Oregon billed $10.8M in attorney fees to settle foster care class action

PORTLAND, Ore. (CN) — After settling a class action seeking the reformation of Oregon’s foster care system, the state is on the hook for a whopping $10.8 million in attorney fees and over $500,000 more for costs.

Opening with a quote from Nelson Mandela, U.S. District Court Judge Ann Aiken approved millions of dollars in attorney fees and litigation costs to the counsel representing Oregon foster care children in a scathing order admonishing the state defendants.

“’There can be no keener revelation of a society’s soul than the way in which it treats its children.’ Nelson Mandela,” Aiken wrote in the 38-page order awarding the fees. “Measured by that metric, plaintiffs’ case has been a resounding success.”

In 2019, 10 former foster care children represented by counsel from local nonprofit Disability Rights Oregon, national advocacy group A Better Childhood and two local firms accused the Oregon Department of Human Services and several state leaders of endangering the children in its care. It came on the heels of a 2018 audit by the secretary of state documenting the problems within the system.

“Over the next five years of frequently bitter litigation and contentious negotiation, they continued to pursue that goal, culminating in the settlement agreement,” Aiken wrote.

Both parties proposed the settlement the night before the case was set to go to trial in May and Aiken formally approved the settlement in September. The kids weren’t seeking money, but change to the system that harmed them.

Under the terms of the settlement agreement, the Department of Human Services promises to bring major reforms to the system with a neutral third party overseeing and monitoring it.

Some of those changes include promises to deliver medical, dental and mental health treatments to foster youth faster; to increase the quality and availability of foster homes and related services; to keep kids and teens safe after they enter foster care; and to make sure youth have what they need to stay safe and healthy when they return to their families.

“While plaintiffs did not win every skirmish on the way to ultimate victory, their submissions reflect justifiable pride in what they have achieved in this case,” Aiken wrote.

Aiken noted that the state defendants challenged almost every aspect of the plaintiffs’ fee request and proposed the fees be reduced by 50% and the costs be reduced by 60%.

“These proposals, and many of defendants objections, ring hollow when plaintiffs’ submissions are compared to defendants’ own fees and costs in this case,” Aiken wrote.

Specifically, Aiken took aim at the state defendants’ retention of the Portland-based law firm Markowitz Herbold, which she said employed over 33 attorneys to work on the case over the five years and billed over $18 million in fees accounting for 52,588 billable hours of work. Those fees, plus $23.3 million in costs come to around double what the plaintiffs sought.

In addition, the Oregon Department of Justice spent another $325,500 in attorney fees for the case in excess of what was billed to the private firm.

“The court is not here to pass judgment on the propriety of defendants’ fees — that is between defendants’ counsel and the State of Oregon. However, the court notes that fees for all parties were driven up by certain litigation decisions made by defendants in this case, notably concerning discovery,” Aiken wrote.

Plus, the case was repeatedly referred for settlement as early as 2019, Aiken wrote.

“One is left to wonder how much more progress might have been made in repairing the deficiencies identified by the Secretary of State’s audit had the tens of millions of dollars expended in this litigation been devoted instead to that goal,” Aiken wrote.

In total, the state defendants have been ordered to pay $10,920,301 in attorney fees to the four firms representing the plaintiffs. A Better Childhood is to receive $7.5 million, Disability Rights Oregon $1.2 million, Davis Wright Tremaine $1.3 million and Rizzo Bosworth Eraut $1.2 million.

Total costs awarded to the plaintiffs run to $509,580.07, also divided between the firms.

Aiken swiftly rejected the state defendants’ objections to the rates claimed by the plaintiffs’ counsel. For instance, the defendants objected to entries in which plaintiffs’ attorneys billed over eight hours in a single day, saying the hours were unreasonable and unrealistic.

“The court is unimpressed with this objection, as long hours are a frequently observed and much-lamented aspect of legal practice, particularly in the arena of litigation,” Aiken wrote. “The court finds these entries regrettably realistic and will not impose a reduction based on entries exceeding eight hours in a single day.”

Aiken did, however, reduce the fees related to Rizzo Bosworth Eraut paralegals reviewing local media coverage of the Department of Human Services.

As for costs, which related to travel and expert witness fees, Aiken did not make any deductions.

The state defendants argued that it shouldn’t have to pay A Better Childhood for billed “luxury” hotels and “black car service.” Aiken noted that the hotels used by the counsel were in line with average rates in Portland and the car service was only used at times when regular taxi service was not available.

“This was a difficult and complicated case that should have settled far earlier — and far less expensively — than it did,” said Marcia Robinson Lowry, executive director of Disability Rights Oregon. “It is obvious why.” 

Lowry said the children in the Oregon foster care system should not have had to wait so long for the resolution.

“Oregon taxpayers should ask why,” Lowry said.

Emily Cooper, Disability Rights Oregon legal director, said the decision to award nearly all attorney fees and costs is a reflection of the substantial work it took to fight for the children and young adults in the state foster care system for five years.

“While the settlement itself marked a crucial step toward reforming the system, today’s ruling reinforces that protecting the rights of youth in foster care is not just morally imperative but worthy of the full force of our legal system,” Cooper said.

Attorneys for the state defendants did not immediately respond to requests for comment.