Passport Health, Inc. v. Travel Med Inc. et al

Filing 121

ORDER signed by Judge Garland E. Burrell, Jr on 12/14/11 ORDERING that Plaintiff is awarded $175,712.48 in attorneys' fees and costs. (Becknal, R)

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IN THE UNITED STATES DISTRICT COURT
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FOR THE EASTERN DISTRICT OF CALIFORNIA
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PASSPORT HEALTH, INC., a
Maryland corporation,

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Plaintiff,

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v.
TRAVEL MED, INC., a California
corporation and GINA FLAHARTY,
an individual and citizen of the
State of California
Defendants.
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2:09-cv-01753-GEB-JFM
ORDER AWARDING PLAINTIFF
ATTORNEYS’ FEES AND COSTS

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Plaintiff seeks $362,123.48 in attorneys’ fees and costs as

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the prevailing party in this action. (ECF No. 89.) Judgment was entered

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in Plaintiff’s favor on September 6, 2011. (ECF No. 82.) Defendants

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oppose the motion. (ECF No. 98.)

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Plaintiff argues it is entitled to the attorneys’ fees it

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seeks under Section 1717 of the California Civil Code. (Mot. 12:8-14.)

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This statute “authorizes reasonable attorney’s fees ‘in any action on a

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contract, where the contract specifically provides that attorney’s fees

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and costs, which are incurred to enforce the contract, shall be awarded

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. . . to the prevailing party.’” Barrientos v. 1801-1825 Morton LLC, 583

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F.3d 1197, 1216 (9th Cir. 2009) (quoting CAL . CIV . CODE § 1717(a)).

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Plaintiff argues that the Franchise Agreement provides for attorneys’

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fees and costs to the prevailing party. (Mot. 12:16-27.)

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Defendants counter that Plaintiff’s motion for attorneys’ fees

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should be denied “because Plaintiff failed to first seek mediation

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and/or arbitration of this dispute prior to filing the instant lawsuit

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as required by the Franchise Agreement”; or, in the alternative, that

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the

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Plaintiff’s counsel charged rates far in excess of a reasonable rate for

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the Sacramento area for legal services.” (Opp’n 2:4-9.)

request

“should

be

reduced

to

a

reasonable

amount

because

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Defendants argue that the portion of the Franchise Agreement

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authorizing an award of attorneys fees is “subject to” the requirement

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that the parties submit their claims to mediation and/or arbitration

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prior to filing suit, which did not occurr. Id. 5:6-9. Plaintiff

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counters that the Franchise Agreement “exempts some claims, including

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[Plaintiff’s] claims in this matter, from the mediation requirement.”

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(Reply 2:8-9.)

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The Franchise Agreement prescribes, notwithstanding certain

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disputes that are to be arbitrated, “the parties may bring an action

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. . . for monies owed, [and] for injunctive or other extraordinary

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relief, . . . without submitting such action to mediation.” (App. to

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Mot. Ex. 26, § 22(f)(i).) Therefore, the Franchise Agreement did not

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require Plaintiff to submit its claims to mediation or arbitration. The

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Franchise Agreement prescribes that the prevailing party “shall be

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awarded its costs and expenses including, but not limited to reasonable

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accounting, paralegal, expert witness and attorneys’ fees[.]” Id. §

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22(h). Since Plaintiff is the prevailing party, Plaintiff is entitled to

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seek an award of reasonable attorneys’ fees and costs in this lawsuit.

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To

determine

whether

a

request

for

attorneys’

fees

is

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reasonable, courts in this circuit use the lodestar method and multiply

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“the number of hours the prevailing party reasonably expended on the
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litigation

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Financial, Inc., 523 F.3d 973, 978 (9th Cir. 2008) (quoting Ferland v.

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Conrad Credit Corp., 244 F.3d 1145, 1149 n.4 (9th Cir. 2001)).

by

a

reasonable

hourly

rate.”

Camacho

v.

Bridgeport

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Defendants argue Plaintiff’s requested hourly rates for its

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attorneys are unreasonable since they “are not in line with those in the

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Sacramento

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reasonable rate should reflect not only the market rates, but the skill

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and experience of the prevailing party’s counsel.” (Reply 3:5-6.)

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Plaintiff further argues “that the unique and complex trademark and

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franchise issues involved in this case required attorneys experienced in

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those areas and . . . attorneys with experience in franchise litigation

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are not present in the Sacramento market.” Id. 3:7-8, 4:14.

region.”

(Opp’n

7:15.)

Plaintiff

responds

arguing

“a

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“[I]n determining a reasonable hourly rate, the district court

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should be guided by the rate prevailing in the community for similar

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work

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reputation.” Ingram v. Oroudjian, 647 F.3d 925, 928 (9th Cir. 2011)

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(quoting Chalmers v. City of L.A., 796 F.2d 1205, 1210-11 (9th Cir.

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1986)). “[N]ormally the relevant legal community for determining the

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prevailing market rates for attorneys’ fees is the community in which

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the forum is situated.” Gates v. Rowland, 39 F.3d 1439, 1449 (9th Cir.

