H.D.V. - Greektown, L. L. C. et al v. Detroit, City of

Filing 169

ORDER granting in part and denying in part 148 Motion for Attorney Fees; adopting 162 Report and Recommendation. Signed by District Judge Arthur J. Tarnow. (MLan)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
H.D.V. - GREEKTOWN, L. L. C., ET AL.,
Plaintiffs,

Case No. 06-11282
SENIOR U.S. DISTRICT JUDGE
ARTHUR J. TARNOW

v.
DETROIT, CITY OF, ET AL.,

U.S. MAGISTRATE JUDGE
R. STEVEN WHALEN

Defendants.
______________________________/
ORDER ADOPTING REPORT AND RECOMMENDATION [162],
OVERRULING PLAINTIFFS’ OBJECTION [164], AND GRANTING IN
PART PLAINTIFFS’ MOTION FOR ATTORNEY FEES AND COSTS [148]
Before the Court is a Report and Recommendation (“R&R”) [162] entered on
May 23, 2013, recommending granting in part Plaintiffs’ Motion for Attorney Fees
and Costs [148], and awarding $385,401.12 in fees and costs to Plaintiff counsel for
prevailing in the underlying action. Plaintiffs timely filed an Objection [164] and
Defendants filed a Response [167]. On August 23, 2013 the Court stayed the Motion
for Attorney Fees and Costs [148] because the municipal Defendant had filed for
Chapter 9 bankruptcy on July 18, 2013. In December, 2014, the municipal Defendant
emerged from bankruptcy; accordingly, the Court will now issue its ruling on
Plaintiffs’ Motion for Attorney Fees and Costs [148]. For the reasons that follow,
Plaintiffs’ Motion for Attorney Fees and Costs [148] is GRANTED and Plaintiff
counsel is awarded $372,118.19 in fees and $13,282.93 in costs.

BACKGROUND
Plaintiffs obtained a $2,950,000 settlement in this § 1983 action. Plaintiffs are
closely held Michigan limited liability companies in the adult entertainment business.
They alleged that Defendants violated mainly their First Amendment rights by
hindering the operation of their business with regulations. The parties stipulated that
the Court would decide the issue of attorney fees pursuant to 42 U.S.C. § 1988 and
that Plaintiffs were the prevailing parties for the purpose of determining fees and
costs.
STANDARD OF REVIEW
This Court reviews de novo the portions of the R&R [162] to which objections
have been filed. 28 U.S.C. § 636(b)(1); FRCP 72(b). The Court “may accept, reject,
or modify, in whole or in part, the findings or recommendations made by the
magistrate judge.” Id.
ANALYSIS
Plaintiff counsel seeks $1,532,640.61 in fees and costs. Defendants concede that
Plaintiff counsel is entitled to some fees, but argue that the amount the R&R [162]
recommends—$385,401.12—is reasonable.
“The primary concern in an attorney fee case is that the fee awarded be
reasonable,” one that is adequate to attract competent counsel, but does not yield a
windfall for lawyers. Reed v. Rhodes, 179 F.3d 453, 471 (6th Cir. 1999). The Court
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begins by determining the fee applicant's lodestar, which is the proven number of
hours reasonably expended on the case by an attorney, multiplied by her
court-ascertained reasonable hourly rate. Hensley v. Eckerhart, 461 U.S. 424, 433
(1983) (emphasis added).
The R&R [162] calculates the lodestar using the hourly rates proposed by
Plaintiff counsel themselves. The hourly rates were $350, $250, and $200 for
Attorneys Shafer, Pritzlaff, and Hoffer respectively. The R&R [162] concludes,
however, that the total number of hours Plaintiff counsel claims to have expended is
not reasonable. The reasons the R&R [162] found the number of hours to be
unreasonable is two-fold. First, the Magistrate concluded that certain hours are not
compensable here. Second, the remaining time spent on the case was excessive.
Ultimately, the R&R [162] recommends a total fee-and-costs award of $385,401.12.
The Court agrees that $385,401.12 is a reasonable award in this case.
Objection One: Sixty Percent Reduction in Fees
Plaintiffs object to the R&R’s recommendation that the Court reduce the
lodestar by sixty percent. The Magistrate’s approach of making a flat percentage cut
to attorney fees was well within methods accepted by United States Courts to avoid
turning attorney-fee requests into a “second major litigation.” Hensley v. Eckerhart,
461 U.S. 424, 438 (1983).

