Opinion
02 Civ. 6441 (LAK)(HBP)
August 12, 2003
AMENDED MEMORANDUM OPINION AND ORDER
The Memorandum Opinion and Order is amended to correct a mathematical mistake raised in the letter of Paul Cirino, Esq. dated August 11, 2003. In all other respect it is identical to the Memorandum Opinion and Order issued on August 6, 2003.
The dispute before me involves the measure of attorney's fees to be awarded to a defendant as a sanction pursuant to Rule 37. Accordingly, this decision resolves a non-dispositive matter that is within my jurisdiction, and I am not limited to recommending a resolution. See Thomas E. Hoar, Inc. v. Sara Lee Corp., 900 F.2d 522, 525 (2d Cir. 1990).
I. Introduction
By Order dated January 17, 2003, the Honorable Lewis A. Kaplan, United States District Judge, imposed sanctions on plaintiffs' counsel, Surjit P. Soni, Esq., as a result of his failure to comply with a discovery Order issued by Judge Kaplan on October 28, 2002 (the "Order"). Specifically, Judge Kaplan ordered that
Surjit P. Soni, Esq., shall pay to ProQuest the reasonable attorney fees and costs incurred by ProQuest in obtaining the Order and in bringing this motion. If ProQuest and Mr. Soni cannot agree on the amount, ProQuest may file a motion, not later than February 17, 2003, before the Magistrate Judge assigned to fix the amount.Auscape Int'l v. National Geographic Soc'y, 02 Civ. 6441 (LAK), 2003 WL 134989 at *6 (S.D.N.Y. Jan. 17, 2003).
The parties have been unable to agree on the amount of fees ProQuest should recover, and have briefed the motion contemplated by Judge Kaplan. For the reasons set forth below, I conclude that ProQuest is entitled to recover attorneys' fees in the amount of $69,484.00.
II. Facts
The facts underlying both this action and the discovery dispute that led to the instant application have been set forth in several decisions by Judge Kaplan in this action and in several companion cases, familiarity with which is assumed. See Auscape Int'l v. National Geographic Soc'y, supra, 2003 WL 134989; Faulkner v. National Geographic Soc'y, 220 F. Supp.2d 237 (S.D.N.Y. 2002); Ward v. National Geographic Soc'y, 208 F. Supp.2d 429 (S.D.N.Y. 2002). For present purposes it is sufficient to note that plaintiffs are photographers and writers who have contributed photographs or text to National Geographic magazine. In principal part, plaintiffs claim that the publication of their photographs and textual works in archival form as CD-ROMs and on microfilm and microfiche violates their rights under the Copyright Act. Plaintiffs also allege that the publication of their photographs and text violates various other common law and statutory rights.
The instant dispute arises out of plaintiffs' failure to comply with the Order. The Order, which was issued orally, required plaintiffs to produce three categories of documents: "(1) documents relating to the licensing of each allegedly infringed work, (2) original versions of each allegedly infringed work submitted to National Geographic, and (3) contingency fee agreements between each plaintiff and The Soni Law Firm or any of its agents or representatives." Auscape Int'l v. National Geographic Soc'y, supra, 2003 WL 134989 at *1. Despite the fact that plaintiffs were ordered to produce these documents by November 7, 2002, they failed to do so. Subsequent deposition testimony from several plaintiffs disclosed that Mr. Soni had never even sent the document requests to plaintiffs and had misrepresented the difficulty of complying with the Order. Indeed, Mr. Soni's conduct in failing to comply with the Order was so disingenuous and evasive, that Judge Kaplan characterized it as "the sort of 'rope-a-dope' technique that helped make Muhammad Ali famous." See Auscape Int'l v. National Geographic Soc'y, supra, 2003 WL 134989 at *6. Accordingly, Judge Kaplan entered the Order quoted in part on page 1.
In connection with their present application, ProQuest Company and ProQuest Information and Learning Company ("ProQuest") seek attorneys' fees in the total amount of $86,855. The fees sought by ProQuest represent only its counsels' time charges; ProQuest has expressly waived its right to recover any disbursements incurred with respect to the Order and its enforcement.
