Luv N Care Ltd v. Groupo Rimar
Filing
160
RULING re 131 MOTION for Attorney Fees and Costs and Expenses filed by Groupo Rimar, aka Suavinex. Signed by Judge Robert G James on 12/28/15. (crt,DickersonSld, D)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
MONROE DIVISION
LUV N’ CARE, LTD
CIVIL ACTION NO. 14-2491
VERSUS
JUDGE ROBERT G. JAMES
GROUPO RIMAR, AKA SUAVINEX
MAG. JUDGE KAREN L. HAYES
RULING
This Ruling addresses two issues: (1) whether Groupo Rimar, aka Suavinex (“Suavinex”) may
recover the attorneys’ fees it expended as a result of Luv N’Care, LLC’s (“LNC”) breach of the forum
selection clause of the 2012 Termination Agreement and Mutual Release (“2012 Termination
Agreement”) [Doc. No. 132]; and (2) whether Suavinex can recover attorneys’ fees and costs of this
action as set forth in its “Motion and Supporting Memorandum for Attorneys’ Fees and Costs and
Expenses” (“Motion for Attorneys’ Fees and Costs”) [Doc. No. 131].
For the following reasons, Suavinex is precluded from recovery of any attorneys’ fees expended
to defend the improperly-filed state court action. However, the Court will award nominal damages for
Suavinex’s lost time as a result of LNC’s breach. Further, Suavinex’s Motion for Attorneys’ Fees and
Costs is GRANTED IN PART and DENIED IN PART.
I.
FACTS AND PROCEDURAL HISTORY
This Court has previously recounted the facts of this case in its September 30, 2015 Ruling
[Doc. No. 127] and hereby incorporates that recitation of facts by reference.
In its September 30, 2015 Ruling this Court granted Suavinex’s Motion for Partial Summary
Judgment. [Doc. No. 127, 128]. The Court found that Suavinex did not breach the 2012 Termination
Agreement between the parties, but that LNC did breach the 2012 Termination Agreement by filing suit
in the Fourth Judicial District Court in violation of the forum selection clause.
However, the Court did not award damages, finding Suavinex’s proof on that matter to be
deficient. Suavinex asked for “at least the amount of the Banner & Witcoff invoices paid for services
defending against the improper state court action through the dismissal of the state court action on
September 3, 2014.” [Doc. No. 82, p. 3]. The Court found Suavinex’s proof to be too cursory and asked
the parties for supplemental briefing on an appropriate damages award.
On October 14, 2015, Suavinex filed a supplemental memorandum in support of its damages
claim, claiming $99,066 in attorneys’ fees as actual damages for LNC’s breach of the 2012 Agreement’s
forum selection clause. [Doc. No. 132]. LNC filed a supplemental memorandum in opposition. [Doc.
No. 140]. Suavinex filed a Reply, and LNC filed a Sur-Reply. [Doc. Nos. 145, 150].
On October 14, 2015, Suavinex also filed a motion for costs pursuant to Rule 54(d) and
attorneys’ fees pursuant to Paragraph 5.9 of the 2012 Termination Agreement. [Doc. No. 131].1 LNC
filed a memorandum in opposition to this motion. [Doc. No. 148]. Suavinex filed a Reply; LNC filed
a Sur-Reply. [Doc. Nos. 153, 156].
II.
LAW AND ANALYSIS
A.
Attorneys’ Fees as Actual Damages for LNC’s Breach of the Forum Selection
Clause
Although this Court held that LNC breached the 2012 Termination Agreement’s forum selection
1
The Court notes that the attorneys’ fees sought in this motion are not those Suavinex
claims it incurred as a result of the short-lived state court litigation; rather, these attorneys’ fees
are only those Suavinex incurred while litigating in this Court.
2
clause, the Court was unable to assess Suavinex’s resultant damages and ordered supplemental briefing
on the issue. In compliance with the Court’s request, Suavinex submitted detailed evidence of the
attorneys’ fees it incurred while defending against the improperly-filed suit.
1.
The American Rule and Attorneys’ Fees for Breach of the Forum Selection
Clause
Louisiana law governs this dispute in accordance with the 2012 Termination Agreement’s plain
language. In its memorandum in opposition, LNC argues for the first time that Louisiana follows the
American Rule which precludes an award of attorneys’ fees as damages for breach of the forum
selection clause. The American Rule directs a court to refrain from awarding attorneys’ fees absent
express contractual or statutory authorization. According to LNC, the Louisiana legislature has not
enacted a statute allowing for attorneys’ fees in this case, nor does the 2012 Termination Agreement
allow them as a matter of contract. Suavinex counters that it seeks attorneys’ fees, not as a penalty, but
as actual damages resulting from LNC’s breach of the 2012 Termination Agreement’s forum selection
clause. The Court did not address this issue in its September 30, 2015 Ruling, as neither party briefed
it.
Courts from other jurisdictions, applying contract law identical to that of Louisiana, have held
that attorneys’ fees are not an appropriate form of actual damages for breach of a forum selection
clause–at least when the state follows the American Rule. See, e.g., Brown Rudnick, LLP v. Surgical
Orthomedics, Inc., 13-4348, 2014 WL 3439620 at *14 (S.D.N.Y. July 15, 2014); Versatile Housewares
& Gardening Sys., Inc. v. Thrill Logistics, Inc., 819 F.Supp.2d 230, 246 (S.D.N.Y 2013); Tri-County
Towing & Recovery v. BellSouth Advertising & Publishing Corp., 10-517, 2011 WL 1497384 at *5
(N.D. Ga. Apr. 19, 2011); Fednav Intern. Ltd. v. Continental Ins. Co., 624 F.3d 834, 840 (7th Cir.
3
2010).
