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reducing the hours awarded for time entries involving work that could be considered secretarial rather than legal (citing Denton v. PennyMac Loan Servs., LLC, 252 F. Supp. 3d 504, 525-26 (E.D. Va. 2017))
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CIVIL ACTION NO: 4:19cv41
2020-04-10
Erik LARSEN, Plaintiff, v. AR RESOURCES, INC., Defendant.
Counsel for Plaintiff: Joshua A. Mize, Esquire, Mize Law PLLC, 110 Front Street, Suite 300, Jupiter, FL 33477. Counsel for Defendant: Randall Clair Lenhart, Jr., Esquire, Kalbaugh Pfund & Messersmith PC, 1200 PNC Bank Building, 555 East Main Street, Norfolk, VA 23510, Kevin Cornish, Esquire, High Swartz, LLP, 40 East Airy Street, Norristown, PA 19401.
Counsel for Plaintiff: Joshua A. Mize, Esquire, Mize Law PLLC, 110 Front Street, Suite 300, Jupiter, FL 33477.
Counsel for Defendant: Randall Clair Lenhart, Jr., Esquire, Kalbaugh Pfund & Messersmith PC, 1200 PNC Bank Building, 555 East Main Street, Norfolk, VA 23510, Kevin Cornish, Esquire, High Swartz, LLP, 40 East Airy Street, Norristown, PA 19401.
MEMORANDUM ORDER
REBECCA BEACH SMITH, SENIOR UNITED STATES DISTRICT JUDGE This matter comes before the court on the Plaintiff's Motion for Award of Attorney's Fees and Expenses and accompanying brief in support, filed on February 14, 2020. ECF Nos. 62, 63.
I. Procedural History
On April 24, 2019, the Plaintiff filed a Complaint in this court against the Defendant, alleging that the Defendant violated the Fair Debt Collection Practices Act ("FDCPA"). ECF No. 1; 15 U.S.C. §§ 1692c, 1692d, 1692e, 1692f, 1692k. The Plaintiff filed an Amended Complaint on May 16, 2019, and a Second Amended Complaint, adding a claim under the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. § 227(b)(1)(B), on October 24, 2019. ECF Nos. 5, 17. On December 19, 2019, the Defendant filed a Motion for Partial Summary Judgment, requesting that the court enter summary judgment in the Defendant's favor on Count Two and on one of the claims in Count One of the Second Amended Complaint. ECF No. 19. The Plaintiff filed a Response, opposing summary judgment on the FDCPA claim but not opposing summary judgment on the TCPA claim. ECF No. 22. The court granted summary judgment on the TCPA claim and reserved ruling on the FDCPA claim. ECF No. 33.
A three-day jury trial was held on January 28, 29, and 31, 2020. The jury returned a verdict for the Plaintiff, and awarded him the maximum $1,000 statutory damages and no actual damages. ECF No. 56. Judgment was entered for the Plaintiff on February 3, 2020. ECF No. 60. The Plaintiff filed the instant Motion on February 14, 2020. ECF No. 62. The Defendant filed a Response on February 28, 2020. ECF No. 64. The Plaintiff filed a Reply on March 2, 2020. ECF No. 69.
The Defendant has also filed Motions for Judgment as a Matter of Law with Request for New Trial, to which the Plaintiff responded. ECF Nos. 65, 67, 75, 76. The Plaintiff has not made a request for attorney's fees with respect to time spent responding to those motions or with respect to time spent preparing the Motion for Attorney's Fees and Expenses.
