In re Jacqueline C. Melcher

Filing 55

ORDER GRANTING 27 RENEWED MOTION TO DETERMINE AMOUNT OF SANCTIONS by Judge William Alsup. (whalc2S, COURT STAFF) (Filed on 9/30/2017) The deputy clerk hereby certifies that on October 2, 2017, a copy of this order was served by sending it via first-class mail to the address of each non-CM/ECF user listed on the Notice of Electronic Filing. Modified on 10/2/2017 (afmS, COURT STAFF).

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IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA

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IN RE JACQUELINE MELCHER

No. C 13-04930 WHA

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For the Northern District of California

United States District Court

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ORDER GRANTING
RENEWED MOTION TO
DETERMINE AMOUNT
OF SANCTIONS

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This matter stems from the bankruptcy proceedings of debtor Jacqueline Melcher.

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Judge Ronald Whyte originally withdrew the reference to the bankruptcy court to consider the

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Trustee’s motion for $688,000 in sanctions against debtor pursuant to Section 1927 of Title 28

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of the United States Code. Judge Whyte granted the Trustee’s motion “to compensate the

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victims of Ms. Melcher’s litigation abuses” but deferred calculation of the amount of sanctions

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“because the litigation [was] ongoing and more unnecessary fees may be incurred in the future”

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(Dkt. No. 15). Judge Whyte instructed the Trustee to move for determination of the final

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amount of sanctions at the conclusion of debtor’s bankruptcy case.

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The Trustee then filed a supplemental motion for sanctions that stated, “The Trustee is

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closing the bankruptcy case and is filing the present motion for determination of the amount of

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sanctions through September 30, 2015. The Trustee is foregoing a request for sanctions for

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unnecessary fees caused by the Debtor after that date” (Dkt. No. 16 at 2). Judge Whyte,
however, noted that “[d]ebtor ha[d] appealed the bankruptcy court’s December 10, 2015 order

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approving interim compensation, and the Trustee ha[d] moved to dismiss that appeal for lack of

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jurisdiction on the grounds that the bankruptcy court’s fee award [was] not yet final,” so “the

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Trustee’s position seem[ed] to be that the fee amount that the bankruptcy court ultimately

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approve[d was] subject to change” (Dkt. No. 25 at 2). Since Judge Whyte intended to use the

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Trustee’s attorney’s fees “as a basis for sanctions,” he deferred ruling on the final amount of

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sanctions “until the bankruptcy case is complete and the bankruptcy court makes a final

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determination of the amount of attorneys’ fees to be awarded” (id. at 2–3).

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In compliance with Judge Whyte’s order, the Trustee then filed a renewed motion to

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determine the amount of sanctions with documentation to support the reasonableness of his
attorney’s fees (see id. at 3; Dkt. No. 27). The Trustee’s renewed motion explained that “[a]ll

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For the Northern District of California

United States District Court

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fees requested by counsel have been approved on a final basis” by the bankruptcy court (Dkt.

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No. 27 at 2). This matter was then reassigned to the undersigned judge, along with several of

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debtor’s pending appeals from various orders of the bankruptcy court.

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Since debtor had missed her briefing deadline, the undersigned judge issued an order to

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show cause why the Trustee’s motion should not be granted (Dkt. No. 32). In response to that

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order, debtor argued that (1) the bankruptcy court’s determination regarding attorney’s fees was

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not final because she had appealed it, (2) the Trustee’s notice of the motion mentioned an

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inaccurate briefing deadline, and (3) she “was not allowed to participate and was denied the

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right to object” prior to the bankruptcy court’s final approval of attorney’s fees (Dkt. No. 35).

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The undersigned judge held a hearing on the Trustee’s renewed motion, at which debtor

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had the chance to be heard (see Dkt. No. 49). Her pending appeals from the bankruptcy court’s

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orders relating to attorney’s fees have been rejected. See In re Jacqueline C. Melcher, Case No.

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3:16-cv-05982-WHA; In re Jacqueline C. Melcher, Case No. 3:16-cv-06123-WHA. There is

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no further reason to postpone decision on the Trustee’s renewed motion.

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The customary method for assessing an attorney’s fee application in bankruptcy cases is

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the “lodestar” method, which multiplies the reasonable hourly rate for the services provided by

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the number of hours reasonably expended. In re Eliapo, 468 F.3d 592, 598–99 (9th Cir. 2006).

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The Trustee urges application of the lodestar method here (Dkt. No. 27-1 at 3). After the
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hearing on the Trustee’s renewed motion, the Trustee’s attorney also submitted a declaration

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voluntarily limiting the amount requested to the $688,000 sum originally considered by Judge

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Whyte (Dkt. No. 54 at 2–3). The Trustee and his attorney have also explained that they

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understand the collection of any amount of sanctions from debtor is unlikely, but they

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nevertheless pursued a large amount in the hope that it would protect the victims of debtor’s

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litigation misconduct by deterring further frivolous or harassing filings (see, e.g., id. at 2).

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In the original motion considered by Judge Whyte, the Trustee’s attorney claimed hourly

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rates ranging from $475 per hour in 2008 to $540 per hour in 2013, and approximately 1,300

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hours related to debtor’s frivolous and vexatious conduct, amounting to a total fees request of
$688,000 (Dkt. No. 1-5 at 23). This order finds that the claimed hourly rates are reasonable

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For the Northern District of California

United States District Court

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under these circumstances. This order further finds that, given debtor’s documented history of

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vexatious litigation, including numerous frivolous appeals, the claimed hours are likewise

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reasonable. Moreover, any risk of excessive billing is likely neutralized by the Trustee and his

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attorney’s voluntary waiver of costs accrued after April 30, 2013 (see Dkt. No. 1-5 at 24). This

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order therefore concludes that $688,000 is an appropriate amount of sanctions in this case.

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For the foregoing reasons, the Trustee’s renewed motion to determine the amount of

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sanctions pursuant to Judge Whyte’s prior order is GRANTED in the amount of $688,000.

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Judgment will follow.

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IT IS SO ORDERED.

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Dated: September 30, 2017.

WILLIAM ALSUP
UNITED STATES DISTRICT JUDGE

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