However, other courts have held that attorneys’ fees are available as actual damages for breach
of a forum selection clause. See Molnar v. 1-800-Flowers.com, Inc., 08-0542, 2008 WL 4772125 at *5
(C.D. Cal. Sept. 29, 2008). For example, federal courts applying New York law have reached different
conclusions on the issue, as have courts applying Illinois law. (Compare Versatile Housewares, 819
F.Supp.2d at 246 with Allendale Mut. Ins. Co. v. Excess Ins. Co. Ltd., 992 F.Supp. 278, 281 (S.D.N.Y.
1998) and Fednav, 624 F.3d at 834 with Lab. Corp. of America v. Upstate Testing Lab., Ltd., 967
F.Supp.2d 295, 299 (N.D. Il. 1997). A number of state courts have also held that attorneys’ fees are
available as actual damages for the breach of a forum selection clause. See Masiongale Elec.-Mech.
Inc. v. Constr. One, Inc., 102 Ohio St.3d 1, 2002-Ohio-1861, 806 N.E.2d 148, 150; El Paso Natural
Gas v. Transamerican Natural Gas Corp., 669 A.2d 36, 40 (Del. 1995).
Having reviewed and compared the cases, the Court finds that a Louisiana court would follow
LNC’s cited cases. First, they are more recent: Suavinex cites only one case decided in the past fifteen
years. Second, LNC’s cases examine the issue in greater depth. Many of the cases Suavinex cites simply
assume that attorneys’ fees are available as actual damages when a party breaches a forum selection
clause. See Versatile Housewares, 819 F.Supp.2d at 243 (noting the scant discussion in many older
cases awarding attorneys’ fees as actual damages for breach of a forum selection clause). Finally,
Louisiana has expressed a strong intent to limit the award of attorneys’ fees to those provided by statute
or contract. Consequently, unless a contractual provision or statute says otherwise, the American Rule
bars Suavinex from recovering attorneys’ fees resulting from LNC’s breach of the forum selection
clause.
There is no statute or contractual provision that would allow Suavinex to recover attorneys’ fees
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for LNC’s breach of the forum selection clause in this case. The 2012 Termination Agreement allows
a court to award attorneys’ fees when a court of competent jurisdiction “has reached a decision which
is substantially closer to one Party’s original claims or defenses, taken as a whole, than the opposing
Party’s.” [Doc. No. 64-8, p. 6]. The Fourth Judicial District Court is not “a court of competent
jurisdiction.” Moreover, the Fourth Judicial District Court did not render a decision on either party’s
claims or defenses.
Finally, neither party points to a Louisiana statute allowing attorneys’ fees for the breach of a
forum selection clause. Accordingly, Suavinex is precluded from obtaining attorneys’ fees resulting
from LNC’s breach of the 2012 Agreement’s forum selection clause.
2.
Nominal Damages
However, the American Rule does not prevent Suavinex from recovering damages other than
attorneys’ fees. Suavinex also claims that it lost time and effort by having to deal with the improperlyfiled suit. Louisiana courts allow for nominal damages in situations where some damage has been
incurred, but there is no proof of the actual amount of damages. See Standard Plumbing Supply Co. v.
U.S. Steel Corp., 530 703 F.2d 802, 804 (5th Cir. 1983); see also Fidelity Bank and Trust Co. v.
Hammons, 87-1832 (La. App. 1 Cir. 2/28/1989); 540 So.2d 461, 463 (“[I]n the absence of proof of
actual damages, the court may make an award of nominal damages”). Therefore, the Court will award
nominal damages for LNC’s breach of the forum selection clause.
Nominal damages are usually minuscule in value, but Louisiana does not limit them to a specific
or fixed amount. Caselaw gives further guidance on the issue. In Standard Plumbing, for example, the
Fifth Circuit reversed a district court’s award of $50,000 “actual” but unproven damages for breach of
contract and remanded for an award of nominal damages not to exceed $1,000. 703 F.2d at 805. In
5
Fiesta Foods, Inc. v. Ogden, 159 So.2d 577, 555 (La. App. 1 Cir. 1963), a Louisiana court considered
$500 to be an appropriate award of nominal damages in a breach of contract action. In Tacquino v.
Teledyne Monarch Rubber, 893 F.2d 1488, 1491 (5th Cir. 1990), the Fifth Circuit found a district court
exceeded the bounds of discretion when it awarded $10,000 in nominal damages and lowered the
amount to $2,000.
Based on this precedent, the Court will award Suavinex $500 as nominal damages for LNC’s
breach of the forum selection clause.
B.
Costs Under Federal Rule of Civil Procedure 54(d)
Suavinex also moves for an award of costs pursuant to Federal Rule of Civil Procedure 54(d),
which allows a prevailing party to recover certain costs resulting from federal court litigation:
Unless a federal statute, these rules, or a court order provides otherwise, costs–other
than attorney’s fees–should be allowed to the prevailing party. But costs against the
United States, its officers, and its agencies may be imposed only to the extent allowed
by law. The clerk may tax costs on 14 days notice. On motion served within the next 7
days, the court may review the clerk’s action.
Section 1920, Title 28, United States Code defines the term “costs” as used in Rule 54(d) and
enumerates taxable expenses. Gaddis v. United States, 381 F.3d 444, 450 (5th Cir. 2004). Section 1920
provides:
A judge or clerk of any court in the United States may tax as costs the following:
(1)
Fees of the clerk and marshal;
(2)
Fees for printed or electronically recorded transcripts necessarily obtained for use in the
case;
(3)
Fees and disbursements for printing and witnesses;
(4)
Fees for exemplification and the costs of making copies of any materials where the
copies are necessarily obtained for use in the case;
6
(5)
Docket fees under section 1923 of this title;
(6)
Compensation of court appointed experts, compensation of interpreters, and salaries,
fees, expenses, and costs of special interpretation services under section 1923 of this
title....
“Rule 54(d)(1) contains a strong presumption that the prevailing party will be awarded costs.”
