April 24, 2019 Feature

Discovery of Opponents’ Attorney Fees in Fee-Shifting Cases

By Douglas R. Richmond

Assume for a moment that you are your law firm’s general counsel, the head of its litigation practice or a litigation practice area, or just one of those experienced lawyers in a firm to whom everyone seems to gravitate when they encounter situations that they have not encountered before. In any event, two of your partners approach you with a concern about discovery affecting your firm. They defended a client in litigation and lost. The opponent is now attempting to recover its attorney fees as a prevailing party, whether under a fee-shifting provision in a contract, a statute, or a court rule or under the insurance exception to the American Rule.1

When the opponent submitted its fee application, your partners represented the client in challenging the requested fees on reasonableness grounds. After all, a lawyer’s fees must be reasonable even when they will be paid by an adverse party.2 Indeed, Model Rule of Professional Conduct 1.5(a), which provides that lawyers “shall not make an agreement for, charge, or collect an unreasonable fee or an unreasonable amount for expenses,” does not confine that prohibition to lawyers’ dealings with clients.3 Furthermore, even where there is a valid fee-shifting provision in a contract, a statute, or court rule that permits fee shifting, or where the insurance exception to the American Rule applies, a court may decline to award attorney fees to the prevailing party altogether if the prevailing party’s fee request is “outrageously excessive” under the circumstances.4 Similarly, a court may in its discretion refuse to award attorney fees otherwise due a prevailing party where it would be inequitable or unjust to make the losing party pay.5

Anyway, the opponent is now attempting to discover your lawyers’ hourly rates and determine the amount of time they spent on various tasks. It has served your client with requests to produce documents, seeking copies of your firm’s invoices related to the litigation. Your opponent argues that this comparative evidence will support the reasonableness of its attorney fees.

Your partners’ question to you is straightforward: Is the opponent entitled to this discovery? The not particularly helpful answer to this question appears to be “it depends.”6 The trial court has discretion in deciding whether or not to permit discovery in this situation.7 Courts sometimes decide that a comparison of the hourly rates or fees charged by the prevailing and opposing parties will be helpful in determining the attorney fees to be awarded to the prevailing party.8

The correct answer to the partners’ question, however, generally should be no.9 There are at least four reasons that such discovery ordinarily should not be permitted. First, courts generally refuse to permit postjudgment discovery because it prolongs litigation that otherwise should be concluded, unnecessarily draining the parties’ resources and burdening the court in the process. That principle is as true in the context of attorney fees challenges as it is in any other type of dispute.10 Second, and relatedly, a prevailing party’s request for attorney fees “should not result in a second major litigation.”11 Allowing discovery into an opposing party’s fees presents precisely that risk. Third, an opposing party’s attorney fees and billing information are not relevant to the reasonableness of the prevailing party’s fees under Model Rule 1.5(a) and equivalent standards. Fourth, a prevailing party’s discovery of an opponent’s attorney fees and billing information threatens the opponent’s attorney-client privilege and work-product immunity.

This article focuses on the latter two reasons for refusing discovery—relevance to the reasonableness of the prevailing party’s fees and attorney-client privilege and work-product concerns—in the context of the Texas Supreme Court’s seminal 2017 decision In re National Lloyds.12

Reasonable Fees, Relevance, and In re National Lloyds

In considering whether a prevailing party should be permitted to demonstrate the reasonableness of its attorney fees via comparison with the fees charged by the lawyers for its adversary, it makes sense to first ask whether the adversary’s attorney fees are even relevant to the reasonableness inquiry.

Model Rule 1.5(a). Courts tasked with evaluating the reasonableness of attorney fees typically apply the eight factors identified in Model Rule of Professional Conduct 1.5(a).13 No single factor listed in Rule 1.5(a) controls the reasonableness of an attorney’s fee.14 Although more than one of the Model Rule 1.5(a) factors frequently come into play in any evaluation of a lawyer’s fees, not all factors are relevant in all cases.15 Beyond any value that comes from facilitating possible appellate review, a court is not obligated to engage in a factor-by-factor analysis of disputed or requested fees.16 The weight assigned to any particular factor depends on the facts of the case.17 Furthermore, the Model Rule 1.5(a) factors are not exclusive.18 Courts may consider other factors in appropriate cases.19 For example, when awarding attorney fees, courts often consider the undesirability of the case and fee awards in similar cases.20

At least superficially, the first Rule 1.5(a) factor—which calls for an evaluation of the time and labor required and the novelty and difficulty of the questions involved—arguably supports discovery of your law firm’s fees and billing information.21 The third Rule 1.5(a) factor—the fee customarily charged in the locality for similar legal services—also would seem to support the opponent’s use of your colleagues’ fees to demonstrate the reasonableness of its attorney fees. But, in fact, neither factor necessarily supports the discovery of your firm’s fees, as the Texas Supreme Court explained in In re National Lloyds.

