Opinion
15-CV-4244 (JGK) (OTW)
03-31-2023
GYM DOOR REPAIRS, INC., et al., Plaintiffs, v. TOTAL GYM REPAIRS, et al., Defendants.
REPORT& RECOMMENDATIONTO THE HONORABLE JOHNG. KOELTL
ONA T. WANG, UNITED STATES MAGISTRATE JUDGE
I. INTRODUCTION
The action is before me for a Report and Recommendation on attorney's fees and costs. Plaintiffs brought this suit against 19 defendants, seeking permanent injunctive relief, damages, and attorney's fees and costs for Defendants' alleged infringement of Plaintiffs' patent, copyrights, and trademarks, and for unfair competition, tortious interference with business relationships, and civil conspiracy. (ECF 989). The relevant Defendants for this Report & Recommendation include Defendants Qpala Enterprises, Guardian Gym Equipment, and James Petriello (collectively, “Guardian”) for fees and costs; and, Defendant Total Gym Repairs (“Total Gym”) and Defendant Carl T. Thurnau (“Thurnau”) for costs only.
Total Gym was previously awarded fees of $91,810.00. (See supra Part II(d)).
Counsel for Guardian, Furgang & Adwar, LLP (hereinafter “F&A”), including Phillip Furgang (“Mr. Furgang”), also previously represented Defendants Tri-State Folding Partitions, Inc. and Peter Mucciolo (collectively, “Tri-State”). (ECF 325). F&A withdrew representation of Tri-State on March 11, 2020 and has not sought fees for his former clients. (ECF 875). Tri-State is now represented by Kantrowitz, Goldhamer & Graifman, P.C. (“Kantrowitz”) in this proceeding and in New York State Court. (ECF 879, 880).
The New York State Court proceeding is a fee dispute brought by F&A against Tri-State for unpaid fees in this action. (ECF 1002 at 2).
For the following reasons, I recommend that: the Court award the costs of $25,420.43 to Thurnau, $8,717.91 to Total Gym, and $17,626.61 to Guardian; and, that the Court award Guardian $56,285 for attorney's fees.
II. BACKGROUND AND PROCEDURAL HISTORY
The Court assumes familiarity with the case's facts, procedural background, the Court's previous Orders, and the lengthy electronic docket.
a. 2016 Motion to Dismiss and 2018 Motion for Summary Judgment
In an Opinion and Order dated September 9, 2016, The Honorable John G. Koeltl granted in part and denied in part the Defendants' motion to dismiss. Gym Door Repairs, Inc. v. Young Equip. Sales, Inc., 206 F.Supp.3d 919 (S.D.N.Y. 2016). Judge Koeltl dismissed from the case defendants Dennis Schwandtner, Richard Young, Brian Burke, and the NYCDOE Defendants. Id. Judge Koeltl also granted dismissal of certain claims, including in relevant part to the defendants at issue: (1) the patent infringement claims against all defendants; (2) the copyright infringement claims against Thurnau and Total Gym; (3) all claims against Thurnau in his official capacity; (4) and, the civil conspiracy claims against Total Gym, Guardian, and Tri-State. Id. Some claims against Total Gym, Guardian, and Thurnau remained in the case. On September 19, 2018, Judge Koeltl granted Defendants' motions for summary judgment on all remaining claims except for one copyright claim against the Young Defendants. (ECF 685). Gym Door Repairs, Inc. v. Young Equipment Sales, Inc., 331 F.Supp.3d 221, 230 (S.D.N.Y. 2018). Plaintiffs filed a motion for reconsideration on September 27, 2018. (ECF 687, 688). On October 30, 2018, Judge Koeltl denied the Plaintiffs' motion for reconsideration, and denied leave to file a second motion for reconsideration. (ECF 711).
The copyright claim against the Young Defendants was settled in May of 2019. (ECF 773, 775).
The remaining claims for each defendant at issue here were: (1) tortious interference, trademark infringement and unfair competition for Total Gym; (2) tortious interference and civil conspiracy for Thurnau; (3) tortious interference, copyright infringement, and trademark infringement and unfair competition for Guardian; and, (4) tortious interference, copyright infringement, and trademark infringement and unfair competition for Tri-State.
Guardian filed counterclaims for abuse of process, tortious interference with business relationships, and tortious interference with prospective business relationships. (ECF 256). On June 10, 2020, Judge Koeltl directed the Clerk to enter judgment dismissing all claims and counterclaims with prejudice. (ECF 889).
b. Defendants' Motions for Attorney's Fees and Costs
All told, the parties filed more than 100 docket entries (excluding appended exhibits) over time in connection with their motions for attorney's fees and costs. On July 1, 2020, Total Gym filed their motion for attorney's fees and costs. (ECF 896, 897, 898). On July 8, 2020, Guardian filed their motion for attorney's fees and costs seeking “fees of $639,140.73 and costs and disbursement of $46,000.00 for a total of $685,140.73.” (ECF 899, 900, 903). While Total Gym submitted invoices in support of their motion (ECF 898-28), F&A did not. Plaintiffs, Total Gym, and Guardian, then opposed each other's filings. (See ECF 901, 902, 911, 912, 918, 919, 924, 933, 934).
Guardian also re-filed their memorandum of law on July 30, 2020. (ECF 935). The memorandum of law is identical to the one filed previously, except for Table of Authorities and part of the Table of Contents, both of which were moved to the front of the document instead of the end.
Thurnau and Total Gym filed Bills of Costs. (See ECF 907, 908 (Thurnau); 909, 917 (Total Gym). Due to an alleged “server upgrade issue,” which led to an “unavoidable delay in filing the Bill of Costs,” Guardian requested and received an extension to July 29, 2020, to file their Bill of Costs. (ECF 920, 922, 924). F&A finally filed a correct Bill of Costs on August 7, 2020, which they amended three weeks later. (ECF 947, 957) (See also 921, 941, 942, 944, 945, 946 (incorrectly filed Bills of Costs)). The parties briefed objections (ECF 928, 929, 930, 938, 939) and replies (ECF 940). The Clerk of Court issued decisions on Taxation of Costs for Thurnau (ECF 949) and Total Gym (ECF 950), which Plaintiffs appealed. (ECF 951, 952). Thurnau opposed (ECF 953), and Plaintiffs filed objections and repeated replies to their own appeal (ECF 954, 955, 961).
Judge Koeltl then referred this matter to me for a Report and Recommendation on the various Defendants' motions for attorney's fees and appeals of the Taxations of Costs. (ECF 960). The Clerk of Court issued a decision on Guardian's Bill of Costs, finding the amount should be $0 since they did not explain their transcript costs and costs for parking, tolls, mileage, and meals were not recoverable. (ECF 962). Guardian appealed the Clerk of Court's decision (ECF 963, 964) and Plaintiffs opposed (ECF 965, 966).
c. The February 2021 R&R on Fees and Costs
On February 22, 2021, I issued a Report and Recommendation. (“R&R”) (ECF 977). I found that Total Gym and Guardian should be entitled to recover attorney's fees for defense against Plaintiff's trademark, patent, and copyright claims, but denied relief under 28 U.S.C. § 1927 and New York State Judiciary Law § 487. (R&R at 19). Total Gym's fees were calculated by a lodestar analysis using Total Gym's hourly rate of $250 per hour and a 20% reduction in hours charged, for a total fee award of $91,810.00. (R&R at 23-24).
Only Guardian moved for fees under New York State Judiciary Law, and they cited to the incorrect statute, 28 U.S.C. § 498 instead of § 487. (R&R at 19).
Guardian sought “estimated” fees totaling $639,140.73 but did not submit a single invoice. Because Guardian did not provide the requisite support for a fee reward in any amount, I recommended Judge Koeltl deny their request for fees entirely. (See R&R 24) (“[T]he briefest examination of the caselaw would reveal that in successful fee applications, the party submitted contemporaneous time records.”).