Pacheco v. Mineta, 448 F.3d 783, 793 (5th Cir. 2006). Usually, a successful litigant is also the
prevailing party for purposes of Rule 54(d). See Schwarz v. Folloder, 767 F.2d 125, 130 (5th Cir.
1985). Although broad, a district court’s ability to award costs pursuant to Rule 54(d) is not unfettered.
The costs must be allowable under § 1920; the costs must be supported by proper documentation; and
the costs must be reasonable.
Suavinex is the prevailing party in this lawsuit for purposes of Rule 54(d). First, Suavinex
prevailed on LNC’s claim against it. Second, Fifth Circuit precedent holds a party that receives even
nominal damages from a breach of contract claim is a prevailing party under Rule 54(d). Three-Seventy
Leasing Corp. v. Ampex Corp., 528 F.2d 993, 998 (5th Cir. 1976) (“In our view, the award of nominal
damages marks the plaintiff, 370, as the prevailing party within the meaning of Rule 54(d)...”).
Accordingly, Suavinex may recover appropriate costs pursuant to Rule 54(d).
1.
Stamping Trial Exhibit Numbers
Suavinex seeks $370.13 for the cost of stamping numbers on its trial exhibits. Under § 1920,
a prevailing party may recover as costs “[f]ees for exemplification and costs of making copies of any
materials necessarily obtained for use in the case.”
Suavinex’s pretrial exhibit list reveals 178 exhibits. With this large a list, numbering the exhibits
was necessary to ensure orderly presentation during trial. Further, this Court’s rules require exhibits to
be numbered. Thus, to the extent Suavinex seeks recovery of the $370.13 it expended to stamp trial
7
exhibits, its motion is GRANTED.
2.
Blowback Printing and Related Charges
Suavinex originally sought $955.07 for “Blowback Printing–color (8.5x11)” printing costs for
899 pages printed in color. However, in response to LNC’s opposition, Suavinex agreed that printing
costs should be reduced to $0.25 per page–a reduction of $449.50.
Again, § 1920 allows a prevailing party to recover “[f]ees for exemplification and the costs of
making copies of any material where the copies are necessarily obtained for use in the case.” The Fifth
Circuit also looks to whether the prevailing party includes an itemized breakdown of the copying costs
in the documentation supporting the request for costs. Fogleman v. ARAMCO, 920 F.2d 278, 286 (5th
Cir. 1991).
In the instant case, Suavinex has failed to include an itemized breakdown of its purported
copying costs. Suavinex merely offers its counsels’ declaration “that the foregoing costs are correct and
were necessarily incurred in this action and that the services for which fees have been charged were
actually and necessarily performed.” [Doc. No. 131-1, Bill of Costs]. This assurance does not amount
to the kind of itemized breakdown the Fifth Circuit requires before awarding printing costs. Therefore,
to the extent Suavinex seeks recovery of “Blowback Printing” and related charges, its motion is
DENIED.
3.
Translations of Trial Exhibits and Depositions
Suavinex seeks $4,145.12 for (1) translating trial exhibits from Spanish to English, and (2)
translating oral Spanish deposition testimony into written English.
Section 1920 allows a prevailing party to tax the “compensation of interpreters.” However, as
LNC argues and the United States Supreme Court has squarely held, “compensation of interpreters”
8
does not encompass document translation. Taniguchi v. Kan Pacific Saipan, Ltd., 132 S. Ct. 1997, 2003
(2012).
However, Suavinex argues that it should still recover the exhibit translation as a kind of
exemplification under § 1920(4). Suavinex cites no case in support of this argument. Moreover, in the
Bill of Costs it filed with the Court, Suavinex listed this amount under “compensation of interpreters,”
not exemplification. Therefore, to the extent that Suavinex seeks recovery of the $2,648.87 it expended
to translate exhibits from Spanish to English, the motion is DENIED.
Suavinex also argues that Taniguchi does not bar its claim for the costs of translating oral
deposition testimony into its written English counterpart. According to Suavinex, Taniguchi only
prohibits costs associated with translating written documents and does not bar costs associated with
converting spoken Spanish into written English.
That argument must fail. Taniguchi held that the “compensation of interpreters” is limited to
those translating “orally from one language to another.” Taniguchi, 132 S.Ct at 2007. Suavinex’s
translation cannot be described as an oral-to-oral translation. It was an oral-to-written translation, and,
therefore, beyond the reach of Rule 54(d). Moreover, because “taxable costs are limited by statute and
are modest in scope,” the Court resists an expansive interpretation of the word “interpreters” and,
instead, gives a conservative interpretation. Id. at 2006. Thus, to the extent Suavinex seeks recovery
of $1,496.25 it expended to translate Spanish deposition testimony into English, the motion is DENIED.
4.
Costs of Deposition Transcripts, Video Recordings of Depositions, and
Deposition Exhibits
Suavinex seeks $13,764.77 in costs for deposition transcripts and video recordings of
depositions. LNC argues that the deposition transcripts and video recordings of the depositions were
9
not necessarily obtained for use in the case.
Section 1920 allows a prevailing party to recover “fees for printed or electronically recorded
transcripts necessarily obtained for use in the case.” “[P]revailing parties are entitled to recover the
costs of original depositions and copies” under § 1920 “provided they were ‘necessarily obtained for
use in the case.’” Fogleman, 920 F.2d at 285.
LNC argues that Suavinex has failed to produce evidence that it obtained the deposition
transcripts and video recordings out of necessity. In opposition, Suavinex notes that it needed the
deposition transcripts to prepare for trial as well as to prepare motions.
To the extent Suavinex seeks to recover the costs of the deposition transcripts, its motion is
GRANTED. Suavinex relied on the deposition transcripts in drafting its Motion for Partial Summary
Judgment which this Court granted. However, to the extent Suavinex seeks video recording costs, its
motion is DENIED. Other courts within this Circuit have refused to award costs for both deposition
transcripts and video recordings when the video recordings were not actually used at trial. See Stoffels
v. SBC Communications, Inc., 05-0233, 2012 WL 2122191 at *2 (W.D. Tex. June 11, 2012) (“The
Court notes that SBC Communications seeks recovery for the costs of the transcripts as well as the
video recordings of these depositions. The Court does not generally award costs for both.”). Suavinex
has failed to separate its deposition costs from its video recording costs. Therefore, Suavinex will be
required to supplement its motion with evidence showing the exact costs of the deposition transcripts.
