Judge Nixes 'Windfall' Fees in Vitamin C Cartel Case

, The Litigation Daily

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A judge this week awarded Boies, Schiller & Flexner, Susman Godfrey, and Hausfeld LLP just a fraction of the $15 million in attorneys fees and costs they were seeking for winning a historic jury verdict in a price-fixing case against Chinese Vitamin C manufacturers.

In a 12-page ruling issued on Monday, U.S. District Judge Brian Cogan in Brooklyn granted the firms $4.1 million in attorney fees and no costs. Cogan credited them for the "high quality" of their work, writing that he had no problem with their hourly rates of $375 an hour for junior associates to $980 an hour for senior partners. But the judge determined that all of the lawyers costs and good chunk of their fees had already been covered by earlier settlements with co-defendants.

Roughly 80 percent of the world's Vitamin C is produced by a handful of Chinese companies. After a lengthy investigation, Boies Schiller partner William Isaacson brought price-fixing claims against the vitamin-producers in 2006. His co-counsel included Susman Godfrey's Jim Southwick and Shawn Raymond and Hausfeld's Brian Ratner and Brent Landau.

As the case crawled toward trial, the three law firms wrested a combined $30 million from three codefendants. The firms, which had self-financed the case, took a cut of more than $10 million from the settlements to partially cover their costs and fees.

The litigation climaxed in March 2013 with a $162 million verdict against North China Pharmaceutical Group Ltd. and a related company (Cogan later reduced the verdict to $153 million). We named Isaacson our Litigator of the Week for his years of impressive work on the case.

In May, plaintiffs counsel submitted a request for an additional $14 million in fees and $1.4 million in costs, which they later reduced to $13.7 million in fees and $1.36 million in costs.

In Monday's decision, Cogan praised Isaacson and his colleagues for their commitment to a unique and immensely difficult case. "[T]o my knowledge, there is no plaintiffs' class action firm with the capacity to deal with a case of this magnitude resident within this district," the judge wrote.

Cogan nonetheless expressed skepticism toward the request for an additional $1.3 million in costs. He noted that Susman Godfrey asked for almost $250,000 to cover travel expenses, despite already receiving $183,000 in travel costs from one of the pre-trial settlements. "Perhaps there is a good reason for these apparent inconsistencies, but plaintiffs have certainly not provided one," the judge wrote.

Cogan offset the $13.7 million fee request with the $9.6 million plaintiffs counsel kept from the pre-trial settlements. "Failing to apply an offset would amount to a windfall," the judge wrote.

Charles Critchlow of Baker & McKenzie, who represented North China Pharmaceutical, was not immediately available for comment. We also didn't immediately hear back from Isaacson.

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