Contract Design Group, Incorporated et al v. Wayne State University et al

Filing 262

ORDER GRANTING PLAINTIFFS MOTION FOR ATTORNEYS FEES AND EXPENSES [#234] AND DENYING DEFENDANTS MOTION FOR AN ORDER FOR LIMITED DISCOVERY RELATED TO ATTORNEYS FEES [#246]. Signed by District Judge Gershwin A. Drain. (Bankston, T)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
CONTRACT DESIGN GROUP, INC.,
a Michigan corporation, and ROBERT
MURRAY,

Case No.: 2:10-cv-14702
Honorable: Gershwin A. Drain

Plaintiffs,
Magistrate Judge: Michael J.
Hluchaniuk

v.
WAYNE STATE UNIVERSITY,
THE WAYNE STATE UNIVERSITY
BOARD OF GOVERNORS; JAMES
R. SEARS, in his individual and
official capacity; JOAN M.
GOSSMAN, in her individual and
official capacity; and JOHN L.
DAVIS, in his individual and official
capacity, jointly and severally,
/

Defendants.

ORDER GRANTING PLAINTIFFS’ MOTION FOR ATTORNEY’S FEES AND
EXPENSES [#234] AND DENYING DEFENDANTS MOTION FOR AN ORDER FOR
LIMITED DISCOVERY RELATED TO ATTORNEY’S FEES [#246]

I.

Introduction

Plaintiffs Contract Design Group, Inc. (“CDG”) and Robert Murray (“Murray”) filed a
Complaint against Defendants Wayne State University and The Wayne State University Board of
Governors (“Wayne”). Plaintiffs also named three Wayne employees as Defendants: James R.
Sears (“Sears”), Joan M. Gossman (“Gossman”) and John L. Davis (“Davis”). This case went to
trial, and on April 24, 2014, a jury returned a verdict for Plaintiffs on their counts of violation of
procedural due process, account stated, and breach of contract. See Dkt. # 202. Presently before

the Court is Plaintiffs’ Motion for Attorney’s Fees and Expenses [#234] and Defendants’ Motion
for an Order for Limited Discovery Related to Plaintiff’s Request for Attorney’s Fees [#246].
For the reasons that follow, the Court will grant Plaintiffs’ Motion for Attorney’s Fees and
Expenses deny Defendants’ Motion for an Order for Limited Discovery Related to Plaintiffs’
Motion for Attorney’s Fees and Expenses. For the reasons that follow, the Court will Grant the
Plaintiffs Motion for Fees and Expenses [#234], and Deny Defendants’ Motion for an order for
Limited Discovery related to Plaintiffs’ Motion for Attorney’s Fees and Expenses [#246].
II.

Factual Background

On April 22, 2014, the jury returned a verdict for CDG and Murray on their procedural
due process claims, but did not award damages to CDG on the procedural due process claim.
See Dkt. #202. The jury found CDG could not establish actual damages, but the Court Awarded
CDG nominal damages of $1. See Dkt. #248. The jury found that the Defendants violated
Murray’s procedural due process rights and awarded him $100,000. The jury found CDG
established an account stated, and awarded CDG $200,000 for this claim. Last, the jury found
Wayne in breach of contract, and the jury awarded CDG $250,000 for the breach of contract
claim. As the prevailing party in a § 1983 claim, CDG and Murray filed a Motion for Attorney’s
pursuant to 42 U.S.C. § 1988.
III.

