Obesity Research Institute, LLC v. Fiber Research International, LLC et al

Filing 219

ORDER on Fiber Research's 102 Motion for Attorneys' Fees. The Court Grants Fiber Research's motion for attorneys' fees and Orders Obesity Research to pay Fiber Research $28,260.00 within 30 days of this Order, absent further order of the Court or agreement of the parties. Signed by Magistrate Judge Mitchell D. Dembin on 4/18/2016. (rlu)

1
2
3
4
5
6
7
8

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF CALIFORNIA

9
10
11
12
13
14
15

Case No. 15-cv-595-BAS-MDD

OBESITY RESEARCH
INSTITUTE, LLC,
Plaintiff,
v.
FIBER RESEARCH
INTERNATIONAL, LLC,

ORDER ON FIBER RESEARCH’S
MOTION FOR ATTORNEYS’ FEES
[ECF NO. 102]

Defendant.

16
17

Before the Court is Defendant Fiber Research’s motion for the

18

attorneys’ fees and costs it expended to obtain this Court’s December 15,

19

2015, Order striking Plaintiff Obesity Research’s disclosure of non-retained

20

experts Henny den Uijl, Jim Ayres, and Brian Salerno. (ECF No. 102; and

21

see ECF No. 76 (“the underlying Order”)). In the underlying Order, the Court

22

found the position taken by Plaintiff during the required meet and confer

23

session “frivolous” and its required disclosures “patently deficient.” See ECF

24

No. 76 at 5, 8. The Court, sua sponte, determined that sanctions beyond

25

striking the offending disclosures may be appropriate and offered Defendant

26

the opportunity to seek fees. Id. at 3 fn. 1, 8-9. This motion followed.
1
15-cv-595-BAS-MDD

1

Fiber Research seeks a total award of $36,735. In its initial motion,

2

Fiber Research sought $27,687.50 (corresponding to 58.9 hours) for

3

preparation and filing of the ex parte motion and joint discovery motion

4

including its efforts in meet and confer sessions regarding this dispute. (ECF

5

No. 102-1 at 2). In its reply, Fiber Research agreed to two reductions of the

6

amount requested for work performed on the underlying successful motion:

7

$1,637.50 and $437.50 (a total reduction of $2,075, for a total of $25,612.50).

8

(ECF No. 109 at 12 at 14). Fiber Research also seeks $11,122.50

9

(corresponding to 25.2 hours) for the preparation and filing of the present

10

motion for fees. (Id.). Combined, the amount requested for the underlying

11

motion and this motion totals $36,735. Fiber Research has not sought

12

reimbursement for the time expended in preparing the reply.

13
14

LEGAL STANDARD
The Supreme Court has made clear that determining the appropriate

15

amount of attorneys’ fees “should not result in a second major litigation.”

16

Hensley v. Eckerhart, 461 U.S. 424, 437 (1983). In determining the size of a

17

fee award, “trial courts need not, and indeed should not, become green-

18

eyeshade accountants.” Fox v. Vice, 131 S. Ct. 2205, 2216 (2011). Courts

19

should not strive to “achieve auditing perfection” but should attempt “to do

20

rough justice.” Id. In so doing, courts may “take into account [] overall sense

21

of a suit” and may even “use estimates in calculating and allocating an

22

attorney’s time.” Id.

23

Even though it is impossible to determine with mathematical precision

24

the amount of attorneys’ fees incurred by one party as a direct result of

25

misconduct, courts must “abide by the injunction of the arithmetic teacher:

26
2
15-cv-595-BAS-MDD

1

Show your work!” Padgett v. Loventhal, 706 F.3d 1205, 1208 (9th Cir. 2013);

2

Salstrom v. Citicorp Credit Services, Inc., 74 F.3d 183, 185 (9th Cir. 1996).

3

In the Ninth Circuit, courts calculate awards for attorneys’ fees using

4

the “lodestar” method. Haeger v. Goodyear Tire and Rubber Co., 813 F.3d

5

1233, 1249 (9th Cir. 2016); Hensley, 461 U.S. at 429. “The ‘lodestar’ is

6

calculated by multiplying the number of hours the prevailing party

7

reasonably expended on the litigation by a reasonable hourly rate.” Camacho

8

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

9

Conrad Credit Corp., 244 F.3d 1145, 1149 n.4 (2001)). The reasonableness of

10

the hourly rate is determined by the prevailing market rates in the

11

community in which the court sits, for similar litigation by attorneys of

12

comparable experience, skill and reputation. Blum v. Stenson, 465 U.S. 886,

13

895 and n.11 (1984).

