Court losses have class action lawyer paying his targets

ATLANTA – A six-figure penalty will stand against a class action lawyer known for angering judges with novel theories of consumer deception at the grocery store, as a federal appeals court has refused to reduce it.

The U.S. Court of Appeals for the 11th Circuit on Aug. 27 upheld a $144,047 penalty imposed on New York attorney Spencer Sheehan by a Florida federal judge last year. Sheehan had sued Big Lots in New York over serving sizes in coffee and lost. He then signed a complaint making the same allegations in Florida.

The judge there found the case was frivolous, considering the previous loss, and ordered Sheehan to pay Big Lots’ attorneys fees. He fought in the 11th Circuit to reduce the amount, arguing both the hours billed and the hourly rates of attorneys were excessive, but failed.

“We agree with the district court that 182.4 hours was a reasonable amount of time ‘given the novelty and difficulty presented by aggressively defending Sheehan’s frivolous lawsuit,’” the court wrote.

Sheehan has been described by a federal judge as a “wrecking ball” and is still fighting a similar issue in Florida state court brought against him by Ashley Furniture, which argues it spent thousands on lawyers fighting a case Sheehan knew had no merit.

Earlier this year, an Illinois judge ordered Sheehan to pay $155,000 for the attorneys fees of Arizona Beverages in a case alleging Arnold Palmer drinks marketed as “lite” weren’t as healthy as a consumer would think. Problems arose when the plaintiff Sheehan picked testified about whether he ever read the label at issue. That order has been appealed.

Sheehan first gained notoriety as the "vanilla vigilante," filing a host of lawsuits that claimed vanilla flavoring in products did not contain traditional vanilla. He advertises on Facebook to find new plaintiffs, like a woman who used Ricola cough drops for more than 20 years before deciding to sue.

Sheehan has sued because the strawberry flavoring in Pop-Tarts comes from pears and apples and is dyed red. He complained that Bagel Bites have cheese that is a blend made with skim milk and feature tomato sauce that contains ingredients consumers wouldn't expect (the judge hearing that case called his claims "unreasonable and unactionable").

He’s lost a lawsuit that said the fudge in fudge-covered Oreos should adhere to traditional definitions of "fudge" by containing more milk fat and not palm oil and nonfat milk.

The suits against Big Lots alleged packaging on its Fresh Finds-brand coffee claimed to make up to 210 suggested-strength 6 oz. servings but didn't. Judges found those plaintiffs didn't pay enough attention to other serving instructions on the package. 

But Big Lots still had to pay lawyers to fight the cases. Davis Wright Tremaine billed 122 hours on Sheehan’s claims then another 60 in asking that he pay its fees.

Lawyers billed at rates ranging from $625 to $950 an hour.

“It is true that in awarding fees in this case, the district court used hourly rates that were higher than the market rate for attorneys in the Middle District of Florida,” the 11th Circuit wrote.

“But it used these higher rates because Big Lots’ attorneys had unique experience that equipped them to litigate the case effectively and efficiently.”

Sheehan is fighting a $500 sanction in another case in an appellate court. He was also fined $1,000 for suing the Dutch airline KLM, alleging it induced consumers to fly on it by misrepresenting its commitment to climate goals.

During litigation, it came to light his plaintiff had used a third party to book tickets and had not specifically picked KLM. Judge Ronnie Abrams said she hopes "Sheehan has learned a valuable lesson."

In October, Ricola asked that Sheehan pay $60,000 in lawyer fees after beating allegations it misled consumers with promises Swiss herbs in its lozenges had any cough-suppressant value. That motion remains pending.