Montgomery v. Kraft Foods Global, Inc. et al
Filing
165
OPINION REGARDING PLAINTIFF'S MOTION FOR ATTORNEY'S FEES AND COSTS AND RELATED MOTIONS; signed by Judge Gordon J. Quist (Judge Gordon J. Quist, jmt)
UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
__________________________
PAMELA MONTGOMERY, on behalf of
Herself and for the Benefit of All with the
Common or General Interest, Any Persons
Injured, and All Others Similarly Situated,
Plaintiffs,
v.
Case No. 1:12-CV-00149
KRAFT FOODS GLOBAL, INC.,
a Delaware Corporation; and
STARBUCKS CORPORATION,
a Washington Corporation,
HON. GORDON J. QUIST
Defendants.
_________________________________/
OPINION REGARDING PLAINTIFF’S MOTION FOR
ATTORNEY’S FEES AND COSTS AND RELATED MOTIONS
BACKGROUND
Plaintiff, Pamela Montgomery, filed a class action complaint in this case on February 20,
2012 against Defendants, Kraft Foods Global, Inc. and Starbucks Corporation, alleging state law
claims for violation of the Michigan Consumer Protection Act (MCPA), M.C.L. § 445.901 et seq.
and similarly worded state laws, innocent misrepresentation, breach of express and implied
warranties and breach of contract. Montgomery also asserted a federal claim of unfair competition
in violation of the Lanham Act, 15 U.S.C. § 1125 et seq. (Dkt. # 1.) Montgomery, a Starbucks
coffee drinker, alleged that she purchased a Kraft-Tassimo single serving coffee brewing system for
approximately $100, for the purpose of brewing Starbucks coffee. Montgomery alleged that from
January 2010 until about November or 2011, Kraft and Starbucks disseminated false and misleading
information designed to lead consumers to believe that Starbucks T-discs (the single-serve beverage
component of the brewing system) would be available for a reasonable amount of time into the
future, although Defendants knew that their business relationship would soon be at an end.
Montgomery further alleged that after she purchased her Tassimo, it became increasingly difficult
and impossible to find Starbucks T-discs.
On May 10, 2012, Defendants filed separate motions to dismiss all of Montgomery’s claims.
(Dkt. ## 14, 16.) On September 24, 2012, after the motions to dismiss were fully briefed, the Court
heard oral argument. On October 9, 2012, Montgomery filed a first amended class action complaint
that, among other things, amended the proposed class definitions and deleted the Lanham Act claim.
Defendants then renewed their motions to dismiss. On December 6, 2012, the Court issued an
Opinion and Order granting in part and denying in part Defendants’ motions to dismiss. (Dkt. ##
39, 40.) Specifically, the Court dismissed Montgomery’s claims for breach of express and implied
warranties, breach of contract, and violation of section 3(1)(h), (n), (p), (q), (t), (u), and (w) of the
MCPA, leaving the alleged violation of section 3(1)(a), (c), (s), (bb), and (cc) of the MCPA as
Montgomery’s only viable claim.1
On February 28, 2013, the Court issued a Case Management Order that provided for an
initial phase of discovery regarding class certification, ending on August 15, 2013, to be followed
by a motion for class certification by Montgomery. (Dkt. # 51.) Thereafter, the parties engaged in
class discovery and, after an extension of the class discovery and motion for class certification
deadlines, Montgomery filed her motion for class certification on October 1, 2013. Following the
completion of briefing on the motion for class certification, the Court heard oral argument, and on
May 9, 2014, issued an Opinion and Order denying Montgomery’s motion for class certification.
(Dkt. ## 132, 133.) Montgomery did not appeal the denial of class certification. See Fed. R. Civ.
P. 23(f).
1
Montgomery abandoned her innocent misrepresentation claim by failing to address it in her response. (Dkt.
# 39 at Page ID#424 n.2.)
2
The denial of class certification left Montgomery’s individual claim under the
MCPA—which would have provided Montgomery a maximum recovery of $250 in statutory
damages had she prevailed at trial—as the only claim remaining in the case. On September 3, 2014,
in light of minimal potential damages, the certainty that the amount of attorney fees that would be
incurred to further litigate the case would dwarf any damages that Montgomery might recover, and
the parties’ inability to formulate a reasonable and economical plan to resolve the case, the Court
issued an Order to Show Cause why the Court should not order Defendants to submit an offer of
judgment to Montgomery in the amount of $250.00, plus costs and reasonable attorney fees as
determined by the Court. (Dkt. # 144.) In response to the Order to Show Cause, Defendants made
an offer of judgment to Montgomery on substantially the same terms outlined in the Order to Show
Cause. On October 1, 2014, after further posturing, Montgomery accepted Defendants’ offer of
judgment, with the qualification that she was not waiving her right to appeal the Court’s denial of
class certification. (Dkt. # 150.)
