Opinion
Civil Action No: 02-156, SECTION: 02-156
April 17, 2003
ORDER AND REASONS
Before the Court is plaintiff's Statement of Itemized Costs (Rec. Doc. 28) and defendants' Traverse of Plaintiff's Itemized Statement of Costs (Rec. Doc. 30). Having considered the record, the memoranda of counsel, and applicable law, the Court finds that defendants are entitled to costs in the amount of $1883.40 to reiniburse attorney's fees incurred in connection with their Motion for Entry of Final Judgment.
BACKGROUND
This suit arises from the alleged breach of a franchise agreement by Viva La Smoothie, Inc., a franchisee of plaintiff Smoothie King Franchises, Inc. Following extensive negotiations between the parties, in August of 2002, the parties ostensibly had worked through their differences, and submitted a joint consent order resolving the matter to the Court, which was signed and entered as an order in this case. However, by November of 2002, defendants had failed to follow through with certain obligations they owed under the consent order. Accordingly, plaintiff filed a Motion for Entry of Final Judgment and for Sanctions (Rec. Doc. 11), seeking to enforce the terms of the negotiated settlement, as well as sanctions for its costs incurred in bringing the motion.
Defendants filed an opposition to the motion. Prior to the hearing date, the Court scheduled a conference in chambers to discuss the motion, in the hope that any misunderstandings could be corrected and the issues amicably resolved. At that conference, the Court informed defense counsel that it considered the opposition frivolous and violative of counsel's duties as an officer of the Court. Accordingly, the Motion for Entry of Final Judgment and for Sanctions was granted, in an order which set a Rule to Show Cause why defense counsel should not be sanctioned under Rule 11 and 28 U.S.C. § 1927. At a hearing in open court on January 9, 2003, the Court found that counsel had engaged in sanctionable conduct, and ordered defense counsel to pay Rule 11 sanctions in the amount of $2,500. The Court further ordered plaintiff to file the instant statement of itemized costs incurred in bringing the motion (which would not have needed to have been brought in the absence of the sanctionable conduct), and provided the defendants an opportunity to submit a traverse. How, having reviewed the parties' submissions, the Court finds that plaintiff is entitled to an award of attorney's fees of $1883.40, for attorney's fees attributable to the New Orleans law firm Baldwin Haspel for work performed by Lance Arnold, Esq. and the Chicago law firm Piper Rudnick for work performed by Norman Leon, Esq. and Margaret Egan, Esq.
DISCUSSION
The Fifth Circuit has adopted the "lodestar" method for calculating attorney's fees. See Fender v. Zapata Partnership, Ltd., 12 F.3d 480, 487 (5th Cir. 1994); Heidtman v. County of El Paso, 171 F.3d 1038, 1042-43 (5th Cir. 1999). The "lodestar" is calculated by multiplying the number of compensable hours reasonably expended by a rate that is considered appropriate in the community. Shipes v. Trinity Industries, 987 F.2d 311, 319-20 (5th Cir. 1993).
In calculating the number of compensable hours, courts consider whether the total number of hours claimed is reasonable based on the nature and extent of the legal services rendered. Hensley v. Eckerhart, 103 S.Ct. 1933, 1939-40. Excessive or duplicative time is not compensable. Watkins v. Fordice, 7 F.3d 453, 457 (5th Cir. 1993). In determining a reasonable hourly rate, courts look to the prevailing community standards for attorneys of similar experience in similar cases.Shipes, 987 F.2d at 319. Courts in this district have applied a "forum rule" which requires "the district court to determine only the prevailing market rate within its jurisdiction, an inquiry about which it should develop expertise." Diamond Shamrock Exploration Co. v. Hodel, 1991 WL 62097, *2 (E.D. La. Apr. 15, 1991). Under the so-called "forum rule," a party seeking out-of-town rates must demonstrate that local counsel was unavailable due to some exceptional circumstance. Id.; see also, Globe Glass Mirror Co. v. Brown, 1996 WL 325602 8128, at *7 (E.D. La. Jun. 12, 1996) ("The prevailing market rates in the relevant community should be used unless the subject matter is so unusual or requires such special skills that only an out of state attorney can handle prosecution of the lawsuit.").
At all times, "the fee applicant bears the burden of establishing entitlement to an award and documenting the appropriate hours expended and hourly rates. The applicant should exercise `billing judgment' with respect to hours worked and should maintain billing time records in a manner that will enable a reviewing court to identify distinct claims."Hensley, 103 S.Ct. at 1941. Finally, once the lodestar has been determined, the "district court may then adjust the lodestar upward or downward depending on the respective weights of the twelve factors set forth in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974)."
With these principles as a background, the Court considers the fee application for each attorney in turn.
Compensable Hours
Mr. Arnold
Plaintiff has submitted the following time entries on behalf of Mr. Arnold:1. 12/12/02; .32 hours. "Telephone conference with Norman Leon."
2. 12/13/02; .82 hours. "Telephone conference with Norman Leon; E-Mail to Jill Schultz."
3. 12/16/02; 2.68 hours. This entry reflects tasks associated with and attendance at the conference held by the Court to address the motion. The only portion defendants dispute is an entry for "Review of letter from Traina."