Suavinex also seeks $681.50 for deposition exhibit costs. LNC argues that these costs were not
necessary to the litigation, and, therefore, are unrecoverable. In support of that contention, LNC cites
Ashkenazi v. South Broward Hosp. Dist., 11-61403, 2014 WL 3673308 at *2 (S.D. Fla. July 23, 2014).
In that case, a federal district court in Florida held that, unless proven to be borne of necessity rather
10
than counsels’ convenience, deposition exhibit costs are not recoverable. In response, Suavinex
contends that the exhibits were necessary because both parties listed the deposition exhibits as trial
exhibits.
The Court agrees with Suavinex and finds that the deposition exhibits were necessary. These
exhibits were from the depositions of Suavinex’s design expert Mr. Visser, LNC’s design expert
witness Mr. Manzo, and Suavinex’s damages expert Mr. Troxel. Had this case made it past the
summary judgment stage, expert testimony on product design might well have been crucial to determine
whether Suavinex breached the 2012 Termination Agreement. What is more, each party included these
deposition exhibits on its trial exhibit list, bolstering a finding that the exhibits were necessarily
obtained for use in this case. To the extent Suavinex seeks to recover deposition exhibit costs, its
motion is GRANTED.
In sum, to the extent Suavinex seeks to recover costs for stamping trial exhibits, deposition
transcripts, and deposition exhibits, its motion is GRANTED; the motion is otherwise DENIED.
Further, Suavinex must supplement its request with evidence showing the exact cost of the deposition
transcripts.
C.
Reasonable Attorneys’ Fees under the 2012 Agreements’ Express Terms
Suavinex also seeks reasonable attorneys’ fees in the amount of $825,884.50 as the “prevailing
party” under the 2012 Termination Agreement. The 2012 Termination Agreement provides:
The prevailing party in a claim in a court of competent jurisdiction arising under this
agreement against another Party shall be entitled to collect reasonable attorney’s fees
incurred in connection with the claim or suit in the underlying matter. For purposes of
this Section, a Party shall be considered the prevailing party if the court of competent
jurisdiction has reached a decision which is substantially closer to one Party’s original
claims or defenses, taken as a whole, than the opposing Party; provided that if the
decision is not clearly substantially closer to one party’s original claims or defenses,
11
taken as a whole, than the opposing Party, none of the Parties shall be entitled to collect
attorney’s fees.
[Doc. No. 64-8, p. 6].
The Court concludes that Suavinex is the prevailing party because the Court’s decision in the
underlying matter is substantially closer to Suavinex’s claims and defenses. The Court granted
Suavinex’s Motion for Partial Summary Judgment to the extent that Suavinex asked the Court to find
that it did not breach the 2012 Termination Agreement. Further, the Court found that LNC had breached
the 2012 Termination Agreement’s forum selection clause by filing a state court action.
Next, the Court considers and rejects LNC’s contention that the 2012 Termination Agreement’s
reasonable attorneys’ fees provision is inapplicable here because Suavinex’s claims and defenses did
not arise under the 2012 Termination Agreement, but under the 2009 agreement which did not contain
an attorneys’ fees provision. According to LNC, “[i]t is beyond dispute that LNC’s claim against
Suavinex asserted breach of obligations that were created by the 2009 Agreement.” [Doc. No. 148].
This argument contorts the 2012 Termination Agreement’s express language. The 2012
Termination Agreement awards attorneys’ fees to a prevailing party whose claims or defenses–not the
obligations underlying those claims or defenses– arise under the agreement. The 2009 Agreement may
have originally created the obligations that Suavinex allegedly violated, but LNC’s breach of contract
claim did not arise under the 2009 agreement. The 2012 Termination Agreement created LNC’s cause
of action in this case, logically, because the 2009 Agreement no longer existed at the time it filed suit.
In short, LNC’s claims arose under the 2012 Termination Agreement.
The Court now turns to Suavinex’s request for reasonable attorneys’ fees under the 2012
Termination Agreement. The 2012 Termination Agreement’s express language dictates that Louisiana
12
law governs the Court’s award of attorneys’ fees in this case.
Under Louisiana law, a “reasonable attorney’s fee is determined by the facts of an individual
case. In making awards for attorney’s fees, the trial court is vested with great discretion...” Richardson
v. Parish of Jefferson, 98-625 (La. App. 5 Cir. 1999); 727 So.2d 705, 707 (citations omitted). “The
fundamental measure of attorney’s fees is reasonableness, considering the factors set forth by Rules of
Professional Conduct R. 1.5 [now Rule 1.5(a)].” Mayeur v. Campbell, 94-2263 (La. App. 1 Cir. 1995);
666 So.2d 366, 370.
Louisiana courts take the following factors into consideration when examining the
reasonableness of attorneys’ fees: (1) the ultimate result obtained; (2) the responsibility incurred; (3)
the importance of the litigation; (4) the amount of money involved; (5) the extent and character of the
work performed; (6) the legal knowledge, attainment, and skill of the attorneys; (7) the number of
appearances involved; (8) the intricacies of the facts involved; (9) the diligence and skill of counsel;
and (10) the court’s own knowledge. Silver Dream, LLC v. 3MC, Inc., 10-3658, 2011 WL 5878142,
at *2 (E.D. La. Sept. 8, 2011).
These factors are essentially the same as those the Fifth Circuit articulated in Johnson v.