In accordance with the briefing schedule issued by the Court, Montgomery has filed a motion
for attorney’s fees and costs. Montgomery has also filed several related motions. The motions are
fully briefed and ready for decision.
DISCUSSION
I.
Montgomery’s Motions to Delay Ruling on Motion for Attorney Fees and Costs, to
Compel Attorney Fee Records, and to Conduct an Evidentiary Hearing on Defendants’
Objections
After filing her motion for attorney’s fees and costs, Montgomery filed three ancillary
motions—a motion requesting the Court to delay ruling on Montgomery’s request for attorney fees
and costs pending the Court’s review of Defendants’ fee records, a motion to compel Defendants
and their counsel to produce their attorney fee billing records, and a motion for an evidentiary
hearing on Defendants’ objections to Montgomery’s request for fees and costs. The Court will deny
all of these motions.
3
Montgomery filed her motion for attorney’s fees on October 23, 2014. On November 17,
2014, after Defendants filed their response raising numerous objections to Montgomery’s request,
Montgomery filed a motion requesting the Court to delay ruling on her request for fees and costs
until the Court reviewed Defendants’ counsels’ billing records to measure the legitimacy of
Defendants’ objections.2 Montgomery argued that “[a]fter promising to forego the issue of
Plaintiff’s entitlement to attorney fees and costs under the MCPA to induce acceptance, Defendants
now seek to ‘have it both ways’ by opposing Plaintiff’s submission of documents supporting those
reasonable fees and costs.”3 (Dkt. # 157 at Page ID#3231.) Subsequently, Montgomery served
non-party subpoenas on Defendants’ law firms pursuant to Rule 45 of the Federal Rules of Civil
Procedure, requesting them to produce their billing entries and fee statements in relation to this case.
(Dkt. # 159-2.) After the law firms objected to the subpoenas, Montgomery filed a motion to
compel Defendants and their law firms to produce their billing records.
Montgomery’s request for opposing counsel’s billing information, while a first for this Court,
is not unprecedented. As Montgomery notes, some courts have required a party opposing a fee
2
Although docketed as a supplement to her motion for attorney’s fees, Montgomery’s request for a delay on
the ruling is actually denominated as a separate motion.
3
Montgomery noted that Defendants criticized her for failing to cite any legal authority supporting her request
for an attorney’s fee award of $174,786.50.51 for obtaining a $250 settlement or to even file a brief supporting her
request. She also asserted that Defendants made a misleading argument that Montgomery’s counsel included a single
time entry for 36 hours of travel in one day (even though counsel’s bill of costs reflected only 3.1 hours of flight time
on that day), and that Defendants attempted to mislead the Court by attaching Montgomery’s “class action”portion of
her retention agreement with her counsel. (Dkt. # 157 at Page ID##3231–32.) Montgomery’s contentions lack merit.
As Defendants accurately noted, Montgomery did not submit a brief in support of her motion for attorney’s fees and
costs, as required by Local Rule 7.1(a) (“All motions, except those made during a hearing or trial, shall be accompanied
by a supporting brief.”). Defendants are thus absolutely correct that M ontgomery failed to provide any legal authority,
because she did not file a brief. Moreover, Defendants did not, as M ontgomery suggests, agree to simply accept
whatever fee amount Montgomery requested as reasonable. As for the 36-hour time entry, it is hard to see how
Defendants’ argument could be misleading when, in fact, Montgomery’s counsel actually included a 36-hour entry for
a single day in his billing records. Even if Defendants had not raised the issue, the Court (which Montgomery cannot
claim should have known about the circumstances of her counsel’s travel) would have raised the issue sua sponte in
reviewing Montgomery’s counsel’s records for reasonableness. Finally, Defendants did not mislead the Court by
attaching a copy of Montgomery’s retainer agreement to their response. Montgomery stated in her motion that she
agreed to an hourly rate of $350 “pursuant to a duly entered and executed hourly retainer agreement.” (Dkt. # 152 at
Page ID#3028.) Montgomery did not attach a copy of such “hourly retainer agreement” to her motion, nor did she attach
a copy of such document to any of her numerous subsequent filings. Defendants submitted the retainer agreement— the
only such agreement that has been presented to the Court— to show that Montgomery never agreed in writing to an
hourly rate of $350.
