Opinion
CIVIL ACTION NO.: 3:12-CV-116-HTW-LRA
02-28-2018
KLLM TRANSPORT SERVICES, LLC PLAINTIFF v. JBS CARRIERS, INC. DEFENDANT
ORDER
BEFORE THIS COURT is the plaintiff KLLM Transport Services, LLC's Motion for Attorney Fees and Litigation Costs [Docket no. 232]. This motion stems from a years-long, extremely contentious litigation between the parties. After a careful review of the submissions of the parties, the relevant legal precedent, and the oral arguments of the parties, this court is convinced that KLLM Transport Services, LLC's Motion for Attorney Fees and Litigation Costs [Docket no. 232], should be granted, but with reductions. Below, this court sets out the facts and law upon which this court bases its rulings.
I. BACKGROUND
This case revolves around the termination of a "dedicated" hauling contract and the breach of a settlement agreement. The salient background facts are as follows.
This is a type of transportation contract where a non-transportation business hires a transportation company to transport its goods as if the transport company were a private company wholly-owned by the non-transportation company.
In 2008, KLLM Transport Services, LLC (hereinafter referred to as "KLLM"), an over-the-road trucking company based in Mississippi, entered into a dedicated hauling contract with Pilgrim's Pride Corporation (hereinafter referred to as "PPC"), a chicken processing company. In 2010, PPC allowed its sister company, JBS Carriers Inc. (hereinafter referred to as "JBS"), to perform the dedicated hauling services for the PPC/KLLM contract. JBS, though, also began poaching some of the KLLM employees who had worked on the PPC dedicated hauling contract. Afterwards, an aggrieved KLLM sued JBS. KLLM contended that JBS had tortuously interfered with KLLM's business relationships, converted its proprietary trade secrets, and converted its customers. KLLM filed this lawsuit in this court, the United States District Court for the Southern District of Mississippi in case number 3:10-CV-546-HTW-LRA.
With the court's help and encouragement, the two parties ultimately settled their differences out of court on December 1, 2010. [Docket no. 1-2]. In the settlement agreement, JBS agreed as follows:
The current contract between KLLM and Pilgrim's Pride shall be honored and continued for its stated duration and no early opt-out or termination of such contract will occur. KLLM will continue to provide services and pricing levels as stated in such contract.[Docket no. 1-2, ¶ 5]. JBS further agreed that "JBS Carriers will not circumvent this Agreement or its obligations as set forth herein through any of its parent or affiliated companies." [Docket no. 1-2, ¶ 8].
Despite this settlement agreement, on December 13, 2011, PPC informed KLLM that it was terminating its dedicated hauling contract with KLLM. On February 17, 2012, KLLM filed this lawsuit in this federal court against JBS, contending that JBS had breached the settlement agreement in permitting PPC to terminate the dedicating hauling contract. [Docket no. 1]. In addition to compensatory damages, KLLM also requested punitive damages.
This matter was brought to trial on August 19, 2015, before a jury of eight persons. After nine (9) days of trial, on September 1, 2015, the jury began its deliberation and returned a verdict in favor of KLLM. The jury awarded KLLM $36,950.00 in contractual damages for JBS Carrier's breach of the settlement agreement. [Docket no. 216].
The next day, on September 2, 2015, that same jury heard the punitive damages phase of trial. During its closing argument in the punitive damages phase of the trial, KLLM argued that JBS had violated the settlement agreement that it had entered into voluntarily just eleven months prior. KLLM also reiterated to the jury that JBS's counsel who penned the settlement agreement was the same attorney who terminated the KLLM-JBS contract less than a year later. JBS, said KLLM, terminated the contract to benefit itself because JBS's business was suffering and the PPC contract JBS took from KLLM doubled JBS's business. Just as KLLM had emphasized during the trial, KLLM characterized JBS' conduct as "reckless disregard for KLLM's rights." [Docket no. 223, P. 7].
JBS presented to the jury that PPC decided to terminate KLLM's contract before they knew about the prior settlement agreement and that no JBS employees were involved in the decision to terminate KLLM's contract with PPC. The jury was not persuaded by JBS's arguments.
JBS also presented what it purported to be its balance sheet. According to this balance sheet, JBS had only $38,019.00 in cash-on-hand and a negative net worth of $71,702,835.00. [Docket no. 229, P. 27]. KLLM did not object to this document being admitted into evidence. KLLM, though, did question the veracity of this balance sheet, noting that JBS was "working for these other companies in the family that are huge companies. They've got money coming in. I submit that if you make the award, which I trust you to do with proper and sound judgment as the court instructed you, they will find a way pretty easily to pay it." [Docket no. 223].
The jury, after due deliberation, awarded KLLM $900,000.00 in punitive damages. [Docket no. 218].
II. JURISDICTION
This court earlier confirmed that it possesses diversity of citizenship subject-matter jurisdiction over this dispute in its orders dated July 26, 2013 [Docket no. 137], and August 17, 2015 [Docket no. 204]. Inasmuch as this court is exercising diversity of citizenship subject-matter jurisdiction, this court, sitting in Mississippi, will apply Mississippi law to the substantive issues in accordance with the Erie Doctrine. Erie v. Tompkins, 304 U.S. 64, 78-79, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). Under the Erie Doctrine, federal courts sitting in diversity must apply state substantive law and federal procedural law. Foradori v. Harris, 523 F.3d 477, 486 (5th Cir. 2008) (citing Gasperini v. Ctr. for Humanities, Inc., 518 U.S. 415, 426-427 (1996)).
