Opinion
Case No. CIV. S-05-0545 WBS JFM.
September 22, 2006
MEMORANDUM AND ORDER RE: ATTORNEYS' FEES AND COSTS
On July 21, 2006, judgment was entered against defendants Katharsis LLC and William Scheck for copyright infringement under 17 U.S.C. § 505. The court now considers plaintiffs Odnil Music Limited and Fifty-Six Hope Road Music Limited's motion for attorneys' fees and costs.
I. Factual and Procedural Background
Plaintiffs Odnil Music Limited and Fifty-Six Hope Road Music Limited filed suit on March 17, 2005, alleging that they own the copyrights to four songs written by Bob Marley, that defendants infringed those copyrights by causing those songs to be publicly performed in the Owl Club Ale House on September 2, 2004, and that defendants had not purchased a license for the right to do so. (Compl. ¶¶ 11-14 (referencing Schedule A).) Defendants William Scheck and Nathaniel Scheck are members of Katharsis L.L.C., which, in turn, owns the Owl Club Ale House located in Roseville, California. (Id. ¶¶ 4, 5.) This matter came on regularly for trial before the court, sitting without a jury, on July 18, 2006. No appearance was made on behalf of defendants Katharsis LLC or Nathaniel Scheck. Because defendant Nathaniel Scheck failed to appear for trial, and the Magistrate Judge had made Findings and Recommendations recommending that default judgment be entered against defendant Katharsis, plaintiffs elected to proceed in this trial against defendant William Scheck only.
On July 20, 2006, the court made its findings of fact and conclusions of law; pursuant to the court's order, judgment was entered against William Scheck and Katharsis LLC on July 21, 2006. The court indicated that plaintiffs are to recover reasonable attorneys' fees and costs of suit from defendants Katharsis LLC and William Joseph Scheck, jointly and severally. (July 20, 2006 Order ¶ 30.) Plaintiffs now move for attorneys' fees and costs in the amount of $68,020.50. (Pls.' Mot. for Att'ys' Fees 9.) Defendant opposes this motion in its entirety and seeks a denial of all attorneys' fees and costs, or, in the alternative, an award of attorneys' fees in an amount no greater than $5,000.
II. Discussion
As the court previously explained in its order dated July 20, 2006, the Copyright Act provides for the imposition of costs and attorneys' fees in favor of the prevailing party:
In any civil action under this title, the 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. Except as otherwise provided by this title, the court may also award a reasonable attorney's fee to the prevailing party as part of the costs.17 U.S.C. § 505; see also Frank Music Corp. v. Metro-Goldwyn-Mayer, Inc., 886 F.2d 1545, 1556 (9th Cir. 1989) ("Plaintiffs in copyright actions may be awarded attorney's fees simply by virtue of prevailing in the action: no other precondition need be met, although the fee awarded must be reasonable."); Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 (1994). Further, "[a] plaintiff need not succeed on every claim to be entitled to fees and `is a prevailing party by succeeding on any significant issue which achieves some of the benefit sought.'" Mantolete v. Bolger, 791 F.2d 784, 786 (9th Cir. 1986) (citing Soda Mountain Wilderness Council v. Norton, 2006 WL 2054062, *1 (E.D. Cal. July 21, 2006)).
If attorneys' fees are warranted, the district court determines the amount of an award of attorneys' fees by using the lodestar calculation — the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate. Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). There is a strong presumption that the lodestar amount is reasonable. Fischer v. SJB-P.D., Inc., 214 F.3d 1115, 1119 n. 4 (9th Cir. 2000) (citation omitted). However, the court may adjust the lodestar figure if various factors overcome the presumption of reasonableness. Hensley, 461 U.S. at 433-34.
The court may adjust the lodestar figure on the basis of the Kerr factors:
(1) the time and labor required, (2) the novelty and difficulty of the questions involved, (3) the skill requisite to perform the legal service properly, (4) the preclusion of other 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.Kerr v. Screen Guild Extras, Inc., 526 F.2d 67, 70 (9th Cir. 1975). However, many of the Kerr factors have been subsumed in the lodestar approach. Cunningham v. County of Los Angeles, 879 F.2d 481, 487 (9th Cir. 1988). Moreover, although the court should consider the factors established by Kerr, it need not discuss each factor. Sapper v. Lenco Blade, Inc., 704 F.2d 1069, 1073 (9th Cir. 1983).