4
request to produce its own counsel’s billing records because such information might be probative
of whether the time spent on the case by the party seeking fees was reasonably and necessarily spent
on the case. See Stastny v. S. Bell Tel. & Tel. Co., 77 F.R.D. 662, 663–64 (D.C.N.C. 1978)
(requiring opposing counsel to provide information as to the number of hours each attorney spent
on the case and on what matters the time was spent); Chi. Prof’l Sports Ltd. P’ship v. Nat’l
Basketball Ass’n, 1996 WL 66111, at *3 (N.D. Ill. Feb. 13, 1996) (noting that in an antitrust case
“it is not an abuse of discretion to find that a defendant’s costs and hours are irrelevant to the
reasonableness of a plaintiff’s claimed award,” but allowing the plaintiffs to obtain the defendant’s
billing information because such information might provide the best available comparable standard
to measure the reasonableness of the plaintiffs’ fees); Coalition to Save Our Children v. State Bd.
of Educ., 143 F.R.D. 61, 64–65 (D. Del. 1992) (citing In re Fine Paper Antitrust Litig., 751 F.2d
562, 587 (3d Cir. 1984), and noting that “[t]he Third Circuit Court of Appeals has recognized that
evidence of fees and expenditures of other parties may be relevant to the issue of the reasonableness
of the petitioner’s fees and leaves questions of discovery on this issue to the informed discretion of
the district court.”). Montgomery also cites several cases from the Western District of Tennessee
that allowed discovery of opposing counsel’s fees. See, e.g., Pollard v. E.I. DuPont de Nemours &
Co., No. 95-3010, 2004 WL 784489, at *3 (W.D. Tenn. Feb. 24, 2004) (concluding that the
defendant’s counsel’s billing records could be relevant to the defendant’s objections that the
plaintiff’s fee request included hours that were excessive, redundant, or unnecessary).
On the other hand, as Defendants note, several circuits, including the Seventh, Tenth, and
Eleventh Circuits, have concluded that opposing counsel’s fees are generally not relevant to a
moving party’s fee request. For example, in Mirabal v. General Motors Acceptance Corp., 576 F.2d
729 (7th Cir. 1978), the Seventh Circuit observed that opposing counsel’s fees are not helpful in the
determination of a fee petition because “a given case may have greater precedential value for one
side than the other,” and “a plaintiff’s attorney, by pressing questionable claims and refusing to
5
settle except on outrageous terms, could force a defendant to incur substantial fees which he later
uses as a basis for his own fee claim.” Id. at 731. Similarly, in Johnson v. University College of
University of Alabama in Birmingham, 706 F.2d 1205 (11th Cir. 1983), the Eleventh Circuit stated:
“The amount of hours that is needed by one side to prepare adequately may differ substantially from
that for opposing counsel, since the nature of the work may vary dramatically. The case may have
far greater precedential value to one side than the other.” Id. at 1208. In addition, both the
Michigan Supreme Court and the Michigan Court of Appeals have indicated it is improper to
consider the fees of opposing counsel to measure the reasonableness of the attorney fees incurred
by the party seeking a fee award. See Fletcher v. Bd. of Educ., 323 Mich. 343, 349, 35 N.W.2d 177,
180 (1948) (“The reasonableness of the charges for services by one attorney cannot be measured by
what some other attorney would charge. There is no universal yardstick which can be used to
measure the reasonableness of charges for services of all attorneys, comparing one with another.”
(internal quotation marks omitted)); Smolen v. Dahlmann Apartments, Ltd., 186 Mich. App. 292,
298, 463 N.W.2d 261, 264 (1990) (noting that “the reasonableness of charges for legal services
performed by one attorney is not measured by what other attorneys would charge” and holding that
“the trial court did not abuse it discretion in refusing to permit the discovery of defendants’
attorneys’ time records and hourly rates”).
Regardless of whether opposing counsel’s billing statements and fees can ever be an
appropriate consideration in an attorney’s fee dispute, Montgomery is not entitled to such
information in this case because she has failed to show how it could be relevant to the specific
objections Defendants have raised. Defendants’ objections concern matters such as the sufficiency
and accuracy of Montgomery’s counsel’s billing records, Montgomery’s request for fees related to
class discovery and class certification (which the Court denied) and claims that were dismissed, and
the reasonableness of Montgomery’s counsel’s proposed rate of $350 for a sole practitioner in
Lansing in his first year of practice. Defendants are not arguing that Montgomery’s counsel spent
6
too much time on a particular task, for which their counsels’ billing records could arguably be
relevant. In light of Defendants’ objections, their counsels’ billing records cannot assist the Court
in determining whether Montgomery is entitled to fees incurred in connection with her class action
allegations and unsuccessful claims, whether Montgomery’s counsel’s billing records and
descriptions of the work performed are too inaccurate or insufficient to enable the Court to
determine whether the work performed was reasonable, and whether Montgomery has failed to show
that her counsel’s requested hourly rate is reasonable for an attorney with similar experience, in a
similar locale, and in similar circumstances. Moreover, the United States Supreme Court has stated
that the determination of a reasonable attorney’s fee “should not result in a second major litigation.”
