Nan Hanks & Associates, Inc. v. Original Footwear Company, Inc.

Filing 37

ORDER signed by District Judge Troy L. Nunley on 8/16/18: The Court awards Plaintiff $9,090 in reasonable attorney's fees and costs. Defendant shall comply with this Order within fourteen (14) days of the date on which this Order is filed. (Kaminski, H)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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NAN HANKS & ASSOCIATES, INC.,

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Plaintiff,

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No. 2:17-cv-00027-TLN-KJN

v.

ORDER

THE ORIGINAL FOOTWEAR
COMPANY, INC.,
Defendant.

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This matter is before the Court on Plaintiff Nan Hanks & Associates, Inc.’s (“Plaintiff”)

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January 1, 2018 Motion for Sanctions, for which Plaintiff requested and was granted attorney’s

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fees. (ECF No. 26.) The Court ordered additional evidence regarding the requested amount of

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attorney’s fees. (ECF No. 34 at 10.) On July 9, 2018, Plaintiff’s lawyer, Scott Sanders, filed a

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declaration regarding the attorney’s fees. (ECF No. 35.) On July 16, 2018, Defendant Original

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Footwear Company, Inc. (“Defendant”) filed their response. (ECF No. 36.) For the following

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reasons, the Court will award the Plaintiff $9,090 in reasonable attorney’s fees and costs.

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I.

FACTUAL BACKGROUND

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Plaintiff commenced this action on November 28, 2016 in the Superior Court for the State

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of California, County of San Joaquin. (ECF No. 1 at 1.) On December 30, 2016, Defendant

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became incorporated under the laws of Tennessee. (See generally ECF No. 22.) Arguing that

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this Court had diversity jurisdiction, Defendant removed the action on January 5, 2017. (ECF No.

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1.) On February 9, 2017, Defendant filed a Motion to Transfer for Convenience. (ECF No. 4.)

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Thereafter, Plaintiff filed a Motion to Remand on the grounds that the Court lacked subject matter

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jurisdiction because, at the time the action commenced, Defendant was a “citizen” of California

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under 28 U.S.C. § 1332(c)(1), and, therefore, removal was improper under 28 U.S.C. §

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1441(b)(2). (See generally ECF No. 16.) Additionally, Plaintiff filed an Opposition to

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Defendant’s Motion to Transfer for Convenience on February 23, 2017. (ECF No. 17.) The

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Court remanded the action to the Superior Court for the State of California, County of San

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Joaquin, on August 17, 2017, because it lacked subject matter jurisdiction pursuant to §

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1441(b)(2). (ECF No. 25 at 2.)

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On February 1, 2018, Plaintiff moved for sanctions and attorney’s fees under Federal Rule

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of Civil Procedure 11 and 28 U.S.C. § 1447(c), or alternatively under 28 U.S.C. § 1927. (See

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generally ECF No. 29.) Defendant opposed Plaintiff’s Motion for Sanctions. (ECF No. 31.) On

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June 26, 2018, the Court denied Plaintiff’s Motion for Sanctions and granted Plaintiff’s Motion

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for Attorney’s Fees. (ECF No. 34.) The Court found insufficient evidence was presented to

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allow the Court to conduct a proper lodestar analysis. (ECF No. 34 at 10.) Thus, the Court

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ordered Plaintiff to present a declaration and supporting evidence detailing the hours spent

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preparing and drafting its Motion to Remand, Motion to Transfer, and Motion for Sanctions.

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(ECF No. 34 at 10.) On July 9, 2018, Plaintiff filed a Declaration detailing the hours spent

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preparing and drafting its Motion to Remand, Motion to Transfer, and Motion for Sanctions and

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seeking $27,252.50. (ECF No. 35.) On July 16, 2018, Defendant filed a Response to the

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Declaration, which contests the reasonableness of Plaintiff’s attorney’s hourly rates and hours

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expended.1 (ECF No. 36.)

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The Court, having already determined Plaintiff was entitled to attorney’s fees, ordered Defendant to refrain from

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II.

STANDARD OF REVIEW

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“An order remanding the case may require payment of just costs and any actual expenses,

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including attorney fees, incurred as a result of the removal.” 28 U.S.C. § 1447(c) (2012). Under

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a fee shifting statute, courts must calculate awards for attorney fees using the lodestar method.

