Opinion
1484CV01049BLS1
08-17-2018
The JACOBS LAW, LLC v. BOSTON OUT-PATIENT SURGICAL SUITES, LLC
DECISION AND ORDER RE PLAINTIFF’S COUNSEL’S PETITION FOR FEES AND COSTS IN COMPLIANCE WITH COURT ORDER (DOCKET ENTRY NO. 36.0)
Brian A. Davis, Associate Justice of the Superior Court
This is a putative class action in which defendant Boston Out-Patient Surgical Suites, LLC ("Defendant" or "BOSS") stands accused of having illegally overcharged for providing copies of patient medical records in violation of G.L.c. 111, § 70 ("Chapter 70"). The named plaintiff is The Jacobs Law, LLC ("Plaintiff" or "Jacobs Law"), a Boston-based law firm. Jacobs Law alleges in its First Amended Class Action Complaint and Demand for Jury Trial ("Amended Complaint," Docket Entry No. 4.0) that it submitted requests for medical records to BOSS on behalf of certain Jacobs Law clients, and that BOSS improperly demanded the payment of various fees and costs that exceed the maximum amounts permitted by law as a precondition for production of the requested records. Amended Complaint, ¶¶ 13-27. Jacobs Law further claims that its difficulties with BOSS are not unique, and that BOSS "has engaged in similar acts and omissions in charging for and receiving payments ... in excess of what may be permissibly charged pursuant to [Chapter 70] with respect to numerous similarly situated business entities ..." Id., ¶ 40.
Jacobs Law, through Attorneys Travis Jacobs, Stefano D’Agostino, and Eric Moreno, commenced this action in May 2014 "on behalf of [Jacobs Law] and all other similarly situated business entities." Plaintiff’s Class Action Complaint and Demand for Jury Trial (Docket Entry No. 1.0) at 1. As indicated, Jacobs Law acted, initially at least, as both the lead named plaintiff and lead counsel for the putative class, which it defined as,
those business entities or representatives as defined by M.G.L.c. 111, § 70, who (a) requested medical and/or billing records from Boston Out-Patient Surgical Suites; (b) received an invoice (without the documents requested) from BOSS demanding a prepayment administration fee for copies of medical and/or billing records; (c) paid BOSS in accordance with the invoice; (d) received medical records and/or bills from BOSS; and (e) were improperly charged a fee for copies of medical and/or billing records in an amount exceeding the charges permitted by M.G.L.c. 111, § 70.Id., ¶ 45. Jacobs Law further represented that its claims were "typical of the claims of other members of the class," and that it would "fairly and adequately protect the interests of the class ..." Id., ¶¶ 47-48.
BOSS responded to Plaintiff’s class action complaint by filing a motion to dismiss on various grounds, including the ground that Jacobs Law was prohibited, for ethical reasons, "from serving as both class counsel and named [class] plaintiff ..." Defendant’s Motion to Dismiss (Docket Entry No. 5.0) at 1. See also In re California Micro Devices Litigation, 168 F.R.D. 257, 262 (N.D.Cal. 1996) (recognizing the "long line of cases which have prevented attorneys from serving as both class representatives and class counsel" because, in part, "[i]f one attorney played both roles, he would be sorely tempted to sacrifice the interests of his fellow class members in favor of maximizing his own fees").
Before BOSS’ motion to dismiss was heard by the Court, Jacobs Law attempted to resolve the conflict created by its participation as both class counsel and as named plaintiff by retaining new counsel-Attorney Walter H. Jacobs and Attorney Alexandria A. Jacobs of W. Jacobs and Associates at Law, LLC ("W. Jacobs and Associates")-who, while not strictly members of Jacobs Law, are the father and sister of Jacobs Law’s lead attorney, Travis Jacobs. Attorneys Travis Jacobs, Stefano D’Agostino, and Eric Moreno all withdrew as counsel for Plaintiff at the same time Attorney Walter Jacobs and Attorney Alexandria Jacobs filed their appearances in August 2014.
Plaintiff’s conflict was not so easily laid to rest, however. In a decision issued on July 9, 2015, this Court (per Kaplan, J.) held that representation of the putative class members by the father and sister of the named plaintiff still presented an impermissible conflict of interest. See Memorandum and Order on Defendant’s Motion to Dismiss (the "July 2015 Order," Docket Entry No. 9.0) at 4-8. The Court simultaneously ordered that it would strike the class allegations of Plaintiff’s Amended Complaint,
unless, before the filing of any motion for class certification, either Class Counsel or the Class Representative has been replaced such that the holders of the two positions do not share any close familial, business or social ties ...Id. at 11-12.