Hensley v. Eckerhart, 461 U.S. 424, 437, 103 S. Ct. 1933, 1941 (1983). As recognized in the
Court’s September 3, 2015 Order to Show Cause, Defendants’ offer of judgment was not an
admission that Defendants had no defense to Montgomery’s MCPA claim, but instead was a means
to end a case that could no longer be economically justified and that could serve only to
unnecessarily generate additional attorney fees. It would be ironic, indeed, if the Court were to
allow Montgomery’s requested discovery in these circumstances, thereby resulting in increased fees.
Montgomery has also moved for an evidentiary hearing on Defendants’ objections. In Smith
v. Khouri, 481 Mich. 519, 751 N.W.2d 472 (2008), the Michigan Supreme Court held that “[i]f a
factual dispute exists over the reasonableness of the hours billed or hourly rate claimed by the fee
applicant, the party opposing the fee request is entitled to an evidentiary hearing to challenge the
applicant’s evidence and to present any countervailing evidence.” Id. at 532, 751 N.W.2d at 480.
In the instant case, Defendants, who are the “part[ies] opposing the fee request,” have not requested
a hearing. Moreover, a court has discretion whether to hold an evidentiary hearing. John J. Fannon
Co. v. Fannon Prods., LLC, 269 Mich. App. 162, 171, 712 N.W.2d 731, 737 (2005). “If the trial
court has sufficient evidence to determine the amount of attorney fees and costs, an evidentiary
hearing is not required.” Id. In spite of Montgomery’s insistence that a hearing is required to allow
7
her counsel to address Defendants’ objections, the Court concludes that an evidentiary hearing is
not warranted because the materials that the parties presented are sufficient to allow the Court to
determine a reasonable fee award.
II.
Montgomery’s Motion for Attorney’s Fees and Costs
A.
Attorney’s Fees
Pursuant to the MCPA, a plaintiff that prevails on a claim under the MCPA is entitled to
recover her “reasonable attorneys’ fees.” M.C.L. § 445.911(2). Montgomery requests that the Court
award her attorney’s fees in the amount of $174,786 through October 2, 1014, based on 499.39
hours of work performed at an hourly rate of $350. In addition, Montgomery has submitted a
supplemental fee request in the amount of $8,382.50 for 23.95 hours of work that her counsel
performed after accepting the offer of judgment.
The burden of establishing the reasonableness of attorney fees is on the party requesting
them. Reed v. Reed, 265 Mich. App. 131, 165–66, 693 N.W.2d 825, 846 (2005). “[T]here exists
no precise formula by which a court may assess the reasonableness of an attorney fee.” In re Temple
Marital Trust, 278 Mich. App. 122, 138, 748 N.W.2d 265, 274 (2008) (per curiam). However, the
Michigan Supreme Court has noted that courts may consider the following factors from Crawley
v. Schick, 48 Mich. App. 728, 737, 211 N.W.2d 217, 222 (1973), in computing reasonable attorney
fees: “(1) the professional standing and experience of the attorney; (2) the skill, time and labor
involved; (3) the amount in question and the results achieved; (4) the difficulty of the case; (5) the
expenses incurred; and (6) the nature and length of the professional relationship with the client.”
See Wood v. Detroit Auto. Inter-Ins. Exch., 413 Mich. 573, 588, 321 N.W.2d 653, 661 (1982).
Subsequently, in Smith, supra, the court observed that trial courts have also applied the factors listed
in Rule 1.5(a) of the Michigan Rules of Professional conduct in assessing reasonable attorney’s fees.
Id. at 529, 751 N.W.2d at 479. Those factors, which overlap with the Crawley factors, include:
8
(1)
the time and labor required, the novelty and difficulty of the questions involved, and
the skill requisite to perform the legal services properly;
(2)
the likelihood, if apparent to the client, that the acceptance of the particular
employment will preclude other employment by the lawyer;
(3)
the fee customarily charged in the locality for similar legal services;
(4)
the amount involved and the results obtained;
(5)
the time limitations imposed by the client or by the circumstances;
(6)
the nature and length of the professional relationship with the client;
(7)
the experience, reputation, and ability of the lawyer or lawyers performing the
services; and
(8)
whether the fee is fixed or contingent.
