Loesel et al v. Frankenmuth, City of

Filing 164

ORDER granting in part 96 MOTION For Entry of Judgment and Assessment of Interest, Attorney Fees and Costs, denying as moot 138 MOTION to Quash and Ordering Supplemental Briefing. Set Motion Deadlines as to 96 MOTION For Entry of Judgment and Assessment of Interest, Attorney Fees and Costs: (Three page supplemental briefs due by 8/6/2012). Signed by District Judge Thomas L. Ludington. (SGam)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
NORTHERN DIVISION

RONALD LOESEL, ARTHUR
LOESEL, GAYLE LOESEL, ELAINE
LOESEL, VALERIAN NOWAK,
VALERIAN NOWAK AND ALICE
B. NOWAK TRUST BY VALERIAN
NOWAK,
Plaintiffs,
Case Number 08-11131-BC
Honorable Thomas L. Ludington

v.
CITY OF FRANKENMUTH.,
Defendant.
__________________________________/

ORDER AND OPINION GRANTING IN PART PLAINTIFFS’ MOTION FOR ENTRY
OF JUDGMENT AND ASSESSMENT OF INTEREST, ATTORNEY FEES, AND COSTS
AND DENYING PLAINTIFFS’ MOTION TO QUASH AS MOOT
Plaintiffs Ronald and Arthur Loesel filed a complaint against Defendant City of Frankenmuth
on March 17, 2008. The Loesels are owners of a tract of land on the northern outskirts of
Frankenmuth. On May 4, 2009, the Loesels filed an amended complaint [Dkt. # 33], joining as
necessary plaintiffs the co-owners of the tract of land, including Gayle and Elaine Loesel, Valerian
Nowak, and The Valerian Nowak and Alice B. Nowak Trust. Collectively, Plaintiffs entered into
an option agreement with Wal-Mart for Wal-Mart to purchase their land for four-million dollars if
it could lawfully build a store.
Defendant learned of the contract, became concerned about the impact that a Wal-Mart and
other similar stores would have on Defendant, and eventually adopted a zoning ordinance (“the
ordinance”), which appeared to preclude Wal-Mart from building a store that it sought to build on
Plaintiffs’ property. The ordinance placed a 65,000 square foot cap on the size of buildings that

could be built on property, including Plaintiffs’, to which it applied. Wal-Mart later abandoned its
application to build a store on Plaintiffs’ property and the option contract with Plaintiffs. On March
4, 2010, a jury concluded that Plaintiffs proved that Defendant had violated their equal protection
rights, and determined that Plaintiffs were entitled to recover $3.6 million in damages.
Now before the Court is Plaintiffs’ motion for entry of judgment and assessment of interest,
attorney fees, and costs [Dkt. # 96, Apr. 14, 2010]. On May 4, 2010, Defendant filed a response
[Dkt. # 101] and Plaintiffs filed supplemental authority [Dkt. # 102]; on May 18, 2010, Plaintiffs
filed a reply [Dkt. # 105]; and on May 20, 2010, Defendant filed a sur-reply [Dkt. # 108]. In
addition, Plaintiffs filed a supplemental brief [Dkt. # 129] on August 17, 2010, which Defendant
opposed in a response [Dkt. # 132] dated August 30, 2010.
Plaintiffs’ motion was scheduled for hearing on July 8, 2010, but prior to the scheduled
hearing, Defendant filed a motion for judgment or in the alternative for a new trial or remittitur [Dkt.
# 110, June 14, 2010]. Plaintiffs filed a response [Dkt. # 120] on July 9, 2010; and Defendant filed
a reply [Dkt. # 127] on August 16, 2010. The Court scheduled both pending motions for hearing
on September 13, 2010, but directed the parties to provide supplemental briefing as to whether the
Court should declare the challenged ordinance unconstitutional. Pursuant to the Court’s order,
Plaintiffs and Defendant filed supplemental briefs on September 1, 2010. See [Dkt. # 133, 134].
On September 27, 2010, the Court denied Defendant’s motion for judgment, a new trial or remittitur,
granted in part and denied in part Plaintiff’s motion for entry of judgment and assessment of interest,
attorney fees, and costs, and scheduled an evidentiary hearing to determine the rates and amounts
of attorney fees to be awarded to Plaintiffs [Dkt. #135].
On October 28, 2010, Plaintiffs filed a motion to quash and/or modify Defendant’s

