Machine Maintenance, Inc. d/b/a Luby Equipment Services, Inc. v. Generac Power Systems, Inc.

Filing 186

MEMORANDUM AND ORDER IT IS HEREBY ORDERED that Lubys Motion for Actual Costs and Attorneys Fees, (ECF No. 158) is GRANTED IN PART and DENIED IN PART.IT IS FUTHER ORDERED that Luby is awarded attorneys fees in the amount of $89,364.88 and actual costs in the amount of $40,864.18. 158 160 Signed by District Judge Jean C. Hamilton on 4/29/14. (CLA)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
MACHINE MAINTENANCE, INC.
d/b/a Luby Equipment, Inc.,
Plaintiff,
v.
GENERAC POWER SYSTEMS, INC.,
Defendant.

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Case No. 4:12-cv-793-JCH

MEMORANDUM AND ORDER
This matter is before the Court on Plaintiff Luby Equipment, Inc.’s (“Luby”) Motion for
Actual Costs and Attorneys’ Fees (“Motion”), which it filed on November 27, 2013. (ECF No.
158). The Motion has been fully briefed and is ready for disposition.
On April 3, 2012, Luby initiated this action against Defendant Generac Power Systems,
Inc. (“Generac”) by filing a petition in the Circuit Court for St. Louis County, Missouri
(“Petition”). (Cir. Ct. Dkt. Sh., ECF No. 1-1). Generac then timely removed the matter to this
Court on May 3, 2012. (Notice of Removal, ECF No. 1). The Petition contained two counts.
(Petition, ECF No. 5). Count I alleged a violation of the Missouri Industrial Maintenance and
Construction Power Equipment Act (“MCPEA”), which prohibits manufacturers of industrial
power equipment from terminating retail contracts without good cause and, more relevant to this
Motion, provides a statutory basis for attorneys’ fees. (Petition, ¶¶ 40-48). Count II was a
recoupment claim. Id. ¶¶ 49-61. Generac filed an answer to the Petition on July 3, 2012 after
having a motion to dismiss substantially denied. (ECF Nos. 21, 24). It then filed several
counterclaims on March 28, 2013, none of which is relevant here. (ECF No. 60).

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After a discovery dispute and failed cross-motions for summary judgment, (ECF Nos. 41,
88), the matter went to trial on November 4, 2013. (ECF No. 137). Following a two-week jury
trial, Luby prevailed on its MCPEA claim. The jury awarded Luby with $50,000 in damages,
(Jury Verdict, ECF No. 153), an amount significantly lower than the $6,019,399 Luby sought.
(Trial Tr. Excerpt, ECF No. 176, 16:4-8).
Luby filed this Motion on November 28, 2013. (ECF No. 158). In the Motion, Luby
seeks the following in attorneys’ fees and costs: (1) $728,861.00 in Attorneys’ Fees;1 (2)
$34,759.50 in Trial Support Costs; (3) $13,663.59 in Travel & Meal Expenses; (4) $148,861.26
in Expert Witness Fees; (5) $15,183.30 in Electronic Discovery Management; (6) $2,707.50 in
Mediation Costs; (7) $6,291.75 in Paralegal Fees. (Motion, ECF No. 158, ¶ 3). Altogether, Luby
seeks an award of $950,327.90. Id.
DISCUSSION
I. Whether Luby Can Recover Actual Costs and Attorneys’ Fees
In this diversity action, Missouri law “governs the availability of attorney’s fees[.]” Weitz
Co. v. MH Washington, 631 F.3d 510, 528 (8th Cir. 2011). Missouri adheres to the “American
Rule,” under which a party must pay its own attorneys’ fees unless there is express statutory
authorization or contractual agreement. City of Cottleville v. St. Charles County, 91 S.W.3d 148,
150 (Mo. Ct. App. 2002). Luby claims it is entitled to actual costs and attorneys’ fees under the
MCPEA, which is codified in relevant part at Mo. Rev. Stat. §§ 407.753, 755. Under § 407.753,
any manufacturer of industrial power equipment who enters into a contract with a retailer, under
which the “retailer agrees to maintain a stock of parts or complete or whole machines or

Luby filed a notice on December 18, 2013 that it wished to reduce its attorneys’ fees claim to
$725,897.00. (ECF No. 171). It did not, however, provide the Court with any basis for the reduction.
Because all of the documentation provided to the Court supports the $728,861 figure, the Court has used
that starting point in its calculation of the final award.
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attachments, shall not terminate, cancel, or fail to renew any such contract without good cause.”
Id. If the manufacturer violates § 407.753, then under § 407.755 the retailer “may bring an action
against such manufacturer . . . for damages sustained by the retailer as a consequence of the
violation, together with the actual costs of the action, including reasonable attorney’s fees.” Id.
(emphasis added). According to the Missouri Supreme Court, statutes under Chapter 407—also
known as the Missouri Merchandising Practices Act (“MMPA”)—are pieces of “paternalistic
legislation designed to protect those that could not otherwise protect themselves.” Berry v.
Volkswagen Group of America, Inc., 397 S.W.3d 425, 433 (Mo. 2013) (en banc) (internal
quotation marks omitted); Lift Truck Lease and Service, Inc. v. Nissan Forklift Corp., 2013 WL
6243172, at *8 (E.D. Mo. Dec. 3, 2013).
Luby claims that an award of attorneys’ fees to a prevailing plaintiff is mandatory under
the most natural reading of MCPEA. (Luby Supp. Br., ECF No. 159, at 2-3). Generac contends
that Luby’s is a strained interpretation, and that the use of the permissive “may” in § 407.755
means courts have discretion whether to award attorneys’ fees under the statute. (Generac Opp.
Br., ECF No. 170, at 2-4).
No Missouri court has determined whether the MCPEA mandates that plaintiffs who
prevail under the act must receive costs and attorneys’ fees. Regardless, the parties agree that
under the MCPEA courts at least have discretion to award such costs and fees. Because of the
paternalistic nature of the statute and the duration of this matter, it is appropriate as a matter of
discretion to award reasonable costs and attorneys’ fees to Luby and therefore unnecessary to
examine the novel issue of Missouri law that the parties contest.

