Pure Wafer Incorporated v. Prescott, City of et al

Filing 148

ORDER: IT IS ORDERED that Pure Wafer's Motion for Attorneys' Fees, (Doc. 142 ), is GRANTED in the amount of $69,535.62 [see attached Order for details]. Signed by Senior Judge James A Teilborg on 7/31/17.(MAW)

1

WO

2
3
4
5
6

IN THE UNITED STATES DISTRICT COURT

7

FOR THE DISTRICT OF ARIZONA

8
9

Pure Wafer Incorporated,
Plaintiff,

10
11

ORDER

v.

12

No. CV-13-08236-PCT-JAT

City of Prescott, et al.,

13

Defendants.

14
15

Pending before the Court is Plaintiff Pure Wafer, Inc.’s (“Pure Wafer’s”) Motion

16

for Attorneys’ Fees. (“Motion,” Doc. 142; see also Doc. 142-1). After reviewing the City

17

of Prescott’s (the “City’s”) Response, (Doc. 143), and Pure Wafer’s Reply, (Doc. 144),

18

the Court now rules on the Motion.

19

I.

BACKGROUND

20

The Court previously detailed the factual and procedural background in its

21

Findings of Fact and Conclusions of Law and Permanent Injunction (the “Findings and

22

Conclusions”). (See Doc. 87 at 1–13). After a bench trial, the Court found that the City

23

violated the Contract Clause of the U.S. Constitution when it declared that its sewage

24

treatment plant would no longer accept effluent discharged by Pure Wafer. (See id. at 13–

25

29). Because the Court found in favor of Pure Wafer on its Contract Clause claims, it did

26

not reach the merits of Pure Wafer’s alternative claims for breach of contract and the

27

implied covenant of good faith and fair dealing resulting from the parties’ obligations

28

under a Development Agreement. (Id. at 29). The Court also granted Pure Wafer’s

1

request for a permanent injunction, enjoining the City from enforcing various provisions

2

of the City’s Ordinance No. 4856-1313 (the “Ordinance”) against Pure Wafer. (See id.

3

at 29–32). The Court finally entered a final judgment in Pure Wafer’s favor.

4

(“Judgment,” Doc. 88).

5

The City appealed the Findings and Conclusions as well as the Judgment.

6

(Doc. 95). The Ninth Circuit Court of Appeals (the “Ninth Circuit”) affirmed-in-part and

7

reversed-in-part and remanded for further proceedings. Pure Wafer Inc. v. City of

8

Prescott, 845 F.3d 943, 959 (9th Cir. 2017). In particular, the Ninth Circuit held:

9

11

[W]hile the City prevails on its appeal of the Contract Clause
issue, judgment for Pure Wafer can be sustained on the
alternative ground that the City has breached its contract with
Pure Wafer. We leave it for the district court on remand to
decide the appropriate remedy.

12

Id. at 958. The Ninth Circuit also affirmed the Court’s judgment on the City’s

13

counterclaim. Id. at 958 n.14.

10

14

After the Ninth Circuit issued its opinion, Pure Wafer filed its motion for

15

attorneys’ fees with the Ninth Circuit. (Doc. 142-1 at 10). The Ninth Circuit subsequently

16

filed an order remanding Pure Wafer’s motion for attorneys’ fees to this Court.1

17

(Doc. 136). The Court then issued an order allowing the parties to refile the same

18

pleadings regarding the motion for attorneys’ fees that they filed with the Ninth Circuit.

19

(Doc. 140).

20

II.

LEGAL STANDARD

21

Ninth Circuit Rule 39-1.6 governs the procedure for attorneys’ fees motions on

22

appeal. This rule sets forth the required content of the memorandum in support of the

23

motion, the necessary supporting documentation—including an itemized statement of

24

fees, a showing that the hourly rates are legally justified, and an affidavit attesting to the

25

accuracy of the information—and the format and description requirements of the

26

itemized statement. 9th Cir. R. 39-1. The parties’ Development Agreement provides that

27
1

28

The City argues that the Ninth Circuit lacked jurisdiction over the attorneys’ fees
motion because the Ninth Circuit had already filed its mandate. (Doc. 143-1 at 2).
Because the Ninth Circuit remanded the Motion to this Court, this argument is moot.
-2-

1

“the prevailing party shall be entitled to reasonable attorneys’ fees and all reasonable

2

costs, expenses, and disbursements in connection with such action.” (Doc. 1-1 at 16).

3

III.

ANALYSIS

4

Pure Wafer seeks an award of $87,548.12 in attorneys’ fees and an additional

5

$8,554.25 in other litigation costs and expenses, for a total of $96,102.37. (Doc. 142-

6

1 at 4). The City argues that Pure Wafer is not entitled to these fees, costs, and expenses

7

because: (1) Pure Wafer is not the prevailing party; (2) Pure Wafer seeks costs unrelated

8

to the appeal, improperly seeks costs, and seeks costs that are unreasonable; (3) Pure

9

Wafer’s request is a procedurally deficient collateral attack on the Court’s determination

10

that costs are not appropriate in this case; and (4) Pure Wafer’s requested attorneys’ fees

11

are unreasonable and should be reduced by at least $32,899.37, if awarded. (See

12

Doc. 143 at 2–7).