A. Prevailing Party
The court previously determined that defendants William Scheck and Katharsis LLC knowingly and deliberately infringed upon plaintiffs' copyrights, continue to perform copyrighted materials in the ASCAP repertory, refused to obtain permission to perform copyrighted materials, threatened ASCAP representatives with bodily harm, and forced this matter to be litigated through trial. Therefore, under § 505, plaintiffs are the prevailing party and are entitled to recover reasonable attorneys' fees and costs. See Milene Music, Inc. v. Gotauco, 551 F. Supp. 1288, 1298 (D.R.I. 1982) (finding that where the "defendants had deliberately and knowingly infringed upon plaintiffs' copyrights" and then "forced the plaintiffs to engage lawyers and to resort to the courts to enforce the proprietary interests in the copyrights" without justification, the "litigation fairly crie[d] out for an award of attorneys' fees.").
B. Lodestar Calculation
1. Hours Reasonably Expended
Properly calculated fee awards should represent the reasonable worth of the services rendered in vindication of the plaintiffs' copyright claim. Blanchard v. Bergeron, 489 U.S. 87, 96 (1989). "Counsel for the prevailing party should make a goodfaith effort to exclude from a fee request hours that are excessive, redundant, or otherwise unnecessary. . . ." Hensley, 461 U.S. at 434. When the hours worked or the rates claimed are not supported by evidence or adequate documentation, the district court may reduce the award accordingly. Id. at 433.
Plaintiffs have submitted a billing statement itemizing the time counsel has spent on this matter. Plaintiffs seek $68,020.50 in attorneys' (and paralegals') fees and $6,976.18 in costs. (Alan M. Steinberg Decl. Ex. A.) Defendant would have the court deny all fees and costs as unreasonable, contending that the case should have required minimal preparation and arguing in particular that telephone calls, conferencing, letters, and document reviews were unnecessary and immaterial to proving that the copyright violation occurred. (Def.'s Opp'n to Pl.'s Mot. for Attys' Fees 1.)
By their own actions, defendants compounded the fees at issue here. Both defendants failed, without advance notice or justification, to appear at the settlement conference scheduled for August 8, 2005. (Aug. 9, 2005 Order to Show Cause.) Defendant Nathaniel Scheck additionally failed to appear at the pretrial conference held on May 8, 2006. (May 8, 2006 Pretrial Order 1.) On the morning that the bench trial was scheduled to proceed, defendant William Scheck informed the court that Nathaniel Scheck would not be appearing at trial because he had entered a substance abuse rehabilitation program four days earlier. (See July 18, 2006 Civil Court Trial Minutes.)
By contrast, plaintiffs' actions have demonstrated a willingness to resolve the case expeditiously. After the summary judgment hearing on June 1, 2006, plaintiffs' counsel cautioned defendant William Scheck that proceeding to trial would result in substantial attorneys' fees. (Alan Steinberg Decl. ¶ 6.) When defendant Nathaniel Scheck did not appear for trial, plaintiffs elected to proceed against defendants Katharsis LLC and William Scheck. (July 18, 2006 Civil Court Trial Minutes.) Moreover, plaintiffs have undertaken to reach a stipulated settlement the case with defendant Nathaniel Scheck. What has prevented this case from being resolved in a more efficient and cost-effective manner is hardly an overzealous attempt by plaintiffs to bill elevated fees. Instead, it was defendants' failure to abide by the orders and schedule set by the court that has caused delay and increased expenditures by plaintiffs' attorneys.
Relatedly, the court notes that defendant William Scheck's opposition to this motion was untimely.
