No. 16-0107
IN THE SUPREME COURT OF TEXAS
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Albert G. Hill, Jr.
v.
Shamoun & Norman, LLP
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On Petition for Review
From the Fifth Court of Appeals,
Dallas, Texas (No. 05-13-01634-CV)
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AMICUS CURIAE BRIEF
SUBMITTED IN SUPPORT OF PETITIONER ALBERT G. HILL, JR.
AND ATTORNEY FEE OBLIGORS NOT SIMILARLY SITUATED
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TO THE HONORABLE MEMBERS OF THE TEXAS
SUPREME COURT
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TABLE OF CONTENTS
Index of
Authorities ……………………………………………………………………………………
4
Issues
Presented ..…………….…………………………………………………..
1
- I. The Shamoun-Hill dispute is as atypical as it can get, factually speaking, but this Court’s resolution thereof will likely impact the vast majority of cases in which the amount in controversy is less than $50,000, and the market-based attorney’s fees are in the range of $150 - $500 per hour.
- II. The implications of the issues in this case go far beyond the statute of frauds governing contingent fee contracts and the reasonableness of an hourly fee of $48,000.00, whether imputed or part of an express lodestar calculation.
- III. The briefing of the distinguished legal practitioners on behalf of the parties and the amici in this case fails to address the wider ramifications of the Court’s anticipated ruling on the availability of quantum meruit recovery for attorney work not expressly contracted for.
- IV. If the Court were to rule for Shamoun, it would encourage other attorneys to deceive their clients about the scope of representation, would encourage them to turn the tables on their own clients, and would reward them for colluding with opposing counsel to proffer favorable testimony about their “formidable-foe” status to exaggerate the alleged value of settlements to the former client and the quantum of compensation to be awarded on the quantum meruit claim asserted against the former client.
- V. This Court should address the matter of how attorney’s fees are properly “priced” in the context of fee-shifting and in the absence of a contractual agreement across the full spectrum of cases, including those involving small or moderate amounts in controversy, which would never make it to the Supreme Court by petition for review or mandamus, and do not therefore provide the High Court with an opportunity to address the attorney-fee issue for the judicial system as a whole and the bulk of the caseload.
- VI. The methodology for judicial determination of the value of legal work in Texas courts should be revisited and revamped to take into account advances in technology.
A. The lodestar approach incentivizes
inefficient busywork and bill bloating, but it also imposes some accountability
because it is based on quantifiable measures and requires factual particulars.
It thus promotes reasonableness in amounts requested and awarded, transparency,
and predictability. As such, it facilitates rational assessments on both sides
and settlement. It also enables trial courts to engage in a meaningful review
of the necessity of discrete task performed in cases litigated to trial, and
the reasonableness of the amount of time spent on them.
B. The Andersen laundry-list is nebulous, unempirical, and outmoded.
C. Neither the Lodestar nor the Andersen
approach is satisfactory for computer-driven mass litigation that is largely
automated and
requires minimal attorney
time
D. While not squarely before this Court,
the issue of how attorney fee claims are properly handled in small-value cases
at the “retail level”, and how excessive ones are to be curbed, cries out for
high-court attention.
Issues Argued
…………………………………………………………… 4
A.
The Shamoun-Hill dispute is as atypical
as it can get on the facts,
but the issues are not sui
generis. ………………………..…… 4
B.
The implications of the issues raised
in this case go far beyond the statute of frauds and the $85,000.00
per-hour-equivalent fee…..… 5
C.
The ample briefing fails to address the
collateral consequences
of a ruling on viability of quantum meruit recovery for
attorney
work not covered by contract……………………………………………………….. 7
D.
Ethical attorneys and law firms would
suffer a competitive
disadvantage …………………………………………………. 8
E.
Lawyers are in a privileged position to
know the law
and obtain consent ……………………………..…………… 10
F.
The Court should address the “pricing
issue” in the absence of an attorney-client contract and in the fee-shifting
context ………………. 13
G.
Scenario I: Computer-driven flat-fee
mass litigation………….. 15
H.
