Opinion
2:19-CV-07748-CAS (PLAx)
03-14-2022
HOPE MEDICAL ENTERPRISES, INC. v. FAGRGON COMPOUNDING SERVICE, LLC ET AL.
Attorneys Present for Plaintiffs: Joseph Akrotirianakis, Aaron Craig, Amanda Farfel. Attorneys Present for Defendants: Lawrence Silverman, Ellen Robins, Sherylle Francis.
Attorneys Present for Plaintiffs: Joseph Akrotirianakis, Aaron Craig, Amanda Farfel.
Attorneys Present for Defendants: Lawrence Silverman, Ellen Robins, Sherylle Francis.
Present: The Honorable CHRISTINA A. SNYDER
CIVIL MINUTES - GENERAL
Proceedings: HOPE'S MOTION FOR ATTORNEYS' FEES (Dkt. 433, filed on January 31, 2022)
I. INTRODUCTION AND BACKGROUND
On September 6, 2019, plaintiff Hope Medical Enterprises, Inc., d/b/a Hope Pharmaceuticals ("Hope") filed suit in this Court against defendants Fagron Compounding Services, LLC, JCB Laboratories, LLC, AnazaoHealth Corporation, and Coast Quality Pharmacy, LLC (collectively, "defendants"). Dkt. 1 ("Compl."). The gravamen of Hope's claims was that defendants' drug compounding practices constituted unfair competition in violation of several states' consumer protection laws.
On October 26, 2021, this Court issued its Findings of Fact and Conclusions of Law in favor of Hope. Dkt. 418 ("Findings of Fact"). On January 14, 2022, the Court amended its Findings of Facts and determined that Hope is entitled to attorneys' fees for the time Hope's counsel spent establishing Fagron's liability. Dkt. 429.
In its Order modifying the Court's Findings of Fact, the Court determined that Hope, as the prevailing party, was entitled to recover attorneys' fees for "the time Hope's attorneys spent establishing liability," but not for "time spent in seeking to prove damages under the state statutes." Dkt. 429 at 4. The Court ordered that Hope and Fagron "meet and confer to determine the allocation of attorneys' fees," and "[a]bsent an agreement," requested that Hope "file a motion to determine the reasonable amount of fees to be awarded." Dkt. 429 at 6.
On January 31, 2022, Hope filed the present motion for an order determining the reasonable total amount of attorneys' fees to be awarded. Dkt. 433 ("Mot. for Fees"). In its motion, Hope requests that the Court award it $5, 639, 621.65-reduced by $14, 406 from originally-sought $5, 654, 027.65-in attorneys' fees and $186, 683.08 in expert witness costs. On February 7, 2022, Fagron filed an opposition. ("Opp."). On February 14, 2022, Hope filed a reply. ("Reply").
On March 14, 2022, the Court held a hearing. Having carefully considered the parties' arguments and submissions, the Court finds and concludes as follows.
II. LEGAL STANDARD
Under Fed.R.Civ.P. ("Rule") 54, "[a] claim for attorney's fees and related nontaxable expenses must be made by motion unless the substantive law requires those fees to be proved at trial as an element of damages." "Unless a federal statute, these rules, or a court order provides otherwise, costs-other than attorney's fees-should be allowed to the prevailing party." Id
To determine reasonable attorneys' fees, the starting point is "the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate." Hensley v. Eckerhart 461 U.S. 424, 433 (1983). This is called the "lodestar" method. The fee applicant must submit evidence of the hours worked and the rates claimed. Id. Once the fee applicant has done so, "[t]he party opposing the fee application has a burden of rebuttal that requires submission of evidence to the district court challenging the accuracy and reasonableness of the hours charged or the facts asserted by the prevailing party in its affidavits." Gates v. Deukmejian, 987 F.2d 1392, 1397 (9th Cir. 1992). All hours that are not reasonably expended, or that are excessive or redundant, should be excluded. Hensley, 461 U.S. at 434. "[T]here is a strong presumption that the lodestar represents a reasonable fee." Gates, 987 F.2d at 1397.
"Although in most cases, the lodestar figure is presumptively a reasonable fee award, the district court may, if circumstances warrant, adjust the lodestar to account for other factors which are not subsumed within it." Camacho v. Bridgeport Financial Inc., 523 F.3d 978 (9th Cir. 2008) (quoting Ferland v. Conrad Credit Corp., 244 F.3d 1145, 1149 n. 4 (9th Cir. 2001)). In such cases, a district court may make upward or downward adjustments to the presumptively reasonable lodestar based on the factors set out in Kerr v. Screen Extras Guild. Inc., 526 F.2d 67, 69-70 (9th Cir. 1975): (1) the time and labor required; (2) the novelty and difficulty of the questions presented; (3) the necessary skill required; (4) the preclusion of other employment by the attorney; (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 on the case; (10) the undesirability of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases.