III. Analysis
Both Mr. Soni and ProQuest agree that the fees to be awarded to ProQuest is appropriately determined using the lodestar method (Memorandum of Law in Support of the ProQuest Defendants' Motion for Attorneys' Fees, dated February 18, 2003 at 6; Plaintiffs' Opposition to ProQuest Defendants' Motion for Attorneys' Fees, dated March 8, 2003 at 14).
Under the lodestar method, "'an attorney fee award is derived "by multiplying the number of hours reasonably expended on the litigation times a reasonable hourly rate."'" I.B. v. New York City Dep't of Educ., Docket Nos. 02-7990, 02-7993, 2003 WL 21639069 at *1 (2d Cir. July 14, 2003), quoting G.M. v. New Britain Bd. of Educ., 173 F.3d 77, 84 (2d Cir. 1999), which, in turn, quotes Blanchard v. Bergeron, 489 U.S. 87, 94 (1989). See also Hensley v. Eckerhart, 461 U.S. 424, 433 (1983); Orchano v. Advanced Recovery, Inc., 107 F.3d 94, 96-99 (2d Cir. 1997); Grant v. Martinez, 973 F.2d 96, 99 (2d Cir. 1992).
The hours actually expended and the rates actually charged are, of course, not dispositive. Foster v. Kings Park Cent. Sch. Dist., 174 F.R.D. 19, 27 (E.D.N.Y. 1997). An award of fees must be limited to the number of hours reasonably expended and limited to reasonable hourly rates.
The Honorable Loretta A. Preska, United States District Judge, has summarized the factors to be considered in assessing the reasonableness of the hours claimed in a fee application:
To assess the reasonableness of the time expended by an attorney, the court must look first to the time and work as they are documented by the attorney's records. See Forschner Group, Inc. v. Arrow Trading Co., Inc., No. 92 Civ. 6953 (LAP), 1998 WL 879710, at super* 2 (S.D.N.Y. Dec. 15, 1998). Next the court looks to "its own familiarity with the case and its experience generally. . . . Because attorneys' fees are dependent on the unique facts of each case, the resolution of the issue is committed to the discretion of the district court." AFP Imaging Corp. v. Phillips Medizin Sys., No. 92 Civ. 6211 (LMM), 1994 WL 698322, at super* 1 (S.D.N.Y. Dec. 13, 1994) (quoting Clarke v. Frank, 960 F.2d 1146, 1153 (2d Cir. 1992) (quoting DiFilippo v. Morizio, 759 F.2d 231, 236 (2d Cir. 1985))).
* * *
Finally, billing judgment must be factored into the equation. Hensley, 461 U.S. at 434; DiFilippo, 759 F.2d at 235-36. If a court finds that the fee applicant's claim is excessive, or that time spent was wasteful or duplicative, it may decrease or disallow certain hours or, where the application for fees is voluminous, order an across-the-board percentage reduction in compensable hours. In re "Agent Orange" Products Liab. Litig., 818 F.2d 226, 237 (2d Cir. 1987) (stating that "in cases in which substantial numbers of voluminous fee petitions are filed, the district court has the authority to make across-the-board percentage cuts in hours 'as a practical means of trimming fat from a fee application'" (quoting Carey, 711 F.2d at 1146)); see also United States Football League v. National Football League, 887 F.2d 408, 415 (2d Cir. 1989) (approving a percentage reduction of total fee award to account for vagueness in documentation of certain time entries).Santa Fe Natural Tobacco Co. v. Spitzer, 00 Civ. 7274 (LAP), 00 Civ. 7750 (LAP), 2002 WL 498631 at *3 (S.D.N.Y. Mar. 29, 2002). See also Hensley v. Eckerhart, supra, 461 U.S. at 434. Accord Orchano v. Advanced Recovery, Inc., supra, 107 F.3d at 98. The party seeking fees bears the burden of establishing that the number of hours for which compensation is sought is reasonable. Cruz v. Local Union No. 3 of Int'l Bhd. of Elec. Workers. 34 F.3d 1148, 1160 (2d Cir. 1994), citing Hensley v. Eckerhart,supra, 461 U.S. at 437.
Reasonable hourly rates are determined by reference to fees in the community in which the action is pending and to the skill and experience of the attorneys who worked on the matter. Luciano v. Olsten Corp., 109 F.3d 111, 115-16 (2d Cir. 1997).