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See, e.g., Ferland v. Conrad Credit Corp., 244 F.3d 1145, 1149 n.4 (9th Cir. 2001) (citations

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omitted). The lodestar method involves “multiplying the number of hours the prevailing party

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reasonably expended on the litigation by a reasonable hourly rate.” See e.g., Staton v. Boeing

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Co., 327 F.3d 938, 966 (9th Cir. 2003).

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The District Court may reduce the total hours included in the lodestar calculation “where

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documentation of the hours is inadequate … if the case was overstaffed and hours are duplicated

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… [or] if the hours expended are deemed excessive or otherwise unnecessary.” Chalmers v. City

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of Los Angeles, 796 F.2d 1205, 1210–11 (9th Cir. 1986), reh’g denied, amended on other

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grounds, 808 F.2d 1373 (9th Cir. 1987.) “[P]urely clerical or secretarial tasks should not be

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billed at a paralegal [or lawyer’s] rate, regardless of who performs them.” Davis v. City & Cty. of

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San Francisco, 976 F.2d 1563, 1543 (9th Cir. 1992), reh’g denied, vacated in part on other

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grounds, 984 F.2d 345 (9th Cir. 1993). However, a court “may not attempt to impose its own

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judgment regarding the best way to operate a law firm, nor to determine if different staffing

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decisions might have led to different fee requests.” Moreno v. City of Sacramento, 543 F.3d

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1106, 1115 (9th Cir. 2008).

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“When determining a reasonable hourly rate, the relevant community is the forum in

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which the district court sits.” Gonzales v. City of Maywood, 729 F.3d 1196, 1205 (9th Cir. 2013).

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The fee applicant has the burden of producing “satisfactory evidence” that the requested rates are

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in line with those prevailing in the relevant community for similar legal services of reasonably

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comparable skill and reputation. Blum v. Stenson, 465 U.S. 886, 895 n.11 (1984); Gonzales, 729

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F.3d at 1205. Satisfactory evidence of the prevailing market rates for similar legal services may

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include affidavits of plaintiff’s counsel, affidavits of other attorneys regarding prevailing market

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rates in the relevant community, and rate determinations in other cases, particularly those setting

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argument on the propriety of awarding fees in its response. (ECF No. 34 at 11 n.1.)

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a rate for the plaintiff’s counsel. United Steelworkers of Am. v. Phelps Dodge Corp., 896 F.2d

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403, 407 (9th Cir. 1990).

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The fee calculated under the lodestar method is presumptively reasonable, but may be

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adjusted upwards or downwards pursuant to a variety of factors. Gonzales, 729 F.3d at 1208–09;

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see Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 70 (9th Cir. 1975) (enumerating twelve factors

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to consider in awarding reasonable attorney’s fees). To the extent that the Kerr factors are not

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addressed in the calculation of the lodestar, the court may consider them in adjusting the fee

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award after the calculation is completed. Chalmers, 796 F.2d at 1212.

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III.

ANALYSIS

Plaintiff requests $27,252.50 in attorney’s fees. (ECF No. 35 at 3.) Defendant objects to

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the amount Plaintiff can recover. (ECF No. 36 at 1.) Defendant first argues that Plaintiff’s

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counsel’s hourly rate is unreasonable for this district. (ECF No. 36 at 2.) Second, Defendant

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argues the following: 1) that the hours spent on the Motion to Remand are unreasonable; 2) that

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there should be no award for the transfer opposition; and 3) that the hours spent on the Motion for

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Sanctions are excessive. (ECF No. 36 at 5–7.) Defendant also contends that Plaintiff’s requested

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fees exceed other fee awards following removals by this Court and other cases from this District.

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(ECF No. 36 at 9.) The Court will analyze these arguments in turn.