III. DISCUSSION
Hope moves for an award of $5, 639, 621-reduced from its initial request for $5, 654, 027.65-in attorneys' fees. The Court evaluates Hope's request under the lodestar method, first evaluating the reasonableness of Hope's attorneys' hourly rates, and then evaluating the number of hours Hope's attorneys reasonably expended. Hensley, 461U.S. at 434.
A. Reasonable Hourly Rates
Hope argues that the hourly rates its attorneys billed are reasonable and typical of the Central District of California for attorneys of their respective skill and experience. Mot. for Fees at 1. For partners at King & Spalding, Hope seeks hourly rates of $895 to $1, 120 for Joseph Akrotirianakis, $895 to $1, 100 for Aaron Craig, $1, 045 to $1, 295 for Jeffrey Bucholtz, $870 to $1, 040 for Lisa Dwyer, and $1, 005 for Anne Voigts. Deck Akrotirianakis 12-3. Additionally, Hope seeks hourly rates of $1000 for Heather Banuelos, counsel; and hourly rates of $565 to $985 for associates Marisa Maleck, Matthew Noller, Kathleen Gilchrist, Kathryn Kuhn, Jennifer Chiang, Alicia Gilbert, and Cory Burleson, and $280 for and David Shea. Id. 14-5.
Fagron argues that Hope's billing rates exceed what courts have awarded for attorneys performing similar services. Opp. at 1. Fagron contends that plaintiffs' billing rates of $895 to $1, 295 per hour for King & Spalding partners and counsel, and between $565 and $985 for associates is unreasonable. Opp. at 5. Fagron cites to Strategic Partners, where a court in the Central District of California found that a rate of $795 per hour was reasonable for partners in the field of business torts, trade secrets, unfair competition, and false advertising matters. 2020 WL 306440 at *4 (CD. Cal. Apr. 29, 2020). Fagron argues that recoverable fees should be limited to a reasonable hourly rate of no more than $800 for partners and no more than $550 for associates in this field. Opp. at 6.
The Court notes that to determine the reasonable rate of attorneys' fees, the Court looks to the "relevant market"-here Los Angeles-and not to a specific subject area as defendants suggest. Strategic Partners, 2020 WL 306440, at *4 (CD. Cal. Apr. 29, 2020) ("The Court must assess the reasonableness of attorneys' fees based on the prevailing market rate of the community, i.e., Los Angeles."). District courts within the Ninth Circuit have squarely rejected defendants' argument that the "relevant market" is "limited" to a particular subject area of a case. Stonebrae, LP. v. Toll Bros., Inc., 2011 WL 1334444, at *3 (N.D. Cal. Apr. 7, 2011); see also Camacho v. Bridgeport Financial Inc., 523 F.3d 973, 982 (9th Cir. 2008). "In litigation, clients generally pay for litigation and strategic experience and skills, not expertise in a particular subject area." Stonebrae. 2011 WL 1334444, at *3.
Further, the Court should not limit its analysis to one court's determination of fees, but rather must examine the rates of attorneys of comparable reputation and ability within the community. The Court finds that other courts in the Central District have many times approved rates as high as or higher than Hope's counsels' rates for attorneys with similar reputation and ability. The Declaration of Joseph Akrotirianakis, Hope's lead counsel, establishes both the credentials and extensive years of experience of Hope's litigators. Akrotirianakis Decl. 16, 12-31.
See, e.g., Williams v. Berryhill, 2018 WL 6333695, at *2 (CD. Cal. Nov. 13, 2018) (approving fees exceeding $l, 500/hour); Kolay Flooring IntT, LLC v. Milliken & Co., 2019 WL3059276, at *4 (CD. Cal. Mar. 6, 2019) (approving fees of $850 to $1000/hour); Coles v. Berryhill. 2018 WL 3104502, at *3 (CD. Cal. June 21, 2018) (approving fees of $ 1, 431.94/hour); Masimo Corp. v. Tyco Health Care Grp., L.P., 2007 WL 5279897, at *7 (CD. Cal. Nov. 5, 2007) (approving fees of $900 to $1000/hour).
Accordingly, the Court finds that Hope's attorneys' billing rates of $895 to $1, 295 per hour for partners and counsel, and between $565 and $985 for associates is reasonable within the legal community of Los Angeles for attorneys of similar skill and experience.
