Federal prosecutors in Massachusetts have claimed that a Beaumont attorney is seeking a "manifestly unreasonable" cut of damages awarded to his clients in a whistleblower case.
Zachary J. Hawthorn has requested a 33 percent contingency fee from ship workers who notified the government of illegal off-shore dumping. Zack Hawthorn practices locally with his father, renowned criminal defense attorney Joseph "Lum" Hawthorn, represented two of 12 workers in the federal case.
If the Boston court approves the fee, Hawthorn would receive almost $300,000 from his two clients. According to court documents and a story published by the Boston Globe on Nov. 10, lawyers for the other 10 clients involved in the case were billed less than $10,000 by their lawyers.
The 12 ship workers each received $437,500 after reporting secret dumping of oil sludge into U.S. coastal waters.
The whistleblowers were poor Filipinos who worked aboard oil tankers owned by Overseas Shipholding Group. As a result of the reports the workers made to the U.S. Coast Guard, OSG was fined $37 million by the U.S. Government. As reported in the Southeast Texas Record on June 25, the $37 million fine included a payment of $10 million to the Eastern District of Texas for environmental protection projects.
Hawthorn submitted a Motion for Approval of Attorney Fees in August, requesting 33 percent of his clients' award. On Sept. 18, federal prosecutors filed a motion asking the judge to deny Hawthorn's request for a one-third cut and a hearing on the matter has been scheduled for Nov. 19.
In a telephone interview from his Beaumont office, Hawthorn said his clients, John Altura and Benedict Barroso, were satisfied with the fee he requested and have written as much to U.S. District Judge Reginald Lindsay, who had ruled that any legal fees over $10,000 had to have the court's approval.
"I successfully represented my clients, and they made a good amount of money and are happy with it," Hawthorn told the Record. "Everybody has agreed to it."
As a general rule, excessive legal fees are prohibited by state and federal law, but there are no firm guidelines for how much a lawyer can claim of a whistle-blowing client's award.
U.S. Attorney Michael J. Sullivan and assistant U.S. Attorney Jonathan Mitchell in Massachusetts submitted a motion urging the court to deny Hawthorn's request and determine if there has been a violation of the Massachusetts Rules of Professional Conduct.
The prosecutors wrote that the fees for which Hawthorn seeks approval are "manifestly unreasonable" because:
- The size of the fees are grossly disproportionate to the amount and importance of the work Hawthorn performed;
- None of the attorneys for the 10 other whistleblowers, including the attorneys for the other two Texas whistleblowers entered into contingency fee agreements
- The fees dwarf the annual incomes of his Filipino clients, who work in the bowels of container ships for months at a stretch and are unfamiliar with our legal system; and
- Hawthorn's status as a court-appointed attorney make him eligible for payment through the Criminal Justice Act.
They claim that the work Hawthorn did was indistinguishable from that of the other whistleblower attorneys and was not significant enough to justify the fees sought.
"Hawthorn filed one substantive pleading, which was nine pages in length and included two case citations, and spoke for less than two minutes at the sentencing hearing," the Government's Response to Motion for Approval of Attorney's Fees states. "In each instance, he addressed merely the narrow factual point that because Barroso and Altura contributed to the overall settlement in the case, this court had discretion to issue them an award. These facts do not appear to justify the fees sought at all."
One of the Boston lawyers representing another ship worker told the Boston Globe that he charged his client less than $10,000 and called Hawthorn's fee "excessive" and said the cases "didn't require a lot of brilliant lawyering."
Sullivan and Mitchell also claim that Hawthorn has not actually attempted to recover his fees under the Criminal Justice Act and does not know if CJA funds are available to cover his hourly fees.
But in a response to the government's motion he submitted to the court on Oct. 30, Hawthorn wrote that there were two major facts that clearly entitled him to the requested contingency fee.
First, the Magistrate Judge in the Eastern District of Texas, where his clients' case originated, found both clients to be indigent, making a contingency fee contract "the only way Barroso and Altura could have received paid-for legal representation."
"Second, throughout the time of their representation, the clients agreed to the fee," Hawthorn wrote. "Neither undersigned nor the Government can find any authority for a court to disaffirm a contingent fee contract when both parties to the contract still agree to its terms."
Hawthorn said representing his clients in the Massachusetts court cost him a great deal of money from his own pocket, including the expense of travelling to Boston and finding local counsel in Massachusetts.
He also takes issue with the prosecutors' assumption that he did little work on the case, and said the government has never even looked into the amount of work he performed.
He wrote that he dedicated almost three weeks of his practice just to prepare for hearing preparation and a substantial amount of time in correspondence, e-mails and telephone calls.