II. Legal Standards
In the case of a successful action under the FDCPA, the defendant is liable to the plaintiff for attorney's fees and costs. 15 U.S.C. § 1692k(a)(3). The award of attorney's fees under the FDCPA "is mandatory in all but the most unusual circumstances," although the court retains broad discretion in determining the fee award. Carroll v. Wolpoff & Abramson, 53 F.3d 626, 628 (4th Cir. 1995). In the Fourth Circuit, courts use a three-step process to calculate attorney's fees. First, the court determines the "lodestar figure" by "multiplying the number of reasonable hours expended times a reasonable rate." Robinson v. Equifax Info. Servs., LLC, 560 F.3d 235, 243 (4th Cir. 2009). The lodestar amount can be adjusted for reasonableness based on the multifactor Johnson test. Id.; see Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974). Next, the court subtracts fees for hours spent on unsuccessful claims, if the hours spent on those claims were unrelated to the successful claims. Id. at 244. Finally, the court may adjust the remaining amount based on the plaintiff's degree of success. Id.; see Lilienthal v. City of Suffolk, 322 F. Supp. 2d 667, 675 (E.D. Va. 2004) (Smith, J.) ("[T]he degree of success obtained by the plaintiff is the most critical factor in determining the reasonableness of a fee award.").
III. Analysis
A. Lodestar Amount
The Plaintiff claims 221.7 hours worked and a reasonable hourly rate of $400.00, for total attorney's fees of $88,680.00. Brief at 8. In support of these figures, Plaintiff's counsel, Joshua Mize, attached his timesheet for the matter and a declaration by Lisa Bertini, an attorney who regularly practices before this court. Ms. Bertini's declaration stated her opinion that $400.00 is consistent with the market rate in the Norfolk area for matters such as this one and for an attorney of Mr. Mize's experience, and that 221.7 hours is an "exceptionally reasonable" amount of time to have expended on the case. ECF Nos. 63-1, 63-2.
In response, the Defendant challenges three aspects of the lodestar calculation. First, the Defendant argues that the Plaintiff failed to prove by "specific evidence" that $400.00 is a reasonable hourly rate. Response at 5. Second, the Defendant points to particular time entries, totaling 148.6 hours, that it argues should be excluded as unreasonable. Id. at 5–10. These entries include 57.4 hours of contested travel time, as well as numerous entries that the Defendant claims are redundant, excessive, or represent block billing. Id. at 11. Third, the Defendant asserts that the lodestar amount is unreasonable in light of the twelve " Johnson" factors. Id. at 12–13. The court will address, in turn, each of the Defendant's objections to the Plaintiff's lodestar amount.
i. Reasonable Hourly Rate
While the Defendant is correct that the Plaintiff's proposed hourly rate must be supported by "specific evidence," the Plaintiff has done so in this case. The Plaintiff produced a declaration by an experienced local attorney, who represented that she had knowledge of the prevailing market rates for FDCPA attorneys in the area. See ECF No. 63-2. This is exactly the kind of "specific evidence" that the Fourth Circuit has said satisfies the fee applicant's burden of production on this issue. See Robinson, 560 F. 3d at 245 ("Examples of the type of specific evidence that we have held is sufficient to verify the prevailing market rates are affidavits of other local lawyers who are familiar both with the skills of the fee applicants and more generally with the type of work in the relevant community."). The Plaintiff, by contrast, offers no affidavits or other specific evidence in support of an alternative rate. Although a reasonable hourly rate differs from attorney to attorney, recent cases in this District indicate that $400.00 is a reasonable market rate for consumer protection work in the area. For these reasons, the court finds that $400.00 is a reasonable hourly rate in this case. ii. Challenged Time Entries
The Defendant's Response states that $400.00 is "more than double the hourly rate of counsel for ARR." Response at 5. However, this unsworn statement makes no mention of defense counsel's area of practice, relative level of experience, or any other basis for recognizing defense counsel's rate as a suitable comparison point in this case.
See, e.g., Denton v. PennyMac Loan Servs., LLC, 252 F. Supp. 3d 504, 510 (E.D. Va. 2017) (Davis, J.) ($425.00 and $575.00); Beasley v. Red Rock Fin. Servs., LLC, No. 1:14cv1497, 2016 WL 8261707 (E.D. Va. Aug. 31, 2016) (Lee, J.) ($300.00); Randle v. H & P Capital, Inc., No. 3:09CV608, 2010 WL 2944907 (E.D. Va. July 21, 2010) (Lauck, M.J.) ($425.00 and $450.00).
The Defendant contests forty separate line items in Mr. Mize's time sheet, totaling 148.6 hours of challenged time. The challenged line items fall into three general categories: travel, block billing, and general excessiveness.