B. Number of Hours Reasonably Expended
Hope seeks fees for 7, 344.5 hours of attorney time incurred by Hope in the litigation of this action. Akrotirianakis Decl. ¶1. Hope contends that these hours "do not include any time spent investigating or pursuing any claims or remedies as to which plaintiff was unsuccessful following a trial of this action." Id. at ¶¶ 33-38. Hope argues that the time requested was for tasks necessary to the successful establishment of liability in this case. Mot. for Fees at 4.
1. Specific Objections by Fagron
Fagron raises a number of objections to Hope's calculation of reasonable hours expended. Fagron argues that (1) Hope improperly seeks fees for its unsuccessful and abandoned damages claims, (2) Hope improperly block-billed time entries, (3) Hope improperly billed for clerical and administrative work, and (4) Hope's time entries were excessive, improperly redacted, duplicative, and vague. Opp. at 1-5.
First, Fagron argues that Hope is seeking damages-related fees incurred in connection with pleadings, discovery, motions for preliminary injunction, dispositive and contempt motions, and motions opposing defendants' appeal to the Ninth Circuit. Dkts. 22, 47, 68, 105, 146, 151, 153, 230, 237. Fagron emphasizes that the Court specifically precluded Hope from recovering fees "for the time it spent pursuing a damages theory;" however, Hope only reduced its attorneys' fees by 264.2 hours-only 3.48% of its total fees. Opp. at 5-7 (Dkt. 433-1 at 12).
The Court finds that a significant percentage of Hope's requested fees do in fact relate to the recovery of damages. Because the Court specifically precluded Hope from recovering for time it spent pursuing damages, the Court finds it appropriate to reduce Hope's request for fees as set forth below. See Gates, 987 F.2d at 1392 ("[W]hen faced with a massive fee application the district court has the authority to make across-the-board percentage cuts."); see also Infra Section III.B.2.
Second, Fagron contends that a significant number of billing entries are in a block-billing format, which makes it more difficult to determine how much time was spent on particular activities and makes it difficult to determine reasonableness of fees. Opp. at 10. Of the 2, 735 time entries, Fagron notes that approximately 1, 219 are block-billed- almost 45 percent of the time entries. Id. The Court finds it appropriate to impose an across-the-board reduction of Hope's request due to Hope's block billing practice. "Although block billing is a common practice, courts may reduce block billed hours because they make it more difficult to determine the time spent on a particular assignment." Langer v. Westco Investment, LLC 2020 WL 7060137 (CD. Cal. Aug. 7, 2020); Welch v. Metropolitan Life Ins. Co., 480 F.3d 942, 948 (9th Cir. 2007). Hope's decision to "block bill some of its time rather than itemize each task individually" makes it more difficult for the Court to evaluate the reasonableness of Hope's fees. See Langer. 2020 LW 7060137 (noting that "a report by the California State Bar's Committee [] concluded that block billing may increase time by 10% to 30%") (internal citations omitted); see also Hensley, 461 U.S. at 438 (in requesting attorneys' fees a party "should maintain billing records in a manner that will enable a reviewing court to identify distinct claims."); Role Models Am., Inc. v. Brownlee, 353 F.3d 962, 971 (D.C. Cir. 2004) (finding it appropriate to make an across-the-board percentage reduction in fees because "many time records lump[ed] together multiple tasks," which made it difficult to evaluate their reasonableness.).
For example, here, a billing entry on 11/1/2020, by Aaron Craig lists the following tasks, in which he billed 12.5 hours:" Prepare, review and revise motion for summary judgment, statement of undisputed facts, J. Akrotirianakis declaration, C. Sherman declaration, application to file under seal and A. Craig declaration in support, proposed orders; prepare proposed judgment; emails to defendants' counsel and Fresenius's counsel regarding filing under seal; review and revise motion for contempt sanctions; telephone conference with S. Heinemann regarding deposition prep." Dkt. 432-1 at 63. Similarly, a 6/10/2021 billing entry by Amanda Farfel lists the following tasks, in which she billed 12.7 hours: "Draft motion in limine No. 7 regarding evidence of alleged off-label promotion and unclean hands arguments; review and revise motion in limine No. 6 and draft proposed order regarding motion in limine No. 6; prepare confirmatory letter to opposing counsel regarding June 7 conference of counsel pursuant to local rule 16-2.6; legal research and analysis for motion in limine No. 7 regarding abandonment of equitable defenses, applicability of equitable defenses, off-label promotion claim, and relevance and prejudice cases applying Federal Rules of Evidence 401, 402, 403." Nearly half of Hope's time entries are block-billed in this manner, and this makes "it impossible for the Court to determine how long an activity took in relation to the other components within the same entry." Langer, 2020 WL 7060137.
