Victoria Ryan v. Editions Limited West, Inc. et al

Filing 288

ORDER GRANTING-IN-PART MOTION FOR FEES. Signed by Judge Paul S. Grewal on January 19, 2016, re 276 . (psglc1S, COURT STAFF) (Filed on 1/19/2016)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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VICTORIA RYAN,
Plaintiff,

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ORDER GRANTING-IN-PART
MOTION FOR FEES

v.

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(Re: Docket No. 276)

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EDITIONS LIMITED WEST, INC., et al.,

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United States District Court
Northern District of California

Case No. 5:06-cv-04812-PSG

Defendants.

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Having traveled to the Ninth Circuit and back multiple times, Plaintiff Victoria Ryan once

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again seeks attorney’s fees and Defendants Editions Limited West, Inc. et al. oppose.1 Ryan’s

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motion is GRANTED-IN-PART, and no later than February 2, 2016, ELW shall remit payment to

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her in the total amount of $349,083.00.

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I.

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Ryan is an artist, and ELW publishes art posters.2 Several years ago, Ryan signed a

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licensing agreement with ELW to publish two of her paintings as posters.3 This agreement had a

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fee-shifting clause, which provided that “[i]n the event that litigation is instituted with regard to

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this Agreement, the prevailing party shall be entitled to its costs of the suit, including reasonable

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attorney’s fees.”4

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See Docket Nos. 276, 279.

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See Docket No. 268 at 4.

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See Docket No. 1 at Ex. A.

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See id. at Ex. A ¶ 12.

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After their partnership soured, Ryan sued ELW for copyright infringement, unfair

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competition, breach of contract and slander of title.5 The court granted ELW summary judgment

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on each claim and limited damages for copyright infringement to $1.72.6 Addressing two separate

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appeals by Ryan, the Ninth Circuit affirmed summary judgment on all claims except copyright

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infringement, on which it determined that Ryan had raised a triable issue.7 It also held that if the

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district court found “ELW liable for contributory or vicarious copyright infringement, it should

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consider whether Ryan is the prevailing party under the broad language of the contract, and

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whether she is entitled to a permanent injunction against ELW.”8
Following remand and a bench trial, the court found in favor of Ryan on the contributory

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copyright infringement claim and in favor of ELW on the vicarious copyright infringement claim.9

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United States District Court
Northern District of California

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The court found that Ryan provided no evidence to substantiate a claim for damages or ELW’s

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profits from infringement,10 but Ryan did secure a permanent injunction. Following the Ninth

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Circuit’s directive, the court further concluded that under the licensing agreement’s fee-shifting

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clause, Ryan was entitled to reasonable attorney’s fees and costs incurred in prosecuting only the

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claim she had prevailed on, for contributory copyright infringement.11
Ryan requested $425,439.72 in attorney’s fees, costs and interest.12 The court instructed

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Ryan to provide a declaration setting forth the fees incurred in prosecuting the contributory

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See Docket No. 1.

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See Docket No. 105 at 21; Docket No. 142.

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See Docket No. 180 at 3.

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Id. at 6.

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See Docket No. 234.

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See id. at 7, 13.

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See id. at 16.

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See Docket No. 235; Docket no. 242 at 11.

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copyright infringement claim that she prevailed on, but she did not.13 The court accordingly

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excluded the following fees and costs as either moot in light of prior rulings or insufficiently

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detailed to show that they were specifically related to litigating the contributory copyright

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infringement claim:

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

fees and costs related to Ryan’s pre-lawsuit cease and desist efforts ($7,267.31);

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fees and costs related to Ryan’s defense of ELW’s defamation counterclaim ($82,061.32);

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fees and costs relating to Ryan’s first appeal, which resulted in a reversal of summary
judgment on the copyright claims ($67,357.74);

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

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fees and costs relating to Ryan’s second appeal, which reversed finding ELW the
prevailing party under the licensing agreement ($11,567.98).14