Scenario II: Computer-driven
percentage-based mass litigation 17
Conclusion
…...………………………………………….…………….. 22
Amicus
Curiae Statement of Interest ..…………………………'……… 23
Certificate
of Service……………………………………………………. 23
Certificate
of Word Count ……………………………………………… 23
INDEX OF AUTHORITIES
Arthur Andersen & Co. v.
Perry Equip. Corp., 945 S.W.2d 812 (Tex. 1997) …… 18
City
of Laredo v. Montano, 414 S.W.3d 731
(Tex. 2013) (per curiam)………..… 19
El Apple I, Ltd. v. Olivas,
370 S.W.3d 757 (Tex. 2012) ……………………...… 18
Long
v. Griffin, 442 S.W.3d 253 (Tex.
2014) (per curiam)…………………...… 19
Shamoun
& Norman, LLP v. Hill,
483 S.W.3d 767 (Tex.
App.-Dallas 2016, pet. granted)………………….. 9
ISSUES ARGUED
A. The
Shamoun-Hill dispute is as atypical as it can get, but this Court’s resolution
thereof will likely impact the vast majority of cases in which the amount in controversy
is less than $50,000 and the market-based hourly fee rate would be in the $150-$500
range.
Attorney fees are the
bread-and-butter issue for the legal profession.
The Court has already had the benefit of the briefing of a
total of more than a dozen high-caliber members of the profession, not to
mention the distinguished jurists in the courts below. This critical mass of
legal talent and wisdom no doubt enhances the quality of the decision-making
process, but it also skews the lop-sided consensus.
To be sure, Petitioner Hill is a client and not an attorney,
but Mr. Hill is a client who can afford to send a bevy of lawyers into a
peripheral fee skirmish, and with a judgment to the tune of $7,250,000 already entered
against him, the cost-benefit calculus in retaining high-powered appellate
talent surely runs in his favor.
But that is not so for the rest of the populace, washed or
otherwise.
What about the vast majority of consumers of legal services;
-- the entire population of clients of Texas attorneys? What about those Texans
who cannot afford a lawyer at all, and yet find themselves at the receiving end
of fee-shifting?
When the State’s highest court ponders the weighty matter of
whether a contract is required to entitle an attorney to an enforceable fee,
and how the reasonableness of the fees is to be measured and determined, the
average Lone State denizen’s interest are very much at stake too. Because one
day, he or she may be forced to pay attorney’s fees quantified in the manner
ordained by this Court’s precedent, whether or not they ever sought legal
counsel. Whether or not asked for it. Whether or not indeed they ever had heard
the name of the attorney whose fees they are required to pay.
The kind of lodestar, if any, that guides the High Court in
matters of legal fees has rather important implications for the vast majority
of Texas who are not adept at navigating the byzantine Texas court system,
particularly when they do not have the benefit of any steering by a pilot with
the requisite license. They still stand a good chance of ending up liable for
the fees payable to an attorney whose assistance or advice -- unlike Mr. Hill -- they have never
sought for anything. All they may have in common with a man of Mr. Hill’s luck
and means may be complex family dynamics, -- a rather ubiquitous phenomenon.
B. The
implications of the issues raised in this case go far beyond the statute of
frauds governing contingency fee contracts and the reasonableness of an hourly
fee of $85,000.00, whether imputed or part of an express lodestar calculation.
As commonly understood, a contingent fee agreement is one
between a lawyer/law firm that signs up a client as plaintiff, and the
higher-than-otherwise “cut” for the lawyer/law firm constitutes compensation
for the latter’s assumption of the risk that the case will yield no recovery at
all, in which case any and all efforts expended by the law firm (other than
costs, for which the client may be liable, depending on the specifics of the
contract) are for naught. That risk, however, is voluntarily incurred by the
lawyer/law firm and not imposed. The law does -- as it should -- permit contingent fee contracts, because they
promote access to the justice system by folks who would not otherwise have the
means to do so, and it promotes discipline and quality control on the part of
the lawyers and law firms that pursue such cases because efforts expended on
ultimately non-viable cases would entail a loss in attorney time and law firm
resources.
