United States of America v. All funds on deposit with R.J. O'Brien & Associates, held in the name of Bridge Investment, S.L., bearing account numbers XXX-X3931 and XXX-X1784, maintained at Harris Bank account number XXX-171

Filing 179

MEMORANDUM OPINION AND ORDER signed by the Honorable Matthew F. Kennelly on 5/9/2014: For the reasons stated in the accompanying decision, the Court grants in part claimants' motion for attorney's fees and costs [docket no. 168]. Claimant s' modified requested fee and cost award request of $341,535.62 should be reduced as stated in the decision. Counsel are directed to confer promptly to quantify the reductions ordered by the Court and are to make a supplemental joint submission in that regard by no later than May 21, 2014. (mk)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

UNITED STATES OF AMERICA,
Plaintiff,
vs.
ALL FUNDS ON DEPOSIT WITH R.J.
O'BRIEN & ASSOCIATES, HELD IN THE
NAME OF BRIDGE INVESTMENT, S.L.,
BEARING ACCOUNT NUMBERS XXXX3931 AND XXX-X1784, MAINTAINED AT
HARRIS BANK, ACCOUNT NUMBER XXX171-6,
Defendant.

)
)
)
)
)
)
)
)
)
)
)
)
)
)
)

No. 11 C 4175

MEMORANDUM OPINION AND ORDER
MATTHEW F. KENNELLY, District Judge:
The United States filed an in rem action seeking forfeiture of about $6.7 million
held in futures trading accounts and belonging to an affiliate of the Al Qaeda terrorist
organization. Several insurance companies that paid billions of dollars on their
insureds' property damage claims arising from the September 11, 2001 terrorist attacks
then filed verified claims to the funds, along with answers to the government's
complaint. The Court first granted the government's motion to strike claimants' claims
and answers. Claimants, having registered a judgment against Al Qaeda in this district,
then served a citation to discover assets on the United States Marshal and obtained a
writ of execution from another judge in this district. The Court subsequently granted
claimants' motion to amend their claims and denied the government's motion to quash

the writ of execution. Both the government and claimants then moved for summary
judgment. The Court granted claimants' motion and denied the government's motion.
The Court then issued a judgment order, finding claimants substantially prevailed and
were entitled to attorney's fees.
Claimants have now moved for an award of attorney's fees and costs. For the
reasons stated below, the Court grants the claimants' motion but reduces the requested
award.
Background
The Court assumes familiarity with the facts of this case from its earlier
decisions. In 2005, insurance companies filed suit against Al Qaeda in the Southern
District of New York seeking reimbursement for their losses from the terrorist attacks of
September 11, 2001. The companies received an order of default in April 2006, but the
court did not issue an order specifying a damages award until December 2011. That
amount was $9,351,247,965.99. The court entered a final judgment in January 2012.
In 2005, an individual named Mohammad Qasim al Ghamdi took control of a
commodities futures trading account at R.J. O'Brien & Associates (RJO), a Chicago
company. The account had been opened two years earlier in the name of Bridge
Investment, S.L. The funds belonged to Muhammad Abdallah Abdan Al Ghamdi, a
member of Al Qaeda also known as Abu Al Tayyeb. In June 2007, the United States
Department of the Treasury's Office of Foreign Assets Control (OFAC) blocked the two
RJO accounts in question. Four years later, on June 19, 2011, the United States filed a
verified complaint in this Court for forfeiture of the funds, an action in rem under
18 U.S.C. § 981(a)(1)(G)(i) and (iv), the civil forfeiture statute.

2

On June 21, 2011, the Chicago Tribune published an article about the
government's decision to block the RJO/Al Ghamdi accounts. The article served as the
first notice about the funds for the insurance companies that had obtained the order of
default against Al Qaeda in the Southern District of New York. In August 2011, the
insurance companies filed in the forfeiture action verified claims to the RJO / Al Ghamdi
funds. After briefing and argument, the Court granted the government's motions to
strike the claims in March 2012. See United States v. All Funds on Deposit with R.J.
O'Brien & Assocs., No. 11 C 4175, 2012 WL 1032904 (N.D. Ill. Mar. 27, 2012). The
Court did not decide whether claimants had constitutional standing, but it granted the
government's motion to strike and denied claimants' motion to amend their claims on
the ground that they lacked statutory and prudential standing.
Claimants registered their judgment against Al Qaeda in this district on February
27, 2012, and the matter was assigned to Judge Gettleman. They sought a writ of
execution in that matter on March 13, 2012 and filed a notice of citation to discover
assets on April 6. Four days later, Judge Gettleman ordered issuance of a writ of
execution. The matter was later transferred to this Court's docket. In September 2012,
this Court denied the government's motion to quash the writ and granted claimants'
motion to amend their claims to reflect the entry of final judgment in the Al Qaeda
litigation. See United States v. All Funds on Deposit with R.J. O'Brien & Assocs., 892 F.
Supp. 2d 1038 (N.D. Ill. 2012). Among other issues, the Court concluded that the
claimants had both prudential and statutory standing based on their interest in the
defendant property. Both sides thereafter moved for summary judgment. The Court
granted summary judgment to claimants and denied summary judgment to the