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United States District Court
Northern District of California

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This left $256,819.07 in fees relating to pre-trial and trial litigation of all the issues in dispute,

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which the court reduced as follows:

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75% reduction because Ryan prevailed on only one of her four claims;

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20% reduction because Ryan block-billed and improperly claimed interest before the fee
amounts were certain and vested.15

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The court made these reductions because Ryan “failed to follow the court’s instruction or

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otherwise to provide sufficient guidance to determine reasonable attorney’s fees and costs related

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to the prosecution of the contributory copyright infringement claim,” such that “the court [was]

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left to its own devices to fashion an appropriate award.”16 The final award was $51,363.81 in

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attorney’s fees and $7,989.94 in costs.17

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See Docket No. 242 at 9.

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See id.

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See id. at 10.

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Id.

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See id. at 10-11.

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The parties then cross-appealed once more to the Ninth Circuit, which held in relevant part

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that Ryan was entitled to attorney’s fees under the licensing agreement18 but that this court had

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improperly reduced Ryan’s requested fees.19 The Ninth Circuit held that the court had erred in

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excluding fees relating to Ryan’s pre-litigation cease and desist efforts and fees relating to Ryan’s

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first appeal, as this work was “plainly related to the eventual prosecution of her infringement

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claim.”20 The Ninth Circuit directed the court to “consider the interrelated nature of the claims” in

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Ryan’s case and “provide more detailed explanation” for any reductions if the court decided to

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reduce the requested fees “to comport with Ryan’s limited success” on remand.21 The Ninth

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Circuit declined to provide any “precise formula or methodology” for determining which hours

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were “clearly unrelated” to the copyright infringement claim or excessive.22
The Ninth Circuit also held that the 75% reduction was error, because “[p]ro rata

United States District Court
Northern District of California

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apportionment is particularly ineffective . . . where the various claims asserted involve a common

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set of facts and issues.”23 On remand, the court must use “an adequate [reduction] method” that

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balances Ryan’s prevailing party status with her “limited success in the litigation as a whole.”24

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Finally, the Ninth Circuit held that the 20% reduction for block-billing was error, because

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the court did not explain how it selected the 20% rate, and not all entries were block-billed.25 On

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remand, the court may reduce fees for block billing and improperly claimed interest, but must

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See Docket No. 268 at 8-14

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See id. at 8-21.

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Id. at 18.

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Id. at 19.

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Id.

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Id.

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Id. at 20.

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See id.

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explain how the reduction balances the hours that were block-billed and how it determined the

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percent reduction to apply.26
Ryan now requests a total fee award of $1,048,444.13.27 She calculates this amount as

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follows: ($335,170.00 total principal + $189,052.07 interest) x 2.0 fee enhancement multiplier.28
II.

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This court has subject matter jurisdiction and supplemental jurisdiction pursuant to 28

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U.S.C. §§ 1331, 1338 and 1367. The parties further consented to the jurisdiction of the

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undersigned magistrate judge under 28 U.S.C. § 636(c) and Fed. R. Civ. P. 72(a).29
“Plaintiffs may be considered ‘prevailing parties’ for attorney’s fees purposes if they

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succeed on any significant issue in litigation which achieves some of the benefit the parties sought

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United States District Court
Northern District of California

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in bringing suit.”30 The court must then determine what attorney’s fee is “reasonable.”31

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In determining what is a reasonable fee, the court first “establishes a lodestar by

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multiplying the number of hours reasonably expended on the litigation by a reasonable hourly

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rate.”32 The resulting figure is presumptively reasonable.33 The party seeking fees bears the

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burden of documenting the hours expended in the litigation and must submit evidence supporting

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the hours and rates claimed.34 In determining the appropriate lodestar, the court may exclude

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See id. at 21.

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See Docket No. 276 at 2.

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See id.

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See Docket Nos. 5, 23.

