A Minnesota U.S. District Court judge has ordered the state’s Department of Commerce (DOC) to pay Safelite Group’s attorney’s fees and costs for a lawsuit brought forth by the company following allegations made by the DOC’s commissioner Michael Rothman.
Rothman alleged the company was steering insureds to use auto glass shops within its network by telling the consumer that he or she “may be” balance billed if they chose a non-network repair shop. Safelite responded by suing the commissioner and the DOC. In January 2017, Judge Susan Nelson ruled in favor of Safelite, stating the company’s scripted reminders were protected by the First Amendment and not “inherently misleading.”
On August 11, Judge Nelson granted in part and denied in part Safelite’s motion for attorney’s fees and costs.
According to the court document, Safelite used out-of-state attorneys whose hourly rates far exceeding those in-state. The company’s attorney’s fees totaled $1,912,551.06 for 2,700 billed-hours. The DOC urged the judge to reduce the associated costs to be comparable to a local firm’s, as well as reduce the total numbers of hours-billed, claiming they were “grossly excessive.”
“Defendant asserts that the attorneys’ efforts and level of staffing were unreasonable in several ways. The DOC asserts that the reimbursement request for approximately 2,700 hours of billed time is ‘grossly excessive,’ particularly as the case did not go to trial and only two contested motions were filed,” the document states.
According to the DOC, its attorney’s spent less than 900 hours in total preparing for it defense.
The judge ruled in favor of the DOC, stating the price disparity between the chosen N.Y.-based firm and a local firm of the same caliber was too great. “ …Between out-of-state counsel and local counsel, the Court has calculated an $820 billing rate disparity for partners and a $475 disparity for same-level associates,” the ruling reads.
The court mandated the DOC to pay Safelite a total of $941,534.67.
“The Commerce Department stands by its insurance company investigation to help protect consumers and small, local businesses from anti-competitive practices, and will continue to do its job even when companies hire out-of-state attorneys with fees in excess of $1,000 per hour,” Rothman’s office said in a statement to Minnesota’s ABC 5. “More often than not, the deck is stacked in favor of private industry while Minnesotans struggle to understand their rights and how to protect themselves from inappropriate industry practices…”