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subpoenas for testimony and attorney time and expense records [Dkt. #138], contending that the
subpoenas required disclosure of privileged or other protected matter. On November 2, 2010,
Defendant filed a response [Dkt. #139] and Plaintiffs filed a reply on November 9, 2010 [Dkt. #141].
The Court held a telephonic status conference on November 10, 2010. Counsel for Plaintiffs
explained that redacted attorney time and expense records would be provided to counsel for
Defendant. Upon receipt of the redacted attorney time and expense records, Defendants filed a
supplemental brief [Dkt. #144], requesting additional disclosures regarding the attorney time and
expense records of the topics researched the identity of the parties with whom there were
discussions, other than the clients, and the topics discussed. Plaintiffs responded on December 6,
2010 that the information Defendant requests is confidential and privileged information that it is not
entitled to review [Dkt. #145].
On December 22, 2010, the Court directed counsel for both parties to meet and confer on the
remaining pending issues and for counsel for Plaintiff to provide a report to the Court on what was
accomplished towards reaching an agreement on the attorney fee rate [Dkt. #147]. If no agreement
was reached, the Court requested that the parties propose how the Court should resolve the attorney
fee rate issue and any remaining unresolved issues concerning the attorney time and expense record
redactions. Finally, the Court requested that the report include a description of any issues remaining
that are necessary to resolve.
The attorney report was filed on January 12, 2011 [Dkt. #148]. The report indicated that the
parties had resolved the issue concerning the attorney time and expense records, rendering Plaintiffs’
motion to quash [Dkt. #138] moot. Plaintiffs and their counsel maintained their position that the
records are protected by the attorney-client privilege and/or the work product doctrine, but agreed

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to submit the unredacted version of the attorney time and expense records to Defendant in order to
bring finality to the case. The report also provided that the attorney fee rate for Plaintiffs’ counsel
remains unresolved. The other unresolved issues are: the interest rates to be used in calculating the
final judgment; whether a “lodestar” fee enhancement is warranted; the number of hours invested
by Plaintiffs’ counsel; Defendant’s objections to Plaintiffs’ counsels’ attorney fee time and expense
records; and the taxed costs from the Clerk not requested or docketed. Counsel for both parties
notified the Court that it was not their preference to have an evidentiary hearing, but instead
requested that the Court address the unresolved items based on the parties’ papers.
I.

Interest

Plaintiffs request pre-judgment interest pursuant to 28 U.S.C. § 1961 but utilize the state
statutory scheme under Mich. Comp. Laws § 600.6013(8) rather than the federal framework under
28 U.S.C. § 1961 for the calculations. Defendant correctly notes that the federal framework and rates
should be used if pre-judgment interest is awarded. The legal authority Plaintiffs provide also does
not justify an award of pre-filing interest. The parties will be directed to file a supplemental brief
with their respective pre-judgment calculations for the Court’s consideration.
II.

Fee Enhancement

Plaintiffs’ request and justification for a fifty-percent fee enhancement and Defendant’s
response have been discussed at length in the Court’s September 27, 2010 opinion and order [Dkt.
#135 at 31-36]. Although the legal theory of the case is novel, the trial proofs were unremarkable
and the “class of one” equal protection claim was not difficult or complex to litigate. Accordingly,
this in not a case that presents “rare” and “exceptional” circumstances under which an award may
be enhanced. Perdue v. Kenny, - - - U.S. - - -, 130 S. Ct. 1662, 1673 (2010).

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III.