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Hensley v. Eckerhart, 461 U.S. at 433 (quoting Nadeau v. Helgemoe, 581 F.2d 275, 278-79 (1st
Cir. 1978).
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Hensley, 461 U.S. at 433

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Welch v. Metro. Life Ins. Co., 480 F.3d 942, 945 (2007).

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See Hensley, 461 U.S. at 434.

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See Hensley, 461 U.S. at 433.

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hours that are “excessive, redundant, or otherwise unnecessary.”35 The court must also determine

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a reasonable hourly rate, considering “certain factors, including the novelty and difficulty of the

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issues, the skill required to try the case, whether or not the fee is contingent, [and] the experience

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held by counsel and fee awards in similar cases.”36 When determining the rate, the court may also

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consider whether there has been a delay in payment.37 “District courts have the discretion to

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compensate plaintiff’s attorneys for a delay in payment by either applying the attorneys’ current

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rates to all hours billed during the course of the litigation or using the attorney’s historical rates

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and adding a prime rate enhancement.”38
The court may then adjust the lodestar to account for block billing39 or to reflect a party’s

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limited degree of success.40 In particular, where a plaintiff is deemed “prevailing” even though

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United States District Court
Northern District of California

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she succeeded on only some of her claims for relief, the court must consider (1) whether the

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plaintiff failed to prevail on claims that were unrelated to the claims on which she succeeded and

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(2) whether the plaintiff achieved a level of success that makes the hours reasonably expended a

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satisfactory basis for the fee award.41 As to the second prong, “a district court ‘should focus on

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the significance of the overall relief obtained by the plaintiff in relation to the hours reasonably

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expended on the litigation.’”42

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Id. at 434.

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Moreno v. City of Sacramento, 534 F.3d 1106, 1114 (9th Cir. 2008).

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See id. at 947.

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Id.

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See Welch v. Metro. Life Ins. Co., 480 F.3d 942, 948 (9th Cir. 2007).

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See Hensley, 461 U.S. at 436-37.

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See Hensley, 461 U.S. at 434.

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Id. at 436 (explaining that “[i]f the plaintiff has achieved only partial or limited success, the
product of hours reasonably expended on the litigation times a reasonable hourly rate may be
[excessive] . . . even where the plaintiff’s claims were interrelated, nonfrivolous, and raised in
good faith”).
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Finally, California law offers the court discretion to adjust the lodestar to “include a fee

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enhancement for the purpose, e.g., of compensating the attorney who agreed to undertake such

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representation at the risk of nonpayment or delayed payment, in an amount approaching the

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market rate for comparable legal services.”43 The court is “not required to include a fee

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enhancement . . . for contingent risk, exceptional skill, or other factors,” however, and the burden

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of proof is on the party seeking the enhancement.44 The court should consider whether the

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attorney has been able to mitigate the risk of nonpayment and the degree to which the relevant

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market rate compensates for contingency risk, extraordinary skill, or other factors.45 The court

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should “not consider these factors to the extent they are already encompassed within the lodestar. .

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. . Otherwise, the fee award will result in unfair double counting and be unreasonable.”46
III.

United States District Court
Northern District of California

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Applying the above standards, Ryan’s motion for fees is GRANTED-IN-PART.

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First, the court must determine the reasonable hours for the lodestar calculation.

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According to billing records from Ryan’s counsel, Mr. Richard De Liberty, he spent 1,166.70

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hours on this case,47 plus 8.5 hours on his earlier fee declaration48 and 22.2 hours on this motion

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and other work incurred after filing a fee motion with the Ninth Circuit.49 Of the 1,166.70 hours,

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200.02 were incurred in connection with the anti-SLAPP motion,50 and the court already

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Ketchum v. Moses, 24 Cal. 4th 1122, 1136 (2001).

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Id. at 1138 (emphasis original).

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See id.

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Id. at 1138-39.

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See Docket No. 276-2 at 16.

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See Docket No. 276-1 at ¶ 10.

