Direct Benefits, LLC, et al v. TAC Financial Inc., et al.

Filing 308

MEMORANDUM AND ORDER denying without prejudice 298 and 301 Motions for Attorney Fees; directing Plaintiff will be given one final opportunity to file a single petition for attorneys fees in accordance with the dictates of this Courts Local Rules and as set forth herein; setting deadline to file amended petition and briefing schedule. Signed by Judge Stephanie A. Gallagher on 11/30/2021. (dass, Deputy Clerk)

UNITED STATES DISTRICT COURT
DISTRICT OF MARYLAND
CHAMBERS OF
STEPHANIE A. GALLAGHER
UNITED STATES DISTRICTJUDGE

101 WEST LOMBARD STREET
BALTIMORE, MARYLAND 21201
410 962-7780
[e-mail]

November 30, 2021

LETTER ORDER
RE: Direct Benefits, LLC, et al v. TAC Financial Inc., et al.
Civil Case No. SAG-13-1185
Dear Counsel:
Upon review of the two petitions for attorneys’ fees that were filed in this case, ECF 298
and 301, it is evident that they are not organized in the format required by the Local Rules of this
Court. Initially, the petitions purport to seek fees incurred in the litigation of a separate but
tangentially related bankruptcy matter. Those fees are not recoverable in this litigation and should
be excluded from the amended petition. With respect to the fees actually incurred in the litigation
of this case, the Local Rules require that the applications “shall be submitted in the following
format organized by litigation phase.” Loc. R. App’x B at 1.b (D. Md. 2021) (breaking out the
appropriate litigation phases). The requirement that a party organize its billing statements in a
chronological, litigation phase format is essential to permit this Court to assess, on an entry by
entry basis, the appropriate lodestar calculation. In this case in particular, the number of entries
reflecting attorneys in conferring with one another suggests that there will be a large number of
duplicative billing entries, even across the various law firms involved. See Loc. R. App’x B at 2.d
(D. Md. 2021) (“Generally, only one lawyer is to be compensated for client, third party, and intraoffice conferences, although if only one lawyer is being compensated the time may be charged at
the rate of the more senior lawyer.”). The culling of duplicative entries cannot rest with this Court,
but should properly be performed by Plaintiff. Additionally, one attorney attempts to bill $23,750
for hours “worked but not logged.” Those “guesstimated” entries are also impermissible and
should be eliminated in their entirety from the amended petition.
Several of the counsel in this matter have attempted to use some kind of “rough percentage”
calculation in deciding which of their individual fees to claim. No matter the purported basis for
determining the “percentage” used, that procedure does not accord with the lodestar calculations
required by the Supreme Court and the Fourth Circuit. This Court fully intends to review each
time entry to determine whether it should be included in the lodestar calculation, in whole or in
part. Many of the attorneys’ entries use “block billing,” which may mean that those entries will
be dramatically reduced or discounted in their entireties, in light of the relatively small portion of
the effort in this case devoted to Mr. Gellene’s wage claims. For example, roughly 3 pages of the
28 page Amended Complaint address the wage claims. The preliminary injunction briefing and

Direct Benefits, LLC, et al v. TAC Financial Inc., et al.
Civil No. SAG-13-1185
November 30, 2021
Page 2
almost all of the motions briefing related to the non-wage claims. Simply taking a percentage of
the billing entries is likely to grossly overrepresent the importance of the wage claims to this case,
and does not meet the standards required for this Court to award reasonable fees.
In sum, the two pending petitions for attorneys’ fees, ECF 298 and 301, will be DENIED
without prejudice. Plaintiff will be given one final opportunity to file a single petition for
attorneys’ fees in accordance with the dictates of this Court’s Local Rules. The amended petition
should perform the culling function referenced above, should attach summary billing records
organized by date and litigation phase, not by individual law firm, and should request an amount
calculated by multiplying each attorney’s reasonable hourly rate by the number of hours the
attorney worked and documented on the wage claim only. TAC will then be afforded an
opportunity to respond to the amended petition and to seek deduction of its fees for its two prior
oppositions to the inadequate petitions. Plaintiff’s amended petition should be filed on or before
December 30, 2021, with TAC’s opposition due on or before January 20, 2022, and any reply due
on or before February 3, 2022.
Despite the informal nature of this letter, it is an Order of Court and will be docketed as
such.
Sincerely yours,
/s/
Stephanie A. Gallagher
United States District Judge