Securities and Exchange Commission v. Schooler et al

Filing 1460

ORDER Granting Allen Matkins' Seventeenth Interim Fee Application 1434 . Having been satisfied that Counsel to Receiver cured the defects in its Seventeenth Interim Fee Application, ECF No. 1434, identified by the Court in its order denying the Seventeenth Interim Fee Application, ECF No. 1448, the Court Grants Allen Matkins' Seventeenth Interim Fee Application, ECF No. 1434. Signed by Judge Gonzalo P. Curiel on 4/10/17.(dlg)

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1 2 3 4 5 6 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA 7 Case No.: 3:12-cv-2164-GPC-JMA 8 GRANTING ALLEN MATKINS’ SEVENTEENTH INTERIM FEE APPLICATION 9 10 11 12 13 14 15 16 17 SECURITIES AND EXCHANGE COMMISSION, [ECF No. 1434] Plaintiff, v. LOUIS V. SCHOOLER and FIRST FINANCIAL PLANNING CORPORATION, dba Western Financial Planning Corporation, Defendants. 18 19 20 21 22 On March 14, 2017, the Court denied the Seventeenth Interim Fee Application of 23 Allen Matkins Leck Gamble Mallory & Natsis LLP, Counsel to Receiver (“Allen 24 Matkins”) and directed Counsel to Receiver to file Supplemental Briefing addressing the 25 Court’s concerns. ECF No. 1448. The Court received such briefing on March 20, 2017. 26 ECF No. 1450. Accordingly, and having been satisfied that Counsel to Receiver has 27 cured the defects present in the initial filing, the Court hereby GRANTS Allen Matkins’ 28 Seventeenth Interim Fee Application. 1 3:12-cv-2164-GPC-JMA The Court previously denied Allen Matkins’ request for fees because it found that 1 2 Counsel to Receiver had failed to demonstrate that their hourly rates were fair and 3 reasonable in light of prevailing market rates.1 ECF No. at 1448. The Court attributed 4 this failure to the fact that Allen Matkins had raised the hourly rates of its lawyers by 5 6.5% without notice and without explanation to the Court. Id. at 7. The Court expressed 6 particular concern about the fact that the overwhelming majority of work on the 7 Receivership had been previously billed at $486.00 per hour and was now being billed at 8 an hourly rate of $517.00. Id. 9 The Supplemental Briefing submitted by Counsel to Receiver explains that the 10 6.5% rate increase is due to an annual adjustment in the law firm’s annual rates which it 11 made “in light of increases in operating expenses and the additional skill and experience 12 of their attorneys.” ECF No. 1450 at 3. Allen Matkins added that the firm makes such 13 adjustments each year, effective July 1.2 Id. In light of this new information, the Court finds that Allen Matkins’ rates are fair 14 15 and reasonable. The Court begins by noting that the total fees requested by Allen 16 Matkins include a 10 percent discount, which has been customary throughout the firm’s 17 tenure as Counsel to Receiver. See ECF No. 1450 at 3. Accordingly, although Allen 18 Matkins accrued $99,325.35 in fees during the Seventeenth Application Period, it has 19 only requested $89,392.82. See ECF No. 1434. The Court further observes that most of 20 the work performed by Counsel to Receiver was billed at $517.00 and that, when taking 21 into account the 10 percent discount, Allen Matkins average rate per hour was $475.75.3 22 As such, the Court finds that Allen Matkins’ rates are reasonable notwithstanding the fact 23 24 25 26 27 28 1 Apart from the hourly rate, the Court otherwise concluded that the fees requested were reasonable in light of the complexity and quality of Allen Matkins’ work, along with the non-opposition of the SEC, and the Receivership’s ability to bear the fees. See ECF No. 1448 at 6-10. 2 The firm further noted that it would freeze its rates for the remainder of the Receivership. 3 Counsel to Receiver requests $89,392.82 in fees for 187.9 hours of work. See ECF No. 1434 at 2. Therefore, Counsel’s average rate per hour is $475.75 ($89,392.82 / 187.9 = $475.75). 2 3:12-cv-2164-GPC-JMA 1 that Allen Matkins’ range of hourly rates, $256.50 – $715.004, is higher than comparable 2 professionals. 3 Case Court and Case 4 Receiver’s Counsel Hourly Docket Nos. No. 5 Rates SEC v. Lambert Van Tuig, et al. SEC v. Learn Waterhouse, Inc., et al. SEC v. Christian Stanley, Inc., et al. 6 7 8 9 10 USDC-CD Case No. 06-cv-00172 USDC-SD Case No. 04-cv-02037 USDC-CD Case No. 11-cv-07147 Sheppard Mullin Richter & Hampton LLP Ervin Cohen & Jessup LLP $290- Dentons US LLP $211- 765/774 $520 $235- 729-3/732 $575 204-2/211 $531 11 12 ECF No. 1450 at 3. Of the 187.9 hours that Allen Matkins spent on the Receivership this 13 application period, only 22.6 hours (roughly 12%) were billed above $517.50. Given that 14 only a small percentage of Allen Matkins’ fees were billed at the higher rates, the Court 15 finds that the firm’s 10 percent discount is more than sufficient to bring its compensation 16 within an acceptable range, as evidenced by the fact that the average rate per hour, after 17 incorporating the discount, was $475.75. As such, the Court concludes that Allen Matkins’ rates represent the fair value of 18 19 the time, labor, and skill provided, as measured by conservative business standards and in 20 light of comparable rates in this geographic area. 21 CONCLUSION 22 Having been satisfied that Counsel to Receiver cured the defects in its Seventeenth 23 Interim Fee Application, ECF No. 1434, identified by the Court in its order denying the 24 Seventeenth Interim Fee Application, ECF No. 1448, the Court hereby GRANTS Allen 25 26 27 28 The Court misstated the spectrum of Allen Matkins’ hourly rates in its motion denying Allen Matkins seventeenth interim fee application as ranging from $256.50 – $702.00. The correct range is $256.50 – $715.50. See ECF No. 1434 at 28. 4 3 3:12-cv-2164-GPC-JMA 1 Matkins’ Seventeenth Interim Fee Application, ECF No. 1434, and awards fees and costs 2 as set forth in the following table: Applicant Fees Allowed % of Fees Incurred5 3 4 Counsel $99,325.35 80 Costs Allowed $503.96 % of Costs Requested 100 5 6 7 IT IS SO ORDERED. 8 9 Dated: April 10, 2017 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 The Court includes the percentage of fees incurred rather than a percentage of the fees requested, given that the Receiver and Allen Matkins request only a percentage of their actual fees. 4 3:12-cv-2164-GPC-JMA

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