Nine months later, Attorney Charles F. Perrault and Attorney Steven S. Blair of the Perrault Law Group filed appearances on Plaintiff’s behalf. Attorney Walter Jacobs and Attorney Alexandria Jacobs did not immediately withdraw, however, at that time. Rather, it took yet another order from this Court (again, per Kaplan, J.), issued on March 8, 2017 (Docket Entry No. 24.0), to get Attorney Walter Jacobs and Attorney Alexandria Jacobs to withdraw their appearances on behalf of Jacobs Law. Their joint Notice of Withdrawal eventually was filed on March 20, 2017.
The litigation continued to move forward following the departure of Attorney Walter Jacobs and Attorney Alexandria Jacobs. At a status conference on July 12, 2018, the parties reported that they had reached a settlement of all class claims. A written settlement agreement reportedly is in the works, but has not yet been filed with the Court. What has been filed, however, is a Petition for Fees and Costs submitted by W. Jacobs and Associates for services allegedly rendered to Jacobs Law in the 2014-2017 timeframe. As represented to the Court, BOSS and Jacobs Law have agreed that Plaintiff’s counsel is entitled to recover their legal fees and costs in this proceeding as part of the parties’ proposed class action settlement. As further represented to the Court, BOSS and Jacobs Law also have agreed that what, if any, fees and costs are to be recovered by W. Jacobs and Associates for its services on behalf of Plaintiff is to be resolved by the Court.
The Court has received and reviewed W. Jacobs and Associates’ Petition for Fees and Costs, which includes the supporting Affidavit of Attorney Walter Jacobs and a series of bi-monthly legal invoices. In total, W. Jacobs and Associates seeks attorneys fees in the amount of $96, 570.00, representing approximately 241 hours worked over a roughly three-and-a-half-year period at $400 per hour. The vast bulk of the fees pertain to work performed after this Court expressly ordered in July 2015 that either class counsel or the named plaintiff be replaced "such that the holders of the two positions do not share any close familial, business or social ties," and at least $4, 400.00 of the fees pertain to work performed by Attorney Walter Jacobs after he withdrew as counsel for Jacobs Law in March 2017. W. Jacobs and Associates also seeks costs of $275.00 for "filing and summons by the Plaintiff" and $37.00 for "service of the Complaint," although no W. Jacobs and Associates attorney appeared in this action until after these costs were incurred. No opposition or response to W. Jacobs and Associates’ Petition for Fees and Costs has been submitted by Jacobs Law or BOSS.
As best the Court can determine from W. Jacobs and Associates’ Petition for Fees and Costs and Attorney Walter Jacobs’ supporting affidavit, none of the legal fees sought pertain to services rendered by Attorney Alexandria Jacobs.
The amount of attorneys fees to be awarded in any particular case is "committed to the sound discretion of the judge." Berman v. Linnane, 434 Mass. 301, 302-03 (2001). Notwithstanding that discretion, the Massachusetts Supreme Judicial Court has identified various objective and subjective factors that judges are encouraged to consider in making fee awards, including,
the nature of the case and the issues presented, the time and labor required, the amount of damages involved, the result obtained, the experience, reputation and ability of the attorney, the usual price charged for similar services by other attorneys in the same area, and the amount of awards in similar cases.
Linthicum v. Archambault, 379 Mass. 381, 388-89 (1979) ("Linthicum").
The current, standard method for calculating what constitutes reasonable attorneys fees is the "lodestar" method, which requires the court to determine the fair market rate for the legal services provided and multiply that rate by the number of hours reasonably spent on the case. Ross v. Continental Resources, 73 Mass.App.Ct. 497, 515 (2009). "After making its initial [lodestar] calculation, the court then may adjust the fee upward or downward based on other considerations, including the results obtained." T & D Video, Inc. v. City of Revere, 66 Mass.App.Ct. 461, 477 (2006), reversed in part by, 450 Mass. 107 (2007).
While Linthicum predates the widespread adoption of the lodestar method, the considerations that it describes still are applicable and useful. See, e.g., Siegel v. Berkshire Life Ins. Co., 64 Mass.App.Ct. 698, 706 n.8 (2005) ("Under the lodestar method, other, formerly separate considerations ... come into play indirectly" (citing Linthicum)). "For example, the complexity of the case is likely to be reflected in the judge’s finding as to the amount of time reasonably spent on the matter, and the ability and reputation of the attorney are likely to be reflected in the judge’s finding as to a reasonable hourly rate." Id.
