Federal Trade Commission et al v. Dalbey et al

Filing 157

ORDER re: 147 Notice of Filing Declarations Supporting Attorneys' Fees and Costs Relating to the No Show Deposition of Stephen M. Nowlis, Ph.D. ORDERED that the Dalbey Defendants shall remit a payment of $12,753.48 to Plaintiff FTC. ORDERED that the Dalbey Defendants shall remit a payment of $2,384.02 to Plaintiff COAG, by Magistrate Judge Kristen L. Mix on 2/9/12. (lsw, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 11-cv-01396-RBJ-KLM
FEDERAL TRADE COMMISSION and
STATE OF COLORADO, ex rel. JOHN W. SUTHERS, ATTORNEY GENERAL,
Plaintiffs,
v.
RUSSELL T. DALBEY,
DEI, LLLP,
DALBEY EDUCATION INSTITUTE, LLC,
IPME, LLLP,
CATHERINE L. DALBEY, and
MARSHA KELLOGG,
Defendants.
_____________________________________________________________________
ORDER
_____________________________________________________________________
ENTERED BY MAGISTRATE JUDGE KRISTEN L. MIX
This matter is before the Court on Plaintiffs’ Notice of Filing Declarations
Supporting Attorneys’ Fees and Costs Relating to the “No Show” Deposition of
Stephen M. Nowlis, Ph.D. [Docket No. 147; Filed January 12, 2012] (the “Notice”). On
December 21, 2011, the Court granted Plaintiffs’ request for sanctions against Russell T.
Dalbey and Catherine L. Dalbey (the “Dalbey Defendants”).1 See Order [#138]. In the
Order, the Court ordered the Dalbey Defendants to pay Plaintiffs “any costs associated with
the [missed] deposition [of Stephen M. Nowlis on September 23, 2011], including Plaintiffs’

1

The facts underlying this Order are set forth in Plaintiffs’ Motion for Sanctions [#110], the
Dalbey Defendants’ Response [#124], Plaintiffs’ Reply [#126], the Court’s Order [#138] granting the
Motion for Sanctions, and the documents attached to these filings.

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travel expenses and reasonable attorneys’ fees associated therewith.” Id. at 5. The Court
further ordered the Dalbey Defendants to pay “Plaintiffs’ reasonable attorneys’ fees
incurred in drafting the Motion [for Sanctions] [#110] and Reply [#126].” Id. The Court
further ordered Plaintiffs’ counsel to submit affidavits as to fees and costs in accordance
with D.C.COLO.LCivR 54.3. See id. Plaintiffs’ counsel filed three affidavits on January 12,
2012. See Notice [#147]. The Dalbey Defendants did not file a response contesting the
amount of fees and costs claimed by Plaintiffs.
In the Notice, Plaintiffs represent that they incurred a total of $15,137.50 in
attorneys’ fees and travel costs in connection with the Nowlis deposition. See Notice [#147]
at 3. Of that amount, $10,397.58 is the amount of fees requested by Attorneys David P.
Frankel (“Frankel”) and Jay B. Simonson (“Simonson”), $1,596.06 is the amount of fees
requested for time spent by FTC staff economist Patrick McAlvanah (“McAlvanah”), and the
remaining $3,143.86 represents costs associated with travel to and from the deposition
site. See id. at 2-3.
A.

Attorneys’ Fees
To determine a “reasonable attorney's fee,” the Court must conduct a lodestar