Id. at 530, 751 N.W.2d at 479 (quoting MRPC 1.5(a)).
In applying the factors listed above,
a trial court should begin its analysis by determining the fee customarily charged in
the locality for similar legal services, i.e., factor 3 under MRPC 1.5(a). In
determining this number, the court should use reliable surveys or other credible
evidence of the legal market. This number should be multiplied by the reasonable
number of hours expended in the case (factor 1 under MRPC 1.5(a) and factor 2
under [Crawley]). The number produced by this calculation should serve as the
starting point for calculating a reasonable fee. We believe that having the trial court
consider these two factors first will lead to greater consistency in awards.
Thereafter, the court should consider the remaining [Crawley]/MRPC factors to
determine whether an up or down adjustment is appropriate. And, in order to aid
appellate review, a trial court should briefly discuss its view of the remaining factors.
Id. at 530–31, 751 N.W.2d at 479–80. A reasonable fee should be proportionate to the results
obtained. Augustine v. Allstate Ins. Co., 292 Mich. App. 408, 437, 807 N.W.2d 77, 94 (2011).
Customary Fee
Montgomery contends that she is entitled to fees “based upon an agreed hourly rate of
$350.00 per hour,” but she has submitted no proof that she actually agreed to pay her counsel, Mr.
McCarthy, $350 per hour for his services in this case. Moreover, Montgomery has offered no
evidence concerning McCarthy’s experience, reputation, or ability as an attorney. In his declaration,
9
McCarthy states that a rate of $350 is reasonable because it is commensurate with the rate charged
by Michigan solo practitioners in the 95th percentile, as set forth in the State Bar of Michigan’s 2014
Economics of Law Practice Survey attached to his declaration. (Dkt. # 154 at Page ID#3094; Dkt.
# 154-1.) However, McCarthy fails to give any reason why the Court should apply the rate for the
95th percentile of solo practitioners.
Defendants, on the other hand, contend that an appropriate hourly rate for Mr. McCarthy’s
work in this case is $110 per hour, based on various hourly rate considerations addressed in the State
Bar of Michigan’s 2011 Economics of Law Practice Survey. (Dkt. # 156-6.) Defendants note that,
at the time Mr. McCarthy began his work on this case, he had been a licensed attorney for less than
eight months, that Mr. McCarthy practices law in Lansing, and that Mr. McCarthy is a solo
practitioner working out of a home office.4 According to the 2011 survey, for attorneys in their first
year of practice, hourly rates were $125 for the 25th percentile, $190 for the 75th percentile, and
$200 for the 95th percentile. The mean rate for first year attorneys was $154. For solo
practitioners, hourly rates were $150 for the 25th percentile, $200 for the 75th percentile, and $300
for the 95th percentile, with a mean rate of $180. The survey also shows that the mean rate for
attorneys in the Lansing area was 6.4% lower than the mean rate for all private practitioners.
Defendants arrive at a rate of $110 by starting with the mean rate for solo practitioners of $180,
applying the difference in the mean rates for first year attorneys and all attorneys (65.2%), and
applying the difference in mean rates for Lansing attorneys (93.6%) to arrive at approximately $110.
Michigan courts have held that surveys such as those produced by the State Bar of Michigan
are appropriate sources for determining reasonable hourly rates in fee cases. Smith, 481 Mich. at
4
There is no evidence in the record indicating whether Mr. McCarthy actually works out of his home or whether
he has an office outside of his home. The rates in the 2011 survey for solo practitioners vary based on whether the
attorney has an office outside the home, practices from the home, or shares space (presumably outside the home), with
attorneys working out of a home office charging the least. The differences in rates are not material to the Court’s
analysis of a reasonable hourly rate.
10
531–32, 751 N.W.2d at 480. In this case, the 2011 survey provides the most relevant data, as
McCarthy performed much of the work at issue in 2011. Based on its review of the pertinent
information submitted by the parties, the Court concludes that $155 per hour is a reasonable rate for
the work performed in this case. The Court rejects McCarthy’s proposed rate of $350 because
McCarthy has failed to show that the circumstances warrant it. As Defendants note, McCarthy took
this case as a first year solo practitioner in Lansing. As such, his proposed rate is significantly more
than the mean rates for first year attorneys, solo practitioners, and attorneys in Lansing, and
McCarthy has shown no reason for such a significant departure from those rates. Moreover, this was
not a complex case. Montgomery’s MCPA claim was relatively straightforward and could have
been handled by any attorney without any particular specialized experience. On the other hand, the
Court concludes that Defendants’ proposed hourly rate of $110 is too low, being 12% less than the
rate for first year attorneys in the 25th percentile and about 27% less than the rate for sole
practitioners in the 25th percentile. A rate of $155 per hour, which was approximately the mean rate
for first year attorneys, is an adequate rate to compensate McCarthy for the work performed in this
case.
