Opinion
Case No. 2:04-cv-493.
May 1, 2006
ORDER
This matter is before the Court to set an award of attorney's fees. The Court granted the Debtors' motion for an award of attorney's fees under 28 U.S.C. § 1927 after finding that Appellant Amedisys, Inc. knew or reasonably should have known that its bankruptcy appeal was frivolous and would needlessly cause expense and delay to the opposing party. See April 25, 2005 Order.
Amedisys had appealed the bankruptcy court's April 9, 2004 order approving a settlement agreement between the Debtors and Provident Bank. Amedisys argued that the order prejudiced certain setoff rights that Amedisys claimed to have with respect to a promissory note Amedisys gave to a subsidiary of the Debtor National Century Financial Enterprises, Inc. After Amedisys voluntarily dismissed its appeal, the Debtors filed a motion for attorney's fees. The Court granted the motion for attorney's fees, finding that the appeal was frivolous because the bankruptcy court's order expressly stated that "nothing" in the order "shall be deemed to affect" any rights Amedisys claimed to have with respect to the note.
The Debtors, represented by the Jones Day law firm, submitted an affidavit and itemized statement of the attorney's fees incurred in this appeal. The Debtors request a total award of $75,510.50 in attorney's fees.
Amedisys argues that the amount requested by the Debtors is excessive and would be a windfall. Amedisys contends that many of the entries on the itemized statement of fees are duplicative, vague, and not directly related to motions briefing. Amedisys further argues the number of attorneys working on the case is excessive.
Under Section 1927, an attorney "who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys' fees reasonably incurred because of such conduct." 28 U.S.C. § 1927. The Sixth Circuit has stated that the "primary concern in an attorney fee case is that the fee awarded be reasonable. . . . A reasonable fee is `one that is `adequate to attract competent counsel, but . . . [does] not produce windfalls to attorneys.'" Reed v. Rhodes, 179 F.3d 453, 471 (6th Cir. 1999) (quoting Blum v. Stenson, 465 U.S. 886, 893 (1984)). The party seeking attorney's fees has the burden of documenting the hours worked and rates claimed. Reed, 179 F.3d at 472.
In arriving at an award of attorney's fees, the court should determine a reasonable billing rate and multiply that by a reasonable number of hours worked (the lodestar method). See Reed, 179 F.3d at 471. Factors to consider in calculating an award include:
(1) the time and labor required by a given case; (2) the novelty and difficulty of the questions presented; (3) the skill needed to perform the legal service properly; (4) the preclusion of employment by the attorney due to acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the "undesirability" of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases.Id. at 472 n. 3.
Here, the itemized billing statement shows that eight Jones Day attorneys worked on this appeal. Their hourly rates ranged from $435 to $155. The combined hourly rate charged by Jones Day for all eight attorneys (the total amount billed divided by the total number of hours worked) was $264. Citing other recent bankruptcy cases in Columbus, Ohio, Jones Day argues that these rates are in line with the rates generally charged by bankruptcy counsel in Columbus. Jones Day further contends that its rates are a bit below the rates charged by other counsel in the National Century proceedings. See July 29, 2005 Aff. of Matthew A. Kairis, ¶¶ 6-8.
Amedisys argues Jones Day has failed to establish that its billing rates are reasonable. However, the only particular objection Amedisys makes is to the rate charged by Matthew A. Kairis, the sole partner assigned to the case. Mr. Kairis's hourly rate ranged from $395 to $425. Amedisys points out that this exceeds the $380 hourly rate Mr. Kairis charged in a fee statement submitted to the bankruptcy court.
Amedisys's objection to the rates charged by Mr. Kairis is unpersuasive for two reasons. First, Amedisys has no specific objection to the $380 rate; it is the extra $15 to $35 an hour that Amedisys argues is excessive. Second, counsel for Amedisys himself charged an hourly rate of $405 for a matter pending in the bankruptcy court. See July 29, 2005 Kairis Aff., ¶ 7.
The Court finds that $264 is a reasonable hourly rate in the circumstances here. Cf. Isabel v. Memphis, 404 F.3d 404, 416 (6th Cir. 2005) (upholding award of attorney's fees based on hourly rate of $250); Kadri v. Johnson, No. 03-2562 M1/V, 2005 WL 3454330, at *3 (W.D. Tenn. Dec. 16, 2005) (finding hourly rate of $250 to be reasonable); Black-Hosang v. Mendenhall, No. 2:01-cv-623 (S.D. Ohio, Graham, J.), March 16, 2006 Order (finding hourly rate of $250 for two experienced attorneys to be reasonable). This appeal is a part of what the bankruptcy court has called one of the largest and most complex bankruptcy proceedings in Ohio history. The Court's own experience with litigation arising out of the National Century bankruptcy proceedings confirms this. It is to be expected that the Debtors be represented by a large law firm and by counsel with considerable skill and experience. The Court therefore finds that a combined hourly rate of $264 for Jones Day attorneys is reasonable.