calculation as set out in Hensley v. Eckerhart, 641 U.S. 424, 433 (1983), in accordance with
“relevant Tenth Circuit precedent applying Hensley.” Anchondo v. Anderson, Crenshaw
& Assocs., LLC, 616 F.3d 1098, 1102 (10th Cir.2002). A lodestar calculation involves
taking the product of the number of attorney hours expended to resolve an issue or perform
a task and a reasonable hourly billing rate. Hensley, 641 U.S. at 433. To determine the
number of hours expended, the Court reviews counsel's billing entries to ensure that he
exercised proper “billing judgment.” Case v. Unified Sch. Dist. No. 233, Johnson County,
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Kan., 157 F.3d 1243, 1250 (10th Cir.1998) (internal quotation marks omitted); id. at 1251
(“The district court is not bound by the opinions of the parties regarding the reasonableness
of the time they spent on the litigation.”). Once the Court determines the lodestar, it may
“adjust the lodestar upward or downward to account for the particularities” of the work
performed. Phelps v. Hamilton, 120 F.3d 1126, 1131 (10th Cir.1997).
“Billing judgment consists of winnowing the hours actually expended down to the
hours reasonably expended.”

Case, 157 F.3d at 1250.

“In determining what is a

reasonable time in which to perform a given task,” an attorney submitting billing entries
should consider the following factors: (1) the complexity of the case; (2) the number of
reasonable strategies pursued; (3) the responses necessitated by the maneuvering of the
other side; and (4) “the potential duplication of services” caused by the presence of multiple
attorneys when one would suffice. Ramos v. Lamm, 713 F.2d 546, 554 (10th Cir.1983).
The burden is on the party requesting fees to prove that its counsel exercised proper billing
judgment. Case, 157 F.3d at 1250 (“Counsel for the party claiming the fees has the burden
of proving hours to the district court by submitting meticulous, contemporaneous time
records that reveal, for each lawyer for whom fees are sought, all hours for which
compensation is requested and how those hours were allotted to specific tasks.”).
1.

Attorney Frankel

Mr. Frankel is a staff attorney with Plaintiff Federal Trade Commission (“FTC”). See
Decl. of Frankel [#147-1] at 1. He is requesting reimbursement for his hourly compensation
as provided by the FTC’s Deputy Chief Financial Officer. See id. at 5. This rate is $115.64
per hour. See id. Mr. Frankel represents that he incurred a total of $8,904.28 in attorney
fees for 77 hours of time expended in connection with the Nowlis deposition and
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subsequent request for sanctions. See id. at 3-5. He asserts that he is not seeking
reimbursement for: (1) time spent preparing for the Nowlis deposition, or (2) time spent by
others at the FTC preparing and reviewing Plaintiffs’ motion for sanctions and reply brief.
See id. at 5-6. Mr. Frankel’s affidavit lists the following billing entries:
(1) Prior to September 21, 2011—2 hours of attorney time conferring multiple
times with the Dalbey Defendants’ attorney to schedule the Nowlis deposition
and arrange for the FTC’s San Francisco office to reserve a conference room
and for a court reporter to transcribe the deposition;
(2) September 21, 2011—2 hours of attorney time “read[ing] and react[ing]
to the correspondence” received from opposing counsel “purporting to cancel
the Nowlis deposition;”
(3) September 22, 2011—9 hours of attorney time conferring with FTC
colleagues and Mr. Simonson regarding the last-minute efforts of opposing
counsel to cancel the Nowlis deposition, preparing e-mail messages and
leaving voice mail for opposing counsel, traveling from Washington, D.C. to
San Francisco, and meeting and conferring with Mr. Simonson;
(4) September 23, 2011—12 hours of attorney time conferring with Mr.
Simonson, opposing counsel, and the Court regarding the dispute, attending
the deposition, and traveling from San Francisco back to Washington, D.C.;
(5) September 25-29, 2011—25 hours of attorney time preparing Plaintiffs’
motion for sanctions and related papers, which included a 16-page
memorandum in support, Mr. Frankel’s 8-page declaration, and the proposed
order, and meeting and conferring with opposing counsel regarding the
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proposed sanctions motion;
(6) October 20-21, 2011—1 hour of attorney time reviewing the response and
accompanying declaration in opposition to Plaintiffs’ motion for sanctions;
(7) October 21-28, 2011—16 hours of attorney time preparing Plaintiffs’ reply
brief (10 pages) and accompanying declaration (2 pages with 2 exhibits); and
(8) December 22, 2011 to January 6, 2012—10 hours of attorney time
reviewing the Court’s Order granting the motion for sanctions; preparing his
own declaration, Mr. McAlvanah’s declaration, and accompanying Notice;
and conferring with Mr. Simonson and Mr. McAlvanah in connection with their
declarations.
See id. at 3-5. The Court has reviewed the documents prepared by Mr. Frankel, including
the Motion for Sanctions [#110], the Reply [#126], this Notice [#147], and all accompanying
filings.
The Court finds that Mr. Frankel has carried his burden of demonstrating proper
billing judgment. The Court further finds that: (1) Mr. Frankel’s hourly compensation of
$115.64 is reasonable, and (2) the hours of attorney time noted by Mr. Frankel are
reasonable. Accordingly, the Court concludes that Plaintiff FTC is entitled to an award of
$8,904.28 for the fees it reasonably incurred in connection with the Nowlis deposition and
subsequent request for sanctions.
2.