Attorney Fee Rate

Plaintiffs seek an hourly fee rates ranging from $200 for its associates and up to $400 for its
senior partners. Plaintiffs acknowledge that the “relevant community” for purposes of § 1988
attorney fees is generally based on where the district court sits. Plaintiffs insist, however, that rates
outside the district court’s forum may be used “if local counsel was unavailable, either because they
are unwilling or unable to perform because they lack the degree of experience, expertise, or
specialization required to handle properly the case.” See e.g., Barjon v. Dalton, 132 F.3d 496, 500
(9th Cir. 1997). As noted in the Court’s September 27, 2010 order, Plaintiffs contend that they were
unable to locate a lawyer or firm in the greater Saginaw area to represent them in their suit against
Defendant. Plaintiffs assert that all of these hourly rates are well within the range, or substantially
less, than the ordinary fees charged in by attorneys in the metropolitan Detroit area with similar skill,
experience, and reputation as that of Plaintiffs’ attorneys. See [Dkt. # 96-9]
In response, Defendant contends that Plaintiffs’ counsel’s hourly rates are well in excess of
prevailing market rates for the Saginaw and Bay City areas, and that the rates “should be adjusted
to reflect their experience or lack thereof in litigating zoning cases.” Defendant also contends that
the rate selected by the Court should be lowered because Plaintiffs’ counsel lacks experience in
litigating “zoning cases.” Defendant insists that when an attorney voluntarily accepts a case outside
of his or her home area, they are voluntarily subjecting themselves to the relevant rate in the out of
town area, citing Alcock-Ladd v. Sec. of Treasury, 227 F.3d 343, 350 (6th Cir. 2000). Defendant
does not address why there could not be an exception, as Plaintiffs suggest, to this general rule.
The billing records provided reflect counsel used the following rates: Attorney Kochanowski
billed his time at $350 per hour; Attorney Szymanski bill his time at $300 per hour, and Attorney

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Young billed his time at $150 per hour. Attorneys Szymanski and Young performed the majority
of the work for Plaintiffs. Plaintiffs do not explain why the Court should conclude that the
reasonable attorney fee rate should be higher than the rates actually billed, especially given the fact
that the prevailing market rates for the Saginaw and Bay City areas is significantly lower. There is
nothing in the record to suggest that Plaintiffs were, in fact, unable to find a lawyer or firm in the
greater Saginaw area to represent them in their suit against Defendant. Considering the affidavits
provided, counsel’s experience and services provided, and the State Bar Survey a reasonable fee rate
in this case is $240 per hour for the services provided by Attorney Kochanowski, $220 per hour for
work performed by Attorney Szymanski and the other partners included in the billing statement, and
$125 for the services provided by associates.
IV.

Number of Hours Invested By Plaintiffs’ Counsel and Defendant’s Objections
Due to Vagueness, “Lumping,” and Disallowable Charges

Plaintiffs contend that the number of hours invested by their attorneys on the case is
“reasonable.” Plaintiffs’ attorneys reportedly spent a total of 1,190.11 hours developing and
presenting the case, equaling fees in the amount of $405,672.00. Plaintiffs again emphasize that
their attorneys undertook significant discovery efforts, including thirty-one discovery subpoenas,
FOIA requests, depositions of party and third-party witnesses, and review of many thousands of
pages of documents, including zoning codes, the city charter, extensive records of e-mail
correspondence among over twenty people, extensive Wal-Mart records, and the records of the DDA
and EDC. Plaintiffs’ counsel had to respond to Defendant’s efforts to join other parties, invocation
of privileges and immunity defenses, two motions for summary judgment, and a motion in limine.
Additionally, the jury trial lasted seven days over a three-week period.
Defendant objected to Plaintiffs’ counsels’ billing records in its response brief filed February
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17, 2011 [Dkt. #151]. Defendant contends that Plaintiffs’ counsel has not maintained and submitted
billing time records that are sufficiently detailed to enable the Court to review the reasonableness
of the hours expended as required by Hensely v. Eckerhart, 461 U.S. 424, 433 (1983). More
specifically, Defendant contends that the billing time records contain multiple vague and nondescriptive billing entries, demonstrate a practice of “lumping” multiple activities into a single time
entry, include billing entries for time spent on claims that did not survive Defendant’s motion for
summary judgment or claims that were not pled, and billing entries for media contact. Defendant
requests that the time for these entries be eliminated or substantially reduced.
The Court will sustain Defendant’s specific objections regarding billing for claims that did
not survive summary judgment, claims that were not pled, and issues—such as the motion for entry
of judgment and the reply brief as well as the Rule 50/59 motion—on which an excessive amount
of time was billed. Defendant’s specific objections to the “lumped” billing entries will be sustained
in part and reduced because Plaintiffs’ counsel’s billing records reflect a significant number of
“block” billing entries, many of which are for entries of six to eight hours without adequate
explanation. More specifically, the Court will reduce the entries Defendant has objected to that
include claims that were not pled or did not survive summary judgment that are included in
“lumped” entries that include time billed for recoverable items and the specific entries that
Defendant contends include excessive amounts of time billed. The majority of the “lumped,”
“block,” or non-descriptive billing entries to which Defendant provides specific objections will be
eliminated. The media contact billing entries will also be eliminated. Defendant objections will be
overruled as to its request that the Court review the billing entries for additional reduction or
elimination of billing entries outside of Defendant’s specific objections.