3

government. The Court found that claimants had constitutional, statutory, and
prudential standing and that sovereign immunity did not preclude them from asserting
their interest in the defendant funds. See United States v. All Funds on Deposit with
R.J. O'Brien & Assocs., No. 11 C 4175, 2013 WL 5567562 (N.D. Ill Oct. 9, 2013).
The Court issued a judgment order in this case in November 2013. The order
stated that "[c]laimants have substantially prevailed in this litigation and therefore are
entitled to reasonable attorney fees and other litigation costs reasonably incurred as
well as pre- and post-judgment interest pursuant to the provisions of 28 U.S.C. §
2465(b)." Nov. 13, 2013 Judgment Order at 2, Case No. 11 C 4175 [docket no. 162].
Claimants filed the present motion for fees and costs in December 2013.
Discussion
The United States is liable for "reasonable attorney fees and other litigation costs
reasonably incurred by the claimant" in "any civil proceeding to forfeit property under
any provision of Federal law in which the claimant substantially prevails." 28 U.S.C.
§ 2465(b)(1)(A). In general, "[m]ultiple equitable factors govern the crafting of an
attorneys' fees award, so district courts have wide discretion to determine what
constitutes reasonable attorneys' fees." Serafinn v. Local 722, Int'l Bhd. of Teamsters,
Chauffeurs, Warehousemen & Helpers of Am., 597 F.3d 908, 919 (7th Cir. 2010)
(internal alterations and quotation marks omitted).
In their initial memorandum, Claimants request $345,347.50 in fees and
$7155.19 in costs for a total of $352,502.69, which they reduced to $341,535.62 after
making concessions following the government's filing of its response brief. The
government argues that claimants' original total request should be reduced by $194,893

4

and that claimants' requested hourly rates should also be reduced. The government
challenges the fees and costs claimants incurred at a time when the government
contends their claims were insufficient as a matter of law, as well as fees that the
government argues relate to other cases. The government also argues that claimants
are not entitled to certain of their travel expenses related to this litigation or fees for
clerical (as opposed to legal) work that claimants' paralegals performed. Finally, the
government argues that certain of claimants' attorneys' discrete tasks are not
compensable and that the requested hourly rates for claimants' attorneys should be
reduced by twenty percent.
A.

Fees for work prior to claimants' citation to discover assets
The government argues that the Court should deny $142,757.40 in claimants'

requested fees and costs because they were incurred before April 10, 2012—a time
when, the government argues, claimants' claim to the funds was "hopelessly deficient"
and "insufficient as a matter of law." Gov't Resp. at 8. This argument is based on the
fact that claimants did not obtain a writ of execution against the defendant funds until
that date, shortly before which they received a judgment in a New York federal case
against al Qaeda and registered the judgment in this district. Claimants respond that
they originally stated their interest in the defendant funds in June 2011 and that they
deserve compensation for work performed from that date through their successful
motion for summary judgment. They contend that their efforts prior obtaining the writ of
execution preserved their interest in the funds, advanced their claim to the funds,
expedited proceedings, provided research and argument for later proceedings, and
helped them prevail on several issues. They also argue that the cases the government

5

cites for its argument are distinguishable, because they deal with parties who
simultaneously make successful and unsuccessful claims, rather than those who pursue
a single claim.
The Supreme Court has observed that a "fee award should not be reduced
simply because the plaintiff failed to prevail on every contention raised in the
lawsuit. . . . The result is what matters." Hensley v. Eckerhart, 461 U.S. 424, 435
(1983). At the same time, if "a plaintiff has achieved only partial or limited success," a
district court may find plaintiff's counsel's lodestar to "be an excessive amount" and
eliminate specific hours or reduce the overall award "to account for the limited success."
Id. at 436–37. There is "no precise rule or formula" for doing so. Id. at 436. Courts are
to differentiate "winning and losing claims [that] are just different legal theories in
support of the same relief" from "losing claims seeking different or additional relief, or
damages against different defendants." Richardson v. City of Chicago, 740 F.3d 1099,
1103 (7th Cir. 2014). In the former category, "full compensation is proper"; in the latter,
the judge can calculate the time "devoted to the winning claims, had no clunkers been
presented" or otherwise "make an across-the-board reduction that seems appropriate in
light of the ratio between winning and losing claims." Id. This is "a highly contextual
and fact-specific enterprise," and "[p]recision is impossible in such calculations," but "the
district court must justify its decision." Sottoriva v. Claps, 617 F.3d 971, 975–76 (7th
Cir. 2010).
The Court originally struck claimants' claim in March 2012 because they did not
have the requisite interest in the specific funds at issue. In its March 2012 order, the
Court noted that claimants had no security interest or lien on the defendant funds, which

