Watson et al v. Dillon Companies, Inc. et al

Filing 899

ORDER. ORDERED that Plaintiffs Motion for Attorney Fees and Costs Pursuant to Colo. Rev. Stat. § 6-1-113 (ECF No. 826) is GRANTED to the extent that Plaintiffs are awarded attorney fees in the amount of $826,500 against the Defendants. The request for costs is DENIED WITHOUT PREJUDICE in light of the Clerk of the Court's Order Taxing Costs in the amount of $38,439.78 by Judge Wiley Y. Daniel on 08/28/13. (jjhsl, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No.: 08-cv-00091-WYD-CBS
WAYNE WATSON and
MARY WATSON
Plaintiffs,
v.
DILLON COMPANIES, INC., d/b/a KING SOOPERS, also d/b/a INTER-AMERICAN
PRODUCTS, INC., et al.
Defendants.

ORDER

I.

INTRODUCTION
This matter is before me on Plaintiffs’ Motion for Attorney Fees and Costs

Pursuant to Colo. Rev. Stat. § 6-1-113 (ECF No. 826). Here, Plaintiffs seek an award of
attorney fees and costs, as authorized by Colo. Rev. Stat. § 6-1-113(2)(b). However,
for reasons stated on the record at the August 8, 2013 hearing, I deny the request for
costs without prejudice in light of the Clerk of the Court’s Order Taxing Costs in the
amount of $38,439.78. See ECF No. 865.
By way of background, I note that following a two-week jury trial, the jury returned
a verdict in favor of the Plaintiffs on the following four claims: (1) strict liability; (2) failure
to warn: (3) negligence; and (4) deceptive trade practices under the Colorado
Consumer Protection Act. On September 26, 2012, Judgment was entered in favor of
the Plaintiffs and against the Defendants in the amount of $7,217,961. In a separate
Order filed contemporaneously herewith, I granted Defendants’ motion to alter or amend

the judgment and reduced the amount of total damages awarded to Plaintiffs to
$3,044,829.80.1
II.

STANDARD OF REVIEW
The Colorado Consumer Protection Act (“CCPA”) provides for an award of

attorney fees to a prevailing plaintiff who proves that a defendant engaged in a
deceptive trade practice as defined by the Act. Colo. Rev. Stat. § 6-1-113(2)(b)
provides that
(2) Except in a class action or a case brought for a violation
of section 6-1-709, any person who, in a private civil action,
is found to have engaged in ... any deceptive trade practice
listed in this article shall be liable in an amount equal to the
sum of:
...
(b) In the case of any successful action to enforce said
liability, the costs of the action together with reasonable
attorney fees as determined by the court.
In this case, the jury concluded that the Defendants engaged in a deceptive trade
practice, as defined by the CCPA, that caused actual damages or losses to the Plaintiff
Wayne Watson. In awarding attorney fees under the Colorado Consumer Protection
Act, Colo. Rev. Stat. § 6-1-113(2), I may consider the amount in controversy, the
amount of time expended, the complexity of the case, and the value of the legal
services to the client. See Robinson v. Lynmar Racquet Club, Inc., 851 P.2d 274, 280
(Colo. App. 1993); Public Service Co. of Colorado, 26 F.3d 1508, 1520 (10th Cir. 1994).
Generally, the court's initial estimate of reasonable attorney fees is reached by

1

A detailed recitation of the background of this case is set forth in the Order
granting Defendants’ motion to alter or amend the judgment and is incorporated by
reference herein.
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calculation of the “lodestar” amount. The lodestar amount represents the number of
hours reasonably expended multiplied by a reasonable hourly rate, and which carries
with it a strong presumption of reasonableness. Tallitsch v. Child Support Services,
Inc., 926 P.2d 143, 147-148 (Colo. App. 1996). Once the lodestar amount is
determined for purposes of awarding attorney fees, that basic amount may be adjusted
upward or downward by application of factors such as amount in controversy, length of
time required to represent the client effectively, complexity of the case, value of the
legal services to the client, and awards in similar cases, together with the degree of
success achieved and those factors set forth in Rules of Professional Conduct, Rule
1.5. Id.
III.