Reasonable Number of Hours
As noted, Montgomery requests a fee award for 499.39 hours of work through the date of
her motion for attorney’s fees, and for 23.95 hours of work that McCarthy performed after the
motion was filed. Defendants have categorized the 499.39 hours of work as follows: 1) precomplaint research: 9.90 hours; 2) preparation of the complaint: 38.10 hours; 3) responding to the
motions to dismiss:
41.00 hours5; 3) initial discovery/case management: 16.40 hours; 4)
5
This figure includes 17.5 hours that McCarthy billed in June of 2013 regarding the motions to dismiss— at least
six months after Montgomery had filed her responses and after the Court issued its ruling on the Motions. McCarthy
claims that he made a mistake on his billing entries, which should have read 2012 rather than 2013. (Dkt. # 161-1 at
Page ID#3328.) But that explanation is unavailing because even if the billing entries read 2012, they would still be
inaccurate. The work described in most of those entries pertained to Defendants’ renewed motions to dismiss, which
were not filed until October of 2012. (Dkt. ## 33, 34.)
11
miscellaneous: 3.36 hours; 5) phase I/class certification discovery: 240.78 hours; 6) processing of
phase I/class certification data: 71.95 hours; 7) class certification: 18.10 hours; and 8) post-class
certification ruling: 59.80 hours. (Dkt. # 156-7.) Having compared Defendants’ summary exhibit
to McCarthy’s billing statements, the Court finds it accurate.
Initially, the Court notes that Montgomery’s request for 499.39 hours is unreasonable on its
face because it includes 330.83 hours for work spent on class discovery and class certification
issues. Montgomery states that the hours she requests are “exclusive of work related to Plaintiffs’
Request for Class Certification,” (dkt. # 152 at Page ID#3028), but even a cursory review of
McCarthy’s billing records shows that this is not true. The billing entries describe work that
pertained exclusively to class certification issues, for example, depositions of representatives from
Walmart and Target—stores from which Montgomery did not purchase her Tassimo. To the extent
Montgomery is arguing that she should be awarded fees for work that McCarthy performed during
the class discovery period through the date the Court denied class certification because such work
also supports her individual MCPA claim, her argument ignores the reality that this case was largely,
if not exclusively, driven by Montgomery’s request for class certification, which the Court rejected.
Absent such allegations, Montgomery’s individual claim, involving at most $250 in damages, likely
would have made it no further than the complaint stage and certainly would not have been within
this Court’s jurisdiction.6
Moreover, any suggestion that it would be reasonable to spend
$174,786.50 (at $350 per hour), or even $79,902.40 (at $160 per hour), to recover $250 is patently
absurd.7 Accordingly, the 330.83 hours incurred during class discovery through the denial of class
certification will be excluded from reasonable hours calculation.
6
The Court recognizes that Montgomery included a Lanham Act claim in her complaint which theoretically
would have invoked federal question jurisdiction but, as Defendants demonstrated in their motions to dismiss, such claim
was frivolous.
7
To the extent McCarthy engaged in merits discovery following entry of the February 8, 2013 Case
Management Order, he did so in violation of the Case Management Order, which limited discovery to class certification
issues.
12
Regarding the 9.90 hours that McCarthy spent on pre-complaint research, Defendants
contend that this time should be reduced by 50% to reflect Montgomery’s lack of success on her
claims. The Court concludes that a reduction is appropriate, but concludes that this time should be
reduced to 4 hours to reflect the simplicity of the case as an individual claim under the MCPA.
Moreover, McCarthy’s entries for much of this time, e.g., “Compile and Research Industry Reports,
Data; Chronology Rev.”, provide little detail about how such work related to Montgomery’s
successful MCPA claim, as opposed to her unsuccessful class allegations or dismissed warranty or
Lanham Act claims.
