P I C Group Inc v. Landcoast Insulation Inc

Filing 414

ORDER granting in part and denying in part Plaintiff's 399 Motion for Attorney Fees. The Court awards $40,790.17 in fees to Plaintiff. Signed by District Judge Keith Starrett on August 9, 2011 (dsl)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
SOUTHERN DIVISION

PIC GROUP, INC.,

PLAINTIFF

v.

CIVIL ACTION NO. 1:09-CV-662-KS-MTP

LANDCOAST INSULATION, INC.

DEFENDANTS

MEMORANDUM OPINION AND ORDER
The Court now considers Plaintiff’s Motion for Attorney Fees [399]. For the reasons stated
below the motion is granted in part and denied in part. Plaintiff submitted a request for $69,811
in attorney’s fees incurred due to Defendant’s failure to comply with its discovery obligations. The
Court awards Plaintiff $40,790.17 in attorney’s fees.
I. DISCUSSION
The background of this matter was discussed at length in the Court’s Memorandum Opinion
and Order [396] of July 7, 2011. PIC Group, Inc. v. LandCoast Insulation, Inc., No. 1:09-CV-662KS-MTP, 2011 U.S. Dist. LEXIS 73342 (S.D. Miss. July 7, 2011).
A.

Standard of Review
As the first step in determining the amount of attorney’s fees to award, the Court must

“determine the compensable hours from the attorneys’ time records, including only the hours
reasonably spent.” Shipes v. Trinity Indus., 987 F.2d 311, 319 (5th Cir. 1993). Then, the Court “must
select an appropriate hourly rate based on prevailing community standards for attorneys of similar
experience in similar cases.” Id. The Court then multiplies the number of compensable hours by the
hourly rate to produce the “lodestar” amount. Id.
1

After determining the lodestar amount, the Court may adjust it to account for a variety of
factors. Id. at 320. The pertinent factors are:
(1) the time and labor involved; (2) the novelty and difficulty of the questions; (3)
the skill requisite to perform the legal services properly; (4) the preclusion of other
employment by the attorney due to this case; (5) the customary fee; (6) whether fee
is fixed or contingent; (7) time limitations; (8) the amount involved and results
obtained; (9) the experience, reputation, and ability of counsel; (10) the
undesirability of the case; (11) the nature and length of the professional relationship
with the client; and (12) awards in similar cases.
Id. at 320 n. 6 (citing Johnson v. Ga. Highway Express, 488 F.2d 714, 717-19 (5th Cir. 1974)).
When applying the Johnson factors, the Court should “be careful, however, not to double count a
Johnson factor already considered in calculating the lodestar . . . .” Id. at 320. The Court must also
“explain with a reasonable degree of specificity the findings and reasons upon which the award is
based, including an indication of how each of the Johnson factors was applied.” Id. Upward
adjustments to the lodestar based on the Johnson factors “are proper only in certain rare and
exceptional cases supported by both specific evidence on the record and detailed findings . . . .” Id.
In the present case, Plaintiff’s attorneys billed $69,811.00 in fees purportedly related to
Defendant’s discovery abuses. All of Defendant’s objections pertain to whether the hours are
compensable.
B.

Specific Items Billed by Frilot Firm
First, the Court will address Defendant’s objections to specific items billed by the Frilot firm.

After addressing the objections, the Court will tally the total amount of fees, if any, to be deducted
as non-compensable from the total amount submitted by Plaintiff.
12/7/10

TJE

Review supplemental document production by LCI
to edit Motion for Sanctions

2

2.50 hrs.

$400.00

Defendant argues that Plaintiff would have incurred fees for review of discovery materials
regardless of whether Defendant timely produced them. In response, Plaintiff claims that the fees
above were charged for review that was specifically related to the motion for sanctions. Defendant’s
objection is overruled, as this is a reasonable expense. Plaintiff’s counsel could not effectively draft
a motion for sanctions without assessing the extent of Defendant’s compliance with its discovery
obligations.
12/8/10

TJE

Review of ESI submitted with supplemental
disclosure

2.80 hrs.

