Grynberg et al v. Ivanhoe Energy, Inc. et al
Filing
188
ORDER granting in part and denying in part 153 Defendants' Motion for Attorneys' Fees and Costs. See Order for details. By Judge Walker D. Miller on 8/1/11.(mnfsl, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Senior Judge Walker D. Miller
Civil Action No. 08-cv-02528-WDM-BNB
JACK J. GRYNBERG, an individual;
COTUNDO MINERALES S.A., an Ecuadorian company;
RSM PRODCUTION CORPORATION, a Texas corporation; and
ARCHIDONA MINERALES, S.A., a Panama corporation
Plaintiffs,
v.
IVANHOE ENERGY, INC., a Canadian corporation;
IVANHOE ENERGY LATIN AMERICA INC., a Canadian corporation;
IVANHOE ENERGY ECUADOR, INC., a Canadian corporation;
ROBERT M. FRIEDLAND, an individual;
DAVID R. MARTIN, an individual; and
JOHN DOES 1-10, potential assignees of IVANHOE ENERGY ECUADOR, INC.,
Defendants.
ORDER ON MOTION FOR ATTORNEYS’ FEES AND COSTS
This matter comes before me on the Motion for Attorneys’ Fees and Costs filed by
Ivanhoe Energy, Inc., Ivanhoe Energy Latin America Inc., Ivanhoe Energy Ecuador, Inc.,
Robert Friedland, and David Martin (collectively, “Defendants”) on November 13, 2009
(ECF No. 153). I have reviewed the parties’ filings and find that oral argument is not
required. For the reasons set forth below, I will grant the motion in part.
BACKGROUND
In the Amended Complaint, filed February 29, 2009, plaintiffs Jack Grynberg,
Contundo Minerales S. A., RSM Production Corporation, and Archidona MInerales, S. A.
(collectively, “Plaintiffs”) brought claims against Defendants for fraud, intentional and
tortious interference with prospective unique business advantages, unjust enrichment, civil
conspiracy to commit fraud, and violation of the federal Racketeer Influenced and Corrupt
Organizations Act (RICO) (18 U.S.C. § 1961 et seq.). See Amended Compl., ECF No. 40.1
Defendants moved to dismiss Plaintiffs’ complaint for lack of personal jurisdiction.
(ECF No. 18). I granted this motion and dismissed the case without prejudice, finding that
the exercise of personal jurisdiction over Defendants in the State of Colorado was not
proper under any of the relevant inquiries. Judgment entered on my order on October 2,
2009, and Defendants now seek their attorneys’ fees and costs incurred in defending this
action.
As an initial matter, I must determine whether the law Defendants’ rely on in their
motion for attorneys’ fees, C.R.S. § 13-17-201, and for costs, C.R.S. § 13-16-113(2),
governs this case.
APPLICABLE LAW: ATTORNEYS’ FEES
Section 13-17-201 provides, in relevant part:
In all actions brought as a result of a death or an injury to person or property
occasioned by the tort of any other person, where any such action is
dismissed on motion of the defendant prior to trial under rule 12(b) of the
Colorado rules of civil procedure, such defendant shall have judgment for his
reasonable attorney fees in defending the action.
Although section 13-17-201 refers only to dismissals under the Colorado rules, the
Tenth Circuit has held it applies “with equal force when a federal court dismisses a pendent
state tort [action]” pursuant to federal Rule 12(b). Jones v. Denver Post Corp., 203 F.3d
748, 757 (10th Cir. 2000).
1
I have determined that the Amended Complaint is the operative pleading
for purposes of these proceedings. Order on Various Motions, at 10 (ECF No. 125).
2
1.
Choice of Law
Plaintiffs contend that Colorado law–specifically section 13-17-201–does not apply
to the resolution of the attorneys’ fees issue in this case under a choice of law analysis.
They argue that Defendants’ reliance on the statute is inconsistent with their position taken
in the motion to dismiss, i.e., that Colorado has no connection to this litigation.
I have subject matter jurisdiction in this case based upon the federal question
presented by the RICO claim and on either (or both) diversity jurisdiction or supplemental
jurisdiction for the state law tort claims.2 28 U.S.C. §§ 1331, 1332, 1367. Accordingly, I
must apply the substantive law of Colorado, including choice of law rules, to issues arising
under state law. Jones, 203 F.3d at 757 (“When exercising jurisdiction over pendent state
claims, we must apply the substantive law of the forum state . . . just as we would if our
jurisdiction rested on diversity of citizenship”) (quoting Lytle v. City of Haysville, 138 F.3d
857, 868 (10th Cir. 1998)); BancOklahoma Mortg. Corp. v. Capital Title Co., 194 F.3d 1089,
1103 (10th Cir. 1999) (rule for applying substantive law of forum state “also applies when
a federal court exercises supplemental jurisdiction over state law claims in a federal
question lawsuit”). Attorneys’ fee statutes are considered substantive in the Tenth Circuit.