Therefore, the Court finds it appropriate to reduce Hope's request for fees for its block-billing practices by 20 percent across the board for fees incurred both pre-repudiation and post-repudiation of damages as set forth below. See id. ("The Ninth Circuit has affirmed large percentage reductions for block billed entries."); see also Infra Section III.B.2.
Third, Fagron argues that Hope improperly seeks fees for time spent performing clerical tasks such as filing, downloading, and saving pleadings and discovery documents, compiling documents for service on defendant, working on pleading indices, estimating document analysis costs, having discussions with vendors, estimating budgets, and scheduling meetings. Opp. at 11.
The Court finds that Hope does not improperly seek fees for these clerical and administrative entries. It appears that most of the entries Fagron cites involve paralegal work for which Hope should be compensated. Hope is entitled to recover fees for paralegal work at market rates. Trustees of Constr. Indus. & Laborers Health & Welfare Trust v.Redland Ins. Co., 460 F.3d 1253, 1256 (9th Cir. 2006). See Missouri v. Jenkins, 491 U.S. 274, 285 (1989) ("[A] fee award must take into account the work not only of attorneys, but also of secretaries, messengers, librarians, janitors, and others whose labor contributes to work product for which an attorney bills her client.").
Fourth, Fagron argues that Hope's billing entries are duplicative, vague, and contain excessive time spent performing tasks. Opp. at 16-21. For example, Fagron notes that Hope has billed over 300 hours related to intra-office conferences with many of the entries reflecting multiple attorneys billing for the same conference, hi at 16. Additionally, Fagron argues that several instances of excessive billing are present here, such as Hope's counsel billing over 162 hours for the time attorneys spent drafting, revising, finalizing, and attending the hearing for the amended preliminary injunction after Hope had already billed 289 hours for the previous withdrawn motion. Id. at 16-17.
Further, Fagron argues attorneys' fees should be reduced based on the fact that many of the time entries are redacted. Id. at 19; Francis Deck, 114. Moreover, Fagron contends that many of Hope's time entries are duplicative, and should therefore be reduced. For example, Fagron argues that Hope's counsel billed time for multiple lawyers performing the same tasks, such as finalizing a motion to compel. Opp. at 19-20.
Lastly, Fagron argues defendants are entitled to across the board reductions for billing records which are extremely vague, such as billing entries which describe attorneys' tasks ambiguously with terms such as "attending to," coordinating, filing, and service of motions. Id
The Court finds that Fagron has not identified any billing entries that are unduly vague or inappropriately redacted. Regarding duplication, the Court finds that Fagron has not identified any unreasonable intra-office conferences. More generally, "the Ninth Circuit has 'recognized that the participation of more than one attorney does not necessarily constitute an unnecessary duplication of effort.'" C.J, v. Bellflower Unified Sch. Dist, 2020 WL 3893238, at *6 (CD. Cal. July 10, 2020) (quoting McGrath v. County of Nevada, 67 F.3d 248, 256 (9th Cir. 1995)). The work by Hope's counsel at times reasonably included multiple attorneys with different subject matter and process expertise. Reply at 11.
Further, the Court finds that Fagron does not identify any unreasonable redactions. Hope "is entitled to keep [its] work product secret" by redacting its billing entries when necessary. Democratic Party of Wash. St. v. Reed. 388 F.3d 1281, 1286 (9th Cir. 2004) (internal quotations omitted). After reviewing Hope's time entries, the Court notes that Hope only redacted 72 of the 2, 735 entries; and of the redacted entries, Hope only redacted small portions of the entries which "do not obscure the nature of the work performed." First City Pac, 2019 WL 1715479, at *5. Reply at 15.
Moreover, the Court finds that Fagron has not established that any of Hope's billing entries are unreasonably vague. The Supreme Court has held that a prevailing party "is not required to record in great detail how each minute of his time was expended." Hensley v. Eckerhart, 461 U.S. 424, 437 n.12 (1983). Instead, the party is only required to "identify the general subject matter of his time expenditures." Id. Fagron has not established that Hope's billing entries fail this test.
Accordingly, the Court finds Hope's billing practices are not improperly redacted nor unduly vague. Nonetheless, as set forth below, the Court finds that the time entries for certain tasks are unreasonable.
