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From Securities Regulation Daily, May 29, 2014

Suit brings “modest recovery” for whistleblower, $500,000 in fees for lawyers

By Anne Sherry, J.D.

A whistleblower who had settled her retaliation lawsuit against Riverview Community Bank for $110,000 was awarded nearly five times that amount in attorney’s fees and costs. While the court would not allow a 23-percent upward “locality adjustment,” it otherwise awarded virtually all of the fees and costs actually incurred by Tracey McEuen, who was awarded prejudgment attorney’s fees of $411,000, postjudgment fees of $19,000, and costs of 79,000 (McEuen v. Riverview Bancorp, Inc., May 27, 2014, Bryan, R.).

Settlement. McEuen sued Riverview under Sarbanes-Oxley Section 806 and for wrongful discharge under Washington common law. She sought compensatory damages of $400,000 for lost income, $1 million in non-economic damages, and attorney’s fees and costs. On the eve of trial, she accepted the defendants’ offer of judgment in the amount of $110,000 plus fees and costs available pursuant to SOX. The applicable fee-shifting provisions under both SOX and the Revised Code of Washington are mandatory, granting the court discretion only over the amount of fees to award.

Fee request. McEuen requested an award of $515,000 in attorney’s fees and $75,000 in costs, including expert witness fees. Riverview objected, and McEuen requested an additional $23,000 to cover fees incurred in responding to the objections.

Riverview did not challenge McEuen’s attorney’s hourly rates. However, McEuen had sought a 23-percent upward adjustment to bring her Portland firm’s rates in line with the prevailing market rate for the Seattle/Tacoma area. Riverview objected to the adjustment, noting that the rates charged by McEuen’s counsel were comparable to those charged by Riverview’s own counsel. The court, having recently approved a comparable hourly rate in an employment discrimination case, found that the standard market rates reflected prevailing rates in the Western District of Washington and denied the request for an upward adjustment. It also found that the paralegal rates sought and the hours expended were reasonable.

No Kerr adjustment. Finally, the court considered the twelve factors set forth by the Ninth Circuit in Kerr v. Screen Extras Guild, Inc. that may warrant an enhancement or a reduction in the fee award. Many of these factors, such as time, labor, and skill required and the difficulty of the case, were already accounted for in the fees charged and the hours expended. The parties did not submit evidence regarding certain of the other factors. As for the amount involved in the case, the court acknowledged that the settlement “reveals a modest recovery,” but noted that the litigation was contested, numerous motions were brought all the way to the eve of trial, and a substantial amount was at risk in the litigation. Accordingly, no adjustment was warranted.

Costs. The court did find merit in several of Riverview’s objections to the requested costs and reduced the award by approximately $700 for insufficiently documented costs and fees.

The case is No. C12-5997 RJB.

Attorneys: Anne Foster (Dunn Carney Allen Higgins & Tongue) for Tracey McEuen. Jennifer S. Pirozzi (Littler Mendelson) for Riverview Bancorp, Inc.

Companies: Riverview Bancorp, Inc.; Riverview Community Bank

MainStory: TopStory SarbanesOxleyAct WashingtonNews

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