As Judge Motley has noted, "The Second Circuit has warned that attorney's fees are to be awarded 'with an "eye to moderation," seeking to avoid either the reality or the appearance of awarding "wind falls."'"Evans v. State of Connecticut, 967 F. Supp. 673, 691 (D. Conn. 1997),aff'd without opinion, No. 97-7688, 2001 WL 1486543 (2d Cir. Nov. 15, 2001), quoting Beazer v. New York City Transit Auth., 558 F.2d 97, 101 (2d Cir. 1977).
A. Hours Reasonably Expended
ProQuest staffed the discovery dispute in this matter with seven attorneys and one paralegal. Their positions, rates and number of hours each worked on the discovery dispute in issue are as follows:
The work for which ProQuest seeks fees bridged both 2002 and 2003. ProQuest's counsel, Latham Watkins LLP ("Latham") increased the hourly rates of some of its professionals in 2003. Accordingly, two rates are quoted for some of the attorneys who worked on the matter.
Name Position Rate Hours Total
Juli W. Marshall Partner $475.00 1.4 $665.00 Juli W. Marshall Partner $495.00 2.0 $990. 00 Daniel S. Schecter Partner $450.00 1.7 $765.00 Daniel S. Schecter Partner $475.00 4.9 $2,327.50 Paul Cirino Senior Associate $425.00 62.3 $26,477.50 Paul Cirino Senior Associate $460.00 32.3 $14,858.00 Elizabeth A. Heering Junior Associate $215.00 76.4 $16,426.00 Julia A. Cilia Junior Associate $250.00 22.7 $5,675.00 Julia A. Cilia Junior Associate $320.00 8.5 $2,720.00 Melissa A. Rubin Junior Associate $260.00 34.8 $9,048.00 Jason A. Grossman Managing Attorney $315.00 1.8 $567.00 Jason A. Grossman Managing Attorney $330.00 1.0 $330.00 Damon Gaynair Paralegal $130.00 11.0 $1,430.00(Declaration of Paul Cirino, dated Feb. 18, 2003, Exs. 7-8; Supplemental Declaration of Paul Cirino, dated Feb. 24, 2003, Exs. A-C). Thus, ProQuest is seeking compensation for a total of 267.4 hours of attorney time and 11.0 hours of paralegal time. The sum sought for the attorney time totals $85,425.00; the sum sought for the paralegal time totals $1,430.00.
As required by New York State Ass'n for Retarded Children. Inc. v. Carey, 711 F.2d 1136, 1147-48 (2d Cir. 1983), ProQuest has submitted contemporaneous time records for all attorneys who worked on the discovery dispute that set forth the date on which services were performed, the hours spent and the nature of the work performed. See generally Mikes v. Straus, 274 F.3d 687, 706 (2d Cir. 2001). Specifically, ProQuest has submitted a printout from what appears to be its counsels' billing software which contains all the required information. Such a submission clearly meets the evidentiary threshold for the recovery of attorneys' fees. Tri-Star Pictures v. Unger, 42 F. Supp.2d 296, 302-03 (S.D.N.Y. 1999) ("The actual original time sheets are not necessary; submitting an affidavit and attaching a computer printout of the pertinent contemporaneous time records is acceptable."); accord Greenidge v. Mundo Shipping Corp., 60 F. Supp.2d 10, 13 (E.D.N.Y. 1999).
I have reviewed each of the entries in the time records, and although I do not find that specific tasks were staffed in a redundant manner, I do find that the relatively large number of attorneys — six partners and associates plus the managing attorney — assigned to the specific, narrow discovery dispute in issue did, no doubt, give rise to inefficiencies. For example, the number of attorneys involved increased the time necessary for communications between the attorneys working on the matter and there was, no doubt, some overlap in the work the attorneys performed. In addition, given the fact that the present dispute does not involve multiple distinct legal issues, the fact that multiple attorneys were assigned to research and draft motion papers also appears to have contributed to some duplication of effort. However, because an application for sanctions based on the misconduct of an adverse attorney is a serious motion that should not be made lightly, the meticulous preparation of ProQuest's counsel was appropriate.