2. Calculation of Hours
The Court finds that a significant portion of the hours Hope's attorneys billed are duplicative in content and include hours billed toward proving Hope's damages theory. The Court notes that Hope pursued damages since the inception of this litigation until it disavowed damages on June 28, 2021, eight-weeks prior to trial. Accordingly, the Court finds it appropriate to divide the reasonable attorneys' fees Hope's lawyers are entitled to into two discrete time periods: (1) from the first billing entry on 05/20/19 to 06/27/21, the day before Hope filed its motion to strike Fagron's jury demand and (2) from 06/28/21 through trial and post-trial motions.
During the hearing, counsel for Hope argued that April 21, 2020-not June 28, 2021-provides the more accurate date for Hope's disavowal of damages. In support of its argument, Hope cites to the Hon. Paul L. Abrams', Magistrate Judge presiding, order on defendants' motion to compel, dkt, 95, in which the Magistrate Judge stated:
Accordingly, no later than April 21, 2020, plaintiff shall produce all documents reflecting its "revenues, costs, and profits from its sales of its own FDA-approved Sodium Thiosulfate Injection" in the five states at issue, unless it affirmatively confirms, in a declaration signed under penalty of perjury by a corporate officer and by counsel, that it will not under any circumstances seek its lost profits at trial.Dkt. 95 at 8.However, April 21, 2020, is only cited in the Magistrate Judge's order to establish the date in which Hope is required to declare that it will not seek "lost profits," not the date it is required to disavow all monetary damages. Dkt. 95 at 8. Subsequent to that date, Hope billed many hours related to its damages claim, regardless of whether Hope defined the damages it sought as its own lost profits or defendants' ill-gotten profits. After reviewing the record, the Court finds Hope did not repudiate its claim for money damages until June 28, 2021, when it filed its motion to strike defendants' jury demand and disavowed all legal remedies: although Hope still attempted to seek disgorgement as an equitable remedy thereafter. Accordingly, the Court finds that June 28, 2021, is the date on which Hope disavowed monetary damages, and as such, is the appropriate date for the Court to use in dividing fees between Hope's pre-repudiation and post-repudiation of damages.
a. Pre-Repudiation of Damages
Hope contends that "in compliance with the Court's ruling, Hope's calculation of fees excluded all time entries-including expert witness time-spent investigating or pursuing damages." Reply at 4. After reviewing the period of time in which Hope was still seeking damages-05/20/19 to 06/27/21-the Court finds that multiple billing entries relate to Hope's pursuit of damages and should therefore be deducted from the total hours Hope seeks. During this time period, Hope billed 5, 217 hours for a total of $4, 055, 949 in fees.
Although Hope argues that all time with expert witnesses related to damages have been deducted from the total, the Court notes multiple billing entries related to Suzanne Heinemann, Hope's damages expert. In Heinemann's declaration, Heinemann states that she "was retained as a damages expert witness by Plaintiff in this matter," and she is the "founder of Analytics West. Inc. [] an economic consulting and forensic accounting firm." Dkt. 151-3. The Court finds that a majority of the work Heinemann performed was related to calculating damages and disgorgement. As such, the Court finds that Hope is not entitled to recover the hours billed for the majority of Heinemann's time. However, a small percentage of Heinemann's work related to establishing defendants' liability under 503B's "essentially a copy provision" by reviewing, categorizing, and tabulating defendants' attestations. Reply at 19. From 05/20/19 to 06/27/21, Hope billed 156 hours for a total of $150, 334 in fees for work related to Heinemann. The Court finds that Hope is entitled to recover 25 percent of the fees for the time Heinemann spent, totaling $37, 583.50. The other 75 percent of Heinemann's time, $112, 750.50-which the Court finds related to damages-should be deducted for the total.
Further, the Court notes that Hope's requested fees should be reduced because Hope sought to obtain information to support its damages theory during discovery, including filing motions to compel defendants' nationwide sales and profit information. Dkt. 68, 76, 146. Multiple time entries reference Hope's counsels' review and analysis of defendants' sodium thiosulfate sales in pursuing its damages theory throughout discovery. Francis Decl., ¶6. For example, on 05/29/20, Aaron Craig billed 6.4 hours for, among other things, a conference with "J. Akrotirianakis, re sales spreadsheet and voluminous records exception." Dkt. 432-1 at 34. On 06/11/20, Jennifer Chiang billed 7.6 hours for, among other things, "research regarding [] lost sales." Id. at 37. Further on 08/21/20, Jennifer Chiang billed 8.3 hours for, among other things, "review [of] defendants' production for documents related to the nationwide sales of sodium thiosulfate." Id. at 47. The Court finds that many of these entries are not only duplicative, but also relate to time spent on a topic unnecessary to Hope establishing liability in the case. From 05/20/19 to 06/27/21, during discovery, Hope billed 140 hours for a total of $124, 772 in fees related to requests for production, document review, and preparation for depositions that are labeled as reviewing defendants' "sales;" time spent reviewing and requesting records not required to establish liability. This amount should be deducted from the total.
