look at both your honor and i'll explain why that is the case the starting point is the campbell county case which both both parties have cited in that case the virginia supreme court listed the factors that a court should consider in a quantum erowid and malice s and one of the factors that the district court notes is whether or not the fee absolute or contingent it being a recognized rule that an attorney may properly charge a much larger fee where it is to be contingent than where it is not so and not  did not apply those factors it simply wrote them off it said that there are no after it did the lodestar analysis and deeply discounted the hourly basis fees it simply ignored the contingent nature of the fee agreement it ignored the outcome it ignored the substantial amount that was it issue and other factors that it was required to consider but we think that the central point is really  contingent nature of the arrangement whereas here your honor is a contingent fee firm secures a large jury verdict before it is discharged without cause we believe that the predominant factor in determining a quantum marrow it fee has to be the contingent nature of the fee because the major risk factor on which the fee was contingent was a limited by the jury's jury verdict now while it may be make sense early in the case focus on the amount and character of the services rendered really the hours times writes that is only because the the first firm hasn't incurred significant risk and hasn't eliminated any risk but where is here a firm as unaided a major risk factor through securing a jury verdict the contingent factor under campbell county we believe takes center stage and we also believe that the result secured under the abrams case for example of this court is a very significant factor under campbell county the firm is entitled to a much larger fee where it is to be contingent than where it is not so the heisman case itself indicates that securing a verdict warrants a contingency fee its inception through a twenty six million dollar verdict and beyond a law weisberg batasan copley contributed we're not saying that they did not they did not alone affect the client's recovery it was a joint effort that contributed to the cop client's recovery and the use of the language effect the client's recovery we think of the sizes in heinzman emphasizes that point while only the second firm affected the recovery and heintz men both firms efforts to sequentially effected the clients recovery here we don't think that that really can be seriously disputed and secondly and this is really very significant the court denied the first attorney a contingency fee because that the court concluded that the result that he would have achieved had he not been terminated was quote unquote entirely speculative and the specific language of the court used on this is really quite significant as the court put it the virginia supreme court said the first attorney quote might have affected a greater settlement or want a larger verdict considering the vagaries of trial he might have recovered nothing that is that age nine sixty four of the decision and the court focus on the verdict and the vagaries of trial is particularly significant here because we know here that gilbert l l p won a twenty six million dollars for jury verdict we know that gilbert l a p overcame the vagaries of trial this is not merely a difference in degree your honors this is a difference in kind under the reasoning and rationale heinsohn gilbert lp is entitled to a share of the contingency fee on like the attorney there who had done and done essentially nothing of value and had not create contributed to the client's recovery and your honor so i'd like to that direct the horse attention particularly to another virginia case virginia's supreme court case that received frankly scant mention in the briefs hughes the cole four sixty five south the second eight twenty that's a case involving a discharge contingency fee counsel where the virginia supreme court approved a field  ard that was a multiple of clearly a multiple of the hourly fees of the attorneys involved in that case the virginia supreme court did not cite lodestar or discuss hours times rates rather what it said were and let me just set the stage it was a fight over the proceeds of a lottery ticket and the client hired a whole series of lawyers the first lawyers that were hired worked the case for a while in north carolina i believe they got summary judgment that was that on appeal they were just charge without cause so several sets of other lawyers were then hired to finish out the proceedings in north carolina and continue in virginia what the court said the with respect to the first set of attorneys was the virginia supreme court was that it would rule it relied this is a quote relied on the rules which pertain to strictly contingent fees that age eight hundred thirty three of the opinion and affirmed an attorney fiord equivalent to more than eight hundred fifty dollars an hour for attorneys who had handled as i said part of the case in north carolina other attorneys finished it out there and moved on to proceedings in hours but it didn't talk about their rates and it didn't do it rates times hours analysis it didn't start with that it simply approved the fee that they would receive of eight hundred fifty thousand dollars for less than one thousand hours of work and you're talking about work that was done in one thousand nine hundred to one thousand nine hundred three nearly a quarter of a century ago by local law firms in north carolina the abrams case which is a two thousand and ten case talks about three hundred dollars an hour being sort of the going rate in north carolina for legal services to the extent that this was three hundred or twenty some years ago substantially less than that you're talking about a three four five times multiplier to reflect the contingency contingent nature of that representation or are you going to