Regarding costs, I found that Total Gym, Guardian, and Thurnau were all entitled to costs of transcripts for depositions and court conferences, including the deposition of Stephen J. Cole. (R&R at 27-28). I recommended modifications to each Taxation of Costs accordingly. (R&R at 30, 31). As for Guardian's other costs, I found that parking, mileage, and tolls are not recoverable under Local Rule 54.1 and thus should be denied. (R&R at 31).
Again, everyone filed objections and opposed each other's objections. (ECF 979, 983, 984, 986). Guardian attached, for the first time, 271 pages of copies of their invoices to Guardian. (ECF 980, 981, 982 (“Invoices”)). In addition to their own objections, Guardian joined in Thurnau's and Total Gym's objections and oppositions. (ECF 985, 987).
F&A first incorrectly filed their objections as an appeal of the R&R. (ECF 987). After filing their objections properly, they re-filed on the same day. (ECF 981).
d. Judge Koeltl's Opinion and Order
On March 26, 2021, Judge Koeltl adopted the portion of my R&R that recommended the award of $91,810.00 for Total Gym and the finding that Guardian was entitled to attorney's fees. (ECF 989 at 11) (“O&O”). Judge Koeltl also adopted my recommendation regarding reasonable deposition transcript costs, court conference costs, and denial of Guardian's requests for meals, mileage, and parking. (O&O at 17). Judge Koeltl remanded the matter to me for another Report & Recommendation on the amount of attorney's fees to Guardian and to determine the precise amount of costs to be awarded to each defendant. (O&O at 13-17).
Plaintiffs also attempted to renew their objections to Total Gym's fees award. I have neither the jurisdiction nor the inclination to revisit Total Gym's fees award.
e. Supplemental Briefing on Costs
I ordered the defendants to submit a joint calculation of pro rata shares of transcript costs of an original plus one copy for each deposition. (ECF 990). Defendants filed a joint calculation requesting separate judgments in the following amounts: $25,420.43 for Thurnau, $8,737.91 for Total Gym, and $17,626.61 for Guardian. (ECF 993). Without leave of court and outside of the Court's order, Guardian submitted an attached addendum for “costs in connection with the depositions,” in which they also again requested costs for parking, mileage, tolls, meals, totaling $5,386.13. (ECF 993-1 at 5-6). They also listed $25,764.50 for their “Billed Depositions” and cited to ECF 948-3 without explanation. (ECF 993-1 at 6).
f. Supplemental Briefing F&A's Attorney's Fees
I also directed the relevant parties to file supplemental briefs regarding F&A's attorney's fees. (ECF 990). Plaintiff's opposition argued, inter alia that: F&A's invoices were not contemporaneous time records, 918 entries were purely clerical or administrative tasks, 775 entries were unrelated to the intellectual property claims, 375 entries were too vague, their legal research was unspecified, and the billing rates for each of the attorneys was unascertainable. (ECF 994). Their memo included a 271-page exhibit of F&A's invoices (ECF 982) annotated with individual comments inserted in Microsoft Word. (ECF 994-1, 994-2, 994-3, 994-4, 994-5, 994-6, 994-7, 994-8). The Court ordered the Plaintiffs to refile their unwieldy opposition “with calculations of time and dollars for each challenged category” (ECF 995), which they did on April 26, 2021 (ECF 996).
In F&A's reply, they called the Plaintiffs' objections “name calling” and “flat out lies” without a “scintilla of support.” (ECF 998 at 3). While F&A did explain Mr. Furgang's rate, they failed to include the billing rates of the other attorneys and did not address the billing issues raised by Plaintiffs. (ECF 998 at 5). After the Court directed F&A to clarify the exact billing rates for F&A's remaining lawyers (ECF 999), F&A represented their attorneys' hourly rates as follows:
• Phillip Furgang, $337.50 to $360.00;
• Stephanie Furgang Adwar, $285.00 to $312.50;
• Armando Llorens, $285.00 to $312.50;
• Beth N. Silberman, $125.00; and,
• Robert Spivack, $125.00 to $150.00.(ECF 1000).
F&A listed all of the individuals as lawyers. They did not list any paralegals or other similar administrative roles.
Tri-State, now represented by Kantrowitz, filed a response to F&A's supplemental filing on their rates, alleging that “[t]he statement [of hourly rates] by Mr. Furgang is, at best misleading and, at worst, a misrepresentation.” (ECF 1002 at 2). Rather than charging $337.50 to $360.00 per hour, Tri-State alleged that Mr. Furgang charged them double the rate, but claimed to divide the time worked during the period when F&A jointly represented both sets of Defendants in half. (ECF 1002 at 2). Tri-State pointed out that based upon an example invoice, Mr. Furgang charged approximately $719 per hour. (See ECF 1002 at 2 n.1). Tri-State further alleged that Guardian and Tri-State had already paid F&A approximately $466,000 in fees. (ECF 1002 at 2). As discussed in Part IV(c)(ii) infra, F&A's estimation of $688,286 in fees on behalf of Guardian represents only half of the time charged to F&A's clients, a stark contrast to Total Gym's award of $91,810 for the same amount (or more) of work.
For example, the Court notes that Total Gym filed substantial briefs in support of Defendants' motions to dismiss and summary judgment, while F&A's filings often consisted of joining in Total Gym's arguments. (See, e.g., ECF 171-1, 180, 458).
g. The Court's Hearing on Attorney's Fees and Additional Supplemental Briefing
Unable to determine a reasonable rate and calculate any appropriate fee award, the Court ordered a hearing on May 27, 2021. (ECF 1003). Before the hearing, F&A submitted affidavits attempting to clarify their billing practices. (ECF 1006). Tri-State and Plaintiffs continued to file letters, affidavits, and exhibits, challenging F&A's billing practices. (ECF 1009, 1010). During the hearing, F&A claimed that they did have an agreement between the two clients to “split the bill equally,” but that because of the “billing system's” inability to provide a split rate, they instead decided to split the time charged within the billing system. (ECF 1017 at 13). If, for example, an attorney spent four hours on a task, two hours would be billed to Guardian and two hours billed to Tri-State. (ECF 1017 at 13). Thus, rather than providing a “half-rate”, F&A provided “half-time.” (ECF 1017 at 13-14).
After oral argument, which failed to clarify all of the issues and open questions before the Court, I ordered supplemental briefing from F&A. A chart detailing the submissions that were ordered and Guardian's response, if any, can be found at Appendix A. Most useful for this R&R, F&A produced an Excel version of the chart of the billing entries (ECF 1016-1) by email (hereinafter, “Billing Entries Exhibit”). The parties filed responses. (ECF 1026, 1027, 1028, 1029).
h. Motions for Further Supplemental Briefing on Attorney's Fees
Days later, on July 6, 2021, F&A filed a motion for an extension of time to include additional exhibits for omitted fees for up to 4 months in the 4th quarters of 2015, 2016, and 2017, that had been previously omitted due to yet another “malfunction in the PCLaw program.” (ECF 1020 at 1)., F&A submitted what purports to be a new spreadsheet of all of Guardian's billing entries including the omitted fees without identifying the changes. (ECF 1020-1, 1020-2, 1020-3, 1020-4, 1020-5, 1020-6). The Court denied the motions and denied reconsideration (ECF 1020, 1025, 1032, 1033, 1043).
This motion was opposed by both Plaintiffs and Tri-State. (ECF 1021, 1023).
The Court found that F&A did not even attempt to explain the “malfunction”, how it caused the alleged omissions, or how they would plan to address the malfunction in future submissions. (ECF 1025 at 2).
III. COSTS ANALYSIS
Judge Koeltl ruled that Guardian, Total Gym, and Thurnau (collectively, “Defendants”), were entitled a pro rata share of the costs of all depositions for which reimbursement is sought, for only one transcript plus one copy per deposition. (O&O at 16-17). Thurnau on behalf of all Defendants who sought costs submitted a joint calculation of the claimed costs., (ECF 993 at 1).