Moreover, defendant William Scheck has not demonstrated that the particular work for which plaintiffs seek reimbursement is unreasonable. Provided that the party seeking attorneys' fees submits supporting documentation, courts regularly award attorneys' fees for legal activities such as communications by phone with clients or opposing counsel, document review, and meetings. See, e.g., Assembly of State of Cal. v. U.S. Dept. of Commerce, No. 91-990, 1993 WL 188328, at *12 (E.D. Cal. May 28, 1993) (finding a billing entry that included phone calls reasonable); Monsanto Co. v. Pacificorp, No. 01-607, 2006 WL 1128226, at *8 (D. Idaho Apr. 24, 2006) (awarding attorneys' fees for "considerable time investigating the potential success of filing such a complaint, including interviewing witnesses and reviewing relevant documents"); Martinez v. Longs Drug Stores, Inc., 03-1843, 2005 WL 3287233, at *7 (E.D. Cal. Nov. 28, 2005) (concluding that meetings for support staff were reasonable billing entries). Defendants here have submitted supporting documentation for all of these charges. (Steinberg Decl. Ex. B.) Moreover, activities such as communications, meetings, and document review are commonplace within, and central to, the legal profession. Adequate preparation for trial requires more than simply gathering evidence and marshaling arguments to make a legal claim — it necessarily involves working and interacting with support staff, clients, court staff, and opposing counsel. An attorney should not be expected to perform those essential functions for free. Therefore, without a more specific reason to consider these charges improper, the court will not reduce the amount of attorneys' fees requested.
2. Rate Reasonably Charged
The reasonable hours expended in this litigation must be multiplied by a reasonable hourly rate to determine the lodestar amount. To determine the reasonableness of hourly rates claimed, the court looks to the "prevailing market rates in the relevant community," Blum v. Stenson, 465 U.S. 886, 895 (1984), for "similar work performed by attorneys of comparable skill, experience, and reputation." Chalmers v. City of Los Angeles, 796 F.2d 1205, 1210-11 (9th Cir. 1997). The fee applicant bears the burden "to produce satisfactory evidence — in addition to the attorney's own affidavits — that the requested rates are in line with those in the prevailing community. . . ."Blum, 465 U.S. at 895 n. 11. The relevant community is generally the forum in which the district court sits. Barjon v. Dalton, 132 F.3d 496, 500 (9th Cir. 1997).
Defendant does not appear to contest the hourly rate charged by plaintiffs' counsel.
Plaintiffs' counsel seeks a hourly compensation rate of $195 for Forrest Plant, Jr., a partner of the law firm of Goldsberry, Freeman Guzman, LLP, prior to January 1, 2006, when the firm ceased billing at that flat rate. Subsequently, Mr. Plant billed at an hourly rate of $235. The same billing schedule holds for David L. Ditora, another partner at the same firm. For the work performed by associate Alan M. Steinberg, plaintiffs' counsel seeks compensation of $200 an hour. Plaintiffs' counsel further seeks $75 an hour for paralegal Joan Debra Ellison. (Steinberg Decl. Ex. B at 7.) This court has consistently found that $250 per hour for an experienced attorney and $75 for a paralegal are reasonable hourly rates for this community. Loskot v. U.S.A. Gasoline Corp., No. 01-2125, slip op. at 11 (E.D. Cal. Apr. 26, 2004) (applying those rates to determine plaintiff's attorneys' fees); see also Sanford v. Thrifty Payless, Inc., No. 02-480, 2005 WL 2562712, at *4 (E.D. Cal. Oct. 11, 2005) (implicitly recognizing that these are rates are still reasonable); Hiram C. v. Manteca Unified Sch. Dist., No. 03-2568, slip op. at 3 (E.D. Cal. Nov. 5, 2004) (finding $250 to be a reasonable hourly rate for an experienced attorney).
The court has additionally found $150 an hour to be the standard hourly rate for an associate practicing in this district in suits brought under the Americans with Disabilities Act.See, e.g., White v. GMRI, Inc., No. 04-0620, 2006 U.S. Dist. LEXIS 2059, at *14-15 (E.D. Cal. 2006); Eiden v. Thrifty Payless Inc., 407 F. Supp. 2d 1165, 1171 (E.D. Cal. 2005). Mr. Steinberg's rates are admittedly higher than that rate. However, Mr. Steinberg has over ten years of litigation experience (see Alan Steinberg Decl. Ex. E (Resume)), which was amply demonstrated by his proficiency in litigation skills in the proceedings before thiscourt. Mr. Steinberg has additionally represented that the hourly rate he seeks in this motion is the standard fee that he charges and collects from clients, including plaintiffs (when he is retained by them on other matters). Moreover, although Mr. Steinberg is not an expert in copyright law, he represented to the court that he wisely relied on his client's considerable expertise in the field to avoid research costs he might have otherwise incurred due to any unfamiliarity with the field. Plaintiffs did not submit bills for the client's time. Therefore, based on Mr. Steinberg's skills and experience, the court finds that a fee higher than the rate previously approved by this court for associates in disability cases is eminently reasonable here.