talk at all about costs as opposed to fees yes your honor it would seem to me that a different this might apply here right so we the the main reduction in the the the claimer the lean for costs was in the damages expert  obviously where you get a twenty six points some million dollar verdict the damages experts testimony is really key in terms of achieving that result and here the the  reimbursement for the damages expert was reduced from approximately one point eight million dollars to seven hundred something thousand thousand dollars now this is really a different analysis from the fee analysis quantum arrow it does to apply it plainly doesn't apply to expenses campbell county says compensation it doesn't say reimbursement for expenses so really the question is what's the appropriate measure of recovery for gilbert l p for amounts that it in good faith expended out of pocket at vance in those amounts for the client based on the client's contractual commitment to repay those amounts from any recovery and it can't be the same  analysis the same type of quantum error when analysis because the same factors don't apply the factors of is the client going to be bound to the initial law firm and not able to switch that just doesn't apply the ethical standards that would say that when you're seeking a benefit in terms of compensation to the law firm it has to be a reasonable fee but that also doesn't apply the law firm was not going to make any profit on the  expenses that it paid to third parties such as the expert at most it was only going to recover the amounts that were expended so there was not only was there no incentive to inflate those amount s but there was every incentive to conserve on those costs and to only incur costs and pay experts where that was providing real benefit to the case because if the case was lost you weren't going to get it back so the smaller the number the better if the case was one you weren't going to get a bonus on it you weren't going to make money on it you were only going to get reimbursed so we think that the mode of analysis is really completely different and indeed whereas quantum mero it under campbell county and under heinsohn and other cases supplants the fee agreements since quantum merit doesn't apply nothing supplants the contractual obligation under the under th agreement between the firm and the client to reimburse for these costs it ought to be the burden of the client to establish that in some way the expenses are so far beyond the pale that they shouldn't be paid and fundamentally if gilbert elop he had an obligation to pay those costs to the expert absent really unusual standards and subject to a very high bar we believe that the client should be obligated to reimburse we think it's really a completely different mode of analysis and what a lot of this comes down to in both the fee and the expense side your honour's is it's it's a bigger question than just build rebel now obviously here gilbert l a p believes that a grave injustice was done in carving down its fee and its expenses to a level where this case notwithstanding that the firm handled the case diligently was committed to the client was loyal to the client and secured a fantastic result for the client that it was carved down to a level that was an absolute financial loss for the firm but if this decision is affirmed what this will say to lawyers in virginia and to lawyers within the fourth circuit is that you can take on a contingency fee case you can take the risk of no recovery you can invest millions of dollars potentially in hourly fee equivalence you can advance millions of dollars in costs and at the end of the day you will suffer a financial loss from having taken the case notwithstanding a fabulous outcome a fabulous result in the case and in that circumstance your honour's we believe that no rational firm would accept a contingent fee representation if the district court's decision is up held and that is we think very very significant concern under abrams we think it what animates huntsman is access to contingent fee counsel etc and the best way to divide the three here i'm to go back to judge floyd to your question is to do it in proportion to the relative investments of the two firms you take the forty percent fee you look at that our leads that each firm incurred and you divide it in that fashion particularly appropriate here where it's the same team of lawyers at both firms that did the work but you're not as you know us or send remand with instructions to the district court to divide the forty percent contingency fee as in kid and doesn't appleton between the two firms in proportion to their relative contributions which should be measured by i take your poorly this is an abuse of discretion standard which is pretty high but you're saying that the district court really you know adequately analyzed the campbell factors in why would it not suffice i understand that you would like more but why would not the appropriate response be to send it back for the appropriate consideration of those factors well i don't because your honor i don't think that it is simply i don't think it's an abuse of discretion standard because i think that the the framework that was applied was the wrong framework and that is sub that the correct framework what the campbell county factors mean not necessarily how they are applied but what they mean and what framework they establish is subject to do novo review and the point is where you have a contingent firm that is subsequently discharged that has secured things in response to that you're on a first alpha does not contend they contend that the the fia grievance is a dead letter and we agree in effect with respect to the fi portion of it because what virginia law does is it supplants the contract with quantum erowid and i've discussed the basis for quantum aero it getting us to the division of the contingency fee the forty percent contingency fee but further your honor even if