Georgia Hwy. Express, Inc., 488 F.2d 714 (5th Cir. 1974), to help courts analyze whether a fee award
is reasonable. “Because the fundamental requirement of reasonableness and the factors used under
Louisiana law are substantially similar to the federal lodestar method,” the Court uses the federal
lodestar analysis to determine the reasonable amount of attorney’s fees. See Silver Dream, LLC, 103658, 2011 WL 5878142 at *3 (utilizing federal lodestar method to determine reasonable fee award
under Louisiana law).
Under the federal approach, there are two steps to arriving at a reasonable attorney’s fee. First,
13
the Court determines the lodestar amount by multiplying the number of hours reasonably expended by
an appropriate rate in the community for such work. Shipes v. Trinity Indus., 987 F.2d 311, 319-20 (5th
Cir. 1993). Next, the court considers whether to raise or lower the lodestar. This undertaking requires
the court to consider the Johnson factors to assure the fee’s reasonableness. The Johnson factors are:
(1) the time and labor required; (2) the novelty and difficulty of the issues; (3) the skill
required to perform the legal services properly; (4) the preclusion of other employment
by the attorney; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) the
time limitations imposed by the client or circumstances; (8) the amount involved and
the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the
undesirability of the case; (11) the nature and length of the professional relationship
with the client; and (12) the award in similar cases.
488 F.2d at 718.
1.
Calculating a Reasonable Hourly Rate
Attorneys’ fees must be calculated at the prevailing market rates in the relevant community for
similar services by attorneys of reasonably comparable skills, experience, and reputation. Johnson v.
City of Monroe, 06-0635, 2007 WL 4680476 at *2 (W.D. La. Nov. 27, 2007). The relevant legal market
is the community where the district court sits. Tollett v. City of Kemah, 285 F.3d 357, 368 (5th Cir.
2002). The party seeking attorneys’ fees bears the burden of producing satisfactory evidence that the
requested rate is aligned with prevailing market rates. Wells v. Regency Hosp. Co., 07-3775, 2008 WL
5273712 at *2 (E.D. La. Dec. 15, 2008) “A district court may not simply rely on its own experience
in the relevant legal market to set a reasonable hourly billing rate.” Worldcom, Inc. v. Automated
Communications, Inc., 75 F.Supp.2d 526, 531 (S.D. Miss. 1999). A United States District Court for
the Middle District of Louisiana recently described the proof necessary to establish the prevailing
market rate:
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“[A] mere conclusory statement that [a] fee [is] reasonable” is insufficient for
calculating the lodestar fee. Rather, [t]o inform and assist the court in [determining the
reasonable rate]” the fee applicant should produce an affidavit of the attorney
performing the work, information of rates actually billed and paid in similar lawsuits,
as well as “affidavits of other attorneys practicing [in the community in question] (the
party seeking fees submitted “affidavits from other attorneys in the community showing
the prevailing market rates in the community”).
Heck v. Buhler, 07-00021, 2014 WL 2003270, at *2 (M.D. La. May 15, 2014) (citations omitted).
Here, Suavinex seeks attorneys’ fees for seven attorneys and one paralegal from two different
law firms. Four attorneys and one paralegal are from Banner & Witcoff (“Washington counsel”), a
Washington D.C. law firm specializing in intellectual property disputes:
1.
Mr. Altherr (“Altherr”) who charged $615 per hour;
2.
Mr. Roth (“Roth”) who charged $405 and $415 per hour;
3.
Mr. College (“College”)who charged $245 per hour;
4.
Ms. Sauer (“Sauer”) who charged $240 and $245 per hour; and
5.
Mr. Goldie (“Goldie”) (a paralegal) who charged $130 per hour.
Three attorneys are from Hudson, Potts & Bernstein (“Monroe counsel”), a Monroe law firm:
1.
Mr. Baldwin (“Baldwin”) who charged $250 per hour;
2.
Mr. Huckabay (“Huckabay”) who charged $250 per hour; and
3.
Mr. Cossey (“Cossey”) who charged $200 per hour.
LNC first argues that these hourly rates lack evidentiary support and exceed those commanded
in Monroe, Louisiana. In support of the reasonableness of the rates, Suavinex relies on Altherr’s
testimony that “[t]he billing rates provided for counsel from Banner & Witcoff, Ltd. are within the
reasonable rates for Intellectual Property attorneys with comparable experience located in the
Washington D.C. area.” [Doc. No. 131, pg. 8]. Suavinex also cites the American Intellectual Property
15
Law Association 2015 Report of the Economic Survey which shows that the average hourly billing rate
of a Washington D.C. partner with intellectual property expertise ranges from $534-$824 per hour.
Finally, Suavinex points the Court to Dugas v. Mercedes-Benz USA, LLC, 12-02885, 2015 WL 1198604
(W.D. La. Mar. 16, 2015), a case that the United States District Court for the Western District of
Louisiana, Lafayette Division, decided just a few months ago, holding that $275 per hour was a
reasonable rate in this district. In order to fully address these arguments, the Court must determine the
relevant “community” for purposes of this suit.
Usually, the relevant community is defined as the district in which the forum court sits. In re
Enron Corp. Securities, Derivative & ERISA Litigation, 586 F.Supp.2d 732, 754 (S.D. Tex. 2008).
However, under certain limited circumstances, out-of-district counsel may be entitled to the rates
charged in their home districts. See McClain v. Lufkin Indus. Inc., 649 F.3d 374 (5th Cir. 2011). In
McClain, the Fifth Circuit held that where “abundant and uncontradicted evidence prove[s] the
necessity of turning to out-of-district counsel, the co-counsel’s ‘home rates’ should be considered as
a starting point for calculating the lodestar amount.” Id. at 382. The court went on to find that out-ofdistrict counsel was necessary where the record was flooded with “affidavits from a variety of expert
employment lawyers who swore that no Texas attorneys were willing and able to assist in such a large
case that might drag on for years without any guarantee of financial remuneration.” Id. at 383.