In re National Lloyds: Background. In re National Lloyds arose out of four multidistrict litigation (MDL) cases in which homeowners sued National Lloyds and two claims-adjusting firms (collectively, National Lloyds) for allegedly underpaying hail damage claims. The homeowners asserted statutory, contractual, and extracontractual claims against National Lloyds. The homeowners claimed their attorney fees incurred in prosecuting their statutory and contractual claims as an element of damage. Accordingly, they served National Lloyds with interrogatories requesting its lawyers’ hourly rates, the total amount of fees billed by its lawyers, and the total reimbursable expenses charged by its lawyers. The homeowners also served document requests seeking copies of National Lloyds’s lawyers’ invoices, payment logs, payment ledgers, and payment summaries; copies of any fee audits; and any documents pertaining to flat-rate billing. The homeowners asserted that National Lloyds’s attorney fees and billing information were discoverable because in an earlier MDL hailstorm case, Amaro v. National Lloyds Insurance Co.,22 one of National Lloyds’s current lawyers, Scot Doyen, testified as an attorney fees expert and admitted on cross-examination that “an opposing party’s fees could be considered as ‘a factor’ in determining a reasonable fee recovery.”23 In testifying as an expert, Doyen also offered his law firm’s billing practices as an example of how to properly allocate attorney fees to avoid “artificially inflated” fee claims in MDL cases.24

National Lloyds objected to the discovery requests on several grounds, including relevancy. With respect to relevancy, National Lloyds argued that discovery of its attorney fees and related information and materials was unwarranted because it had stipulated that it would not rely on any of that content to dispute the reasonableness of the homeowners’ attorney fees.

A special master concluded that “an opponent’s attorney-billing information is, as a general proposition, relevant to the reasonableness of an attorney-fee request in the same case.”25 The special master recommended that the homeowners be required to narrow their discovery requests and that National Lloyds be allowed to redact certain documents to prevent the discovery of material that was protected by the attorney-client privilege or work-product immunity (more on that later), but that the court should otherwise overrule National Lloyds’s objections. The court adopted the special master’s recommendations and ordered National Lloyds to respond to the discovery requests.26

National Lloyds instead petitioned the Texas Court of Appeals for a writ of mandamus. The court of appeals acknowledged that “an opposing party’s attorney-billing information may be irrelevant in a given case,” but it concluded that the MDL court did not abuse its discretion in permitting such discovery here.27

In reaching this conclusion, the court of appeals reasoned that an opponent’s attorney fees are relevant to at least two factors that inform courts’ determination of reasonable and necessary attorney fees under the test outlined by the Texas Supreme Court in Arthur Andersen & Co. v. Perry Equipment Co.28 Under Arthur Andersen, a court evaluates requested fees for reasonableness and necessity against a list of eight factors that are nearly identical to the Model Rule 1.5(a) factors. The two factors in question in this case were (1) “the time and labor required, the novelty and difficulty of the questions involved, and the skill required to perform the legal service properly” and (2) “the fee customarily charged in the locality for similar legal services.”29 And, as the court of appeals further noted in upholding the MDL court’s ruling, the eight Arthur Andersen factors are not exclusive.30

In re National Lloyds: Texas Supreme Court general holding. Undeterred, National Lloyds appealed to the Texas Supreme Court, where it found a more receptive audience. The Texas Supreme Court held that the information sought by the homeowners was not relevant for four reasons:

(1) the opposing party may freely choose to spend more or less time or money than would be “reasonable” in comparison to the requesting party; (2) comparisons between the hourly rates and fee expenditures of opposing parties are inapt, as differing motivations of plaintiffs and defendants impact the time and labor spent, hourly rate charged, and skill required; (3) “the tasks and roles of counsel on opposite sides of a case vary fundamentally,” so even in the same case, the legal services rendered to opposing parties are not fairly characterized as “similar”; and (4) a single law firm’s fees and hourly rates do not determine the “customary” range of fees in a given locality for similar services.31

The In re National Lloyds court stated that its holding reflected the general rule. General rules typically have exceptions, of course. In this instance, if a party were to use its own lawyers’ hours and billing rates as benchmarks for gauging the reasonableness of a prevailing party’s attorney fees, the party would thereby place its lawyers’ fee and billing information at issue and consequently make that information discoverable.32

Considering that the party seeking to recover its attorney fees bears the burden of proving the reasonableness of those fees, the court reasoned that an opposing party’s lawyers’

hourly rates, total amount billed, and total reimbursable expenses do not, in and of themselves, make it any more probable that a requesting party’s attorney fees are reasonable and necessary, or not, which are the only facts of consequence.33

This is true because an opposing party’s litigation expenses are “not ipso facto reasonable or necessary.”34 Indeed, a party that has no need or right to recover its attorney fees may choose to devote, for various reasons, more or less time to, or spend more or less money on, a case than would be necessary or reasonable for a party that needs to recover its attorney fees to make the litigation worthwhile.