For cases that turn out to be of marginal merit, the same
dynamic encourages early settlement or a well-considered decision to not pursue
the claim at all.
But Shamoun’s case does not fit the general pattern. Based on
the fact recitations of the parties and the Dallas Court of Appeals, the
contingency here involves the avoidance of losses (and control of inherited
family assets) along with non-monetary issues (perjury liability, for example)
rather than the procurement of a monetary recovery for personal injury or
similar compensatory damages, whether by judgment or settlement.
This is an important distinction for public policy and
jurisprudential purposes because access to justice is not an issue for a
well-heeled litigant such as Mr. Hill, who undisputedly had the ability to pay,
and did pay, all invoices sent by Shamoun for legal services rendered
totaling over $900,000.[1]
Mr. Hill did not need to be made whole. He already was. By
middle-class, lower-class, and underclass standards, if not by the standards that
might imbue the thinking of the top 1 percent. And to the extent Mr. Hill
incurred perjury liability under the federal court sanctions regime, it would
seem to have been of his own doing and hardly deserving of judicial sympathy
and equitable outreach.
To all appearances, Mr. Hill can also afford to pay the $7,250,000
meant to be awarded by the jury, reviewing courts on several levels of the
judicial hierarchy permitting. But how many Texans could? How many members of
the middle class? How many Texas attorneys even? Whether Shamoun ultimately
recovers $7,250,000 from Hill is of no moment to people of Texas, or to the State,
for that matter (except for the tax revenue consequences, if any, perhaps).
But the import of the jurisprudential principles relied upon
by the Court in resolving this case is an entirely different matter. It will
likely have far more sweeping ramifications.
Whichever way this Court rules, its opinion should provide a
basis for distinction in subsequent cases that likewise implicate the question
of whether a percentage-based quantum meruit recovery should be permitted as an
exception to the statute of frauds governing contingent fee contracts. And,
more broadly speaking, it should address whether a quantum meruit recovery
should be permitted at all when it comes on
top of fees earned, billed, and paid under a fee agreement involving
the same legal services provider and the same client (as opposed to a situation
where there is no written attorney-client contract of any kind).
C. The ample briefing
of the distinguished legal practitioners on behalf of the parties and the
contributions of the three amici at the PFR-application stage fail to address
the wider ramifications of the Court’s anticipated ruling on the availability
of quantum meruit recovery for
attorney work not expressly contracted for.
Mr. Hill’s legal team urged in their petition that
this case should be resolved in a per
curiam opinion while those for the Defendant law firm insisted in their
response that no high court involvement was called for at all. This Court has
nevertheless requested full briefing and set the case for oral argument on
October 10, 2017. All this portends an ultimate High Court opinion that will do
more than write the last chapter of a drawn-out family feud involving billions
of dollars in assets that were – to all
appearances -- not earned by any of the family members doing battle over
them.
Former Chief Jefferson, in his brief for the Shamoun,
says that all three amici do no more than parrot Hill’s argument. While it may
be tempting to add one more chirp (not tweet) to the chorus of the parrots, the
full aviary of birds – rare, odd, or merely common -- should not be excluded
from the theater. A few discordant notes might beneficially accentuate how the
member of the legal profession marshalled for a battle of wits in this
high-stakes case nevertheless chime rather in unison.
The undersigned odd-bird amicus will therefore take
the want of novelty diagnosed by ex-Chief Jefferson as a high bar, and attempt
to address it at least in part, in addition to expressing the hope that the statute
of frauds as it applies to contingent windfalls to be raked in by Texas
attorneys will survive the instant petition for review.
D. Ethical
attorneys and law firms would suffer a competitive disadvantage in the
marketplace for legal services
If this Court were to rule in Shamoun’s favor, it would give
other Texas attorneys an incentive to put their own interest before those of
clients even before the legal matter that is the subject of the representation
is concluded. Or before the attorney-client relationship is even formed, for
that matter.
