Jottings By An Employer's Lawyer

Friday, August 05, 2005

$200,000 Attorneys' Fees Award to Defendant Washed Away - Not a Pretty Site For Anyone

Sometimes litigation takes on a life of its own, and at some point -- way past the rational stage-- it all gets laid out for the whole world to view and perhaps ask the question -- where did this go so wrong? This is such a case. The defendant won summary judgment in a disability case primarily on the theory that there was no evidence that the person making the discharge decision had any knowledge of the alleged disability. That decision was affirmed on appeal by the 11th Circuit.

But before that decision was issued, the defendant had sought to recover its attorneys fees under the heavy burden of Christiansburg Garment Co. v. EEOC, 434 U.S. 412 (1978), which requires a showing that the case was frivolous. Initially successful, the district court awarded approximately $200,000 in attorneys fees --- apportioning $10,000 to the plaintiff and $190,000 to the plaintiff's counsel. But that was to be, or so I would think, a pyrrhic victory.

Because it was back to the 11th Circuit, which today spent 42 pages -- concurring, once again as to just how weak the plaintiff's case was, but finding that it did not fall over that fine line into frivolousness. Cordoba v. Dillard's Inc. (11th Cir. 8/4/05) [pdf].

Not content to stop at that determination, the Court turned to the manner in which the counsel for the defendant had handled the case noting among other things in its five page "postscript":
We note that Dillard’s might have avoided much of the expense of defending Cordoba’s claims had it conducted this litigation differently. By our calculations, it appears that more than $75,000 of the fees and expenses awarded were incurred before Groo’s deposition was completed. Moreover, more than $50,000 in fees were related directly to discovery regarding Cordoba’s alleged disability, another $23,000 was expended procuring expert testimony regarding her condition, and the bulk of Dillard’s memorandum of law in support of its motion for summary judgment focused on the question whether Cordoba’s heart condition was a disability under the ADA. All this work ultimately proved unnecessary.
Following an extended discussion of why the motion for summary judgment had not been filed earlier, the Court concluded:
But if, as we think is more likely, the district judge is somewhat more flexible than Dillard’s represented at oral argument, then the unnecessary cost and expense is attributable instead to Dillard’s failure to move for summary judgment on the knowledge issue as soon as was practical—whether because it misjudged the district judge’s likely response to such a motion or because Dillard’s itself did not perceive Cordoba’s claims to have been as frivolous as it now argues they were.

About the kindest thing that was said was a footnote from the Court:
This observation is, of course, made in hindsight. We would not ordinarily fault a litigant for having failed to move for summary judgment at the precise point, identified after the fact, that such a motion would likely have been granted. But given that Dillard’s now argues that Cordoba’s case was completely frivolous, we think it is fair to ask in hindsight why Dillard’s did not seek to bring this to the court’s attention at an earlier point in time.
Hindsight. If only we could possess it at the beginning.


Of course the real reason for this mess is that defense lawyers' interests are not properly aligned with that of their clients. Defense lawyers get paid by the hour so it is not in their interest to settle cases or move for early dispositive motions. Most defense lawyers at large firms need to churn at least $40K to $50K out of a case before they can bring up any serious discussion of how to get rid of the case with the client. I can't count the number of times we have billed $70K or $80K or more on a file that obviously can be settled for less than half that.
I can't count the number of times a client has said I'd rather pay you (defense lawyer) than pay that bum a nickle, so under no condition will I settle -- only to settle after at least $40k to $50k has been paid to the lawyers.

And it's very rarely "obvious" how much a case can be settled for.

The sky's the limit for a plaintiff's initial demand, so it's very easy for the plaintiff's attorney to send a signal that settlement for a reasonable amount is not possible early in the game.

If the lawyer's any good, the fee goes a long way to reducing the amount of the ultimate settlement. In which case the interests of lawyer and client are aligned.

Early dispositive motions are risky. It's very easy for the plaintiff to convincingly beg for more discovery, and if that is granted the defense has shown its hand too soon.
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