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See id. at ¶ 12.

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The court applied the following equation to each time entry that listed fees for “Anti-SLAPP
Motion” and took the sum of the results to calculate the total hours spent on the anti-SLAPP
motion: Anti-SLAPP Motion fees / Total fees * Hrs = hours spent on anti-SLAPP Motion. See
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addressed the fees for those hours in a previous order.51 De Liberty also claims 20.0 hours that he

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“anticipate[s] incurring” in responding to ELW’s motion for a stay and filing the reply brief for

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this fee motion.52 The court finds that fees are recoverable for the 1,166.70 hours, the 8.5 hours

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and the 22.2 hours, minus the 200.02 hours, for a total of 997.38 hours. These hours were

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reasonably expended in the litigation and Ryan submitted evidence, namely De Liberty’s historical

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billing records, to support the hours claimed. The 20.0 hours are not recoverable, however,

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because they are not supported by billing records and are merely an estimate of time that may be

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incurred. If Ryan wishes to recover fees for these hours, she must file a supplemental declaration

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with evidence of the hours actually incurred.
ELW argues that the court should limit Ryan’s attorney’s fees to only the fees that were

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United States District Court
Northern District of California

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incurred in connection with the contributory copyright infringement claim that she prevailed on.53

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In ELW’s view, the hours spent on the breach of contract, slander of title and anti-SLAPP claims

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were unrelated and should be stricken. However, the Ninth Circuit specifically admonished this

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court to eliminate only hours that are “clearly unrelated” to the contributory copyright

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infringement claim,54 and after examining the billing records, the court is unable to identify any

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billing entry that meets this exacting standard. As discussed in the court’s previous order on fees,

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while Ryan failed to provide either a declaration or billing records “setting forth the particular

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attorney’s fees incurred in prosecuting the claim for contributory copyright infringement,”55 ELW

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also failed to object to any specific billing entries or identify a method for reducing the hours that

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Docket No. 276-2.
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See Docket No. 193 at 7-9.

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Id. at ¶ 13.

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See Docket No. 297 at 7-8.

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See Docket No. 268 at 19.

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Docket No. 242 at 9.

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would be consistent with the Ninth Circuit’s order.56 This leaves the court with no choice but to

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follow the Ninth Circuit’s other admonition in its previous order to “[b]y and large . . . defer to the

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winning lawyer’s professional judgment as to how much time he was required to spend on the

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case.”57
Second, the court must determine the reasonable hourly rate for the lodestar. An important

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factor in this case is the delay that Ryan experienced in receiving payment. The court finds that

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the appropriate method for compensating Ryan for the delay is to apply De Liberty’s current rate

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of $350 to the 997.38 hours reasonably billed in this litigation.58 In his solo practice, De Liberty

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currently bills $350 per hour.59 He also works with a San Francisco law firm, which bills $450 per

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hour for De Liberty’s work.60 De Liberty represents Ryan in this case as part of his solo practice,

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United States District Court
Northern District of California

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and so his solo rate is appropriate. In fact, this is the rate he used in calculating fees for his most

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recent work in this case.61 A reasonable hourly rate of $350/hr x 997.38 hours results in a lodestar

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of $349,083.00.
Ryan argues that rather than De Liberty’s current billing rate, the court should use “an

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actual interest calculation,”62 citing Theme Promotions, Inc. v. News America Mktg. FSI, Inc.,63 on

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the order of 10%.64 But the court in Theme Promotions enhanced the attorney’s hourly rate by the

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See Docket No. 279 at 4-8.

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Moreno, 534 F.3d at 1112.

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See Docket No. 276-1 at ¶ 12.

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See id.

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See id.

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See Docket No. 276-4.

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See Docket No. 276 at 2-3.

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731 F. Supp. 2d 937, 949 (N.D. Cal. 2010).

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See Docket No. 282 at 5.