Crafty members of the Bar might decide to offer their
services at a discounted hourly rate and insert limitation-of-engagement fine-print in the retainer
contract, banking on their ability to sue their former clients in quantum
meruit later, and thereby hope to make up for the up-front discount on the
hourly rate. It would make economic sense.
And the opportunity to generate additional fees from
prosecution of the follow-on quantum-meruit suit itself, as already illustrated
by the Dallas Court of Appeals opinion in this very case,[2]
would provide an additional incentive for such deceptive conduct as part and
parcel of the law firm’s business model. At least with respect to the client
segment composed of high-asset individuals.
But clients of moderate means with rare lawsuit exposure
would not be spared either. An enterprising family law practitioner, for
example, might elect to pursue a quantum meruit claim for having to deal with ”complex
family dynamics” beyond the spousal relationship at issue in the divorce, or
might decide to capitalize on some other peripheral case-specific circumstance
that would not be expressly contemplated by the engagement letter or retainer
agreement. In fact, there would be an incentive to draft the retainer agreement
as narrowly as possible so as to amplify the opportunity to later advance QM
claims for extra exertions that do not fall within its scope.
A crafty practitioner could just wait until the final decree
of divorce is entered and the division of property effectuated. A quantum
meruit claim predicated on some unique constellation of facts in the particular
case would then allow him to tap the client’s freshly-received assets to
capture at least a share of the Splittsville spoils, if not their entirety.
Suffice it to point out the obvious: That this Court’s
blessing of quantum merit recovery on
top of charges billed and paid for based on either a contract or on open
account would be bad public policy because it would incentivize bad apple
behavior and would distort fair competition in the marketplace for legal
services, a market that is not very transparent for the average consumer of
legal services to begin with.
This Court should decline the invitation to tilt the scales
in favor of those short of scruples who would seek to gain an unfair edge over
their peers by discounting their hourly fee in the client-acquisition phase,
only to turn the tables on their retained clients later, after settlement or final
judgment. The Court should not create incentive for suing clients for additional
compensation on a quantum-meruit theory for carved-out services, not to mention
allowing them to compound the windfall through additional fees incurred in the
second lawsuit and shifting those, too, to their former clients.
E.
Lawyers are in a privileged position to
know the law and obtain prior consent
The general public is charged with knowledge of the law. Ignorance
of the law does not generally provide an excuse for failing to abide by it. The
same should apply, with even greater force, to attorneys, who are presumed to
know the law better than laymen, and are therefore in an even more advantageous
position to comport their conduct with it.
Shamoun must have been fully aware of the need to not only
reduce a contingent fee agreement to writing, but to obtain the client’s
express consent to it. And he obviously could not force the client to sign the agreement he desired or may already have
drafted himself of by an agent.
Nor was Hill under an obligation to sign the proposed “bonus”
agreement submitted to him. Individuals are free to contract as they see fit,
or decline to do so. And they are surely entitled to say No.
Regardless of whether written consent was required by a
statue of frauds, the client would have to agree to the terms of the contact
proposed by the lawyer. The client’s refusal to sign would seem an indication not
only of the lack of an agreement to the extravagant compensation terms that
Shamoun subsequently sought to have imposed by a court by force, but of their
rejection. Shamoun then sought to pass off the rejected terms as the proper
measure of value under the theory of quantum meruit. The re-cloaking was not
even particularly artful. It consisted of nothing more than slapping a
different label on the same squiggly global services product that could not
even be pinned to any one lawsuit, and was not therefore subject to ongoing
judicial oversight and discipline within the context of a lawsuit governed by
the particular set of rules and standards of conduct in the relevant forum.
Shamoun could not have reasonably relied on the expectation
that the client would pay on the excessively generous terms that the client
expressly refused to consent to. Which might explain why promissory estoppel
was (apparently) not even pleaded in the district court below.
