This article discusses two recent interesting decisions concerning each court’s reasoning in addressing legal fees. The first is the U.S. Court of Appeals for the Second Circuit decision in Wyly v. Weiss,1 a case of first impression. The court held that once the court finds class action plaintiffs’ counsel’s legal fees are reasonable and fair, any future actions, including one for attorney malpractice, will be barred. The second case, Toussie v. County of Suffolk,2 held that although a plaintiff in a civil rights action prevails on some cause of action, the court, in its discretion may refuse to award any legal fees if it finds the fees are grossly and willfully inflated.
‘Wyly v. Weiss’
In Wyly v. Weiss, the Second Circuit confronted an issue of “first impression,” which was whether class plaintiffs may challenge the actions of their class counsel in a subsequent action after the court has determined the settlement and legal fees are “fair and reasonable.” It unanimously held plaintiffs are not entitled to prosecute their malpractice action under the relitigation exception to the Anti-Injunction Act. The District Court held a Fairness Hearing in which it determined the settlement and the award of attorney fees in the consolidated class action suit were reasonable and fair. The “reasonableness” finding bars any future action by class members against their counsel.
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