The CNMI government has filed its strong objection to Betty Johnson counsels’ petition for attorneys’ fees and costs, with the Office of the Attorney General describing them as “exorbitant and beyond the realm of reasonable.”
On its part, the NMI Retirement Fund board, through its trustee ad litem, said the requested fees and costs are “astonishing” considering that if the court totals the maximum fees petitioned by Johnson’s various attorneys, it would bring the amount to over $60 million.
The trustee ad litem, the Civille & Tang law firm, wants the attorneys’ fees—whatever amount the court approves—to be paid at the end of every fiscal year so that the “benefit” can be measured.
Johnson’s counsels Bruce Jorgensen is seeking either $18.6 million, $29.6 million, or $38.9 million; Bronster Hoshibata is requesting $17.5 million; Stephen Woodruff is demanding $1.01 million; and Timothy R. Lord is claiming either $3.6 million or $5.9 million.
In the CNMI government’s response filed Friday and yesterday, assistant attorney general Teresita J. Sablan pointed out that it is “fundamentally unfair and unreasonable” to compensate class counsel for more than they actually earned, while asking class members to accept a 25-percent cut in their benefits.
Sablan said the reasonable fee award in this case is the lodestar amount without a multiplier.
Lodestar amount refers to the “reasonable number of hours multiplied by a reasonable rate.”
Saying the lodestar amount is already enough to compensate the class counsel, Sablan asked the court to limit the fee amount to the lodestar amount of $448,079 plus reasonable and necessary expenses, $29,591.42.
Sablan said the class counsel’s fee requests appear unreasonable on their face: Bronster Hoshibata requests compensation at a rate of $6,906.081 per hour; Jorgensen requests $4,875 (lodestar) or $7,726.53 (percentage of the fund) per hour; and Woodruff requests $3,375 per hour.
Sablan said the fee-shifting approach governs the reasonableness of the fees in this case.
Under the fee-shifting approach, the court determines reasonableness based on the lodestar amount.
To justify their exorbitant request, Sablan said the class counsel exaggerated their achievements in this case.
“The Commonwealth has never denied its obligation to provide for retirees and future retirees and the litigation. The Commonwealth’s multimillion-dollar liability is not a result of this litigation, it is a function of the Commonwealth Constitution,” she pointed out.
Sablan said the class counsel did not single-handedly stop the bankruptcy—the Commonwealth and the U.S. Trustee also opposed the bankruptcy and moved to dismiss the petition.
“Even if class counsel’s portrayal of their achievements was accurate, it still would not justify their fee request—it would still be unreasonable to ask class members to take a 25 percent reduction while the attorneys collect more fees than they actually earned through honest work,” she said.
Sablan said that both Jorgensen and Woodruff failed to meet their burden of production to justify their fees and should not be compensated.
She said Jorgensen’s billings are indecipherable, and Woodruff failed to submit any billing details altogether.
Sablan said Bronster submitted adequate billing documents and that based on a review of those documents, Bronster reasonably expended 1,995.5 hours on this litigation.
Sablan said that in the absence of evidence from class counsel to justify their rates, the reasonable rate should be $225.
With respect to Lord’s petition, assistant attorney general Charles Brasington said the lawyer is not entitled to attorney’s fees because Johnson terminated his services and that his petition is untimely.
The hearing on the attorneys’ fees and costs will be held on Sept. 30, 2013, which is also the date for the final approval of the settlement agreement.