Again, ignoring Judge Koeltl's prior ruling, Guardian attempted to relitigate costs that had previously been denied. (R&R at 31) (O&O at 15, 17). Guardian attached an unsolicited addendum requesting “costs in connection with the deposition”-parking, mileage, tolls, meals-for a total of $5,386.13. (ECF 993 -1). I have neither the jurisdiction or inclination to review these findings.
F&A submit in their attached addendum a differing total for “Billed Depositions”, $25,764.50, only ascertainable as transcript costs because of the offhand citation to ECF 948-3, a 24 page document of previously submitted invoices for transcript fees. (ECF 993-1 at 6). F&A concurrently join in on the Defendants' joint calculation for deposition transcript costs which lists $17,626.61 for Guardian, as submitted by Thurnau, while submitting a differing value in their addendum without any explanation as to the difference. (ECF 993 at 2, 993-1 at 6). Considering F&A's complete lack of calculation or legal argument on how to arrive at $25,764.50 for their deposition costs, their inability to address any differences or disputes as the discrete calculation decisions the Defendants supposedly collectively utilized to arrive at an accurate pro rata distribution in accordance with Judge Koeltl's order, and the deficiencies of their fees application as detailed below, the Court shall use the calculations submitted by Thurnau on behalf of all Defendants.
The Court has reviewed the chart and attached documentation and finds the calculation accurate to the invoices. (ECF 993). In finding the calculations to be correct, the Court adopts the following assumptions:
• where the court reporter's invoice does not state a charge for the cost of a copy, the Defendants' reasonable calculation for the cost of the copy shall be the cost of the original transcript (See Karmel v. City of N.Y., 00-CV-9063 (KMK), 2008 WL 216929, at *4 n.8 (S.D.N.Y. Jan. 9, 2008));
• the cost of the copy is $0 where the invoice reflects that the court reporter supplied an original and a copy (ECF 993 at 2 n.2);
• where there are separate invoices submitted by different Defendants for the same deposition, the value of the lowest invoice will be used as the cost of the transcript (ECF 993 at 2); and,
• the pro rata share shall be calculated based on the number of Defendants who ordered the transcript. (ECF 993 at 2).
Judge Koeltl did not order costs to be awarded or calculated for docketing fees, so the $20 docketing cost claimed by Total Gym is not included. (ECF 993-2). Additionally, because discovery conference transcripts are taxable (O&O at 15), the costs for Court conferences are included as requested in the Defendants' chart. (ECF 993-2).
The $20 charge is listed at the very bottom of ECF 993-2 in the same row as “Docket Fees” under column “Total Gym Total.”
The costs for Court Conferences are listed near the bottom of ECF 993-2 as $415.92 for Thurnau and $180.78 for Total Gym.
Accordingly, I recommend the costs for deposition transcripts be awarded as follows: $25,420.43 to Thurnau, $8,717.91 to Total Gym, and $17,626.61 to Guardian. IV. ATTORNEY'S FEES ANALYSIS
Because Guardian and Tri-State were to be sharing costs and fees, and F&A represented both Guardian and Tri-State at the time, an award of costs of $17,626.61 might consist of recovery for both Guardian and Tri-State.
a. Legal Standard
To calculate attorney's fees, courts use the lodestar method, “whereby an attorney fee award is derived by multiplying the number of hours reasonably expended on the litigation by a reasonable hourly rate.” Streck v. Bd. of Educ., 408 Fed.Appx. 411, 415-16 (2d Cir. 2010). “In determining whether an hourly rate is reasonable, courts primarily consider the prevailing market rates in the community for comparable legal services.” C.L. v. N.Y.C. Dep't, No. 21-CV-7094 (RA), 2022 U.S. Dist. LEXIS 177926, at *5-6 (S.D.N.Y. Sep. 29, 2022). In making this determination, courts should step “into the shoes of the reasonable, paying client, who wishes to pay the least amount necessary to litigate the case effectively.” Arbor Hill Concerned Citizens Neighborhood Ass'n v. County of Albany, 522 F.3d 182, 184 (2d Cir. 2008).
The fee applicant “bears the burden of documenting the hours reasonably spent by counsel, and the reasonableness of the hourly rates claimed.” Allende v. Unitech Design, Inc., 783 F.Supp.2d 509, 512 (S.D.N.Y. 2011). The fee applicant must “produce satisfactory evidence-in addition to the attorney's own affidavits-that the requested rates are in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience and reputation.” Ritchie v. Gano, 756 F.Supp.2d 581, 583 (S.D.N.Y. 2010) (quoting Blum v. Stenson, 465 U.S. 886, 896 n. 11, 104 S.Ct. 1541, 79 L.Ed.2d 891 (1984)).
Courts must also consider the twelve factors discussed in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974):
(1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the level of skill required to perform the legal service properly; (4) the preclusion of employment by the attorney due to acceptance of the case; (5) the attorney's customary hourly rate; (6) whether the fee is fixed or contingent; (7) the time limitations imposed by the client or the circumstances; (8) the amount involved in the case 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.Lilly v. City of N.Y., 934 F.3d 222, 228 (2d Cir. 2019). Because “the determination of fees should not result in a second major litigation, courts may consider the Johnson factors holistically, rather than applying each factor individually to the facts of the case.” C.L., 2022 U.S. Dist. LEXIS 177926, at *7 (internal citations and quotations omitted).
The essential goal in fee shifting “is to do rough justice, not to achieve auditing perfection.” Fox v. Vice, 563 U.S. 826, 838 (2011). “Courts have wide latitude in determining what constitutes reasonable attorneys' fees.” Jung v. Neschis, 01-CV-6993, 2008 WL 2414310, at *2 (S.D.N.Y. June 13, 2008). A court may in its discretion “use a percentage deduction as a practical means of trimming fat from a fee application.” McDonald ex rel. Prendergast v. Pension Plan of the NYSA-ILA Pension Tr. Fund, 450 F.3d 91, 96 (2d Cir. 2006) (quotation marks omitted). “It is common practice in this Circuit to reduce a fee award by an across-the-board percentage where a precise hour-for-hour reduction would be unwieldy or potentially inaccurate.” Alicea v. City of New York, 272 F.Supp.3d 603, 612 (S.D.N.Y. 2017).
Courts in this circuit have upheld reductions as high as 70% or 75%. See, e.g., Love and Madness, Inc. v. Claire's Holdings, LLc, et al., 21-CV-1913 (SLC), 2022 WL 5138806, at *12 (S.D.N.Y. Oct. 5, 2022) (applying a 75% reduction); Williams v. Epic Sec. Corp., 368 F.Supp.3d 651, 662 (S.D.N.Y. 2019) (applying a 70% reduction); Est. of Heiser v. Bank of Baroda, New York Branch, 11-CV-01602 (LGS), 2013 WL 4780061, at *5 (S.D.N.Y. July 17, 2013) (applying a 70% reduction); Small v. New York City Transit Auth., (SLT) (MDG), 2014 WL 1236619, at *14 (E.D.N.Y. Mar. 25, 2014) (applying a 70% reduction) (collecting cases). A reduction of 80% may be “unusually large,” but permitted “within the range of the broad discretion committed to the district court.” Guardians Ass'n of Police Dep't of New York v. City of New York, 133 Fed.Appx. 785, 786 (2d Cir. 2005). If reducing by a large percentage, it is best for the Court to provide an explanation of exactly how the court used the factors to arrive at the figure.” Id.
b. Calculation of Reasonable Rate
The twelfth factor in Johnson, awards in similar cases, provides guidance as the Court determined in its prior R&R that the reasonable hourly rate for Total Gym's attorneys was $250 per hour. 488 F.2d at 719. (R&R at 21) (finding Total Gym's rate within the range of reasonable rates in this district) (collecting cases). Guardian, Tri-State, and Total Gym faced similar claims, filed the same motions, attended the same appearances, and did not face major departures on their litigation of the case, so the hourly rate of $250 is similarly reasonable for Guardian. Indeed, F&A filed “me too” motions on behalf of Guardian and Tri-State, relying on Total Gym's attorneys. (See, e.g., ECF 174-1, 180, 458). Furthermore, at the hearing on May 27, 2021, I directed F&A to provide the qualifications of all of the attorneys at their firm, not just Mr. Furgang, in order to assess Johnson's ninth factor, the experience, reputation, and ability of the attorneys, and they did not do so. 488 F.2d 714. (See APPENDIX A).