DISCUSSION
A.

The Lodestar

The Independence, Missouri law firm of Humphrey, Farrington & McClain, P.C.
(“HFM”) represented the Plaintiffs throughout the pendency of this matter. HFM states
that they collectively spent a total of 6,161 hours working on this case. Plaintiffs’ Ex. 1
at 124. HFM charged at rates ranging between $200 to $750 per hour, depending on
the experience and skill of the attorney involved as well as the task being performed.
As supported by the testimony of Plaintiffs’ expert witness, Stuart Ollanik, at the August
8, 2013 hearing, Plaintiffs argue that these rates are reasonable. Plaintiffs’ Ex. 3 ¶ 18.
Plaintiffs contend that these rates are also consistent with rates regularly charged by
other attorneys in similar areas of practice. Plaintiffs’ Ex. 3 ¶¶ 18-23. In summary,
Plaintiffs contend that attorney fees in the amount of $1,399,494.00 are reasonable and
provide a basis for the initial lodestar estimate.
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In response, Defendants state that the fee request should be reduced because
the billing statement lacks specificity to identify the services rendered for each attorney
performing the services and for which defendant the services were performed. See
ECF No. 827-2. Defendants also assert that the requested fees are (1) excessive in
both time and activities not reasonably spent in connection with the prosecution of the
CCPA claim and (2) the requested attorney rates exceed the prevailing market by
lawyers in the community. Moreover, Defendants argue that I should reduce the
attorney fee request because of (1) the number of attorneys and paralegals that
participated in this case and attended or supported the trial and (2) the number of
attorneys that appeared in court after the case was presented to the jury.
In support of their arguments for a reduction in fees, Defendants engaged the
services of Michael O'Donnell, Esq., of Wheeler Trigg O'Donnell LLP. Mr. O’Donnell
prepared a report and testified at the August 8, 2013 hearing. Mr. O'Donnell concluded
that the Plaintiffs' billing statement is excessively vague and lacks the requisite minimal
specificity in identifying the nature of services performed. See Defs’ Ex. B at 7-9.
Based on his analysis, Mr. O’Donnell opined that the total number of hours allocable to
Defendants should be 4341.3, which is then subject to further reductions. In conclusion,
Mr. O’Donnell calculated that a fee award of $282,360 is appropriate.
Turning to my analysis, I first consider the reasonableness of the hourly rates of
the various HFM attorneys and paralegals who worked on this case. Attorney Kenneth
McClain is lead trial counsel for Plaintiffs in this matter, and his rate is $550 per hour
with an increased rate of $750 per hour during trial. Defendants object to the increased
rate of $750 during trial, noting that such a “split” rate is highly unusual. After hearing
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argument and testimony from the two expert witnesses on this issue at the August 8,
2013 hearing, I agree with Defendants that Mr. McClain’s $750 per hour rate during trial
is unreasonable and inconsistent with customary billing practices. However, I do find
that the hourly rate of $550 for Mr. McClain is reasonable in light of his experience,
qualifications, and skill. In addition to Mr. McClain, seven other HFM attorneys worked
on this case with hourly rates ranging from $180 to $300 per hour. Four of those
attorneys are shareholders and the remaining three attorneys are associates. HFM’s
shareholders’ rates range from $220 to $300 per hour. HFM’s associates’ rates range
from $180 to $200 per hour, and HFM’s paralegals charge $75 per hour. Defendants
do not dispute the reasonableness of these rates, and based on my careful
consideration, I find that these rates are reasonable. At the August 8, 2013 hearing,
Plaintiffs’ expert witness, Stuart Ollanik, proposed a blended attorney rate of $275.50
per hour, which I find to be reasonable in calculating the lodestar as noted on the
record. Hr’g Ex. 56.
I next consider the issue of whether the number of hours billed is reasonable. As
set forth above, Plaintiffs seek the recovery of fees for 6,161 hours of work. Defendants
make multiple arguments for a reduction in fees including (1) a reduction for fees
incurred in pursuit of non-CCPA claims; (2) a reduction in fees so that the Defendants
would only be liable for their respective shares and not for the shares of the other
defendants who were involved in the case at one time; and (3) a reduction in fees based
on vague and/or duplicative billing entries and block billing.
While I find the first two arguments for a reduction to be unsupported by
controlling authority applied to this record, I do find merit in Defendants’ argument that
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the fee request should be reduced due to duplication and excessively vague billing
entries. See In re Green, 11 P.3d 1078, 1089 (Colo. 2000) (holding that vague entries
provide a sufficient rationale to conclude that a specific charge is unreasonable).
D.C.COLO.L.Civ.R 54.3.B.1 requires the Plaintiffs to include "a detailed description of
the services rendered . . . for each person for whom fees are claimed." See Hensley v.