III. MOTION FOR ATTORNEY FEES AND LITIGATION COSTS [Docket no. 232]
KLLM asks this court to award it attorney fees and litigation costs in accordance with the settlement agreement which was the central issue in this case. The settlement agreement between the parties reads:
10. If a court of competent jurisdiction determines that JBS has breached or violated any aspect of this Agreement, JBS will reimburse and pay all [attorney fees] and litigation costs incurred by KLLM in connection with the investigation, preparation and filing of a complaint, together with any additional [attorney fees] and litigation costs which may be incurred in connection with legal proceedings brought by KLLM for breach of this Agreement entered into between KLLM and JBS. The claimed amount of such [attorney fees] and litigation costs will be submitted to the applicable court for assessment and approval.[Docket no. 1-2, ¶ 10]. Thus, KLLM has submitted its Motion for Attorney Fees and Litigation Costs [Docket no. 232] along with exhibits that purport to itemize its attorney fees and litigation costs.
Docket no. 233 Exhibits include: 233-1 "Settlement Agreement"; 233-2 "Declaration of J. Stephen Kennedy Verifying Attorney's Fees"; 233-3 "Declaration of Cable M. Frost Verifying Attorney's Fees"; 233-4 "Declaration of Richard F. Yarborough, Jr. Verifying Attorney's Fees"; 233-5 "Declaration of Brad C. Moody Verifying Attorney's Fees"; 233-6 "Declaration of Michael V. Bernier Verifying Attorney's Fees"; 233-7 "Declaration of R. David Kaufman in Support of KLLM Transport Services, LLC's Motion for Attorney's Fees"; 233-8 "Declaration of Robert L. Gibbs in Support of KLLM Transport Services, LLC's Motion for Attorney's Fees"; 233-9 "Fee and Expense Detail"; 233-10 "2013 NLJ Billing Survey"; 233-11 "Defendant JBS, Inc.'s Response to Plaintiff's First Set of Interrogatories"; 233-12 "Letter Dated April 16, 2013 to KLLM"; and 233-13 "Motion Hearing Transcript Excerpts, December 8, 2014."
KLLM seeks an award of $1,232,701.50 in attorney fees, $84,560.23 in expenses, and $350.00 in litigation costs. JBS, on the other hand, argues for an award of either $634,265.92 at the maximum or $62,766.00 at a minimum in attorney fees, $17,780.61 in expenses, and $350.00 in litigation costs. This court is persuaded for the reasons set forth below that various reductions of KLLM's requested attorney fees are warranted. This court, however, is also persuaded that KLLM has shown its expenses are reasonable - with the exception of two (2) expert witnesses' fees. This court is finally persuaded that KLLM is entitled to its costs of court.
a. Attorney Fees
The settlement agreement between the parties expressly states that JBS will "pay all attorney fees... incurred by KLLM in connection with the investigation, preparation and filing of a complaint, together with any additional attorney fees ... which may be incurred in connection with legal proceedings brought by KLLM for breach of this Agreement." This agreement is particularly impactful where the parties and the court engaged in a nine (9) day jury trial to resolve this litigation.
In determining attorney fees, this court must follow Fifth Circuit precedent by calculating a "lodestar" fee "by multiplying the reasonable number of hours expended on a case by the reasonable hourly rates for the participating lawyers." Louisiana Power & Light Co. v. Kellstrom, 50 F.3d 319, 324 (5th Cir. 1995). The court then considers whether the lodestar figure should be adjusted upward or downward depending on the circumstances of the case. Id. In making a lodestar adjustment the court should look to twelve factors, known as the Johnson factors, after Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974).
"When ... the applicant for a fee has carried his burden of showing that the claimed rate and number of hours are reasonable, the resulting product is presumed to be the reasonable fee[.]" Blum v. Stenson, 465 U.S. 886, 897, 104 S. Ct. 1541, 1548, 79 L. Ed. 2d 891 (1984). Indeed, the United States Supreme Court has held:
The "lodestar" figure has, as its name suggests, become the guiding light of our fee-shifting jurisprudence. We have established a "strong presumption" that the lodestar represents the "reasonable" fee, Delaware Valley I, supra, 478 U.S., at 565, 106 S.Ct., at 3098, and have placed upon the fee applicant who seeks more than that the burden of showing that "such an adjustment is necessary to the determination of a reasonable fee." Blum v. Stenson, 465 U.S. 886, 898, 104 S.Ct. 1541, 1548, 79 L.Ed.2d 891 (1984) (emphasis added).City of Burlington v. Dague, 505 U.S. 557, 562, 112 S. Ct. 2638, 2641, 120 L. Ed. 2d 449 (1992)
KLLM asserts the hours it has claimed and the hourly rates it charged are reasonable and consistent with other cases in this region. JBS does not challenge the hourly rates as presented to this court by KLLM. JBS argues, instead, that the sheer number of attorneys and paralegals working on this litigation was unreasonable and that the hours allegedly expended and now claimed by the attorneys and paralegals for KLLM are excessive.
