Twenty years or so ago, I represented an insurer in a $20 million insurance bad faith and Chapter 93A claim in which one of the key issues was whether the insurer was right to rely on the advice of a terrific lawyer, Tom Burns (the Burns in the Boston firm Burns and Levinson), who had defended the insured in a substantial personal injury case. Judge van Gestel, a former Goodwin trial partner who was the founding judge of Massachusetts’ well-regarded business litigation court, found after a bench trial in favor of the insurer and, by inference, of Burns’ original advice as well.
What I most often think about from that case is one particular question from the plaintiff’s counsel to Burns and his one answer. In an attempt to show that Burns’ advice should have been disregarded, plaintiff’s counsel tried to show that he was overly dependent on the insurance industry by characterizing him as an insurance defense lawyer; the question caused Burns to explain that in his 40 plus years as a trial lawyer he had tried everything from securities fraud cases to wrongful death claims and countless types of claims in-between. From a courtroom tactics perspective, one of the great things about that answer was that it put an end with only one thoughtful answer to what otherwise undoubtedly would have been a long line of hostile questioning on the subject of whether counsel was overly connected to the insurance industry.
I often think of this because, while I am predominately at this point in my career an ERISA and insurance bad faith litigator, I have litigated and tried many other types of cases over the years, ranging from patent infringement cases to business disputes to construction accident cases and a host of others. One of the more interesting things to me, probably as a result, is when a decision in one area of my practice is instructive for another area, as long as you see, and are prepared to make use of, the overlap.
A couple of weeks ago, in Vermont Mutual Insurance Company v. Poirier, the Massachusetts Supreme Judicial Court addressed a number of issues related to attorney fee awards in Chapter 93A cases. One of the commonalities between ERISA litigation on the one hand and insurance bad faith litigation in Massachusetts on the other is that each is an exception to the American rule on attorney’s fees, with each statute containing a fee shifting provision. Two aspects of the Court’s discussion in Vermont Mutual are, I think, of particular value to lawyers litigating fee disputes in both contexts, and are easily transferable to briefing of fee disputes in the ERISA context.
There are two common arguments in defending fee requests, and you see them particularly often in ERISA cases. One is that the work of plaintiffs’ counsel doesn’t justify the amount of the request. It isn’t always easy to find a succinct statement in the case law of how a court should think about whether the amount being sought is justified, and lawyers often respond by instead writing far more on that subject in a brief than they should. In Vermont Mutual, though, the Supreme Judicial Court provided a pithy explanation of the right way to analyze this question, explaining that:
What constitutes reasonable attorney’s fees “is a multifactor assessment of ‘the nature of the case and the issues presented, the time and labor required, the amount of damages involved, the result obtained, the experience, reputation and ability of the attorney, the usual price charged for similar services by other attorneys in the same area, and the amount of awards in similar cases.’”
I would venture that, in 99% of cases where fees are sought, a court could settle on the right amount to award simply by applying this framework.
Second, defense lawyers always complain in fee disputes (particularly in ERISA cases, where cases can take many years and the incurred fees can therefore be substantial) that the amount sought is too high, and sometimes that is true – all lawyers working in these areas have seen fee requests that appear to be an attempt to gouge a losing defendant. Many times, however, the truth of the matter is that the real reason the fee request is large is because the defense team did an excellent job, forcing plaintiff’s counsel to invest many hours to win the case. In a footnote in Vermont Mutual, the Supreme Judicial Court addressed exactly this point, noting that “[d]ue in no small part to the very capable defense presented by defendants’ counsel, the plaintiffs’ counsel had to work long and hard to overcome numerous hurdles and to build their case,” with the Court acknowledging that this should be considered “[i]n evaluating the work done by the prevailing attorneys.” To me, the quality of the defense team’s work is always an important point that should be considered when a court passes on a fee request, because it often can explain the size of a particular request and is often the key issue in evaluating whether what appears to be a particularly high fee request is actually not when viewed in context.