13

A.

14

The City argues that Pure Wafer is not the prevailing party because the matter was

15

remanded to this Court and some of Pure Wafer’s arguments were rejected on appeal.

16

(Doc. 134-1 at 3). The Ninth Circuit held “judgment for Pure Wafer can be sustained on

17

the alternative ground that the City has breached its contract with Pure Wafer.” Pure

18

Wafer, 845 F.3d at 959. Although, the Ninth Circuit noted that the City prevailed on its

19

Contract Clause argument, Pure Wafer is ultimately the prevailing party as the City was

20

found to have breached the Development Agreement. Id. Thus, the City’s argument is

21

rejected.

22

B.

23

The City advances a few arguments as to why Pure Wafer is not entitled to costs

24

related to the appeal. First, the City argues that Pure Wafer seeks fees and costs unrelated

25

to the appeal, improperly seeks costs, and seeks unreasonable costs. (Doc. 143-1 at 4).

26

Second, the City argues that Pure Wafer’s request for costs is a procedurally deficient

27

collateral attack on the Ninth Circuit’s ruling that each party shall bear its own costs on

28

appeal. (Id. at 9). Pure Wafer rejoins that the expenses it seeks are “far broader than

Prevailing Party

Costs on Appeal

-3-

1

‘taxable costs.’” (Doc. 144-1 at 4). Further, Pure Wafer argues that under the language of

2

the Development Agreement, it is entitled to “all reasonable costs, expenses, and

3

disbursements in connection with such action.” (Id. at 3).

4

While the Development Agreement could be interpreted to include certain costs

5

and expenses, the Ninth Circuit specifically ordered “each party shall bear its own costs

6

on appeal.” Pure Wafer, 845 F.3d at 959. This Court is bound by the ruling of the Ninth

7

Circuit and will not award costs. After reviewing Pure Wafer’s requested “litigation

8

expenses,” the Court finds that the expenses are all “costs” and, thus, not recoverable

9

under the Ninth Circuit’s mandate. (Id.). Therefore, the Court will not award the

10

$8,554.25 of “expenses” or costs requested by Pure Wafer. (Doc. 142-1 at 24, 32).
Reasonableness of Attorneys’ Fees

11

C.

12

The City argues that some of Pure Wafer’s requested fee amounts are

13

unreasonable. (Doc. 143-1 at 4). Specifically, the City claims that the Court should

14

reduce Pure Wafer’s requested attorneys’ fees because: (1) certain time entries are related

15

to prior work before this Court and not related to the appeal; (2) some items are related to

16

a voluntarily dismissed Ninth Circuit appeal; (3) it is unreasonable to take 22 hours to

17

update case law after filing its brief and before oral argument; (4) it is unreasonable to

18

recover for preparation for a mediation that Pure Wafer withdrew from; and (5) it is

19

unreasonable to recover fees for litigating the ultimately unsuccessful Contract Clause

20

claim. (Id. at 4–7).

21

1.

Attorneys’ Fees Unrelated to the Appeal

22

The City argues that certain entries are unreasonable because they are not part of

23

the appeal and, instead, relate to this Court’s “entry, stay, and collection of an attorneys’

24

fees judgment.” (Id. at 4). Pure Wafer argues that under the Development Agreement, it

25

is entitled to all reasonable attorneys’ fees related to such action, which are “not limited

26

to attorneys’ fees and expenses incurred in briefing and arguing the Court of Appeals.”

27

(Doc. 144-1 at 3 (quotation marks omitted)). The Court disagrees. This Motion was filed

28

-4-

1

with the Ninth Circuit, and, thus, the fees must relate to the Ninth Circuit appeal.2

2

Therefore, the fees incurred in litigation before this Court—$9,997.50,3 (see Doc. 143-2

3

at 2–3)—are not recoverable as part of the Ninth Circuit appeal.

4

2.

Attorneys’ Fees Related to a Separate Appeal

5

The City argues that fees related to a separate appeal to the Ninth Circuit, which

6

was voluntarily dismissed, are not recoverable. (Doc. 143-1 at 4). Pure Wafer argues that

7

because the appeal arose out of this action, it should be recoverable. (Doc. 144-1 at 4).

8

The Court agrees with the City—because the appeal was voluntarily dismissed, there was

9

no prevailing party. Therefore, the Court will not award attorneys’ fees for litigating the

10

separate appeal. These fees are entirely duplicative of the $9,997.50 the Court deemed

11

unrecoverable in the prior section. See supra Section III.C.1.

12

3.