The Defendant also challenges entries related to the TCPA claim, of which the Plaintiff ultimately agreed to dismissal. The court addresses those entries in Part III.B, infra.
Courts around the country differ widely in their treatment of travel time in calculating the lodestar amount. In this District, courts generally allow attorneys to recover a fee award for time spent traveling, but often apply a discount to the hourly rate. See Project Vote/Voting for America, Inc. v. Long, 887 F. Supp. 2d 704 (E.D. Va. 2012) (Smith, C.J.); Prison Legal News v. Stolle, 129 F. Supp. 3d 390, 403–04 (E.D. Va. 2015) (Davis, J.) (collecting cases). The Defendant in this case argues that the court should reduce both the number of hours spent traveling and the hourly rate applied to those hours, in part because Mr. Mize could have agreed to do depositions over videoconferencing or hired local counsel. Response at 10. The court finds that an award of half the claimed travel fees is appropriate, in keeping with recent precedent from this district. Prison Legal News, 129 F. Supp. 3d at 404. Although it was not unreasonable for Mr. Mize to demand in-person depositions, the 57.4 hours of travel time did not require legal skills and presented the opportunity to do work related or unrelated to the case, make business phone calls, or otherwise be productive. The court will reduce the lodestar amount by $11,480.00, or half of the requested attorney's fees related to travel.
The Defendant's arguments regarding block billing are less convincing. The Defendant points to eleven entries that it alleges are "block billing." While it is true that block billing can constitute inadequate documentation of an attorney's time expenditures, courts generally apply the term when an attorney combines multiple unrelated tasks into one entry, such as when an attorney records a single entry for an entire day of work. See Project Vote, 887 F. Supp. 2d at 716. Here, the alleged instances of block billing largely consist of entries where Mr. Mize billed for both researching and writing documents, or for trial preparation. Researching and writing are not necessarily separable activities, and trial preparation often involves a number of different tasks being done simultaneously. As such, the court finds that the Plaintiff has met his burden of describing his entries with sufficient specificity, and, therefore, did not "block bill." However, the court agrees with the Defendant that the descriptions for four of the entries, totaling 25.2 hours, appear to include work that could be considered secretarial rather than legal. See Response at 8–9. The Plaintiff did not respond to this point. Because clerical or secretarial tasks are generally not compensable in an award of attorney's fees, the court will reduce the hours awarded for these four entries by 10%, for a reduction in the lodestar amount of $1,008.00. See Denton v. PennyMac Loan Servs., LLC, 252 F. Supp. 3d 504, 526 (E.D. Va. 2017) (Davis, J.).
Finally, the Defendant challenges as excessive the number of hours billed for certain preparatory tasks. For example, the Defendant asserts that preparation of about eight hours for a deposition, a total of nine hours spent preparing jury instructions, and thirty-seven hours of trial preparation are excessive, given the nature of the claims and counsel's purported experience in these matters. Response at 6–10. The court finds that these entries are not excessive. The trial in this case lasted for three days and involved painstaking review of documents and records. The jury instructions were lengthy and complicated, given the numerous statutory provisions at issue, and the parties did not have the benefit of model jury instructions on the substantive instructions. In disputing the amount of preparation necessary in this case, the Defendant offers no contrary evidence or data to suggest what an appropriate amount of time for these tasks would be. For these reasons, the court will not reduce these entries for alleged excessiveness.
iii. Johnson Factors
The Defendant argues that the court should adjust the lodestar amount based on the twelve Johnson factors. See Johnson, 488 F.2d at 714 (adopted by the Fourth Circuit in Barber v. Kimbrell's, Inc., 577 F.2d 216, 226 & n.28 (4th Cir. 1978) ). The Johnson factors include the following:
(1) the time and labor expended; (2) the novelty and difficulty of the questions raised; (3) the skill required to properly perform the legal services rendered; (4) the attorney's opportunity costs in pressing the instant litigation; (5) the customary fee for like work; (6) the attorney's expectations at the outset of the litigation; (7) the time limitations imposed by the client or circumstances; (8) the amount in controversy and the results obtained; (9) the experience, reputation and ability of the attorney; (10) the undesirability of the case within the legal community in which the suit arose; (11) the nature and length of the professional relationship between attorney and client; and (12) attorneys' fees awards in similar cases.