Law and Analysis

A. Standard of Review
The court, in its discretion, “may allow the prevailing party [on a section 1983 claim] a
reasonable attorney’s fee as part of the costs.” Farrar v. Hobby, 506 U.S. 103, 109 (1992). The
fee award is only appropriate when a party prevails on the merits. Id.; see also Hanrahan v.
Hampton, 446 U.S. 754, 758 (1980). Success on “any significant issue in the litigation which
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achieves some of the benefit the parties sought in bringing the suit” is required for attorney’s
fees. Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). The plaintiff must demonstrate that there
is a resolution of the dispute that has changed the legal relationship between them and the
defendant in order to be the prevailing party under § 1988. Texas State Teachers Ass’n v.
Garland Indep. Sch. Dist., 489 U.S. 782, 792-93 (1989). Prevailing party status requires plaintiff
to obtain some form of relief on the merits. Farrar, U.S. 506 at 111.
A party who has won nominal damages is a prevailing party for the purposes of § 1988.
Id. at 112. A judgment for nominal damages modifies the defendant’s behavior in the plaintiff’s
benefit because it makes the defendant pay money he would not have paid otherwise. The
“magnitude of relief obtained” does not alter one’s prevailing party status, and a party’s degree
of success does not affect their § 1988 eligibility. Id. at 114; Garland, 489 U.S. at 790. Nominal
damages awards, however, do effect the “propriety” of the § 1988 award. Id. The extent of the
plaintiff’s success determines the reasonableness of the fee award. Id.; Hensley v. Eckerthart,
461, U.S. 424, 436.

The degree of success is the most critical factor in determining the

reasonableness of the fee award. Id.
A reasonable fee is the product of hours worked multiplied by a reasonable hourly rate,
which is commonly referred to as the “lodestar” method. Hensley, 461, U.S. 436; see Barnes v.
City of Cincinnati, 401 F.3d 729, 745 (6th Cir. 2005). Fees that are not reasonably expended,
such as fees incurred as a result of duplication of efforts are to be excluded.

Id.

The

reasonableness of hours (and hourly rate) is determined by consideration of the following
factors:
(1) the time and labor required; (2) the novelty and difficulty of the questions presented;
(3) the skill needed to perform the legal service properly; (4) the preclusion of
employment by the attorney due to acceptance of the case; (5) the customary fee; (6)
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whether the fee is fixed or contingent; (7) time and limitations imposed by the client or
the 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) awards in
similar cases.
Isabel v. Memphis, 404 F.3d 404, 415 (6th Cir. 2005).
In assessing the “reasonable hourly rate” component of the lodestar method the district
court should assess the “prevailing market rate in the relevant community.” Blum v. Stenson,
465 U.S. 886, 895 (1984). The prevailing market rate is “that which lawyers of comparable skill
and experience can reasonably expect to command within the venue of the court of record . . . .”
Addock-Ladd v. Sec’y of Treasury, 227 F. 3d 343, 350 (6th Cir. 2000).
There are cases in which the lodestar method leads to an excessive award for a party who
has won only nominal damages. Hensley, 461, U.S. 436. The district court is obligated to
consider the amount and nature of damages awarded in relation to the fee amount sought. City of
Riverside Riverside v. Rivera, 477 U.S. 561, 585 (1985) (Powell, J., concurring in judgment); see
Wikol ex rel. Wikol v. Birmingham Pub. Sch. Bd. of Educ., 360 F.3d 604, 612 (6th Cir. 2004)
(quoting Hensley, 461 424, 440 (“[W]here the plaintiff achieved only limited success, the district
court should award only that amount of fees that is reasonable in relation to the results
obtained.”). Usually, a plaintiff who only has won nominal damages is entitled to a reasonable
fee that is actually no fee. Rivera, 477 U.S. at 580.
Section 1988 also grants the court the authority to award out-of-pocket expenses if they
are reasonably incurred. These expenses include postage, travel, meals, legal research and expert
fees. Northcross v. Board of Education of Memphis City Schools, 611 F.2d 624, 639 (6th Cir.
1979).