14
15
16
17

ANALYSIS
I.

Reasonable Hourly Rate
Fiber Research lists the hourly rates for each of the partners and

associates whose time entries are at issue.

18

Timekeeper

Position

Graduation Year

Hourly Rate

19

Jack Fitzgerald

Partner, LOJF

2004

$625

20

Thomas A. Canova

Partner, LOJF

1985

$725

21

Melanie Persinger

Associate, LOJF

2010

$400

22

Chris Sullivan

Partner, PPK

1995

$675

23

Jason Kerr

Partner, PPK

1998

$650

24
25

Fiber Research supports the hourly rates with a declaration from lead

26

counsel Jack Fitzgerald describing the skill and experience of each
3
15-cv-595-BAS-MDD

1

professional. (ECF No. 102-1 at 6; ECF No. 102-2 (Fitzgerald Decl.) ¶¶ 7-40

2

and Exh. 1). Fiber Research further provides support in the form of two

3

surveys showing rates charged by other attorneys. (Fitzgerald Decl. ¶¶ 41-42

4

and Exhs. 4-5). Fiber Research also supports attorney Fitzgerald and

5

Canova’s rates with prior findings by the Superior Court of the State of

6

California, San Diego County that their rates are reasonable in this market.

7

(Id. at ¶ 10 and Exh. 3).

8
9

In its opposition, Obesity Research contends that these rates are
unreasonable. (ECF No. 108). In support of that contention, Obesity

10

Research distinguishes each of the cases in which Fiber Research’s attorneys’

11

hourly rates have been found reasonable. (Id. at 9-16). Obesity Research

12

argues that most of the cases approving Mr. Fitzgerald’s (or rates similar to

13

his) hourly fee (at rates ranging from $525/hr. to $625/hr.) were class action

14

settlements in which the defendants agreed not to challenge the

15

reasonableness of the hourly rate as part of the settlement. (Id.). Fiber

16

Research responds that class actions, like any other case, can be simple or

17

complex. Fiber Research further replies that, although the class action fee

18

applications were unopposed, they were scrutinized by objectors, class

19

representatives, and courts, which owe fiduciary duties to class members.

20

The Court agrees with Fiber Research that courts do not rubber stamp

21

unopposed class action fee applications, and considers the findings in these

22

cases as evidence of the reasonableness of counsel’s fees in this matter.

23

Obesity Research also challenges the two surveys, noting that the “2010

24

NLJ Billing Survey” is outdated, only lists one firm in this District, and that

25

firm (Luce, Forward, Hamilton & Scripps) no longer exists. Obesity Research

26

contends that the second “NLJ Billing Survey” lists national firms without
4
15-cv-595-BAS-MDD

1

reference to San Diego. Fiber Research responds that courts in this District

2

rely on the very type of survey evidence—and even one of these exact

3

surveys—in finding hourly rates reasonable. (ECF No. 109 at 10 (citing

4

Makaeff v. Trump Univ., LLC, 2015 WL 1579000, at *4-5 (S.D. Cal. Apr. 9,

5

2015) (Curiel, G.) (approving rates of $250-$440 for associates and $600-$825

6

for partners after considering the National Law Journal “NLJ” Survey))).

7

Finally, Obesity Research offers the declaration of its lead counsel, Mr.

8

Sybert, stating that the hourly rates his firm is charging their client in this

9

matter are much lower, specifically: “associate $325, senior counsel $375,

10

partner $425, and senior partner $475.” (ECF No. 108-1 at 3). In response,

11

Fiber Research argues that Mr. Sybert recites his firm’s rates “in this case,”

12

but does not identify his firm’s customary rates. Fiber Research suggests

13

that Obesity Research may have obtained a reduced rate with counsel

14

because Obesity Research’s new in-house counsel is a former partner of Mr.

15

Sybert. In support of that suggestion, Fiber Research points out that Obesity

16

Research’s “original counsel, Scott Ferrell, for example, charged his ‘new

17

defense clients’ $750 per hour six years ago, in 2010.” (ECF No. 109 at 11

18

n.5). The Court considers the evidence presented by Mr. Sybert but declines

19

to accord it substantial weight.

20

The Court finds that Fiber Research has produced satisfactory evidence

21

that the hourly rates for its associates and partners are reasonable. The

22

hourly rates are supported by counsel’s detailed declaration, are consistent

23

with those previously approved by this Court and in this District, are

24

consistent with the survey data provided, and are consistent with this Court’s

25

experience regarding the rates charged in the San Diego community.