$448.00

Defendant objected to this entry on the same basis as the previous one. Unlike the previous
entry, this one does not contain any indication that the work specifically pertained to the motion for
sanctions. Therefore, Defendant’s objection is sustained.
1/14/11

TJE

Correspondence re: reply deadlines

0.30

$48.00

Defendant objects to this entry on the basis that it is vague and exhibits no relation to the ESI
issues in this case. In response, Plaintiff claims that the billing statement was inadvertently cut off
during copying. Defendant’s objection is sustained. Regardless of the reason, the record contains
no evidence that this entry was related to the ESI issues in this case. On January 14, 2011, there were
multiple motions awaiting Plaintiff’s reply, at least one of which – Plaintiff’s Motion for Declaratory
Judgment [254] – did not concern ESI issues.
1/14/11

DPC

(PIC Recovery Action) Telecon to Ed Taylor re:
discovery matters, subpoenas to ex-LCI employees
and motion for extension of time to file reply briefs
on the motion for sanctions, motion for court
appointed forensic expert and motion to enter final
declaratory judgment

3

0.50 hrs.

$80.00

Defendant objects to this entry on the basis that it reflects matters unrelated to ESI issues.
Defendant also argues that Plaintiff would have had to subpoena ex-LCI employees regardless of
Defendant’s failure to comply with discovery obligations. The entry pertains to a telephone
conference about five matters: 1) discovery issues; 2) subpoenas to ex-LCI employees; 3) an
extension of time related to the motion for sanctions; 4) an extension of time related to the motion
for a court-appointed expert; and 5) an extension of time related to the motion to enter a final
declaratory judgment. The subpoenas and the extension of time for a reply brief on the motion to
enter final declaratory judgment are not related to discovery issues. Therefore, the Court will only
award 0.30 hours of the 0.50 hours billed.
1/14/11

DPC

(PIC Recovery Action) Research local rules re:
motions for extension of time

0.30

$48.00

Defendant objects to this entry on the basis that there is no indication that it is related to the
ESI issues in this case. Plaintiff filed a motion for an extension of time [270] to file a reply brief on
its motion for sanctions and motion to appoint a computer forensics expert on January 14, 2011.
Therefore, this fee was related to the ESI issues in this case. Defendant’s objection is overruled.
1/28/11

DPC

(PIC Recovery Action) Review PIC’s second
supplemental discovery to LCI and notices of
service re: additional ESI from PIC that has not
been produced but is potentially responsive

0.50 hrs.

$80.00

Defendant objects to this entry on the basis that Plaintiff’s counsel would have had to review
materials produced during discovery regardless of their timeliness. In response, Plaintiff claims that
this review was necessary to prepare the Motion for Sanctions. There is no indication within this
entry that these fees were incurred specifically for the motion for sanctions. Therefore, Defendant’s
objection is sustained.
4

2/10/11

DPC

(Galvan) Prepare corr. to Jimmy Heidelberg re:
Judge Parker’s ruling re: protective order re: LCI’s
deleted ESI

0.10 hrs.

$16.00

2/10/11

DPC

(Galvan) Review corr. from Jimmy Heidelberg re:
Judge Parker’s ruling re: protective order re: LCI’s
deleted ESI

0.10 hrs.

$16.00

3/4/11

AJK

Prepare correspondence to M. Alexander regarding
Order appointing Craig Ball as Special Master

0.10 hrs.

$22.50

3/4/11

DPC

(Galvan) Prepare correspondence to Mark
Alexander and A. Allison regarding Order from
District Judge Starrett re: Special Master Craig Ball
and LCI’s deletion of ESI

0.20 hrs.

$32.00

These entries represent work done in other cases. Accordingly, Defendant’s objections to
them are sustained.
3/4/11

AJK

Prepare correspondence to D. Rountree regarding
Order appointing Craig Ball as Special Master

0.10 hrs.

$22.50

3/4/11

DPC

(PIC Recovery Action) Prepare report to Dirk
Rountree, Emilio Diego and James Deaver
regarding Order from District Judge Starrett re:
Special Master Craig Ball and effect on potential
settlement with LCI’s excess carrier, ACE
Winchester

0.30 hrs.

$48.00

3/16/11

TJE

Draft letter to client on summary of call with special
master

1.50 hrs.

$240.00

4/8/11

TJE

Draft letter summarizing call with Special Master
from Client

1.80 hrs.

$288.00

4/11/11

TJE

Edit letter to client on call with Special Master

0.50 hrs.

$80.00

4/11/11

AJK

Review and revise report to client – ESI

0.50 hrs.