Eckerhart, 461 U.S. 424, 433 (1983) (stating that the party seeking an award of fees
should submit evidence supporting the hours worked and rates claimed. Where the
documentation of hours is inadequate, the district court may reduce the award
accordingly).
Though not required to do so, I conducted a painstaking review of each billing
entry listed in HFM’s 124-page billing statement. See Am. Water Dev., 874 P.2d 352,
387 (Colo. 1994) (recognizing that it is unrealistic to expect a trial judge to evaluate and
rule on every entry in an application and endorsing percentage cuts as a practical mans
of trimming fat from a fee application). For example, Plaintiffs submitted their billing
statement with general descriptions such as, "research," "review discovery," and
"conference with staff.". These types of vague entries occur throughout 2008 and
account for approximately 50 hours for discovery “review” and approximately 61 hours
for “research and review.” Other vague entries in 2008 include “scientific research,”
numerous entries for “travel,” “prepare chart regarding purchases,” and “review product
identification.” See Plaintiffs’ Ex. 1 at 1-26.
In 2009, “Review document production” entries appear numerous times. See
Plaintiffs’ Ex. 1 at 27, 36-41. Also, multiple vague “Research” entries appear totaling
approximately 21 hours of unspecified charges. Plaintiffs’ Ex. 1 at 32-33, 35-37, 39.
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Also, in 2009, two HFM shareholders billed 3.5 hours in April for unspecified “review” of
a scheduling order. Plaintiffs’ Ex. 1 at 31.
In 2011, HFM submitted approximately five vague entries totaling 9.5 hours for
“case status review” without any further clarifying information. Plaintiffs’ Ex. 1 at 78. On
June 7, 2011, an HFM associate billed .5 hours ($100) for sending another HFM
associate a single text message. Plaintiffs’ Ex. 1 at 73. Further, HFM submitted more
than 40 separate charges totaling approximately 290 hours stating either “Prepare for
Daubert hearing” or “Prepare for hearing” without any detail as to the particular tasks
being performed. Plaintiffs’ Ex. 1 at 68-77.
HFM’s billing statement also includes numerous entries for “Travel” to and from
Denver and other locations. Without further clarifying information, it is impossible for me
to determine the amount of time dedicated to travel, as opposed to attorney or paralegal
work hours. Plaintiffs’ Ex. 1 at 10, 12, 32, 37, 43, 46-47, 49, 53-55, 57, 66-67, 75-77,
79, 81-82, 84-88, 94-95, 97, 103-104, 112-113, 116-117, 120, 122-123. Additionally,
between October 26, 2010 and September 3, 2012, HFM submitted more than 95
separate charges totaling approximately 440 hours for “Trial preparation.” None of
these entries identifies any of the activities conducted in preparing for trial. Plaintiffs’
Ex. 1 at 65-66, 68, 79-80, 96, 98, 101-123.
In addition to vague billing entries, my review of Plaintiffs’ billing statement
revealed many instances of duplicative or redundant charges. “The term duplicative in
the context of attorney’s fees requests usually refers to situations where more than the
necessary number of lawyers are present for a hearing or proceeding or when multiple
lawyers do the same task. The more lawyers representing a side of the litigation, the
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greater the likelihood will be for duplication of services.” Robinson v. City of Edmond,
160 F.3d 1275, 1285 n.10 (10th Cir. 1998) (internal citation and quotation omitted).
Here, Plaintiffs’ requested fees include charges for as many as eight attorneys
and three paralegals. While this number of people working on a case of this duration is
understandable, the number of attorneys attending the same hearings and the trial is a
concern. For example, in June of 2011, District Judge Walker Miller presided over the
first Daubert hearing in this case (“Daubert I”). Five attorneys (including at least three
shareholders and two associate attorneys) and one paralegal traveled to Denver and
attended the hearing. Approximately 500 total hours were billed in connection with the
preparation for and attendance of this hearing. Plaintiffs’ Ex. 1 at 69-77.
In April of 2012, I held a second Daubert hearing (Daubert II). Similar to Daubert
I, HFM sent at least four attorneys and one paralegal to attend the 5-hour hearing.
Plaintiffs’ Ex. 1 at 93-95. The trial was held in September of 2012. Based on my careful
review of HFM’s billing statement, 5 attorneys and 2-3 paralegals attended the 2-week
trial. Additionally, although this case was submitted to the jury for deliberation on
September 17, 2012, 4-5 attorneys returned to court on both September 18 and 19,
billing for this time spent awaiting a jury verdict. Plaintiffs’ Ex. 1 at 106-123.
Accordingly, based on my judicial experience and careful consideration of the
evidence and governing law, I find that Plaintiffs’ claimed number of hours expended
are unreasonable and excessive due to both vagueness and duplication. Based on the
above noted billing inadequacies, I reduce Plaintiffs’ claimed number of hours expended
to 3000. Thus, I find that the lodestar amount (the number of hours reasonably
expended—3000—multiplied by the reasonable blended hourly rate of $275.50) is
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$826,500. See Tallitsch, 926 P.2d at 147-148.
B.

