Tempers flare as lawyers argue over legal fees in Flint water case
LANSING – Emotions ran high Thursday during a hearing on how much cash attorneys should take from a proposed $641.25-million partial settlement of civil lawsuits arising from the lead poisoning of Flint’s drinking water.
One lawyer said he has been pilloried by some residents, including one who wants to know whether he plans to buy a yacht from his proceeds.
Another accused a lawyer objecting to the requested fees as excessive of being secretly funded by big corporations such as oil companies and tobacco firms that want to gut the class-action and mass-tort legal processes that can hold them accountable for their misdeeds.
In a March filing, attorneys requested up to $202.8 million in legal fees — a request that has provoked outrage and condemnation from many Flint residents and others.
Lead attorneys have defended the request, saying they and lawyers from about 30 other firms have collectively worked 182,000 hours on the case in the last five years, fighting a deep-pocketed state of Michigan that made immunity and other defense claims that had to be fought all the way to the Michigan Supreme Court and U.S. Supreme Court before lengthy and difficult negotiations resulted in a proposed settlement.
It is up to U.S. District Judge Judith Levy to determine whether both the settlement itself — and the attorney fees — are fair.
New York attorney Corey Stern, one of the lead liaison attorneys for individually represented plaintiffs in the mass tort portion of the settlement, expressed outrage at how objectors have addressed the legal fee question, which he said has been reflected in both media coverage and public feedback.
“I’ve gotten 470 emails since May 1 related to my conduct,” Stern said. The most recent email, received Thursday morning, asked him to say in court “whether or not I intend to purchase a yacht,” he said.
“I can’t buy a single thing,” Stern said.
No attorney involved in the litigation has received $1 to date, though in addition to the 182,000 hours they have worked, they have paid expenses of at least $7 million “without any guarantee that we will get even $1 of it back,” he told the court during an online hearing.
Even objectors to the fees agree that lawyers deserve to be compensated for the risk they took in taking on the litigation with no guarantee of any recovery.
But Frank Bednarz, a lawyer with the Center for Class Action Fairness at the Hamilton Lincoln Law Institute In Washington, D.C., said it would be excessive for lawyers to take close to one-third of the proposed settlement, as requested. Courts have found in other “mega-fund” cases around the country that as the gross settlement amount increases, the percentage paid to attorneys should generally go down, he said.
“It’s not necessarily 600 times more difficult to achieve a $600-million settlement than a $1-million settlement,” Bednarz said.
Bednarz, who is objecting to the fees on behalf of Flint clients, wants Levy to allow him and other lawyers to review detailed time and billing records that lawyers have submitted to the special master in the case and that Levy has reviewed privately.
More:Flint water crisis attorney fees: Who would get how much of the $203M, and why?
More:Concerns mount over attorney fees in Flint water settlement. Here’s why.
Bednarz said based on the limited information he has been able to review, he has already found a problem where one firm listed millions of dollars of work as being performed by the firm’s own lawyers at hourly rates of $500 an hour, when in fact the work was nearly all performed by contract attorneys he believes would have been paid closer to $50 an hour.
“We can’t flag issues if we don’t know about them,” said Bednarz, arguing for access to more billing records.
Levy has not ruled on that motion, but she stressed to Bednarz that the lawyers are not being paid based on the time records they have submitted. Instead, the time records are a way of cross-checking that the percentage fees requested are not out of line, she said.
Bednarz also wants disclosures about any fee-sharing agreements among firms involved in the case.
Paul Napoli, a New York attorney whose firm is the other lead liaison counsel for individually represented plaintiffs and has offered controversial bone-scanning services as a way for Flint residents to document their exposure to toxic lead, accused Bednarz of acting in bad faith.
Napoli said the Hamilton Lincoln Law Institute has ties to the Competitive Enterprise Institute, a libertarian think tank in Washington, D.C., he said is funded by large corporations that want to “undermine people’s rights like those in Flint.”
Bednarz said his institute left the Competitive Enterprise Institute some time ago and “since then have not received a penny from any corporation.” Bednarz said he does not hold the views Napoli ascribes to him, and even if he did, that would be irrelevant to his arguments in the case.
Levy said the maximum attorney fees — even if the request was granted in full — is likely to be lower than what was cited earlier, and closer to 29%, or $186 million. But that revision would not mean more money is available for Flint plaintiffs. Instead, it means costs related to claims administrators and others whose job it will be to administer the settlement — which also must come out of the total — are likely to be higher than the lawyers estimated in their fee request, she said.
Under the proposal, the four lead attorneys would share in a 6.33% common benefit fee assessed against the total settlement amount, for work they did that benefits all attorneys in the case. All other attorney fees would be capped at 27%.
Contact Paul Egan: 517-372-8660 or [email protected] Follow him on Twitter @paulegan4. Read more on Michigan politics and sign up for our elections newsletter.
Become a subscriber.