Nonetheless, because Mr. Furgang charged approximately 850.7 hours, 69% of the total hours billed, the experience, reputation, and ability the F&A attorneys' supports finding $250 as the reasonable rate for everyone.
Accordingly, the Court shall use $250 per hour as the reasonable rate for the lodestar.
c. Calculation of Reasonable Hours Expended
i. Plaintiffs and Tri-State's Objections to F&A's Billing Records
I originally recommended no award of fees to F&A because of their failure to support their request for “presently estimated” fees of $639,140.73 billed to Guardian alone. Their initial motion for fees contained only a bare affirmation of F&A's fees, with no invoices. As discussed above, F&A's first submission of any documents resembling invoices or billing records was contained in their objections to my R&R, but these Invoices did not add up any of the time or hours purportedly worked. Additionally, Plaintiffs' response identified errors and areas of concern on virtually every page. (See ECF 994-1 to 994-8). Tri-State also raised issues based upon F&A's invoices. (ECF 1009). After the May 27, 2021, conference, which addressed several high-level concerns, the Court directed F&A to resubmit, inter alia, in spreadsheet form, all of the billing entries for which they sought fees, and the time attributed to each task. (See APPENDIX A). This was the only timely-submitted document that provided total hours billed and amounts sought. (See supra Part IV(c)(vi)).
F&A represented both Tri-State and Guardian through at least 2018, and only sought recovery for fees billed to Guardian. (ECF 1017 at 22). Until the fee dispute between F&A and Tri-State, each of F&A's filings was made on behalf of both Guardian and Tri-State, without distinction between the two. The Court questions whether F&A could have done the same on this fee application as well.
Nonetheless, counsel for Plaintiffs and for Tri-State raise several concerns regarding F&A's billing submissions, all of which they claim raise serious doubt as to the reliability of their records. I will address some examples here before calculating the reasonable hours expended. Considered together, these issues raise serious concerns about the reliability and accuracy of F&A's billing records.
ii. “Half-time” Rate
Although unartfully explained until the May 27, 2021, conference, F&A did ultimately clarify that because their “billing program cannot split the rate, . . . the [worked] hours were split and the full rate was charged for one-half the hours spent.” (ECF 981 at 8-9) (see also ECF 1016 at 2). Thus, since the Billing Entries Exhibit purports to cover only time charged to Guardian, the actual time worked (and charged) by F&A would be double the time reported on the Billing Entries Exhibit.
iii. Implausible Billing Entries
Many, although not all, of these challenges are raised by Tri-State and Plaintiffs. The specific examples discussed here relate to the broader challenge that F&A's submissions, as a whole, are not reliable or not contemporaneous, or both. Plaintiffs suggest that the discrepancies, both large and small, warrant a denial of an award of fees altogether. At a minimum, I find that these discrepancies and implausible entries, in addition to the more common reasons for reducing hours, warrant significant reductions to F&A's fees.
1. Billing Tri-State after 2018
Although ultimately not included in the lodestar calculation for other reasons, Tri-State assert that F&A stopped work and “fired” them around November 2018 for nonpayment of fees, and thus F&A's billing records should not have reflected any time charged to Tri-State after November 2018. (See ECF 1009). Exhibit 6 lists several entries where F&A charged time to both the Tri-State and Guardian well after 2018; indeed, F&A billed Tri-State over $225,000 for work done after November 2018. (ECF 1016-6 Ex. 6) (ECF 1017 at 21).
Although clearly an oversight because F&A filed numerous documents on Tri-State's behalf in 2016 (See, e.g., ECF 175, 196, 179, 180, 193, 194), F&A did not file a notice of appearance for Tri-State until May 16, 2017 (ECF 325). And notwithstanding F&A claiming to cease work for Tri-State in November of 2018, F&A did not file a notice of withdrawal until December 2019 (ECF 842) and was not removed as their counsel until March 11, 2020. (ECF 845, 854, 856, 857, 858, 869, 870, 871, 872, 873, 875).
2. Billing more than 24 hours in a day (August 7, 2019)
Tri-State assert that they were billed for work on August 7, 2019, with 15.6 hours billed by Mr. Furgang in one entry, “[t]o preparation and filing of a brief.” (ECF 1027 at 4) (ECF 1009-1). This time period was inexplicably not included in the Billing Entries Exhibit, nor is it one of the dates that F&A sought to add via ECF 1020. Again, because this day's work was not included in the Billing Entries Exhibit, it is not included in the base hours of the lodestar calculation, but it is probative of the Court's concerns. Under F&A's representations, if Tri-State and Guardian should have been billed “half-time” each for this work, Mr. Furgang billed 31.20 hours of work in a 24-hour period. Adding insult to injury, F&A twice incorrectly filed their brief in the early morning hours of August 8, 2019, before correctly filing it approximately 12 hours later, together with a letter explaining the errors, for which Mr. Furgang charged his clients 3.4 (1.7 x 2) hours. (See ECF 818-821) (ECF 1009-1 at 10). No reasonable client would pay 30 hours in a 24-hour period for counsel to file a brief late and incorrectly, twice, the next day.
3. June 7, 2016 “Conference”
On June 7, 2016, both Guardian and Tri-State were billed 5.5 hours each - or a total of 11 hours - for a court appearance. (ECF 1027 at 3). The same amount of time is charged for a court appearance on August 1, 2016. (ECF 1027 at 3). The billing description for the June 7, 2016 entry on the Billing Entries Exhibit reads, in its entirety: “[t]o proceeding to Federal District Court and arguing against the motion for a preliminary injunction and themotion [sic] to dismiss and returning” (emphasis added). The billing description for the August 1, 2016, entry reads: “[t]o proceeding to United States District Court . . . and appearing with counsels representing co-defendants before Judge Koeltl and arguing against Gym Door's motion for a Temporary Restraining Order and a Preliminary injunction and in support of Tri-State's and Guardian's motion to Dismiss [sic] and returning to West Nyack, New York.”
Entry No. 178782. (Billing Entries Exhibit).
Entry No. 179392. (Billing Entries Exhibit).
A transcript of the August 1, 2016, evidentiary hearing is on the docket at ECF 219. While it appears to have been a lengthy hearing with a 182-page transcript, the charged 11 hours includes travel time.
Although it is clear from the docket that a hearing did take place on August 1, there is no suggestion from the docket that there was also a lengthy hearing on June 7. Indeed, Plaintiffs filed their affidavits of service for Tri-State and Mr. Mucciolo on March 9, 2016, (ECF 158, 159), and the very next docket entry, ECF 160, was filed on June 14, 2016, by Plaintiffs, seeking a certificate of default against the Tri-State and Guardian for failing to respond to the Second Amended Complaint. On July 8, 2016, Plaintiffs notified the Court of their intent to seek an order to show cause for a preliminary injunction and temporary restraining order, (ECF 163), and Judge Koeltl ultimately set a briefing schedule and scheduled the hearing on the TRO, injunction, and the defendants' motions to dismiss for August 1, 2016. (ECF 170). Docket entries 171 through 196 were filed between July 20 and July 31, 2016, and consist of the parties' motion papers for the TRO, injunction and motion to dismiss. There is simply no suggestion that a hearing of any kind took place on June 7, 2016, much less a lengthy hearing on motions that had not yet been briefed.
While a small double-billed entry might in some instances be attributable to an oversight of data entry error, the June 7, 2016, entry accounts for well over $7000 of charged time at Mr. Furgang's usual billing rate. (Compare ECF 982-1 at 39-43 to ECF 982-2 at 2-7).