Attorney Simonson

Mr. Simonson is a First Assistant Attorney General for the Colorado Attorney
General and represents Plaintiff State of Colorado, ex rel. John W. Suthers, Attorney
General (“COAG”). See Decl. of Simonson [#147-3] at 1. Mr. Simonson is requesting
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reimbursement for the hourly rate cost to the state for his time, not reimbursement at a
market rate. See id. at 3. According to his office’s Budget Analyst, Mr. Simonson’s hourly
rate is $55.72. See id. Mr. Simonson represents that he incurred a total of $1,493.30 in
attorney fees for 26.8 hours of time expended in connection with the Nowlis deposition and
subsequent request for sanctions. See id. Mr. Simonson’s affidavit lists the following billing
entries:
(1) September 22, 2011—8.4 hours of attorney time for travel from Denver
to San Francisco for the deposition and discussions with Mr. Frankel and an
in-office colleague about the upcoming deposition;
(2) September 23, 2011—9.6 hours of attorney time to attend the deposition,
confer with opposing counsel and Mr. Frankel about the cancellation of the
deposition, and return to Denver; and
(3) September 24-28, 2011—8.8 hours to prepare declaration of fees and
costs, confer with Mr. Frankel, and review and edit the joint motion for
sanctions drafted by Mr. Frankel.
See id. at 2-3.
The Court finds that Mr. Simonson has carried his burden of demonstrating proper
billing judgment. The Court further finds that: (1) Mr. Simonson’s hourly rate of $55.72 is
reasonable, and (2) the hours of attorney time noted by Mr. Simonson are reasonable.
Accordingly, the Court concludes that Plaintiff COAG is entitled to an award of $1,493.30
for the fees it reasonably incurred in connection with the Nowlis deposition and subsequent
request for sanctions.
B.

Mr. McAlvanah’s Fees
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Mr. McAlvanah is a staff economist with the FTC. See Decl. of McAlvanah [#147-2]
at 1. He is here requesting reimbursement for his hourly compensation as provided by the
FTC’s Deputy Chief Financial Officer. See id. at 3. This rate is $88.67 per hour. See id.
Mr. McAlvanah represents that he incurred a total of $1,596.06 in compensation for 18
hours of time expended in connection with the Nowlis deposition. See id. at 2. He asserts
that he is not seeking reimbursement for time spent preparing for the Nowlis deposition.
See id. Mr. McAlvanah asserts that he incurred 18 hours over the course of two days
traveling from Washington, D.C. to San Francisco, appearing at the Nowlis deposition, and
traveling back to Washington, D.C. See id.
The Court finds that Mr. McAlvanah has carried his burden of demonstrating proper
billing judgment. The Court further finds that: (1) Mr. McAlvanah’s hourly compensation of
$88.67 is reasonable, and (2) the hours listed for reimbursement for two days of work and
travel in connection with the Nowlis deposition are reasonable. Accordingly, the Court
concludes that Plaintiff FTC is entitled to an award of $1,596.06 for the fees it reasonably
incurred in connection with the Nowlis deposition.
C.