With respect to the first two entries, the Court finds that they are too vague because they do not indicate whether the conferences were connected to plaintiff's Motion for Entry of Final Judgement. Because the fee claimant has the burden of establishing entitlement to a fee award and has failed to do so with respect to these entries, no fees should be awarded for the associated time.
With respect to the third entry, the referenced letter contains the apology to the Court from the defendants' counsel and bears no connection to the plaintiff's Motion for Entry of Final Judgement. Thus, the Court finds that the recorded hours for this entry should be reduced by .25 hour.
Accordingly, Mr. Arnold's submitted total, 4.50 hours, should be reduced by 1.39 hours (.32 + .82 + .25), and his total of compensable hours is 3.11.
Ms. Egan
Defendants have suggested that the out of state attorneys should not be compensated for any fees incurred prior to pro hac vice admission, noting that Ms. Egan was never admitted pro hac vice, and Mr. Leon was not admitted pro hac vice until December 16, 2002. In making this argument defendants cite only one case, Mitchell v. Johnston, which they concede is not directly on point. 701 F.2d 337 (5th Cir. 1983). The Court's review of the Mitchell case indicates that it does not prohibit such fees, but rather that it emphasizes that the touchstone inquiry for out of state counsel is whether the attorneys have performed "competent nonduplicative work." Id. at 351. The fees allowed for out of state counsel in this case are for work that was both competent and non-duplicative.
Plaintiff has submitted the following time entries on behalf of Ms. Egan:
1. 11/20/02; 1.10 hours. "Conference with N. Leon re: entry of consent judgement; conference with defendants' counsel, Richard Traina, re: same; draft of motion for entry of judgement."
2. 11/21/02; 3.00 hours. "Research for and draft of motion for entry of judgement."
3. 11/22/02; 1.30 hours. "Revisions to motion for entry of judgement; conference with N. Leon re: same; conference with L. Arnold re: same; conference with client re: same."
In the above referenced time entries, Ms. Egan reports spending a total of 5.40 hours performing activities connected with plaintiff's Motion for Entry of Final Judgement, three of which were spent on the actual research and drafting of the motion. While it may well be that the task could have been accomplished in less time, the Court cannot say the time spent is excessive. Accordingly, Ms. Egan is entitled to the full 5.40 hours requested in these three entries.
4. 12/5/02; .20 hours. "Conference with Jenna Smith re: response to motion to re-set hearing and pro hoc [sic] vice motion."
To the extent the conference described in this entry is related to the "pro hac vice" motion, it clearly is not recoverable because it is entirely unrelated to the Motion for Entry of Judgment. Further, it is simply unclear whether the other topic discussed is related or not. Accordingly, this time is not compensable.
5. 12/16/02; .50 hours. "Telephone conference with Court, R. Traina and N. Leon re: hearing on Motion for Entry of Judgement; conference with N. Leon re: same."
Mr. Leon and Mr. Arnold have submitted entries for the same date that are partially redundant. Attorneys should be compensated for "competent and nonduplicative work." Mitchell v. Johnston, 701 F.2d 337, 351 (5th Cir. 1983). Ms. Egan and Mr. Leon are both attorneys employed by the law firm Piper Rudnick; accordingly, Ms. Egan's hours are duplicative of the hours submitted by Mr. Leon for this activity, and therefore are not compensable.
Summarizing the above, Ms. Egan's submitted total, 6.10 hours, should be reduced by a total of .70 hours (.20 + .50). Ms. Egan's new total of compensable hours is 5.40.
Mr. Leon
Plaintiff has submitted the following time entries on behalf of Mr. Leon:
1. 11/22/02; 1.60 hours. "Conference with M. Powers and Sherri regarding matter; make final revisions to motion to enter judgement and for sanctions; conference with local counsel regarding matter; review email from local counsel."
2. 12/16/02; 3.90 hours. "Telephone conference with Judge Barbier on motion to enter judgement and for sanctions; conferences with local counsel and Sherri re: same; correspondence with Sherri and Rachel Rosenblum re: Webster Store; review Viva's opposition to motion; conference with Mr. Arnold re: same; review letter from R. Traina [to Court re: sanctioned conduct]; conference with R. Traina."
3. 12/26/02; 2.50 hours. "Review order on motion to enter judgement and for sanctions; conferences with client re: same; conferences with R. Traina; e-mail to client re: proposal."
4. 1/10/2003; .70 hours. "Review judgment; review letter from local counsel regarding bill of costs; conference with Mr. Powers regarding letter for Viva's counsel; review order granting sanctions."
With respect to the first entry, it does not indicate what "matter" was being addressed or the topic of the email reviewed. The only portion of the entry clearly related to the Motion for Entry of Judgment is "make final revisions to motion to enter judgement and for sanctions." Given the length and substance of the motion, the Court finds that half an hour is sufficient to revise it, accordingly, only .50 of this entry is compensable.
