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Wednesday, September 22, 2010

Insuror Says Defense Lawyers Overbilled Millions In Chiquita Death Squad Cases: U.S. AG Eric Holder's Law Firm at Center of $7.7 Mil Clash

CINCINNATI (TDB) -- Almost $4.5 million in attorney fees and expenses billed by Atty. Gen. Eric Holder's former law firm in DC are being challenged as "excessive" in a Cincinnati lawsuit. Covington & Burling LLP was retained to defend Cincinnati-based Chiquita Brands International Inc. against federal criminal charges and civil lawsuits that it financed deadly right wing terrorists in Colombia on its banana plantations. Court records filed in the Cincinnati lawsuit -- and obtained by The Daily Bellwether -- indicate 1,290 people were allegedly killed or injured by the armed paramilitaries in Colombia.

The lawsuit about the legal fees is styled as Chiquita Brands International Inc v. National Union Fire Insurance Co. of Pittsburgh, Pa. Hamilton County Common Pleas Judge Steve Martin is presiding. The Case No. is A 0808934. The court documents show $7.7 million in fees and expenses were billed after Holder, a white collar crime specialist then in private practice, was retained in November 2006. Holder was paid $770 per hour: "Pursuant to the November 14, 2006 engagement letter, Covington offered and Chiquita accepted hourly rates as follows: $800 for senior partners; $770 for Eric Holder; a range of $240 for junior associates to $800 for senior partners; and $175 to $270 for legal assistants."

National Union says those fees were beyond reasonable, and that it should not be hit with tshe cost of bearing all of Chiquita's defense costs:

"The attorneys fees and expenses incurred by Chiquita relative to the defense of the Mass Tort Lawsuits for the limited period of June 2007 to July 31, 2009 are staggering. During this 25-month period, the fees total $7,679,107.68 and expenses total $334,338.73. These numbers are more shocking when considered in the context of the procedural posture of the Mass Tort Lawsuits during the 25-month period: no answers were filed; five substantially similar venue pleadings and nine duplicative Rule 12(b) procedural motions to dismiss were filed, and formal discovery was stayed. A review of the defense invoices, however, sheds light on how the fees and expenses became so substantial in such a short period of time: hourly rates exceeding $830; dublicative briefs filed at an average cost per page of $2,412; and interoffice conferencing charges totaling over $760,000.

"National Union does not have an unlimited defense obligation simply because Chiquita retained Covington & Burling LLP (Covington) to take the lead in representing its interests with respect to all of its legal problems resulting for its illegal conduct in Colombia. Furthermore, the scope of National Union's defense obligation does not expand because Chiquita retained independent counsel. Contrary to Chiquita's unjustified expectation that National Union will simply hand over a blank check to pay for its defense, National Union is only required to pay for a reasonable and necessary defense consistent with its contractual rights and obligations under the policies and applicable law. Specifically, National Union is required to pay hourly rates consistent with the prevailing market rates and to pay for hours expended that were reasonable and necessary to the defense of the underlying Mass Tort Lawsuits."

Holder's official Justice Department bio is available here. Chiquita says it hired Holder's law firm because it was a national law firm with a stellar reputation in complex litigation.

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