First let me say that I know nothing about this case. In fact, the first I heard of it was in this morning’s Times-Picayune article by Richard Webster. Of course, and regrettably, the deplorable conditions described in the article come as no surprise. See Flint et al. as well as this poignant piece in today’s Washington Post.
That aside, I do know a thing or two about the business of law, particularly the high stakes business of representing plaintiffs in complex litigation. Most such cases are taken “on contingency,” meaning that the client only pays “contingent upon success.” In other words, if the lawyers representing the tenants in the HANO lead paint case were unable to wrestle a settlement from the Defendant (and/or the Defendant’s insurer), then the attorneys would get nothing. Many such plaintiff attorneys work a case for years, investing thousands of hours and often many millions of dollars – only to lose. In such cases the attorneys walk away empty handed (and occasionally bankrupt).
Of course, such is not a reason to charge an unreasonable fee. But reasonableness is in the eye of the beholder, and at first blush what may seem a windfall to the attorney is anything but. Not to mention, while the class action vehicle is often panned in popular culture as rewarding attorneys more than victims, such lawsuits are often the only economically feasible way to provide justice to large numbers of people.
Again, I do not pretend to know the specifics of the HANO lead case matter. Maybe these cases could have been brought as individual actions, but probably not. And rarely are all class members satisfied with the result of a settlement. As BP’s lead counsel in the Deepwater Horizon case famously opined:
“Like any settlement, the settlement that has been reached to resolve this litigation is a compromise, a yielding of the highest hopes in exchange for certainty and resolution.”
When you settle, you compromise. You do not get everything you want. For whatever reason(s), the residents of the affected housing projects (and their attorneys) decided to take a settlement rather than continue on with years of litigation where a return of $0 was theoretically possible. Could a better deal have been struck? Who knows. Could a jury have returned a verdict awarding significantly more money? Maybe, but then years of appeals would no doubt follow.
Numerous tests are used to determine the reasonableness of attorneys fees. In mass and class action cases like HANO, something called the Johnson Factors are employed by judges to ensure fair compensation. In the case of Johnson v. Georgia Highway Express, the court held that the following twelve factors should be considered when awarding attorneys fees:
- Time and labor required
- Novelty and difficulty of the questions
- Skill requisite to perform the legal service properly
- Preclusion of other employment by the attorney due to acceptance of the case
- Customary fee
- Whether the fee is fixed or contingent
- Time limitations imposed by the client or the circumstances
- Amount involved and the results obtained
- Experience, reputation, and ability of the attorneys
- The “undesirability” of the case
- Nature and length of the professional relationship with the client
- Awards in similar cases
Some of these may not be applicable at all in the HANO case, and some may be more relevant than others. That said, the justification for implying that the attorneys fees in this case were unreasonable, inflated or otherwise improper because the average victim received $17,000 and some of the participating lawyers received millions, is probably much too simplistic, as it only considers one of the twelve Johnson Factors (“time and labor required”).