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The court may order discovery of any relevant matter in a case if there is good cause. See
Fed. R. Civ. P. 26(b)(1). Discovery on fees is rare because it can result in a second round of
major litigation in a case. Hensley, 461, U.S. 424, 437 (1983).
B. Defendants’ Motion
Defendants argue limited discovery on the issue of fees must take place because
Plaintiffs’ billing entries are vague and offer inadequate descriptions of work done on this case,
particularly work done with the description “attention to.” In an effort to avoid creating a second
trial on the issue of attorney’s fees, the Court will DENY Defendants’ Motion. Plaintiffs’
submission in Exhibit 4 of their Motion for Fees and Expenses details counsel’s billing entries in
a manner that accounts for roughly 87% of the work done in this matter. “Attention to entries”
comprise roughly 13% of the billing entries. The Court has the authority to address vague
entries in the motion for fees and expenses, and does not see the need to create a trial within a
trial over the issues of attorney’s fees.
C. Plaintiffs Motion
CDG and Murray are prevailing parties and seek fees based on the lodestar method for
the work their counsel has performed on this case. Plaintiffs have submitted significant evidence
in order to establish counsel has billed at reasonable rates for the region. See Pls’. Ex. 2, 3, & 5.
Plaintiffs have complied records for their hours spent on various aspects of this case. See Pls’.
Ex. 4 & 7-9. The total amount Plaintiffs seek for work done on the matter is $763,093.00 plus a
10% fee enhancement, which adds up to an $839,402.30 attorney’s fee request. See Pls’. Mot. at
21. Plaintiffs also seek costs totaling $33,590.69. Defendants argue that CDG is not entitled to
fees because the jury did not award damages to CDG on its due process claim, there is no
entitlement to fees on the state law claims, and Plaintiffs engaged in fraud.
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In the absence of special circumstances, the district court must award fees to the
prevailing party. Cleveland v. Ibrahim, 121 F.App’x 88, 90 (6th Cir. 2005) (citing Wikol, 360
F.3d at 611). The Sixth Circuit has not found an instance where special circumstances justify
denying fees under § 1988. McQueary v. Conway, 614 F.3d 591, 604 (6th Cir. 2010) (changes in
law that would change the outcome of the case are not special circumstances that justify denial of
attorney’s fees); see Wikol, 360 F.3d 611 (prevailing party’s bad acts are not special
circumstances that justify denial of attorney’s fees).
Defendants rely on Farrar for their argument, but Farrar does not establish a bright-line
rule that a Plaintiff who wins nominal damages cannot recover attorney’s fees. The jury found
Wayne violated CDG’s procedural due process rights, and CDG is a prevailing party under §
1988. Although Farrar holds that usually the reasonable fee is zero for a plaintiff who has won
nominal damages, the same facts and evidence applied to both CDG and Murray’s procedural
due process claims. Plaintiffs made arguments on identical claims, used a common set of
evidence to make these arguments, and succeeded on the merits for those claims. The award of
damages to Murray still achieved Plaintiffs’ desired results. See Isabel, 404 F.3d at 416 (holding
plaintiff’s success on one of four claims did not justify reducing attorney’s fees).

Work

conducted for both CDG and Murray required counsel to apply the same legal theories and
conduct legal work for to two distinct clients, a corporate client and individual client. The state
law claims in this case are part of a common core of facts and derive from the due process
violation. Plaintiffs presented evidence that Wayne considered them debarred before having a
hearing, and said such in front of other contractors. Defendants offer no basis for their claim to
the contrary.

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Defendants vigorously argue that Plaintiffs engaged in fraud, and therefore, any
deprivation was harmless or justified. This argument is unavailing. The jury was not asked to
assess Plaintiffs’ culpability. Moreover, both parties presented evidence that Plaintiffs had
misled Wayne regarding the Prevailing Wage Act, and the jury still found Wayne in breach of
contract.
Defendants also contend that the hours logged by Plaintiffs’ counsel are excessive and
should be limited to those adequately attributed to work on Murray’s claim of deprivation of
debarment procedure. Defendants argue Plaintiffs’ counsel has not adequately detailed work for
particular clients on particular claims. For reasons explained above, the court finds the claims in
this case to be interrelated and derivative of a common set of sets that apply to both plaintiffs. A
review of Plaintiffs’ Exhibit 4, however, does show that some entries lack specificity and are
categorized as “attention to.” The Plaintiffs acknowledge that the court has the authority to
apply across-the-board reductions in fees for vague billing entries. See Potter v. Blue Cross Blue
Shield of Michigan, 10-14981, 2014 WL 1304327, at 26* (E.D. Mich. Mar. 31, 2014). The
“attention to” entries are vague relative to other entries. The sum total of these entries is
$97,802.00 of the $763,093.00 request or 12.8% of the total request. Given the size of this
amount relative to the total request, the Court will apply a 10% reduction to Plaintiffs’ fee
request. The Court will award Plaintiffs $686,784.00 in attorney’s fees, and will not grant their
requested fee enhancement.
Plaintiffs also seek $33,590.69 in costs. Plaintiffs’ costs consist of postage, meals, travel,
legal research and expert fees. The statute explicitly authorizes expert fees. See § 1988(c).
Proper invoices that charge the product of the experts’ hours worked multiplied by a reasonable

