Lawyers Must Try Again for More Fees on $508 Million Bias Pact

Lawyers who obtained a landmark $508 million settlement in 2000 for more than 1,000 women allegedly denied jobs or promotions with the now defunct U.S. Information Agency based on sex must try again to show why they should get another $34 million in fees in the 40-year-old case.

The suit was filed in 1977 and the $460,000 average payout to the class members was “the largest per-capita recovery in a case of its kind,” the U.S. District Court of the District of Columbia said Tuesday. The agreement was reached in 2000, but it wasn’t until 2018 that the last of the $508 million settlement fund was distributed to the workers, the court said.

Class counsel began receiving interim awards for its work in 1995 and through 2018 had received more than $26 million for fees, expenses, and accrued interest in 28 separate payments, the court said. Lead counsel Bruce Fredrickson, who took “the case as a 26-year-old just one year out of law school,” and the other class lawyers filed a petition following the final settlement payment seeking an additional $34 million plus, the court said.

An enhancement to the fees awarded thus far is justified to account for delays in paying the class lawyers and some shortfalls in the prevailing market rates they were awarded along the way, Judge Amit P. Mehta said.

But their fees petition was lacking and they must “go back to the drawing board,” the judge said. The rates used in D.C. to calculate a reasonable attorneys’ fees in suits brought under federal fee-shifting statutes were improperly adjusted for inflation during at least a portion of the time the case was pending.

Adjustments were made according to the overall increase in the cost of all goods and services “based on the flawed assumption” that legal service compensation rates in the D.C. area would rise in lockstep with them, the court said. An adjustment that uses the Bureau of Labor Statistics’ legal services index to account for inflation would seem to be a better measure, the court said.

The attorneys’ proposed approach would have only been warranted if counsel hadn’t already received multiple interim fee awards, Mehta said.

The request also didn’t factor in that they were reimbursed at or near market rates at least through 1998, the judge said.

Finally, the suggested adjustment to the lawyers’ hourly rates for years during which the flawed figures were used appeared arbitrary and would result in overpayment, Mehta said.

Compiling the data necessary to arrive at a more exact figure by recalculating attorney time “hour by hour, time-keeper by time-keeper” may be burdensome, but it appears possible, the court said.

Convenience isn’t a good excuse to overcompensate “class counsel to the tune of millions of dollars,” it said.

Webster & Fredrickson PLLC, Correia & Puth PLLC, Steptoe & Johnson LLP, and Heller, Huron, Chertkof & Salzman PLLC represent the class. The U.S. attorney’s office represents the government.

The case is Hartman v. Pompeo, D.D.C., No. 1:77-cv-02019, 11/3/20.