Attorney’s $2,465 hourly rate sparks objection in J&J talc bankruptcy case

Attorney Neal Katyal is seen outside the U.S. Supreme Court building after arguing a case in court in Washington, U.S., November 4, 2014. REUTERS/Gary Cameron

May 24 – US opposes Johnson & Johnson subsidiary’s offer to add Hogan Lovells partner Neal Katyal to its legal team in high-stakes bankruptcy case, citing his hourly rate of $2,465 – a possible new record in the legal sector.

Johnson & Johnson is using the procedure to try to resolve claims that its baby powder and other talc-based products have caused cancer. The company, which maintains the products are safe, in October filed thousands of talc lawsuits against a new subsidiary, LTL Management LLC, and filed for bankruptcy.

US trustee in Chapter 11 case on Friday asked a New Jersey federal bankruptcy judge to stop LTL from retaining Katyal, calling his hourly rate “significantly higher” than the partners at the other seven law firms already involved in the case.

LTL asked the judge for approval to add Katyal to his legal team earlier this month, citing his and Hogan Lovells’ expertise in federal appeals. Several talc plaintiffs have appealed the February ruling that allowed LTL’s bankruptcy to proceed.

Partner billing rates at large law firms are considered competitive business information and are generally not public. But they are disclosed in some court records, particularly in bankruptcy cases where a debtor’s legal fees must be approved by a judge.

Katyal’s hourly rate is said to rank among the highest figures publicly available in the legal industry. Former U.S. Attorney General Eric Holder Jr, a partner at Washington, D.C.-based Covington & Burling, billed $2,295 an hour last year under a contract the company signed with a university in the United States. Oregon to conduct a workplace culture survey.

Lynn LoPucki, a professor at the University of California, Los Angeles School of Law who follows bankruptcy cases, said Monday that Katyal’s rate of nearly $2,500 was the highest he had ever seen.

Katyal, a former acting U.S. solicitor general who has argued dozens of cases before the U.S. Supreme Court, declined to comment on the objection on Monday. Hogan Lovells did not immediately respond to requests for comment. The administrator, Andrew Vara, declined to comment through a Justice Department spokeswoman, and representatives for Johnson & Johnson did not respond to requests for comment.

According to the trustee’s objection, the hourly rate among Jones Day’s LTL attorneys topped out at $1,350. Skadden, Arps, Slate, Meagher & Flom charged up to $1,195; The highest rate from Weil, Gotshal & Manges was $1,579; and Orrick Herrington & Sutcliffe was $1750. Lawyers for King & Spalding and Shook, Hardy & Bacon are also representing LTL.

The administrator had previously sought to disqualify Jones Day and Skadden from LTL’s legal team because they represented Johnson & Johnson in other matters, but that effort was unsuccessful.

The highest billing rates approved in bankruptcy cases have hit the $2,000 mark in the past year. Kirkland & Ellis partners hourly billing rate reached $1,895 in three separate bankruptcies in 2021, while Simpson partners Thacher & Bartlett billed up to $1,850 per hour in the bankruptcy of the Chilean bank holding company Corp Group Banking SA last year.

The case is LTL Management LLC, US Bankruptcy Court for the District of New Jersey, No. 21-30589.

For LTL: Greg Gordon of Jones Day

For Committee I of Talc Claimants: David Molton of Brown Rudnick; Melanie Cyganowski from Otterbourg; Genova Burns’ Daniel Stolz; Brian Glasser of Bailey & Glasser; Lenard Parkins by Parkins Lee & Rubio; and Jonathan Massey of Massey & Gail

For the Talc Applicants Committee II: Cullen Drescher Speckhart of Cooley

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