26

Although the Court has considered the lower rates charged by Obesity
5
15-cv-595-BAS-MDD

1

Research’s counsel and its challenges to the evidence presented by Fiber

2

Research, the Court finds Fiber Research has met its burden to produce

3

“satisfactory evidence, in addition to the affidavits of its counsel, that the

4

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

5

services of lawyers of reasonably comparable skill and reputation.” Jordan v.

6

Multnomah County, 815 F.2d 1258, 1263 (9th Cir.1987); see also United

7

Steelworkers of Am. v. Phelps Dodge Corp., 896 F.2d 403, 407 (9th Cir. 1990)

8

(courts should consider affidavits of the movant’s attorney and other

9

attorneys regarding prevailing fees in the community, and rate

10

determinations in other cases, particularly those setting a rate for the

11

movant’s attorney).

12

II.

Reasonably Expended Hours

13

Fiber Research provides detailed time entries in support of its request.

14

(ECF Nos. 102-4 and 102-10). Fiber Research contends that the timekeeper

15

records “demonstrates that this work was staffed properly,” with “fifth-year

16

associate Melanie Persinger perform[ing] most of the work (36 of 50.2

17

hours).” (ECF No. 102-1 at 7-8). Fiber Research emphasizes the difficulty of

18

responding to new arguments raised by Obesity Research at each step of the

19

meet and confer and joint motion drafting process. Fiber Research explained

20

that it already deducted 8.7 hours ($3,617.50) for time spent on researching,

21

conferring about, and briefing related to the 5-factor test courts use when

22

considering Rule 37(c) forms of relief. Finally, Fiber Research deducted half

23

of the 50.4 hours ($22,245) it spent in preparing the fee motion, and is

24

instead only seeking 25.2 hours ($11,122.50). Fiber Research did not include

25

or seek any fees for the time it spent preparing its reply.

26
6
15-cv-595-BAS-MDD

1

Obesity Research opposes on the grounds that Fiber Research’s portion

2

of the “simple and straightforward” underlying motion “was only five pages.”

3

(ECF No. 108). Obesity Research objects that Fiber Research overstaffed the

4

case by “pil[ing] on multiple attorneys, including one not even admitted in

5

California.” (Id.). Obesity Research argues that it is unreasonable to bill

6

four separate partners’ time for reviewing the drafts prepared by the

7

associate. Obesity Research contends that Fiber Research “seeks to recover

8

for an excessive and duplicative number of hours.” Obesity Research only

9

spent 19.6 hours (compared to Fiber Research’s 67.6 hours) on the underlying

10

motions. In addition, Obesity Research notes that the documents filed by Mr.

11

Fitzgerald reveal that he routinely files fee motions and argues that as a

12

result of their prior fee motions, they should have been able to draft this

13

motion and fee declaration in less time. In response to this assertion, Fiber

14

Research explains that it did indeed leverage prior work product to achieve

15

efficiencies of scale, but significant effort was still required to tailor the work

16

to this dispute. Obesity Research further contends that Ms. Persinger

17

improperly block-billed her time.

18

The Court finds that 40.2 hours of the time requested for the work on

19

the underlying motion is reasonable. At the outset, the Court notes that

20

Fiber Research chose not to pursue the time drafting the reply in support of

21

this motion and in addition deducted 37.2 hours of time actually billed for the

22

underlying motion and this moving brief.

23

The Court further notes that the time was expended not just on writing

24

a five page brief, as Obesity Research contends, but on repeatedly meeting

25

and conferring with Obesity Research prior to and during the drafting of the

26

brief. In addition, it is usually more time-consuming to write a succinct brief
7
15-cv-595-BAS-MDD

1

than it is to write a lengthy (though unfocused) brief. And, as Fiber Research

2

contends, designations of non-retained experts in Lanham Act litigation is

3

not a regular occurrence.

4

The Court disagrees with Obesity Research’s contention that Ms.

5

Persinger performed clerical work or block-billed her time, and instead finds

6

that her entries are sufficiently specific for the Court to determine the

7

reasonableness of the time she spent on each task. See e.g., Sunstone

8

Behavioral Health, Inc. v. Alameda County Med. Ctr., 646 F.Supp.2d 1206,

9

1217 (E.D. Cal. 2009) (even block-billed entries are permissible so long as

10

entries provide sufficient detail for the court to evaluate what the lawyers

11

were doing and whether the time was reasonably spent).