$112.50

4/27/11

AJK

Prepare correspondence to J. Deaver – Special
Master interim Report

0.10

$22.50

Defendant objects to these entries on the basis that they represent correspondence between
Plaintiff and its attorneys. It is reasonable to expect Plaintiff’s attorneys to communicate with it
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regarding the status of the ESI dispute. These communications would not have been necessary if not
for Defendant’s failure to comply with its discovery obligations. Therefore, Defendant’s objections
are overruled.
4/11/11

TJE

Discussion with A. J. Krouse re: strategy for
reopening discovery

0.40 hrs.

$64.00

4/20/11

TJE

Research on reopening of discovery as sanctions for
spoliation

1.00 hrs.

$160.00

Defendant objects to these entries because it claims that it was already in the process of
supplementing its ESI productions at the time these fees were incurred, and that the fees were
therefore unnecessary. Defendant’s objection is overruled. Plaintiff would not have been forced to
seek the Court’s intervention if not for Defendant’s failure to comply with its discovery obligations.
Regardless of whether Defendant had begun to comply with its obligations, it was reasonable for
Plaintiff to prepare to seek the Court’s intervention.
3/16/11

mkt

coordinate with L. Spooner for possible
supplemental production of metadata

1.00 hrs.

$75.00

4/12/11

ldt

Review of prior disclosures and discovery responses
of LCI for all ESI provided to date

1.80 hrs.

$135.00

4/13/11

ldt

Continue review of prior disclosures and discovery
responses of LCI for all ESI provided to date

0.80 hrs.

$60.00

4/15/11

AJK

ESI review – LCI

2.50 hrs.

$562.50

4/15/11

mkt

Receive link to ESI download from LandCoast;
access and download .zip archived file of first
production; extract files and upload to review
platform; quality control check for accuracy and
compliance with agreed upon production protocol

1.60 hrs.

$120.00

4/16/11

AJK

LCI ESI review sample format

1.50 hrs.

$337.50

4/18/11

AJK

LCI ESI review

1.50 hrs.

$337.50

6

4/18/11

mkt

Receive link to second attempt at production of ESI
from LandCoast via email; access production at FTP
site and download zip archive containing same;
extract production images, natives and load file
from zip archive and edit load file for review
platform; upload production and quality control
check for compliance with agreed upon production
protocol

1.20 hrs.

$90.00

4/20/11

ldt

Continued review of e-mails produced by LCI in
prior disclosures and discovery responses

2.10 hrs.

$157.50

4/26/11

AJK

Receive and review LCI first ESI production

2.40 hrs.

$540.00

5/12/11

AJK

Review LCI Privilege Logs regarding Special
1.70 hrs. $382.50
Master Report
Defendant objects to the above entries because Plaintiff would have incurred these fees

regardless of whether Defendant timely complied with its discovery obligations. The Court agrees.
Even if Defendant had fully complied with its discovery obligations, Plaintiff’s counsel would have
still reviewed these materials and addressed the technical issues surrounding data transfer.
Defendant’s objection is sustained.
6/18/11

TJE

Review of prior filings for draft of response to
LCI’s opposition to report of special master

1.00 hrs.

$160.00

6/20/11

TJE

Draft Memorandum in Support of Rebuttal to
Response to LCI’s Opposition to Special Master’s
final report

2.30 hrs.

$368.00

6/21/11

TJE

Revise Memorandum in Support of Rebuttal to
Response of LCI to Report of Special Master

1.50 hrs.

$240.00

6/21/11

TJE

Finalize Rebuttal to Response of LCI to Report of
Special Master

0.50 hrs.

$80.00

6/22/11

AJK

Review and revise Rebuttal Memorandum - Motion
to Adopt Special Master Report - Sanctions

0.50 hrs.

$112.50

Defendant objects to these entries on the basis that the Court disallowed any further
submissions regarding the Special Master’s report and recommendations during its June 16, 2011,
7

hearing. Defendant is correct. The Court specifically asked the parties whether they had any further
evidence or argument regarding the Special Master’s report and recommendations. The parties had
none, and the Court deemed the time for submissions to be closed. Accordingly, Defendant’s
objection is sustained.
Therefore, after reviewing Defendant’s objections to these specific items, the Court finds that
the following items are not compensable: 1) 8.40 hours submitted by Toni J. Ellington; 2) 1.1 hours
submitted by David P. Curtis; 3) 10.2 hours submitted by Allen J. Krouse; 4) 3.8 hours submitted
by Margery D. Thomas; and 5) 4.7 hours submitted by Lisa D. Towler. These non-compensable
items represent $4,452.50 of the $69,811.00 in fees submitted by Plaintiff.1
C.