Costs
The affidavits of Mr. Frankel, Mr. Simonson, and Mr. McAlvanah list the following

travel costs in connection with the Nowlis deposition:
Taxicabs:
(1) $175.00 total for three taxicab rides shared by Mr. Frankel and Mr. McAlvanah,
from their office in Washington, D.C. to Dulles International Airport ($60.00), from San
Francisco International Airport to their hotel ($60.00), and from downtown San Francisco
to San Francisco International Airport ($55.00), Decl. of Frankel [#147-1] at 2;
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(2) $79.00 for a taxicab ride shared by Mr. Frankel and Mr. McAlvanah, from Dulles
International Airport to their respective homes, Decl. of McAlvanah [#147-2] at 2; and
(3) $73.00 total for a shuttle ($22.00) and a taxicab ride ($51.00) for Mr. Simonson
to and from San Francisco International Airport to downtown San Francisco, Decl. of
Simonson [#147-3] at 2.
Airfare:
(1) $396.39 for round-trip airfare for Mr. Frankel between Dulles International Airport
and San Francisco International Airport, Decl. of Frankel [#147-1] at 2;
(2) $396.39 for round-trip airfare for Mr. McAlvanah between Dulles International
Airport and San Francisco International Airport, Decl. of McAlvanah [#147-2] at 2;
(3) $479.75 for round-trip airfare for Mr. Simonson between Denver and San
Francisco International Airport, which includes a $26.00 airfare service fee and $69.00
flight-rescheduling fee, Decl. of Simonson [#147-3] at 2.
Parking and mileage:
(1) $40.00 total for airport parking fee ($20.00) and mileage from house to home
($20.00), Decl. of Simonson [#147-3] at 2.
Hotel:
(1) $208.17 for hotel for Mr. Frankel in San Francisco for one night, Decl. of Frankel
[#147-1] at 2;
(2) $185.04 for hotel for Mr. McAlvanah in San Francisco for one night, Decl. of
McAlvanah [#147-2] at 2;
(3) $210.97 for hotel for Mr. Simonson in San Francisco for one night, Decl. of
Simonson [#147-3] at 2.
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Per diem for meals:
(1) $106.50 total for a reduced per diem of $53.25 for meals for each of two days for
Mr. Frankel, Decl. of Frankel [#147-1] at 3;
(2) $106.50 total for a reduced per diem of $53.25 for meals for each of two days for
Mr. McAlvanah, Decl. of McAlvanah [#147-2] at 2;
(3) $87.00 total for per diem for meals for Mr. Simonson, Decl. of Simonson [#147-3]
at 2.
Court reporter:
(1) $600.15 for court reporter appearance and expedited transcription fees, Decl. of
Frankel [#147-1] at 3.
The Court finds that Plaintiffs have carried the burden of demonstrating reasonable
costs in connection with their travel to and from the Nowlis deposition. Accordingly, the
Court concludes that Plaintiff FTC is entitled to an award of $1,486.21 for the costs of Mr.
Frankel and $766.93 for the costs of Mr. McAlvanah, and that Plaintiff COAG is entitled to
an award of $890.72 for the costs of Mr. Simonson.
In sum, the Court finds that Plaintiff FTC is entitled to a total award of $12,753.48
and that Plaintiff COAG is entitled to a total award of $2,384.02. Accordingly,
IT IS HEREBY ORDERED that the Dalbey Defendants shall remit a payment of
$12,753.48 to Plaintiff FTC within thirty (30) days of the date of this Order.
IT IS FURTHER ORDERED that the Dalbey Defendants shall remit a payment of
$2,384.02 to Plaintiff COAG within thirty (30) days of the date of this Order.

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Dated: February 9, 2012

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