JBS postulates an alternate lodestar figure for this court to contemplate, saying that $634,265.92 is the maximum lodestar that the court should award and $62,766.00 is the minimum. JBS complains that KLLM's lodestar of $1,232,701.50 is excessive because: time is accounted for in blocks; a dozen (12) attorneys and 10 paralegals worked on this matter; duplicative billing; the preparation of certain witnesses who were not called for trial; "extraordinary and unreasonable" amount of time spent in preparation of pleadings; electronically stored information preparation; and paralegal's fees which are not "work traditionally done by an attorney." [Docket no. 232-1, *SEALED*].
KLLM answers JBS' contention, saying that it had good reasons to utilize the services of a dozen (12) attorneys during various phases of this litigation. The parties engaged in twenty-three (23) depositions in five (5) states requiring the services of multiple attorneys to prepare for and conduct said depositions. The parties also engaged in a significant volume of electronic discovery that required an attorney to manage an ESI vendor to ensure the discovery process complied with the Federal Rules of Civil Procedure. KLLM says, on the other hand, it relied upon the services of only two (2) attorneys at trial. This approach was chosen, says KLLM, in an attempt to limit the litigation costs for its client and, potentially JBS.
ESI is an abbreviation for "electronically stored information".
In addition to its attack on KLLM's lodestar calculation, JBS next points to a ratio determination between the jury's award and the attorney fees claimed by KLLM. JBS says that "KLLM should be reimbursed at most for only 5.1% of [KLLM's requested attorney fees] to reflect its minimal 'degree of success' in obtaining a $36,950.00 compensatory damage award." [Docket no. 241, P. 4, *SEALED*].
KLLM correctly counters that a "proportionality requirement between the amount of attorney fees and the amount of damages ... was explicitly rejected by the [United States Supreme] Court in [City of Riverside v. Rivera, 477 U.S. 561 (1986)]." Cobb v. Miller et al, 818 F.2d 1227, 1235. (5th Cir. 1987). The City of Riverside holding proclaimed "[i]n the absence of any indication that Congress intended to adopt a strict rule that attorney's fees under § 1988 be proportionate to damages recovered, we decline to adopt such a rule ourselves." 477 U.S. 561, 581, 106 S. Ct. 2686, 2697, 91 L. Ed. 2d 466 (1986). And Cobb dutifully followed stating:
In the absence of other Johnson factors justifying a reduction in a fee award, a district court should not reduce the fee award solely because of a low damages award. Such an approach would lead to a proportionality requirement between the amount of attorney's fees and the amount of damages and was explicitly rejected by the Court in Riverside.Cobb v. Miller et al, 818 F.2d 1227, 1235. (5th Cir. 1987).
In any event, this court notes, JBS's assertion that the ratio between the attorney fees claimed by KLLM in this matter and the total damages awarded by the jury (a ratio of 1:1.3) is not disproportionate: JBS fails to account for the punitive damages award. The total award of the jury was $936,950. The claimed attorney fees are $1,244,349.50. This provides a ratio of 1:1.3, a figure not even remotely close to JBS's calculated figure of 1:34. JBS's figure would be correct in the absence of the jury's punitive damage award, but is not when the total damages award is tallied.
This court must now review the hours claimed by KLLM in its "Fee and Expense Detail". [Docket no. 233-9]. After a thorough review, contemplating the issues raised by JBS, this court finds the lodestar figure of $1,232,701.50 contains excessive and duplicative time entries. The court has prepared several charts, based on the submissions of KLLM, which indicate the figures upon which the court is relying. These charts are attached hereto as Exhibits A-C.
As JBS correctly indicates, KLLM's attorneys and paralegals engaged in "block billing" for many of its time entries. Fifth Circuit precedent, however, is clear that "block billing", while disfavored, is not an automatic reason to deny an award of attorneys fees.
The ability to assess the reasonableness of a fee request is greatly undermined by the practice of billing multiple discrete tasks under a single time designation—so-called "block-billing." This practice was heavily utilized by Plaintiffs' counsel in this case. We have held that a party seeking an attorneys' fee award must produce documentation that is "sufficient for the court to verify that the applicant has met its burden of establishing an entitlement to a specific award." Gagnon v. United Technisource, Inc., 607 F.3d 1036, 1044 (5th Cir. 2010); La. Power & Light Co., 50 F.3d at 325 (supporting documentation must be "adequate to determine reasonable hours"). At first blush, block-billing appears to be in tension with this standard, as district courts must not only assess whether the total amount of time spent is reasonable, but also "whether the particular hours claimed were reasonably expended." La. Power & Light Co., 50 F.3d at 325 (emphasis added). Nevertheless, we have stated that "failing to provide contemporaneous billing statements does not preclude an award of fees per se, as long as the evidence produced is adequate to determine reasonable hours." Gagnon, 607 F.3d at 1044.