4. April 2018 Reply Briefs (ECF 653, 655)
The parties filed numerous documents in early 2018 concerning the Defendants' summary judgment motions. The briefing schedule was extended several times by both Judge Koeltl and the Part I Judge, with reply briefs due by April 2, 2018. (See e.g., ECF 625, 632, 635). On April 2, F&A requested an additional extension to April 6, 2018, to file their reply brief, which Judge Koeltl granted in part, to “April 5, 2018.” (ECF 651) (emphasis in original). F&A filed a reply brief on April 6, 2018. (ECF 653). Later that day, citing an unexpected “total reboot of our servers” by their “off-premises IT company,” F&A notified the Court that ECF 653 had been an incomplete draft, and sought permission to file a “corrected version by tomorrow at the latest.” (ECF 654). F&A's “Second Reply Memorandum of Law” was filed on April 7, 2018. (ECF 655).
Three lawyers, Mr. Furgang, Ms. Adwar and Mr. Spinak, charged considerable time to research and drafting the reply brief in March 2018. For the time period from April 1 through April 7, however, with the exception of 6 hours (3.0 x 2) billed by Mr. Spinak, the remainder of the time was billed by Mr. Furgang:
Entry No. 194763. (Billing Entries Exhibit).
• On April 1, 2018, the day before the reply briefs were due, Mr. Furgang charged 7.6 hours (3.80 x 2) to “To legal research and preparation of brief.”
• On April 2, 2018, Mr. Furgang charged 4.6 hours “To preparation of the brief,” 0.8 hours “To the preparation of a letter to Judge Koeltl requesting an enlargement of time to file the brief and filing same via ECF,” and 0.4 hours to reviewing the ECF notifications of the filing of other defendants' reply briefs.
• On April 3, Mr. Furgang spent 7.5 hours working on the reply brief, and 0.1 hours reviewing Judge Koeltl's memo endorsement extending Guardian and Tri-State's time to file their reply to April 5.
• On April 4, Mr. Furgang spent 17 hours on the brief; Mr. Spinak spent 6 hours.
• On April 5 and 6, Mr. Furgang spent 15 hours each day on the brief.
• On April 7, Mr. Furgang charged a total of 11.3 hours on the brief and the April 6 letter to the Court regarding the incorrect filing dated April 6. (ECF 654).
• On April 9, Mr. Furgang spent 0.1 hours reviewing Judge Koeltl's order granting F&A permission to file the corrected reply brief that had been filed on April 7.
Entry No. 194753. (Billing Entries Exhibit).
Entry No. 194754. (Billing Entries Exhibit).
Entry No. 194755. (Billing Entries Exhibit).
Entry Nos. 194756, 194757, 194758, 194759. (Billing Entries Exhibit).
The work done by F&A between April 3rd and 7tj was all work done after the other parties had timely filed their replies due April 2nd.
Entry No. 194760. (Billing Entries Exhibit).
Entry No. 194761. (Billing Entries Exhibit).
Entry No. 194762. (Billing Entries Exhibit).
Entry No. 194763. (Billing Entries Exhibit).
Entry Nos. 194764, 194765. (Billing Entries Exhibit).
Entry No. 194766. (Billing Entries Exhibit).
Entry No. 194767. (Billing Entries Exhibit).
While it is not physically impossible to spend 58 hours in four consecutive days working on a reply brief, it is physically impossible to draft a letter on April 7 that was filed on April 6. (Compare ECF 655 and Billing Entries Exhibit at Entry No. 195766). Moreover, the minimal changes between ECF 653 and ECF 655 (both of which were unsigned), do not support the more than 20 hours charged on April 6 and 7 to working on the brief.
iv. Additional Discrepancies and Billing Practices
A closer examination of Guardian's invoices has raised additional questions regarding F&A's billing practices and whether time entries were indeed recorded contemporaneously. For example, the August 17, 2016 Invoice (ECF 982-1 at 39) (“August Invoice”) and September 21, 2016 Invoice (ECF 982-2 at 2) (“September Invoice”) contain entries for time worked in June and July 2016. Specifically, the August Invoice references work done between June 7 and July 30, 2016, by Mr. Furgang, with 2 time entries for Ms. Adwar, one of which was not charged (“0.00” in time) (August Invoice at 40). The September Invoice references work done between June 20 and August 31, 2016 and consists of Mr. Furgang's time entries only. (September Invoice).
However, the entries for work dated between June 20 and July 31 are not consistent. While some time entries are consistent as to date, description and time charged, several entries appear only on one invoice and not the other, while some entries appear on both invoices. Specifically, with the exception of some entries totaling 0.30 (0.60 hours worked) relating to Plaintiffs' communications and transmittal of their motion for TRO and preliminary injunction on July 8, the balance of the entries from July 8 through July 31 do not correspond or overlap in any way whatsoever. The entries reference different work at different times. Even where entries are made on the same date on the two invoices, the tasks summaries are wholly different. (Compare, e.g., July 11 entry on August Invoice (0.25 hours in one entry) and July 11 entry on September Invoice (0.20 hours in two entries describing different communications)).
In sum, the August Invoice reflects approximately 21 hours charged to Guardian (a/k/a 42 hours worked) from July 8 through July 31. The September Invoice reflects an additional 1.85 hours charged (a/k/a additional 3.7 hours worked) from the same timekeeper for completely different tasks.
v. Other discrepancies
Plaintiffs and Tri-State have also identified numerous entries that reflect the more typical challenges to a fee motion, such as vague entries, billing for administrative or clerical tasks, billing at full rate for travel time, and block-billing; examples of these billing issues will be addressed in the lodestar calculation below.
Additionally, Tri State also points to a “discrepancy” in the billing from December 2017, claiming that Guardian was “billed” about 35 hours less than Tri-State's bills. The Court has compared the Billing Entries Exhibit that was timely submitted (which shows a complete absence of any December 2017 entries) and the proposed corrected exhibit (ECF 1020-3) which does purport to show approximately 35 hours of time entries in December 2017 that F&A claimed were omitted due to “the PCLaw malfunction” referenced in ECF 1020 and 1029. In any event, those time entries are not considered in this Report and Recommendation because they were not timely submitted and declines to take further action on “the PCLaw malfunction.”
vi. F&A's Alleged Fees and Hours
The amount of fees sought by F&A has varied and conflicted over time. The table below depicts each source of fees and hours:
Source Title
Citation
Fees
Hours
July 8, 2020, Motion for Attorney's Fees and Costs
ECF 900 at 26. ECF 903 at 3.
$639,140.73 “Presently estimated”
NOT PROVIDED.
March 8, 2021, Declaration of Philip Furgang in Support of Objections to the Report & Recommendation (“Invoices”)
ECF 982-1, 982- 2, 982-3, 982-4, 982-5, 982-6, 982-7, 982-8.
NOT PROVIDED.
NOT PROVIDED. Plaintiffs estimated 1,272.99 hours. (ECF 996 at 3).
Affirmation and Certification of Philip Furgang (“Billing Entries Exhibit”)
ECF 1016-1 Ex. 1.
$688,286.00
1226.9 hours
Denied Supplemental Briefing
ECF 1020-1, 1020-2, 1020-3, 1020-4, 1020-5, 1020-6.
$737,715.75
1308.8 hours
Originally, F&A sought an “estimated” amount of $639,140.73 in attorneys' fees with no support whatsoever. (ECF 900 at 26) (ECF 903 at 3). Indeed, they stated the estimate would be “more set forth in the attach [sic] affirmation by Philip Furgang” (ECF 900 at 26), but then supported the motion by simply writing: “I provide an estimate and leave for a court-ordered accounting the final determination.” (ECF 903 at 2). They also did not provide an estimate of the number of hours they billed. The Billing Entries Exhibit, as calculated by the Court using excel, suggests that F&A seek $688,286.00 for 1226.9 hours of work across varying rates.(Billing Entries Exhibit).
The 261 pages of attached exhibits to the original attorney's fees motion are misleading. They are not invoices or calculations of fees or hours. The exhibits merely contain copies of already filed documents such as the Court's orders, the Second Amended Complaint, and Total Gym's filings. (ECF 903 at 1-2).