you would look to the actual contract with the contract says is the firm is entitled to a contingency fee then it has a terminations provision with two prongs the first prong says if we're terminated we get our hourlies and the second prong says that if there's a recovery within a year we get an extra benefit we get elect to take the contingency fee if it's greater so what alpha has done in their argument is they've said well they point to the second prong and they turn it on its head it's a benefit under the contract to gilbert they turned it into a limitation which we think is  impermissible construction but more importantly the firm didn't get its hourly fees alpha did not write a check for four point one something million dollars to gilbert immediately upon the terminations in fact what author has done is to dispute that it has an obligation to pay the hourly fees so that the second prong which is the contingency fee within a year is linked to the first prong which is you get your our lease but in any event  honor judge lloyd we the the fee agreement is essentially eliminated as a factor because under clear authority whether it's a campbell or heinsohn the fee agreement is supplanted by was not only permitted but required to forsake the well established lodestar method for its own president there and he cannot meet that burden i'd like to start today by discussing why the district court was within its broad discretion to apply lodestar and are you saying that the district court analyzed with through and discussed in a fashion sufficient to facilitate appellate review the campbell county of the campbell county factors i do not think that it went through factor by factor and applied it in a factor some it really didn't touch upon at all i completely disagree and here's why your honor and i think you have to read i think i think the supreme court's decision  instructive here because they are it said that you don't have to walk through each of those factors because many of them are subsisting determining what a reasonable rate is and what a reasonable hour is i think this court particularly given this is an abuse of discretion review should take the di court's word for it when it said i looked at the campbell county factors and i did not find that an enhancement is warranted under these circumstances so that certainly short circuits are all doesn't it well well your honor i think given the deference that this court has has said that it will reducing the hours and rates reasonable under the tattling that of the analysis was it consistent with those factors but i don't think that there is a requirement and i'm not aware of any decision where it says that you have to specifically go through and breakdown item by item each factor in that analysis and i think they'll be particularly unwarranted given the evolution of the case law since one nine hundred twenty two including in supreme court decisions like city of burlington b to give you and and kick and produ extra wind where the supreme court the united states has expanded extensively on the nearly acquittal and johnson factors and explained why that analysis isn't necessary and that generally what is required is that you determine a reasonable hourly rate and a reasonable hourly fee and here the dish accordingly and extensively wiped out so soon that it was done because he said it was done where's the evidence that there was a consideration of the contingency aspect of this case when  determining the release of all it pays well your honor the district court in the transcript of the hearing specifically said that it would consider that factor and it did not make an adjustment those factors but if you look at the cases that the district court relied upon when setting the hourly me in that for all practical purposes there was no contingency left in the major contingent see that had ever existed in this case was gone back to tampa the client change for you know your honor can i please address  a very important case and i think it's absolutely not correct the verdict in this case which is what they keep harping on happened in year one every four and a half year fight to get the clients recovery in this case the judgment in this case the listener relevant then it wasn't  relevant but the judgment in the significant it was it was it was it was not without significance but you wanted the judgment was against companies in dubai and china two companies or two jurisdictions they do not recognize u judgment foresman actions litigated around the country including case litigated all the way up through oral argument the second circuit the success in this case was unprecedented i'm not aware of a single other case where somebody has been forced to judgment against a chinese company if you want to look at the allocation of risk and how much of that went to the substantial post judgement foresman in this case look at the settlement offers and this is in the record the most that the chinese defendant had offered to sell this case for while the case was still a go riposte trial was one million dollars it settled the case for sixteen million dollars and get this goes to an important point under heinzman your honor and it's why it's one of the many reasons why there are contingency splitting theories irreconcilable sile both heinzman heinzman prohibits recoveries based on speculation they said there's no speculation in this case because there was already a jury verdict but there was there was still an incredible uncertainty in this case and help me been with costs it was no uncertainty about cost seeks to recover right it was why why where is the uncertainty about the pain it not not second guessing about whether they should have been paid whether they should be higher or lower whether or not expert testimony was helpful or not where is the uncertainty about the payment there was no answer to get the expert expenses were paid many of the other expenses the engagement letter state very clearly