As told in the briefs, the record in this case demonstrates
not merely the absence of evidence (or absence of sufficient evidence) of an
enforceable agreement for the “monumental” bonus payment, but establishes the
contrary proposition as a matter of law: Hill’s refusal to agree to the
proposed terms set forth in the proposed statute-of-fraud-compliant fee
agreement. That alone should preclude any recovery on an alternative theory as
a matter of law, rather than as a matter of facts to be delved into and
resolved by a jury. If Judge Jim Jordan is to be faulted at all, he is to be
faulted for not dismissing the quantum meruit claim before it went to the jury
(assuming he was presented with a proper motion that would have allowed him to
do so).
Even if no express refusal of proposed bonus-terms were
supported by the record, any and all alternative non-contract theories should
be held precluded under these circumstances because a contract was required
under the statute of frauds, and the required contract would preclude recovery
on equitable theories because the parties to that required contract would have
an adequate remedy at law. Shamoun’s invocation of quantum meruit after failing
to secure a client contract on the terms desired by him is nothing more than an
effort to circumvent the statute of frauds and render it impotent. It amounts
to an effort to take advantage of the client after having been told No.
Alternatively, the Court should hold that whatever tasks Shamoun
performed under the rubric of “global settlement services” he provided either
on the known risk of not getting paid the desired bonus or reward, or pro bono.
The law shouldn’t provide a remedy for every risk willingly taken.
While Shamoun suggests in his brief that he was duty-bound to
continue to serve his client, he was not the attorney of record in most of the
cases within the “spiderweb” and was not therefore required to obtain leave of
court to withdraw. In any event, nonpayment of fees (or client’s failure to
sign a contingent fee agreement in the alternative) would certainly constitute
sufficient good grounds or just cause for most courts to grant permission to
withdraw.
Shamoun was free to refrain from providing any “global
settlement services” in the absence client consent and payment agreement in
writing, and he could have posed the choice to Hill to either sign another engagement
letter or forego his services. He could also have offered his client more
reasonable terms, perhaps an hourly rate of $750, reflecting a premium for
having to deal with “complex family dynamics” and “rapport development and
cultivation” and telephonic “unified voice” overtures directed to opposing
counsel in a context where others had allegedly fallen short.
Shamoun was under no obligation to render services not
covered by pre-existing fee contracts, and courts should not therefore aid his
efforts to coerce payment for services not properly contracted for. If this
Court were to hold otherwise, it would lower the standards for the Bar as a
whole, and would encourage sloppy practices in managing client-relationships by
others. It would also encourage attorneys to sue their clients when they would
not do otherwise, which would further erode the public esteem for the legal
profession and its practitioners. Finally, it would encourage attorneys to
collude with opposing counsel so the later will help them with favorable testimony
once they are ready to turn the tables on their own clients and sue them.
F. This Court
should address the matter of how attorney’s fees are properly “priced” in the
context of fee-shifting and in the absence of a contractual agreement across
the full spectrum of cases, including those involving small or moderate amounts
in controversy, which would never make it to the Supreme Court by petition for
review or mandamus, and do not therefore provide the Court with an opportunity
to address the attorney-fee issue for the judicial system and across the entire
caseload as a whole.
Shamoun claims to have rendered
exceptional services and to have realized “monumental” benefits for this
(former) client worth a $7,250,000 fee.[3]
That rather eye-popping amount is
said to constitute but a small fraction of the total value proposition as told
by Shamoun.
Regardless of how much of that volume
is to be deflated to correct for self-serving puffing, Shamoun has – no doubt – done more than those at the
opposite end of the continuum of quantity and quality of effort, and an
exceptional hourly rate of $750.00 may very well be defensible in an
exceptional case of this nature.
At the opposite end of the spectrum,
however, are attorneys who spend minimal amounts to time and effort on a single
case because they preside over the contemporary equivalent of a well-oil
litigation mill. They, too, claim attorney’s fees vastly out of proportion with
the amount of time actually spent on a case, and shift their fees to the opposing
parties, most of whom do not have a lawyers of Shamoun’s caliber to defend
them. Not to mention defend them in the courts of appeals when cases go awry in
the trial courts.
Indeed, most of these defendants do
not have a lawyer at all.