Amedisys next objects to the amount of time charged by the Debtors' counsel and to the number of attorneys working on the case. Amedisys contends that many of the entries on the itemized statement of fees are duplicative and not directly related to motions briefing.
The billing statement shows that Debtors' counsel charged a total of 286.2 hours. That total can be broken down as follows: 43 hours for the initial phase of the appeal, including preparing the counter-designation of the record on appeal and researching the merits of Amedisys's claim to a right of setoff; 90.4 hours for the motion to dismiss and 60 hours for the reply; 15.8 hours for preparing scheduling orders; 5.3 hours for advising of the settlement of the appeal; 41 hours for the motion for attorney's fees and 30.7 hours for the reply.
The original statement showed a total of 290.5 hours billed, but the Debtors' reply brief withdrew 4.3 hours of charges.
The Court finds that 286 hours is an unreasonable number of hours. Though the complexities of the overall bankruptcy proceedings justified the Debtors having skilled counsel, this particular appeal proved to be rather simple. The parties never filed briefs on the merits of the appeal. Instead, once Amedisys filed its notice of appeal, the Debtors filed a motion to dismiss. In their 20-page motion, the Debtors argued three threshold issues: equitable mootness, waiver of the right to appeal, and lack of standing. Before the motion to dismiss was ruled on, the parties reached a settlement and filed a joint motion to dismiss the appeal. Following dismissal, the Debtors filed a motion for attorney's fees, arguing many of the same points they had raised in their motion to dismiss. The Court found that the appeal had no merit and granted the motion for attorney's fees. Thus, this was not a difficult appeal from either a procedural or substantive standpoint.
By way of comparison, this Court recently awarded attorney's fees to a § 1983 plaintiff who won a jury verdict in her favor. See Black-Hosang v. Mendenhall, No. 2:01-cv-623 (S.D. Ohio, Graham J.), March 16, 2006 Order. The case had a lengthy procedural history, extensive motions practice, and went to trial. Plaintiff's counsel billed a total of 460 hours.
The Court agrees with Amedisys that having eight attorneys working on the appeal resulted in duplication and an unreasonable number of hours billed. The Court does not fault Jones Day for having a team of attorneys assigned to the National Century bankruptcy proceedings as a whole. See May 11, 2005 Aff. of Matthew A. Kairis, ¶ 4. There is nothing objectionable about Jones Day utilizing a team of attorneys to handle complex bankruptcy litigation, but there was no need to have so many attorneys working on what was, in the Court's view, a rather simple appeal.
The following aspects of the billing statement demonstrate that Jones Day billed an excessive number of hours: three attorneys spent 15.8 hours preparing two scheduling orders; two attorneys took 11 hours to review Amedisys's designation of the record on appeal and to prepare a counter-designation; four attorneys billed 90.4 hours to draft a relatively simple motion to dismiss, and four attorneys spent an additional 60 hours to prepare a reply brief; and three attorneys spent 71.7 hours briefing a motion for attorney's fees that reiterated some of the points made in the motion to dismiss.
A "district court may take . . . duplication into account by making a simple across-the-board reduction by a certain percentage." Hudson v. Reno, 130 F.3d 1193, 1209 (6th Cir. 1997), overruled in part on other grounds, Pollard v. E.I. du Pont de Nemours Co., 532 U.S. 843, 121 S.Ct. 1946 (2001).See also Chicago Title Ins. Corp. v. Magnuson, No. 2:03-cv-368, 2005 WL 2373430, at *33 (S.D. Ohio Sept. 26, 2005). The Court finds that a 50% reduction in attorney's fees is appropriate here. See American Wrecking Corp. v. Secretary of Labor, 364 F.3d 321, 331 (D.C. Cir. 2004) (reducing request for attorney's fees by 50% because counsel billed "an excessive amount" of hours); Goodwin v. Metts, 973 F.2d 378, 384 (4th Cir. 1992) (upholding district court's finding that "duplication of effort . . . constituted a proper basis for reducing the fees claimed by approximately fifty-percent"); ACE Ltd. v. CIGNA Corp., No. 00 CIV. 9423, 2001 WL 1286247, at *7 (S.D.N.Y. Oct. 22, 2001) (applying 50% reduction where two attorneys duplicated each other's efforts);Grogg v. General Motors Corp., 612 F.Supp. 1375, 1380 (S.D.N.Y. 1985) (reducing an award by 50% because there was "substantial duplication of effort").
Accordingly, the Court finds that the Debtors are entitled to an award of attorney's fees in the amount of $37,752.00. Counsel for Appellant Amedisys, Inc. shall pay this amount to the Debtors within thirty days of the date of this Order.