The remainder of the hourly rates are at or below the billing rates previously approved by this court in other cases, and the court therefore finds them reasonable. Thus, the court will apply the hourly rates of $195 for Alan Steinberg prior to January 1, 2006, and $200 after that time; $195 for Forrest Plant, Jr. and David L. Ditora prior to January 1, 2006, and $235 after that time; and $75 for paralegal Joan Debra Ellison.
The court notes that the billing statement plaintiffs submitted incorrectly lists Mr. Steinberg's rate at $235/hour, which is higher than plaintiffs contend it should be. (See Steinberg Decl. Ex. B (Invoice 19878 at 5).) However, plaintiffs appear to have calculated the total amount of fees correctly.
3. Adjusting the Lodestar Calculation
Defendants additionally appear to request that this court apply a negative multiplier to the court-determined lodestar amount. (Def.'s Opp'n to Pl.'s Mot. for Attys' Fees 4-5.) There are twelve factors that the court in Kerr indicated could be used to apply a negative multiplier to the lodestar amount, but fiveKerr factors are subsumed in the lodestar analysis: (1) the novelty of the issues, (2) the skill and experience of counsel, (3) the quality of representation, (4) the results obtained, and (5) the contingent nature of the fee agreement. Morales v. City of San Rafael, 96 F.3d 359, 364 n. 9 (9th Cir. 1996). Further, there is a strong presumption that the lodestar amount is reasonable. Fischer, 214 F.3d at 1119 n. 4.
Defendants argue that the questions involved did not present any particular novelty or difficulty (Def.'s Opp'n to Pl.'s Mot. for Attys' Fees 3), and accordingly, the court should reduce the fee amount. However, to consider the novelty of the issues would be to consider a factor already subsumed in the lodestar analysis. This circuit disfavors consideration of subsumed reasonableness factors after the lodestar has been calculated. Morales, 96 F.3d at 364 n. 9. Therefore, the court is unpersuaded by defendant's argument in favor of departure from the lodestar calculation.
4. Costs
Plaintiffs have submitted a cost bill totaling $6,976.18. Defendants have not objected. The fact that defendant William Scheck subsequently filed an appeal of the court's underlying judgment has no bearing on the court's jurisdiction to consider this bill of costs. Cent. States, Se. Sw. Areas Pension Fund v. Cent. Cartage Co., 992 F. Supp. 980, 985 (N.D. Ill. 1998) ("A district court may still address ancillary matters, such as costs, while a case is pending appeal." (citingKusay v. United States, 62 F.3d 192, 194 (7th Cir. 1995)));see also United States v. Kersting, 891 F.2d 1407, 1413 (9th Cir. 1989) (recognizing that "a motion for costs may be collateral to the action on appeal" if it "does not seek reconsideration of substantive issues resolved in the judgment"),overruled on other grounds by Richmark Corp. v. Timber Falling Consultants, 959 F.2d 1468, 1480 (9th Cir. 1992). Additionally, because defendants William and Nathaniel Scheck are jointly and severally liable for fees and costs in this action, (see July 20, 2006 Order 19), the court need not wait until Nathaniel's liability is determined before awarding costs.
At oral argument on the motion for attorneys' fees, defendant William Scheck contended that plaintiffs should not have flown to attend the settlement conference. (This would appear to be a brazen position to be taken by one who himself defied the court's order by his failure to appear at the settlement at all.) In order to facilitate settlement, the court required that parties with decision-making authority attend the settlement conference. Therefore, the cost of a flight for a person with the ability to make settlement decisions was a necessary expense, and has appropriately been included in the cost bill.
