Plaintiffs asked for an award of attorneys’ fees in Vanguard Pai Lung, LLC v. Moody, 2022 NCBC 48. They had been awarded $3 million in compensatory and punitive and thjeir lawyers sought $2.5 million in fees. The motion for fees was not successful, for a number of reasons, but what sticks out in Judge Conrad’s opinion is his assessment that the fees applied for were excessive.
How much were Plaintiffs asking per hour? More than $700 per hour, with two of the lawyers billing more than $1,000 per hour. (Note that these lawyers weren’t from around here, they were from California and Texas.) Judge Conrad stated that the request was “not reasonable,” and said:
These rates may be typical of firms and attorneys based in California and Texas but are significantly higher than rates customarily charged in North Carolina for cases of this type.
“Typical And Customary” Hourly Rates For Complex Commnercial Litigation In North Carolina
Judge Conrad observed that the Business Court had previously concluded “that a typical and customary hourly rate charged in North Carolina for complex commercial litigation ranges from $250 to $475.” Op. ¶20 (quoting Bradshaw v. Maiden, 2018 NCBC LEXIS 98 at *12).
Did the complexity of the case warrant such high fees? No, said Judge Conrad, holding:
Although this has not been a simple case, neither has it been inordinately complex. Commercial
litigation often involves the same mix of business torts at issue here. It would be unreasonable to award “a fee that includes rates double those billed in the community where the litigation took place for work that seemingly did not require such a premium.”
Adding insult to injury, Judge Conrad noted that the rates demanded by the out of state counsel “dwarf those charged by [Plaintiff’s] capable local counsel. Id.
Don’t think that this Opinion from the Business Court was fueled by xenophobia. In many respects it follows the Court of Appeals’ rejection of high hourly fees charged by New York lawyers in GE Betz, Inc. v. Conrad, 231 N.C. App. 214 (2013), which I wrote about a few years ago.
Other Deficiencies In The Fee Request
Would asking for a more reasonable hourly rate made a difference in Plaintiffs’ fee request? Probably not. The fee demand was based on G.S. §1-538.2, which says that a party prevailing on a claim for embezzlement is entitled to “reasonable attorneys’ fees.” While one Plaintiff had obtained a judgment for embezzlement against one of the Defendants, that success came in a case in which sixteen claims for relief were made, and twelve counterclaims filed. Thus, the Court stated, it was required to apportion fees among the myriad of claims and counterclaims. Op. ¶18.
Apportionment would not be required if all of the claims and counterclaims were “inextricably interwoven with [the] embezzlement claim. Op. 18-19. These were not.
Another stumbling block for Plaintiffs was to provide nothing more in their fee application than “the total number of hours billed and the total amount charged by each attorney.” Op. Par. 22. That made it “impossible to determine whether Vanguard’s attorneys spent a reasonable or unreasonable amount of time drafting or responding to motions, preparing for and conducting depositions, and
handling other discovery matters, for example.” Op. Par. 22.
Plaintiffs get another crack at their fee request, as Judge Conrad denied the request without prejudice to a renewal of the motion after “the entry of judgment, the resolution of any postjudgment motions, and the exhaustion of any appeals.” Op. Par. 23. I expect that Plaintiffs will take another run at obtaining fees, but it won’t be a request for $2.5 million the next time around.