The second entry also contains items clearly unrelated to the motion, such as the Webster project and review of Traina's letter. However, it is unclear what portion of the total time requested these unrelated tasks took up (although the Court has previously concluded review of the Traina letter would take no more than .25). The Court is thus required to work backwards into an appropriate amount of time for compensable tasks; it estimates that the conference with the Court would have taken no more than .50 (unfortunately, the Court does not have a precise record of the length of the conference), that discussing the conference with interested parties should not have taken more than .50 (.25 each), and that review of Viva's opposition should have taken approximately .50. Thus, of the time requested, 1.5 is demonstrably compensable.
The third entry suffers from the same problem — while some of the time is compensable, some is not (namely, email to client re: proposal, which is just not clearly related to the Motion to Enforce Judgment), and it is unclear what portion of the total was devoted to compensable services. Allowing .50 for review of the order, and .50 for the conferences, the Court finds that one hour of the requested time is allowable.
With respect to the fourth entry, the only portion which appears compensable is "review judgment." The Court finds that this should not have taken more than .25.
Accordingly, Mr. Leon's submitted total, 8.70 hours, should be reduced to 3.25 compensable hours.
Having established the total compensable hours for each attorney, the Court next considers what is an appropriate rate for each.
The Appropriate Rate
Defendants do not object to the hourly rate sought by Mr. Arnold, plaintiff's local counsel practicing at the Baldwin Haspel firm, of either $180.00 or $200.00 per hour. The Court's review of the average rates awarded in this jurisdiction also indicates that this range is fair for an attorney of Mr. Arnold's experience. "An attorney's requested hourly rate is prima facie reasonable when he requests that the lodestar be computed at his or her customary billing rate, the rate is within the range of prevailing market rates and the rate is not contested." Jimenez v. Paw-Paw's Camper City, Inc., 2002 WL 257691, *19 (E.D. La., Feb. 2, 2002), citing Louisiana Power Light Co. v. Kellstrom, 50 F.3d 319, 328 (5th Cir. 1995). Accordingly, the Court finds that Mr. Arnold's time should be reimbursed at a rate of $190.00 per hour.
Mr. Arnold's rate changed from $180 per hour to $200 per hour on January 1, 2003; $190 represents the average.
However, the rates charged by the Chicago-based Piper, Rudnick attorneys — $320.00 per hour for Mr. Leon and $280.00 per hour for Ms. Egan — are problematic, because they reflect average rates in Chicago rather than in this forum. See, Diamond Shamrock Exploration Co. v. Hodel, supra. Further, in requesting their fees, the Piper, Rudnick attorneys have not demonstrated that the subject matter involved in this suit was so unusual, or that it required such special skill, that only an out of state attorney could handle the suit. See, Globe Glass Mirror Co. v. Brown, 1996 WL 325602 8128, at *7. Accordingly, the hourly rate for the Chicago-based attorneys should be consistent with appropriate rates in the New Orleans legal community.
A review of his credentials suggest that Mr. Leon's hourly rate should be equivalent to Mr. Arnold's hourly rate of $190 per hour. Ms. Egan had been working as a litigation associate with Piper, Rudnick for approximately 5 years and has other legal experience through working for the U.S. Department of Justice (for about one year) and interning with the Office of the Public Defender, South Bend, Indiana. Attorneys with comparable experience in New Orleans charge between $100 and $130 per hour. See Police Association of New Orleans v. City of New Orleans, 1995 WL 608470, *2 (E.D. La. Oct. 16, 1995) (Reasonable rate for non-lead attorney was between $100 and $125 per hour); Green v. The Administrators of the Tulane Educational Fund, 284 F.3d 642, 662 (5th Cir. 2002) (affirming rate of $110 per hour for first-year associate based on Magistrate Judge's finding that $100 — $130 per hour appropriate for non-lead attorneys.) The Court concludes that $125 per hour is a fair rate for Ms. Egan's services.
Calculation of the Lodestar
Based on the number of compensable hours and rates for each attorney, the lodestar can be calculated as follows:
Total Hours x Rate = Recoverable Fees
Mr. Arnold: 3.11 $190 $590.90
Ms. Egan: 5.40 $125 $675.00
Mr. Leon: 3.25 $190 $617.50
The Johnson Factors
Having calculated the lodestar, a district court may alter it based on the relative weights of the twelve factors set forth in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974). However, the lodestar may not be adjusted due to any Johnson factor if that factor has already been taken into consideration in determining the lodestar. Shipes, 987 F.2d at 319-20. The Court's review of the Motion For Entry of Final Judgement filed by the plaintiff does not indicate that there is anything so exceptional about it to justify an enhanced award based on the Johnson factors.
The Johnson factors are as follows: (1) the time and labor required; (2) the novelty and difficulty of the issues; (3) the skill required to perform the legal services properly; (4) the preclusion of other employment by the attorney; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) the time limitations imposed by the client or circumstances; (8) the amount involved and 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) the award in similar cases. 488 F.2d at 717-19.
CONCLUSION
Based on the calculation of the lodestar for each of attorney claiming fees in this case as set forth above,
IT IS ORDERED that the plaintiff should be awarded fees in the amount of $590.90 for Mr. Arnold, $675.00 for Ms. Egan, and $617.50 for Mr. Leon.