The Court notes that the number of hours Hope's attorneys' billed during discovery related to gathering and reviewing defendants' sales is likely higher than 140 hours; however, the Court deducts only those hours in which Hope specifically states its hours relate to defendants' "sales."
Apart from discovery, the Court notes that although many of the motions Hope filed did not specifically seek damages, a substantial portion of the work Hope's attorneys undertook in research and drafting dispositive motions related to damages- including Hope's motion for summary judgment. Under these circumstances where damages were an integral part of plaintiff s litigation strategy and permeated many aspects of the litigation up until June 28, 2021, the Court determines that Hope fees should be discounted to properly exclude the time spent pursuing damages.
Hope argues that the entirety of the work performed in research and drafting these motions relates to proving liability and not to proving damages, and therefore all the time Hope spent drafting these motions is recoverable. Reply at 5. In response to Fagron's contention that Hope should not be compensated for the hours it spent on these motions related to "lost sales," Hope argues that the time related to "lost sales" was necessary to establish liability under all of its claims in order to prove that defendants sold their compounded sodium thiosulfate in the five states. Id. Therefore, Hope argues it had to prove defendants' sales and Hope's lost sales not to prove damages, but rather as a part of establishing liability. Id.
The Court finds that the time entries related to Hope's "lost sales" and defendants' sales is not recoverable, as it relates to damages. A portion of the research and drafting of Hope's motion for preliminary injunction and motion for summary judgment involved researching defendants' sales and Hope's lost sales, and the extent of the research conducted would not have been necessary to establish liability under the five states' statutes. Dkts. 141, 151. Under the five states' laws, Hope was required to show, generally, "economic injury" or "actual, ascertainable losses," to prove liability. Kwikset Corp. v. Superior Ct., 51 Cal.4th 310, 322 (2011); Williams v. Quest Diagnostics. Inc., 353 F.Supp.3d 432, 450 (D.S.C. 2018).
To succeed on its UCL claim, Hope had to prove (1) defendants engaged in an unlawful, unfair, or fraudulent business act or practice, (2) Hope suffered a loss or deprivation of money, and (3) the economic injury was caused by the defendants' unlawful or unfair business practice. Kwikset. 51 Cal.4th at 322. To succeed on its claim under FDUTPA, Hope had to prove (1) that defendants engaged in unfair or deceptive practice, (2) causation, and (3) actual damages. Glob. Tech Led, LLC v. Hilumz Int'l Corp.. 2017 WL 588669, at *8 (M.D. Fla. Feb. 14, 2017). To succeed on its TCPA claim, Hope had to prove (1) defendants engaged in an unfair or deceptive act or practice declared unlawful by the TCPA and (2) defendants' conduct caused an "ascertainable loss of money or property, real, personal, or mixed, or any other article, commodity, or thing of value wherever situated." Tucker v. Sierra Builders, 180 S.W.3d 109, 115 (Term. Ct. App. 2005). To succeed on its SCUTPA claim, Hope had to prove that (1) defendants engaged in an unfair or deceptive trade practice, (2) Hope suffered actual, ascertainable losses as a result of the defendants' use of the unlawful trade practice, and (3) the unlawful trade practice engaged in by the defendants had an adverse impact on the public interest. Williams, 353 F.Supp.3d at 450. To succeed on its CUTPA claim, Hope had to prove that (1) defendants' conduct was in the course of their primary trade or commerce; (2) the conduct, "without necessarily having been previously considered unlawful, offends public policy as it has been established by statutes, the common law, or otherwise," and (3) Hope suffered "any ascertainable loss of money or property, real or personal, as a result of the use or employment of a [prohibited] method, act or practice." Ulbnch v. Groth, 310 Conn. 375, 409-10 (2013).