Jones, 203 F.3d at 757.
The Colorado Supreme Court applies the “most significant relationship” test from the
Restatement (Second) of Conflict of Laws to resolve choice of law questions in tort cases.
United States Aviation Underwriters, Inc. v. Pilatus Bus. Aircraft, Ltd., 582 F.3d 1131, 1143
2
In the Amended Complaint, Plaintiffs assert jurisdiction is proper based on
diversity of citizenship. 18 U.S.C. § 1332. In their Response to the Motion for
Attorneys’ Fees and Costs, they assert a pendent jurisdiction analysis is proper.
3
(10th Cir. 2009) (citing AE, Inc. v. Goodyear Tire & Rubber Co., 168 P.3d 507, 509-10
(Colo. 2007)). This test requires that I consider the following principles:
(a) the needs of the interstate and international systems,
(b) the relevant policies of the forum,
(c) the relevant policies of other interested states and the relative interests
of those states in the determination of the particular issue,
(d) the protection of justified expectations,
(e) the basic policies underlying the particular field of law,
(f) certainty, predictability and uniformity of result, and
(g) ease in the determination and application of the law to be applied.
Id. (quoting Restatement (Second) of Conflict of Laws § 6(2), 145.
The Tenth Circuit directs that I look to the following contacts in applying these
principles:
(a) the place where the injury occurred,
(b) the place where the conduct causing the injury occurred,
(c) the domicil, residence, nationality, place of incorporation and place of
business of the parties, and
(d) the place where the relationship, if any, between the parties is centered.
Id. at 1143-44.
Plaintiffs advocate consideration of these factors, but their analysis centers on the
parties’ conduct giving rise to the litigation itself, not on the events supporting Defendants’
claim for attorneys’ fees.3 While I have already found that neither Defendants themselves
3
In their response to an earlier motion for attorneys’ fees, that filed by
defendant Jose Fabricio Correa Delgado, Plaintiffs argued that I should apply section
4
nor their alleged actions have sufficient nexus to Colorado to support exercise of personal
jurisdiction, this is no longer the relevant inquiry.4 I agree with Defendants that I must apply
the considerations of the “most significant relationship” test in the context of the specific
issue before me: the appropriateness of an award of attorneys’ fees to Defendants based
on the events of the litigation itself. Id. at 1144 (the relevant contacts of the “most
significant relationship” test should be applied to the specific issue at hand and thus vary
accordingly).
Considering the relevant contacts, although Defendants are not domiciled or
otherwise present within the state, the remaining contacts weigh in favor of Colorado law.
Both the injury to Defendants of being subjected to litigation in Colorado and Plaintiffs’
actions in instigating the litigation occurred in Colorado, and the relationship between the
13-17-201. Applying the factors of the “most significant relationship” test to the specific
issue of the attorneys’ fee motion, i.e., litigation in Colorado courts, the relationship
between Correa and his attorneys in Colorado, compensation for Colorado attorneys,
and Colorado’s policy of discouraging unnecessary litigation, Plaintiffs concluded that
Colorado law should apply. See Response at 13 (ECF No. 123). They now argue the
opposite, changing their focus back to the issue of the conduct underlying the tort
claims rather then the conduct of the litigation.
4
To the extent Plaintiffs argue Defendants’ position on the issue of personal
jurisdiction precludes reliance on section 13-17-201, they improperly conflate choice of
law analysis with minimum-contacts jurisdictional analysis. These are “distinct”
inquiries. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 481-82 (1985).
Furthermore, I agree with Defendants that applying the same analysis to the
availability of an award of attorneys’ fees under section 13-17-201 as to the question of
personal jurisdiction would lead to the absurd result of removing Rule 12(b)(2)
dismissals from the scope of the attorneys’ fee statute, a result clearly not intended by
the Colorado legislature. See Gognat v. Ellsworth, 224 P.3d 1039, 1055 (Colo. App.
2009) (“To hold that a party may obtain dismissal based on a lack of personal
jurisdiction under C.R.C.P. 12(b)(2), but may not then seek attorney fees under section
13-17-201 without waiving that objection would be inconsistent with the statute”)
(rejecting argument that request for attorneys’ fees as part of a motion to dismiss
constituted a general appearance).
5
parties as parties to the litigation is centered here.
Addressing the principles of the Restatement, I reach the same result. Although
Plaintiffs’ failure to propose an alternative to section 13-17-201 makes application of these
principles more difficult, I conclude that Colorado’s policy of discouraging unnecessary
litigation, the protection of Defendants’ justified expectations in the protection offered by
section 13-17-201, the certainty and predictability of result, and the ease in determination
and application of the law to be applied all weigh in favor of finding that Colorado has the
most significant relationship to the issue of an attorneys’ fee award.
