Ninth Circuit Says $919,000 in Legal Fees May Not Be Enough

The Ninth U.S. Circuit Court of Appeals in San Francisco.

PASADENA, Calif. (CN) — The Ninth Circuit on Monday again remanded a long-running dispute over a fees award to attorneys who won a $9.5 settlement involving Kaplan test prep courses.

In 2013, Kaplan and West Publishing agreed to pay $9.5 million to settle an antitrust case involving bar exam review courses.

The Glendale law firm Harris & Ruble represented Stephen Stetson in his 2008 class action against West Publishing and Kaplan, claiming they colluded to squeeze out competitors in the market for bar review courses.

Attorneys asked for $1.9 million in fees, which U.S. District Judge Manuel Real called excessive. He awarded them $585,000.

But last year, the Ninth Circuit found that Real failed to justify the 70 percent fee reduction and remanded to U.S. District Judge Gary Klausner.

Klausner then awarded $918,898 in fees and the attorneys appealed again.

On Monday, the Ninth Circuit panel remanded to Klausner again. The panel said the judge erred in not making a calculation “to compensate for the delayed payment” and relied on the attorneys’ 2013 rates and a privately published analysis called the “Real Rate Report.”

While the attorneys argued in filings that Klausner’s denial of their fee request was “factually and legally unsound,” the Ninth Circuit did not go that far.

“The district court’s decision reveals nothing of the report’s methodology. Use of the Real Rate Report may, however, be appropriate if supported by findings that the report reflects contemporaneous rates,” the unsigned ruling states.

Harris & Ruble attorney Alan Harris argued in court filings that the case carried inherent risks and legal hurdles that Klausner should have factored into the award.

“The risk of nonpayment includes both the possibility that a plaintiff will not make any recovery as well as the possibility that the defendant will be insolvent,” Harris wrote.

The panel vacated the award and told Klausner to reconsider the risk the attorneys had taken in litigating the case, as well as the attorneys’ updated hourly rate.

The court did affirm Klausner’s denial of expert fees, finding the attorneys had provided little evidence of their contribution to the case.

“The district court denied costs for expert fees because the amount requested for two experts was not justified and the time records submitted by appellants did not reveal which fees were attributed to which expert,” the 5-page memo states.

Ninth Circuit Judges Stephen Reinhardt, Richard Paez and Milan Smith sat on the panel.

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