Rule 54(d)(1) of the Federal Rules of Civil Procedure and Local Rule 54-292(f) govern the taxation of costs to losing parties, which are generally subject to limits set under 28 U.S.C. § 1920.See 28 U.S.C. § 1920 (enumerating taxable costs); Fed.R.Civ.P. 54(d)(1) ("costs other than attorneys' fees shall be allowed as of course to the prevailing party unless the court otherwise directs. . . ."); L.R. 54-292(f); Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 441 (1987) (limiting taxable costs to those enumerated in 28 U.S.C. § 1920). However, when a party prevails on claims of copyright infringement, the limitations imposed by 28 U.S.C. § 1920 do not apply. See 17 U.S.C. § 505 (permitting the court, in its discretion, to "allow the recovery of full costs by or against any party" in actions for copyright infringement (emphasis added)); Twentieth Century Fox Film Corp. v. Entm't Distrib., 429 F.3d 869, 885 (9th Cir. 2005) ("[D]istrict courts may award otherwise non-taxable costs, including those that lie outside the scope of § 1920, under § 505.").
Under either statute, the court exercises its discretion in determining whether to allow certain costs. 17 U.S.C. § 505 ("[U]nder this title, the court in its discretion may allow the recovery of full costs. . . ."); Amarel v. Connell, 102 F.3d 1494, 1523 (9th Cir. 1997) (holding that the district court has discretion to determine what constitutes a taxable cost within the meaning of 28 U.S.C. § 1920); Alflex Corp. v. Underwriters Labs., Inc., 914 F.2d 175, 177 (9th Cir. 1990) (same). Also, regardless of the applicable statute, the losing party has the burden of overcoming the presumption in favor of awarding costs to the prevailing party. See Russian River Watershed Protection Comm. v. City of Santa Rosa, 142 F.3d 1136, 1144 (9th Cir. 1998) (noting that the presumption "may only be overcome by pointing to some impropriety on the part of the prevailing party"); Amarel, 102 F.3d at 1523; see also L.R. 54-292 (d) ("If no objection is filed, the Clerk shall proceed to tax and enter costs.").
After reviewing the bill, the court finds that certain costs are unreasonable. Namely, the court takes issue with the costs for subsistence (lodging and meals) for witnesses called by defendant at William Scheck's trial. The subsistence costs ($479.98 for Dean DeMerritt, $243.76 for Scott Greene, and $253.22 for Kevin McDonough) exceed the statutory limits for a two day/one night stay in the Sacramento area. 28 U.S.C. § 1821(d)(2) ("A subsistence allowance for a witness shall be paid in an amount not to exceed the maximum per diem allowance prescribed by the Administrator of General Services . . . for official travel in the area of attendance."). The maximum amount that plaintiffs can bill for these three witnesses comes to $183 each. See U.S. Gen. Servs. Admin., Per Diem Rates, California — FY 06, available at at http://www.gsa.gov/Portal/gsa/ep/perdiem.do? pf=yqueryYear=2006queryState=California (last visited Sept. 18, 2006) (setting the maximum lodging cost, excluding taxes, at $94 per day and allowing for $44.25 for meals and incidental expenses on the first and last day). Pursuant to the foregoing discussion, costs of $5,525.02 will be allowed.
Although the maximum GSA rate for hotel stays does not include taxes, the court is ignorant of the going rate for applicable taxes in the Sacramento area during the relevant time period and consequently cannot take account of these amounts in this order.
III. Conclusion
In accordance with the foregoing discussion, attorneys' fees are awarded in the following amounts:
David L. Ditora: 7.7 hours @ $195/hr = $1,501.50 19.5 hours @ $235/hr = $4,582.50 Forrest Plant, Jr.: 37.5 hours @ $195/hr = $7,312.50 40.4 hours @ $235/hr = $9,494.00
Alan M. Steinberg: 221.3 hours @ $200/hr = $44,260.00 Paralegal: 11.6 hours @ $75/hr = $870.00 Costs: ($6,976.18 — $1,451.16) = $5,525.02
TOTAL = $73,545.52
IT IS THEREFORE ORDERED that plaintiffs' motion for attorneys' fees and costs as against defendants William Scheck and Katharsis LLC be, and the same hereby is, GRANTED in the total sum of $73,545.52.