Under F&A's “half-time” representation, the Billing Entries Exhibit, although allegedly incomplete, suggests that F&A billed more than 2453 hours that they valued at more than $1.37 million.
In response to Plaintiffs' objection to this unexplained discrepancy, F&A argued that “the amount sought in those actual bills,” i.e. 271 pages of billing attached to their objections to the Court's prior R&R (ECF 982-1 to 982-8), is what they seek. (ECF 1029) (incorrectly citing 991-1 to 991-8). While Fed.R.Civ.P. 54(d)(2)(B)(iii) permits a “fair estimate” of the amount sought, it does not explain F&A's failure to represent to the Court a final amount sought. Their only proffered explanation for the discrepancy between their estimation, which should have been based on contemporaneous billing records submitted in the first instance, is, again, “technical issues”. (ECF 1029 at 6).
F&A cannot provide a number “estimating” their fees and simultaneously insist the number that they do provide cannot be relied upon since it is an “estimate.” (ECF 1029). The purpose of the Billing Entries Exhibit was to provide a summary that the Court could use to conduct its lodestar analysis. Using a spreadsheet enables the Court to conduct its own analysis and sorting, without having to rely on potential errors due to data entry or calculations across 271 pages of invoices, particularly where Plaintiffs and Tri-State have expressed concern about the reliability of these invoices. Accordingly, the Court shall proceed with the amount provided in the Billing Entries Exhibit.
d. Calculation of Fees
i. Fees on Fees
The Court may decline to award fees for the filing of an attorney's fees motion, commonly referred to as “fees on fees.” See, e.g., Commissions Imp. Exp. S.A. v. Republic of the Congo, 19 MISC. 195 (KPF), 2021 WL 4991716, at *7 (S.D.N.Y. Oct. 27, 2021) (“While the Court has awarded [fees on fees] in the past, it will not do so here.”) (internal citations omitted). Here, in light of the numerous rounds of unnecessary briefing due to F&A's deficiencies and errors, oftentimes requiring a judicial order to have any sort of clarification on the information needed to calculate reasonable fees, awarding fees on fees to F&A would reward F&A for their untimely submissions, incomplete responses, and outright errors. Even after the Court's efforts, the records and numbers requested by F&A remain deficient. Accordingly, the Court will not consider any time billed for work after October 30, 2018, the date Judge Koeltl denied the motion for consideration on summary judgment. These entries total 324.25 hours. Additionally, time charged before October 30, 2018, to research on attorney's fees will also be removed. These entries total 2.1 hours.
The entries are numbered 197752 (“To the e-mail to all counsel on[] attacking Gym Door for counsels' fees”) (.1 hour) and 197807 (“To legal research on Copyright statute lawyer fees and abuse of process”) (2 hours). (Billing Entries Exhibit).
After removal of “fees on fees” (a total of 326.35 hours), the Court finds that the base hours (from which further reductions will be taken) to be 900.55 hours (hereinafter “base hours”). The Court turns next to percentage deductions to “trim the fat” off of the base hours, a necessary move considering the voluminous entries in the Billing Entries Exhibit (over 2400), the voluminous pages of billing invoices (271 pages), the discrepancies in their amount requested, the confusion over the “half-time” billing rate, and the objections raised by Plaintiffs and Tri-State.
ii. Excessive Billing: 35%
The Court is not to compensate counsel for “excessive, redundant, or otherwise unnecessary hours.” Hensley v. Eckerhart, 461 U.S. 424, 434 (1983). See also Congregation Rabbinical Coll. of Tartikov, Inc. v. Vill. of Pomona, 188 F.Supp.3d 333, 340-341 (S.D.N.Y. 2016). The Court may, in its discretion, simply deduct a reasonable percentage of the number of hours claimed as a practical way to trim the fat from a fee application. Id. Kirsch v. Fleet St., Ltd., 148 F.3d 149, 173 (2d Cir. 1998). Upon evaluation of what issues were at hand, the Court may find that the claimed hours were excessive in light of the nature of the issue. Congregation Rabbinical Coll. of Tartikov, Inc., 188 F.Supp.3d at 341 (citing cases).
Here, Total Gym's fees and hours provide guidance on assessing the reasonableness of F&A's fees. After seeking $119,587.50 in fees for 478.25 hours of work, Total Gym was awarded $91,810 in attorney's fees. (R&R at 21) (O&O at 11). F&A's total hours charged-including time for fees on fees-is approximately 2500 hours, more than five times Total Gym's time sought, which also included time for fees on fees.
Upon closer examination of certain billing entries, the number of hours billed for certain tasks is excessive, and certainly not what a reasonable client would pay. For example, on March 12, 2016, F&A billed both Guardian and Tri-State 2.25 hours each (4.5 hours worked) for “consider[ing]” a voicemail and writing an email. (ECF 2017 at 3). F&A attack their former client's objection as an “absurd suggestion,” arguing, after the fact, that the e-mail and voicemail “led to legal work regarding matters concerning jurisdiction and the research in connection therewith and attorney/client communications.” (ECF 1029 at 3). But such additional legal work on research should have been billed separately, and if billed separately would not justify 4.5 hours to think about a voicemail and “writ[e]” an email.
Entry No. 176355. (Billing Entries Exhibit).
In addition to the foregoing, F&A billed an excessive amount for the “receipt and consideration” of emails. While not exhaustive, the Court identified more than half of the billing entries (1,428 out of 2,439) to include “to receipt and consideration of” emails and similar documents. These entries alone account for approximately 177.05 hours billed to Guardian. The entries repeat themselves in the same format, beginning with “[t]o receipt and consideration of” and ending with an e-mail as simple as a notification from ECF. For example, Mr. Fugang billed .05 hours for “receipt and consideration of an e-mail from District Court of Clerk's notification that Plaintiffs filed a deficient pleading,” and .05 hours “[t]o receipt and consideration of[] an e-mail from District Court with attached Clerk's notice that Case has been ECF Designated.” No reasonable client would pay for a a law firm senior partner to spend 6 minutes reviewing an ECF notification that the case has been ECF designated.
Plaintiffs argue that these emails are administrative tasks. The Court may also consider them under excessive billing. See, e.g., Barile v. Allied Interstate, Inc., 12-CV-916 (LAP) (DF), 2013 WL 795649, at *18 (S.D.N.Y. Jan. 30, 2013), report and recommendation adopted, 12-CV-916 (LAP), 2013 WL 829189 (S.D.N.Y. Mar. 4, 2013) (reducing fees for excessive emails).
The entry numbers are too numerous to list. Because some entries were block billed, the Court can only approximate what portion of those block bills are attributable to receipt and consideration of emails, which stands as a prime example of why block billing hinders the Court from determining reasonable hours for an attorney's fees lodestar.
Entry Nos. 174550, 172844. (Billing Entries Exhibit).
For more examples, see entries 171902 (“To receipt and consideration of[] an e-mail from James Petriello with reference to the e-mail of June 28”), 175967 (“To receipt and consideration of[] an e-mail from Dimitrios Kourouklis, Esq, forwarding courtesy copy of files to the court”), 178810 (“To receipt and consideration of[] an email from Eryn Truong, Esq., on conference”).
Accordingly, F&A' fees should be reduced by 35% for excessive, redundant, and unnecessary billing.
iii. Vagueness: 20%
A court may decrease the requested award because of “vagueness, inconsistencies, and other deficiencies in the billing records.” Kirsch, 148 F.3d at 173 (affirming a reduction of 20%). See also Raja v. Burns, 43 F.4th 80 (2d Cir. 2022); Ritchie, 756 F.Supp.2d 581. Vague entries prevents the Court from assessing whether the time spent on each task was reasonable and necessary. Congregation Rabbinical Coll. of Tartikov, Inc., 188 F.Supp.3d at 344.