Barber, 577 F.2d at 226 n.28.
In particular, the Defendant argues that, under factors (2) and (3), the legal issues are not novel, difficult, or requiring of particular legal skill; under factor (8), the results obtained require a lower award; and, under factor (12), the fee awards in similar cases were much lower than the amount sought here. Response at 12. Most of these are addressed elsewhere in this Memorandum Order. However, here, the court will address factor (12), the amounts of attorney's fees awarded in similar cases.
The Defendant points to several cases involving consumer protection statutes where the court awarded substantially lower fees than the amount requested by the Plaintiff. Of those cases, the court finds Beasley, the only one to go to trial, to be the best comparison point. In that case, the court calculated a lodestar amount of $67,020.00, which was the product of 223.4 hours times a $300.00 hourly rate. Beasley v. Red Rock Fin. Servs., LLC, No. 1:14cv1497, 2016 WL 8261707 at *3 (E.D. Va. Aug. 31, 2016) (Lee, J.). Here, the Plaintiff records almost exactly the same number of hours (221.7 hours), and the difference in lodestar amounts is a result of the $100.00 difference in hourly rates. In Beasley, the $300.00 hourly rate was set in the attorney's contract with the plaintiffs. Here, as discussed above, the only evidence on the issue of rates is Ms. Bertini's declaration, which confirms that $400.00 is a reasonable hourly rate. Accordingly, upon review of the Defendant's cited cases, the court finds that Johnson factor (12) does not require a lower lodestar award, but rather supports the lodestar award in this case.
The cited cases are: Carroll v. Wolpoff & Abramson, 53 F.3d 626, 628 (4th Cir. 1995) ; Denton, 252 F. Supp. 3d at 504 ; Beasley, 2016 WL 8261707 ; Withers v. Eveland, 997 F. Supp. 738 (E.D. Va. 1998) (Merhige, J.); Jones v. Vest, No. 3:00cv287, 2000 WL 33907601 (E.D. Va. Dec. 27, 2000) (Dohnal, M.J.).
iv. Final Lodestar Amount
In summary, Mr. Mize seeks fees for 221.7 hours at an hourly rate of $400.00, for a total fee award of $88,680.00. For the reasons discussed above, the court will subtract $11,480.00 to reflect an adjustment to account for travel time, and $1,008.00 to reflect the potentially clerical nature of several time entries. The court finds a lodestar amount of $76,192.00 to be appropriate in this case.
B. Reduction for Hours Expended on TCPA Claim
In general, courts should not award attorney's fees for unsuccessful claims that are wholly unrelated to successful claims. Hensley v. Eckerhart, 461 U.S. 424, 435, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983). The Fourth Circuit has explained that claims are "related" if the claims arose from a "common core of facts" as, and are "impossible to isolate" from, the successful ones. Abshire v. Walls, 830 F.2d 1277, 1283 (4th Cir. 1987), abrogated on other grounds by Green v. Bock Laundry Mach. Co., 490 U.S. 504, 109 S.Ct. 1981, 104 L.Ed.2d 557 (1989). In this case, the Plaintiff added a claim under the TCPA in the Second Amended Complaint, but abandoned the claim two months later at the summary judgment stage. See ECF No. 22 at 2. The Defendant requests that the court deduct fees connected to the TCPA claim. Response at 13. In his Reply, the Plaintiff contends that the TCPA claim was sufficiently related to the successful FDCPA claim to award fees for time spent on it. Reply at 4.
In accordance with Fourth Circuit precedent, the court finds that the TCPA claim was related to the FDCPA claim, because it arose from a common nucleus of facts and required overlapping work. Abshire, 830 F.2d at 1283. As such, the court will not exclude the hours spent on the Second Amended Complaint at this stage, but rather will consider the unsuccessful TCPA claim when it accounts for the degree of success.