6

precluded statutory standing to pursue those funds. The Court also denied claimants'
motion to amend their claims, noting in particular that they had not served a citation to
discover assets on the government, which would have created a lien on the funds in
question and given them an interest in the property. Claimants subsequently served
such a citation. Thereafter, the service of this citation and claimants' acquisition of a
writ of execution prompted this Court to find that claimants had statutory standing, deny
the government's motion to quash claimants' claims, and grant claimants' motion to
amend their claim and answers.
In short, claimants filed a claim to the defendant funds, and they were eventually
successful on that claim. They did not bring multiple claims to the funds based on
different theories, only one of which was successful, the sort of situation contemplated
in the cases cited above and in the government's brief. In other words, there is no
"losing claim" in this case. See Richardson, 740 F.3d at 1103. The government argues
that claimants presented two "temporally distinct" claims "based on different facts."
Gov't Resp. at 9. But the claim that claimants brought and the claim they won on
summary judgment were one and the same. Though it is true that the Court originally
struck claimants' claim, it permitted claimants to amend the claim under Rule 15(a).
The government's contention that an initial setback on an ultimately successful
claim precludes a fee award for that party's initial work presents a novel legal theory.
Taken to its logical endpoint, it would entitle a prevailing party to attorney's fees only for
work it performed on the latest, successful version of its complaint. Any of the initial
preparation, research, strategizing, and investigation a party performed prior to its filing
of its latest amended complaint would be lost time. This result would withhold funds

7

from parties, like claimants here, for the entirety of their work on a successful claim.
The government also characterizes claimants' research efforts prior to their citation to
discover assets as "pre-litigation/pre-interest fee-shifting" that is not permitted by
Section 2465. Gov't Resp. at 9. Yet the work claimants performed on their claim after
they filed it cannot be called "pre-litigation" with a straight face.
The government further contends in general that compensating claimants for
their work on the case prior to filing their citation to discover assets is not reasonable
under 28 U.S.C. § 2465(b)(1)(A). Yet claimants' earlier efforts in the case led to the
Court's issuance of a decision that was helpful to them. Although the Court struck their
claims in March 2012, the Court's opinion made it clear what it would take for claimants
to obtain the requisite interest in the defendant funds. It noted that the claimants at that
time "lack[ed] the requisite interest in the property that is the subject of the forfeiture
action." All Funds on Deposit with R.J. O'Brien & Assocs., 2012 WL 1032904, at *8. "In
particular," the Court said, claimants had "not served citations to discover assets, which,
under Illinois law, would create a lien on the defendant property and thus give them an
interest in the property. See 735 ILCS 5/2-1402(a), (m)." Id. As noted above,
claimants did serve such a citation two weeks later, and one day after that, they filed
their ultimately successful motion to amend their claims. In short, claimants' efforts prior
to their filing of the citation were part of the chain of events establishing their interest in
the defendant funds and eventually prevailing on summary judgment. The Court
concludes this work was reasonable and therefore properly compensable under section
2465(b)(1)(A).
The cases the government cites do not require a different result. They feature

8

situations in which plaintiffs brought multiple claims against defendants, only one or
some of which were successful. The government cites this Court's decision in Wells v.
City of Chicago, 925 F. Supp. 2d 1036, 1042 (N.D. Ill. 2013), where the Court reduced
the requested fee award "given plaintiff's partial and limited success." Yet in that case,
as claimants point out, the plaintiff had two claims and lost one of them. The Court
observed that "a good deal of the fees and expenses were incurred only because" the
plaintiff's medical care claim, which she lost, "was part of the case." Id. at 1043.
Although the plaintiff contended that all ninety of the depositions she took were
reasonably related to her winning claim (unlawful detention), the Court concluded that
this argument "strain[ed] credulity past the breaking point" because the majority of the
depositions concerned the losing claim. Id. Because of these and other factors, the
Court ordered an overall reduction of the plaintiff's compensable hours by three-fourths.
Unlike Wells, claimants in the present case have not experienced "partial" or "limited"
success; they have achieved complete and total success on their sole claim to the
defendant funds. The fact that their claims were initially stricken does not change this
fact. Wells does not govern this case.
The government also cites United States v. One Star Class Sloop Sailboat,
546 F.3d 26 (1st Cir. 2008). Although the government cites this case only for the
general proposition that courts may disallow time spent in litigating failed claims, the
facts of the case are also distinguishable from those under review here. In that case,
one of the winning lawyers "had prevailed on only one issue . . . and had failed on
others to which he had quixotically dedicated time and resources." Id. at 39.
Furthermore, the attorney had ultimately recovered far less than the amount he sought