The upshot of this jurisprudence is that litigants take their chances in submitting fee requests containing block-billed entries and will have no cause to complain if a district court reduces the amount requested on this basis. See, e.g., Welch v. Metro. Life Ins. Co., 480 F.3d 942, 948 (9th Cir. 2007) ("We do not quarrel with the district court's authority to reduce hours that are billed in block format."); Lahiri v. Univ. Music & Video Dist. Corp., 606 F.3d 1216, 1223 (9th Cir. 2010) (affirming reduction of 30 percent for block-billed entries).DeLeon v. Abbott, 687 F. App'x 340, 346 (5th Cir. 2017).
This court is persuaded that KLLM's requested attorneys and paralegals fee entries which are block billed do not give this court the requisite specificity required to determine whether the time spent was "reasonably expended" in prosecuting KLLM's case. For example, in its Fee and Expense Detail, Cable Frost, KLLM's lead attorney, billed 2.2 hours on February 7, 2012 for the following:
Prepare proposed response to Nick White re PPC/JBS's settlement position; confer with internal KLLM team re same; transmit KLLM's response to Nick White; confer with Brad Moody re drafting of Complaint.[Docket no. 232-9, P. 2]. In another example, Brad Moody, a junior attorney assigned to KLLM billed 7.7 hours for the following on May 30, 2012:
Correspond with defense counsel re document production issues; correspond with Andy Mozingo re data production issues; analyze damages spreadsheet from Terry Thornton; telephone conference with Terry Thornton re damages spreadsheet; continue drafting and revising damages calculation for initial disclosures; [redacted line] correspond with Terry Thornton re damages calculations; review e-mails of Brandon Woods to identify additional documents for production; review powerpoint presentation given by Bill Hahn to identify slides to include in initial production.[Docket no. 232-9, P. 9]. In yet another example, Richard Yarborough, a shareholder at Baker Donaldson and KLLM's primary attorney, billed 1.5 hours on August 28, 2015 for the following:
Obtain routine trial updates; [redacted line]; conference with S. Kennedy regarding Judge's ruling on lost profits issue and steps going forward; alternative in closing and issue of instructions to jury.[Docket no. 232-9, P. 150]. The above quoted entries are a fraction of the time entries from KLLM's submission that qualify as "block-billing".
JBS, attached to its response in opposition to KLLM's Motion for Attorneys' Fees and Litigation Costs, a color coded copy of KLLM's itemized detail of attorney fees and expenses. [Docket no. 240-5, *SEALED*]. Accordingly, this court hereby unseals that document and makes it an Exhibit of this order. JBS's color coding indicates various problems as it sees KLLM's entries: allegedly excessive and duplicative time is color coded in green; expert witnesses who were not called are color coded in yellow and light blue; allegedly unreasonable expenditures of time preparing pleadings and preparing for hearings are color coded in orange; and all entries related to electronically stored information are color coded in red. This court hereby adopts JBS's highlighted exhibit [Docket no. 240-5, *SEALED*] as to both attorney fees and paralegal fees and, accordingly, unseals said document. See Exhibit E.
Accordingly, this court finds that KLLM has not provided this court with a record of its time spent on this litigation with the requisite specificity and must, therefore, reduce KLLM's requested attorney and paralegal fees. This court finds that a reduction of the lodestar is appropriate here to account for excessive and duplicative time, as well as time billed as "block-billing". Thus, this court accepts JBS's contention that $634,265.92 is the maximum amount of the lodestar that can be awarded to KLLM, and, this court will utilize that figure when applying the Johnson factors.
When reviewing the Fee and Expense Detail and the Affidavits submitted by KLLM's attorneys, this court noted that KLLM's attorneys had already voluntarily reduced significant expenditures of time thereby reducing their bill to KLLM, and by extension to JBS. Michael Bernier, counsel for KLLM, in his affidavit asserts that "Baker Donelson voluntarily cut 303.1 hours from its bills to KLLM, totaling reductions of $86,549.50." [Docket no. 262-6, P. 3, *SEALED*]. The court conducted an independent analysis of the Attorney Fee and Expense Detail submitted by KLLM in support of its request and has verified Baker Donelson's assertion. This court found, for example: Michael Bernier, the junior associate who conducted the day to day tasks associated with this litigation, waived 57 time entries; and Cable Frost, the shareholder who supervised this litigation, waived 17 time entries. See Exhibit A to this Order.
KLLM's attorneys also waived attorney fees in toto for several of its attorneys who had assisted in this matter, as well: Scott Carey; Amy Champagne; Brent Cole; Blake Fulton; Samuel Gregory; Adria Jetton; and Everett White. KLLM's attorneys, by not billing anything for forty-one point one (41.1) hours' worth of the aforementioned attorney's time, further voluntarily reduced KLLM's alleged bill by eight thousand one hundred dollars ($8,100.00). See Exhibit C to this Order.
See Exhibit C attached hereto.
This court reviews the reasonableness of the hours charged by determining, if, "at the time the work was performed, a reasonable attorney would have engaged in similar time expenditures." Grant v. Martinez, 973 F.2d 96, 99 (2nd Cir. 1992). This court finds that KLLM may have acted reasonably; however, this court cannot find that KLLM has provided evidence of its attorney fees with the specificity required. This court, therefore, is persuaded to reduce the lodestar fee by at least $596,435.58, as suggested by JBS.