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A. Reasonable Hourly Rate

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Plaintiff seeks an hourly rate of $500 through the end of 2017 and $425 thereafter. (ECF

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No. 35 at 3.) Defendant argues that the appropriate rate in this District is between $250 and $300,

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citing Done Deal Inc. v. Wilbert, No. CIV–13–1009, 2013 WL 3994442, at *4 (E.D. Cal. Aug. 1,

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2013), which held that the “prevailing rate in this district has been found by one judge of the court

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to be $250 an hour.” (ECF No. 36 at 4.) Defendant also cites other cases from the Eastern

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District, Sacramento Division, which have determined that hourly rates ranging from $250 to

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$300 are reasonable in various types of cases for experienced attorneys. (ECF No. 36 at 4);

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Johnson v. Patel, No. 2:14-2078, 2016 WL 727111, at *3 (E.D. Cal. Feb. 23, 2016) ($300 is a

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reasonable rate in Sacramento for a managing partner with over 20 years experience); Johnson v.

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Wayside Prop., No. 2:13–1610, 2014 WL 6634324, at *5, 8 (E.D. Cal. Nov. 21, 2014) ($300 is a
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reasonable rate in Sacramento for managing partner with over 20 years experience). Defendant

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contends that Mr. Sanders’s rate should be reduced to no more than $300 per hour because

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Plaintiff has not satisfied its burden of producing satisfactory evidence supporting divergence

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from the appropriate rate in the District in which this Court sits. (ECF No. 36 at 3.)

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Plaintiff must provide “satisfactory evidence” that the hourly rate he requests comports

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with the prevailing rate in this district for similar legal services. See Blum, 465 U.S. at 895 n.11.

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Plaintiff argues that Mr. Sanders’s billing rate is normal and customary for lawsuits filed within

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California in this area of agency sales law based upon Mr. Sanders’s 28 years of experience in

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this specialized area. (ECF No. 35 at 3.) However, the Plaintiff fails to allege that this billing

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rate is normal and customary for lawsuits filed within this specific District, not just California

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generally.

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After an examination of related decisions in this district, the Court finds that $300 per

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hour is a reasonable rate for Mr. Sanders. See Johnson v. Geudoir, No. 2:14-cv-00930-TLN-AC,

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2017 WL 3172994, at *5 (E.D. Cal. July 26, 2017); Luna v. Hoa Trung Vo, No. CV F 08–1962

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AWI SMS, 2011 WL 2078004, at *5 (E.D. Cal. May 25, 2011) (finding a reasonable rate of $375

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per hour for attorney with more than 40 years of experience in “disability–related litigation”).

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Although Mr. Sanders has 28 years of experience in agency sales law, his briefings in this case

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have been predominantly procedural, and he has thus not relied upon his experience in agency

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sales. (ECF No. 35 at 3; see generally ECF Nos. 16, 23, 29 & 32.) Furthermore, the Court is not

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convinced that Mr. Sanders has demonstrated the “ability and reputation” that warrants a

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departure from the prevailing rates for legal work of similar complexity. See Welch v. Metro. Life

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Ins. Co., 480 F.3d 942, 946 (9th Cir. 2007). Accordingly, the Court will award Plaintiff

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attorney’s fees at an hourly rate of $300 per hour as is consistent with this district.

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B. Hours Reasonably Expended

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In determining the lodestar figure, a district court should exclude from its initial

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calculation hours that are “excessive, redundant, or otherwise unnecessary,” i.e. hours that were

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not “reasonably expended.” Hensley v. Eckerhart, 461 U.S. 424, 434 (1983); Dang v. Cross, 422

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F.3d 800, 812 n.12 (9th Cir. 2005); In re Dawson, 390 F.3d 1139, 1152 (9th Cir. 2004). The fee
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applicant bears the burden of documenting the appropriate hours expended in the litigation and

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must submit evidence in support of those hours worked. Hensley, 461 U.S. at 433, 437; Gates v.

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Rowland, 39 F.3d 1439, 11449 (9th Cir. 1994); Gates v. Deukmejian, 987 F.2d 1392, 1398–99

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(9th Cir. 1992). “Plaintiff’s counsel … is not required to record in great detail how each minute

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of his time was expended,” even “minimal” descriptions that establish that the time was spent on

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matters on which the district court may award fees is sufficient. Lytle v. Carl, 382 F.3d 978, 989

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(9th Cir. 2004). Counsel need only “identify the general subject matter of [their] time

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expenditures.” Trustees of Dirs. Guild of Am-Producer Pension Benefit Plans v. Tise, 234 F.3d

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415, 427 (9th Cir. 2000); see also Lytle, 382 F.3d at 989. The party opposing the fee application

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has a burden of rebuttal that requires submission of evidence that challenges the accuracy and

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reasonableness of the hours charged or challenges the facts asserted by the prevailing party.