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Plaintiffs’ time sheets for fees are 113 pages long. Plaintiff counsel requests
fees for things like communicating with the media, participating in administrative
proceedings, watching the evening news, and for work related to the Jane Roe
Plaintiffs who were voluntarily dismissed and received no legal relief from this action.
Plaintiff counsel requests $56,795 for preparation of its own fee Motion [148] and
$21,980 for preparation of the Reply [155] alone.
“The purpose of § 1988 is to ensure ‘effective access to the judicial process for
persons with civil rights grievances.’” HR REP. NO. 94-1558, p. 1 (1976). That
fundamental purpose of § 1988 is hardly relevant, let alone compelling here. Plaintiffs
are closely held, extraordinarily profitable companies whose access to the judicial and
political processes is far greater than most citizens, as demonstrated by the very
background of this case. Further removing this Motion [148] from the congressionally
intended purpose of § 1988, is the nature of Plaintiffs’ grievance in this case—they
pursued the least constitutionally important type of First Amendment right. Kiser v.
Reitz, 765 F.3d 601, 607 (6th Cir. 2014) (holding that advertisements and other
commercial speech enjoy less rigorous First Amendment protection than other forms
of expression).
Plaintiffs spared no expense protecting their right to utilize the First
Amendment to seek pecuniary gain. “While parties to a litigation may fashion it
according to their purse and indulge themselves and their attorneys . . . they may not
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foist these extravagances upon their unsuccessful adversaries.” King World
Productions, Inc. v. Financial News Network, Inc., 674 F. Supp. 438, 440 (S.D.N.Y.
1987). The Court is not required to engage in a line by line analysis of Plaintiff
counsel’s 113 pages of fee requests. In light of the indiscriminate approach counsel
took to its fee petition and the tangential relationship compelling civil rights have to
this case, the Court finds the R&R’s [162] sixty percent reduction recommendation
in the lodestar is warranted. This yields a preliminary award of $361,279.80 before
accounting for Plaintiffs’ fee request for preparing its own Fee Motion [148].
Objection Two: Sixty Percent Reduction in Costs
Plaintiffs object to the R&R’s recommendation that their allowable1 claimed
costs—totaling $33,207.34—should be reduced by sixty percent. Plaintiffs assert that
the R&R double dips its reduction because Defendants requested a 50% reduction in
attorney hour travel time and the R&R recommends a 60% reduction in travel costs.
The award amounts recommended in the R&R [162] reveal that Plaintiffs’ double-dip
argument is incorrect. Rather, the Magistrate simply did not grant Defendants’
piecemeal reduction request and implemented an across-the-board reduction without
multiplying the reductions. The R&R [162] recommends a cost award of $13,282.93,
which is a 60% reduction from Plaintiffs’ allowable requested costs ($33,207.34).
1

Plaintiffs apparently concede in their Objection [164] that the $164,921.49 in expert
witness fees they attempted to recover in their Motion [148] are not allowable as a matter of law
in an action under § 1983.
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Plaintiffs also argue that the Magistrate cannot recommend reducing costs
because they were actually incurred. As the R&R [162] states, it is the reasonableness
of costs that is at issue. Just as the attorneys may have expended all of the hours
claimed, it was not reasonable to expend so many hours in this case. Similarly,
although the claimed costs may have actually been incurred, it was not reasonable to
incur them. There is no reason, therefore, that the reduction for the unreasonable
attorney fees should not be commensurate with the reduction for the unreasonable
costs. A sixty percent reduction is warranted and Plaintiffs are awarded costs in the
amount of $13,282.93.
Objection Three: The Jane Roe Plaintiffs
Plaintiffs object to the R&R’s recommendation that they are not entitled to an
award of fees for their work on behalf of the Jane Roe Plaintiffs in this action.
Plaintiff counsel argues this is true because the Jane Roe Plaintiffs were voluntarily
dismissed after the Court entered the consent decree stipulating that Plaintiffs are the
prevailing party in this action. That claim is patently false. The Consent Decree [145]
was entered on August 23, 2011. The Jane Roe Plaintiffs were dismissed by
Stipulation [144] twelve days earlier on August 9, 2011. The dismissal of the Jane
Roes—the anonymous Plaintiffs whose speech undergirded the named Plaintiffs’ First
Amendment claims—before the Consent Decree [145] ensured that they received no
relief from the $2,950,000 award “by issuance of a check made payable to ‘H.D.V.6/10