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Accordingly, the billable entries will be reduced as follows: Attorney Kochanowski’s entries
will be reduced by 149 hours for a total of 455.6; Attorney Szymanski’s entries will be reduced by
23 hours for a total of 228.25 hours; Attorney Harmon’s entries will be reduced by 20 hours for a
total of .4 hours; Attorney Owens’s entries will be reduced by 34.2 hours for a total of 17.1 hours;
Attorney Stoops entries will be reduced by 5.7 hours for a total of 2.7 hours; and Attorney Young’s
entries will be reduced by 149 hours for a total of 219.8 hours.
Defendant also requests an overall reduction of 25% of the amount the Court would
otherwise award as a reasonable attorney fee because of the lumped and blocked billing entries to
which Defendant did not make specific objections. The Court, however, finds it appropriate to
sustain Defendant’s specific objections regarding non-descriptive and excessive time entries. The
Court’s review of the billing records does not reflect that an additional 25% overall reduction is
warranted. Based on the specific objections that have been sustained, the total attorney fee award
is $190,361.50.
V.

Taxed Costs

The Court’s September 27, 2010 order outlined the necessary procedures for Plaintiffs to
recover their taxed costs. The order stated that
[n]otably, costs in this Court are taxed in accordance with Federal Rule of
Civil Procedure 54(d)(1) and Eastern District of Michigan Local Rule 54.1.
In addition, the Clerk’s Office has provided guidance to attorneys through the
Bill of Costs Handbook, available online . . . . Until the Clerk’s Office has
taxed costs, review by this Court is premature and Plaintiffs’ motion will be
denied in part as premature.
As of today’s date, Plaintiffs have not submitted the proposed costs to the Clerk for taxing
and Plaintiffs’ motion will be denied as premature.

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VI.

Conclusion

Accordingly, it is ORDERED that Plaintiff’s motion for entry of judgment and assessment
of interest, attorney fees, and costs [Dkt. # 96] is GRANTED IN PART AND DENIED IN PART.
Pursuant to 42 U.S.C. § 1988, this Court awards Plaintiffs, Ronald Loesel, Gayle Loesel, Arthur
Loesel, Elaine Loesel, Valerian Nowak, and The Valerian Nowak and Alice B. Nowak Trust,
attorneys fees in the amount of $190,361.50, against, and which shall be paid by, Defendant, City
of Frankenmuth.
It is further ORDERED that the parties’ are DIRECTED to file supplemental briefing, no
longer than three pages, explaining the appropriate amount of pre-judgment interest pursuant to the
rates under 28 U.S.C. § 1961. The parties’ supplemental briefs are due on or before August 6, 2012.
It is further ORDERED that Plaintiffs’ motion to quash [Dkt. #138] is DENIED AS
MOOT.
s/Thomas L. Ludington
THOMAS L. LUDINGTON
United States District Judge
Dated: July 30, 2012

PROOF OF SERVICE
The undersigned certifies that a copy of the foregoing order was served
upon each attorney or party of record herein by electronic means or first
class U.S. mail on July 30, 2012.
s/Tracy A. Jacobs
TRACY A. JACOBS

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