By Jeff Birren
The O’Bannon plaintiffs’ liability verdict and injunction meant that they were entitled to receive attorney’s fees. Clayton Act § 26 requires the court to award “reasonable attorneys’ fees and costs” if the plaintiff has successfully sought an injunction and substantially prevails in antitrust case. They asked for $45,573,985.45 in fees and $5,295,062,20 in costs. After opposition by the NCAA’s lawyers, U.S. Magistrate Judge Nathanael M. Cousins reduced the fees by $1,151,129.41 and the costs by $3,749,191.62. Plaintiffs’ counsel may pocket $45,968,726.62 though it may be reduced depending on the Ninth Circuit’s liability decision.
A Clayton Act fee application requires the submission of evidence supporting the number of hours worked on the case and the reasonableness of the claimed hourly rate. The opposing party can attack the reasonableness of the hours claimed, that is whether the claimed hours were excessive, unnecessary, or redundant and raise other arguments. The court first determines a reasonable number of hours and then sets an hourly rate. It analyzes the rates in community and can look at the rates charged by the prevailing party’s counsel, even though the plaintiff’s class action firms typically take the cases on contingency. That done, it can then consider other factors that can either increase or decrease the fee.
The NCAA challenged the fee petition based “on objections that almost exclusively concern the reasonableness of plaintiff’s hours expended…In fact, the NCAA clarifies that it does not challenge plaintiffs’ counsel hourly rates with the exception of one objection regarding inefficient staffing” (O’Bannon v. NCAA, Case No. 09-cv-03329-CW (NC) at 4/5 N.D. Cal. July 13, 2015)). The court thus found that that plaintiffs’ “have satisfied their burden of demonstrating the reasonableness of plaintiffs’ counsel’s hourly rates” (Id. at 5).
The NCAA raised six main objections to the claimed hours. The first objection was that much of the work performed pertained to hours spent by plaintiffs’ counsel pursuing claims that were ultimately unsuccessful. The NCAA sought to eliminate all hours prior the August 31, 2012 class certification motion. It next asked the court to eliminate work spent pursuing failed damages claims between September 1, 2012 and November 8, 2012, and finally for time spent after November 8, 2012 relating to group licensing or live broadcasts, products, or monitoring the companion Keller case. As a fall back, the NCAA asked the court to reduce the fees by “at least 50 percent overall” (Id. at 6).
The court declined this request. The court found that the unsuccessful claims were related to the successful claims. The court stated that it did “not find the NCAA’s arguments convincing…. At the same time, the Court finds that a common core of facts underlay all of the claims plaintiffs brought about the NCAA during the five years of litigation; the claims are all premised upon defendants’ exploitative use of plaintiffs’ names, image and likeness to generate revenue for defendants” (Id. at 7/8).
The court also found that “the time spent on unsuccessful claims contributed to the decisive success by laying the groundwork for the eventual trial victory. Indeed, as plaintiffs point out, during the period between 2009 and 2013—which the NCAA argues plaintiffs should not receive fees for—plaintiffs took depositions, conducted discovery and defeated multiple motions to dismiss” (Id. at 8).
Since the unsuccessful claims were related to the successful claims, the court analyzed “the overall relief’s significance” (Id. at 9). It determined “that plaintiffs did receive ‘excellent results.’ Plaintiffs were vindicated on their core claim—that the NCAA violated the Sherman Act by setting rules that bar student-athletes from receiving payments for the use of their name, image or likeness—and granted a substantial remedy: a permanent injunction prohibiting the NCAA from enforcing a set of its own longstanding rules… This win against a behemoth of an institution like the NCAA could significantly change American college sports; in particular, the way the NCAA treats its student-athletes” (Id.).
The NCAA compared the case to Dickens’ “A Tale of Two Cities” saying it was a tale of two cases. The first case was about former student athletes and the second was about current student athletes. The court compared it to Game of Thrones. “For plaintiffs, their trial victory on this adventurous, risky suit, while more than a mere game, is nothing less that a win that warrants attorneys’ fees for work spent on all claims—successful or unsuccessful” (Id. at 10). It also rejected the NCAA’s supposed “attempt to find a middle ground by requesting an overall 50 percent reduction on plaintiffs’ entire fee request” (Id.).
