Attorney plans to return to court to explain $96,000 fee

In a recent order denying a proposed agreement to settle a collective-action lawsuit brought to recoup unpaid overtime for employees of Welspun Pipes, a federal judge took the plaintiffs’ attorneys to task for trying “to squeeze excessive fees” out of the defendants.

Josh Sanford, a Little Rock lawyer whose firm was the target of U.S. District Judge Billy Roy Wilson’s wrath, said Friday that Wilson misunderstood his filings, acknowledging that the filings didn’t do a good job of explaining why the firm sought $96,000 in attorneys’ fees in a case that generated $211,666 for one class of plaintiffs and $57,673 for a second class.

“We intend to go back to the court and try to explain to the court the settlement process in a way that satisfies the court,” Sanford said. He said he expects to “better explain” in a way that “the court will be satisfied that everything was aboveboard.”

The request was a joint one, filed by the Sanford firm as well as attorneys Bruce Cross and Gregory Northern, who represented Welspun on behalf of the Cross, Gunter, Witherspoon and Galchus firm in Little Rock. Neither Cross nor Northern returned calls for comment Friday.

Sanford regularly represents employees in wage and hour disputes brought under the Fair Labor Standards Act. Wilson wrote that years ago, Congress allowed the prevailing party in such cases to seek fees from the defendants “so citizens would have access to the courts to enforce their federal rights.”

“While that concept is good in theory,” he said, “it has become apparent that, in practice, lawyers’ fees are the driving force in many FSLA cases. This case presents the problem perfectly.”

Wilson noted the parties first sought approval of the settlement of the “run-of-themill” labor dispute in September, and he denied the request then, saying he first needed to see the plaintiffs’ attorneys’ billing records. He said the parties filed a second motion March 19 that provided only one of three pieces of additional information he sought.

Wilson said the plaintiffs’ attorneys “candidly admit” the total fees as of March 27 were $47,502, “yet they somehow convinced the defendants to agree to pay $96,000 for fees in the proposed settlement. To justify this doubled amount, Plaintiffs’ lawyers assert that billing would have been well over $96,000 if the case proceeded to trial.”

Wilson said if damages and fees had been negotiated separately, as they are supposed to be under a 2019 directive from the 8th U.S. Circuit Court of Appeals, which oversees federal cases in Arkansas, the additional costs wouldn’t have been part of the calculation. He said that while the joint motion states that the fees were negotiated “entirely separately” from the settlement of the case itself, “this statement is contradicted by the record.”

He also said,”the agreement on liability damages obviously is contingent on the amount of lawyers’ fees Defendants [Welspun] are willing to pay Plaintiffs.”

He said records show damages and attorneys’ fees were, from the beginning, “simultaneously discussed during negotiations,” and while they were later listed separately, this “does not negate the fact that an agreement on both liability damages and lawyers’ fees was required before Plaintiffs’ lawyers would agree to finalize settlement of the liability damages.”

When settling labor lawsuits, Wilson said, “the lawyers’ fees must be an afterthought, not the primary focus.”