Applying the lodestar method to the facts of this case, and taking into account the factors set out in Linthicum, supra, the Court finds W. Jacobs and Associates’ requested hourly rate for Attorney Walter Jacobs (i.e., $400.00 per hour) to be fair and reasonable given the experience level of Attorney Walter Jacobs, the nature and complexity of Plaintiff’s claims, and the billing rates approved by this Court in past, comparable proceedings. The Court further finds, however, that the number of hours for which W. Jacobs and Associates seeks compensation (i.e., 241.4 hours) vastly exceeds the amount of time that W. Jacobs and Associates attorneys reasonably should have spent on this case. Attorneys Walter Jacobs and Alexandria Jacobs arguably never should have appeared on behalf of Jacobs Law in this proceeding given the substantial body of case law that precludes or strongly discourages close familial, professional, or social relationships between a proposed class representative and class counsel. Even assuming, however, that Attorneys Walter Jacobs and Alexandria Jacobs’ conflict was not immediately self-evident when they first appeared in August 2014, they clearly should have withdrawn as counsel for Jacobs Law shortly after the Court issued its July 2015 Order directing that "either Class Counsel or the Class Representative [be] replaced such that the holders of the two positions do not share any close familial, business or social ties ..." July 2015 Order at 11-12. Because Jacobs Law remained as class representative, Attorney Walter Jacobs and Attorney Alexandria Jacobs were required to-but did not-step aside. The Court is not inclined to reward W. Jacobs and Associates for rendered legal services that its attorneys had been told they could not provide. Similarly, the case law holds that W. Jacobs and Associates has no enforceable right to recover, either as a matter of contract or in quantum meruit, for legal services rendered in circumstances where its attorneys were explicitly disqualified from representing the firm’s purported client, Jacobs Law. See Misci v. Revere Housing Auth., 359 Mass. 743, 743-44 (1971) (attorney, who previously was a member of housing authority, was precluded from recovering fees for legal services rendered to authority, "either on the contract or in quantum meruit," where conflict of interest clause in authority’s contract with federal government explicitly "disqualified [him] from accepting the employment contract in question ...").
These cases, which are cited in footnote 5 to the Court’s July 2015 Order, include Redman v. RadioShack Corp., 768 F.3d 622, 638 (7th Cir. 2014) (class representative employed by former law firm of class counsel); Eubank v. Pella Corp., 753 F.3d 718, 722 (7th Cir. 2014) (ordering father-in-law of class counsel to be removed as lead plaintiff because "[t]he impropriety of allowing [plaintiff] to serve as class representative as long as his son-in-law was lead class counsel was palpable"); London v. Wal-Mart Stores, Inc., 340 F.3d 1246, 1255 (11th Cir. 2003) ("long-standing personal friendship" between class representative and class counsel); Petrovic v. Amoco Oil Co., 200 F.3d 1140, 1155 (8th Cir. 1999) (affirming trial court’s order striking appearance of firm in which a partner’s husband and sister-in-law were class representatives); Zylstra v. Safeway Stores, Inc., 578 F.2d 102, 104 (5th Cir. 1978) (reversing denial of motion to disqualify class counsel, where partner of lead firm was husband of class representative); McDonough v. Toys R Us, Inc., 638 F.Supp.2d 461, 478 (E.D.Pa. 2009) (class representative deemed inadequate because she was class counsel’s sister); Susman v. Lincoln American Corp., 561 F.2d 86, 90 (7th Cir. 1977) (holding that plaintiff who was class counsel’s brother was an inadequate representative); Stull v. Pool, 63 F.R.D. 702, 704 (S.D.N.Y. 1974) (holding that wife of member of firm seeking to represent class could not serve as class representative and describing conflict as "obvious").
Accordingly, the Court will reduce the number of hours for which W. Jacobs and Associates receives compensation to 45.4, which equals the number of hours expended by Attorney Walter Jacobs between August 2014, when he first appeared on behalf of Jacobs Law, and July 9, 2015, when Attorney Walter Jacobs’ obligation to withdraw as counsel for Jacobs Law was made explicit by this Court. The resulting amount of fees awarded to W. Jacobs and Associates is $18, 160.00. The Court simultaneously denies W. Jacobs and Associates’ request for costs as none of the costs identified in its Petition appear to have been incurred by W. Jacobs and Associates.
For the foregoing reasons, it is hereby ORDERED that W. Jacobs and Associates recover reasonable attorneys fees in the amount of $18, 160.00 and zero costs.