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.

Ohio Lawsuit Filed Over Chiquita Ties To Terror: Labor Union Says Shareholders Damaged

CINCINNATI (TDB) -- The 1.9-million member Service Employees International Union contends Chiquita Brands International Inc.'s board engaged in rogue activities when the Ohio-based multinational funded a right wing terrorist group in Colombia. Democratic Hamilton County Commissioner Todd Portune's private law firm represents the union, and Portune is signed on as a litigator in the case.

According to the union's civil lawsuit, Chiquita's top officials "instituted a corporate culture that encouraged unlawful and irresponsible activity." It names 11 current and former directors or executives as defendants, describes them as negligent in the management and administration of the affairs of the company, and seeks unspecified damages for breach of fiduciary duties.

Chiquita is based in Cincinnati. In March, the company agreed to a pay a $25 million fine after pleading guilty to federal charges that it made $1.7 million in payments to a violent paramilitary organization. The company said the money was to protect its employees and operations from extremists. The Justice Department brought the charges nine months ago, and said the payments took place from 1997 until early 2004.

SEIU said it owns shares in publicly traded Chiquita. It said the defendants had a duty to ensure that the company did not break any laws. The case is A 0711383 in Hamilton County's Court of Common Pleas.

Chiquita produces, distributes and market bananas and other produce in Europe and North America. It has about $4 billion in annual sales in some 70 countries. According to the lawsuit:

"The individual defendants, in light of their positions of control and authority as directors and/or officers of the Company, were able to and did, directly and indirectly exercise control over the criminal acts described herein. That conduct involves knowing, willful and repeated violations and obligations as officers and directors of Chiquita. Furthermore, Chiquita's Board effectively ratified the illegal conduct of Chiquita's officers, employees and . . . by failing to take any legal actions on behalf of the company against them . ."

Those named include:

Roderick Hills, who served on the board from 2002 until May 2007. He chaired the company's audit committee.

Fernando Aguirre, president and CEO since 2004.

Morten Arntzen, a director since 2002.

Steven P. Stanbrook, a director and audit committee member.

Robert W. Fisher, a director since 2002 and a one-time action COO.

Durk Jager, a board member since December 2002.

Jaime Serra, a director since 2003.

Clare Hasler, a board member since October 2005.

Jeffrey D. Benjamin, a director from March 2002 until his resignation in February 2007.

Cyrus F. Friedheim Jr., former CEO and chairman.

Robert Olson, who served as the company's general counsel.

Ohio Papers Snooze While Nat'l Press Peels Back Chiquita Story: Homeland Chief Chertoff's Name Pops Out

CINCINNATI (TDB) -- Both the Washington Post and the Wall Street Journal have page 1 stories today about the Cincinnati-based banana company's legal difficulties. The Wall Street Journal's is available by subscription only. Michael Chertoff's name is mentioned in both stories as a Justice Department official who first met with Chiquita emissaries when the company self-reported payoffs to Colombian terrorists.

However, the Ohio press corps has not dug into this story, and has been on the sidelines throughout. They seem content to be lap dogs rather than watchdogs, particularly the Cincinnati Enquirer, which has virtually ignored the scandal about its hometown multi-national and its intrigues with the Justice Department under President George Bush. The Gannett-owned newspaper's name, Enquirer, means to inquire. But it seems intent on doing just the opposite.