Attorneys’ Fees Related to Updating Case Law

13

The City next argues that Pure Wafer’s requested fees for updating case law are

14

unreasonable. (Doc. 143-1 at 5). Pure Wafer claims that these expenses were necessary

15

for counsel to determine “whether any of the previously cited authorities have been

16

overruled, criticized, or questioned; or . . . whether new cases have been decided that are

17

pertinent to the issues briefed.” (Doc. 144-1 at 5). While the Court agrees with Pure

18

Wafer that some updating of research is necessary, the Court finds that the total amount

19

of attorneys’ fees—which accrued from work completed after Pure Wafer’s brief was

20

filed—relating to this research are unreasonable. See Cabrales v. Cty. of L.A., 875 F.2d

21

740, 741 (9th Cir. 1989) (reducing attorneys’ fees for duplicative research of cited cases).

22

Beyond the entries contested by the City, Pure Wafer’s counsel updated case law on other

23

occasions in preparation for the Ninth Circuit oral argument and the Court will not reduce

24

the uncontested, non-duplicative updating research fees. (See, e.g., Doc. 142-1 at 31–32).

25
26
27
28

2

While Pure Wafer may be correct that it might be able to recover attorneys’ fees
pursuant to the Development Agreement, these attorneys’ fees are not procedurally
recoverable as part of this Motion filed as part of the appeal.
3

Although the City’s calculation of these fees is $9,998.00, the Court’s own
calculation of these fees is $9,997.50.
-5-

1

However, because Pure Wafer had already filed its appellate brief, the Court finds it

2

unreasonable that Pure Wafer spent over 22.9 hours4 updating case law. Therefore, the

3

Court will reduce some of the fees5 related to Pure Wafer’s updating of case law; this

4

reduces Pure Wafer’s requested fee amount by $8,015.00, (see Doc. 143-2 at 5).

5

4.

Attorneys’ Fees Related to the Ninth Circuit Mediation Program

6

The City additionally argues that the Court should reduce Pure Wafer’s requested

7

fees related to the Ninth Circuit’s mediation program because “Pure Wafer refused to

8

participate in [the mediation] and actually withdrew from it.” (Doc. 143-1 at 6). Pure

9

Wafer argues that it did not refuse to participate in the mediation, and the fees regarding

10

mediation were incurred in connection with the appeal. (Doc. 144-1 at 4). Fees related to

11

the Ninth Circuit’s mediation program are reasonable. See Seven Signatures Gen. P’ship

12

v. Irongate Azrep BW LLC, Civil No. 11-00500 JMS-RLP, 2014 WL 4129522, at *3

13

(D. Haw. Aug. 18, 2014). Despite the fact that the mediation did not occur, it is

14

reasonable for an attorney to prepare for the mediation. Further, these fees relate to the

15

appeal. Therefore, the Court will not reduce the amount of fees relating to preparation for

16

the mediation.
5.

17

Attorneys’ Fees Related to Contract Clause Argument

18

Finally, the City argues that, because Pure Wafer’s Contract Clause argument was

19

unsuccessful, any fees related to the Contract Clause claim are presumptively

20

unreasonable. (Doc. 143-1 at 6–7). Pure Wafer does not clearly address this argument in

21

its Reply. Nonetheless, the Court rejects this argument. Pure Wafer remains the

22

prevailing party on appeal despite losing on some of its arguments. Therefore, the Court

23

declines to reduce Pure Wafer’s fees related to the Contract Clause argument.

24

///

25
26
27
28

4

Although the City’s Itemized Objection #2 purportedly objects to only 18.5
hours, the City lists 22.9 hours. (Doc. 143-2 at 4). This oversight is confirmed by the
City’s correct calculation of the contested $8,015.00 fee amount.
5

As the Court noted, the City does not object to all entries related to Pure Wafer’s
updating of case law in preparation for oral argument. (See, e.g., Doc. 142-1 at 31–32).
-6-

1

D.

2

Pure Wafer requests a total of $96,102.37 in attorneys’ fees, costs, and expenses.

3

(Doc. 142-1 at 4). Consistent with the Ninth Circuit’s mandate, the Court will subtract

4

$8,554.25, representing Pure Wafer’s costs, from Pure Wafer’s requested amount. The

5

Court will also subtract $9,997.50, representing work related to a voluntarily dismissed

6

Ninth Circuit appeal and unrelated to the appeal-at-issue, from Pure Wafer’s requested

7

amount. Finally, the Court will reduce Pure Wafer’s requested amount by $8,015.00,

8

representing the unreasonable time spent updating case law after Pure Wafer’s appellate

9

brief was filed. In sum, the Court reduces Pure Wafer’s requested amount by $26,566.75,

Summary

10

for a total award of $69,535.62.

11

IV.

CONCLUSION

12

Based on the foregoing,

13

IT IS ORDERED that Pure Wafer’s Motion for Attorneys’ Fees, (Doc. 142), is

14
15

GRANTED in the amount of $69,535.62.
Dated this 31st day of July, 2017.

16
17
18
19
20
21
22
23
24
25
26
27
28

-7-