One such litigation-machine attorney
is a state employee: Assistant Attorney General John C. Adams, who collects on
student loans made the Texas Higher Education Coordinating Board (“THECB”). Another
one is Deanna L. Longo, an attorney with LINEBARGER GOGGAN BLAIR & SAMPSON,
LLP (“LINEBARGER”), which has a contract with the Harris County for toll road
collection work.[4]
G.
Scenario I: Computer-driven Flat Fee Mass Litigation:
$5,000 for 5-10 minutes of attorney work
Assistant AG John C. Adams regularly
swears that his efforts on Texas Higher Education Coordinating Board (THECB)
student loan collection lawsuits are worth between $1,500 and $5,000 apiece
even though every single one of them is produced with a document production
system using electronic forms (i.e. boilerplate), and even though most of them
result in default judgments, and do not even involve an in-person court
appearance.
In the rare event when a hearing is
necessary -- typically in a case in which the defendant obtains a lawyer --
Adams budgets 5 minutes of county court time for it.[5]
For a rare trial involving a represented defendant, the amount may be 10-20
minutes.
As the beneficiary of a special venue
rule, the Attorney General sues all student loan obligors in Austin, TX,
regardless of where they reside, whether in-state, out-of-state, or even in
foreign countries. The metric for AAG Adam’s travel to court is therefore city
blocks, not miles and overnight stays. The
proper metric under the Lodestar would be minutes, rather than hours.
Under Attorney General Paxton
stewardship, the OAG also engages in double-dipping. It sues the
student-borrower and his or her co-signer separately on the same debt, and
charges the flat-fee attorney’s fees twice, even though one suit is a copy-cat
of the other, the only difference being the identifying information for the
Defendant(s). The pleadings and motion templates do not even distinguish
between debtor and guarantor.
The vast majority of THECB student
loan defendants do not have legal representation. They are cash cows ready to
be milked. And the private attorneys that agree to take on such cases are loath
to challenge the sworn fee testimony of another attorney, not to mention an
attorney for the State.
If this Court continues to treat
uncontroverted attorney testimony as reasonable ipse dixit, this class of litigants and other in the same boat will
continue to be liable for fees measuring thousands of dollars for legal work
measured in minutes. Close to de minimis.
And they will have these fees shifted
against them, with virtually no judicial oversight as to the quantum that is
merited, at least not with respect to the vast majority of cases that either
end in default or an agreed judgment, or cases in which the defendant is
unrepresented and is in no position to challenge a fee affidavit because he or
she is not qualified to opine on what is reasonable. Nor would the majority of
defendants even be aware that the lawsuit papers are the output of a largely
automated production system, i.e., a lawsuit mill.
On the other hand, if it is
acceptable for the State to set up and run a one-lawyer lawsuit machine as a
profit center, and as a revenue source to cross-subsidize other activities of
the executive branch, the Court should explore the pros and cons of whether
only the State should be permitted to reap the windfalls of automatization of
the litigation process, and whether private law firms should be able to do the
same. Charge for minutes of attorney attention at hourly rates, or even more.
Mr. Hill’s appeal to this court is
relevant in this regard because it involves more than just the statute of
frauds for contingent fees. It very much implicates the larger question of how
legal services are to be “priced” when they are not subject to market-place
price-setting, and have not been contracted for.
In Shamoun’s case, there was no
agreement on the price to be paid for the much-touted “global settlement
services.” In the case of THECB student loan collection, there is not even a
market at all. The Texas Attorney General has a statutorily granted monopoly. See
Tex. Edu. Code §52.39 (“Suit for the remaining sum shall be instituted by the
attorney general”).
Assistant AG Adams at least signs
pleadings, motions, and fee affidavits. In the second example of dubious
attorney-fee claims on an industrial scale in small-value cases, Linebarger’s designated toll suit
attorney cannot be troubled to do even that. The firm uses an image of the Rule
8 attorney’s signature not only on its mass-produced pleadings and motions for
default and summary judgment, but on its attorney fee affidavits as well. It is
the current state-of-the art in robo-litigation. Highly efficient. A single attorney
suffices to oversee a litigation docket comprising hundreds of
contemporaneously pending cases, but the attorney’s reasonable work hours are
not pro-rated over the entire docket.