Hope was not required to go into detail on the economic injury or losses it suffered in order to prove liability. To determine that Hope had established liability under SCUPTA, the Court looked to the fact that Fagron had "sold in South Carolina their sodium thiosulfate drug, which had not been approved by" the FDA. Dkt. 418 *[ 44. The Court was not required to determine the specific amount of lost sales by Hope because the Court found that "Hope suffered a loss or deprivation of money caused by defendants' unlawful conduct because "[w]hen two competitors split a market, [] one's lost sales are likely the other's gains." dkt. 418 (citing K&N Eng'g. Inc. v. Spectre Performance. 2012 WL 12893797, at *6 (CD. Cal. Aug. 2, 2012)). Accordingly, the Court held:
Here, because Hope and defendants were the only providers of sodium thiosulfate drugs, this presumption supports a finding that defendants' sales caused Hope to lose at least some sales that Hope would have made but for defendants' unlawful conduct. The Court thus finds that defendants caused Hope financial loss in the form of lost sales of Hope's Sodium Thiosulfate Injection.Dkt. 418128.
Therefore, the specific amount of sales Fagron gained or Hope lost were not necessary in establishing liability, and proving that Hope suffered a loss or deprivation of money did not require an extensive review of Fagron's sales. These efforts were to prove damages.
Finally, the Court finds that Hope's fees for this time period should be reduced because Hope should not be able to recover for duplicative time spent researching and drafting arguments that it previously drafted and researched in earlier motions. Common to almost all of Hope's motions is Hope's contention that Fagron was circumventing the compounding rules; and therefore the research on this central issue was already completed after Hope's first motion for preliminary injunction. "[I]t is appropriate for a district court to reduce duplicative fees when awarding attorney's fees." G&G closed Circuit Events. LLC v. Parker, 2021 WL 164998, at *6 (S.D. Cal. Jan. 19, 2021) (internal quotation omitted:) Outdoor Sys.. Inc. v. City of Mesa. 997 F.2d 604, 620 (9th Cir. 1993) ("A district court may reduce a fee award by excluding hours that are duplicative or unnecessary.").
For example, in Hope's motions for preliminary injunction, Hope billed approximately $519, 377. Then, in its motion for summary judgment, Hope billed an additional $567, 579. After reviewing the motions, the Court finds that a significant portion of the time billed on these motions was spent raising identical arguments regarding establishing Hope's liability within each of the five states. See dkts. 38, 151. The Court notes that time spent on work that is "excessive, redundant, or otherwise unnecessary" should generally not be compensated in an award of attorney's fees. Hensley, 461U.S.at437.
"In circumstances such as this one, 'the district court has the authority to make across the board percentage cuts either in the number of hours claimed or in the final lodestar figure as a practical means of trimming the fat from a fee application." Shedlin v. Balagot. 2016 WL 2732133 (CD. Cal. 2016) (citing Gates v. Deukmeiian. 987 F.2d 1392, 1399 (9th Cir. 1992); see also Lahiri v. Universal Music and Video Distribution Corp., 606 F.3d 1216, 1222 (9th Cir. 2010) (affirming a district court's decision to make an across the board percentage reduction of attorneys' fees for excessive and redundant work and block billing practices); Taco Bell Crop, v. TBWA Worldwide, Inc., 2008 WL 11423853 (CD. Cal. Feb. 5 2008) (applying a percentage reduction for excessive hours, unrelated tasks, and block billing, among other things).
"The district court is in the best position to discern what work was unnecessary" and "judges are justified in relying on their own . . . experience concerning reasonable and proper fees." Vargas v. Howell. 949 F.3d 1188, 1199 (9th Cir. 2020) (internal citations omitted) (affirming a district court's decision to an across the board reduction in fees because of "entries that it consider excessive or duplicative"). In light of the foregoing, the Court finds a 65 percent reduction of attorneys' fees during this period is appropriate.
Accordingly, the Court finds that from 05/20/19 to 06/27/21, Hope's initial claim for $4, 055, 949 should be reduced by $112, 750.50 for the time related to Hope's damages expert, by an additional $124, 772 for time billed related to defendants' sales during discovery, and then reduced by 65 percent of the total for motion practice that related to seeking a damages remedy and that was duplicative. Therefore, Hope's reasonable fees for this period are $1, 336, 449.28.
b. Post-Repudiation of Damages
On June 28, 2021, Hope disavowed damages. From 06/28/2021 through trial, up until the last billing entry on 1/26/2022, Hope billed 2, 099 hours for a total of $1, 578, 780 in fees. The Court finds that after Hope disavowed damages as a remedy, Hope should be able to recover fees for all of the hours it billed, absent the majority of the fees related to its damages expert witness, Suzanne Heinemann, and absent hours it billed seeking disgorgement.
First, for the reasons set forth above, the Court finds that Hope should not be able to recover fees for a majority of the time spent during trial related to its damages expert Sue Heinemann. From June 28, 2021 onward, Hope billed 131 hours for a total of $132, 918 in fees related to Heineman. Therefore, the Court finds that Hope is entitled to recover 25 percent of the total hours billed for Heinemann's services during this time period, totaling $33, 229.50. The other 75 percent of Heinemann's time, $99, 688.50 will be deducted from the total amount of fees recoverable during this period.