9

throughout the litigation. Here, by contrast, claimants achieved total success on their
only claim. And in Jaffee v. Redmond, 142 F.3d 409, 414 (7th Cir. 1998), which the
government also cites, the Seventh Circuit reversed the district court's decision to deny
fees to an attorney on the ground that a particular argument "did not 'contribute to' her
ultimately successful claim." In this regard, the court noted that "an unsuccessful but
reasonable argument in support of a successful claim may be compensable." Id. This
does not help the government's position; indeed, it may help claimants. Even were the
Court to agree that claimants' earlier activity in the case somehow constituted a distinct,
unsuccessful claim, it was still "in support of" claimants' ultimate success.
The government also cites policy concerns, contending that section
2465(b)(1)(A) was intended to relieve rightful property owners of the burden of litigating
the return of their property. Because claimants were not rightful owners before April 10,
2012, the government argues, they do not deserve fees for work prior to that date. This
is a variation of the government's other arguments on this question, and it ignores the
fact that the Court has decided that claimants are rightful owners of the defendant
funds. They have pursued their claim to a favorable resolution.
Finally, in a footnote, the government argues that even if the Court finds that
claimants' work on the case prior to the citation is compensable, the Court "could—and
should—still deny or reduce the fees prematurely incurred." Gov't Resp. at 11 n.9. The
government provides no direct rationale for this argument and no suggestions for the
amount by which the Court should reduce the amount sought. Instead, it provides a
citation to an unreported California district court case quoting the Ninth Circuit for the
notion that a court may reduce a party's hours of they are inadequately documented, if

10

the case was overstaffed with duplicated hours, or if the hours were "excessive or
otherwise unnecessary." See United States v. One 2008 Toyota RAV 4 Sports Utility
Vehicle, No. 2:09-cv-05672-SVW-PJW, 2012 WL 5272281, at *4 (C.D. Cal. Oct. 18,
2012). The government does not list particular pre-citation tasks that it contends were
excessive, duplicated, or inadequately documented. In short, this argument gives the
Court no basis to reduce claimants' requested fees and costs.
The Court concludes that claimants are entitled to the reasonable fees and costs
they incurred prior serving to their citation to discover assets.
B.

Work outside this case
The government contends that 28 U.S.C. § 2465(b)(1)(A) allows recovery of fees

only for a forfeiture proceeding. It argues that claimants request fees from cases
outside their forfeiture action and that these are not compensable. These include In re
Terrorist Attacks, 03-MDL-1570 (S.D.N.Y. Mar. 10, 2003), a case that claimants
pursued to a judgment in their favor in the Southern District of New York, as well as the
judgment enforcement action they filed in this district, Art Ins. Co. v. Al Qaeda, No. 12 C
1346. The government supplies a chart in its brief listing the hours to which it objects.
It contends that because section 2465 presents only a "narrow exception" to the
government's sovereign immunity, only work performed on the forfeiture proceeding
itself can be compensated under the statute. Gov't Resp. at 11. Each entry on the
government's chart includes notes stating why the government objects to the specific
entry. Some of these entries concern meetings of claimants' counsel with the Plaintiffs'
Executive Committee (PEC) in the In re Terrorist Attacks litigation. The government
argues that "[s]trategy meetings of that committee do not constitute actions taken in

11

furtherance of pursuing the defendant funds in the forfeiture action and are therefore not
compensable under 28 U.S.C. § 2465." Id. at 14.
In response, claimants concede that some of the hours to which the government
objects were for other matters, including the judgment enforcement action, and they
have withdrawn requests for 23.6 of these hours, worth $4525. The other hours on the
government's chart, claimants contend, are valid. Some were "incurred in connection
with reporting on the forfeiture action to the Plaintiff's Executive Committee," where
"lawyers from several of the PEC firms performed substantive work in support of
Claimants' forfeiture claims." Cls.' Repl. at 8. Claimants argue they did not ask for fees
for the work of those lawyers, but they contend that time spent discussing research with
those lawyers is compensable, because the research involved "the core legal issues
and motions in the forfeiture proceeding." Id. at 8–9. Further, claimants contend, the
government sought a copy of a confidential agreement among the MDL plaintiffs, which
required discussion among PEC members. As for the remaining hours, claimants
acknowledge that some were for research performed for the enforcement action, but
they argue this research "became relevant to the forfeiture action in 2013." Id. at 9.
They point to the Court's statement that the enforcement and forfeiture actions have
become intertwined; they also argue that the government acknowledges the research in
question was relevant to the forfeiture action in 2013. Id. Other time, claimants argue,
was relevant to both actions because the work it represents was "undertaken in
furtherance of and applied equally to both claims." Id.
Claimants do not, however, offer defenses for each individual entry on the
government's chart—essentially leaving it to the Court to figure out which hourly entries

12

on the chart apply to each defensive argument claimants make. Some of these entries
do appear to correspond to claimants' explanations, but others do not. As the Court
determines, 10.38 hours listed on the chart, worth $5314.17, do not correspond to any
of claimants' arguments listed above.1 Without any explanation from claimants about
what these hours had to do with this litigation, the Court concludes that these hours
should be excluded from the fee award.
The remaining hours on the chart seem to fall into a few categories. First, there
are hours spent researching topics for related litigation that was also used in this
litigation. Second, there are hours seemingly spent on the judgment enforcement
action; claimants say they excised requests for work in that case, but it looks like they
missed some. There are also hours spent on consulting with the PEC and / or coplaintiffs in the In re Terrorist Attacks case, which claimants argue are compensable in
this action, as noted above. Finally, there are hours that seem to have been spent
directly on the In re Terrorist Attacks case, such as "Call w/clerk for Judge Daniels in
1