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McGrath v. County of Nevada, 67 F.3d 248, 255–256 (9th Cir. 1995); Gates v. Gomez, 60 F.3d

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525, 534–35 (9th Cir. 1995); Deukmejian, 987 F.2d at 1398–99.

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i.

Hours for Motion to Remand

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Plaintiff requests a total of $11,350 for 22.7 hours of attorney’s fees incurred as a result

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of researching, drafting, and preparing Plaintiff’s Motion for Remand and for researching and

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drafting a Reply to Defendant’s Opposition to Motion to Remand. (ECF No. 35 at 2.)

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Defendant argues that reasonable briefing on a Motion to Remand should take approximately 13

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hours, instead of the 22.7 hours sought by Plaintiff. (ECF No. 36 at 5.) Defendant cites

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numerous cases where courts have reduced the hourly expenditure requested for attorney’s fees,

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and contends that the average number of hours from the cases cited is approximately 13. (ECF

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No. 36 at 5.) While these cases do not control whether Mr. Sanders’s 22.7 hour expenditure on

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the Motion to Remand is reasonable, the Court notes that similar cases have had significantly

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lower expenditures. See Breshears, Inc. v. Delaware N. Companies, No. 1:16-CV-1129, 2016

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WL 7010501 at *5, 7 (E.D. Cal. Nov. 30, 2016) (plaintiff requested 14 hours for motion to

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remand; the Court reduced to 12 hours). See also Lopez v. Pfeffer, No. 13–cv–03341, 2013 WL

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5367723 at *5 (N.D. Cal. Sept. 25, 2013) (12.5 hours is reasonable); Beauford v. E.W.H. Group

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Inc., No. 1:09–CV–00066, 2009 WL 3162249 at *8 (11.87 hours is reasonable).
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The Court has reviewed Mr. Sanders’s invoices for the Motion to Remand and has

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determined that an expenditure of 18.2 hours is appropriate. Mr. Sanders’s invoices contain a

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plethora of telecommunications, sometimes on consecutive days. (See, e.g., ECF No. 35 at 13

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(Telecommunications with client listed on March 1, 2017 and then again on March 2, 2017).)

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While the Court recognizes that communications between an attorney and client are an important

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part of an attorney’s job in preparing a Motion to Remand, Mr. Sanders’s hourly expenditures in

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client communications is excessive and Plaintiff has not met the burden for proving that all of

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these communications were reasonable. Additionally, the Court noticed that Mr. Sanders has

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billed for multiple hours of drafting and review of the Motion to Remand. (See, e.g., ECF No. 35

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at 10 (Separate invoice entries on the same day titled “Revisions and additions to Motion for

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Remand” and “Prepare revised version of Motion for Remand”).) Plaintiff has similarly not met

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the burden for proving that these extensive revisions were reasonable.

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The Court declines to award fees for three of Mr. Sanders’s itemized billings where it

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found review and drafting was duplicative and unreasonable. First, the entry on January 25,

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2017, which is titled: “Review Moving Papers & outline opposition to Motion to Transfer” for

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0.5 hours. (ECF No. 35 at 8.) The Court determined this is excessive because the following entry

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is again listed as “Outline and Prep Opposition to Motion to Transfer” with 5.4 hours. Second,

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the entry on February 27, 2017, which is titled: “Begin research of opposition citations & prep of

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Reply to Opposition re Motion for Remand” for 2.3 hours. (ECF No. 35 at 12.) The entry on

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March 1 is similarly listed as “Continue prep of reply to opposition to Motion for Remand” for

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2.5 hours and is thus duplicative. One of these expenditures spent on preparation is sufficient

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here. Finally, the Court declines to award fees for the entry on March 2, 2017, which is titled:

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“Revisions to reply to opposition in prep for finalizing (re Motion for Remand)” for 1.9 hours.