Despite the “superficial appeal” of comparing an opponent’s attorney fees when evaluating the reasonableness of a prevailing party’s fees, this approach has serious practical flaws.35 First, for an opposing party’s attorney fees to be a relevant measure for evaluating a prevailing party’s attorney fees, the prevailing party initially would have to establish that the opponent’s fees were themselves reasonable and necessary.36 That exercise would require a separate application of the Arthur Andersen factors and would require the court to consider a range of information beyond the disputing parties’ expenditures. Second, but relatedly, substantial additional discovery would be required to establish that the opposing party’s attorney fees were reasonable and necessary, and therefore relevant as a foundational matter. Such discovery would “serve[] no purpose besides unnecessarily complicating the litigation in pursuit of a collateral matter.”37 Third, because adversaries may devote substantially different resources and time to litigation for a host of reasons, evidence of an opposing party’s attorney fees “lacks genuine probative value as a comparator for a requesting party’s fees and, at best, would be merely cumulative or duplicative of other evidence directed to that inquiry.”38 In sum, “two wrongs don’t make a right, and proving two rights is unnecessary when the only fact of consequence is whether one is right.”39

In re National Lloyds: Arthur Andersen analysis. With that groundwork laid, the In re National Lloyds court turned to the two Arthur Andersen factors that the homeowners and court of appeals cited in support of the MDL court’s discovery order. Regarding the first factor—which takes into account the time and labor required, the novelty and difficulty of the questions involved, and the skill required to carry out the representation properly—the court thought it obvious that “different motivations and different demands drive the time and labor spent, hourly rate charged, and skill required to defend litigation as compared to prosecuting a suit.”40 With respect to the third Arthur Andersen factor—which considers the fee customarily charged in the locality for similar legal services—opposing parties’ lawyers do “not provid[e] ‘similar legal services’ even in the same case.”41 Furthermore, the term customarily as used in the third factor suggests that a court should evaluate a composite of fee information for lawyers in the area rather than information from a single law firm.42

At bottom, opposing parties’ interests and their lawyers’ tasks and roles are so distinct that there is no logical basis to compare their fees and billing rates.43 As the court explained by way of example:

[A] party subject to repeat litigation, such as an insurer or corporate defendant, may view the precedential value of a case more significantly than an opposing party who might not anticipate ever being involved in similar litigation again. Likewise, one side may have more at risk in a case. Such considerations could reasonably justify greater expenditures in time, labor, and money than might be considered “reasonable” from the other party’s perspective. As the expression goes, one side of the litigation may have more skin in the game than the other.44

Similarly, the nature of the parties’ relationships with their lawyers may differ in ways that affect the hourly rates that the lawyers charge, the tasks for which they do and do not bill, and how they allocate their time. For example, many corporations, governmental entities, and insurance companies have ongoing relationships with their outside counsel that allow them to negotiate favorable hourly rates and other billing terms predicated on the provision of a steady stream of work. These organizations are frequently demanding clients in terms of the reporting and analytical requirement that they impose on their outside counsel, thereby requiring more time by their lawyers. The In re National Lloyds court considered these factors to be especially pertinent in multiparty litigation, like the MDL proceedings out of which this case arose.45 Certainly, a law firm’s discounted hourly rates do not necessarily reflect the rates normally charged in a community for similar legal services. In the same vein, if a lawyer’s billable time is increased by a client’s administrative demands or litigation-management requirements, the total time spent by a lawyer on a matter becomes an unreliable comparator when evaluating the reasonableness of the opposing party’s attorney fees.

The court further reasoned that even when working on the same tasks, lawyers litigating the same case do not approach those tasks in sufficiently comparable ways for their time to be truly probative of the degree of effort or skill required by each other. Using depositions as an obvious example, the lawyer taking the deposition might well spend more time preparing for the deposition than the lawyer defending the deposition would devote to preparing the deponent to testify. “Suffice it to say” that lawyers on opposing sides in the same case “are not actually or even effectively performing ‘similar legal services’ for the litigation.”46

Even if opposing lawyers were performing closely equivalent legal services, a single law firm’s fees and hourly rates do not equal a customary fee in a locality for similar legal services. What one law firm charges for its services based on its tactical or strategic choices in litigating a specific case is no basis for deciding what constitutes a customary fee. Rather, the customary fee factor requires an analysis of a composite of legal fees charged for a given service.47 Focusing on one law firm’s billing practices is simply not helpful in this context, let alone anywhere close to being dispositive.