The second objection dealt with a claimed insufficiency of the evidence provided to support the fee request. The NCAA argued that counsel improperly used block billing, vague entries, redactions and improper time increments. In block billing the lawyers put done a daily total for the time spend working on the case. Not ideal, perhaps, but the court stated: “block billing has been accepted in this district” (Id. at 11). Moreover, it found the entries contained enough information to ascertain that the time spent was reasonable.
The NCAA also argued that there were a substantial amount of “vague entries.” The court disagreed. “Even short descriptions such as ‘Draft complaint’ permit the court to fairly evaluate the reasonableness of the time expended” (Id. at 12).
The NCAA next argued that partially redacted entries obscured the text and made it impossible to evaluate the entry for reasonableness. The plaintiffs accepted some of the proposed reductions and as to the rest, “the Court finds they are sufficiently detailed for the Court to make a reasonableness determination. In addition, the Court finds that the time expended on each redacted and partially redacted entry to be reasonable” (Id. at 13).
The NCAA argued that it was improper to use “quarter-hour increments as opposed to six-minute increments” (Id.) and challenged 5,191 entries. The court did not find that quarter-hour entries were legally impermissible but did find that “a small number of the entries that the NCAA identified do describe tasks that likely took a fraction of the time” (Id. at 14). It thus imposed “a 5 percent reduction as to the 5,191 entries the NCAA identified for a total reduction of 4332,644.19.” (Id.)
The third major challenge dealt with fees related to damages, the jury trial and media work. The NCAA edited a sentence by the plaintiffs into a purported admission that they could not receive fees for media work. The court remarked that the NCAA quoted a sentence from plaintiffs to that effect, and ended: “most time related to press releases, interviews and the like.” “In fact, the sentence from plaintiffs’ brief that the NCAA quotes does not end with the word ‘like.’ The final part of the sentence reads” ‘…and the like, even though the Northern District of California recognizes that time as compensable (citation omitted). The next sentence reads: As with the decision to forgo current rates in favor of historical rates, these time reductions again reflect the conservative nature of this fee application” (Id. at 14).Thus, plaintiffs had not admitted that they were not entitled to such compensation and the NCAA had no authority for the proposition that they were not entitled to it. All they had was a deliberately altered quote masquerading as an admission. So although plaintiffs’ brief purportedly eschewed fees for such work, this did not preclude recovery for it (Id. at 15).
The next major challenge was for supposed improper fee shifting to work performed against EA Sports, work related to state law claims, work soliciting clients and certain clerical work. Both plaintiffs and court agreed that they should not be compensated for the same work twice. However, the court rejected the contention that all work related to EA should be stricken from the award because those claims “involve a common core of facts with the claims brought against the NCAA” (Id. at 16). The court found “the plaintiffs properly excluded from this immediate fee application work related to the EA/CLC settlement” and rejected a further reduction (Id. at 16/17).
The court next rejected the contention that a reduction for time spent pursuing state law claims was proper because those claims “share a common core of facts with the successful antitrust claims brought against the NCAA”(Id.). It also rejected the NCAA’s assertion that certain entries indicated a search for plaintiffs because all but 12 of the entries came after filing the complaint. The court rejected the NCAA’s position that there could be no fees for case-management efforts, noting that the NCAA “cites to no authority supporting their proposition that plaintiffs cannot recover for time spent on case administration” (Id. at 18). The court agreed that the plaintiffs could not recover time spent on “purely clerical or secretarial work” (Id.). However, when it examined the NCAA’s examples, it found that the NCAA’s disputed entries included “drafting discovery responses and brief writing” (Id.). Consequently, the NCAA’s arguments were not “convincing” (Id.). No wonder.
The fifth major challenge was for inappropriate staffing. The NCAA claimed that plaintiffs had improperly used partners and not associates to perform certain tasks. “The Court does not see why such integral litigation tasks cannot be reasonably assigned to partners as well as associates (citation and quote omitted). In particular, the NCAA does not offer any authority for its suggestion that plaintiffs should have had only ‘contract attorneys and paralegals’ complete document review” (Id. at 19). Nevertheless, plaintiffs agreed to a reduction of over $56,000.