The Second Circuit did not reach the question on whether to adopt the Fifth and Ninth Circuits' exception to the rule that a “prevailing party may recover for total attorney's fees incurred in a litigation containing both Lanham Act and non-Lanham Act claims if ‘‘the Lanham Act claims and non-Lanham Act claims are so intertwined that it is impossible to differentiate between” them.” Sleepy's LLC v. Select Comfort Wholesale Corp., 909 F.3d 519, 531 (2d Cir. 2018) (quoting Gracie v. Gracie, 217 F.3d 1060, 1069 (9th Cir. 2000). It is unnecessary for this Court to determine if it should, or should not, adopt the Fifth and Ninth circuit exceptions, since where “a court has directed parties to parse out records to clearly state how much time the attorneys spent on each claim, and the parties have done so insufficiently and have referred to an unrealistic volume of hours as “inextricably intertwined” with many claims, the court may also decrease the requested award amount.” Ritchie, 756 F.Supp.2d at 583 (citing Kirsch, 148 F.3d at 173).
Here, F&A's billing records lack the specificity necessary to determine what legal services were actually rendered. Vague entries include “continued preparation of the[] gym door case” (Entry No. 171906), “online legal research” (Entry No. 174447), “[t]o discovery preparation” (Entry No. 182130), “[d]iscovery processing” (Entry No. 184867), “[t]o the review of documents” (Entry No. 184403), and “[t]o preparation for hearing” (Entries No. 189682, 189935). (Billing Entries Exhibit). In particular, the numerous billings for “preparation” for unspecified depositions and oral arguments are deficient.
Entry Nos. 188509, 188522, 189691, 196549, 196585. (Billing Entries Exhibit).
The Court explicitly directed F&A at the hearing on May 27, 2021, to provide a chart explaining the purpose of each billing entry for “legal research”, including a note if the information was derived from contemporaneous records or a later review. (ECF 1017 at 30).F&A submitted ECF 1016-4 to address the vague entries for “legal research” and only partially complied with the order. Many entries remain unspecified legal research. Moreover, F&A failed to include, as ordered, whether the source of the information was contemporaneous records or not.
“[I]t can't just say ‘legal research.' You're going to have to tell me what the legal research was for, because some of that may have been legal research that is not subject to the fee shifting.”
Furthermore, some explanations provided by F&A remained deficient. For example, the entry numbered 184886 included in the description “to the conference with Phillip Furgang, Esq. regarding strategy and legal research needed.” (Billing Entries Exhibit). The explanation in the memorandum simply says “[n]o legal research listed.” (ECF 1016-4 at 3 and 19). Entries for “online legal research” remain unexplained. (Billing Entries Exhibit at Entry Nos. 192342, 194089) (ECF 1016-4 at 21-22).
The vagueness and insufficiency of the billing entries even after a hearing and opportunities to supplement and provide more specificity merits a percentage reduction and renders the Court unable to reliably parse which work was conducted for which claims. Accordingly, the Court need not reach the question whether we should adopt the exception to the rule for Lanham Act recovery, and F&A's fees should be reduced by 20% for vagueness, inconsistencies, and other deficiencies in the billing records.
iv. Block Billing: 15%
The Court may “reduce an attorney's hourly rate for time spent on clerical tasks or apply an across-the-board reduction to account for time spent on clerical tasks (or block-billed time entries reflecting a mix of clerical and legal work).” Raja, 43 F.4th at 87 (citing Lilly, 934 F.3d at 234 (internal punctuation removed)). Block billing is “generally disfavored because it can complicate the district court's task of determining the reasonableness of the billed hours.” Raja, 43 F.4th at 87.
Use of block billing is not inherently prohibited. It may be permissible “as long as the district court is still able to conduct a meaningful review of the hours” for which counsel seeks reimbursement.” Raja, 43 F.4th at 87 (internal punctuation removed). Courts in this circuit have generally limited percentage reductions to “where there was evidence that the hours billed were independently unreasonable or that the block-billing was mixing together tasks that were not all compensable, or not all compensable at the same rate.” Adusumelli v. Steiner, 08-CV-6932 (JMF), 2013 WL 1285260, at *4 (S.D.N.Y. Mar. 28, 2013) (citing Hnot v. Willis Grp. Holdings Ltd., 01-CV-6558 (GEL), 2008 WL 1166309, at *6 (S.D.N.Y. Apr. 7, 2008 (collecting cases)). Block billing is “most problematic where large amounts of time . . . are block billed.” Beastie Boys v. Monster Energy Co., 112 F.Supp.3d 31, 53 (S.D.N.Y. 2015).
For example, block billing for a total of 0.1 hours (6 minutes) for an attorney to review several substantive docket entries, such as scheduling orders or letters, would probably be permissible.
Here, F&A engaged in frequent block billing which mixed together clerical and legal work. For example, F&A billed 0.2 hours “[t]o legal researching with regard to local rules and electronic filing rules; to the telephone conference with the Clerk of the Court; to the[] conference with Philip Furgang,Esq. and making copies” (emphasis added). The block billed entry includes the clerical work of “making copies”, phoning the Clerk of Court, and “legal researching” a non-legal topic, and mixes those tasks with the only legal task there, a telephone conference with co-counsel.
Entry No. 182208. (Billing Entries Exhibit).
As another example, Mr. Furgang billed “[t]o preparation of a cross-motion and Opposition to[] the motion by Katherine Daniels, Esq., and filing same[] in district court and sending a[] copy to Peter Mucciolo and James Petriello” (emphasis added). No reasonable client would pay a partner at a law firm to file a document and send a copy. Indeed, because it was block billed, it is impossible for the Court to tell how much of the time was committed to preparation of the motion, or to the administrative tasks of filing and sending a copy.
Entry No. 183288. (Billing Entries Exhibit).
The Court further notes that F&A did not apparently use any paralegals to perform any work in this case. See Lilly, 934 F.3d at 234.
Further entries contain other uses of block billing to mix clerical tasks with legal work.Mr. Furgang billed for “docketing of documents reported by the Southern district of New York Clerk's office and review of same; to initial review of letter by Katherine Darnels [sic], Esq., filed with the Court on June 12; to legal research.” The majority of the billing entry is dedicated to clerical work conducted by a lawyer.
For more examples, see entries numbered 190614 (“To the review of court filings of co-defendants and plaintiffs; to printing out of[] hearing transcripts; to the telephone conference with attorney for YES/Young, Eryn Truong, Esq.; to the conference with Philip Furgang, Esq.”), 180417 (“To preparation of the answer and transmitting a draft to Tri-State and Guardian with a request for comments; telephone conference with YES'attorney, and forwarding order for the settlement conference,[] and legal research”), and 184886 (“To the review of letter to the[] Court and Plaintiffs' response including print and review of her new index; to the conference with Philip Furgang, Esq. regarding strategy and legal research needed; to printing out and organizing documents to supplement production request”), among others.
Entry No. 206840. (Billing Entries Exhibit). While this entry has been removed from the calculation because it was billed in 2020 for the attorney's fees motion (“fees on fees”), it still is an illustrative example of F&A's block billing practices.
Putting aside block billed entries mixed with both clerical and legal work, there remain additional instances of block billing with multiple tasks of legal work so vague and intertwined as to render the Court unable to gauge the reasonableness of the tasks and the time spent on each. For example, Mr. Furgang billed 0.4 hours for “legal research and preparation of discovery.” In addition, F&A frequently mixed in conferences, a billable item with an easily determined discrete time period, with other vague legal tasks. F&A billed 3.9 hours:
Entry No. 183229. (Billing Entries Exhibit).
[t]o multiple telephone conferences with Marie Delaney; to the conference call with Katherine Daniels, Esq., and Philip Furgang, Esq.; to multiple e-mail exchanges with Katherine Daniels, Esq.; to conferences with Philip Furgang, Esq., regarding same and next steps;[] to Westlaw research; to considering and forwarding Marie Delaney 10 prior Safepath cases.
Entry No. 186233. (Billing Entries Exhibit).
This entry alone could contain as many as 5 conferences, together with email exchanges and unspecified legal research, and is only one example of many.