It was irrelevant to the Texas Supreme Court that National Lloyds had disputed the reasonableness of the homeowners’ attorney fees. A party can challenge another party’s attorney fees request as not being customary in the locality for similar legal services even though the challenging party also paid a fee that was not customary, as long as the challenger does not rely on its own fees to prove the point.48

In re National Lloyds: Discovery concerns. The homeowners attempted to support their position by citing to several cases standing for the proposition “that an opposing party’s attorney-billing information is at least minimally relevant” when evaluating the reasonableness of a prevailing party’s attorney fees, so ordering the production of that information falls within a trial court’s discretion.49 The court disagreed, noting that it had already determined that in most cases such information is “patently irrelevant” and therefore undiscoverable.50 But even if an opponent’s attorney fees and billing information were marginally relevant to a prevailing party’s fee claim, the In re National Lloyds court explained, discovery still should be denied in most cases because the probative value of that evidence “‘is substantially outweighed by the danger of . . . unfair prejudice, confusion of the issues, misleading the jury, undue delay, or needlessly presenting cumulative evidence.’”51

Additional practical concerns also counseled against permitting discovery of National Lloyds’s attorney fees and billing information. In a nutshell, the In re National Lloyds court perceived a genuine threat that allowing such discovery would encourage abusive discovery practices in general. The court observed that “‘[d]iscovery is often the most significant cost of litigation’ and a potential ‘weapon capable of imposing large and unjustifiable costs on one’s adversary.’”52 Particularly in multiparty litigation, expansive discovery magnifies defense costs, and the cost of defense can become so great that it effectively compels defendants to settle regardless of the merits of the case.53 Although litigants should be allowed to develop fully the facts and issues undergirding their cases, discovery cannot serve as an excuse for unreasonably increasing litigation costs. That concern is particularly acute where, as here, the discovery sought is not necessary for the requesting party to meet its burden of proof.

Summary. Absent unusual circumstances, an opposing party’s attorney fees and billing data are irrelevant when deciding the reasonableness of a prevailing party’s attorney fees. Any marginal relevance that arguably might exist is outweighed substantially by the risk of undue prejudice, confusion of the issues, and the promotion of abusive discovery practices. For these reasons, discovery of an opposing party’s attorney fees and billing information generally should not be permitted.

Attorney-Client Privilege and Work-Product Immunity Concerns

Beyond relevance concerns, permitting discovery of an opposing party’s billing information may jeopardize the party’s attorney-client privilege and work-product immunity.

By way of a refresher, the attorney-client privilege attaches to confidential communications between privileged persons for the purpose of obtaining or providing legal assistance for the client.54 The term privileged persons includes the client, the lawyer, agents of the client and the lawyer who facilitate communications between them, and agents of the lawyer who assist in the client’s representation.55

As for work product, there are two categories or types. The first is “tangible” or “fact” work product, which refers to documents or other tangible things prepared in anticipation of litigation by or for a party, or by or for a party’s representative. The second is “opinion” or “core” work product, which refers to a lawyer’s conclusions, legal theories, mental impressions, or opinions. A party may discover an opponent’s tangible work product upon a showing that it has a substantial need for the materials to prepare its case and cannot, without undue hardship, obtain their substantial equivalent by other means.56 In comparison to tangible work product, opinion work product receives almost absolute protection against discovery. To discover an adversary’s opinion work product, a party must demonstrate something far greater than the substantial need and undue hardship necessary to obtain tangible work product. The circumstances under which this test is met are exceptional and rare. In fact, some jurisdictions do not permit the discovery of opinion work product under any circumstances.57

Attorneys’ invoices and the privilege. As a rule, attorneys’ invoices are not privileged because the time entries on them do not reflect the substance of confidential communications between the lawyer and the client,58 and they otherwise are not mechanisms for communicating legal advice. Attorneys’ invoices may be privileged, however, if they contain narrative time entries that describe legal services performed for the client.59

In California, which generally takes an expansive view of the attorney-client privilege, the privilege broadly shields lawyers’ invoices from discovery in active litigation matters. The California Supreme Court explained this approach in Los Angeles County Board of Supervisors v. Superior Court:60

[W]hile billing invoices are generally not “made for the purpose of legal representation,” the information contained within certain invoices may be within the scope of the privilege. To the extent that billing information is conveyed “for the purpose of legal representation”—perhaps to inform the client of the nature or amount of work occurring in connection with a pending legal issue—such information lies in the heartland of the attorney-client privilege. And even if the information is more general, such as aggregate figures describing the total amount spent on continuing litigation during a given quarter or year, it may come close enough to this heartland to threaten the confidentiality of information directly relevant to the attorney’s distinctive professional role. . . . When a legal matter remains pending and active, the privilege encompasses everything in an invoice, including the amount of aggregate fees.61

