Opinion ID: 1462959
Heading Depth: 2
Heading Rank: 3

Heading: Attorneys' Fee Awards in the Fifth Circuit

Text: Appellees defend the court's unorthodox procedures by relying on Longden, supra, in which this court sustained a district court's reliance on the fee allocation proposed by a committee of plaintiffs' lawyers. Longden is clearly distinguishable and of narrower applicability than Appellees suggest. In Longden, this court held that a district court acted within its discretion when it awarded a lump-sum fee award and then let plaintiffs' counsel, except for one objecting attorney, allocate the award by agreement among themselves. 979 F.2d at 1101. The court determined the objector's individual fee award because she objected to co-counsels' aggregate fee award petition to the court. Her award was taken out of the lump-sum award for all attorneys. To calculate the objector's individual fee award and determine the lump-sum fee award, the court reviewed the time and expense records of all plaintiffs' counsel, applying the Johnson factors and making findings sufficiently based on record evidence. Id. Longden highlights the district court's duty to scrutinize the allocation of a fee award when an attorney objects to his co-counsels' fee award recommendations. It does not stand for the proposition that courts can delegate their duty to allocate a fee award to a committee of interested attorneys who have reached no agreement among themselves and then approve the allocation after a perfunctory review. Appellees cite several district court cases from this circuit in which courts followed the procedure approved in Longden: awarding a lump-sum attorneys' fee and allowing counsel to divide up the award by agreement. See, e.g., Turner v. Murphy Oil USA, Inc., 472 F.Supp.2d 830, 869-70 (E.D.La.2007). [21] That fee allocation procedure, however, is significantly different from the procedures used here. It is one thing for all attorneys to come to an agreement about dividing up fees, and quite another for five attorneys to declare how an award will cover themselves and seventy-four other attorneys with no meaningful judicial supervision or review. Appellees also cite a number of cases, largely from other circuits, in which courts have appointed committees of attorneys to propose a fee allocation to the court for its consideration. See, e.g., Copley, 50 F.Supp.2d at 1148-49. We do not dispute the utility of initial delegation, which is not required but is within the district court's discretion. There is no indication, however, that the district courts in other cases dispensed with traditional judicial standards of transparency, impartiality, procedural fairness, and ultimate judicial oversight as the court in this case did. Even In re Eunice Train Derailment, the case mentioned by the Fee Committee at the ex parte hearing to justify placing the fee allocation list under seal, shows that other courts are not doing what Appellees convinced the court to do here. Like the court in this case, the court in In re Eunice Train Derailment, appointed a fee committee to recommend an allocation, placed its fee allocation list under seal, and prohibited plaintiffs' attorneys from disclosing their fee awards. But, unlike this case, the court required attorneys to submit their contemporaneous time records to a special master. The court's order limited the gag order to sixty days. [22] Finally, the court ordered fee distribution to occur only after attorneys were told their fee awards and after the deadlines for objection or appeal had expired. Here, in contrast, there was no disinterested court officer, such as a special master, working with the Fee Committee to review attorneys' time and expense statements; the fee record was placed under seal indefinitely and attorneys were also barred indefinitely from disclosing their awards; and fees were ordered to be paid immediately, before any challenges could be filed. Appellees' contend that the functional value of appointing a committee of attorneys to propose a fee allocation in complex litigation is significant, and the danger of abuse is small, when judged in light of the guiding effect of judicial supervision. It is likely that lead counsel may be in a better position than the court to evaluate the contributions of all counsel seeking recovery of fees. But our precedents do not permit courts simply to defer to a fee allocation proposed by a select committee of attorneys, in no small part, because counsel have inherent conflicts. In re Diet Drugs Products Liab. Litig., 401 F.3d 143, 173 (3d Cir.2005) (Ambro, J., concurring). As Judge Ambro noted, They make recommendations on their own fees and thus have a financial interest in the outcome. How much deference is due the fox who recommends how to divvy up the chickens? Id. Here, members of the Fee Committee had a direct conflict of interest: they were suggesting to the District Court how to proceed on matters near and dear dividing a limited fund among themselves and other firms. Such a direct conflict of interest strongly suggests that affording substantial deference is inappropriate. Id. at 173-74. Although the proposed allocation may ultimately be fair, careful attention must be paid to the procedures by which the allocation is set. If a district court chooses to rely on the recommendations of a committee of interested attorneys, it then becomes necessary to scrutinize more closely those recommendations. Id.