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fee in this case support expert fees. See Pls’. Ex. 14. The Court will award Expert expenses in
the amount of $11, 743.75.
Under § 1988, the court can award costs for reasonable expenses for photocopying,
paralegal services, travel and telephone costs. Doherty v. City of Maryville, Tenn., 3:07-CV-157,
2010 WL 3619958, at *4 (E.D. Tenn. Aug. 19, 2010); see also Northcross, 611 F.2d at 639.
Postage: Plaintiffs’ Postal expenses are supported by a series of receipts that indicate the
postage was for this matter and the total costs of the shipping from the carrier. Plaintiffs seek to
recover $136.67 in costs for postage, and have offered sufficient evidence to support their
request. See Doherty, 2010 WL 3619958, at *4 (awarding costs for postage supported by
submission of receipts). The Court will award costs for postage in the amount of $136.67.
Meals: Plaintiffs seek $98.53 in costs for meals. The Tenth Circuit has approved costs
for meals. Sussman v. Patterson, 108 F.3d 1206 (10th Cir.1997) (approving award of costs in
civil rights action for photocopying, mileage, meals, and postage). A court in the Western
District of Michigan has cited this case when explaining allowable costs. Beck v. Manistee
Cnty., No. 1:97-CV-533, 2005 WL 2620194 (W.D. Mich. Oct. 14, 2005). Plaintiffs submitted
receipts in their request for costs for meals that total; $91.53 not including gratuity. Plaintiffs
have adequately supported this cost, and the Court will award costs in the amount of $91.53 for
meals.
Travel: Plaintiffs seek costs for travel expenses in the amount of $301.00. These costs
include travel to depositions and court proceedings for the case. See Pls’. Ex. 12. Plaintiffs seek
to recover the cost of using various parking lots in Downtown Detroit. These costs are also
supported by receipts and cost reports. The Court will award travel expenses in the amount of
$301.00.
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Legal Research: Plaintiffs seek $21,310.74 in legal research costs for this matter. There
is no binding Sixth Circuit authority that states legal research fees are reasonable costs under
§1988. Cleveland Area Bd. of Relators v. City of Euclid, 965 F.Supp. 1017, 1023-24 (N.D. Ohio
1997) (awarding computerized legal research costs under §1988 following the trend of other
circuits and district courts); see also Project Vote v. Blackwell, No. 1:06–CV–1628, 2009 WL
917737, at *19 (Mar. 19, 2009 N.D. Ohio). Generally, the added costs of this research equals the
time and money saved in man hours on manual research. Haroco, Inc. v. American Nat'l Bank &
Trust Co. of Chicago, 38 F.3d 1429, 1440–41 (7th Cir.1994). The trend of awarding fees for
computerized legal research is twenty years old.

This Court shares the Seventh Circuit’s

sentiment in Haroco, and will award fees for legal research in the amount of $21, 310.74.
The court will award expenses to Plaintiffs in the amount of $33,583.69 and $686,784.00
in attorney’s fees.
IV.

Conclusion

For the aforementioned reasons, the Court will award attorney’s fees and expenses, and
Plaintiffs’ Motion for Attorney’s and Expenses [#234] is GRANTED. Defendants’ Motion for
an Order for Limited Discovery Related to Plaintiffs’ Motion for Attorney’s Fees and Expenses
[#246] is DENIED.
SO ORDERED.

/s/Gershwin A Drain
Hon. Gershwin A. Drain
United States District Court Judge

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