During the trial, which lasted from March 25 to April 17, attorneys for PVR Marcellus blamed Utility Line Services for delays and accused it of "improper billing practices," according to a Regency Energy Partners' financial filing.
PVR Marcellus also claimed the contractor was responsible for obtaining certain permits, but Utility Line Services said PVR Marcellus was responsible for obtaining the permits and for the delays.
Construction attorneys don't argue many cases in front of juries because contracts require most disputes to go before arbitration panels or mediators.
The interest that accumulates on substantial damage awards provides another incentive to settle cases early. Expert witness testimony and attorneys' fees also add to the size of damage awards.
According to Foltz, Pennsylvania's payment statute provides for shifting of fees and costs in a payment dispute under private construction contracts. "Some award fees routinely go to the 'prevailing party'; others require that fees are shifted only when a party acted in bad faith," Foltz said in an email before the settlement. Unless there is a fee-shifting statute, U.S. courts generally rule that parties to a dispute are responsible for their own litigation expenses, win or lose, he added.
In a memo to the court, Pepper Hamilton and another law firm in the case explained how they calculated attorneys' fees and other expenses due Utility Line Services. Only the unpaid balance owed the contractor was subject to a 2% per month interest under Pennsylvania law. Nine out of ten dollars spent on attorneys' fees, costs and expenses such as expert witnesses— a total of $4.3 million—were connected to recovery of money owed to Utility Line Services, the memo stated. Another $479,000 in attorneys' fees was connected to recovering the damage award.
The complexity of the case required review and coding of documents from numerous companies. Contract attorneys, billing at $53 an hour, and project attorneys at $75 an hour, compiled 172,000 documents into a database. Top attorneys at Pepper Hamilton billed at $612 and $526 an hour initially, with modest rate increases starting in January 2013. Pepper Hamilton billed for a less senior attorney at $315 an hour.
"There is no hard and fast standard for what is a reasonable expense," said Foltz in his email. "Especially in light of the results of the case, we firmly believe that our fees were reasonable and our client was provided with outstanding value."