For more examples, see entries numbered 178798 (“To the telephone conference with co-counsels for each defendant; to legal research; to receipt and consideration of an e-mail from Katherine Daniels, Esq., with additional[] affidavits”), 186507 (“To drafting and forwarding to Philip Furgang, Esq., legal research with regards to motion; to review of correspondence to Judge Peck by Philip Furgang, Esq.; to the e-mails and telephone conference with Philip Furgang, Esq.”), and 186687 (“To the performance of legal research on labor law regulations including cases on[] standing; to review of discovery by YES; to the telephone conference with Philip Furgang, Esq., regarding motion”).
Accordingly, F&A's fees should be reduced by 15% for block billing.
v. Clerical or Administrative Tasks: 5%
The Court may reduce an award by a percentage reduction for tasks that are “clerical or administrative in nature.” Lilly, 934 F.3d at 234. The “key inquiry” remains the question of whether a paying client would be willing to pay the fee. Id. The Court has the discretion “to either reduce an attorney's hourly rate for time spent on clerical tasks or apply an across-the-board reduction to the hours billed or total fee award to account for time spent on clerical tasks (or block-billed time entries reflecting a mix of clerical and legal work).” Id. Examples of clerical tasks include “sending and receiving faxes, requesting and receiving medical records, serving papers, and hand-delivering courtesy copies of filings to the courthouse.” Id.
Here, in addition to mixing in clerical tasks with legal tasks in block billed entries, F&A billed independently for purely administrative tasks such as forwarding copies (Entry Nos. 178808, 202163, 202161, 203104), filing documents (Entry Nos. 178814, 180429, 192071, 192380, 197814, 202082, 203113, 206830, 206840, 206959, 206903, 206914), setting up Dropbox for documents (Entry No. 184421), calling to request a transcript (Entry No. 186622), docketing filings (Entry No. 202163), and providing unspecified documents (Entry No. 203107). (Billing Entries Exhibit). These administrative tasks alone amount to 3.55 hours.
These entries contain administrative tasks alone and do not overlap with the block billed entries detailed above in a separate percent reduction. (See infra Part III(e)(ii)).
Accordingly, F&A's fees should be reduced by 5% for billing for clerical or administrative tasks.
e. Final Calculation of F&A's Attorney's Fees
The base hours for F&A after removal of “fees on fees” is 900.55 hours. The Court recommends a 75% reduction as follows:
• a 35% reduction for excessive billing;
• a 20% reduction for vagueness;
• a 15% reduction for block billing; and,
• a 5% reduction for clerical or administrative tasks.
Applied to the base hours, 900.55 reduced by 75% is 225.14. The reasonable hours of 225.14 hours at the reasonable rate of $250 per hour amounts to $56,285. Accordingly, I recommend the Court award Guardian $56,285 for attorney's fees.
V. CONCLUSION
For the foregoing reasons, I recommend that: the Court award the costs of $25,420.43 to Thurnau, $8,717.91 to Total Gym, and $17,626.61 to Guardian; and, that the Court award Guardian $56,285 for attorney's fees.
VI. OBJECTIONS
In accordance with 28 U.S.C. § 636(b)(1) and Fed.R.Civ.P. 72(b), the parties shall have fourteen (14) days (including weekends and holidays) from receipt of this Report to file written objections. See also Fed. R. Civ. P. 6 (allowing three (3) additional days for service by mail). A party may respond to any objections within fourteen (14) days after being served. Such objections, and any responses to objections, shall be addressed to the Honorable John G. Koeltl, United States District Judge. Any requests for an extension of time for filing objections must be directed to Judge Koeltl.
FAILURE TO FILE OBJECTIONS WITHIN FOURTEEN (14) DAYS WILL RESULT IN A WAIVER OF OBJECTIONS AND WILL PRECLUDE APPELLATE REVIEW. See Thomas v. Arn, 474 U.S. 140, 155 (1985); IUE AFL-CIO Pension Fund v. Herrmann, 9 F.3d 1049, 1054 (2d Cir. 1993); Frank v. Johnson, 968 F.2d 298, 300 (2d Cir. 1992); Wesolek v. Canadair Ltd., 838 F.2d 55, 58 (2d Cir. 1988); McCarthy v. Manson, 714 F.2d 234, 237-38 (2d Cir. 1983).
The Clerk of Court is respectfully directed to close ECF 1036, 1037, 1038, and 1039.
The Defendants filed motions to expedite which are now denied as moot. (ECF 1036, 1037, 1038, 1039).
SO ORDERED.
APPENDIX A
Court Order (ECF 1017 at 28-31, 32) Guardian's Response (ECF 1016) An Excel file of all the fees requested including time entry, date, biller, hourly rate, time, amount, and the detailed narrative for that task; A PDF version of the Excel submission of “the time worked.” (ECF 1016 at ¶ 4(a) (ECF 1016-1 Ex. 1) (Billing Entries Exhibit); a written submission clarifying “half-time” and a certification that the time was split in half but charged at the full hourly rate; a certification that “time entries were split in half between the clients but charged at the full hourly rate” and that “after our representation of the Tri-State parties ended, the Guardian Defendants were charged the full amount.” (ECF 1016 at 2). The date of the “Court-ordered withdrawal was March 13, 2020.” (ECF 1016 at ¶ 2); information about the time actually worked versus the time billed, as in time written off or time recorded for which the clients were not charged; The “time and/or expenses not billed” (ECF 1016 at ¶ 4(b)) (ECF 1016-2 Ex. 2); any agreements for Guardian to pay less than what was actually billed or recorded; An affirmation and certification by Mr. Furgang that “there were no agreements between F&A and the Guardian Parties for the Guardian Parties to pay less than THE TRI-STATE PARTIES what was billed or recorded, nor was there any agreements between F&A and the Tri-State Parties for the Tri-State Parties to pay less than the GUARDIAN PARTIES what was billed or recorded.” (ECF 1016 at ¶ 5); the same agreements for Tri-State; See above. any agreements between Guardian, Tri-State, and F&A on the “half-time” arrangement; See above 37 a chart on legal research explaining what the legal research was for, noting if the information is from contemporaneous records or a review after; The entries “related to legal research” with “descriptions of the legal research performed. The information for the descriptions is derived from a review of our contemporaneous notes, court filings; search records and related documents.” (ECF 1016 at ¶ 8) (ECF 1016-4 Ex. 4). Ex. 4 itself does not include notes if the information is from contemporaneous records or a review after. any conflict waivers; An affirmation that “there is no conflict waiver in our representation in our case as there was no conflict between the parties.” (ECF 1016 at ¶ 10); a certification whether any time was written off or reduced; No certification provided. a certification that contemporaneous records were kept with sufficient specificity; A certification that “contemporaneous records were kept with sufficient specificity to support the fee and cost applications.” (ECF 1016 at ¶ 13); a certification that the requests are only for work subject to the statute that allows for fee shifting, or if Guardian wishes to argue that the tortious interference claims should be subject to fee shifting, then a response on case law, legal argument, and an explanation why Judge Koeltl's previous decision on Total Gym's award was incorrect; An affirmation that after summary judgment “no further services were performed that was exclusively related to the tortious interference claim against the Guardian Parties. All services performed applied to claims and were thus performed in relation to the claims subject to an award of attorneys' fees as ordered by this Court. (ECF 1016 at ¶ 13); and, Legal argument and case law on the Lanham Act (ECF 1016 at 14); No explanation on why Judge Koeltl's previous decision on Total Gym was incorrect provided. a list of the other attorneys at F&A who billed Guardian, and their qualifications. No list with qualifications provided. 38 Not requested by the Court. The entries “which include travel time” (ECF 1016 at ¶ 7) (ECF 1016-3 Ex. 3); Not requested by the Court. The entries “related to e-mails” (ECF 1016 at ¶ 9) (ECF 1016-5 Ex. 5). Not requested by the Court, but the Court granted F&A's request to provide it. (ECF 1017 at 32). “All time and/or expense written off or reduced and that such reduction was applied to the Guardian Parties and the Tri-State Parties.” (ECF 1016 at ¶ 12) (ECF 1016-7 Ex. 6).