I conclude that section 13-17-201 applies under this choice of law analysis.
2.
RICO Claim
Plaintiffs next argue that the RICO statute preempts application of section 13-17-201
to preclude an award of attorneys’ fees incurred in defending the RICO claim. They assert
that Defendants’ failure to request fees under a federal statute or to apportion fees among
federal and state claims bars recovery of any fees at all. Plaintiffs rely on an unpublished
decision of this Court, General Steel Domestic Sales, LLC v. Denver/Boulder Better Bus.
Bureau, No. 07-cv-01145-DME-KMT, 2009 WL 1292780 (D. Colo. May 8, 2009). In that
case, Judge Ebel declined to grant a motion for attorneys’ fees pursuant to section 13-17201, finding, without discussion, that the Colorado statute did not apply to federal § 1983
claims or to a federal RICO claim because its application was preempted.5 Id. at *2.
5
In this case, although Judge Ebel noted that RICO preempted application
of section 13-17-201, his focus appears to be more on the dismissed civil rights claims,
where there is actual conflict between grounds for awarding attorneys’ fees in 42 U.S.C.
§ 1988 and section 13-17-201. 2009 WL 1292780 at *2 (citing State v. Golden’s
Concrete, 962 P.2d 919, 926 (Colo. 1998)).
6
Defendants respond that there is no preemption in this case because the pertinent
provisions of RICO and section 13-17-201 do not conflict.
Congress’s power to preempt state law originates in the Supremacy Clause of the
Constitution. U.S. Const. art. VI. The Supreme Court has recognized that preemption
occurs:
[1] when Congress, in enacting a federal statute, expresses a clear intent to
pre-empt state law, [2] when there is outright or actual conflict between
federal and state law, [3] where compliance with both federal and state law
is in effect physically impossible, [4] where there is implicit in federal law a
barrier to state regulation, [5] where Congress has legislated
comprehensively, thus occupying an entire field of regulation and leaving no
room for the States to supplement federal law, or [6] where the state law
stands as an obstacle to the accomplishment and execution of the full
objectives of Congress.
Louisiana Pub. Serv. Comm’n v. Federal Commc’ns Comm’n, 476 U.S. 355, 368 (1986).
None of these grounds of preemption is present here. The civil RICO statute, 18 U.S.C.
§ 1964, neither states that it preempts state law nor expresses any clear intent to do so.
Nor is there any “outright or actual” conflict between section 1964(c)’s award of attorneys’
fees to a prevailing RICO plaintiff and section 13-17-201. As the two attorneys’ fees
provisions apply in distinct circumstances–awarding fees to the prevailing plaintiff after
judgment on the one hand and to the prevailing defendant upon dismissal of claims under
Rule 12(b) on the other hand–it is difficult to conceive of any situation where a conflict,
direct or otherwise, could arise. The remaining grounds of preemption are likewise
inapplicable. I conclude that RICO does not preempt the application of section 13-17-201.
See Albright v. Attorneys’ Title Ins. Fund, No. 2:03-CV-517, 2009 WL 1065401 at *2 (D.
Utah April 20, 2009) (finding no support for argument that federal RICO statute preempted
an award of attorneys’ fees under state racketeering statute; where federal statute allows
7
prevailing plaintiff to recover fees, the statute is silent on issue of award of fees to
prevailing defendant).
To the extent Plaintiffs’ arguments may be read to suggest that, even if not
preempted, section 13-17-201 does not apply to non-state law tort claims, the Colorado
courts have rejected this position. US Fax Law Center, Inc. v. Henry Schein, Inc., 205 P.3d
512, 517-18 (Colo. App. 2009). When an action contains a mix of claims, “fees may be
awarded if the action is primarily a tort action.” Id. (affirming award of attorneys’ fees under
section 13-17-201 where dismissed action included three state tort claims and one claim
under the federal Telephone Consumer Protection Act, 47 U.S.C. § 227).
In the present case, Plaintiffs asserted four tort claims under Colorado law and one
RICO claim. I hold the action is primarily a tort action and that, under Colorado law, an
award of attorneys’ fees for defending the entire action is appropriate under section 13-17201. Given this conclusion, I need not reach Plaintiffs’ arguments concerning failure to
apportion fees between the tort and RICO claims.
Having determined that section 13-17-201 applies to this action and to all claims
asserted therein, an award of attorneys’ fees is mandated by the express language of the
statute. Crandall v. City and County of Denver, 238 P.3d 659, 665 (Colo. 2010) (“the
express statutory language of sections 13-16-113(2) and 13-17-201 mandate awards of
costs and attorney fees to the defendant in the event that a plaintiff’s tort action is
dismissed pretrial on a . . . 12(b) motion to dismiss”). The only issue left to my discretion
is the task of determining what is a reasonable fee in this case. Id. at 663.