In contrast, when a matter has concluded, California law holds that lawyers’ invoices are privileged only if they communicate information for the purpose of obtaining legal advice or risk exposing information that was communicated for that purpose.62

Lawyers’ invoices and work-product immunity. In addition to the potential application of the attorney-client privilege, in some instances lawyers’ invoices or portions thereof may be shielded from discovery by work-product immunity. Indeed, time entries may reflect a lawyer’s conclusions, legal theories, or mental impressions or may reveal the lawyer’s tangible work product. The more detailed the time entry or billing information, the greater the risk that work-product immunity will be compromised.

Whether time entries are privileged or protected as work product is a case-specific inquiry. The mere fact that a court likely will be burdened with in camera review of a lawyer’s invoices and other billing information to determine whether the attorney-client privilege or work-product immunity applies to particular documents or portions thereof arguably is reason enough to refuse discovery given this information’s minimal (if any) relevance to the reasonableness of the prevailing party’s attorney fees.63 In other words, permitting discovery in this instance fails basic cost-benefit analysis.

In re National Lloyds and work-product immunity. Returning to In re National Lloyds, the Texas Supreme Court concluded that the billing information that the homeowners sought constituted National Lloyds’s work product and therefore was not discoverable. First, the court explained that billing records are communications made in anticipation between or among a party and its representatives. Second, billing records “represent the mechanical compilation of information that reveals counsel’s legal strategies and thought processes, at least incidentally.”64

As the court outlined, billing records illuminate a lawyer’s strategic deployment of a client’s resources; the subject-matter expertise of lawyers working on aspects of the case who are otherwise unknown to the prevailing party; whom the party hired as consultants and when it did so; the party’s litigation decisions; and the lawyer’s and party’s concerns about, or view or evaluation of, certain matters.65 Especially when a party is a repeat litigant, information contained in billing records may reflect a global legal strategy for all of the cases in which the party is involved, which it must be allowed to develop free from interference.66

The homeowners contended that redacting any work-product information from National Lloyds’s lawyers’ billing records would be sufficient to address the court’s concerns, but their argument failed. The homeowners’ argument was unsuccessful principally because the chronological nature of time entries in billing records alone can reveal a lawyer’s or party’s litigation strategy, and redaction simply cannot fix that problem.67

The court reasoned that the same problem existed with respect to aggregate billing information, which also may reveal a party’s strategic choices. As the court explained, a dramatic increase in midlitigation spending could imply an upcoming filing or significant research expenditures related to elevated concerns over recent litigation events. For these reasons, redaction would be inadequate to protect the work-product nature of the totality of the billing information.68

After further observing that allowing discovery of redacted documents would lead only to collateral disputes over the propriety of the redactions, the In re National Lloyds court held that “requests for production of all billing invoices, payment logs, payment ledgers, payment summaries, documents showing flat rates, and audits invade the zone of work-product protection.”69

Analysis of the In re National Lloyds Decision

In re National Lloyds is unusual in that the homeowners attempted to discover National Lloyds’s attorney fees and billing information prejudgment rather than postjudgment, as is typically the case with a prevailing party. That difference does not, however, diminish the decision’s persuasive value. The relevance of attorney fees and billing information does not depend on the timing of discovery, and attorney-client privilege and work-product immunity concerns exist regardless of when discovery is sought. Although it might be argued that a losing party’s work-product immunity does not require postjudgment protection absent the threat of a new trial, that argument fails because work-product immunity should be understood to survive the conclusion of litigation.70 It therefore must continue after the substantive aspect of a case is complete. Of course, the attorney-client privilege applies to qualifying communications without regard for the existence or threat of litigation.

Critically, while an opposing party’s attorney fees and billing information are generally irrelevant to the reasonableness of a prevailing party’s claimed fees, an opposing party may create relevance through its tactical choices. For example, if a party were to use its own lawyers’ hours and billing rates as benchmarks for measuring the reasonableness of the prevailing party’s attorney fees, the party thereby would put its fees and billing information at issue and consequently make that information discoverable.71

Recommendations for Lawyers

For lawyers who are responsible for objecting to a prevailing party’s attorney fees, several points are worth considering.

First, explain to the client that challenging the prevailing party’s attorney fees may invite discovery that potentially could jeopardize the client’s attorney-client privilege and work-product immunity. Depending on the facts and the jurisdiction, that risk may be minor or significant, but the client needs to be aware of it either way.