After having determined the lodestar fee, this court must apply the Johnson factors. In reviewing the Johnson factors, this court is convinced that no further reduction nor any increase of the lodestar is necessary, or appropriate for the reasons infra.
(1) The time and labor required. Although hours claimed or spent on a case should not be the sole basis for determining a fee, Electronics Capital Corp. v. Sheperd, 439 F.2d 692 (5th Cir. 1971), they are a necessary ingredient to be considered. The trial judge should weigh the hours claimed against his own knowledge, experience, and expertise of the time required to complete similar activities. If more than one attorney is involved, the possibility of duplication of effort along with the proper utilization of time should be scrutinized. The time of two or three lawyers in a courtroom or conference when one would do, may obviously be discounted. It is appropriate to distinguish between legal work, in the strict sense, and investigation, clerical work, compilation of facts and statistics and other work which can often be accomplished by non-lawyers but which a lawyer may do because he has no other help available. Such non-legal work may command a lesser rate. Its dollar value is not enhanced just because a lawyer does it. (2) The novelty and difficulty of the questions. Cases of first impression generally require more time and effort on the attorney's part. Although this greater expenditure of time in research and preparation is an investment by counsel in obtaining knowledge which can be used in similar later cases, he should not be penalized for undertaking a case which may "make new law." Instead, he should be appropriately compensated for accepting the challenge. (3) The skill requisite to perform the legal service properly. The trial judge should closely observe the attorney's work product, his preparation, and general ability before the court. The trial judge's expertise gained from past experience as a lawyer and his observation from the bench of lawyers at work become highly important in this consideration. (4) The preclusion of other employment by the attorney due to acceptance of the case. This guideline involves the dual consideration of otherwise available business which is foreclosed because of conflicts of interest which occur from the representation, and the fact that once the employment is undertaken the attorney is not free to use the time spent on the client's behalf for other purposes. (5) The customary fee. The customary fee for similar work in the community should be considered. It is open knowledge that various types of legal work command differing scales of compensation. At no time, however, should the fee for strictly legal work fall below the $20 per hour prescribed by the Criminal Justice Act, 18 U.S.C.A. § 3006A(d)(1), and awarded to appointed counsel for criminal defendants. As long as minimum fee schedules are in existence and are customarily followed by the lawyers in a given community, they should be taken into consideration. (6) Whether the fee is fixed or contingent. The fee quoted to the client or the percentage of the recovery agreed to is helpful in demonstrating the attorney's fee expectations when he accepted the case. But as pointed out in Clark v. American Marine, supra, [t]he statute does not prescribe the payment of fees to the lawyers. It allows the award to be made to the prevailing party. Whether or not he agreed to pay a fee and in what amount is not decisive. Conceivably, a litigant might agree to pay his counsel a fixed dollar fee. This might be even more than the fee eventually allowed by the court. Or he might agree to pay his lawyer a percentage contingent fee that would be greater than the fee the court might ultimately set. Such arrangements should not determine the court's decision. The criterion for the court is not what the parties agreed but what is reasonable. 320 F.Supp. at 711. In no event, however, should the litigant be awarded a fee greater than he is contractually bound to pay, if indeed the attorneys have contracted as to amount. (7) Time limitations imposed by the client or the circumstances. Priority work that delays the lawyer's other legal work is entitled to some premium. This factor is particularly important when a new counsel is called in to prosecute the appeal or handle other matters at a late stage in the proceedings. (8) The amount involved and the results obtained. Title VII, 42 U.S.C.A. § 2000e-5(g), permits the recovery of damages in addition to injunctive relief. Although the Court should consider the amount of damages, or back pay awarded, that consideration should not obviate court scrutiny of the decision's effect on the law. If the decision corrects across-the-board discrimination affecting a large class of an employer's employees, the attorney's fee award should reflect the relief granted. (9) The experience, reputation, and ability of the attorneys. Most fee scales reflect an experience differential with the more experienced attorneys receiving larger compensation. An attorney specializing in civil rights cases may enjoy a higher rate for his expertise than others, providing his ability corresponds with his experience. Longevity per se, however, should not dictate the higher fee. If a young attorney demonstrates the skill and ability, he should not be penalized for only recently being admitted to the bar. (10) The "undesirability" of the case. Civil rights attorneys face hardships in their communities because of their desire to help the civil rights litigant. See NAACP v. Button, 371 U.S. 415, 443, 83 S.Ct. 328, 9 L.Ed.2d 405 (1963); Sanders v. Russell, 401 F.2d 241 (5th Cir. 1968). Oftentimes his decision to help eradicate discrimination is not pleasantly received by the community or his contemporaries. This can have an economic impact on his practice which can be considered by the Court. (11) The nature and length of the professional relationship with the client. A lawyer in private practice may vary his fee for similar work in the light of the professional relationship of the client with his office. The Court may appropriately consider this factor in determining the amount that would be reasonable. (12) Awards in similar cases. The reasonableness of a fee may also be considered in the light of awards made in similar litigation within and without the court's circuit. For such assistance as it may be, we note in the margin a list of Title VII cases in this and other Circuits reviewed in the consideration of this appeal. Johnson v. Georgia Highway Exp., Inc., 488 F.2d 714, 717-19 (5th Cir. 1974) abrogated by Blanchard v. Bergeron, 489 U.S. 87, 109 S. Ct. 939, 103 L. Ed. 2d 67 (1989)(finding 42 U.S.C. § 1988 does not limit the amount of attorney's fee in a contingency fee case).