that alf agrees to reimburse for expert fees in the event alpha terminate the engagement letter contains that language me i addressed why i think it's reason for the district court to look at whether or court here and it was for an important reason your honor when those when those expenses first came in we might my partner and i wanted to challenge those and this was all before the district court because they were excessive the expert had run up hundreds of thousands of dollars expert said no you can't do that you will undermine my ability to work with the expert and additionally you will undermine the reputation of the firm we were overruled when we prepared and they and they paid the fee anyway when the when the when now their act they're asking mr fishman to pay for the very expenses that it would not seek on its behalf because they were defensible and i think your honor i'm not aware of any area of the law where of one party gets to simply say the two to make up a number and say we're entitled to this amount the district court's assessment of the appropriate amount of cost or i think i think that inherent within the within the attorney client relationship and in heinzman i think it's significant because it says the attorney client relationship in a contract between a county attorney and client is different than any other contra inherent with that is the fiduciary obligation to be a good steward of your client's resources and the district court when looking at the cost the man did appropriately considered whether or not you were lp was a good steward of the client's resources in incurring these costs and it had a legitimate role to do that and we cited additional portside like eight different cases where were other courts have have looked at costs that lawyers sought to receive from their client and and determine whether or not they were reasonable and that's all the district court did in this case but your honor let me turn back to request for a contingency fee split because that's really the only argument that they very circumstance and set forth a clear rule it said whenever you have a can counsel that's retained on a contingency basis that is discharged without cause and then the client subsequently obtains recovery through successor counsel that halves that definition it's not based on the value of the services in themselves and it's not independent of the benefit to the client second your honour's gilbert's unprecedented contingency fee splitting theory is but is contrary that there was a contingency fee and i think judge duncan references as well in the sense that the contingency was there whether or not i would win your case that would normally you win the case we share in that result if you lose the case i take the risk i get nothing their point is they won you your client a twenty six million dollars verdict that contingency is finished they won so there's that thing about this the logical extent of the argument is this you win the case well klein let's say twenty six million our hypothetical keeping the same number twenty six million dollars very and and the other side said i'm going to appeal this case the losing defendant the client turns to the lawyer if i'm going to fire you i want another lawyer to do it right ten days deserves that's what the lad means want to marry as much as he deserves so you tell me he continues is finished i wonder twenty six million on a verdict you can just fire me and then hypothetically in ten days later somebody else gets forty recovery going to go to fourteen different things but all of that was because you had a verdict for twenty six million dollars that was your stick and you did a lot of jobs that did a lot of work nobody is saying you did but think about this they were denied the right to look at what you did terms of how much money you would get for example well it may be irrelevant as to how much money you want to get but wouldn't it be relevant to see how much time you put in in reference didn't just use the term quantum arrow it it's specifically defines what it means in this context and it defined it to mean the value the services rendered in the themselves and not benefit to the client the any any amount that we did or any work we did or anything else is irrelevant under how what was the value of the services themselves and that's exactly what i asked you what do you determine the value to if you said you don't look at the value to the client how do you determine the value to the law for you apply lodestar reasonable hours reasonable rates and that's exactly what as it should work in this case or what's reasonable again that is what they had the district court has discretion but you don't have to look at what's reasonable in reference to lawyers handling contingency fee tort case i don't hardly believe i don't believe you do i mean you'd certainly what we did after the fact is entirely irrelevant to the value of the services the cuban lp rendered up to the point of termination which is the sole basis that the supreme court of ginny and huntsman said should be the basis of the feel ward and that's exactly what the district court did in this  theoretically you want to do as little as you can to get your contingency fee because the more always you put in the less you get right is that  was just the opposite the more i was out to put in the more money i make your honor i would suggest that analysis is directly contrary the supreme court's decision in produce the county extra when and i've asked the court to consider the analysis in that case i think there's one point that so what does it mean you want or it means reasonable hours times reasonable rates according to the factors that i'm campbell county which is exactly what the supreme court records only based on where you geography what the hourly rates yes they should be that this creek coal that you look to the greats of the prevailing community and the only time you can look outside of those rates or outside