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Current Developments in the Commercial Divisions of the
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Posted: November 4, 2017

New York Attorney Rates Found Reasonable in Nevada Litigation

On October 18, 2017, Justice Kornreich of the New York County Commercial Division issued a decision in Nexbank, SSB v. Soffer, 2017 NY Slip Op. 32251(U), holding, in deciding a claim for attorneys’ fees, that it was reasonable to engage New York lawyers to litigate an action in Nevada, explaining:

Finally, defendant seeks summary judgment on whether New York or Nevada hourly billable rates should be used to calculate plaintiffs reasonable attorneys’ fees in the Nevada Action. Defendants rely on the well-settled rule in federal court that a reasonable hourly rate is in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation. They also cite Appellate Division cases that appear to have adopted this rule.

There are, however; exceptions to this rule, such as where the special expertise of nonlocal counsel was essential to the case, it was clearly shown that local counsel was unwilling to take the case, or other special circumstances existed. To avail itself of these exceptions, a litigant must persuasively establish that a reasonable client would have selected out-of-district counsel because doing so would likely (not just possibly) produce a substantially better net result.

Leaving aside the fact that this action is not in federal court, and, thus, the Second Circuit’s standard does not strictly apply, the court finds that plaintiff has articulated a highly plausible reason why hiring New York white-shoe lawyers was necessary. The litigation was complex, it involved hundreds of millions of dollars, and defendants chose to be represented by one of the premiere real estate litigators in New York. Simply put, if your adversary hires Stephen Meister, and millions of dollars are at stake, you would be crazy not to hire equally competent New York counsel (if you have the means). It is unfair to insist that plaintiff, unlike defendant, should have hired less sophisticated counsel in the Nevada case simply because the case was in Nevada. This is not a situation where defendants should not be required to pay for a limousine when a sedan could have done the job. That said, the question of whether the quantum of work performed or whether unreasonable duplication occurred (e.g., multiple lawyers attending depositions) is best left, as usual, to be decided with the benefit of a complete factual record. The usual factors shall be considered as part of a holistic reasonableness analysis.

(Internal quotations and citations omitted).

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