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Unfair and Deceptive Acts and Practices: 12.8.11.3.3 Fees calculated based on contingency fee agreement

Where the consumer and the attorney have a contingency fee agreement, some courts take it into account in determining the amount of a fee award. For example, the Seventh Circuit, applying the Illinois UDAP statute, approved a $208,333.33 lump sum fee award calculated as one-third of a $625,000 damages award. The attorney presented, as evidence, a one-third contingent fee agreement, and the court found this to be a reasonable measure of the prevailing market rate because it was a standard contingent fee.1424

Unfair and Deceptive Acts and Practices: 12.8.11.4 Awards for Work on Non-UDAP Counts and on Unsuccessful UDAP Counts

The typical UDAP case will include multiple UDAP and non-UDAP counts. For many non-UDAP counts, such as breach of warranty or common law fraud, there will be no attorney fees available. A prevailing consumer may be awarded damages based on some but not all UDAP counts and on some of the non-UDAP counts. The question will then arise whether the consumer should receive attorney fees for all work done on the case, just on the UDAP counts, just on the successful UDAP counts, or just on the successful counts.

Unfair and Deceptive Acts and Practices: 12.8.11.5 Calculating Fees for Public Interest Attorneys

The calculation of fees for legal services and other public interest attorneys should be based on the prevailing market rate.1446 Paying legal services attorneys at the same hourly rate as others agrees with the purpose of UDAP attorney fees of encouraging litigants to seek redress of consumer wrongs involving small dollar amounts, where the amount at stake may not justify the attorney’s time.1447 This is also in accord with the United States Supreme Court’s decision in Blum v.

Unfair and Deceptive Acts and Practices: 12.8.11.6 Fees for Paralegals, Law Clerks

Paralegal and law clerk rates should be calculated using prevailing market rates, not the cost to a firm of these staff.1450 Where a market bills paralegal time at an hourly rate, that is the rate to use.1451 Decisions from the 1990s and late 1980s have awarded $65 and $50 an hour for paralegal or law clerk work on UDAP cases.1452 In 2012, a court awarded $80 an hour for paralegal or law clerk services.

Unfair and Deceptive Acts and Practices: 12.8.11.7 Out-of-Pocket Expenses; Costs

There is little UDAP case law about supplementing an attorney’s hourly rate with out-of-pocket expenses. The clear import of the Supreme Court’s approach to these questions is that a court should follow the prevailing billing practice of the community.1454 If certain items are typically included in an hourly rate, they should not also be reimbursed separately. However, if attorneys typically bill for these items separately, the attorney fee award should include separate provisions for these expenses.

Unfair and Deceptive Acts and Practices: 12.8.13.2 The Consumer’s Burden of Proof

The fee applicant has the burden of documenting the amount of time spent on the case and the reasonableness of the fee sought.1476 While several courts have held that a separate evidentiary hearing is not necessary to determine the proper size of attorney fees,1477 other courts have required the consumer to offer evidence of the reasonableness of the attorney fee award.1478 Even where there is a default judgment, this proof may be necessary.

Unfair and Deceptive Acts and Practices: 12.8.13.4 Who Makes the Fee Determination?

Where a statute specifies that the “court” may award attorney fees, this is usually construed as a determination for the judge, not the jury.1491 However, the Texas rule seems to be that the amount of a reasonable attorney fee is a fact question to be determined by the jury,1492 while the appellate court is entitled to determine whether the amount is excessive based on the entire record, the amount in controversy, the nature of the case, and the common knowledge and experience of the judges

Consumer Class Actions: 1.7.6.1 Generally

In American Pipe & Construction Co. v. Utah,107 the Supreme Court held that the filing of a class action complaint tolls the statute of limitations for individual claims of members of the putative class until class certification is denied.108 However, the Supreme Court’s opinion in China Agritech, Inc. v.

Consumer Class Actions: 1.7.7.3 Claims That Raise Primarily Legal Questions Are Ideal for Class Treatment

When selecting claims to include in a class action, the factual issues necessary to prove the elements of each claim should be considered. The fewer disputed factual issues presented, the less complicated the case and the more likely the claim will be resolved by summary judgment without the need for an evidentiary hearing or trial. The case will also be less costly and time-consuming than one requiring proof on numerous factual issues.

Consumer Class Actions: 1.7.7.4 Avoid Claims That Are Technical Violations, Yet Threaten Annihilating Damages

Another factor to consider is whether the court will be disposed to grant the relief requested based on the violations alleged. When the defendant’s conduct is egregious, and the class members’ injury is significant, courts will often be willing to order large damages awards. On the other hand, courts are uncomfortable with large statutory damages awards for unintentional, technical violations with minimal or no consumer injury.

Consumer Class Actions: 1.7.7.5 Consider Whether Benefits Can Be Provided to Class Members

The choice of claims will affect the availability of particular remedies. For example, the federal Truth in Lending and Fair Debt Collection Practices Acts contain special class action caps on statutory damages. Bringing a claim under a state debt collection or consumer protection statute may avoid the application of the damages cap. On the other hand, some state consumer protection statutes likewise contain damages caps or do not permit classwide relief.169

Consumer Class Actions: 1.7.8.1 Generally

In many class actions, the class attorney will have the option of including a number of legal claims. It is just as important to decide what viable claims not to raise as it is to decide which ones to pursue.

Consumer Class Actions: 1.7.8.3 Some Risks of Omitting Claims

“Claim-splitting” refers to the general requirement that all claims for relief arising from a single transaction or occurrence must be brought in one action.174 The general rule is that a subsequent suit, arising from the same transaction or events underlying a previous suit, would be barred under the doctrine of res judicata.175 However, a class action “is one of the recognized exceptions to the rule against claim-splitting.”176 For a discussion o