Second, do not put your own fees and billing information at issue. For example, do not compare the hourly rates of the prevailing party’s lawyers to your own, and do not contrast the time that they spent on a task or phase of the litigation to the time that you spent. If you want to contend that the prevailing party’s attorney fees are excessive given the hourly rates charged by similarly situated lawyers in the relevant locality, do so based on published fee surveys rather than offering your rates as a comparator.72 Alternatively, research the fees awarded to prevailing parties in other cases in the jurisdiction, and use the hourly rates approved or fees awarded in those cases for comparison purposes.

Third, if you challenge the time spent on tasks as being excessive, base your objections on objective criteria, such as the length of the disputed document or the limited utility or simplicity of the task.73 If you cite no basis for your conclusion that your adversary’s time was excessive, you risk inviting a comparison to your time spent on the same task.74

Fourth, consider engaging an expert on attorney fees to attack the prevailing party’s fee request. Your hourly rates or billing information should be irrelevant to the expert’s opinions, provided that she does not make the mistake of putting them at issue.75

Fifth, if the court determines that your fees and billing information are relevant and neither privileged nor shielded from discovery as work product, attempt to provide responsive information in the least intrusive fashion possible. Rather than producing invoices, for example, submit affidavits from lawyers or staff members providing hourly rates or setting forth the time spent on tasks or categories of tasks. 

Notes

1. The insurance exception to the American Rule as it is generally understood holds that an insured who successfully sues an insurer to recover benefits unreasonably withheld is entitled to recover its associated attorney fees. Robert H. Jerry II & Douglas R. Richmond, Understanding Insurance Law 617 (6th ed. 2018). Some courts have expanded the exception to hold that an insured is entitled to recover attorney fees when the insurer forces the insured to commence legal action to obtain the full benefits of the insurance policy. See, e.g., Cramer v. Farmers Ins. Exch., 423 P.3d 1067, 1073 (Mont. 2018); Baker v. Fireman’s Fund Ins. Co., 428 P.3d 155, 161 (Wash. Ct. App. 2018).

2. Spegon v. Catholic Bishop of Chi., 175 F.3d 544, 552 (7th Cir. 1999); Target Nat’l Bank v. Higgins, 321 P.3d 1215, 1224 (Wash. Ct. App. 2014).

3. Model Rule of Prof’l Conduct r. 1.5(a) (Am. Bar Ass’n 2018).

4. Clemens v. N.Y. Cent. Mut. Fire Ins. Co., 903 F.3d 396, 402–03 (3d Cir. 2018); see Budget Rent-A-Car Sys., Inc. v. Consol. Equity LLC, 428 F.3d 717, 718 (7th Cir. 2005) (“When an award of fees is permissive, denial is an appropriate sanction for requesting an award that is not merely excessive, but so exorbitant as to constitute an abuse of the process of the court asked to make the award.”).

5. Davis v. Credit Bureau of the S., 908 F.3d 972, 976–81 (5th Cir. 2018) (explaining the outrageous facts that would have made a fee award unjust); Thorkildsen v. Belden, 269 P.3d 421, 424 (Wyo. 2012) (citing Dewey v. Wentland, 38 P.3d 402, 420 (Wyo. 2002)).

6. See Montgomery v. Kraft Foods Glob., Inc., No. 1:12-CV-00149, 2015 WL 881585, at *2–3 (W.D. Mich. Mar. 2, 2015) (collecting competing cases).

7. Okyere v. Palisades Collection, LLC, 300 F.R.D. 149, 150 (S.D.N.Y. 2014) (citing Cohen v. Brown Univ., No. CA 92-197 L, 1999 WL 695235, at *3 (D.R.I. May 19, 1999)); Gabelmann v. NFO, Inc., 606 N.W.2d 339, 342 (Iowa 2000).

8. See, e.g., Frommert v. Conkright, No. 00-CV-6311L, 2016 WL 6093998, at *2–3 (W.D.N.Y. Oct. 19, 2016) (noting the “long and unique history” of the case in determining that “the rates and fees charged and paid by defendants to their several law firms are clearly relevant”); Miller v. Kenny, 325 P.3d 278, 302–03 (Wash. Ct. App. 2014) (observing that in addition to the rates typically charged in the locality, “the fees and costs claimed by the opposing party challenging the request are also appropriate to consider for comparative purposes”).

9. See, e.g., Smolen v. Dahlmann Apartments, Inc., 463 N.W.2d 261, 264 (Mich. Ct. App. 1990) (stating that “the reasonableness of charges for legal services performed by one attorney is not measured by what other attorneys would charge”).

10. See, e.g., Costa v. Sears Home Improvement Prods., Inc., 178 F. Supp. 3d 108, 113 (W.D.N.Y. 2016) (rejecting the plaintiff’s request for discovery).

