Law Firms

Boies Schiller's block billing cited as obstacle to Nike's fee request in Avenatti extortion case

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AP Michael Avenatti Feb 2022

Lawyer Michael Avenatti speaks to members of the media after leaving federal court Feb. 4 in New York. Photo by John Minchillo/The Associated Press.

Nike can recover about $260,000 out of about $856,000 in legal fees paid to Boies Schiller Flexner for helping New York federal prosecutors bring charges against lawyer Michael Avenatti, a federal judge has ruled.

U.S. District Judge Paul Gardephe of the Southern District of New York said Nike is a victim of Avenatti’s multimillion dollar extortion scheme, and it is entitled to restitution for some legal fees incurred.

Bloomberg Law, Law360 and have coverage of Gardephe’s Feb. 14 opinion.

Avenatti will have to pay Nike’s legal fees for services the government “invited, required, requested or otherwise induced,” Gardephe said.

But Nike can’t collect legal fees for work when there is no evidence that the government sought the help. That means that Avenatti doesn’t have to pay for time that Boies Schiller spent analyzing court filings, attending court hearings and the trial, and engaging in motion practice, Gardephe said.

Boies Schiller is outside counsel for Nike. Avenatti had been in the news for representing adult film actress Stormy Daniels in her bid to invalidate a confidentiality agreement with former President Donald Trump.

Gardephe said his ability to analyze the fee expenses was “significantly handicapped” because Boies Schiller used block billing for its time entries, which prevented him from segregating recoverable expenses from nonrecoverable expenses.

He provided some examples of Boies Schiller’s block billing in the sixth footnote. In one example, Boies Schiller billed an hour of time for reviewing Avenatti’s response to a subpoena letter, conferring with Nike about the letter, and emailing “correspondence with SDNY.” In another, the law firm billed Nike 2.8 hours for time spent analyzing an Avenatti motion, reviewing previous productions and “meeting notes to provide response to SDNY.”

Communicating with the government is a recoverable expense, but analyzing court filings is not, Gardephe said. Boies Schiller “mixes and mingles recoverable expense,” he added.

Gardephe said he would not “attempt to extricate recoverable expenses from nonrecoverable expenses in block-billing entries.” Any block entry that contains a nonrecoverable expense will be disallowed in its entirety, he said.

Avenatti was accused of seeking money from Nike in exchange for keeping quiet about alleged corruption in its amateur youth basketball program. He was convicted of three charges, including attempted extortion, in February 2020.

See also: “Book publisher paraphrases Bullwinkle in response to Michael Avenatti’s defamation assertion” “Michael Avenatti agrees to place law firm in receivership after former partner claims he hid money” “Lawyer who once represented Stormy Daniels wins mistrial on charges he stole from clients” “Trump attorney’s statement that he paid Stormy Daniels $130K raises ethics questions”

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