The entries are as follows:
 8/8/11, $1625 (2.5 hours at $650/hour): "Review claim and damage information
on file to assemble information necessary for verified claims for Allstate, AXA,
Onebeacon & Munich Re." (Sean P. Carter)
 8/9/11, $3315 (5.1 hours at $650/hour): "Draft, revise and edit verified claims for
Allstate, AXA, OneBeacon, Munich and calls with clients." (Sean P. Carter)
 2/8/12, $225 (1.8 of 2.4 hours at $125/hour—one-fourth of this entry appears
compensable): "Look for native file of Exhibit JJJJ; create zip file and submit via
email to Lindsay Francis. Correct address for Stephen Miller in Chicago Action.
Locate and send briefs to Carter." (Coleen Williams)
 2/22/12, $116.67 (0.93 of 1.4 hours at $125/hour—one-third of this entry appears
compensable): "Organize cases for Sean Carter's argument file re 2/24/12
argument in Chicago. Deliver Koehler hard drive to Steve Heitz and discussion
on tasks to be done re same. Discuss Koehler hard drive with Heitz, Tarbutton
and Adler." (Coleen Williams)
 10/8/12, $32.50 (.05 of .1 hours at $650/hour—one-half of this entry appears
compensable): "Talk with S. Cozen about appellate strategy in CA2 and Chicago
strategy." (Stephen Miller)
13

SDNY re: Form of Judgment against Al Qaeda and urgency in light of the NDIL
forfeiture procedure." Gov't Resp. at 14 (entry of December 20, 2012). Neither side
advances any legal arguments as to why these hours should or should not be
compensable; in fact, claimants cite no legal authority at all, and the government cites
only section 2465. Therefore, the Court is left to assess the general reasonableness of
the requested hours.
First, considering claimants' argument that the research of their co-plaintiffs'
counsel in the In re Terrorist Attacks case was used in the forfeiture action, the Court
concludes that claimants' time spent consulting with those attorneys on matters related
to this case is compensable. In claimants' telling, the research those attorneys
produced was used in this action, and claimants learned about it through discussions
with those attorneys. They now seek compensation for the time spent on those talks.
Second, time spent on research that claimants used both in the enforcement action and
in the forfeiture action should be compensable here; the research in question was done
when both actions were pending. Claimants should not be penalized for using the same
research in both cases, and the government presents no legal principle that would
prevent claimants from billing for research they used in this case. However, work that
appears to have been exclusively for the judgment enforcement action, or exclusively
for the In re Terrorist Attacks litigation, is not appropriately compensable in this case. It
is true that both cases related to and in some cases prompted claimants' actions in the
forfeiture case. But with regard to certain entries, claimants cannot say that work done
exclusively for the other cases was work done indirectly for the forfeiture case too.

14

These entries account for 9.7 hours, worth $3312.50.2
Finally, the government makes one more argument on a time entry that claimants
do not address—that a $394.57 travel charge by attorney Sean Carter was not related
to this litigation. The spreadsheet entry for this charge that claimants have submitted
bears no explanation for what this travel was for, aside from "Meeting with CTS
Consultants" in Chicago. Without any explanation from claimants, the Court concludes
this time is not appropriately compensable in this case.
C.

Attorney travel to Chicago
The government's next set of arguments concerns the travel claimants' attorneys

2

The entries are as follows:
 12/20/11, $130 (0.2 hours at $650/hour): "Call with Clerk for Judge Daniels in
the SDNY re: Form of Judgment against Al Qaeda and urgency in light of the
NDIL forfeiture procedure." (Sean P. Carter)
 12/20/2011, $130 (0.2 hours at $650/hour): "Call w/clerk for Judge Daniels in
SDNY re: form of judgments against al Qaeda and urgency in light of ND IL
forfeiture proceeding." (Sean P. Carter)
 12/28/11, $262.50 (0.7 hours at $375/hour): "Exchange of correspondence with
Sean Carter and Kevin Caraher in our Chicago office and review of the
Department of Justice's pleadings to determine the proper venue for registering
our judgment against al Qaeda." (Richard C. Bennett)
 4/11/12, $630 (2.1 of 2.8 hours at $300/hour—one-fourth of this entry appears
compensable): "Follow up with efforts to perfect lien with Chicago court, and
gather and organize various documents supporting efforts to perfect lien, as well
as arguments associated with motion to file amended pleadings; coordinate filing
of motion to amend." (Abby Sher)
 7/13/12, $360 (1.2 hours at $300/hour): "Revise and finalize reply to response to
motion to strike in advance of filing." (Abby Sher)
 10/4/12, $600 (2 hours at $300/hour): "Prepare OFAC application for release of
funds." (Abby Sher)
 10/8/12, $390 (0.6 hours at $650/hour): "Review and edit motion to extend
Chicago proceeding." (Sean P. Carter)
 10/8/12, $360 (1.2 hours at $300/hour): "Prepare OFAC application for release
of funds." (Abby Sher)
 10/17/12, $450 (1.5 hours at $300/hour): "Review and analyze allegations in
petition for purposes of addressing connections between funds and al Qaeda."
(Abby Sher)
15