The second prong of this attack was for overstaffing, citing a hearing attended by 16 lawyers but only one spoke. “Here, the NCAA’s claims of overstaffing are undercut by their own staffing decisions. For example, while it claims foul over plaintiffs’ counsel’s alleged over-attendance at trial, the NCAA had close to a dozen attorneys, not to mention paralegals, assistants and technical staff member, representing its interest at the trial. Dkt. No. 360-4 at ¶ 30. But instead of acknowledging how this case’s complexity and scope could require a plethora of attorneys and legal staff, the NCAA seeks to eliminate time related to alleged overstaffing…In light of the reasonableness of plaintiff’s justification—especially given the complexity, size an novelty of the case—and the NCAA’s own decision to highly staff various parts of the litigation process, the Court denies the NCAA’s request to reduce the plaintiffs’ fee award on the basis of overstaffing” (Id. at 20).
The final prong of this attack was that plaintiffs’ sought compensation for “unnecessary and duplicative” work. The court agreed that aside “from containing inaccuracies as plaintiffs demonstrate,” the NCAA failed “to demonstrate how such entries describing conferencing between more than one attorney are actually unnecessary and duplicative (citation omitted). Conclusory statement about the ‘unnecessary and duplicative’ nature of these multiple-lawyer conferences are not sufficient to carry the NCAA’s burden of rebuttal” (Id. at 20/21).
The NCAA also took exception with entries that were “copycat,” “took too long or did not add value to the case.” Plaintiffs voluntarily agreed to reduce the fee application by $71,473,67. However, plaintiffs were once again able to point to inaccuracies by the NCAA and the “Court also identifies numerous inaccuracies that demonstrate the NCAA’s failure to meet their burden that these alleged ‘copycat’ entries should lead to a reduction in requested fee” (Id. at 21). It then found that other claimed examples were either reasonable or were “examples of entries incorrectly characterized as ‘churning’ entries’” (Id. at 22).
The battle turned to plaintiffs’ request for their full expert witness fees. The court said no. It noted the Supreme Court had limited such fees to the statutory limit, currently $40 per diem. (Title 28 U.S.C. § 1920, Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 445 (1987)). Moreover, the Clayton Act does not “provide explicit statutory authority” (O’Bannon at 22). Plaintiffs cited cases that allowed such a recovery yet the court found the NCAA’s “position more persuasive. The Supreme Court’s ruling in Crawford is unambiguous” (Id. at 23). Plaintiffs had agreed to reduce other witness expenses for trial, local travel expenses and pro hac vice applications and the court accepted those reductions.
The court did not accept the NCAA’s arguments concerning photocopying and printing expenses. It found that “plaintiffs have already produced a prodigious amount of reasonable time entries; the NCAA has failed to explain why these copying and printing costs are inconsistent with the time entries” (Id. at 24). The court also found that there was a “lack of auditing perfection in certain travel expenses” but found that the entries “include details the NCAA deems lacking” (Id. at 25). It did accept plaintiff’s voluntary agreement to reduce travel expenses “for senior partners” that deducted $33,490.23. The court did not agree with the NCAA that legal research expenses lacked adequate documentation (Id.)
The court finally dealt plaintiffs’ request to use a multiplier to increase the fee award and a request by the NCAA to use a negative multiplier to reduce it. The court balanced plaintiffs’ “risk of defeat with the fact that they did not succeed on every claim” and denied the request for a multiplier. “But given that plaintiff did secure a significant legal victory at trial on its claim for injunctive relief, the Court also denies the NCAA’s request for a negative multiplier” (Id. at 26).
The court granted a fee award of $44,422,856.04, and costs and expenses of $1,545,870.58 (Id.). Sending 16 lawyers seems highly questionable, however, there is also no excuse for the many apparent inaccuracies in the NCAA’s briefs, nor making bald assertions without any supporting authority and the NCAA may well have surrendered it credibility and thus lost its way in this matter. If the Ninth Circuit affirms the liability judgment, plaintiffs’ counsel is in for a massive payday.
Birren worked for the LA/Oakland Raiders for 34 seasons and was general counsel for much of that time. During that time he worked closely with owner Al Davis and Amy Trask, the NFL’s first female Club Chief Executive. He has an MA in History from USC and a JD from Southwestern, where he taught sports law for three years. He can be reached at jebirren@comcast.net.