Finally, in assessing the number of hours that can be considered reasonable in this case, it is also helpful to consider the context and the number of hours allowed in other matters. A review of some recent cases involving lodestar calculations yields the following results:
Schruefer v. Winthorpe Grant, Inc., 99 Civ. 9365 (GBD)(AJP), 2003 WL 21511157 at *4 S.D.N.Y. July 2, 2003) (Report and Recommendation) — allowing 213 hours to prepare a securities fraud case through successful summary judgment. Marathon Ashland Petroleum LLC v. Equili Co., 00 Civ. 2935 (JSM)(KNF), 2003 WL 21355216 at *3 (S.D.N.Y. June 10, 2003) — allowing 120 hours of attorney time in connection with the retaking of five depositions.
Raniola v. Bratton, 96 Civ. 4482 (MHD), 2003 WL 1907865 at *7 (S.D.N.Y. April 21, 2003) — allowing 1703 hours of attorney time to prepare and try a Title VII case, to prosecute an appeal, and to re-try the case after the appeal.
Tokyo Electron Arizona, Inc. v. Discreet Indus. Corp., 215 F.R.D. 60, 65 (E.D.N.Y. 2003) — allowing 192 hours of attorney time in connection with discovery disputes.
Alvarado v. Manhattan Worker Career Ctr., 01 Civ. 9288 (CBM), 2003 WL 1741183 at *2 (S.D.N.Y. April 1, 2003) — allowing approximately 60 hours of attorney time to litigate a discovery dispute.
Patterson v. Julian, 250 F. Supp.2d 36, 45 (N.D.N.Y. 2003) — allowing 309 hours of attorney time to prepare and try a case alleging a violation of 42 U.S.C. § 1981.
Admittedly, the amount of time necessary to litigate an issue in any case is, to some extent, dependent upon the conduct of one's adversary, and none of the foregoing cases involved misconduct similar to the misconduct that occurred here and that Judge Kaplan characterized as involving "a substantial degree of obstructionism, an almost complete lack of cooperation, and a good deal of evasion and what can be describes only as pettifoggery." Auscape Int'l v. National Geographic Soc'y,supra, 2003 WL 134989 at *1. Nevertheless, I do believe that the foregoing authorities indicate that the approximately 280 hours for which compensation is sought here is not at the modest end of the spectrum.
In view of all the foregoing and based on my knowledge of the case and my knowledge of the practice of law, Clarke v. Frank, 960 F.2d 1146, 1153 (2d Cir. 1992); Big R Food Warehouses v. Local 338 RWDSU, 896 F. Supp. 292, 297 (E.D.N.Y. 1995); Bowne of New York City, Inc. v. AmBase Corp., 161 F.R.D. 258, 267 (S.D.N.Y. 1995), I conclude that the fee sought should be reduced by twenty percent to compensate for inefficiencies due to over-staffing and excessive time expenditures. See generally Luciano v. Olsten Corp., supra, 109 F.3d at 117 (permitting the court to "mak[e] an across-the-board reduction in the amount of hours," in assessing a fee application).
B. Reasonable Hourly Rate
As the chart in Section III(A) indicates, ProQuest seeks fees based on hourly rates ranging from $215 to $495 per hour for attorneys and $130 per hour for the paralegal who worked on the matter. The credentials of the individual attorneys who worked on this matter are as follows:
Juli W. Marshall is a partner at Latham and has been a member of the bar since 1984.
Daniel S. Schecter is a partner at Latham and has been a member of the bar since 1993.
Paul Cirino is a senior associate at Latham and has been a member of the bar since 1995.
Elizabeth A. Heering is a junior associate at Latham and has been a member of the bar since 2001.
Julie A. Cilia is a junior associate at Latham and has been a member of the bar since 2002.
Melissa A. Rubin is a junior associate at Latham who passed the July 2002 New York bar examination and was scheduled to be admitted to the bar in May 2003. Jason A. Grossman is the managing attorney at Latham's New York Office and has been a member of the bar since 1992.
(Declaration of Paul Cirino, dated Feb. 18, 2003, ¶¶ 8-14; Supplemental Declaration of Paul Cirino, dated Feb. 24, 2003, ¶¶ 10-14).