Defendants also contend that the 38.10 hours that McCarthy spent on drafting the complaint
should be reduced by 50%, again to account for Montgomery’s lack of success. Considering that
the vast majority of the allegations and claims in the complaint relate to the proposed classes or to
claims that were dismissed, the Court concludes that 10 hours would have been a reasonable amount
of time to draft a complaint that complied with the pleading requirements of Federal Rule of Civil
Procedure 8(a)(2) for a “short and plain statement of the claim.” This would have entailed no more
than the basic allegations of Montgomery’s purchase of her Tassimo and the pertinent MCPA
violations.8 For similar reasons, Defendants contend that the hours McCarthy spent on the responses
to the motions to dismiss should be reduced by 50%, after deducting the 17.5 hours billed in 2013.
Regardless of whether such hours are considered, the Court concludes that the hours McCarthy spent
responding to the motions to dismiss should be limited to 10 hours because of Montgomery’s
minimal success in defending the motions. In other words, 10 hours would have been a reasonable
amount of time to respond to Defendants’ arguments pertaining to Montgomery’s MCPA claim.
Defendants do not propose a reduction of the 16.4 hours spent on initial discovery/case
8
For example, footnote number 1 of the class action complaint cited similar consumer protection laws from
most, if not all, of the states other than Michigan, paragraphs 20 through 31 pertained solely to the proposed classes, and
paragraphs 36–39, 41, 42, and 45–64 pertained solely to claims that were dismissed. None of this had any bearing on
Montgomery’s individual MCPA claim.
13
management. Accordingly, those hours will be allowed. However, the 3.36 hours of time spent on
miscellaneous matters, described only as “Gilman Law 03212" and “Judicial Estoppel Argument
712/2014 12:34 PM,” will be denied because Montgomery has failed to show how those hours
related to any issue in the case. The description of “Gilman Law 03212" is simply too vague for the
Court to conclude that it furthered Montgomery’s individual MCPA claim, and the issue of judicial
estoppel was never raised by any party, at least in this Court’s recollection.
Defendants also contend that the Court should exclude all of the 59.80 hours that McCarthy
spent on the case following the denial of class certification because such work did not contribute
materially to the resolution of Montgomery’s claims. The Court agrees, for the most part.
Following the denial of class certification and Montgomery’s decision not to file a petition to appeal
that denial, it should have been immediately apparent to Montgomery and McCarthy that continuing
the litigation on Montgomery’s individual claim made no sense. That claim could have likely been
settled for statutory damages and a reasonable attorney fee (or an agreement for the Court to
determine a reasonable fee) with one or two phone calls between counsel. Had McCarthy taken this
route, the case could have been resolved much sooner and without the need for almost 60 hours of
additional time by McCarthy, which did nothing to resolve the case and appears to have been spent
solely on posturing on the issue of attorney’s fees. Accordingly, the Court concludes that one hour
would have been more than reasonable for McCarthy to resolve the case after denial of class
certification.
Citing Coulter v. State of Tennessee, 805 F.2d 146 (6th Cir. 1986), Montgomery seeks an
additional 23.95 hours for work that McCarthy performed for post-offer of judgment matters,
including review of his billing entries, drafting the motion for attorney’s fees, researching legal
issues, and other matters. In Coulter, the Sixth Circuit stated, “[i]n the absence of unusual
circumstances, the hours allowed in preparing and litigating the attorney fee case should not exceed
14
3% of the hours in the main case when the issue is submitted on the papers without a trial and should
not exceed 5% of the hours in the main case when a trial is necessary.” Id. at 151. Montgomery’s
reliance on Coulter is misplaced. The plaintiff in Coulter prevailed on the issue of liability after the
district judge ruled in her favor, and the parties then litigated the issue of attorney fees. Id. at 148.
In contrast to Coulter, Montgomery did not receive a favorable judicial ruling. Instead, Defendants
made an offer of judgment that included “reasonable attorneys’ fees and costs actually incurred and
attributable to the prosecution of Plaintiff’s individual claims.” (Dkt. # 146-1 at Page ID#2992.)
Thus, by its terms, Defendants’ offer of judgment was limited to fees that advanced the prosecution
of Montgomery’s individual claims. The hours that McCarthy incurred after Montgomery accepted
the offer of judgment were not attributable to the prosecution of Montgomery’s claims. In Grissom
v. The Mills Corp., 549 F.3d 313 (4th Cir. 2008), the Fourth Circuit rejected the plaintiff’s claim to
post-offer fees, noting that “when the language upon which Plaintiff relies is read, as it should be,
in conjunction with Rule 68, it is clear that the reference to ‘the issue of attorneys’ fees and costs’
pertains only to attorneys’ fees and costs accrued as of the date of the Defendant’s Rule 68 Offer
of Judgment.” Id. at 320; see also Hanover Grove Consumer Hous. Coop. v. Berkadia Commercial
Mort., LLC, No. 13-13553, 2014 WL 1461399, at *2 (E.D. Mich. Apr. 15, 2014) (holding that under
Sharpe v. Cureton, 319 F.3d 259 (6th Cir. 2003), “where an offer of judgment has been made under
Rule 68, the only attorneys’ fees that are reasonably incurred are those incurred before the
judgment” (internal quotation marks omitted)). Accordingly, Montgomery’s request for post-offer
fees will be denied.
