Jones v. Butler Amusements Inc

Filing 36

MEMORANDUM RE: SETTLEMENT HEARING. Signed by Senior Judge Justin L. Quackenbush. (PL, Case Administrator)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF WASHINGTON

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H. E. J., et al,

)
)
) No. CV-13-0136-JLQ
Plaintiffs,
)
) MEMORANDUM RE:
vs.
) SETTLEMENT HEARING
)
BUTLER AMUSEMENTS, INC.,
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)
Defendant.
)
___________________________________ )
To assist counsel at the April 15, 2014 Minor Settlement Hearing, the court
advises as follows:

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1. In reviewing the merits of Plaintiffs’ claims, it appears to the court, without

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ruling, that in the court’s trustee role, the settlement of the minor’s claims for the gross

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sum of $500,000 is a reasonable resolution of those claims.

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2. The court has serious reservations as to reasonableness of an award of 40% of

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the gross award as attorney fees in the amount of $200,000. The court is first required

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to fix the lodestar fees earned based upon the hours reasonable expended at reasonable

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hourly rates. It is clear to the court that the alleged time claimed by Plaintiffs’ attorneys

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is not based upon time records contemporaneously recorded at the time of each event.

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Rather, as stated in the Declaration of Scott F. Lundberg (ECF No. 30), Exhibit B thereto

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is merely a reconstructed “summary” of hours allegedly spent on this case by Plaintiffs’

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attorneys and staff. This reconstructed “summary” includes, starting on March 20, 2014.

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over 40 hours of “work on time records.” Obviously, the expenditure of such time was

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the result of the failing to contemporaneously record time as it was expended and which

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would not have required the expenditure of such time had it been contemporaneously

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recorded.

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ORDER - 1

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Attorneys with the experience of those herein involved, certainly must, or should,

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know that in the trust position of representing a minor or incompetent person, the

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keeping of contemporaneous time records is strongly recommended. Persons with the

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extensive experience of the attorney fee expert, Philip A. Talmadge, understand the

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necessity for contemporaneous record keeping.

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contemporaneous records has not been discussed in the attorney fee submittals.

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Unfortunately, it is clear that contemporaneous time keeping did not take place in this

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case.

However, the lack of such

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Starting with the 1983 U. S. Supreme Court case of Hensley v. Eckerhart, 461 U.S.

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424, 438 n. 13 (1983), courts have approved a substantial reduction in claimed attorney

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hours by reason of the failure to keep contemporaneous time records. See also Fischer

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v. SJB, 214 F. 3d. 1115 (9th Cir. 2000) (holding that the fact that a fee request is not

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based on contemporaneous records is a valid reason for the trial court to reduce

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requested fees). Washington state courts have also found reconstructed time records to

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be unreliable. See Johnson v. DOT, 174 Wash. App. 684 (Wash.App.Div. 1 2013).

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Federal Circuit Courts of Appeal have stringently applied the contemporaneous rule. In

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Anderson v. Secretary of H.S.S., 80 F. 3d 1500, 1506 (10th Cir. 1996), the Tenth Circuit

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held that a district court may totally deny an attorney fee request when no

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contemporaneous time records were kept.

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The foregoing should not be construed as a suggestion by this court that no

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attorney fees should be awarded in this case. This court’s 23 years in the private practice

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of the law including the handling of many contingent and fixed fee cases and the 34+

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years on this bench have made the court aware of the fact that many law firms,

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particularly those such as represented the Plaintiffs herein who deal primarily in

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contingent fee cases, do not ordinarily maintain time records.

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representing minors or incompetents the maintenance of contemporaneous time records

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is vital and stricter scrutiny is required of the court when non-contemporaneous

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ORDER - 2

However, when

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reconstructed time is claimed. Reconstructed claims such as some 32 hours now

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claimed in November, 2013 in preparing a mediation brief and the attorney fees sought

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for the time spent reconstructing non-contemporaneous time are examples of the reason

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for the contemporaneous time record rule.

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3. Plaintiffs’ law firm seeks reimbursement of “costs” expended in the amount of

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$20,721.49. It is the policy of this court when considering the award of a reasonable

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contingent fee to base the award only after deduction of such costs from the gross

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recovery as to rule otherwise would be awarding a contingent fee on sums being

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reimbursed to the law firm.

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4. The Amended Petition in this case also seeks the payment of $10,590.07 to the

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parents of the minor Plaintiff as reimbursement for medical and tutoring expenses paid.

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The court does not doubt that such sums were paid however, the only specific reference

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thereto is in the Guardian Ad Litem’s Report to the initial Petition.

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5. The Amended Petition also suggests the disbursement of $20,000 to Key Bank

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to cover future medical expenses of the minor Plaintiff. The provision of Local Rule

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17.1 shall be applied thereto, provided that if the court does not require the management

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of such funds through a state court guardianship, such funds may be utilized in the future

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only for special expenses associated with the minor Plaintiff’s injuries herein and not as

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a replacement fund for those expenses ordinarily borne by parents.

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6. The court is further concerned with the fact that the proposed annuity contract

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apparently does not contain a specific restriction on the assignment or sale of future

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payments without the approval of the court.

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The Clerk shall enter this Order and furnish copies to counsel and to the Guardian
Ad Litem, Gregory Decker.
Dated this 8th day of April, 2014.
s/ Justin L. Quackenbush
JUSTIN L. QUACKENBUSH
SENIOR UNITED STATES DISTRICT JUDGE

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ORDER - 3