APPLICABLE LAW: COSTS
The costs statute, section 13-16-113(2), contains language similar to the attorneys’
8
fee statute discussed above: “In all actions brought as a result of a death or injury to
person or property occasioned by the tort of any other person, where any such action is
dismissed prior to trial under rule 12(b) . . . , the defendant shall have judgment for his
costs.”
Plaintiffs argue that the costs statute, C.R.S. § 13-16-113(2), does not apply in this
case because federal law controls assessment of costs. They reiterate their arguments
with regard to preemption and failure to allocate costs among the tort and RICO claims.
Finally, they claim that the amount of costs requested is unreasonable.
While Plaintiffs are correct that federal law generally governs an award of costs in
diversity cases, this rule does not apply where there is an explicit state statutory authority
for such an award. Smith v. Frazzini, 139 F.R.D. 667, 668 (D. Colo. 1991) (citing Chaparral
Res., Inc. v. Monsanto Co., 849 F.2d 1286, 1291-93 (10th Cir. 1988)).6 See also Infant
Swimming Research, Inc. v. Faegre & Benson, LLP, No. 07-cv-00839-LTB-BNB (D. Colo.
Nov. 20, 2008) (applying section 13-16-113).
I have already disposed of Plaintiffs’ argument concerning preemption and
apportionment in the context of the attorneys’ fee statute. My conclusions apply equally
to the availability of costs under section 13-16-113. For the reasons discussed above, I
conclude section 13-16-113(2) mandates an award of costs to Defendants. Thus, only the
issue of reasonableness remains.
6
Plaintiffs assert that Smith bars application of section 13-16-113(2) in this
case because of the presence of a federal law claim. I disagree. Unlike the present
case, Smith did not involve any state law tort claims at all but was purely a federal civil
rights case.
9
REASONABLENESS OF ATTORNEYS’ FEES CLAIMED
With their motion for attorneys’ fees, Defendants provide affidavits and billing sheets
from their attorneys. The amounts claimed, per defendant and per law firm, are as follows.
Baker Botts, representing the Ivanhoe Corporate Defendants, employed six
attorneys from their Washington, D.C. and Dallas offices. Their fees claimed for the years
2008 and 2009 are:
Attorney
Year
Hourly Rate
Hours
James A. Baker IV
2008
$675
20.8
$14,040.00
2009
$700
32.9
$23,030.00
2008
$600
17.8
$10,680.00
2009
$650
184.6
$119,990.00
2008
$425
65.7
$27,922.50
2009
$445
354.4
$157,708.00
2008
$345
136.3
$47,023.50
2009
$365
227.1
$82,891.50
2008
$350
43.7
$15,295.00
2009
$380
97.4
$37,012.00
2008
$230
60.2
$13,846.00
2009
$265
153
$40,545.00
Timothy S. Durst
Todd C. Donohue
Ryan Bangert
Rachel B. Cochran
Nicole Gordon
TOTALS:
1,393.9
7
Total
$589,983.507
According to the Declaration of Todd C. Donohue, the total amount of time
billed to the Ivanhoe Corporate Defendants by Baker Botts for work performed between
November 26, 2008 and September 24, 2009 was 2766.7 hours for a total of
$1,066,221.50. The Ivanhoe Corporate Defendants do not seek an award of
$476,238.00, representing time charged by legal assistants and other personnel, time
billed for document review after entry of the discovery stay, time billed for tasks not
directly related to the litigation, and “a substantial amount of their fees associated with
developing and investigating facts related to the merits of the case.” Motion for
10
Motion for Attorneys’ Fees and Costs, Exhibit 1, Declaration of Timothy S. Durst, at 7-8
(ECF No. 153-1).
The claimed fees are explained on a task-by-task basis in the
Declaration of Todd C. Donohue. Motion for Attorneys’ Fees and Costs, Exhibit 2 (ECF No.
153-2).
The Ivanhoe Corporate Defendants were also represented by the law firm of
Fognani & Faught PLLC. Six attorneys at this firm performed work related to this litigation.
Attorney
Hourly Rate
Hours
John D. Faught
$475
84.6
$40,185.00
Perry L. Glantz
$395
66.6
$26,307.00
Nancy A. Kostro
$375
47.4
$17,775.00
Fritz W. Ganz
$275
4.3
$1,182.50
Tiffany L. Warner
$250
3.2
$800.00
Kendall R. McLaughlin
$225
36.6
$8,235.00
242.7
$94,484.508
TOTALS:
Total
Motion for Attorneys’ Fees and Costs, Exhibit 3, Declaration of John D. Faught, at 3 (ECF
No. 153-3).
The law firm of Holley, Albertson & Polk, P.C. represented defendant David R.
Martin. Martin seeks an award of $11,613.00, representing 55.3 hours billed by attorney
Attorneys’ Fees and Costs, Exhibit 2, Declaration of Todd C. Donohue, at 2 (ECF No.