11. Hensley v. Eckerhart, 461 U.S. 424, 437 (1983).

12. 532 S.W.3d 794 (Tex. 2017).

13. Although courts typically consider the Rule 1.5(a) factors when calculating attorney fees awards, they are not required to do so. Himsel v. Ind. Pork Producers Ass’n, 95 N.E.3d 101, 113–14 (Ind. Ct. App. 2018).

14. Town of Glastonbury v. Sakon, 194 A.3d 1277, 1283 (Conn. App. Ct. 2018) (citing Town of E. Windsor v. E. Windsor Hous., Ltd., LLC, 92 A.3d 955, 959 (Conn. App. Ct. 2014)); Snider v. Am. Family Mut. Ins. Co., 298 P.3d 1120, 1129 (Kan. 2013); BAC Home Loans Servicing, LP v. Trancynger, 847 N.W.2d 137, 143 (S.D. 2014).

15. Twp. of W. Orange v. 769 Assocs., LLC, 969 A.2d 1080, 1088 (N.J. 2009); In re Jardine, 289 P.3d 516, 523 (Utah 2012).

16. Berman v. Linnane, 748 N.E.2d 466, 469 (Mass. 2001).

17. McCabe v. Arcidy, 635 A.2d 446, 452 (N.H. 1993); In re Malone, 886 A.2d 181, 185 (N.J. Super. Ct. App. Div. 2005).

18. WiFiLand, LLP v. Hudson, 100 A.3d 450, 459 (Conn. App. Ct. 2014); Nunn Law Office v. Rosenthal, 905 N.E.2d 513, 520 (Ind. Ct. App. 2009); In re Jardine, 289 P.3d at 523.

19. See, e.g., Bellmoff v. Integra Servs. Techs., Inc., C.A. No. N17C-10-312 PRW CCLD, 2018 WL 3097215, at *2 (Del. Super. Ct. June 22, 2018) (stating that in addition to the Rule 1.5(a) factors, a court should consider the terms of the fee agreement between the law firm and the client).

20. See, e.g., Homeward Residential, Inc. v. Gregor, 165 A.3d 357, 362–63 (Me. 2017) (citing Gould v. A-1 Auto, Inc., 945 A.2d 1225, 1230 (Me. 2008)).

21. See, e.g., Paton v. GEICO Gen. Ins. Co., 190 So. 3d 1047, 1052 (Fla. 2016) (reasoning that “[t]he hours expended by the attorneys for the [losing party] will demonstrate the complexity of the case along with the time expended, and may belie a claim that the number of hours spent by the [prevailing party] was unreasonable”).

22. Cause No. 0304-13-H (Hidalgo Cty., Tex., 206th Dist. Ct. Feb. 27, 2015).

23. In re Nat’l Lloyds Ins. Co., 532 S.W.3d 794, 800 (Tex. 2017).

24. Id.

25. Id. at 801.

26. Id.

27. Id.

28. 945 S.W.2d 812, 818 (Tex. 1997).

29. In re Nat’l Lloyds, 532 S.W.3d at 809 (quoting Arthur Andersen, 945 S.W.2d at 818).

30. Id. at 801.

31. Id. at 808 (footnotes omitted).

32. Id.

33. Id. at 809–10 (footnote omitted).

34. Id. at 810 (emphasis in original).

35. Id.

36. Id.

37. Id.

38. Id. (footnote omitted); see also Souryavong v. Lackawanna Cty., 159 F. Supp. 3d 514, 544 (M.D. Pa. 2016) (observing that “defense counsel’s time records often bear little relevance to the reasonableness of plaintiff’s counsel’s time records because cases may often have a greater precedential value for one side over the other, or may involve more complicated legal defenses for one side over the other”); Oakly Enters., LLC v. NPI, LLC, 354 P.3d 1073, 1085 (Alaska 2015) (observing that opposing parties’ fees may vary substantially when they bear unequal burdens in the litigation).

39. In re Nat’l Lloyds, 532 S.W.3d at 810.

40. Id.

41. Id.

42. Id.; see also Romag Fasteners, Inc. v. Fossil, Inc., Civ. No. 3:10cv1827 (JBA), 2014 WL 7003896, at *3 (D. Conn. Dec. 10, 2014) (“[T]he Court’s inquiry into the prevailing rate in the relevant community is not likely to be assisted by the production of opposing counsel’s rates in this case. . . . This determination is based on . . . a petitioning party’s submissions documenting hourly billing rates in similar litigation charged by comparable community practitioners.” (citation omitted)).