The Fifth Circuit has clearly stated the scope of the Johnson factors is narrowed because "the trial court must be careful not to double count a Johnson factor already considered in calculating the lodestar when it determines the necessary adjustments." Shipes v. Trinity Indus., 987 F.2d 311, 320 (5th Cir. 1993). The Shipes court further expounded, "[f]our of the factors - the novelty and complexity of the issues, the special skill and experience of counsel, the quality of representation, and the results obtained from the litigation - are presumably fully reflected in the lodestar amount." Id.
This court additionally is persuaded that the present lodestar calculation accurately reflects, and takes account of: whether the fee is fixed or contingent; the customary fee for similar work in the community; and the experience, reputation, and ability of the attorneys. This court must then separately address the remaining Johnson factors: the time and labor required; the nature and professional relationship with the client; awards in similar cases; the preclusion of other employment; time limitations imposed by the client or the circumstances; and the undesirability of the case.
KLLM asserts this case required substantial dedication by all assigned counsel and was very time-consuming, therefore, the time and labor required Johnson factor should weigh in its favor. As part of that argument, KLLM contends that the court should take into account JBS's pugnacious litigation tactics. KLLM states in its Motion for Attorney Fees that JBS engaged in time-consuming, dilatory, and vexatious litigation tactics such as: producing discovery that was cryptic and voluminous; naming forty-five (45) persons with knowledge of relevant facts and information; refusing to reduce the number of depositions required by identifying key witnesses; forcing KLLM to engage in thirty (30) depositions in five (5) states; and occasioning contentious motion practice resulting in multiple days' hearings.
JBS produced "a large volume of cryptic emails to and from a vast number of PPC employees" that alleged service issues with KLLM's performance. [Docket no. 233 *SEALED*].
Four (4) were current or former JBS employees and twenty-eight (28) were current or former PPC employees. [Docket no. 233 *SEALED*].
[Docket no. 233 *SEALED*]
KLLM noticed the depositions because JBS allegedly refused to cooperate fully in discovery and, therefore, KLLM asserts it had to do its due diligence in order to protect its rights.
JBS filed the following motions which required hearings: Motion to Compel [Docket no. 35]; Cross Motion for Summary Judgment [Docket no. 84]; Motion for Protective Order [Docket no. 106]; Daubert Motion [Docket no. 157]; Motion for Summary Judgment [Docket no. 159]; and Motion to Exclude Testimony of KLLM CFO and Damages Expert [Docket no. 200]. This court notes that United States Magistrate Judge Anderson found JBS' Motion to Compel [Docket no. 35] well-taken and granted it. [Docket no. 95]. Further, Judge Anderson found JBS' Motion for Protective Order not well-taken and denied it. [Text Only Order, 4/3/2013]. Similarly, this court granted JBS' Duabert Motion. [Docket no. 204].
JBS counters that it did not engage in the onerous tactics as described accusatorily by KLLM; rather, JBS simply defended itself within the bounds of procedure and appropriate jurisprudence. JBS further says that KLLM's time and labor actually was substantially less than KLLM claims. Further, says JBS, KLLM seemingly spent considerable resources on a small amount in controversy.
KLLM originally sought, in its first complaint, an amount in excess of $75,000.00. [Docket no. 1]. JBS, however, asserts that KLLM initially demanded $2.2 million before filing suit. [Docket no. 241, P. 4, *SEALED*].
This court is not persuaded that JBS engaged in vexatious tactics as described by KLLM. There exist no motions on the docket report in this case where KLLM filed a Motion to Compel nor a Motion for a Protective Order to prevent JBS's alleged litigation abuses. Had KLLM done so and won its argument, this court would have some basis for finding that JBS unnecessarily extended the length and breadth of this lawsuit.
Even so, because this lawsuit features multiple depositions, and a nine (9) day jury trial, this court is persuaded that this factor weighs in favor of KLLM.
While KLLM does not understand why the nature and length of the professional relationship with the client factor would contribute to any adjustment, this court looks to Johnson itself where the court stated, "A lawyer in private practice may vary his fee for similar work in the light of the professional relationship of the client with his office." Johnson at 719. KLLM and its attorneys conceded they enjoy a long-standing relationship. As a result of that relationship, "Baker Donelson has voluntarily reduced its hours billed by over 300 hours, totaling reduced fees of almost $90,000." [Docket no. 233, p. 17]. JBS asserts that this factor does not apply to this lawsuit. This court is persuaded that this factor - nature and length of the professional relationship - weighs in favor of KLLM.
Baker, Donelson, Bearman, Caldwell & Berkowitz P.C. is a large U.S. law firm and lobbying group with offices in the Southeastern United States and Washington, D.C. Baker Donelson is the law firm where the attorneys for KLLM are members.
