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Thursday, February 09, 2017

Ind. Law - "Bill eyes limit for attorney fees"

Tony Cook reports today in a front-page Indianapolis Star story [here is a better link]:

The chairman of a legislative committee that deals with the Indiana Bureau of Motor Vehicles is seeking to limit the fees class-action attorneys receive when they sue the state.

The move comes after a pair of class-action lawsuits that exposed massive overcharges at the BMV, resulting in nearly $60 million in refunds to millions of Hoosiers and more than $15 million in attorneys fees for the Downtown law firm that represented motorists.

Now, House Road and Transportation Committee Chairman Ed Soliday wants to restrict how such attorneys fees are calculated — a move critics say could come across as revenge.

“We feel we need some protections when the government finds an error and they are fixing it and this becomes a class-action suit,” Soliday, a Valparaiso Republican, said during a hearing on the bill Wednesday. “All you’re doing is canonizing what is good practice.”

He emphasized that the new restrictions on attorney fees would only apply to future cases, not pending ones.

But opponents worry that the measure could make cases such as the BMV lawsuit less appealing for lawyers. That could undermine one of the few mechanisms to hold the government accountable when it wrongfully overcharges or withholds small amounts of money from a large number of citizens.

“If you want to curtail attorneys fees in cases like this, why don’t you curb the greed and avarice of those taking from Hoosiers without the right to do so,” said attorney John P. Young, president of the Indiana Trial Lawyers Association.

Rep. Dan Forestal, the ranking Democrat on the committee, also raised concerns about the message Soliday’s legislation sends.

“What law firm will ever get involved in a suit if they think the state will seek revenge?” the Indianapolis Democrat said.

Ultimately, the committee voted 9-4 along party lines to advance the measure to the full House.

House Bill 1491
contains a laundry list of minor tweaks and technical corrections to the laws governing the BMV. In fact, the bill is titled “Title 9 revisions,” a reference to the section of Indiana code that deals with motor vehicle laws.

But tacked onto the end of the 64-page bill is a provision that has nothing to do with motor vehicles. Instead, it would change Title 34, which governs civil law and procedure.

The provision would require that the maximum recovery for attorney’s fees in a class-action lawsuit against the government be based on hours worked and a reasonable hourly rate. That differs from another common method for calculating fees, which is based on a percentage — often about 33 percent — of the money awarded to an attorney’s clients.

The important story continues:
Cohen Malad, the law firm handling the BMV cases, received about $6 million in fees as part of its first lawsuit against the BMV. That equaled about 21 percent of the $30 million settlement.

In November, the court awarded the firm another $9.6 million in fees as part of an ongoing second lawsuit that the judge said prompted the BMV to refund another $28.75 million to customers. Those fees represent 33 percent of the refund. The two sides are still awaiting a decision on how much additional money the state owes motorists for unauthorized BMV fees.

Soliday has railed against the attorneys fees, which he says come at the taxpayer’sexpense. “When the government is cleaning up it’s own house, let’s not provide an incentive to pile on,” Soliday said.

But Marion County Superior Court Judge Richard Hanley found in November that the BMV had concealed the overcharges for years, as IndyStar reported in 2015. He also found that Cohen Malad’s efforts were largely responsible for the BMV’s decision to refund money to customers.

The ILB has had many earlier posts on the various BMV fees issues, going back for years. It appears that without the outside impetus of law suits, the situation might never have been resolved. Even so, it is taken quite a while. See, for example, this post from May 26, 2015, headed "Did Patronage Lead to BMV Overcharges?"

Here is the current language of HB 1491, SECTION 93:

13 1, 2017]: Sec. 7. (a) This section applies to a class action against the
14 state.
15 (b) This section applies to an action filed after June 30, 2017.
16 (c) Subject to the requirements this chapter, a court shall award
17 attorney's fees to a prevailing party based on the rate charged for
18 services and hours worked in preparation for the action. In
19 determining the reasonableness of the rate charged,the court shall
20 consider the nature, extent, and value of the services, including:
21 (1) whether the services were performed within a reasonable
22 amount of time commensurate with the complexity,
23 importance, and nature of the action;
24 (2) whether the attorney has demonstrated skill and
25 experience; and
26 (3) whether the compensation is reasonable based on the
27 customary compensation charged by comparably skilled
28 attorneys in similar actions.
29 (d) The court shall conduct a hearing to determine the award of
30 attorney's fees under this section. The hearing may include:
31 (1) presentation of evidence;
32 (2) testimony of expert witnesses; and
33 (3) any other evidence the court requires to make its
34 determination.

Posted by Marcia Oddi on February 9, 2017 10:27 AM
Posted to Indiana Law