Anything but.
G. Scenario II:
Computer-driven percentage-based mass litigation:
Up
to $6,000 in reasonable attorney’s fees in cases of no
(or only
contingent) attorney involvement
LINEBARGER GOGGAN BLAIR &
SAMPSON, LLP handles collection of unpaid tolls for the Harris County Toll Road
Authority, including collection by litigation. Deanna L. Longo’s name appears
on its pleadings as the attorney in charge.
Unlike the Texas Attorney General
through Assistant AG Adams, Linebarger
does not assert its attorney fee claim on a flat-fee basis. Instead, the County’s
private collection firm quantifies and demands its attorney’s fees as a
percentage of the sum comprising unpaid tolls, administrative charges,
penalties and fees. The dollar amounts obtained through default and summary
judgments accordingly vary much more across the caseload than in the THECB
student loan cases, but the percentage is consistent. 20% of the total of tolls
and charges in County Civil Court at Law No. 2; 30% in the three other county
civil courts at law.
But the story is the same. Like THECB
student loan obligors and their parents (or other co-signers), toll-suit
defendants are held liable for hundreds, if not thousands of dollars of
unearned attorney’s fees that are shifted to them as a matter of course by
trial courts granting default judgments in assembly-line fashion.
The consideration of Andersen fee factors does not even come
into play. One of the four county judges will grant only 20% of the total claim
amount in fees, but which defendants are ordered to pay 20% as opposed to 30%
is like a lottery, because cases are assigned randomly to one of the four
county courts at law sharing the caseload.
Of course, the fees routinely awarded
in high-volume litigation are properly denounced as “unearned” only under
traditional approaches for valuing attorney work in terms of quantity of time
and qualify of effort, whether under the Arthur
Andersen[6] or
the lodestar approach used by the federal courts and endorsed by this court -- at
least in a limited number of contexts -- in El
Apple.[7]
This Court has previously condemned
"generalities about tasks performed" and specifically said that,
"without any evidence of the time spent on specific tasks," the trial
court does not have sufficient information to meaningfully review the fee
application. Long
v. Griffin, 442 S.W.3d 253, 255-56 (Tex. 2014) (per curiam); accord City of Laredo v. Montano, 414
S.W.3d 731, 736-37 (Tex. 2013) (per curiam).
In mass litigation cases such as
those by the likes of John C. Adams (delinquent THECB loans) and Deanna L.
Longo (unpaid tolls and fines) as attorneys in charge, the evidence of
litigation effort before the Court takes the form of cookie-cutter pleadings,
motions, and affidavits, including fee affidavits. The case dockets typically
comprise no more than a few lines.
Trial judge rarely even get to see a
flesh-and-blood attorney, or a wet-ink attorney signature, for that matter.
Motions for default judgment do not require a live court appearance, and even
motions for summary judgment are “heard” by submission in Harris County.[8]
As contemporaries in the computer
age, trial court judges are in the position to take judicial notice that attorney
involvement (and indeed human
involvement) per case is minimal. They have meaningful information available to
them to gauge attorney effort and quality, as well as the ability to spot if something
unique cooking on the boilerplates. Unlike individual defendants, county court
judges know from handling their own dockets that these cases vary only in a few
specifics, such as identifying information for the defendant and amount
claimed.
And yet, in the absence of direction
from the High Court, attorney’s fees are routinely awarded in these run-of-the-litigation-mill cases in
amounts that raise the very same concerns as the $48,000.00 hourly fee equivalent
in this case, once the median personal or household income and net worth of the
litigants is taken into consideration.
Notwithstanding their numerosity,
none of the mass litigation cases involving excessive fee awards for legal work
actually performed by computers and automated processes will ever reach this
Court.
Unfortunately, this Court is placed
in the position to render its doctrinal decisions in the most aberrant of
cases, such as this one, involving a member of a family worth billions. Alas.