C. Degree of Success
The attorney's degree of success is the final and "most critical factor" in determining the fee award. Hensley, 461 U.S. at 436, 103 S.Ct. 1933. This adjustment requires a comparison between the relief sought by the plaintiff and the amount actually recovered. Mercer v. Duke Univ., 401 F.3d 199, 205 (4th Cir. 2005). At the same time, the Fourth Circuit has recognized that attorney's fees play an important role in encouraging private enforcement of consumer protection laws, which often involve relatively low damages awards. Yohay v. City of Alexandria Employees Credit Union, Inc., 827 F.2d 967, 974 (4th Cir. 1987) ("[R]equiring that attorney's fees be proportionate to the amount recovered would discourage vigorous enforcement of the Act."). In considering whether, or how much, to reduce attorney's fees to account for an unsuccessful claim, courts distinguish between unsuccessful claims that were raised as "alternative legal grounds for a desired outcome" where the desired outcome was achieved on other grounds, and unsuccessful claims whose failure resulted in a "partial or limited" award for the client. Hensley, 461 U.S. at 435–36, 103 S.Ct. 1933. In other words, "[t]he result is what matters," regardless of under which count that result was achieved. Id. at 435, 103 S.Ct. 1933.
Courts in this District generally adjust for level of success by applying a percentage "discount" to the lodestar amount. In Denton, a case involving the Fair Credit Reporting Act, not the FDCPA, the court applied a 40% reduction to the lodestar amount where the plaintiff settled for $5,000 in total damages, after seeking $120,000 in the initial settlement negotiations. Denton, 252 F. Supp. 3d at 530. In Randle, an FDCPA case that settled for $6,000, the court did not apply an additional reduction to the lodestar amount apart from a 10% reduction requested by the plaintiff. Randle, 2010 WL 2944907 at *7. In Jones, also an FDCPA case, the court did not apply a reduction to the lodestar amount where, as here, the plaintiff was awarded $1,000 in statutory damages. Jones, 2000 WL 33907601 at *5. In Beasley, an FDCPA case, the court applied a 50% reduction for the plaintiff's limited success in achieving $1,000 in statutory damages and $100 in actual damages. Beasley, 2016 WL 8261707 at *5. The plaintiffs in Beasley had sued for $23,000, the case as to one of the two plaintiffs was dismissed before trial, and the jury found no liability for one of the two defendants. Id.
In determining the degree of success in this case, the court considers several pertinent facts. Over the course of the litigation, the Plaintiff pursued two claims: Count One, a claim under the FDCPA, and Count Two, a claim under the TCPA. The TCPA claim, which would have permitted recovery for actual damages and statutory damages of up to $1,500 per violation, was dismissed on summary judgment. ECF No. 33. At trial, the Plaintiff took the stand and asked for $80,000 in damages on the remaining FDCPA claim. The jury awarded the Plaintiff the maximum statutory damages of $1,000 and zero actual damages. In summary, while the Plaintiff did achieve the maximum statutory damages on one of his counts, his overall damages on that count were only 1.25% of the damages sought; the second of his two claims was dismissed outright before trial; and that second count was the more remunerative of the two, allowing for a maximum statutory damages award of $1,500 per violation. The degree of success here was minimal.
The court must balance the low degree of success in this case, as reflected in the low ratio of damages achieved to damages sought, against a statutory mandate to award attorney's fees, Congress' policy goal of promoting private enforcement of the FDCPA, and cases in this District where the awarded damages were minimal. Accordingly, the court finds it appropriate to reduce the lodestar figure of $76,192.00, see supra Part III.A.iv, by 50%, for attorney's fees in the amount of $38,096.00. This figure is separate from what the parties have termed "expenses and costs," which are discussed next.
Cf. City of Riverside v. Rivera, 477 U.S. 561, 578, 106 S.Ct. 2686, 91 L.Ed.2d 466 (1986).
See Beasley, 2016 WL 8261707 at *3 ; supra text at 10, 13.
D. Expenses and Costs
Finally, the Plaintiff seeks expenses of $6,016.24, which comprises seven categories: (1) the filing fee of $400.00, (2) process server fees of $200.00, (3) court reporter and transcript fees of $1,736.85, (4) conference room rental for the Defendant's deposition of $295.20, (5) shipping fees of $354.34, (6) costs for printing and binding trial documents of $408.24, and (7) travel expenses of $2,621.61. Brief at 17.
