Opinion
1:23-CV-01191-RP
08-01-2024
SHIVAM GUPTA, Plaintiff v. NAOMI MARTIN, and SNIPER SCOPE FX, Defendants
REPORT AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE
DUSTIN M. HOWELL, UNITED STATES MAGISTRATE JUDGE
TO: THE HONORABLE ROBERT PITMAN UNITED STATES DISTRICT JUDGE
Before the Court is Plaintiff Shivam Gupta's Second Motion for Costs and Attorney's Fees, Dkt. 21. After reviewing these filings, the relevant case law, and the parties' responses, the undersigned recommends granting the motion.
I. BACKGROUND
On March 19, 2023, Gupta entered into a contract with Defendant Naomi Martin, agreeing to pay Martin $50,000 in exchange for her opening a Forex Trading account in Gupta's name. Dkt. 1, at 2. Pursuant to the agreement, Martin was to keep $20,000 as a personal fee and use the remaining $30,000 to open the account. Id. Additionally, Martin was to provide Gupta with any profits until he made his $20,000 back, at which point Gupta and Martin would split any additional profits. Id. Gupta alleged that Naomi Martin breached the contract when she failed to open a Forex Trading account. Id. As a result, Gupta claimed damages of $100,000. Id.
The undersigned recommended that the Court grant Gupta's Motion for Default Judgment against Martin for the breach of contract and unjust enrichment claims, Dkt. 17. The undersigned also recommended damages amounting to $50,000. Dkt. 17, at 7-8. The Court adopted both recommendations. Dkt. 19. Gupta subsequently filed a Motion for Costs and Attorney's Fees, Dkt. 21, which is before the undersigned for consideration.
II. LEGAL STANDARDS
An award of attorney's fees is entrusted to the “sound discretion” of the district court. Tex. Com. Bank Nat'l Ass'n v. Cap. Bancshares, Inc., 907 F.2d 1571, 1575 (5th Cir. 1990). Even so, “[i]t remains important ... for the district court to provide a concise but clear explanation of its reasons for the fee award.” La. Power & Light Co. v. Kellstrom, 50 F.3d 319, 329 (5th Cir. 1995) (emphasis omitted).
In a civil action, a court “in its discretion may allow the recovery of full costs by or against any party other than the United States or an officer thereof” including an “award of reasonable attorney's fee to the prevailing party as part of the costs.” 17 U.S.C. § 505. The Fifth Circuit uses a two-step process to calculate recoverable attorneys' fees. Heidtman v. Cnty. of El Paso, 171 F.3d 1038, 1043 (5th Cir. 1999). First, courts use the lodestar method to calculate an appropriate fee award by multiplying the number of hours reasonably spent on the case by an appropriate hourly rate in the community for such work. Saizan v. Delta Concrete Prods. Co., 448 F.3d 795, 799 (5th Cir. 2006). The party seeking fees is “charged with the burden of showing the reasonableness of the hours billed and, therefore, [is] also charged with proving that [its attorney(s)] exercised billing judgment.” Id. “The court should exclude all time that is excessive, duplicative, or inadequately documented [and] [t]he hours surviving this vetting process are those reasonably expended in litigation.” Watkins v. Fordice, 7 F.3d 453, 457 (5th Cir. 1993). While plaintiff's counsel need not record in great detail how each minute of their time was expended, they should identify the general subject matter of their time expenditures. Hensley v. Eckerhart, 461 U.S. 424, 437 n.12 (1983).
After calculating the lodestar, the court may decrease or enhance the amount based on the relative weights of the twelve factors set forth in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974), abrogated on other grounds by Blanchard v. Bergeron, 489 U.S. 87 (1989). The Fifth Circuit has instructed that “of the Johnson factors, the court should give special heed to the time and labor involved, the customary fee, the amount involved and the result obtained, and the experience, reputation, and ability of counsel.” Migis v. Pearle Vision, Inc., 135 F.3d 1041, 1047 (5th Cir. 1998).
III. DISCUSSION
Under Texas law, a prevailing party may recover attorneys' fees from an individual in a claim for a written contract. Tex. Civ. Prac. & Rem. Code § 38.001(8). Although “may” is used within the statute's text, courts have determined that fees are required when the matter concerns a breach of contract. Kona Tech. Corp. v. S. Pac. Transp. Co., 225 F.3d 595, 603 (5th Cir. 2000). The amount of reasonable fees, however, is discretionary. Fluorine on Call Ltd. v. Fluorogas Ltd., 380 F.3d 849, 866 (5th Cir. 2004). Because this case deals with a breach of contract from a default judgment, the undersigned finds that awarding costs and attorney's fees to Gupta is appropriate under the circumstances.
Gupta requests $34,000 in fees for 113 hours billed at a $300 rate. Dkt. 21, at 1. To recover attorney fees, the prevailing party must prove that the fees requested are “reasonable.” Tex. Civ. Prac. & Rem. Code § 38.001. Based on the calculated lodestar, the Court may, at its discretion, adjust the amount of reasonable fees based on the factors set out in Johnson. Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974); see Resolution Tr. Corp. v. Tassos, 764 F.Supp. 442, 443 (S.D. Tex. 1990) (“A federal district court may fix attorneys' fees . . . on its own experience without any testimony.”). In his Motion for Costs and Attorney's Fees, Gupta asserts an hourly rate of $300 and includes both a breakdown of the 113 hours billed and an affidavit justifying the fees. Dkt. 21, at 6.