The impact will be suffered -- or
enjoyed, as the case might be -- by a much larger population of litigants,
none of whom have much in common with Mr. Hill. Certainly not his deep pockets,
and the wherewithal to retain top-notch attorneys to do his bidding, or even an
expert witness to challenge an attorney fee affidavit, no matter how
incredulous it may be as to the amount of hours and dollars attested to as
reasonable and necessary, and deemed true in the absence of a qualified
rebuttal by another member of the Bar willing to testify contrariwise.
Most of the vastly more common
litigants in Texas courts affected by the valuation of attorney’s fees have no
one to advocate on their behalf, and no ability to counter an ipse dixit affidavit of a Texas-licensed
attorney opining on the reasonableness of charges for documents churned out by
the litigation mills they oversee, passing off self-serving fee demands as
expert witness testimony that trial courts are bound to credit, based on
existing decisional authority, merely because it is un-contradicted.
This Court should take the moral high
ground and resist the understandable urge to do what lawyers want. Natural
because, day in – day out, the Court
only hears from lawyers and through lawyers.
This Court should affirm that the
role of the judiciary involves more than making the system work for attorneys.
Such role includes acknowledging what
is self-evident for all but a tiny minority of interested parties, albeit a
tiny minority led by a former chief of this Court: That a fee of $48,000.00 per
hour is not only not reasonable, but exorbitant. An affront to all who earn and
make do with no more with what a still-sitting Texas district court judge
earns, and many others who earn less.
What Shamoun is looking for in this
case is a Category 5 windfall.
Whether he has it coming his way will
not concern the rest of Texas. What will matter is what this Court’s opinion in
Hill v Shamoun will stand for, and
will be cited and relied for in the tens of thousands of cases thereafter.
The High Court’s unique role in
shaping the jurisprudence of this State and the setting the rules for
processing of cases in all of its courts should encompass setting some limits
on what lawyers may swear is reasonable to them without incurring sanctions or
perjury liability, particularly in cases in which the defendant is
categorically prejudiced because he or she is deemed inherently incompetent to
contradict an attorney’s professional opinion that a few minutes of his or her
time spent on a transactional court case are worth $1,500, $2,500, or even
$5,000 apiece.
Those fee claims and awards, too
“profoundly disturb notions of fair play and equity.” Albeit at the retail
level. One or two standard deviations left and right from the mean, where most
Texans are in terms of income, assets, and litigation-proneness.
CONCLUSION
The
amount of money implicated in the underlying dispute is staggering, as is the
amount of the fee at issue in the attorney-on-client follow-up litigation that
it spawned. The unusual factual particulars, and the fact that the Court hears
only from high-powered attorneys, have the potential of distorting the
decision-process and culminating in a resolution that might make the attorney fee
jurisprudence of the State worse, rather than better and more just. To avoid
such a result, the High Court should consider the implications for the vast
majority of cases that have no chance of reaching this level within the
judicial hierarchy and would therefore not present the Court with the
opportunity the reshape the common law to suit the typical case -- and the entire caseload statewide -- as
opposed to the rare billion-dollar dispute that attracts some of the best (or
at last best known) appellate advocates on both sides of the docket, and is
marked by idiosyncratic circumstances, rather than typical ones.
[1] Amicus did not have access to the record in this case. The facts are therefore taken either from the Court of Appeals opinion or from the parties’ briefs.
[2] Shamoun & Norman, LLP v. Hill, 483 S.W.3d 767 (Tex. App.-Dallas 2016, pet. granted) (reversing trial court's judgment on zero-dollar jury award for prosecution of law firm’s quantum meruit claim against former client).
[3] Amount found by the jury. Shamoun actually sent a demand letter for much more.
[4] The Court may frown on having these attorneys called out by name, but that is unavoidable because they are the ones that swear to and sign the fee affidavits.
[5] Travis County Local Rules require time estimates for settings, which are shown on the e-docket.
[6] Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812 (Tex. 1997)
[7] El Apple I, Ltd. v. Olivas, 370 S.W.3d 757 (Tex. 2012).
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