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U.S. prime rate interest factor, compounded on an annual basis,65 not any old number plucked at

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random from the sky. During the lifetime of Ryan’s case, the monthly U.S. prime rate ranged

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from 3.25% to 8.25%; on the day that judgment entered, it was 3.25%.66 It certainly was never

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10%.67 While Ninth Circuit precedent permits the discretionary use of the prime rate to

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compensate for delays in payment, it does not allow for arbitrarily selected interest rates.68
Moreover, Ryan fails to explain how she selected the 10% interest rate; how this court

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should determine the correct prime rate to use in a prime rate enhancement calculation; or from

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what date the enhancement should be applied. All this militates against the use of the prime rate

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enhancement method of compensating for delay in payment. Although the prime rate may “more

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accurately account[] for the time value of money over a long period of delay,”69 the Ninth Circuit

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United States District Court
Northern District of California

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has held that the choice between using the current hourly rate or the prime rate enhancement is

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within the district court’s discretion.70
Third, the court declines to adjust the lodestar. ELW argues that under Hensley, the court

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must consider Ryan’s limited success and reduce her fees accordingly. The court acknowledges

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that Ryan succeeded to a limited degree; although she won a permanent injunction, she suffered

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summary judgment on three of her four claims. It is difficult to say that this is a level of success

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that makes the hours reasonably expended a satisfactory basis for the fee award. However, ELW

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See Theme Promotions, 731 F. Supp. 2d at 951, App. Table H.

See Historical Data: Bank Prime Loan: Monthly, Board of Governors of the Federal Reserve
System, available at
http://www.federalreserve.gov/datadownload/Output.aspx?rel=H15&series=6fa2b8138e0eafe0ad6
cde24ba2307f5&lastObs=&from=&to=&filetype=csv&label=include&layout=seriescolumn (last
updated Dec. 2015).
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The U.S. prime rate last reached 10% in December 1990, see id.

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See Welch, 480 F.3d at 947.

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Theme Promotions, 731 F. Supp. 2d at 951.

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See Welch, 480 F.3d at 947.

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suggests no method for reducing the lodestar that would be consistent with the Ninth Circuit’s

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mandate in this case, given the interrelated nature of Ryan’s claims.
Fourth, the court declines to apply the “modest” 2x fee multiplier Ryan requests.71

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Ketchum authorized multipliers specifically in anti-SLAPP cases taken on contingency “to bring

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the financial incentives for attorneys enforcing important constitutional rights, such as those

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protected under the anti-SLAPP provision, into line with incentives they have to undertake claims

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for which they are paid on a fee-for-services basis.”72 There is no basis for a multiplier here: Ryan

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already received fees for her anti-SLAPP motion,73 and her case does not involve enforcement of

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constitutional rights.
Furthermore, the use of a fee multiplier is discretionary rather than mandatory, and Ryan

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United States District Court
Northern District of California

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fails to satisfy the burden of proof, which rests on her.74 She argues that the multiplier is

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necessary to compensate De Liberty for the risk he ran of nonpayment in this contingency case.75

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Under Ketchum, however, that is only one factor in the court’s consideration, and the court finds

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that the reasonable hourly rate it applied already compensates De Liberty for his risk of

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nonpayment. Using a multiplier thus would result in unfair double compensation. Notably, Ryan

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did not request a multiplier in either her motion for anti-SLAPP fees76 or her last fee request;77 that

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the case was on contingency apparently did not justify a multiplier then, and Ryan fails to explain

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to the court what changed circumstances warrant a multiplier now.

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72

Ketchum, 24 Cal. 4th at 1132.

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See Docket No. 193 at 7-9.
Ketchum, 24 Cal. 4th at 1138.

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See Docket No. 276 at 3.

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Docket No. 276 at 3.

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See Docket No. 185.

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See Docket No. 235.

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SO ORDERED.

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Dated: January 19, 2016

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_________________________________
PAUL S. GREWAL
United States Magistrate Judge

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United States District Court
Northern District of California

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