The undersigned finds that Gupta's $300 hourly fee request is reasonable. Williams v. Sake Hibachi Sushi & Bar, Inc., 574 F.Supp.3d 395, 410 (N.D. Tex. 2021) (finding $300 was a reasonable fee for an attorney with fewer than seven years of experience). However, the undersigned concludes that Gupta's 113 hours spent on this case were unreasonably long, and therefore, a downward departure under Johnson is warranted.
In similar cases, other courts have found that extensive hours billed for relatively simple cases are excessive. Dixon v. Bellard, No. 2:17-CV-00119-J, 2017 WL 6524055, at *1 (N.D. Tex. Dec. 18, 2017). For instance, in Dixon, the plaintiff alleged that the defendant breached their contract after the defendant failed to give the plaintiff the monthly payment agreed in the contract and failed to reimburse her for her IRS payment. Id. at *1. The plaintiff sought to recover fees from a default judgment, totaling $16,695 for 46.6 hours billed. Id. at 3. The court held that the fees sought were excessive due to the simple nature of the case and, therefore, reduced the fees to $8,500. Id. at *3-4. Likewise, in BMO Harris Bank, a plaintiff alleged that the defendant breached three contracts. BMO Harris Bank, N.A. v. Balmor Transp., Inc., No. 3:18-CV-01789-S-BT, 2020 WL 4490431, at *1 (N.D. Tex. July 1, 2020). After the court entered default judgment in the plaintiff's favor, the plaintiff contended it was entitled to $30,429.14 in fees for 112.7 hours billed. Id. at 2, 4. The court held that the amount in fees was excessive because of the simple nature of the case and reduced the fees to $21,271.14. Id. at 6.
Additionally, in cases with similar circumstances, other courts have awarded attorney fees much smaller than what Gupta requests. In AR Systems, the plaintiff entered into a contract with the defendant, and the defendant refused to pay the amount due to the plaintiff under the contract. AR Sys., LLC v. Best Solar Now, LLC, No. 6:23-CV-392-JDK, 2023 WL 8531784, at *1 (E.D. Tex. Dec. 7, 2023). The court granted a default judgment after the defendant failed to provide any response, and the plaintiff subsequently sought $5,420.50 in fees. Id. at *4. The court reduced the attorney fees to $3,920.50 to exclude a fee for initial collection efforts. Id. at *5. Likewise, in Douglas, a plaintiff brought a claim against a defendant for failing to pay the plaintiff for his consulting services. Douglas v. Carter, No. 4:16-CV-00835, 2018 WL 3105590, at *1 (E.D. Tex. June 25, 2018). The defendant failed to respond, and the court granted a default judgment. Id. The plaintiff subsequently requested $11,650 in attorney fees, which the court granted. Id. at 2. That is far less than the $34,000 in fees Gupta is requesting.
The undersigned understands that reviewing client documents and preparing briefs require significant time. However, the fees requested are excessive for a simple breach-of-contract case in which Defendant provided no responses and was resolved on a partial default judgment. Dixon, 2017 WL 6524055 at *3 (finding that lowering attorney fees was warranted for a simple default-judgment case).
Additionally, Gupta was awarded a default judgment regarding the claims against Defendant Martin for breach of contract and unjust enrichment. Dkt. 17. Gupta was not awarded a default judgment regarding Defendant Sniper Scope FX for any claim or a default judgment for either Defendant for the negligent-misrepresentation claim. Id. Gupta likely spent significant time on his unsuccessful claims, yet he did not apportion his time between the successful and unsuccessful claims. Id. Based on his affidavit, it is unclear when work was spent on the unsuccessful versus successful claims. Id. Gupta is not entitled to receive attorney fees for the unsuccessful claims, so Gupta cannot recover all attorney fees in this case. Hensley v. Eckerhart, 461 U.S. 424, 437 (1983) (‘The district court . . . may simply reduce the award to account for the limited success.”); Wilhite v. District of Columbia, 110 F.Supp.3d 77 (D.D.C. 2015) (“If a party prevails partially, the court has discretion to determine whether a reduction of fees . . . is appropriate.”).
Accordingly, the undersigned finds that Gupta's suggested lodestar amount of $34,000 is not reasonable. The undersigned, therefore, recommends that the District Judge award a 50% reduction in accordance with the partial default judgment and relevant case law. Martinez v. Ranch Masonry, Inc., 760 Fed.Appx. 288, 291 (5th Cir. 2019) (affirming a 50% reduction in attorney fees because the amount involved and awards in similar cases “weighed heavily in favor of a significant decrease in the lodestar amount”).
IV. RECOMMENDATION
In accordance with the foregoing discussion, the undersigned RECOMMENDS that the District Court grant Gupta's Motion for Attorney's Fees, Dkt. 21, and award Gupta, to recover from Defendants, $17,000 in attorney's fees.
V. WARNINGS
The parties may file objections to this Report and Recommendation. A party filing objections must specifically identify those findings or recommendations to which objections are being made. The District Court need not consider frivolous, conclusive, or general objections. See Battle v. United States Parole Comm'n, 834 F.2d 419, 421 (5th Cir. 1987). A party's failure to file written objections to the proposed findings and recommendations contained in this Report within fourteen days after the party is served with a copy of the Report shall bar that party from de novo review by the District Court of the proposed findings and recommendations in the Report and, except upon grounds of plain error, shall bar the party from appellate review of unobjected-to proposed factual findings and legal conclusions accepted by the District Court. See 28 U.S.C. § 636(b)(1)(C); Thomas v. Arn, 474 U.S. 140, 150-53 (1985); Douglass v. United Servs. Auto. Ass'n, 79 F.3d 1415, 1428-29 (5th Cir. 1996) (en banc).