Suavinex claims it was reasonable to hire out-of-district counsel because this case involved
complex intellectual property issues, and Monroe, Louisiana, is devoid of intellectual property
attorneys. To bolster this assertion, Suavinex notes that there are no attorneys in Monroe, Louisiana,
with eligibility to practice in front of the patent bar.
Assuming arguendo that it was reasonable to hire an intellectual property attorney, Suavinex
16
fails to explain that it was necessary See Davis v. Perry, 991 F.Supp.2d 809, 843 (W.D. Tex. 2014)
(“Although it might have been reasonable for Plaintiffs to hire D.C. counsel, Plaintiffs have failed to
prove that it was necessary, as McClain requires”). Even if it was necessary, Suavinex only shows a
lack of intellectual property attorneys in Monroe, Louisiana, not the entire Western District of Louisiana
as McClain requires. Indeed, the United States Patent and Trademark office website that Suavinex cites
lists a number of eligible attorneys in Shreveport and Lafayette, Louisiana. Finally, the Court notes that
this case was a breach of contract case, not an intellectual property case, further belying Suavinex’s
attempt to use its Washington counsels’ rate as the reasonable rate for the lodestar analysis. Therefore,
all rates in this matter will be judged according to the prevailing market rate in Northern Louisiana. See
Johnson, 06-0635, 2007 WL 4680476 at *2 (holding that the relevant legal community for purposes
of attorneys’ fees computation in case before the United States District Court for the Western District
of Louisiana, Monroe Division, was Northern Louisiana).
However, the Court rejects LNC’s argument that the Court should not award attorneys’ fees as
a matter of law because Suavinex has not produced testimony from disinterested, practicing attorneys
in this community showing the prevailing market rate for attorneys’ fees. While LNC cites to some
cases from this Circuit that disallowed attorneys’ fees under such circumstances, there are also cases
in which the court looked to other evidence to determine a reasonable rate. See e.g. Latioulais v.
Griffith, 09-0018, 2015 WL 4253976, at *4 (W.D. La. July 13, 2015) (finding prevailing party’s failure
to submit competent evidence of prevailing rate in the community did not foreclose award of attorneys’
fees; instead, court looked to other cases to gauge rate’s reasonableness).
In the alternative, LNC argues that the Court should set the rate for Suavinex’s attorneys’ fees
between $150-$200. LNC offers a copious amount of evidence that shows this is the prevailing market
17
rate for attorneys’ fees in the Monroe area.2
The Court will adopt LNC’s proposed rates of $150 an hour for associates and $200 for partners.
These rates are supported with ample evidence and are more reflective of the prevailing rates in
Northern Louisiana than the $275 rate used in the Lafayette case. Finally, the Court likewise reduces
the Banner & Witcoff paralegal’s rate to $65 per hour.
2.
Hours Reasonably Expended
The lodestar formula’s second component is designed to unveil the number of hours the feeseeking party reasonably expended on the litigation. The party seeking attorneys’ fees bears the burden
of establishing the reasonableness of the fees by submitting adequate documentation and time records
of the hours reasonably expended. The fee-seeking party must also show it exercised “billing judgment”
by excluding time that is unproductive, excessive, duplicative, or inadequately documented. Alberti v.
Klevenhagen, 896 F.2d 927, 930 (5th Cir. 1990).
Here, LNC argues that a litany of issues plague Suavinex’s invoices, both from its Washington
D.C. counsel and Monroe counsel. The Court agrees. Suavinex’s invoices suffer from the following
shortcomings:
2
Specifically, LNC submits affidavits from multiple attorneys in the Monroe, Louisiana
area tending to show the prevailing rate in the area: (1) Larry Arbour, an attorney with 39 years
of experience in civil work such as insurance defense, charges $175 an hour [Doc. No. 148, Exh.
A, Affidavit of Larry Arbour]; (2) Michael L. Dubos, a partner in a Monroe law firm, charges
$200 an hour for complex cases [Doc. No. 148, Exh. B, Affidavit of Michael Dubos]; (3) George
Snellings, an attorney with 21 years of experience in a variety of legal work, charges between
$150 to $200 an hour [Doc. No. 148, Exh. C, Affidavit of George Snellings]; (4) Donald
Anzelmo, a litigation attorney with 39 years of experience, charges $150 per hour [Doc. No. 148,
Exh. D, Affidavit of Donald Anzelmo]; and (5) Jon K. Guice, an attorney with 24 years of
experience with a Monroe law firm who states that he has personal knowledge that the hourly
rate for attorneys in non-complex litigation in Monroe averages between $150 to $200 an hour,
and the average for paralegal work ranges from $45 to $75 an hour. [Doc. No. 148, Exh. E,
Affidavit of Jon Guice].
18
a.
Duplicative, Unnecessary, and Excessive Entries
First, LNC argues that many of the invoices contain duplicative and unnecessary entries. LNC
notes that three separate attorneys billed time related to Suavinex’s answer and counterclaim.
Specifically, Altherr billed 17.3 hours, Roth billed 5.9 hours, and Baldwin billed 2.3 hours. LNC also
notes that two separate attorneys worked on Suavinex’s Motion for Partial Summary Judgment. Mr.
Roth billed more than one hundred seventy (170) hours and Mr. Altherr billed in excess of sixty hours.
Although duplication of effort is not per se unreasonable, “[i]f more than one attorney is involved, the
possibility of duplication of effort along with the proper utilization of time should be scrutinized.”
Walker v. United States HUD, 99 F.3d 761, 768 (5th Cir. 1996). To that end, Fifth Circuit courts often
require some evidence that the fee-seeking party employed a division of labor with an eye towards
reducing or eliminating duplicative billing. See Davis, 991 F.Supp.2d at 835.
In this case, three attorneys were not necessary to compose Suavinex’s answer and counterclaim.
Nor were two attorneys needed to construct Suavinex’s Motion for Partial Summary Judgment; indeed,
that motion was substantially similar to the motion Suavinex’s counsel drafted in another state court
suit filed in 2013. It should not take two attorneys more than two hundred hours to essentially copy a
motion for partial summary judgment.