undertook as they came to and from Chicago from Pennsylvania for several hearings.
The government contends that some of these hearings were "routine" and "ministerial"
and thus did not require claimants' "most expensive counsel" to attend, because local
counsel or a telephone conference could have been utilized. Gov't Resp. at 19–21.
The government points to docket entries for various status hearings and concludes that
"counsel traveled to Chicago for the following four hearings that the government submits
were unnecessary." Id. at 21. The government also identifies other "more substantive
hearings" for which "[i]t was appropriate for the claimants' chosen counsel to travel to
Chicago." Id. at 22. The government contends, however, that claimants' counsel
should have been doing work while in transit, which would have cut the chargeable
time: "Surely counsel could have read the parties' briefs and the cases cited in those
briefs while in transit." Id. at 22. As for occasions when it appears claimants' counsel
did do work during travel, the government says the tasks performed were "de minimis"
and likewise should not be compensated. Id. at 22–23.
In calculating an award of attorney fees, "travel time and expenses are
compensable." Stark v. PPM Am., Inc., 354 F.3d 666, 674 (7th Cir. 2004). However, "if
the travel is unnecessary the time spent in travel should be subtracted out." Henry v.
Webermeier, 738 F.2d 188, 194 (7th Cir. 1984). On the government's first point, the
Court does not agree that any of the hearings it scheduled in this case were
"unnecessary." Further, the docket entries the government reproduces in its brief do
not detail what occurred (or did not occur) at each hearing. E.g., Gov't Resp. at 21
(Minute Entry for November 20, 2012 [docket no. 104]: "MINUTE entry before
Honorable Matthew F. Kennelly: Status hearing held and continued to 12/7/2012 at

16

09:30 AM."). Another entry the government provides actually cuts against its position,
because it states that the Court relayed at the hearing an oral decision on the
government's motion for forfeiture. See id. (Minute entry for October 18, 2012 [docket
no. 99]). That was a hearing for which claimants' primary counsel appropriately needed
and wanted to be present. The government has not produced transcripts or excerpts of
any of the hearings. Based on the Court's recollection and notes, however, the Court
cannot agree with the government's contention that nothing of substance happened at
any of these hearings. The hearings may appear to be "ministerial," but that is so only
in hindsight. Claimants' counsel attended by phone when the Court permitted it, but
they otherwise appeared in person.3
On the government's argument that claimants' attorneys should have been doing
work for this case on their flights to and from Chicago, the government presents no
authority that requires that level of attorney "efficiency" in order for time to be
compensable. The Seventh Circuit's statement that "travel time and expenses are
compensable" contains no such caveats. Stark, 354 F3d at 674. Claimants contend
that airplane seats are too narrow for them to handle "binders of voluminous cases and
developing legal strategy on board." Cls.' Repl. at 11. Some might reasonably dispute
this in the age of laptops and iPads. But the Court has enough experience attempting
3

The case the government cites to support its argument on this point is distinguishable,
to put it mildly. See Eli Lilly & Co. v. Zenith Goldline Pharm., Inc., 264 F. Supp. 2d 753
(S.D. Ind. 2003). In that case, the court noted that the attorneys requesting fees
traveled "in style," buying first-class plane tickets for several trips and renting luxury
cars. Id. at 762. The issue with the travel in the case was entirely different from those
presented here: "Absent some unusual circumstances not identified by Lilly here, it is
not reasonable to shift to the opposing party the costs of first class air travel, luxury
cars, or even unreasonably high charges for less luxurious models." Id. at 762. The
government makes no similar complaints about the quality of claimants' attorneys' travel
arrangements.
17

to work in airports and airplanes that it can safely say that claimants' position on this
point is reasonable and that the government's argument does not provide a basis for
reduction of the fee request. There is also no authority requiring attorneys to use the
most up-to-date and most compact technology in order to be compensated for their time
under a fee-shifting statute. Claimants also make an even more compelling argument—
that planning to perform this work while in transit would have been far too risky given
the vagaries of air travel. Finally, the implication of the government's argument is that
work claimants' attorneys performed in preparing for hearings in this case should have
been done the day before or the day of the hearings in question. In practice, this would
impose a disadvantage on out-of-town counsel, and it would also impose a kind of
subject-matter test on the work an attorney does while in transit. The government offers
no authority to support for this argument, and it is without merit.
In general, claimants' counsel's travel time appears reasonable, and the Court
determines that their requested hours for travel time are appropriately included in their
fee award.
D.