12

The Court finds that Obesity Research’s evidence that it only spent 19.6

13

hours on the underlying dispute is of little weight. The Court’s underlying

14

Order found that Obesity Research did not do enough to comply with its Rule

15

26 obligations and engaged in gamesmanship that caused the unnecessary

16

expenditure of Fiber Research’s time.

17

The Court agrees with Obesity Research, however, that Fiber Research

18

overstaffed the case and therefore excludes as unreasonable the 6.7 hours

19

billed by Mr. Thomas Canova for the underlying dispute, in addition to the

20

amounts Fiber Research proactively deducted. The timekeeper records show

21

that four different supervising attorneys actively participated in internal

22

conferences and multiple reviews of Ms. Persinger’s work product. (ECF No.

23

102-4). This overstaffing resulted in duplication of efforts and unreasonable

24

time spent on internal conferencing. Also, Mr. Canova is not licensed to

25

practice in California, is not listed as counsel of record on the docket in this

26
8
15-cv-595-BAS-MDD

1

case, is not admitted pro hac vice, and the timekeeping records show his

2

efforts to be redundant of the work performed by the other three partners.

3

Obesity Research specifically conceded that the 0.1 hours spent by Mr.

4

Kerr on 10/20/15 and the 0.2 hours spent by Mr. Sullivan on 10/28/15 were

5

reasonable, so the Court will not deduct those amounts. (ECF No. 108 at 22).

6

The Court further notes that in its reply Fiber Research took the

7

initiative to deduct 0.5 hours spent by Mr. Kerr on November 6, 2.1 hours

8

spent by Mr. Fitzgerald on November 9, and 0.7 hours spent by Mr.

9

Fitzgerald on November 10 (totaling a deduction of 3.3 hours and $2,075), in

10

response to Obesity Research’s argument that the case was overstaffed by

11

partners redundantly reviewing Ms. Persinger’s work. The Court accepts

12

those deductions, and finds that deduction of the work performed by Mr.

13

Canova is sufficient to address any remaining concern about duplication of

14

efforts caused by the overstaffing.

15

Accordingly, the Court finds the following hours billed for the underlying

16

motion that are shown in the chart below to be reasonable, and finds the

17

resulting lodestar figure of $17,137.50 for the underlying motion is

18

reasonable.
Fees for Underlying Motion

19

Hours
Awarded

Hourly
Rate

Fitzgerald

Hours
Ultimately
Requested
1.9

$625

Total
Ultimately
Requested
$1,187.50

1.9

$1,187.50

Canova

6.7

0.0

$725

$4,857.50

$0.00

Persinger

36

36

$400

$14,400.00

$14,400.00

24

Sullivan

2.2

2.2

$675

$1,485.00

$1,485.00

25

Kerr

.1

.1

$650

$65.00

$65.00

26

Lodestar

$21,995.00

$17,137.50

20
21
22
23

Timekeeper

Total
Awarded

9
15-cv-595-BAS-MDD

1

The Court further finds that the 25.2 hours and $11,122.50 requested

2

for this fee application are reasonable. Although the time entries for work

3

performed on this motion include time spent by Mr. Canova, Fiber Research

4

has already deducted half of all of the time spent on the motion, more than

5

sufficient to avoid inclusion of the time spent by Mr. Canova. (ECF No. 102-

6

10). Consequently, the Court finds the combined lodestar figure of $28,260 is

7

reasonable.

8
9

III.

Adjustments

There is no reason to adjust the lodestar figure of $28,260. See Evon v.

10

Law Offices of Sidney Mickell, 688 F.3d 1015, 1033 n.11 (9th Cir. 2012)

11

(“After computing the ‘lodestar,’ the district court may then adjust the figure

12

upward or downward taking into consideration twelve ‘reasonableness’

13

factors….”). Obesity Research contends the lodestar figure should be

14

adjusted downward by 50% on the grounds that the underlying motion had

15

only limited success and minimal impact on the case. The Court disagrees

16

and declines to adjust the lodestar figure.
CONCLUSION

17
18

The Court GRANTS Fiber Research’s motion for attorneys’ fees and

19

ORDERS Obesity Research to pay Fiber Research $28,260.00 within 30 days

20

of this Order, absent further order of the Court or agreement of the parties.

21

IT IS SO ORDERED.

22
23

Dated: April 18, 2016

24
25
26
10
15-cv-595-BAS-MDD