Finally, multiple Suavinex attorneys researched the same issues. For example, both Altherr and
College researched preemption of state contract law by federal patent law. Similarly, both Althrerr and
Sauer researched sufficiency of process on a foreign corporation. It was likely reasonable for more than
one attorney to research the law. What is not reasonable, however, “is each and every attorney charging
for each and every hour that each attorney spent, with no reduction for the duplication of effort at any
turn.” Lalla v. City of New Orleans, 161 F.Supp.2d 686, 706 (E.D. La. 2001). Suavinex’s counsel billed
19
for duplicative entries, and the Court will reduce the total hours claimed.
b.
Clerical and Administrative Tasks
LNC next argues that the Court should not consider hours devoted to clerical or administrative
tasks in the reasonable hours determination. The following is a non-exhaustive list of clerical entries
that LNC disputes: (1) completed deposition notices to LNC; (2) E-filed Case Management Order in
the Western District of Louisiana; (3) add signature lines and serve on plaintiff’s attorney; (4) convert
motion to compel to PDF and email to Huckabay with exhibits. [Doc. No. 148 p. 21-22].
In an attempt to justify these time expenditures, Suavinex argues that they were performed by
a paralegal. But, “paralegal work can only be recovered as attorney’s fees if the work is legal rather than
clerical.” Vela v. City of Houston, 276 F.3d 659, 681 (5th Cir. 2001). “Work that is legal in nature
includes factual investigation, locating and interviewing witnesses, assisting in discovery, compiling
statistical and financial data, checking legal citations, and drafting correspondence.” Prime Ins.
Syndicate, Inc. v. Jefferson, 547 F.Supp.2d 568, 575 (E.D. La. 2008).
Converting documents to PDF format and adding signature lines to documents are clerical, not
legal duties. Such entries also warrant a reduction to the number of compensable hours.
c.
Lack of Billing Judgment
LNC also argues that Suavinex has not satisfied its burden of proving sound billing judgment.
“Billing judgment requires documentation of the hours charged and of the hours written off as
unproductive, excessive, or redundant.” Saizon v. Delta Concrete Prods. Co., Inc., 448 F.3d 795, 799
(5th Cir. 2006). When a fee applicant fails to satisfy its burden of proving billing judgment, the Court
should reduce the award by a percentage intended to substitute for the exercise of billing judgment. Id.
Suavinex has not submitted evidence that its attorneys exercised any degree of billing judgment
20
by writing off time as excessive or unproductive. Because of counsels’ failure to exercise billing
judgment, the Court will further reduce Suavinex’s claimed hours.
d.
Block Billing and Vague Entries
The Washington counsels’ invoices consist of block billed entries, which are entries that lump
together all of the daily time spent working on a case, rather than itemizing the time expended on
specific tasks. See Fralick v. Plumbers and Pipefitters Nat’l. Pension Fund, 09-0752, 2011 WL 487754
at *4 (N.D. Tex. Feb. 11, 2011). Courts have noted that this practice can make it impossible to
determine the reasonableness of the hours spent on each task. Many courts penalize the block billing
party by reducing their claimed hours. See id. at 5. (“The court finds that Klancnik’s practice of block
billing has impeded its ability to determine the reasonableness of his request. Klancnik’s billing
statement contains no more than one entry per day, and it often groups several tasks under one entry.”);
see also Johnson-Richardson v. Tangipahoa Parish. Sch. Bd., 12-0140, 2013 WL 5671165, at *4 (E.D.
La. Oct. 15, 2013) (reducing hours by 30% because of block billing). The Court will further reduce
Suavinex’s claimed hours because the Washington counsels’ use of block billing makes it difficult to
gauge the reasonableness of their time expenditures.
Finally, LNC points out that many of the invoices contain vague entries. Courts have refused
to compensate vague entries because it is impossible to test their reasonableness. “Litigants, ‘take their
chances’ when submitting inadequately documented fee applications which provide little information
from which to determine the reasonableness of the hours expended on tasks vaguely described or
lumped together.” White v. Imperial Adjustment Corp., 99-3804, 2005 WL 1578810, at*16 (E.D. La.
June 28, 2005).
For example, Suavinex seeks attorneys’ fees for the following:
21
•
Receive email from Hakim
•
Review message from Bob Altherr
•
Email to B. Altherr
•
Phone call with plaintiff’s attorney
•
Phone call with Bob Altherr
This is a non-exhaustive list, but the Court finds the billing for vague tasks further supports a
reduction of compensable hours.
e.
Across the Board Cuts to the Hours “Reasonably” Expended
Suavinex’s attorneys billed for nearly 1,900 hours in this case. In support of its motion for
attorneys’ fees, Suavinex submitted roughly 100 pages of invoices and time sheets. However, the
evidence does not show all of these hours were reasonable. Rather, the time sheets and invoices are
replete with vague entries showing that Suavinex seeks attorneys’ fees for duplicative and clerical tasks.
Suavinex has also failed to exercise sound billing judgment, and its Washington D.C. counsel used
block billing to document time expenditures–a practice many courts criticize.
For these reasons, a reduction in the number of hours Suavinex claims is warranted. Because
sifting through the voluminous record to scrutinize nearly 1,900 hours of time entries is a waste of
judicial resources, and because Suavinex’s use of block billing makes it impossible to determine
specifically which hours should be cut, the Court will apply across-the-board cuts to Suavinex’s
claimed hours. See Richardson Indep. Sch. Dist. v. Michael Z, 561 F.Supp.2d 610, 626 (N.D. Tex.