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(ECF No. 35 at 13.) The previous entry was listed as “prep of reply to opposition to Motion for

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Remand” for 2.5 hours. Additionally, the Court has removed all of the entries following August

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21, 2017 from the amount awarded for the Motion for Remand because the entries past that date

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are listed as done in preparation for the Motion for Sanctions, not the Motion to Remand. (ECF

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No. 35 at 15.)
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Additionally, the entry on January 12, 2017, described as “Proof, scan & fax letter to

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counsel re Removal” was described on the invoice as an administrative duty. (ECF No. 36 at 7.)

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Plaintiff offers no showing that the appropriate amount to bill here is the requested $80 dollars an

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hour, so the Court will not include this entry in the attorney’s fees awarded for the Motion to

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Remand.

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After reviewing the invoices for the Motion to Remand, the Court has determined that
18.2 hours of attorney’s fees for the Motion to Remand is appropriate.

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ii.

Hours for the Opposition to the Motion to Transfer

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Plaintiff requests $5,150 for 10.3 hours incurred as a result of researching, preparing, and

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drafting Plaintiff’s Opposition to Motion to Transfer. (ECF No. 35 at 2.) Defendant contends

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that there should be no award for the Opposition to Motion to Transfer because Plaintiff would

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have had to oppose a motion to transfer if the case proceeded in state court. (ECF No. 36 at 5.)

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Defendant cites Beauford v. E.W.H. Group Inc., No. 1:09–CV–00066, WL 3162249, at *7 (E.D.

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Cal. Sept. 29, 2001). In support, arguing that when a motion “likely would have been incurred in

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state court had the litigation remained there” fee requests are denied. (ECF No. 36 at 5.)

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“[O]ther fees and costs incurred in federal court after a removal may be related only

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tenuously to the removal, as when they replace similar fees and costs that would have been

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incurred in state court if the litigation had proceeded there. Such fees and costs cannot be

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considered ‘incurred as a result of the removal.’ ” Baddie v. Berkeley Farms Inc., 64 F.3d 487,

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490 (9th Cir. 1995); SRE–Cheaptrips, Inc. v. Netblue, Inc., No. CV–07–49, 2007 WL 2572166, at

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*2 (D. Idaho Aug. 31, 2007) (citing Baddie and concluding Plaintiff’s costs related to a motion to

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dismiss and motion to strike were not recoverable as those costs would likely have been incurred

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in state court). Because Plaintiff would have had to oppose a motion to transfer in state court, and

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did in fact oppose a motion to transfer in state court after the case was remanded to the San

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Joaquin County Superior Court, the Court will not grant attorney’s fees for hours expended in

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preparing this document.

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Hours for Motion for Sanctions

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Plaintiff requests $9,152.50 for 20.9 hours in attorney’s fees spent on researching,

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preparing, and drafting Plaintiff’s Motion for Sanctions. (ECF No. 35 at 2–3.) Defendant

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contends that the amount of hours should be reduced because a significant portion of the hours

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were spent on Plaintiff’s unsuccessful request for sanctions under Rule 11 even though Plaintiff

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did not comply with the safe harbor provisions under Rule 11. (ECF No. 36 at 7.) Defendant

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also argues that the request of $1,600 for Plaintiff’s Declaration at a rate and number of hours not

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specified in the invoice should be excluded from the reward for lack of documentation. (ECF No.

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36 at 8.) Finally, Defendant argues that 20.9 hours spent on the Motion for Sanctions is

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unreasonable. (ECF No. 36 at 7.) Defendant argues that Plaintiff does not meet the burden for

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showing why the 20.9 hour expenditure was reasonable. (ECF No. 36 at 7.)

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Defendant argues that because the Court determined Plaintiff’s Motion for Sanctions

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under Rule 11 failed, Plaintiff should not be able to collect attorney’s fees that were incurred on

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that portion of the motion. (ECF No. 36 at 8.) Plaintiff may not recover attorney fees expended

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on unrelated, unsuccessful claims. Kelley v. Sears, Roebuck and Co., No. CV–01–1423–ST, 2004

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WL 1824121 at *1 (D. Or. Aug. 10, 2004). “Claims are ‘unrelated’ if they are entirely distinct

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and separate from the claims on which the plaintiff prevailed.” Sorenson v. Mink, 239 F.3d 1140,

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1147 (9th Cir. 2001) (citations omitted). The Ninth Circuit does not require “commonality” of

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both facts and law before concluding that unsuccessful and successful claims are related.”