153-2).
8
According to the Declaration of John D. Faught, the Ivanhoe Corporate
Defendants do not seek reimbursement of $147,455.00 in attorneys’ fees paid to
Fognani & Faught. These fees relate to time charged by legal assistants, block billed
time entries, and work duplicated by the efforts of the attorneys at Baker Botts. Motion
for Attorneys’ Fees and Costs, Exhibit 3, Declaration of John D. Faught, at 3 (ECF No.
153-3).
11
Scott D. Albertson at an hourly rate of $210.9 Motion for Attorneys’ Fees and Costs, Exhibit
4, Declaration of Scott D. Albertson, at 2 (ECF No. 153-4).
The law firm of Haddon, Morgan, Mueller, Jordan, Mackey & Foreman, P.C.
(Haddon Foreman) represented defendant Robert M. Friedland. Three attorneys at this
firm performed work related to this litigation.
Attorney
Hourly Rate
Hours
Ty Gee
$425
84.1
$35,742.50
Harold A. Haddon
$425
79.6
$33,830.00
Rachel A. Bellis
$315
4.85
$1,527.75
TOTALS:
168.55
Total
$71,100.2510
Motion for Attorneys’ Fees and Costs, Exhibit 5, Declaration of Ty Gee, at 5 (ECF No. 1535).
In sum, Defendants seek an award of $767,181.25 in attorneys’ fees and $41,893.25
in costs (discussed below), for a total award of $809,074.50.
Defendants support their motion for attorneys’ fees and costs with the opinion of
independent counsel, Roger P. Thomasch, as to the reasonableness of the hours spent
and the rates charged. In his affidavit, Mr. Thomasch applies the factors set forth in Rule
9
Martin is not seeking reimbursement of $281 in fees for time charged by
an associate of Holley, Albertson & Polk for legal research or for certain hours spent by
Mr. Albertson on “insurance matters.” Motion for Attorneys’ Fees and Costs, Exhibit 4,
Declaration of Scott D. Albertson, at 2 (ECF No. 153-4).
10
According to the Declaration of Ty Gee, defendant Friedland does not
seek reimbursement of $23,989.00 in attorneys’ fees paid to Haddon Foreman. These
fees represent work related to the Motion for Sanctions, paralegal time, time charged by
Lee Foreman, and time spent on insurance issues. Motion for Attorneys’ Fees and
Costs, Exhibit 5, Declaration of Ty Gee, at 5 (ECF No. 153-5).
12
1.5 of the Colorado Rules of Professional Conduct. Motion for Attorneys’ Fees and Costs,
Exhibit 6, Affidavit of Roger P. Thomasch, at 7-29 (ECF No. 153-6). Based upon his
analysis of these factors, he opines that the claimed fees are reasonable. Id. at 5-6.
Plaintiffs challenge the reasonableness of Defendants’ claimed fees, tendering the
affidavit of Michael H. Berger in support of their position. Mr. Berger opines that a
reasonable attorneys’ fee in this case would be between $233,163.41 and $258,020.10.
Response to Motion for Attorneys’ Fees and Costs, Exhibit 1, Affidavit of Michael H. Berger,
at 7 (ECF No. 162-1).
I note that Defendants do not defend their hours in the reply brief. Further, I agree
with Mr. Berger that the mere fact that a sophisticated client is willing to pay a high hourly
rate for aggressive representation does not, by itself, render the resulting fees reasonable.
A client may choose the “Cadillac” of law firm representation, but such a client is not
automatically entitled to have an opposing party make the car payments. See Praseuth v.
Rubbermaid, Inc., 406 F.3d 1245, 1257 (10th Cir. 2005) (aggressive litigation strategy may
be approved by client but this is not standard under fee shifting statutes). As discussed
below, I conclude that the hourly rates charged by Baker Botts were excessive and that the
hours claimed by Baker Botts, Fognani & Faught, and Haddon Foreman must be reduced.
I accept as reasonable the hourly rates of the attorneys at Fognani & Faught,
Haddon Foreman, and Holley, Albertson & Polk. I further accept as reasonable the hours
worked by Holley, Albertson & Polk. Given no reduction in the rates or hours charged by
Holley, Albertson & Polk on behalf of Defendant Martin, I will award the full $11,613.00
claimed by Mr. Martin.
With regard to the hours claimed by Haddon Foreman, I have reviewed the billing
13
sheets of Harold Haddon and Ty Gee and agree with Mr. Berger that there appears to be
some duplication of effort between these attorneys. Considering Mr. Berger’s estimation
of duplication of 13.5 hours, I reduce the hours claimed by 7 hours. Both attorneys charged
the same hourly rate of $425. Multiplying that rate by 7 hours yields a reduction in claimed
attorneys’ fees in the amount of $2,975.00. Deducting this amount from the total claimed
yields an attorneys’ fee award to Haddon Foreman of $68,125.25 ($71,100.25 less $2,975.)
on behalf of Defendant Friedland.