KLLM cites cases from the United States District Courts of Mississippi, which it says will guide this court; however, as JBS appropriately points out, both cases are distinguishable. In U.S. ex rel. Rigsby v. State Farm Fire & Cas. Co., 2014 WL 691500 (S.D. Miss. 2014), Judge Ozerden reduced the lodestar by 60% after excluding all excessive, duplicative and inadequately documented time. This court already has found disfavor with KLLM's inadequately documented time request because of its numerous submissions containing multiple "block billed" entries. The court additionally has deducted KLLM's excessive and duplicative entries as reflected in Exhibit E, adopted by this court.
JBS contends that Rigsby supports a further reduction of the lodestar. This court is not persuaded having already made the appropriate reductions. And, this court is persuaded that Perez v. Bruister, 2015 WL 5712883 (S.D. Miss. 2015), is distinguishable from the case at bar because the claimed attorney fees were less than the jury award and the attorney fees were not contested. This court finds this factor, awards in similar cases, is neutral.
KLLM does not assert that it imposed time limitations on its attorneys - for example, that KLLM required its attorneys to work exclusively on its case - and therefore this factor is neutral. JBS says that this factor does not apply. This court is inclined to agree with KLLM that this factor applies and is neutral.
Similarly, KLLM does not assert that this case was undesirable, therefore, this factor also is neutral. JBS also contends that this factor is inapplicable. Again, this court agrees with KLLM's assessment that this factor applies and is neutral.
In weighing the Johnson factors, this court is persuaded that court's the lodestar calculation should not be further reduced nor enlarged. By this court's analysis of the Johnson factors, two (2) factors favor KLLM, namely the time and labor required factor and the nature and length of the professional relationship with the client factor; however, these factors are not significant enough to merit an increase in the lodestar. JBS vigorously contested this matter, which required an equally vigorous contest by KLLM, therefore, JBS should not complain that KLLM is entitled to just fees for resources expended and hours consumed. See Henson v. Columbus Bank & Trust Co., 770 F.2d 1566, 1575 (11th Cir. 1985).
b. Litigation Expenses
The settlement agreement between the parties expressly provides that JBS will "pay all ... litigation costs incurred by KLLM in connection with the investigation, preparation and filing of a complaint, together with any additional attorney fees and litigation costs which may be incurred in connection with legal proceedings brought by KLLM for breach of this Agreement." [Docket no. 1-2, ¶ 10]. KLLM seeks litigation expenses in the amount of $84,560.23, exclusive of court costs. See Exhibit D to this Order. KLLM asks this court to award it litigation expenses that would not normally be recoverable under Fed.R.Civ.R. 54 and 28 U.S.C. § 1920 .
(d) Costs; Attorney's Fees.
(1) Costs Other Than Attorney's Fees. Unless a federal statute, these rules, or a court order provides otherwise, costsother than attorney's feesshould be allowed to the prevailing party... Fed.R.Civ.Pro. Rule 54(d)(1).
A judge or clerk of any court of the United States may tax as costs the following:
(1) Fees of the clerk and marshal;A bill of costs shall be filed in the case and, upon allowance, included in the judgment or decree. 28 U.S.C.A. § 1920 (West)
(2) Fees for printed or electronically recorded transcripts necessarily obtained for use in the case;
(3) Fees and disbursements for printing and witnesses;
(4) Fees for exemplification and the costs of making copies of any materials where the copies are necessarily obtained for use in the case;
(5) Docket fees under section 1923 of this title;
(6) Compensation of court appointed experts, compensation of interpreters, and salaries, fees, expenses, and costs of special interpretation services under section 1828 of this title.
JBS asks this court to apply Fed.R.Civ.R. 54 and 28 U.S.C. § 1920 to KLLM's request for litigation expenses. If this court were to agree with JBS, then KLLM would not be entitled to various categories of its expenses: expert witness fees; shipping, postage, and long distance billing; travel expenses; computer research costs; mediation fees; copying costs where they are not shown to be "necessarily obtained for use in the case"; ESI; trial transcript costs where they are not shown to be "necessarily obtained for use in the case"; and deposition transcripts where they are not shown to be "necessarily obtained for use in the case". The effect would be the reduction of KLLM's expenses to $17,780.61 according to JBS.
For support, JBS cites this court's opinion in Alexander v. City of Jackson, Mississippi, 2001 WL 1059293 (S.D. Miss. March 21, 2011). This court declines to find that Alexander is analogous to the instant lawsuit. Alexander involved several Title VII claims that the parties presented for a jury trial. The jury found for the plaintiffs and awarded monetary damages. This court set aside the jury's verdict for various reasons and set it for a new jury trial. After this court set aside the jury verdict, the parties agreed to mediation and eventually settled for a lesser amount than the jury's award. The plaintiffs then moved for expenses under Title 42 U.S.C. § 1988(b) and Title 42 U.S.C. §2000e-5(k) - both of which apply to civil rights cases, not the type of lawsuit under review here.