Upward or Downward Adjustment to Lodestar
Once the lodestar amount is determined for purposes of awarding attorney

fees, that basic amount may be adjusted upward or downward by application of factors
noted in section II of this Order. However, the lodestar is a presumptively reasonable
fee award, taking into account most of the factors that bear on the reasonableness of
the award, and thus, adjustments to the lodestar should only be made in rare and
exceptional cases. Pennsylvania v. Delaware Valley Citizens Council for Clean Air, 478
U.S. 546, 564–65 (1986).
In their motion, Plaintiffs request that I multiply the lodestar by 3, arguing that the
time, labor, novelty and complexity of this matter weigh in favor of an upward
adjustment. However, after considering all of the above factors and as noted on the
record at the August 8, 2013 hearing, I am unconvinced that an upward adjustment of
the lodestar figure is merited in this case. The issues in this case were not so
exceptional, rare, or complex as to justify an enhancement, and I considered the
experience and expertise of counsel in determining their hourly rates. I also considered
the amount in controversy, the time expended, and the value of HFM’s legal services to
the Plaintiffs, and I find that the lodestar figure is reasonable and requires no
adjustment. Likewise, I deny the Defendants’ request that I adjust downward the
lodestar amount.
IV.

CONCLUSION
Based on the foregoing and for reasons stated on the record at the August 8,

2013 hearing, it is
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ORDERED that Plaintiffs’ Motion for Attorney Fees and Costs Pursuant to Colo.
Rev. Stat. § 6-1-113 (ECF No. 826) is GRANTED to the extent that Plaintiffs are
awarded attorney fees in the amount of $826,500 against the Defendants. The request
for costs is DENIED WITHOUT PREJUDICE in light of the Clerk of the Court’s Order
Taxing Costs in the amount of $38,439.78.
Dated: August 28, 2013
BY THE COURT:

s/ Wiley Y. Daniel
Wiley Y. Daniel
Senior United States District Judge

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