In sum, the Court concludes that the number hours reasonably spent on Montgomery’s
individual MCPA claim is 41.4.
Other Factors
The reasonable hourly rate multiplied by the number of reasonable hours results in a fee of
$6,417 for Montgomery’s recovery of $250 in statutory damages.
15
Considering the remaining Crawley/MRPC 1.5(a) factors, the Court does not find any basis
to adjust the fee up or down. Montgomery does not present any specific argument with regard to
these factors, except McCarthy’s assertion that his work on the case limited his availability to accept
other work. (Dkt. # 153 at Page ID#3072.) While that might have been true while McCarthy was
involved in class discovery and related matters, the fee at issue does not deal with class issues.
There is no reason to believe that 41.4 hours of time spent on Montgomery’s individual claim would
have precluded McCarthy from accepting other work.
To the extent other factors are relevant, such as the amount in question and the results
achieved, or the difficulty of the case, the Court has considered those issues as part of the
determination of a reasonable hourly rate. Because a fee of $6,417 is proportionate to the amount
recovered and Montgomery’s success in this case, no adjustment will be made.9
B.
Costs
Montgomery also seeks costs in the amount of $5,183.56, consisting of a filing fee of $400
and court reporting and deposition transcript fees in the amount of $4,783.56. After she filed her
motion for costs and attorney’s fees, Montgomery filed a supplemental request for costs for an
additional $3237.45 in costs consisting of travel expenses. (Dkt. # 155-1.)
The MCPA does not address costs. The general costs statute, 28 U.S.C. § 1920, sets forth
the types of costs that a court may tax against the losing party. Citizens Against Pollution v. Ohio
Power Co., 484 F. Supp. 2d 800, 815 (S.D. Ohio 2007). The statute provides:
A judge or clerk of any court of the United States may tax as costs the
following:
(1) Fees of the clerk and marshal;
9
The Court notes that an additional reduction based on McCarthy’s failure to keep contemporaneous and
accurate time records might be warranted in this case. Olson v. Olson, 256 Mich. App. 619, 636, 671 N.W .2d 64, 74
(2003) (“W hile such [contemporaneous billing] records are not required to be kept, in demanding a large sum of attorney
fees the lack of contemporaneous time records leaves room for doubt regarding the reasonableness of the hours
expended.” (quoting Howard v. Canteen Corp., 192 Mich. App. 427, 437–38, 481 N.W .2d 718, 725–26 (1991) (per
curiam), ovverruled on other grounds by Rafferty v. Markovitz, 461 Mich. 265, 602 N.W .2d 367 (1999)). However, the
Court declines to apply such a reduction in light of the other reductions made to Montgomery’s claimed hours.
16
(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;
(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
1828 of this title.
28 U.S.C. § 1920.
The filing fee that Montgomery paid may be taxed as costs against Defendants pursuant to
§ 1920(1). However, Montgomery paid a filing fee of $350, not $400. As for the remaining
amounts, Montgomery has failed to show that they are recoverable as costs. Those amounts are for
depositions that were taken during the class discovery period. Because Montgomery did not prevail
on class certification, and Defendants therefore did not lose on the issue, those amounts were not
“necessarily obtained for use in the case.” 28 U.S.C. § 1920(2).10 Accordingly, the Court will award
Montgomery $350 in costs.
CONCLUSION
For the foregoing reasons, the Court will deny Montgomery’s motions to delay ruling on
Montgomery’s motion for attorney’s fees and costs, to compel attorney fee records, and to conduct
an evidentiary hearing on Defendants’ objections. The Court will grant Montgomery’s motion for
attorney’s fees and costs in part and award her $6,417 in attorney’s fees and $350 in costs.
An Order consistent with this Opinion will enter.
Dated: March 2, 2015
/s/ Gordon J. Quist
GORDON J. QUIST
UNITED STATES DISTRICT JUDGE
10
Aside from the fact that Montgomery did not prevail on class certification, the amounts Montgomery requests
for McCarthy’s travel expenses may not be reimbursed as costs under § 1920 because they are not listed in that statute.
Calderon v. Witvoet, 112 F.3d 275, 276 (7th Cir. 1997) (per curiam).
17
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