Iowa judge trims attorney fees by 25% in Storm Lake tax dispute

Judge Shayne Mayer ordered a 25% reduction in legal fees for the City of Storm Lake in a recent ruling. The decision directly impacts the billing rates charged by the Dorsey & Whitney law firm. This firm currently represents the city in a long-running dispute with Buena Vista County.

The reduction stems from the judge’s review of detailed invoices. Mayer found that Dorsey & Whitney lawyers charged rates that exceeded the local market average. One partner billed the city $730 per hour. Another partner billed $660 per hour. The judge determined that a reasonable rate for each lawyer was $515 per hour.

The ruling highlights the cost of litigation in a dispute over property tax revenue. Storm Lake sued the county after it mistakenly distributed funds intended for the city to local schools and other taxing bodies. The error occurred over a period of 12 years. The case has now lasted two years, and a trial is not scheduled until next summer.

Mayer also adjusted the bill for redundant staffing. The judge noted that two Dorsey & Whitney lawyers attended hearings together. This arrangement cost the city $1,400 per hour. Mayer stated that one lawyer would have been sufficient for those tasks. He also deducted time the attorneys spent conferring with each other.

The ruling aligns with arguments made in a separate case in the Quad Cities area. Dr. Allen Diercks sued the City of Eldridge after it withheld details on legal invoices. Diercks requested a year’s worth of billing records from Allison Wright, the city’s attorney. The city provided 43 pages of documents but redacted key information.

Eldridge blacked out dates of work, descriptions of tasks, time spent, and the specific lawyer performing the work. The city also hid the hourly rates charged. Diercks could only see the total monthly bill and the law firm’s mailing address. A district judge heard testimony in this case on October 7. A decision is expected later this year.

Diercks has been a frequent requester of government records in the Quad Cities region. He argues that the public needs to see how tax money is spent. His testimony in the Eldridge case echoed the findings in the Storm Lake ruling. Both cases center on bills from outside lawyers hired by municipal governments.

The Storm Lake Times Pilot recently editorialized on the dispute. The paper argued that public officials are using taxpayer money to fight a battle that should be settled. The editorial stated that city, county, and lawyer actions show a lack of respect for taxpayers. Many residents believe a settlement would have been less expensive than hiring high-priced Des Moines attorneys.

The Dorsey & Whitney rates stand in contrast to those charged by the opposing side. Attorneys at Nyemaster Goode billed Buena Vista County between $250 and $370 per hour. The judge used these figures and prevailing market rates in northwest Iowa to justify the fee reduction for Storm Lake. The decision serves as a precedent for how courts may view public legal spending.