The hourly rates sought for these attorneys have been approved in this District for other attorneys with comparable credentials. Hourly rates for paralegal time similar to the rate sought here has also been approved. Raniola v. Bratton, supra, 2003 WL 1907865 at *7 (approving hourly rates of rates of $200-$400 for attorneys); I.L.G.W.U. Nat'l Ret. Fund v. ESI Group, Inc., 92 Civ. 0597 (PKL), 2003 WL 135797 at *3 (S.D.N.Y. Jan. 17, 2003) (approving hourly rates of $150-$350 for attorneys); Wilson v. Nomura Sec. Int'l, Inc., 01 Civ. 9290 (RWS), 2002 WL 1560614 at *5 n. 2 (S.D.N.Y. July 15, 2002) (using average hourly rates for attorney time of $143-$506 per hour); Santa Fe Natural Tobacco Co. v. Spitzer, supra, 2002 WL 498631 at *6-*9 (approving hourly rates of $115-$575 for attorneys and $50-$145 for paralegals); Rodriguez v. McLoughlin, 84 F. Supp.2d 417, 423 (S.D.N.Y 1999) (approving $425 per hour for partner at large metropolitan firm); Berlinsky v. Alcatel Alsthom Compagnie Generale d'Electricite, 970 F. Supp. 348, 351 (S.D.N.Y. 1997) (approving hourly rates of $495 for partners, $225-$365 for associates and $150 for paralegals).
C. Mr. Soni's Arguments
Most of Mr. Soni's arguments in opposition to ProQuest's application can be quickly dispatched.
First, Mr. Soni claims that ProQuest's motion should be denied as untimely because it was filed on February 18, 2003 while Judge Kaplan's Order required that it be filed no later than February 17, 2003. Auscape Int'l v. National Geographic Soc'y, supra, 2003 WL 134989 at *6. February 17, 2003 was observed in this District as Presidents' Day and the Court was closed. Under these circumstances, the second sentence of Fed.R.Civ.P. 6(a) automatically extended the due date to February 18.
I am aware that Judge Kaplan had instructed counsel that when he instructed certain actions to be taken within a specified period of days, he was referring to calendar days, thereby overriding the terms of the third sentence of Fed.R.Civ.P. 6(a). By no rational construction, however, can Judge Kaplan's ruling reach the provisions of the second sentence of the Rule.
Second, Mr. Soni argues that ProQuest should not be awarded fees for work performed prior to November 7, 2002. Mr. Soni contends that because Rule 37(b) permits sanctions only when a court order has been violated and the Order called for the production of documents on November 7, 2003, he could not have violated the Order prior to that date. Mr. Soni's argument improperly conflates the condition precedent for the imposition of a sanction pursuant to Rule 37(b) with the scope of the sanctions that can be imposed pursuant to Rule 37(b). Although Mr. Soni is correct that Rule 37(b) permits sanctions to be imposed only when a court order, either written or oral, has been violated, Salahuddin v. Harris, 782 F.2d 1127, 1131 (2d Cir. 1986);Israel Aircraft Indus., Inc. v. Standard Precision, 559 F.2d 203, 208 (2d Cir. 1977), once such a violation occurs, a court has broad discretion in determining what sanction to impose. Specifically, Rule 37(b)(2) permits the court in which the action is pending to "make such orders in regard to the failure [to obey the order] as are just. . . ." The rule then goes on to set forth a non-exclusive list of examples of sanctions, which includes the expenses caused by the failure to comply with the order. Nothing in the Rule prohibits a court from imposing attorneys' fees incurred prior to the date of the violation, if the court finds that such a sanction is "just." Given the fact that Judge Kaplan expressly directed that ProQuest recover the fees it incurred in obtaining the Order, the conclusion is inescapable that he found the recovery of such fees to be "just."
Although there is authority to the contrary from the Fifth Circuit, Batson v. Neal Spelce Assocs., Inc., 765 F.2d 511, 516 (5th Cir. 1985) (the "plain language of Rule 37 . . . provides that only those expenses, including fees, caused by the failure to comply may be assessed against the noncomplying party"), I believe that that authority improperly ignores Rule 37(b)'s express grant of authority to impose any sanction that the court deems "just." Accordingly, I respectfully decline to follow it.