Greektown, LLC, 415 East Congress, LLC, K&P, Inc., and Shafer and Associates,
P.C., their attorneys.”
Objection Four: Ancillary Proceedings
The 2003 Initial Action
Plaintiffs object to the R&R’s recommendation that they are not entitled to an
award of fees for their work related to H.D.V.-Greektown, L.L.C., et al, v. City of
Detroit, No. 03-74887. The Order [14] dismissing the 2003 action by stipulation
states “all claims in this action are dismissed without prejudice and without costs or
an award of attorneys fees to any party.” As explained at length in the R&R [162], the
placement of the phrase “without prejudice” in that sentence indicates that the
substantive claims were dismissed without prejudice, but any claims for costs or fees
were dismissed with prejudice. Plaintiffs are not entitled to collect fees or costs
related to the 2003 action.
The Board of Zoning Appeals Proceedings
The R&R concluded that Plaintiffs are not entitled for their work before the
Board of Zoning Appeals (“BZA”) because that work related to the claims in the 2003
action exclusively and, therefore, the fees are excluded for the same reason elaborated
in the previous paragraph. Plaintiffs assert, without supporting, that their work at the
BZA proceedings in 2004 gave rise to the bulk of their damage claims for lost
business in this case in 2006. The work on the BZA proceedings was mostly
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defending tickets issued to Plaintiffs for violations of Condition 18, which was the
subject of the 2003 action. Consequently, the Court will not award fees for hours spent
on the BZA proceedings.
The Conyers/Riddle Criminal Proceedings
Plaintiffs object to the R&R’s recommendation that they are not entitled to an
award of fees for their work related to the Monica Conyers and Sam Riddle criminal
proceedings. During the government’s investigation, Plaintiffs’ client Joe Hall
received a grand jury subpoena. Plaintiffs now seek fees for their work in relation to
preparing for Hall’s appearance before the grand jury. Although Plaintiffs argue that
that criminal case was the sole basis for the submission of their Second Amended
Complaint [84], the fact remains that the guilt or innocence of Conyers or Riddle in
the criminal case did not dictate the result in this case. Plaintiffs object that the
criminal proceedings had res judicata and collateral estoppel consequences to their
claims in this action. That claim is unpersuasive as Plaintiffs could never be equitably
barred from bringing claims as a result of a criminal action prosecuted by the federal
government.
Objection Five: Fee Enhancement
Plaintiffs object to the R&R’s recommendation that they are not entitled to a ten
percent fee enhancement under Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542 (2010).
A Perdue enhancement is impermissible except in “rare and exceptional
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circumstances” and the party seeking the enhancement bears the burden of proving the
enhancement is warranted with specific evidence that the lodestar fee would not have
been adequate to attract competent counsel. Id. at 554. Plaintiff counsel has failed to
prove that the lodestar would be inadequate to attract competent counsel for a First
Amendment case, given that the lodestar was calculated with a rate that falls above the
75th percentile of fees charged by civil rights lawyers.
Objection Six: Fees Related to the Attorney Fee Motion
Plaintiffs object to the R&R’s recommendation that their claimed fees for
bringing their Motion for Fees and Costs [148] are excessive. In cases that result in
settlement, the hours expended to prepare a fee petition should not exceed three
percent of the total award for attorney hours in the underlying case. Coulter v. State
of Tennesee, 805 F.2d 146, 151 (6th Cir. 1986). Since the Court has awarded
$361,279.80 in attorney fees, an additional $10,838.39—three percent of the
underlying award—is what is allowable for preparation of the fee petition.
For the foregoing reasons, the Court HEREBY ADOPTS the R&R [162].
Accordingly,
IT IS ORDERED Plaintiffs’ Motion for Attorney Fees and Costs [148] is
GRANTED IN PART.
IT IS FURTHER ORDERED that Plaintiff Counsel is awarded $372,118.19
in attorney fees.
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IT IS FURTHER ORDERED that Plaintiff Counsel is awarded $13,282.93
in costs.
IT IS FURTHER ORDERED that Plaintiffs’ Objection [164] is
OVERRULED.
SO ORDERED.

s/Arthur J. Tarnow
ARTHUR J. TARNOW
SENIOR U.S. DISTRICT JUDGE

Dated: March 31, 2015

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