Wednesday, April 26, 2006

On attorneys' fees in a small interpleader case

In Reliastar Life Ins. Co. v. Lemone, Magistrate Judge Urbanski decimated the attorneys' fee claim of the plaintiff insurance company in a federal interpleader case, where the "boot" was about $28,000 and the fees sought were over $13,000.

We had a federal interpleader case a few years back. In those statutory interpleader cases, the diversity that is required for subject matter jurisdiction is between the claimants to the property, not between the plaintiff and the defendants, and the jurisdictional amount in controversy requirement is much less than $75,000, and frequently, unlike in this case, the plaintiff can file the case, get an injunction that prevents the claimants from suing them while they fight it out among themselves, and then get an award of attorneys' fees out of the money in dispute. I would say you can't beat a deal like that, but evidently there is a reasonable limit when the boot is small on how much you can try to get as fees.

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