Fifth Circuit: Arbitrator’s Attorney’s Fee Award Reinstated
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The Fifth Circuit Court of Appeals reversed a District Court judgment and reinstated an arbitrator’s attorney’s fees award last week. The case is Campbell Harrison & Dagley v. Hill, No. 14-10631 (5th Cir., April 2, 2015).
The underlying claim is an attorney’s fees dispute that arose after Hill terminated two law firms’ litigation services. The contract between the Hill and each law firm provided for a hybrid-fee agreement with an hourly rate plus a contingency. Hill later settled his underlying case for “approximately $188 million,” and Hill refused to pay the two law firms. The law firms sued Hill for their unpaid fees.
After the district court referred the case to arbitration as provided by the contract and after a nine day hearing, the arbitrator rejected Hill’s defenses and awarded the two firms over $3.3 million in hourly fees plus their 15% contingency — an additional $25 million. The firms moved the district court to confirm the award; Hill moved to vacate on evident partiality, unconscionability and public policy grounds. The district court vacated the contingency portion for unconscionability.
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