of the community to determine what reasonable rates are is if you can beat two factors one is that you can show that the case is extraordinary and adequate counsel was unavailable in the jurisdiction and two that the at the choice of outside counsel was reasonable here the district court specifically found that reason that qualified counsel was available at the that's not the basis of our decision your honor he would rely on the language of the agreement which goes out the window for fees but not for profit ok but but one the one point i have to make is the virginia rule professional conduct one point five c expressly states that if a lawyer is going to seek a contingency fee from a client it ss goes in writing out the and in the outset when that when that be will be triggered and how it will be calculated here gilbert did this it defined the trigger as it had there had to be a recovery at least within one year of terminations the contract in this case the contract was terminated i mean that the recovery happened more than two years later and it would be inherently unfair and inequitable it contrary even to the concept of quantum maryland to allow  some kind of inherent value going to a fish and see where i have no idea what that means but not the value of the services to the client but it relies on campbell county and heinsohn for those propositions and you have to ask yourself in hindsight when the court said the first lawyer did nothing of any value it's just absolutely the fundamental premise of huntsman the court then goes out of its way to say that the attorney fee in quantum mero it that reflects the results secured not in benefit to the client but in and of themselves now why would the court have said that the court said that because they were trying to help the attorney not limit the measure of recovery if that attorney was going to get a fee based on results secured and results secured were in benefit to the client that attorney had done nothing to secure results for the benefit of the client that attorney was going to get nothing so the reason that in that context the huntsman court said results secured in and of themselves the inherent value they're really talking about let's look at something like hourly fee value because otherwise the lawyers are going to get nothing similarly in case like client's men or a case in which the lawyer of the contingent fee lawyers discharged early in the case where really it hasn't incurred much risk it certainly hasn't even done anything of real benefit to the client i mean  huntsman it was the lawyers discharged for the complaint was filed so early early in the case lodestar may make it as a starting point may make some sense but we're in a completely different environment where you have a jury verdict for twenty six million dollars which eliminates the major risk factor the major contingency of the case and i know that that's not the appropriate for the district court to analyze what kind of other factors if it district court to other district courts to lawyers and to prospective clients to say that the whole point of this area is certainty is important to provide additional certainty and to say look we're not just going to going to leave it to kind of the vagaries where  have this kind of a circumstance but here i think the court needs to provide direction that says in this circumstance where there is a jury verdict particularly a jury verdict of this magnitude the predominant factor in the starting point is the contingency fee not the hours so you look at the contingency fee say that with the client promise forty percent to two different law firms take the forty percent the court has the inherent power to do that and divide it between the two firms because the contingency has been satisfied contribution to affecting that with the clients recovery is there i want to mention i think the quickly a couple of other factors one is  that there's a very heavy reliance by alpha on a few shifting cases in the city of burlington v day case that they rely on very heavily the supreme court majority opinion actually says that there is a distinction between fee shifting arrangements and private fee agreements when it says we're not going to consider a contingency fee enhancement so all of those fee shifting cases go out the door and similarly in lodestar they don't cite load stark  contingent case after contingent case for lodestar they cite hourly case after hourly case for contingent lodestar the only ones that they cite that are contingency agreements are heinzman which we've discussed extensively hughes which i discussed it was a three four five times multiple of hourly fees to compensate for the contingent arrangement and morris lost the switch it's in our briefs i won't go over it again is the number one distinguish to the extent that the court would include it's not distinguishable it's just flat out wrong because it writes out the contingent fee factor from campbell county and on the expense point just very quickly you know mr copley tells a story which is really not supported by the record there's only one brief statement in an affidavit that they provided that they were opposed to paying the fees of the expert that they objected they this but but they were partners in the law firm that paid the expert they didn't resign and it's not clear what action they took and indeed when they filed their fee shifting application they sought the expense of the expert they reduced it by five hundred thousand dollars but they didn't reduce it by five hundred thousand dollars for the reasons they now tell this court they told the court below in the court below concluded that it should reduce those fees it was because some of the work was not used and other things like that that really had that really had nothing to do with whether the services that away at their urging so we think that we should be reimbursed for the full amount that we in good faith paid to the expert on those amount