Alexandra Marchuk v. Faruqi & Faruqi: What Did She Win In Attorneys' Fees?

A six-figure sum, but nothing close to her $1.4 million request.

When Alexandra Marchuk’s epic sexual-harassment lawsuit against Faruqi & Faruqi and F&F partner Juan Monteverde ended with a defense verdict on most counts and a total damages award of $140,000, many observers (myself included) chalked it up as basically a defense win. Marchuk made serious allegations against the defendants and sought millions of dollars in compensatory and punitive damages, so winding up with just $140,000 at the end of the day must have been a disappointment from Marchuk’s point of view.

But some pro-Marchuk observers said it was too early for the defense to declare victory, noting the possibility of a huge award of attorneys’ fees. And sure enough, Marchuk’s lawyers did move for such an award, seeking almost $1.4 million in fees and costs.

Did they get what they sought? Here’s a report from Law360 (sub. req.), which has covered the case with impressive thoroughness:

A New York federal judge on Monday awarded former Faruqi & Faruqi LLP associate Alexandra Marchuk slightly less than $223,000 in legal fees and costs stemming from a mixed verdict in a sexual harassment case against the securities boutique, denying her request for $1.4 million as “patently unreasonable.”

What did Judge Alvin Hellerstein (S.D.N.Y.) consider in reaching the $223,000 figure? He trimmed some of the hours of plaintiffs’ counsel as excessive, and he also took into account the $425,000 offer of judgment that Marchuk rejected prior to trial:

On Monday, Judge Hellerstein criticized Marchuk’s lawyers at Rottenberg Lipman Rich PC for billing an “unreasonably high” number of hours. The judge noted that Marchuk had rejected a $425,000 settlement offer shortly before the trial began.

“Counsel who aggressively prosecutes a case through trial, leaving favorable settlement offers on the table in pursuit of a huge verdict, faces the risk that much of his work will have been wasted should the verdict come in much lower than he expected,” Judge Hellerstein wrote. “The court should not shield him from that risk by compensating him for every hour regardless of its marginal benefit to the client.”

Scott Bursor, counsel to the defendants, expressed satisfaction with the ruling when we contacted him:

Sponsored

The Court ruled that Marchuk’s lawyers would not be paid a single dollar for their work on the trial, because they rejected a pretrial settlement offer that was three times higher than the jury’s verdict. The Court’s reasoning was that the lawyers should not be paid for a trial that produced no benefit to their client.

On the whole, the Court cut Marchuk’s legal fees by more than 85% because she lost on almost every issue.

The Faruqis themselves issued this statement to ATL:

While we would have preferred that Marchuk and her counsel, Rottenberg Lipman, not be awarded a penny for this salacious and poorly advised claim against our firm and us, we accept the Honorable Judge Hellerstein’s ruling slashing by 85% the fee claim. We appreciate that the Court recognized that we, not Marchuk, prevailed on most accounts. Most importantly, we are grateful that the Court recognized that “we did not do anything wrong.” The Court rightly labeled Marchuk’s complaint as an “unprofessional document that reflects an intent to extend the litigation from the courts to the press.”

We are very thankful that this ends a two-year ordeal that we faced as a firm and personally. Marchuk and her lawyers Rottenberg Lipman fueled a media circus in the hopes of receiving a muli-million dollar settlement or verdict. They deservedly received neither! Judge Hellerstein and the respected members of the jury saw this frivolous and vexatious lawsuit in its true form.

Marchuk, contrary to her self-serving statements, was motivated by greed and vengeance. Rottenberg Lipman counsel did not change their client’s perspective. Rottenberg Lipman’s fee application on behalf the Marchuk case was a last-ditch effort to capture victory from the mouth of defeat.

Harry Lipman, counsel to Marchuk, shared his dissatisfaction:

The Court’s ruling was disappointing and, we believe, clearly erroneous in many respects, but not as disappointing or erroneous as some of the evidentiary rulings during trial, to say nothing of the dismissal of Ms. Marchuk’s substantial defamation and retaliation claims. The jury was permitted to hear only part of the evidence, which, for example, did not include testimony by other female associates at Faruqi who informed the firm in writing that Monteverdi sexually harassed them. Nor was justice served by the Court’s decision to dismiss Ms. Marchuk’s claims arising from defendants’ vindictive $15 million counterclaims, which were based on the mere suspicion that Ms. Marchuk emailed her complaint anonymously to Monteverde’s wife and the Faruqi firm’s clients and opposing counsel, whereas, in fact, discovery proved that a) Defendants never even asked any of their clients or opposing counsel whether they received the complaint from the anonymous Gmail account, and b) someone within the Faruqi firm itself created the anonymous Gmail account!

Even so, Ms. Marchuk was victorious, and today’s fee decision should not be perceived to detract from her win. She was exceedingly brave to bring her case to trial, and she continues to deserve our respect and admiration.

Sponsored

Given his criticism of Judge Hellerstein’s rulings as “clearly erroneous,” I asked Lipman if Marchuk planned to appeal. He declined to comment on that subject. He also declined to comment on how he and his client would split the $223,000, citing the privileged and confidential nature of the information.

Even if Marchuk gets every cent of the fees and costs, that comes to just $360,000 or so when combined with the $140,000 damages award (assuming nothing for her attorneys, which seems… unlikely). It’s a tidy sum, but certainly not enough for her to quit her day job in Omaha. And retiring to Hawaii is definitely out of the question.

(Flip to the next page to read the full order and opinion from Judge Hellerstein.)

Faruqi Accuser Pockets Fraction of $1.4 Million Fee Request [Law360 (sub. req.)]

Earlier: Alexandra Marchuk v. Faruqi & Faruqi: A Juror Speaks
Prior ATL coverage of Marchuk v. Faruqi & Faruqi