Robert Kubicek Architects & Associates Incorporated v. Bashas' Incorporated

Filing 38

ORDER granting Bashas' 23 Motion for Attorney Fees and awarding Bashas fees and costs in the amount of $81,866.81. Signed by Senior Judge Frederick J Martone on 9/12/2013.(LFIG)

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WO

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Bashas’ Inc., et al.,
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Debtors,
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Robert Kubicek Architects & Associates,)
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Inc.
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Plaintiff,
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vs.
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Bashas’ Inc.,
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Defendant.
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In re:

No. CV 12-01497-PHX-FJM
No. BK 09-16050-JMM
Adv. No. 12-AP-0226-JMM
ORDER

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The court has before it defendant Bashas’, Inc.’s motion for an award of attorney’s
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fees (doc. 23), plaintiff Robert Kubicek Architects & Associates, Inc.’s response (doc. 28),
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and Bashas’ reply (doc. 37).
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I
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Robert Kubicek Architects & Associates, Inc. filed this action against one of its
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former employees, Robert Bosley, Bosely’s architectural firm, and Bashas’, asserting
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violations of the Copyright Act, and federal and state anti-racketeering statutes. See Kubicek
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v. Bosley, 11-CV-2112-PHX-DGC (“Bosley Action”). The claims against Bashas’ were
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referred to the bankruptcy court where Kubicek’s pre-petition claims against Bashas’ were

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dismissed. Kubicek then filed the instant action, asking us to withdraw the reference with

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respect to its post-petition claims against Bashas’. We granted that motion and Kubicek filed

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an amended complaint against Bashas’, asserting copyright claims, unjust enrichment, and

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claims for declaratory and injunctive relief. See (doc. 13). We ultimately granted Bashas’

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motion to dismiss all claims (doc. 20), and denied Kubicek’s motion for reconsideration (doc.

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27). Bashas’ is the undisputed prevailing party.

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Bashas’ now requests attorney’s fees and non-taxable costs in the amount of

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$109,866.81, pursuant to the Copyright Act, 17 U.S.C. § 505, and A.R.S. § 12-341.01. We

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conclude that an award of attorney’s fees is appropriate under the Copyright Act and

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therefore do not address whether fees would also be available under A.R.S. § 12-341.01.

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II

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Prevailing parties are eligible for attorney’s fees under the Copyright Act when “an

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award will further the purposes of the Act.” Fantasy v. Fogarty, 94 F.3d 553, 558 (9th Cir.

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1996). The Act’s primary purpose is “to stimulate artistic creativity for the general public

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good.” Twentieth Century Music Corp. v. Aiken, 422 U.S. 151, 156, 95 S. Ct. 2040, 2044

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(1975). That purpose is also advanced when defendants present “a variety of meritorious

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copyright defenses.” Fogerty v. Fantasy, Inc., 510 U.S. 517, 527, 114 S. Ct. 1023, 1029

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(1994) (“Fogerty I”) (stating that “a successful defense of a copyright infringement action

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may further the policies of the Copyright Act every bit as much as a successful prosecution

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of an infringement claim by the holder of the copyright”).

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A non-exclusive list of factors to consider in determining eligibility for an award of

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fees under the Copyright Act are “frivolousness, motivation, objective unreasonableness

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(both in the factual and in the legal components of the case) and the need in particular

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circumstances to advance considerations of compensation and deterrence.” Id. at 534 n.19,

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114 S. Ct. at 1033 n.19. “While no longer a prerequisite to a fee award, the ‘objective

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unreasonableness’ . . . of a losing party’s claim can be a relevant indicator of whether the

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Act’s primary objective is being served by the litigation.” SOFA Entm’t, Inc. v. Dodger
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Prods., Inc., 709 F.3d 1273, 1280 (9th Cir. 2013) (quoting Fogerty I, 510 U.S. at 534 n.19,

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114 S. Ct. at 1033 n.19).

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We concluded in our order granting Bashas’ motion to dismiss that“Kubicek’s claims

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for both copyright infringement and under state law “do not rise above the level of

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speculation.” (Doc. 20 at 5). Despite more than two years of litigation, as well as a full jury

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trial in the Bosley Action, Kubicek argued that it was unable to plead more specific facts

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regarding infringement because it had an inadequate opportunity to conduct discovery. We

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rejected the argument, finding that throughout these lengthy proceedings, Kubicek had more

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than ample opportunity to frame its Complaint in such as way as to satisfy the minimal

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pleading standards of Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 1949 (2009).

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Its failure to do so supports the finding that Kubicek’s copyright claims asserted against

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Bashas’ were objectively unreasonable. Therefore, because an award will advance the

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purposes of the Act, we conclude that Bashas’ is entitled to recover its reasonable attorney’s

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fees under 17 U.S.C. § 505.
III

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Bashas’ seeks fees and nontaxable costs in the total amount of $109,866.81, including

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charges by two law firms–Burch and Cracchiolo, Bashas’ general legal counsel, and Mesch,

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Clark & Rothschild, Bashas’ bankruptcy counsel.

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We will only allow “reasonable” attorney’s fees under the Copyright Act. See 17

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U.S.C. § 505. Two lawyers in the Mesch, Clark & Rothschild law firm, Michael McGrath

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and Scott H. Gan, bill at rates of $545 and $450 an hour, respectively. We find that these

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rates are excessive in comparison to the average hourly rate of $300 in the Phoenix market.

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Therefore, considering the number of hours billed by McGrath and Gan, we reduce the

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requested attorney’s fee award by $7,000.

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We also find several of Kubicek’s objections to the claimed fees persuasive. First,

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we agree that there are multiple instances of improper block billing. An example of the many

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instances include entries on 7/10/12, 12/12/11, 3/21/12, 1/15/13, 4/9/13, 4/16/13, and

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4/17/13. The inadequate documentation makes it difficult, if not impossible to determine the
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reasonableness of the fees claimed. We will accordingly reduce the requested fees for

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improper block billing by $10,000.

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We also agree that there are numerous instances of billing for ministerial duties. Fees

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charged for tasks that are clerical or ministerial in nature are not compensable. Therefore,

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we will reduce the fee award by $5,000.

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Finally, we agree with Kubicek that the billing statements include duplicate billing

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by multiple lawyers. This is due in large part to the fact that, between the two law firms, no

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less than seven lawyers worked on this case, with multiple lawyers often billing for

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performing the same work or attending the same meetings. Counsel have an obligation to

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exercise billing judgment to eliminate duplicate or excessive fees, particularly where so many

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lawyers are participating in the same case. The fee request will be reduced in the amount of

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$6,000 for excessive, duplicate billing.

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IV

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Based on the foregoing, IT IS ORDERED GRANTING Bashas’ motion for an

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award of attorney’s fees and nontaxable costs (doc. 23), and AWARDING Bashas’ total fees

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and costs in the amount of $81,866.81.

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DATED this 12th day of September, 2013.

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