(b) Attorney's fees
In any action or proceeding to enforce a provision of sections 1981, 1981a, 1982, 1983, 1985, and 1986 of this title, title IX of Public Law 92-318 [20 U.S.C.A. § 1681 et seq.], the Religious Freedom Restoration Act of 1993 [42 U.S.C.A. § 2000bb et seq.], the Religious Land Use and Institutionalized Persons Act of 2000 [42 U.S.C.A. § 2000cc et seq.], title VI of the Civil Rights Act of 1964 [42 U.S.C.A. § 2000d et seq.], or section 13981 of this title, the court, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney's fee as part of the costs, except that in any action brought against a judicial officer for an act or omission taken in such officer's judicial capacity such officer shall not be held liable for any costs, including attorney's fees, unless such action was clearly in excess of such officer's jurisdiction.42 U.S.C.A. § 1988 (West)
(k) Attorney's fee; liability of Commission and United States for costs
In any action or proceeding under this subchapter the court, in its discretion, may allow the prevailing party, other than the Commission or the United States, a reasonable attorney's fee (including expert fees) as part of the costs, and the Commission and the United States shall be liable for costs the same as a private person.42 U.S.C.A. § 2000e-5 (West)
KLLM counters JBS's argument by citing MGM Resorts Miss., Inc. v. ThyssenKrupp Elevator Corp., in which the court interpreted a contract that did not define the term "costs." 2015 WL 5178122. The MGM court gave the term "costs" its ordinary meaning when it stated:
The Court therefore must give the word its ordinary meaning. Cont'l Cas. Co. v. Hester, 360 So.2d 695, 697 (Miss.1978) ("It is well settled that the words of a contract are to be given their ordinary meanings.") (citation omitted). "'[C]osts' has an everyday meaning synonymous with 'expenses.'' Taniguchi v. Kan Pac. Saipan, Ltd., 132 S.Ct. 1997, 2006 (2012) (quoting 10 C. WRIGHT ET AL.,
FEDERAL PRACTICE AND PROCEDURE § 2666 (3d ed.1998)). "'Expenses,' of course, include all the expenditures actually made by a litigant in connection with the action. Both fees and costs are expenses but by no means constitute all of them." 10 FED. PRAC. & PROC. CIV. § 2666 (footnote omitted).MGM at *7, fn. 11. The MGM court then awarded expenses which would normally be excluded by 28 U.S.C. § 1920.
This court is persuaded by KLLM's contention that the plain language of the settlement agreement supports an award of expenses outside of Fed.R.Civ.R. 54 and 28 U.S.C. § 1920.
This court, however, is not persuaded that KLLM should be allowed to recover costs for its expert witnesses that never testified at trial, either because this court excluded one of them, namely Dr. Brooking, or because KLLM never called the expert witness, Mr. Keene. Accordingly, this court will reduce KLLM's requested expenses by $32,402.17 (See Exhibit D) to reflect this court's reticence to allow an expense for an expert witness who never testified at trial. Although KLLM requested fees for these purported witnesses who never testified at trial, KLLM did not provide the court any basis for allowing expert fees for advice provided outside of trial. This court, therefore, will reduce KLLM's requested expenses from $84,560.23 to $52,158.06.
See Exhibit D attached hereto. --------
c. Court Costs
KLLM additionally seeks three-hundred fifty dollars ($350) in court costs. JBS does not dispute that KLLM is entitled to reimbursement for the three-hundred fifty dollars ($350) filing fee that KLLM incurred when it filed the instant lawsuit. [Docket no. 241, P. 18, *SEALED*].
d. Conclusion
This court is convinced by KLLM's argument that parties may contractually enlarge the scope of litigation expenses as the parties have done in this case. JBS's contention that KLLM is not entitled to recover "litigation costs incurred by KLLM in connection with the investigation, preparation and filing of a complaint, together with any ... litigation costs which may be incurred in connection with legal proceedings brought by KLLM for breach of this Agreement," would be to condone JBS's violation of the settlement agreement in the first place.
This court, however, finds that KLLM's attorney fees submissions contain multiple block billing, duplicative, and excessive entries. Accordingly, this count must reduce KLLM's requested lodestar to $634,265.92.
This court further finds that KLLM is entitled to reasonable expenses of $52,158.06.
IV. CONCLUSION
This court has presided over this tumultuous and extremely contentious litigation for several years, beginning with the underlying suit that resulted in a settlement, and the present lawsuit filed as a result of a breach of that settlement agreement. Moreover, a jury found that JBS acted with malice in violating its settlement agreement with KLLM.
Further, this court is convinced, after a review of the billing of KLLM's attorneys that KLLM's lodestar must be reduced to $634,265.92 without further reduction after applying the Johnson factors.
Finally, this court is persuaded that the expenses KLLM incurred in prosecuting this litigation should be granted, but reduction is warranted to reflect that two (2) of KLLM's expert witnesses never testified at trial.
IT IS, THEREFORE, ORDERED AND ADJUDGED that KLLM Transport Services, LLC's Motion for Attorney Fees and Litigation Costs [Docket no. 232] is hereby GRANTED, with reductions, and that KLLM is entitled to attorney fees in the amount of $634,265.92.
IT IS FURTHER ORDERED that KLLM is entitled to recover its expenses in litigating this matter in the amount of $52,158.06.
IT IS FURTHER ORDERED that KLLM is entitled to recover its costs of court in the amount of $350.00.
IT IS FINALLY ORDERED that all sealed documents relative to this dispute of attorney fees in this case are hereby unsealed.
SO ORDERED AND ADJUDGED this 28th day of February, 2018.
s/ HENRY T. WINGATE
UNITED STATES DISTRICT COURT JUDGE
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