Clerical work
The government contends that claimants have requested compensation for their

paralegals' clerical work, which they argue is not "sufficiently complex" enough to justify
paralegal fees. Gov't Resp. at 24 (quoting Spegon v. Catholic Bishop of Chi., 175 F.3d
544, 553 (7th Cir. 1999)). The government provides a chart of time entries by
paralegals that it contends were clerical in nature. In response, claimants concede that
they cannot recover paralegal fees for clerical work, and they have withdrawn such
requests. Claimants also have submitted their own chart of withdrawn fee requests,

18

which includes all but two of the paralegal entries the government argues are clerical in
nature. These omissions total 1.5 hours of time, for $188. Claimants provide no
explanation for why these entries are not clerical in nature; likewise, the government
does not say why they are clerical, other than including them on a chart with other
clerical expenses. The entries are "Email from J. Tarman re: local rule regarding
courtesy copy; call to court" and "Draft Notice of Motions; prepare for courier." Gov't
Resp. at 25–26 (entries for 10/13/2011 and 1/12/2012). Both of these entries, like
others on the list, arguably appear to involve clerical matters. Without argument from
claimants to the contrary, the Court concludes these entries are not appropriately
compensable.4
E.

Other attorney tasks
The government next contends that several individual entries within claimants'

fee request do not merit compensation. The government first argues it was excessive
for attorney Richard Bennett to spend 35.4 hours reviewing the parties' initial pleadings
before "conducting research and drafting one section of the claimants' response" to the
government's motion to dismiss. Gov't Resp. at 29. The government also contends
that attorneys Abby Sher and Sean Carter should not be compensated for work on
drafting Rule 26(a)(1)(A) initial disclosures even though forfeiture actions are specifically
exempted from this requirement, which claimants concede. The government further
argues that it is unreasonable to compensate claimants for attorney Kevin Caraher's

4

The government also argues that if the Court finds any of these clerical expenses
reasonable, the Court should at least reduce the hourly rate charged for them. Because
claimants voluntarily removed most of these entries from their fee request, and because
the Court disallows the two entries claimants did not remove, the Court does not need
to consider this rate reduction argument.
19

0.6-hour review of one of claimants' memos considering the fact that he produced no
other time entries in the litigation. The government also points to three further paralegal
entries that are unreasonable, all of which claimants have conceded should not be
compensable.
Claimants' explanation for Caraher's work in this case is reasonable. They say
Caraher needed the 0.6 hours he used to review court filings before signing them and
that he was acting as counsel in Cozen O'Connor's Chicago office. Thirty-six minutes
for this task is reasonable. As for the work of attorney Bennett, claimants contend that
his review of the pleadings also included review of "relevant legal authority," not just the
filings in the case. Cls.' Repl. at 13. They argue that Bennett "ultimately contributed to
Claimants' ability to formulate and develop legal strategy and take positions with regard
to the pleading referenced in the time entry, as well as subsequent time entries." Id.
The government offers no basis to contradict this contention. Thirty-five hours of time to
read court filings and cases does not seem unreasonable, considering claimants'
statements about Bennett's value to the case. The Court determines that claimants'
requests for Caraher's and Bennett's work in this regard are appropriately compensable.
F.

Hourly rate
In the final paragraph of its brief, the government contends that claimants' hourly

rates are "unreasonably generous," "well in excess of those normally charged in
forfeiture actions," and should be reduced by twenty percent. Gov't Resp. at 30. It
argues that the requested fees are higher than those from other cases that claimants
cite, and it question claimants' attorneys' experience in forfeiture matters. Further, the
government says, claimants' attorneys demonstrated their lack of experience in

20

forfeiture actions by spending three hours of attorney time on drafting unnecessary Rule
26 disclosures. (As noted above, claimants have withdrawn their fee request for this
entry.)
In order to determine a reasonable fee award, district courts use the so-called
lodestar method, which means "the number of hours reasonably expended on the
litigation multiplied by a reasonable hourly rate." Hensley, 461 U.S. at 433. Such a
reasonable rate "is derived from the market rate for the services rendered." Pickett v.
Sheridan Health Care Ctr., 664 F.3d 632, 640 (7th Cir. 2011) (internal quotation marks
omitted). The burden to establish such a market rate falls on a fee applicant, and "[t]he
best evidence of an attorney's market rate is his or her actual billing rate for similar
work." Johnson v. GDF, Inc., 668 F.3d 927, 933 (7th Cir. 2012). This rate is
"presumptively appropriate to use as the market rate." People Who Care v. Rockford
Bd. of Educ., Sch. Dist. No. 205, 90 F.3d 1307, 1310 (7th Cir. 1996) (internal quotation
marks omitted). "Only if the court is unable to determine the attorney's true billing rate
(because he maintains a contingent fee or public interest practice, for example) should
the court look to the next best evidence—the rate charged by lawyers in the community
of reasonably comparable skill, experience, and reputation." Muzikowski v. Paramount
Pictures Corp., 477 F.3d 899, 909–10 (7th Cir. 2007) (internal alterations and quotation
marks omitted). Once the fee applicant satisfies her burden of showing that her
requested rate is reasonable, "the burden shifts to the other party to offer evidence that
sets forth a good reason why a lower rate is essential." Pickett, 664 F.3d at 640
(internal quotation marks omitted).
Several attorneys from claimants' counsel's firm worked on this case. Claimants