2008) (approving across the board reduction in hours expended where fee-seeking party failed to
exercise billing judgment and sought recovery for excessive, duplicative, and unspecified entries);
Hopwood v. State of Tex., 236 F.3d 256, 279 (5th Cir. 2000) (Fifth Circuit concluded that district court
22
did not abuse its discretion by ordering a flat, twenty-five percent reduction to attorney’s hours when
counsel exhibited poor billing judgment by performing hours of duplicative and unnecessary work,
expending time on non-reimbursable items, and insufficiently detailing work performed on certain
motions, because it was impractical for the court to wade through hundreds of time entries in order to
assess a specific number of duplicative and excessive hours for each attorney.).
The court will reduce Suavinex’s claimed hours by 25%. There is precedent for that number
within this circuit when attorneys fail to exercise billing judgment; seek recompense for duplicative,
unnecessary, and excessive tasks; and support their motion for attorneys’ fees with vague time entries.
Id. at 279.
After reducing the hourly rate to $150 for associate attorneys, $200 for partners, and $65 for
paralegals, and further reducing Suavinex’s claimed hours by 25%, the lodestar amount for each
attorney and paralegal is as follows:
Name
(Position)
Hours
Claimed
Hours
Awarded
Proposed
Billing Rate
(per hour)
Courtimposed
Billing Rate
(per hour)
Awarded Fee
Robert F.
Altherr, Jr.
(Lead trial
Counsel)
672.4
504.3
$615
$200
$100,860.00
Christopher
B. Roth
(Partner)
727.3
545.475
$405
(through
February
2015, after
$415)
$200
$109,095.00
Adam
College
(Associate)
126.7
95.025
$245
$150
$14,253.75
23
Camille Sauer
(Associate)
51.5
38.625
$240 through
February
2015, $245
after
$150
$5,793.75
Carlos Goldie
(Paralegal)
90
67.5
$130 through
February
2015, after
$135
$65
$4,387.50
Robert
Baldwin
(Partner)
159.2
119.4
$250
$200
$23,880.00
Johnny
Huckabay
(Partner)
32.6
24.45
$250
$200
$4,890.00
George
Cassey
(Partner)
37.7
28.275
$200
$150
$4,241.25
After applying these deductions, and after adjusting the attorneys’ billing rates to more
accurately reflect the prevailing community rates, the combined lodestar is $267,401.25.
3.
Applying the Johnson Factors to the Lodestar
Generally, the lodestar formula yields a reasonable fee award; indeed, the lodestar amount is
presumptively reasonable and courts should not alter it absent extraordinary circumstances. See Coe
v. Chesapeake Exploration, LLC, 09-290, 2011 WL 4366728, at *6 (E.D. Tex. Sep. 15, 2011). The
Johnson factors are designed to pinpoint those extraordinary circumstances, thus allowing the Court
to further assure the reasonableness of the fee. “Four of the Johnson factors–the novelty and complexity
of the issues, the special skill and experience of counsel, the quality of the representation, and the
results obtained from the litigation–are presumably fully reflected in the lodestar amount.” In re
24
Pilgrim’s Pride Corp., 690 F.3d 650, 656 (5th Cir. 2012) (citations omitted). The Court now analyzes
the lodestar amount in light of the Johnson factors.
a.
Time and labor involved
Although one could question whether Suavinex needed two law firms to handle this litigation,
reducing the Washington D.C. counsels’ rates to those of its Monroe, Louisiana counterparts alleviates
any concern. This factor does not warrant an adjustment to the lodestar.
b.
Novelty and difficulty of the questions
The lodestar amount adequately captures this factor.
c.
The skill required to perform the legal services properly
The lodestar amount adequately captures this factor.
d.
Preclusion of other employment
Suavinex offers no evidence showing that its attorneys were precluded from other employment
because they worked on this case.
e.
Customary fee
The Court lowered the attorneys’ rates in this case to better reflect the prevailing community
rate. Therefore, this factor does not require an adjustment to the lodestar.
f.
Fixed or contingent fee
Suavinex was not operating under a fixed or contingent fee arrangement, and no adjustment is
required.
g.
Time limitations
Suavinex introduces no evidence that its attorneys operated under any time restraints.
25
h.
The amount involved and the results obtained
The lodestar amount normally encompasses this factor. The Court sees no reason to adjust the
lodestar based on the results Suavinex obtained.
i.
The experience, reputation and ability of counsel
The lodestar adequately compensates for this factor.
j.
The undesirability of the case
It is unclear whether this case was undesirable or not; neither party introduces evidence on this
point and it does not necessitate adjusting the lodestar.
k.
The nature and length of the professional relationship with the client
Neither party introduces evidence on this point; The Court will not adjust the lodestar because
of it.
l.
Awards in similar cases
The Court has not found any cases with similar facts that would justify an adjustment to the
lodestar.
This is not an exceptional case where the lodestar formula fails to provide a reasonable
attorneys’ fee. Therefore, the Court awards Suavinex attorneys’ fees in the amount of $267,401.25.
III.
CONCLUSION
For these reasons, the Court declines to award Suavinex’s attorneys’ fees as actual damages for
LNC’s breach of the 2012 Termination Agreement’s forum selection clause, but does award nominal
damages in the amount of $500. Further, Suavinex’s Motion for Attorneys’ Fees and Costs [Doc. No.
131] is GRANTED IN PART and DENIED IN PART. To the extent it seeks an award of costs and
expenses for stamping trial exhibits, deposition transcripts, and deposition exhibits, the motion is
26
GRANTED. To the extent the motion seeks a recovery of costs and expenses for “Blowback Printing”
and related charges, deposition and exhibit translation, and video recording, the motion is DENIED.
IT IS FURTHER ORDERED that Suavinex submit evidence showing the costs of the deposition
transcripts separate from the video-taped depositions so that a precise cost award may be determined.
Finally, Suavinex’s Motion for Attorneys’ Fees and Costs [Doc. No. 131] is GRANTED IN
PART and DENIED IN PART. Suavinex is awarded $267,401.25 in attorneys’ fees.
MONROE, LOUISIANA, this 28th day of December, 2015.
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