Galloway’s Hours
Plaintiff submitted 15.4 hours of work by Robert Galloway from the Butler Snow law firm.

Plaintiff hired Galloway as local counsel in this matter and argues that it required Galloway to
review the correspondence and reports in this matter and familiarize himself with the Special
Master’s investigation. Defendant argues that all of the fees submitted by Galloway are duplicative
of bills submitted by the Frilot firm.
Galloway first appeared in this matter on April 4, 2011. A substantial portion of the hours
submitted for his work appear to have been spent reviewing correspondence among attorneys from
the Frilot firm and other parties. Indeed, as Defendant noted in its brief, these entries are duplicative
of billing from the Frilot firm. Accordingly, the Court will not award fees for those entries.
However, some of Galloway’s time was spent preparing drafts of letters, pleadings, and other

1

(8.40 hours)($160.00) + (1.1 hours)($160.00) + (10.2 hours)($225.00) + (3.8
hours)($75.00) + (4.7 hours)($75.00) = $4,452.50
8

documents. He also attended proceedings on behalf of Plaintiff. These are reasonable expenses.
Therefore, the Court finds that the following hours submitted by Robert Galloway are compensable:
5/10/11

RCG

Review, mark with comments and return to Mr.
Krouse, his draft letter to Craig Ball reporting on
LCI’s ESI production to date

0.60 hrs.

$240.00

5/11/11

RCG

Review revised draft letter to Craig Ball and
telephone conference with Mr. Krouse about
letter

0.40 hrs.

$160.00

5/11/11

RCG

Review letter report to Craig Ball as submitted,
and attached LCI e-mails, and note to Mr.
Krouse about redacting personal identifiers

0.40 hrs.

$160.00

5/18/11

RCG

Review Ed Taylor’s cover letter to Magistrate
Judge Parker and LCI’s Response (and Exhibits
and Affidavits of J. Hatchett and E. Taylor) to
Special Masters Interim Report

0.30 hrs.

$120.00

5/18/11

RCG

Memo to Mr. Krouse, et al, about replying to
LCI’s Response

0.20 hrs.

$80.00

5/18/11

RCG

Memo to Mr. Krouse, et al, with comments on
5/17 draft letter to Special Master about 524 emails recently received from LCI

0.20 hrs.

$80.00

5/18/11

RCG

Review Mr. Krouse’s chart of LCI’s recent ESI
production

0.10 hrs.

$40.00

5/18/11

RCG

Memo to Mr. Krouse, et al, about how to
describe LCI’s ESI production to the Court

0.10 hrs.

$40.00

5/18/11

RCG

Further exchange of e-mails with Mr. Krouse re:
letter to Special Master concerning latest 524 emails produced by LCI

0.30 hrs.

$120.00

5/27/11

RCG

Review and comment on Mr. Krouse’s draft
letter to Craig Ball

0.40 hrs.

$160.00

6/4/11

RCG

Review and comment on Craig Ball’s Final
Report

0.50 hrs.

$200.00

6/7/11

RCG

Work on Motion to Adopt Special Master’s
Reports and Recommendations

0.80 hrs.

$320.00

9

6/8/11

RCG

Further work on Motion to Adopt Special
Master’s Reports and supporting Memorandum

1.20 hrs.

$480.00

6/9/11

RCG

Final proofing, file and circulate Motion to
Adopt Special Master’s Reports and
Recommendations, and supporting
Memorandum

0.40 hrs.

$160.00

6/15/11

RCG

Memo to Special Master Ball with LCI’s
Response to his (Final) Report and
Recommendation

0.20 hrs.

$80.00

6/15/11

RCG

Note to Mr. Ball with PIC’s Motion to Adopt
Special Master’s Reports, etc., and supporting
Memorandum

0.10 hrs.

$40.00

6/16/11

RCG

Travel to Hattiesburg

0.50 hrs.

$200.00

6/16/11

RCG

In Court and participate in arguments on
pending motions

1.00 hrs.

$400.00

6/16/11

RCG

Return to Gulfport

0.50 hrs.

$200.00

8.2 hrs.

