Judge Axes Attorney Fees in Computer Class Action

, The Litigation Daily

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Max Taves writes for American Lawyer sibling publication The Recorder.

SAN FRANCISCO — A federal judge on Monday slashed attorney fees sought by plaintiffs lawyers in a consumer class action from more than $2.5 million to $943,000.

In an order explaining his steep cuts, U.S. District Judge Jeffrey White in San Francisco found that three firms representing consumers in a suit against computer maker Acer America Corp. had billed too many hours, charged too much and overstated the complexity of their case.

"The court finds that the amount Plaintiffs seek in attorneys' fees is not well supported," wrote White. "Upon review of the attorneys' declarations, the court finds that the attorneys were not efficient and that they spent excessive amounts of time on the various tasks listed. Moreover it appears as though there was significant duplication of work between the three firms."

Lawyers at those firms—Pearson, Simon & Warshaw; Hausfeld; and Gary, Naegele & Theado—had sought fees based on 4,633 hours of work in Wolph v. Acer, 09-1314. Noting the three firms had claimed credit for work on the same tasks, White concluded that 1,750 hours—or 38 percent of the hours sought­—would have sufficed.

He noted the three firms spent an "exorbitant" 547 hours on attorney meetings and 184 hours on court appearances, "despite the fact that the court vacated all hearings" except for the hearing on final settlement approval and attorney fees.

Consumers had accused Acer America, the San Jose-based subsidiary of the Taiwanese computer manufacturer, of selling defective laptops in violation of California and federal consumer laws, including the Magnuson-Moss Warranty Act.

In their $2.5 million fee request, plaintiffs lawyers highlighted the technical complexity of the case, which alleged that Acer's notebook computers didn't contain enough memory to run a pre-installed operating system, Microsoft Vista Home Premium. As a result, Acer's notebooks ran slowly, crashed often and froze frequently, the suit alleged.

"The technical nature of the defect placed a premium on expert analysis, and made it difficult to prevail against Acer and its in-house team of experts, engineers and technicians," wrote Daniel Warshaw of Pearson, Simon & Warshaw, who did not respond to a request for comment. "Allocating responsibility between two powerful international companies, Acer and Microsoft, made this case even more challenging and difficult."

White disagreed: "The Court notes that while the facts underlying the plaintiff's claims were technically complicated, the legal analysis regarding their warranty and misrepresentation claims was not complex," he wrote.

White also discounted the hourly billing rates requested by the firms, agreeing to pay $175 per hour for paralegals, $350 for associates, and up to $550 for senior partners.

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