With regard to the fees charged by Fognani & Faught on behalf of the Ivanhoe
Corporate Defendants, I agree with Mr. Berger that there was no compensable need for
two competent law firms to represent the same clients beyond the minimal need for local
counsel. Mr. Berger suggests allowing $24,835.00 in fees to Fognani & Faught based on
his reduction of hours to time limited to local counsel duties; he deducts an additional
$10,000 to account for duplication. I accept his calculations as reasonable and will award
an attorney fee of $24,835.00 to the Ivanhoe Corporate Defendants for work performed by
Fognani & Faught.
Berger’s primary disagreements with Defendants’ claim are the hourly rates and the
time charged by Baker Botts. It has long been recognized in this Circuit that the hourly rate
should be based on the local or Denver market. Ramos v. Lamm, 713 F.2d 546, 555 (10th
Cir. 1983). He opines that the hourly rates claimed by Baker Botts exceed the market rates
of the Denver legal community. He proposes the following adjustment in Schedule II to his
Affidavit:
14
Attorney
Year
Hourly Rate
Adjusted
Hours
Adjusted
Rate
James A. Baker IV
Total
$700
$500
32.9
$16,450.00
2008
$600
$500
17.8
$8,900.00
$650
$500
184.6
$92,300.00
2008
$425
$350
65.7
$22,995.00
$445
$350
354.4
$124,040.00
2008
$345
$275
136.3
$37,482.50
$365
$275
227.1
$62,452.50
2008
$350
$250
43.7
$10,925.00
2009
$380
$250
97.4
$24,350.00
2008
$230
$230
60.2
$13,846.00
2009
$265
$230
153
$35,190.00
1,393.9
Nicole Gordon
$10,400.00
2009
Rachel B. Cochran
20.8
2009
Ryan Bangert
$500
2009
Todd C. Donohue
$675
2009
Timothy S. Durst
2008
$459,331.00
TOTALS:
Mr. Berger averages these rates to reach a blended rate of $329.53 per hour worked
by attorneys at Baker Botts. Berger Affidavit, Schedule II (ECF No. 162-1, p. 28).
Although I perceive Mr. Berger’s adjusted rates as on the high side of reasonable
attorneys’ rates for the Denver market, I will accept his adjusted rates–and the blended rate
of $330 per hour11–as the rates conceded by Plaintiffs.
I turn now to the issue of the reasonableness of time expended by Baker Botts on
the specific tasks set forth in Todd Donohue’s Declaration (Exhibit 2 to Motion for Attorneys’
Fees and Costs) (ECF No. 153-2). I note that Mr. Berger agrees that the hours on some
11
I will round Mr. Berger’s blended rate of $329.53 up to $330.
15
tasks were reasonable but suggests reductions of others. I agree that some the hours
expended on certain tasks should be reduced, and I discuss the bases for those reductions
below.
1.
Task: Case intake
I agree that the 52.4 hours charged by Baker Botts attorneys for “Case intake, initial
litigation planning, initial analysis and initial research” is excessive given the nature of this
case. I will reduce the time charged to 40 hours. At the blended attorney hourly rate of
$330, this yields a fee award of $13,200 for this portion of the representation.
2.
Task: Strategy formulation
Mr. Berger recommends a reduction from 132.4 hours to between 40 to 50 hours for
the task of “strategy formulation, supervision of litigation team, direction of case.” I agree,
particularly given the number of hours included in the “case intake” task, above. I will
award fees at the blended rate of $330 for 50 hours, resulting in a fee award of $16,500 for
this task.
3.
Task: Document collection and review
The 171 hours claimed by Baker Botts for “document collection and review and
preliminary witness interviews” is excessive. Although this litigation was undoubtedly
complex and involved high stakes, the focus in this Court was limited to the issue of
personal litigation. I will reduce the hours claimed to 120. At the blended rate of $330, this
yields a fee award of $39,600 for this task.
4.
Task: Collection/interviews in Ecuador
I accept the 24.3 hours claimed with regard to the collection of evidence in Ecuador.
Applying the blended rate, I will award fees in the amount of $8,019. for this task.
16
5.
Task: Collection/interviews in Bakersfield, California
I accept the 49.8 hours charted for the task of collection of evidence from
Bakersfield, California. Applying the blended hourly rate, I will award fees in the amount
of $16,434 for this task.
6.
Task: Collection/interviews in Santa Barbara, California
I accept the 29 hours charted for the task of collection of evidence from Santa
Barbara, California. Applying the blended hourly rate, I will award fees in the amount of
$9,570 for this task.
7.
Task: General investigation of claims
The hours billed for the task of “general investigation of claims, factual development
and general legal research” appear to duplicate time billed in other categories. I will reduce
the 87.5 hours claimed to 50 hours. Applying the blended hourly rate, I will award fees in
the amount of $16,500 for this task.