The Defendant argues that the recoverable costs are limited to those in 28 U.S.C. § 1920. Response at 15. By the Defendant's calculation, § 1920 would exclude recovery on about $5,000.00 of the Plaintiff's requested expenses, including all of the travel costs. However, the Fourth Circuit has emphasized that, in cases where attorney's fees are "expressly authorized by statute," as in the FDCPA, "the trial court is not limited to [ § 1920 ], but, in addition, has authority to include litigation expenses as part of a ‘reasonable attorney's fee.’ " Herold v. Hajoca Corp., 864 F.2d 317, 323 (4th Cir. 1988). Other courts have similarly found that litigation expenses, including travel expenses, are recoverable as part of the award for attorney's fees in an FDCPA case. See, e.g., McDermott v. Marcus, Errico, Emmer & Brooks, P.C., 53 F. Supp. 3d 312, 324 (D. Mass. 2014). Regardless of whether such expenses are categorized as "costs" or "attorney's fees," the court does, contrary to the Defendant's assertion, retain the discretion to allow recovery for travel and other litigation expenses.
Section 1920 defines the costs that a prevailing party may receive under Federal Rule of Civil Procedure 54(d). Crawford Fitting Co. v. J. T. Gibbons, Inc., 482 U.S. 437, 441, 107 S.Ct. 2494, 96 L.Ed.2d 385 (1987).
In Herold, which was not a FDCPA case but involved a statute with a similar fee-shifting provision, the Fourth Circuit went on to note that, "[t]herefore, the trial court did not abuse its discretion in including as costs the travel expenses of the attorneys." Herold, 864 F.2d at 323.
The Defendant's cited cases, which applied the limitations on costs in § 1920 to FDCPA cases, are not very applicable here, particularly given the Fourth Circuit's instruction in Herold that certain litigation expenses should be awarded as attorney's fees, not as costs. In Shlikas v. Sallie Mae, Inc., Civil No. WDQ-06-2106, 2011 WL 5825660 (D. Md. Nov. 16, 2011), the court determined that the pro se plaintiff could not recover attorney's fees, whether for expenses or time, because attorney's fees can only be awarded to attorneys, not pro se parties. In Hutchens v. West Asset Mgmt., Inc., No. 1:11-00996, 2013 WL 1337178 (S.D. W. Va. Mar. 29, 2013), and Rogers v. Summit Receivables, No. 3:17cv69, 2018 WL 1161144 (W.D. Va. Mar. 5, 2018), the cases ended on default judgment with minimal claimed litigation expenses. In Hutchens, moreover, the court found that it was unable to award attorney's fees because the plaintiffs did not provide sufficient information to determine what a reasonable fees award would be.
Apart from these case comparisons, the Defendant has not made any claim that the specific expenses of $6,016.24 in this case are unreasonable. However, the court reduces the claimed expenses by $400.00, because the Plaintiff has separately filed a Bill of Costs seeking reimbursement for the $400.00 filing fee. See ECF No. 61. Moreover, in accordance with recent cases in this District, the court does not reduce the litigation expenses award to account for the Plaintiff's degree of success. See, e.g., Prison Legal News, 129 F. Supp. 3d at 407–08 ; Signature Flight Support Corp. v. Landow Aviation Ltd. P'ship, 730 F. Supp. 2d 513, 529–31 (E.D. Va. 2010) (Cacheris, J.). The court, therefore, awards litigation expenses of $5,616.24.
IV. Conclusion
In summary, the court calculates a lodestar amount of $76,192.00 for attorney's fees, and a litigation expenses amount of $5,616.24. The court reduces the lodestar amount by 50% to account for the Plaintiff's degree of success in this matter. Thus, the court GRANTS the Plaintiff's Motion for Award of Attorney's Fees and Expenses and AWARDS attorney's fees of $38,096.00 and litigation expenses of $5,616.24, for a total amount of $43,712.24. Accordingly, the Clerk shall enter judgment for the Plaintiff for attorney's fees and litigation expenses in the amounts set forth above.