21

request $650 per hour for shareholders from the firm, $375 for firm "members," $300 for
associates, $125 for staff attorneys, and $125 for paralegals. In support of these rates,
claimants offer the following evidence: an affidavit from Stephen A. Cozen, chairman of
claimants' counsel's firm, discussing the biographies as well as the standard billing rates
of those of the firm's attorneys on this matter who charge by the hour rather than on a
contingent-fee basis; another from Elaine M. Rinaldi, the firm's chair of strategic
planning and growth, who affirms that the requested rates are in line with attorneys of
comparable experience in this area; a copy of the Laffey matrix, a chart of hourly rates
for attorneys and paralegals in the Washington, D.C. area; and citations to several
cases involving fee awards for forfeiture cases, along with one from this district on a
42 U.S.C. § 1983 case.
The government does not question all of this evidence. It focuses only on the
cases claimants cite, contending that "[n]one of the fees referenced . . . are as high as
those sought by the claimants here," and questions the expertise of claimants' counsel
in September 11-related litigation and forfeiture law, "for which claimants' counsel do
not allege any such expertise." Gov't Resp. at 30–31. However, the government does
not respond to Cozen's affidavit attesting to the hourly rates certain of their attorneys
actually charge. See Declaration of Stephen A. Cozen at 2 [docket no. 169-1] (stating
"standard billing rate" of firm shareholder Stephen A. Miller as $650); id. at 5 (stating
"standard billing rate" of firm member Richard C. Bennett as $375); id. at 6 (stating
"standard billing rate" of firm member Daniel R. Johnson as $375); id. at 7 (stating
"standard billing rate" of firm associate Abby J. Sher as $300); id. (stating "standard
billing rate" of firm associate Jordan S. Fox as $300); id. at 8 ("The hourly rates for the

22

attorneys identified above are consistent with the standard billing rates that these
attorneys charge for their services in other complex litigation matters involving hourly
paying clients, adjusted annually for inflation.").
As the Court has noted, the rates that these attorneys actually charge are
"presumptively appropriate" as the market rate for these attorneys' services. People
Who Care, 90 F.3d at 1310. This rule is "well established." Muzikowski, 477 F.3d at
909. Although the government attacks the experience of claimants' counsel in forfeiture
matters, it provides no evidence to rebut the reasonableness of the actual charged rates
described above. Furthermore, as both parties are well aware, forfeiture actions such
as this one are relatively rare; claimants' counsel's alleged lack of experience in such
matters thus cannot be determinative of their hourly rates. More broadly, the litigation of
this case was roughly comparable to an appeal; it consisted almost entirely of briefing,
research, and argument, with little or no discovery. This provides a reasonable
benchmark for assessing the reasonableness and comparability of the requested hourly
rates. Claimants' attorney Stephen Miller, a shareholder in the firm who normally
charges on an hourly basis, focuses his practice on appellate work and bills at the $650
rate that claimants request for him and other shareholders at the law firm. That rate,
which Miller actually charges to paying clients, is presumptively appropriate both for
Miller and the other shareholders who worked on the case, and the government has
provided no contrary evidence. In addition, claimants have established that other
attorneys for whom they seek to recover fees actually bill at the hourly rates they are
asking for here, and the government offers no support for its argument that the Court
should diverge from those rates. These rates likewise provide reasonable benchmarks

23

that establish the reasonableness of not only those attorneys' rates but those of others
with a comparable level of experience.
In addition, the government has not responded to claimants' reference to the
Laffey Matrix, which lists rates generally in line with those claimants request here.
Although the Seventh Circuit has noted mixed opinion in the legal community on the
applicability of the Laffey Matrix to any given case, see Pickett, 664 F.3d at 649–51, as
has this Court, see Wells, 925 F. Supp. 2d at 1040; Jimenez v. City of Chicago, No. 09
C 8081, 2012 WL 5512266, at *5–6 (N.D. Ill. Nov. 14, 2012), the government has not
contested its inclusion as evidence here. In short, this is not a case where the attorneys
for whom compensation is requested have no regular hourly rates and support their
proposed rates only with a self-serving statement of reasonableness. Rather, they are
proposing rates that are supported by their actual hourly work for paying clients.
For these reasons, the Court concludes that claimants have met their initial
burden to establish the market rates for their attorneys, and the government has not
sustained its burden to show otherwise. The Court therefore declines the government's
invitation to reduce claimants' requested hourly rates by twenty percent.
Conclusion
For the foregoing reasons, the Court grants in part claimants' motion for
attorney's fees and costs [docket no. 168]. Claimants' modified requested fee and cost
award request of $341,535.62 should be reduced. The reductions include:


$5414.17 for various unexplained entries detailed in Section B above



$3312.50 for tasks related to In re Terrorist Attacks and the enforcement action



$394.57 for attorney Carter's unexplained travel expense

24



$188 for unnecessary clerical work
Counsel are directed to confer promptly to quantify the reductions ordered by the

Court and are to make a supplemental joint submission in that regard by no later than
May 21, 2014. The attorney time for plaintiffs' counsel associated with this additional
work will not be compensable, unless the government or its counsel act unreasonably or
in a dilatory fashion in connection with the additional work required.

________________________________
MATTHEW F. KENNELLY
United States District Judge
Date: May 9, 2014

25