Judge Hellerstein Lambastes 9/11 Law Firm over Fee Request

[WSJ_law_blog]

We know there are some LB readers out there who decry contingency fees and would like to see them, well, reformed.

If you fall into that group, you just might approve a ruling made by SDNY Judge Alvin Hellerstein (pictured) yesterday. In the In Re September 11 Litigation, Judge Hellerstein overturned settlements in four lawsuits filed on behalf of 9/11 victims, saying that one of the law firms that worked on the settlements — Maryland’s Azrael, Gann & Franz — was seeking excessive legal fees by requesting 25% of the $28.5 million it had recovered.

Here are some reasons why, according to Hellerstein:

• “[Jonathan Azrael] did not function in a liaison capacity.”
• “Neither he nor any lawyer in his firm appeared, according to my memory, to argue any motion or present any pleading. He or another member of his firm attended most conferences, but rarely spoke.”
• “Although the description of his services contains self-flattering statements of his contributions to the common effort, they are all conclusory and I have no perception of any contributions on his part.”
• “Azrael’s entire strategy seems to have been to coast on the work of others, and to wait for last position before entering into any meaningful settlement discussions with respect to his clients. Azrael’s strategy made little contribution to the progress of the cases before me, or to the settlements that largely have resolved this litigation. . . And he sought, as well, to advantage his clients by leveraging on Motley Rice’s settlements.”

That hurts. But, in Azrael’s defense, Judge Hellerstein goes on to write, “None of this is unethical, for by these tactics a lawyer seeks to gain the highest possible award for a client. Nor is a 25 percent contingent fee award inherently unethical . . .But this is not an ordinary case.”

When we caught up with Azrael today, he told us that, as scheduled in the opinion, there’s a meeting with Judge Hellerstein on August 6. “We were not surprised about the attorneys’ fees,” Azrael said, “because the judge had indicated that he was troubled by the request for 25%. But we were shocked that he struck his orders approving the settlements for the clients. The clients are suffering greatly by that. The fee issue, to us, is entirely separate from the order that affects the clients’ settlements for these very substantial sums of money.”