$3,280.00

Total:

Accordingly, of the 15.4 hours Plaintiff submitted for work performed by Galloway, 8.2
hours are compensable, reducing the $6,160.00 in requested fees to $3,280.00.
Defendant also argues that Galloway’s hourly rate – $400.00 per hour – is unreasonable in
the local market for this type of routine legal work. Defendant also contends that Plaintiff failed to
submit an affidavit to support its claim that $400.00 per hour is a reasonable and customary rate in
the local market.
Galloway’s submitted rate is higher than any this Court has previously approved for a
Mississippi attorney. However, Galloway performed a limited amount of work in this case, and he
claims to have excluded his travel expenses and the fees for work performed by an associate at his
firm. He further stated in his affidavit that $400.00 per hour is his firm’s established rate for his
work in cases like this one, and that he believes it to be a reasonable one. Therefore, the Court will
10

award fees at the hourly rate requested.1
D.

The Amount of Time Billed
Defendant also argues that Plaintiff’s attorneys billed an unreasonable amount of time for

work on the Motion for Court-Appointed Computer Forensics Expert [256] and Motion for
Sanctions [258]. The Court agrees with Defendant. The Court examined the billing statements
submitted by Plaintiff. In the interest of brevity, the Court will not list the individual entries related
to each motion. However, Plaintiff’s attorneys billed 139.4 hours to research and draft the two
motions listed above [256, 258], and they billed $23,700.00 for that time.2 They also billed an
additional 53.2 hours related to the receipt and review of Defendant’s responses to the motions and
the drafting of rebuttals; they billed another $8,835.50 for those efforts.3 Therefore, Plaintiff’s
attorneys billed it $32,532.50 for 192.5 hours of work on two motions.
This was an unreasonable amount of time for the two motions in question. The Court
conducts research and writes memoranda of law on a daily basis. It is quite familiar with the amount
of time it takes to research an issue and write a brief. The two motions in question did not involve

1

The Court notes, though, that this hourly rate represents the upper boundary of the rates
the Court will award to Mississippi litigators in the absence of more substantial evidence
regarding local market rates than was provided here.
2

Virtually every entry on pages 1 through 6 of Document 401-1 is included in this sum.
The Court did not include two entries, both on page 3 of Document 401-1. The first entry was for
0.20 hours billed by “ldt” for a telephone conference, and the second entry was for 2.80 hours
billed by “TJE” for reviewing ESI submitted with supplemental disclosures. It is not clear the
first entry relates to either of the two motions at issue here. The Court already deemed the second
one to be non-compensable.
3

Again, the Court will not list each individual entry, but the Court has included every
entry on pages 7 through 10 of Document 401-1, with the exception of two entries on page 7 that
the Court already deemed non-compensable and an entry for 0.50 hours on page 10 billed by
“DPC” for review of supplemental discovery responses.
11

complicated or novel issues of law. Even the most cursory research reveals an abundance of
authorities addressing the Court’s discretion to impose sanctions under Rule 37. While cases
addressing the appointment of a computer forensics expert or special master are admittedly more
scarce in this jurisdiction, a case very similar to this one was addressed by the United States District
Court for the Northern District of Mississippi within the past year. See Maggette v. BL Dev. Corp.,
No. 2:07-CV-181-M-A, 2010 U.S. Dist. LEXIS 91647 (N.D. Miss. Sept. 2, 2010). Regardless, other
jurisdictions have addressed ESI issues more frequently than this Court, and those authorities are
not difficult to find.
The Court will only award one third of the fees requested by Plaintiff for the motion for
sanctions and motion to appoint a computer forensics expert – $10,844.17. In so ruling, the Court
does not place a hard limit on the amount of time that attorneys may expend on motions. Plaintiff’s
attorneys simply billed an unreasonable amount of time for the two motions at issue here.
E.

Johnson Factors
Therefore, the Court’s lodestar figure is $40,790.17.4 The Court has already considered some

of the Johnson factors – such as the time and labor involved in the case, and the novelty and
difficulty of the questions of law. Shipes, 987 F.2d at 320 n. 6. After considering the remaining
Johnson factors, the Court finds that it is not necessary to adjust the lodestar any further.
II. CONCLUSION
For the reasons stated above, Plaintiff’s Motion for Attorney’s Fees [399] is granted in part
and denied in part. The Court awards $40,790.17 in fees to Plaintiff.

4

$69,811.00 (amount requested) – $4,452.50 (sustained line-item objections) – $2,880.00
(non-compensable work by Galloway) – $21,688.33 (unreasonable time expended on motion for
sanctions and motion for court-appointed expert) = $40,790.17
12

SO ORDERED AND ADJUDGED this 9th day of August, 2011.
s/Keith Starrett
UNITED STATES DISTRICT JUDGE

13