Mr. Soni next argues that ProQuest should not recover the fees it incurred in preparing its fee motion because it failed to negotiate in good faith concerning the amount of the fees. Although Mr. Soni and counsel for ProQuest failed to reach an agreement concerning the amount of the fees ProQuest could recover, there is no evidence whatsoever that ProQuest failed to negotiate in good faith. The affidavit submitted by ProQuest establishes that ProQuest's counsel met with Mr. Soni at his office, presented a summary of its attorneys' fees that totaled approximately $53,000, subsequently provided detailed daily time records and suggested that ProQuest would be willing to settle for some number between Mr. Soni's initial offer and $53,000 (Declaration of Paul Cirino, dated Feb. 18, 2003, ¶¶ 20-23; Supplemental Declaration of Paul Cirino, dated Feb. 24, 2003, ¶¶ 3-6). Although the negotiations were unsuccessful, the foregoing establishes that ProQuest did negotiate in good faith.
Mr. Soni next claims that ProQuest's fees should be discounted to account for the fact that its motion for sanctions was only partially successful. Mr. Soni's argument here is based principally on the fact that ProQuest had a sought case dispositive sanction on multiple theories but was granted only attorneys' fees. Again, Mr. Soni's argument is unconvincing. ProQuest's motion sought sanctions on different theories, some of which were successful, some of which were not. In any event, having reviewed ProQuest's motion, I conclude that the theories underlying ProQuest's application for sanctions were "'inextricably intertwined'" and "'involve [d] a common core of facts [and were] based on related legal theories'" Kerin v. United States Postal Serv., 218 F.3d 185, 194 n. 6 (2d Cir. 2000), quoting Dominic v. Consolidated Edison Co., 822 F.2d 1249, 1259 (2d Cir. 1987). Under these circumstances, a full award of ProQuest's reasonable attorneys' fees is appropriate.
Mr. Soni next argues that ProQuest's fee application fails to address the twelve factors cited in Hensley that are relevant to calculating a reasonable attorney's fee. In Hensley, the Court noted that the lodestar figure may be increased or decreased on the basis of twelve variables.
The twelve factors are: (1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the skill requisite 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.Hensley v. Eckerhart, supra, 461 U.S. at 430, n. 3, citing Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974). Mr. Soni cites no cases applying these factors to an award of fees pursuant to Rule 37(b) and my own research has disclosed none. Assuming without deciding that these factors are applicable to a fee award under Rule 37(b), Mr. Soni misapprehends their role. The lodestar figure, i.e., the product of the number of hours reasonably expended and a reasonable hourly rate, is presumed to be a reasonable fee. Pennsylvania v. Delaware Valley Citizens' Council for Clean Air, 478 U.S. 546, 564 (1986); Blum v. Stenson, 465 U.S. 886, 897 (1984). The twelve additional factors in Hensley may serve to increase or decrease the lodestar figure, but there is no requirement that a party seeking attorneys' fees must separately address the twelve Hensley factors in order to prove the reasonableness of the figure sought. See Pennsylvania v. Delaware Valley Citizens' Council for Clean Air, supra, 478 U.S. at 564-65.
Mr. Soni next argues that, pursuant to the Supreme Court's admonition in Cunningham v. Hamilton Co., 527 U.S. 198, 210 (1999), the assessment of attorneys' fees should be deferred to the end of this case. ProQuest is correct that nothing in Cunningham requires deferring the assessment of fees, and Judge Kaplan's instruction that the application be made at this time, and not at the end of the case, removes any discretion that I might have otherwise had in this regard.
Finally, the remainder of Mr. Soni's objections to the fee application consist of insignificant complaints to the number of hours spent by ProQuest's counsel. These objections are subsumed by my conclusion above that ProQuest's fee request should be decreased by 20%.
IV. Conclusion
Accordingly, for all the foregoing reasons, I conclude that ProQuest's request for $86,855.00 in attorneys' fees should be decreased by 20%. Accordingly, no later than ten (10) calendar days from the date of this Order, Mr. Soni is directed to remit to ProQuest's counsel the sum of $69,484.00.
SO ORDERED