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Schwarz v. Secretary of Health & Human Serv., 73 F.3d 895, 902 (9th Cir. 1995) (emphasis in

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original). Because Plaintiff’s Rule 11 motion was of the same set of facts as their prevailing

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motion for attorney’s fees, the Rule 11 motion is not unrelated and therefore does not meet the

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bar for reduction of the costs incurred. Defendant does not cite any authority in support of this

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argument, and thus, the Court concludes based on the above case law that further reduction for

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Plaintiff’s unsuccessful claims is not necessary.

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Defendant also argues that the request of $1,600 for Plaintiff’s Declaration at a rate and

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number of hours not specified in the invoice should be excluded from the reward for lack of

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documentation. (ECF No. 36 at 8.) Defendant cites Breshears, Inc. v. Delaware N. Companies,
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No. 1:16-CV-1129, 2016 WL 7010501 at *7 (E.D. Cal. Nov. 30, 2016), “where the

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documentation is inadequate, the district is free to reduce an applicant’s fee award accordingly …

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[A]lthough it is apparent that some time was spent preparing the reply, Breshears provided no

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additional information regarding the specific amount of time … Without additional information,

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the Court declines to speculate how much time was expended on the reply.” (citation and

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quotation omitted). The Court finds this argument compelling. Because Plaintiff has failed to

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provide adequate documentation for the amount of $1,600, the Court will exclude this amount

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from the award of attorney’s fees.

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As to the reasonableness of the remaining hours, the Court has reviewed the invoices

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provided by the Plaintiff and has determined that a 12.1 hourly expenditure is reasonable for the

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Motion for Sanctions. The invoices list many entries of hours expended on multiple drafts of the

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motion. (See generally, ECF No. 36.) The Court recognizes the importance of multiple drafts of

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motions, but has determined the hours expended on these drafts to be excessive. Defendant

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should not be liable for excessive hourly expenditures spent on third or fourth drafts of the

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Motion for Sanctions when the Plaintiff has not met the burden of providing evidence of why

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such expenditures are reasonable. Accordingly, the Court declines to award fees for three of Mr.

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Sanders’s itemized billings spent on research and drafting. First, the Court declines to award fees

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for the entry on January 22, 2018, which is titled: “begin prep of Motion for Sanctions & atty

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fees.” (ECF No. 35 at 25.) The Court has determined this is excessive because the consecutive

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entry is listed as: “finish prep of 1st draft of Motion for Sanctions & Atty Fees”, which is very

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similar to the January 22 entry. (ECF No. 35 at 25.) Plaintiff has not met the burden of showing

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that two separate entries spent on preparing the first draft of the Motion for Sanctions and

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Attorney’s Fees is reasonable. Second, the Court declines to award fees for the entry on January

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29, 2018, which is titled: “add further legal citations and points raised by client & prep next draft

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of Motion for Sanctions.” (ECF No. 35 at 26.) The previous entries amounted to the number of

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hours spent drafting the Motion for Sanctions, and it is not clear that additional hours spent

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adding legal citations and points are reasonable. Finally, the Court declines to award Plaintiff

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attorney’s fees for the entry on January 30, 2018, which is titled: “review revisions & prep final
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drafts of Motion for Sanctions and Sanders Declaration.” (ECF No. 35 at 25.) The Court has

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determined this entry to be excessive because previous entries already allocate 3.7 hours for

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drafting the Motion for Sanctions.

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After reviewing the invoices for the Motion for Sanctions, the Court has determined that
12.1 hours of attorney fees is appropriate.

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IV.

CONCLUSION

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For the foregoing reasons, the Court awards Plaintiff 18.2 hours for the Motion to Remand

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and 12.1 hours for the Motion for Sanctions at an hourly rate of $300 dollars per hour. Thus, the

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Court awards Plaintiff $9,090 in reasonable attorney’s fees and costs. Defendant shall comply

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with this Order within fourteen (14) days of the date on which this Order is filed.
IT IS SO ORDERED.
Dated: August 16, 2018

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Troy L. Nunley
United States District Judge

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