A proposed Nevada ballot initiative to cap contingency fees in all civil lawsuits at 20 percent of what is recovered would still mean millions for the state’s plaintiff’s lawyers, if fewer of them.
That’s according to an analysis of the terms of recent actual and proposed lawsuit settlements.
Nevada plaintiff’s lawyers are protesting the proposed ballot initiative, trying to get state courts to bar it from going to voters. They have filed suit seeking to prevent backers of lawyer fee caps from collecting signatures to put it on a future statewide ballot.
Plaintiffs lawyers working on contingency traditionally charge their clients between 25 and 40 percent of any total settlement. They claim a 20 percent cap would be too low a payday, that they could no longer afford to represent certain categories of clients, like those alleging sexual assault.
In class action lawsuits, plaintiff’s lawyers typically calculate their fees whether individual plaintiffs claim their settlements or not.
For instance, a July class action lawsuit settlement with the owners of Cash App over a company data breach will pay Cash App users “up to $2,500”-- if they can prove the breach cost them money.
Cash App users can also receive $25 per hour for up to three hours — a total of $75 — if they can prove the data breach cost them “lost time.”
Law firms bringing the Cash App suit — Kantrowitz, Goldhamer & Graifman of New Jersey, Migliaccio & Rathod of Washington, D.C., Gustafson Gluek of Minneapolis, the Scott Hirsch Law Group of Florida and Federman & Sherwood of Oklahoma City — will receive $5 million, regardless of how many users collect from the company.
Had the Cash App class action been brought in Nevada, under the proposed contingency fee cap, the lawyers would receive $4 million.
How would the proposed cap have impacted other recent lawsuit settlements?
USAA Class Action
USAA, a financial services provider for current and former U.S. military agreed, last week to settle a class action over banking fees. Approximately 210,000 USAA customers will receive checks for $22 each. The five named plaintiffs in the case will receive $20,000 each.
Two law firms bringing the suit– Zaytoun, Ballew & Taylor in North Carolina and with Smith & Lowney in Washington– will receive $17.7 million.
Had the USAA class action been brought in Nevada, under the state’s proposed contingency fee cap, they would only receive $12.84 million.
Court Fees Settlement
Two law firms filed a class action against U.S. courts over fees charged for its “PACER” court filing system will split $24 million in fees.
Class members will be guaranteed $350 each. Washington, D.C.-based law firm Gupta Wessler and Charleston, SC-based Motley Rice will split the $24 million.
Had the PACER class action been brought in Nevada, under the state’s proposed contingency fee cap, they would have received the same amount: $24 million.
Deepak Gupta, founder of Gupta Wessler, is a public opponent of the Nevada contingency fee cap who filed the lawsuit to block it.
Nevada Sexual Harassment
In August 2023, the State of Nevada taxpayers agreed to pay $475,000 to a gay man — Rino Tenorio of Sunrise Manor Town— who claimed he was harassed in his state job as an auditor of marijuana shops. Tenorio said his supervisor allowed “uninvited discussions of gay sex, gay jokes, obscene gay gestures and gay sexual sounds.”
Tenorio’s lawyer, Douglas Cohen of Las Vegas-based Wolf, Rifkin, Shapiro, Schulman & Rabkin, said his fee would be $185,000 (39 percent) of the settlement, and that Tenorio would receive $290,000 (61 percent).
Had the new proposed Nevada contingency fee cap been in place, Rabkin would have received $95,000 and Tenorio, $380,000.
Internet Service Class Action
In 2023, New York-based internet service provider Altice USA settled a class action in New Jersey state court over “confusing charges” on billing statements.
The company’s 7.7 million customers, if they file “valid claims,” will receive between 10 and $27.50 each.
Law firms DeNittis Osefchen Prince, P.C. of Marlton, New Jersey and Hattis & Lukacs, of Bellevue, Washington were paid $4,999,500 in legal fees.
Had the Altice class action been brought in Nevada, under the state’s proposed contingency fee cap, lawyers would have received $3,030,000.
Firefighter “Hostile Work Environment:”
Omaha, Neb. fireman Amanda Benson sued the city claiming she experienced hostility from fellow employees while on the job.
The city settled her case in January, agreeing to pay her $650,000.
Benson’s lawyer, Heidi Guttau of Omaha, is demanding the city pay her $1.85 million in legal fees, or 2.8 times the settlement amount.
City of Omaha attorneys are challenging the demand, claiming Guttau charges an “exorbitantly high” billing rate of $600 per hour. They offered to pay her $325,000, instead
Had Guttau brought this lawsuit in Nevada, under the state’s proposed contingency fee cap, she would have been due $130,000.
The proposed Nevada ballot initiative would revise Title 1, Chapter 7 of the of the Nevada Revised Statutes to add a section stating: “For causes of action arising after January 1, 2027, an attorney shall not contract for or collect a fee contingent on the amount of recovery for representing a person seeking damages in a civil case in excess of twenty percent of the amount of recovery,” according to the initiative.
The 20% cap would apply to “all forms of recovery, including, without limitation, settlement, arbitration and judgment.”