Federal Judge Weinstein Chops 2 Million off Legal Fees

Judge Cuts NY Name Partner's Fees by More Than $2 Million in Award to Ferry Victim
The New York Law Journal by Mark Fass - September 18, 2008

Eastern District Judge Jack B. Weinstein yesterday awarded $18.3 million to James McMillan, the Fulton Fish Market worker who was left paralyzed below the shoulders after the 2003 Staten Island Ferry disaster. The award represents a $4.6 million reduction from the $22.9 million recommended by an advisory jury eight days ago. The judge also cut the fees Mr. McMillan must pay his attorneys to 20 percent of the award from one-third, a reduction to $3.6 million from about $6 million. At a hearing yesterday, neither side contested the judge's decision in McMillan v. City of New York, 03-cv-6049, regarding Mr. McMillan's award - indeed, the parties had already tentatively agreed to settle the case for just $32 less than Judge Weinstein's total. Mr. McMillan's attorney, Evan Torgan, and Ben Rabinowitz, who represented Mr. Torgan on the fee issue, did however engage in an extended, philosophical debate with the court over the efficacy of reducing a contracted-for contingency fee. Without such fees, Mr. Rabinowitz argued, plaintiffs "from lower socio-economic strata would never have the opportunity to be represented by someone like Mr. Torgan." While attorneys in the many Staten Island Ferry cases that have settled received their agreed-upon fees, Mr. Torgan is being "punished" for not settling years ago when New York City offered $10 million, Mr. Rabinowitz added. That deal, he noted, would have netted Mr. Torgan a comparable fee for vastly less work, while reducing Mr. McMillan's award by nearly $8 million.

In a debate that vacillated between light hearted and heated, Judge Weinstein vehemently disputed Mr. Rabinowitz's characterization of his decision to cut the fee. "I find the word 'punished,' if not objectionable, then inapt, when we're dealing with a fee of $3.5 million," the judge responded. Rather, Judge Weinstein stated that the case's "special circumstances," such as Mr. McMillan's health and the case's strong likelihood of a substantial award, merited the 40 percent reduction. Mr. McMillan was in a hospital, recently paralyzed and in "extreme pain" and of "limited capacity" when he signed the retainer. "[He] wasn't in the position to negotiate," Judge Weinstein said. "The original agreement was not an arm's length agreement." The judge also emphasized the lack of risk taken on by Mr. Torgan and his firm, Torgan & Cooper. There was "never an issue of liability, never an issue of negligence," Judge Weinstein said. Once the city's Jones Act claim was rejected, there was also no limit on liability.

In one of the hearing's lighter moments, Judge Weinstein playfully discounted Mr. Rabinowitz's suggestion that his decision could have a "chilling effect" on the remaining ferry-related cases pending before Judge Edward R. Korman, "Judge Korman has a more romantic view of life than I do," Judge Weinstein said, suggesting that such a perspective should augur well for the plaintiffs' attorneys. "I'm from the streets of New York, the docks of New York." Numerous plaintiffs' attorneys, both those with ferry cases pending and those without, expressed dismay with the ruling. Matthew Gaier of Kramer, Dillof, Livingston & Moore, a medical malpractice specialist who is not involved in the present case, said he had never seen such a decision in New York state court or in a case involving a competent adult. "It's hard to guess what lawyers are going to do, but it will certainly be talked about," said Mr. Gaier, a Law Journal columnist. "The judge has injected himself into the attorney-client relationship." Lawyers for the city declined to discuss the fees issue. Judge Weinstein stayed the judgment for 20 days to allow the parties to seek relief from the U.S. Court of Appeals for the Second Circuit.