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1994). “[T]he burden is on the fee applicant to produce satisfactory

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evidence-in addition to the attorney’s own affidavits-that the requested

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rates are in line with those prevailing in the community for similar

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services by lawyers of reasonably comparable skill, experience and

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reputation.” Blum v. Stenson, 465 U.S. 886, 895 n.11 (1984). “If the

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prevailing party fails to meet this standard, the fee request is reduced

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or excluded altogether.” Schultz v. Ichimoto, No. 1:08-cv-526-OWW-SMS,

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2010 WL 3504781, at *8 (E.D. Cal. Sept. 7, 2010).

performed

by

attorneys

of

comparable

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skill,

experience,

and

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Plaintiff’s

requested

rates

for

its

attorneys’

fees

are

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supported solely by the affidavit of Plaintiff’s counsel, Aimee Furness;

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however, she does not address the prevailing market rates in this

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community. Further, Plaintiff’s conclusory arguments that this case was

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unique and complex do not satisfy Plaintiff’s obligation of producing

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evidence of the rates charged by comparably skilled attorneys in this

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community for similar litigation services. Since Plaintiff has failed to

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satisfy its burden of showing that its hourly rates are reasonable and

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“in line with those prevailing in the community” Plaintiff’s hourly

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rates will be reduced to a reasonable hourly rate. Blum, 465 U.S. at 895

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n.11.

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Defendants’

counsel,

Matthew

Pearson,

has

provided

a

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declaration in which he avers the prevailing market rates in the

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community for similar services are as follows:

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Most attorneys with 8-10 years experience in the
Sacramento region set their rates around $250.00
per hour for business or trademark litigation.
. . . Generally, junior associate rates are between
$100 and $75 per hour less than the partners in the
same firm. . . . Paralegal rates are . . .
generally $100 per hour or less in Sacramento.

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(Pearson

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declaration are within rate ranges previously found reasonable in this

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community, and are not controverted by Plaintiff. Therefore, Plaintiff’s

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hourly rates shall be reduced to the following hourly rates: $250 for

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partners, $150 for associates, and $75 for paralegals.

Decl.

¶

4,

ECF

No.

99.)

The

hourly

rates

in

Pearson’s

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Plaintiff also requests fees for the work of a “consultant”.

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(Mot. 10:23-24.) However, Plaintiff has not explained what services the

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consultant provided, nor offered any support for these fees; therefore,

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the fees’ claimed for the consultant are excluded entirely.

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Defendants also argue that certain charges should be excluded

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from Plaintiff’s request because of “block billing”. (Opp’n 9:6-9.)

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However, the time claimed by Plaintiff is reasonable and will not be

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reduced. Consequently, Plaintiff’s reasonable fees are as follows:

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NAME

Title

HOURS

HOURLY

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FEE AMOUNT

RATE

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Aimee Furness

Partner

200.4

$250

$50,100

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Jason Gonder

Associate

225.2

$150

$33,780

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Melissa Celeste

Associate

244.3

$150

$36,645

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Jennifer Lantz

Partner

24.3

$250

$6,075

Jan Gilbert

Partner

16.4

$250

$4,100

George Graves

Associate

24.3

$150

$3,645

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Charlie Jones

Associate

10.9

$150

$1,635

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Ben Mesches

Partner

1.5

$250

$375

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David Bell

Partner

0.7

$250

$175

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Dorthea Carr

Paralegal

54

$75

$4,050

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Ricky Cabrera

Paralegal

36.8

$75

$2,760

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Steven Burge

Paralegal

13.5

$75

$1,012.50

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Denise Wilson

Paralegal

3.0

$75

$225

Carol Finn

Paralegal

0.2

$75

$15

Michael Brockwell

Consultant

0.7

-

0

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In total, Plaintiff is awarded $144,592.50 for the attorneys’
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fees it incurred to enforce the Franchise Agreement.
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In addition, Plaintiff is entitled to the fees it incurred
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preparing

its

motion

for

attorneys

fees

since

“time

spent

in

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establishing the entitlement to and amount of the fee is compensable.”
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Camacho,

523

F.3d

at

981

(citation

and

internal

quotation

marks

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omitted).

Furness

includes

in

her

declarations

the

time

she,

two

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associates, and a paralegal spent preparing the motion and reply. (Decl.
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5

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of Furness in Supp. of Mot. ¶ 11; Decl. of Furness in Supp. of Reply ¶

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3.) Defendants do not address this request.

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Plaintiff’s request is reduced by the amount of time Furness

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anticipated spending “preparing and participating in oral argument”,

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since this matter was submitted without oral argument. (ECF No. 103.)

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Using the reduced hourly rates discussed supra, Plaintiff’s reasonable

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fees for the preparation of this motion are as follows:

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NAME

Title

HOURS

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HOURLY

FEE AMOUNT

RATE

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Aimee Furness

Partner

5.5

$250

$1,375

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Jason Gonder

Associate

1.6

$150

$240

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George Graves

Associate

40

$150

$6,000

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Katherine Rogers

Paralegal

7.1

$75

$532.5

Therefore, Plaintiff is awarded $8,147.50 for the attorneys’

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fees it incurred preparing this motion.

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Defendants do not address Plaintiff’s request for costs. Since

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the Franchise Agreement specifically allows for an award of costs,

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Plaintiff’s request for $22,972.48 in costs is granted.
For the foregoing reasons, Plaintiff is awarded $175,712.48 in

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attorneys’ fees and costs.

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Dated:

December 14, 2011

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GARLAND E. BURRELL, JR.
United States District Judge

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