43. In re Nat’l Lloyds, 532 S.W.3d at 810–11 (citing McClain v. Lufkin Indus., Inc., 649 F.3d 374, 384 (5th Cir. 2011)).

44. Id. at 811 (footnotes omitted).

45. Id.

46. Id.

47. Id. at 812.

48. Id. (citing Mendez v. Radec Corp., 818 F. Supp. 2d 667, 669 (W.D.N.Y. 2011)).

49. Id.

50. Id. at 812–13 (citing three Texas appellate cases).

51. Id. at 813 (quoting Tex. R. Evid. 403).

52. Id. (quoting In re Alford Chevrolet-Geo, 358 S.W.3d 869, 872 (Tex. 1999)).

53. Id. (citing In re Alford Chevrolet-Geo, 358 S.W.3d at 872).

54. Restatement (Third) of the Law Governing Lawyers § 68 (2000).

55. Id. § 70.

56. Fed. R. Civ. P. 26(b)(3).

57. See, e.g., Chua v. Johnson, 784 S.E.2d 449, 454 (Ga. Ct. App. 2016); TP Orthodontics, Inc. v. Kesling, 15 N.E.3d 985, 995 (Ind. 2014); Wynn Resorts, Ltd. v. Eighth Judicial Dist. Ct., 399 P.3d 334, 347 (Nev. 2017); Henderson v. Newport Cty. Reg’l YMCA, 966 A.2d 1242, 1247 (R.I. 2009).

58. Commonwealth v. Chmiel, 889 A.2d 501, 531 (Pa. 2005).

59. State ex rel. Dawson v. Bloom-Carroll Local Sch. Dist., 959 N.E.2d 524, 529–30 (Ohio 2011).

60. 386 P.3d 773 (Cal. 2016).

61. Id. at 781 (citation omitted).

62. Id. at 783.

63. See Marks Constr. Co. v. Huntington Nat’l Bank, Civ. A. No. 1:05CV73, 2010 WL 1836785, at *6 (N.D. W. Va. May 5, 2010):

To permit Marks to discover the [law firm’s] billing records . . . would require some determination of the issues raised by [the law firm] relative to attorney client privilege and opinion work product. . . . It would require a determination through en camera review whether redactions proposed protected appropriately claimed privileges while still providing the information required. . . . These inquiries and determinations are the start of a second major litigation of the type frowned on by the United States Supreme Court. . . .

64. In re Nat’l Lloyds Ins. Co., 532 S.W.3d 794, 804 (Tex. 2017).

65. Id. at 805.

66. Id. (citing Owens-Corning Fiberglass Corp. v. Caldwell, 818 S.W.2d 749, 751 (Tex. 1991)).

67. Id. at 806.

68. Id.

69. Id.

70. F.T.C. v. Boehringer Ingelheim Pharms., Inc., 778 F.3d 142, 149 (D.C. 2015); McCarthy v. Slade Assocs., Inc., 972 N.E.2d 1037, 1051 n.37 (Mass. 2012); In re Bonding, 522 S.W.3d 75, 86 (Tex. App. 2017) (citing Caldwell, 818 S.W.2d at 751–52).

71. Mendez v. Radec Corp., 818 F. Supp. 2d 667, 669 (W.D.N.Y. 2011); In re Nat’l Lloyds, 532 S.W.3d at 808.

72. See Whispell Foreign Cars, Inc. v. United States, No. 09-315L, 2018 WL 3653442, at *11–12 (Fed. Cl. Aug. 1, 2018) (finding the rates reported in the Missouri Lawyers Weekly annual fee surveys persuasive).

73. See, e.g., Budget Rent-A-Car Sys., Inc. v. Consol. Equity LLC, 428 F.3d 717, 718 (7th Cir. 2005) (criticizing fees as excessive where the related documents were short and routine).

74. See, e.g., Pollard v. E.I. DuPont de Nemours & Co., No. 95-3010 M1V, 2004 WL 784489, at *3 (W.D. Tenn. Feb. 24, 2004) (“DuPont, however, cites no basis for its conclusion that the plaintiff’s attorney’s time spent in preparation was excessive. Therefore . . . DuPont’s own counsel’s time . . . would serve as a logical yardstick from which to determine the reasonableness of such time expended by the plaintiff’s counsel.”).

75. Ruderman v. Wash. Nat’l Ins. Co., Case No. 08-23401-Civ-COHN/SNOW, 2011 WL 13172946, at *4 (S.D. Fla. Feb. 2, 2011).

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By Douglas R. Richmond

Douglas R. Richmond is a managing director of the professional services group of Aon Risk Solutions in Kansas City, Missouri, where he leads risk-management activities for Aon’s 275-plus law firm clients. Before joining Aon in 2004, he was a partner with Armstrong Teasdale LLP, where he had a broad trial and appellate practice. He may be reached at doug.richmond@aon.com. The opinions expressed herein are solely those of the author.