8.
Task: Preparation of Motion to Dismiss
Mr. Berger opined that the 416.6 hours expended by Baker Botts on the task of
“preparation of Motion to Dismiss, including factual investigation, legal research, and
jurisdictional discovery issues” was “excessive by any measure.” Berger Affidavit, at 13.
I agree. Even accepting the complex nature of the litigation, I cannot conclude that the
legal and factual issues related to the personal jurisdiction question were so complex or
novel to warrant more than 200 hours of attorney time on this task. 200 hours at the
blended hourly rate result in an award of $66,000 for this task.
9.
Task: Plaintiffs’ Motion to Lift Stay and for Jurisdictional Discovery
Given the Plaintiffs’ advisement to the Magistrate Judge that Plaintiffs were not
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requesting jurisdictional discovery at that time, the 101 hours claimed for the task of
“Plaintiffs’ Motion to Lift Stay and for Jurisdictional Discovery” is clearly unwarranted. I will
award fees at the blended rate based on a total of 25 hours, yielding a fee award of $8,250
for this task.
10.
Task: Preparation of joint scheduling order
I agree with Mr. Berger that the 104 hours charged for the task of “Preparation of
joint scheduling order, Rule 26(f) conference, preparation of Rule 26(a) disclosures, and
settlement statement” is unreasonable. Because of the stay entered in this case, no Rule
26(a) disclosures were ever filed with the court. Even were such a filing prepared, these
disclosures are generally straightforward. I will reduce the hours claimed to 30 and award
attorneys’ fees of $9,900 for this task.
11.
Task: Dismissal of Defendant Correa Delgado
I accept the 4.5 hours claimed with regard to the dismissal of Defendant Correa
Delgado. Applying the blended rate, I will award fees in the amount of $1,485. for this task.
12.
Task: Responding to Plaintiffs’ Motion for Summary Judgment
The Baker Botts attorneys claimed 118 hours spent on the task of “Task:
“Responding to Plaintiffs’ Motion for Summary Judgment - Personal Jurisdiction over
Robert Friedland (Summary Judgment Response, Motion to Strike, Motion to Stay
Briefing).” Given the duplication of issues between the motion to dismiss and the motion
for summary judgment, I agree with Mr. Berger that much of the necessary work related to
responding to the summary judgment motion had already been done in connection with
preparing the motion to dismiss. The other motions, to strike and to stay, were not
complex. I will award 30 hours for this task. Applying the blended rate, the fee award is
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$9,900.
13.
Task: Response to Plaintiffs’ Motion to Transfer
I agree with Mr. Berger that the legal issues and factual bases involved in
responding to the motion to transfer were not complex. I will reduce the claimed hours from
82.9 to 20, yielding an award of $6,600 for this task.
14.
Task: Addressing my notice regarding disqualification
The 20.5 hours claimed for responding to my notice regarding disqualification typify
the excessive nature of the hours claimed in most of the task categories. I will reduce the
hours claimed on this task to 10, yielding an award of $3,300.
15.
TOTAL AWARD
Adding the fee awards for each of the fourteen task categories listed above yields
a total award of attorneys’ fees for time charged by Baker Botts in the amount of $225,258.
REASONABLENESS OF COSTS CLAIMED
The Ivanhoe Corporate Defendants seek reimbursement for costs incurred by Baker
Botts for the following expenditures and in the following amounts:
Expenditure
Amount
Computerized legal research
$14,189.13
Travel to Ecuador & CA (document collection)
3rd Party document collection
$9,523.10
$11,923.20
Transcripts
$314.15
$582.6412
Translation services
12
The Ivanhoe Corporate Defendants are not seeking the full amount of
$622.64 expended on translation services.
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Exhibit creation
$628.39
Telephone charges
$247.58
TOTALS:
$37,408.19
Durst Declaration, at 9-10 (ECF No. 153-1).
Fognani & Faught’s costs at issue are $4,485.06 for computerized legal research.
Faught Declaration, at 3 (ECF No. 153-3).
In his affidavit, Mr. Thomasch opines that all claimed costs were “of a type that
would reasonably be incurred in defense of an action such as the Lawsuit.”13 Motion for
Attorneys’ Fees and Costs, Exhibit 6, at 30. With regard to the specific costs, he opines it
was reasonable to incur those costs.14 Id. at 30-31. Plaintiffs’ expert, Mr. Berger, does not
address the issue of costs in his affidavit.
Plaintiffs claim the costs requested are unreasonable because: (1) defendants do
not explain what computerized legal research was done, why it was necessary, or how the
charges were calculated; (2) there may be duplication between the computerized legal
research efforts of Baker Botts and those of Fognani & Faught; and (3) the requests for
document collection costs and travel expenses are supported only by conclusory assertions
of necessity and reasonableness.