Second, the Court finds that any time spent pursuing a "disgorgement theory" during trial should be deducted from the total fees recovered. During the bench trial, Hope argued that it was entitled to disgorgement, but ultimately the Court found that by seeking disgorgement, Hope was ultimately seeking a damages remedy which it had disclaimed.
Hope is not entitled to disgorgement of defendants' ill-gotten profits because by abandoning its damages claims, Hope has waived its right to seek equitable restitution. See Sonner v. Premier Nutrition Corp., 971 F.3d 834, 845 (9th Cir. 2020). This is especially the case here where Hope's claim of injury and measure of restitution is based on the sales defendants made which Hope claims would have been made by it but for defendants' unlawful conduct. However, Hope, by waiving a claim for damages, relinquished its claim for recovery of its lost profits based on its own lost sales.Dkt. 418 at 38 173
Hope requests $39, 051 of attorneys' fees related to disgorgement, including time spent related to legal research and analysis on the topic, disgorgement stipulation, talking points, and preparing for and attending hearings related to disgorgement. Dkt. 432-1. Because the Court found that in seeking disgorgement, Hope was in fact seeking damages, the Court finds it appropriate to deduct from the total amount of fees the hours billed related to disgorgement.
Accordingly, the Court finds that from the time period of 6/28/21 to 1/26/22, Hope's initial claim for attorneys' fees in the amount of $1, 578, 780 should be reduced by $99, 688.50 for the time spent with damages expert Sue Heinemann, and by an additional $39, 051 for the hours Hope spent seeking disgorgement of lost profits. Therefore, Hope's reasonable fees for this period are $1, 440, 040.50.
c. Total Lodestar Amount
The Court finds that from the time period of 05/20/19 to 06/27/21, Hope's initial claim for $4, 055, 949 should be reduced first by $112, 750.50 for a majority of the time billed for Hope's damages expert, then by $124, 772 for the time billed during discovery related to reviewing defendants' sales, and then reduced by 65 percent for Hope's duplicative research and drafting of dispositive motions related to pursuing a damages remedy, for a total of $1, 336, 449.28.
Further, the Court finds that from the time period of 6/28/21 to 1/26/22, Hope's initial claim for damages of $1, 578, 780 should be reduced by $99, 688.50 for the majority of the time billed for Hope's damages expert, and by an additional $39, 051 for the time spent pursuing disgorgement, for a total of $1, 440, 040.50.
Thereafter, from 05/20/19 to 1/26/22, the total lodestar rate of $2, 776, 489.78 should be reduced by 20 percent for Hope's unreasonable block billing practices, for a total of $2, 221, 191.82. This number should be further reduced by $14, 406 for the 17.4 hours Hope voluntarily removed from its fee request in its reply brief. Reply at 5.
Accordingly, the final lodestar amount to be awarded is $2, 206, 785.82.
C. Costs
Hope moves for an award of $186, 683.08 in expert witness costs. Mot. for Fees at 2. See, e.g., Maybank v. BB&T Corp., 416 S.C. 541, 582 (2016) (noting that invoices for expert witness fees are recoverable under South Carolina Unfair Trade Practices Act). Hope requests $66, 195.58 in fees for expert witness Suzanne Heineman, and $120, 487.50 for expert witness Kalah Auchincloss. Mot. for Fees at 11. Fagron argues that Hope's request for costs should be denied in its entirety because the experts were retained to support Hope's pursuit of damages, which Hope ultimately waived. Opp. at 3.
The Court previously found that 25 percent of expert witness Heinemann's work related to establishing liability through categorizing defendants' attestations. Therefore, for the time the Court found Heinemann spent establishing liability, the Court finds that Hope is entitled to recover 25 percent of Heinemann's expert witness fees, totaling $16, 548.90. Hope's other expert, Kalah Auchincloss, provided evidence of the relevant regulatory context surrounding Sections 503A and 503B, unrelated to damages. Dkt. 274-3. Therefore, the Court finds that Hope is entitled to recover all of its costs for Auchincloss's services as an expert, $120, 487.50.
Accordingly, the Court finds that Hope is entitled to costs for the work of its expert witnesses amounting to a total of $137, 036.40.
IV. CONCLUSION
In accordance with the foregoing, the Court finds that Hope is entitled to attorneys' fees in the amount of $2, 206, 785.82 and litigation costs in the amount of $137, 036.40.
IT IS SO ORDERED.