Defendants bear the burden of providing me with “sufficient information and
supporting documentation” to allow me to “make a reasoned decision for each cost item
13
Mr. Thomasch expressly does not offer an opinion as to whether the
amount of costs for any particular item claimed is reasonable. Thomasch Affidavit, at
30.
14
In his summary of the costs, Mr. Thomasch appears to omit the $4,485.06
claimed by Fognani & Faught for computerized legal research. Thomasch Affidavit at 6.
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presented.” Brody v. Hellman, 167 P.3d 192, 206 (Colo. App. 2007). With specific regard
to the claim for computerized legal research costs, Defendants must demonstrate: “(1) the
client was billed for computerized legal research expenses separate from attorney fees; (2)
the computerized legal research was necessary for trial preparation; and (3) the requested
costs were reasonable.” Id. I have reviewed the invoices attached to the Durst and Faught
declarations and find that the computerized legal research expenses were billed separately
from attorneys’ fees. Motion for Attorneys’ Fees and Costs, Exhibits 1 and 3. Defendants
provide the affidavit of Mr. Thomasch as to the second and third issues. He opines that it
was reasonable to use computerized legal research to perform the necessary research for
preparation of the motion to dismiss and related briefs and that this type of costs would
reasonably be incurred in this kind of litigation. Motion for Attorneys’ Fees and Costs,
Exhibit 6, at 30. Although the explanations of necessity and reasonableness in the various
declarations of the attorneys for Defendants may leave something to be desired with regard
to detail as to the specific areas researched and the necessity for that research, I conclude
that, on the record as a whole, I have “sufficient information and supporting documentation”
to allow me to “make a reasoned decision” on the computerized legal research costs.
Brody, at 206. On that record, I find the costs were reasonably and necessarily incurred
in this case.
Plaintiffs contend that there is “likely” duplication between the computerized legal
research efforts of Baker Botts and those of Fognani & Faught. Response to Motion for
Attorneys’ Fees and Costs, at 25. Although Defendants’ exhibits do not simplify the tasks
of finding specific pages of invoices or of identifying the entries of legal time related to the
computerized legal research, I have reviewed the time entries for the month of December
21
2008, the month during which the bulk of the computerized legal research at Fognani &
Faught was performed.
Fognani & Faught Invoice # 5579 (attached to Motion for
Attorneys’ Fees and Costs, Exhibit 3); Baker Botts Invoice # 1091301 (attached to Exhibit
1). It appears that most of that research centered on service of process issues. During the
same time, the majority of the legal research time for Baker Botts focused on jurisdictional
and RICO issues. I find only one time entry that included research on service of process,
which, as the time entry includes other work performed, I consider a de minimus
duplication. I decline to reduce the claimed costs for computerized legal research based
on duplication.
Plaintiffs take issue with the requests for document collection costs and travel
expenses, arguing that the assertions of necessity and reasonableness are conclusory.
Given the nature of the claims in this lawsuit and the location of evidence, parties, and
potential witnesses, I find Mr. Thomasch’s opinions that these costs were reasonable and
necessary to be sufficient evidence to support an award of costs for these items.
Finally, Plaintiffs request an evidentiary hearing, citing Michael A. Cramer, MAI,
SRPA, Inc. v. United States, 47 F.3d 379, 383 (10th Cir. 1995), for the proposition that “an
evidentiary hearing is generally preferred, if not required, when factual disputes exist in
connection with a request for attorney fees and costs and those disputes cannot be
resolved without a hearing.” In this case, however, there is no real dispute of fact requiring
development of the record. The parties’ experts disagree on the reasonableness of the
fees and costs claimed by Defendants, but they generally do not take issue with the factual
bases for the amounts claimed. I conclude a hearing is not required to resolve the cost
issue on the record in this case.
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Accordingly, it is ORDERED:
1.
Defendants’ Motion for Attorneys’ Fees and Costs, filed November 13, 2009 (ECF
No. 153) is granted in part and denied in part.
2.
Plaintiffs shall pay the Ivanhoe Corporate Defendants:
a.
attorneys’ fees in the amount of $225,258.00 for work performed by Baker &
Botts;
b.
attorneys’ fees in the amount of $24,835.00 for work performed by Fognani
& Faught;
c.
costs and expenses in the amount of $37,408.19 expended by Baker Botts;
and
d.
costs and expenses in the amount of $4,485.06 expended by Fognani &
Faught.
3.
Plaintiffs shall pay defendant Robert M. Friedland attorneys’ fees in the amount of
$68,125.25.
4.
Plaintiffs shall pay defendant David R. Martin attorneys’ fees in the amount of
$11,613.00.
DATED at Denver, Colorado, on August 1, 2011.
BY THE COURT:
s/ Walker D. Miller
United States District Judge
PDF FINAL
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