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II. What Amount Luby May Recover
A. Attorneys’ Fees
To calculate the amount of a reasonable attorneys’ fees award, Missouri courts begin with
the “lodestar,” which “is determined by multiplying the number of hours reasonably expended by
a reasonable hourly rate in the community.” See Berry, 397 S.W.3d at 429 n.3. In addition to the
lodestar, Missouri courts examine several other factors: (1) the nature and character of services
rendered; (2) the degree of professional ability required; (3) the nature and importance of the
subject matter; (4) the amount involved or the result obtained; and (5) the vigor of the
opposition. Id. at 431. Moreover, Missouri courts are deemed to be experts at fashioning
attorneys’ fees awards and have significant discretion in doing so. Id. at 430.
Luby has proposed a total attorneys’ fees award of $728,861 based on 2364.50 hours
billed by six attorneys at two law firms. (Motion ¶ 3; Lamb Declaration, ECF No. 159-1, at 4-5).
Specifically, Luby retained two partners, Nicholas Lamb and John Kingston, and two associates,
Brian Lamping and Shaun Broeker, from Thompson Coburn, which is a St. Louis law firm. Id.
Luby also retained a partner, Gregory Wagoner, and an associate, Rebecca Shope, from
Shumaker, Loop & Kendrick (“Shumaker”), a law firm based in Toledo, Ohio. Id.
It should be noted at the outset that several factors favor a significant award of attorneys’
fees. The matter lasted well over a year and was vigorously contested, as evidenced by the
discovery dispute and voluminous filings. Further, Missouri has placed a high level of
importance on claims brought under the MMPA, and the provision at issue here falls under that
statutory chapter. But other factors—especially inadequate billing records, overlawyering, and
the result obtained—require a substantial reduction of the amount requested.

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1. Reasonableness of Time Expenditure
Luby’s attorneys billed 2364.50 hours for this matter, which amounts to $728,861.2
Specifically, Mr. Wagoner billed 839.40 hours for a total of $266,184; Mr. Lamb billed 329.70
hours for a total of $143,419.50; Mr. Kingston billed 259.10 hours for a total of $86,798.50; Mr.
Lamping billed 825.90 hours for a total of $206,475; Mr. Broeker billed 54.40 hours for a total
of $11,424; and Ms. Shope billed 56.00 hours for a total of $14,560. (ECF No. 159-1 at 4, ¶ 12).
In support of these figures, Luby has provided time sheets from both Thompson Coburn
and Shumaker. (TC Time Sheets, ECF No. 159-1 at 11-44; Shumaker Time Sheets, ECF No.
159-6 at 5-15). The time sheets contain numerous entries. Each entry indicates an amount of time
billed by an individual attorney for specific tasks and displays a calculation of the total dollar
amount for that entry based on the hourly rate charged by the attorney. These time sheets,
although they provide abundant information, are problematic in certain ways. Unclear charges
for inter-firm and intra-firm communication, the clarity of which is further obfuscated by “block
billing,” make it difficult for the Court to determine the reasonableness of Luby’s attorneys’ time
expenditures. And where the time entries are clear, they reflect a considerable redundancy and
overlawyering.
a. Problematic Time Sheets
A detailed examination of the time sheets reveals that many entries by Luby’s attorneys
are uncorroborated by other attorneys with whom their time entries indicate communication. For
instance, Mr. Wagoner’s time sheet indicates that on June 26, 2012 he had a “[c]onference with
Brian Lamping regarding e-discovery issues and status[,]” which lasted for 0.3 hours. (ECF No.
159-6 at 6). Mr. Lamping’s time sheet does not mention this conference. (ECF No. 159-1 at 13).
Generac does not challenge the reasonableness of the hourly rates charged by Luby’s attorneys, and
Luby has provided enough information for the Court to conclude that those rates are reasonable.
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Indeed, it contains no charge at all on June 26, 2012. Id. Another example is Mr. Lamb’s
December 7, 2012 entry, which contains a 0.3 hour charge for “E-mails and telephone calls to
and from B. Lamping re discovery responses from Luby and status of information requested by
expert witnesses.” Id. at 18. Again, there is no corresponding charge on that date from Mr.
Lamping. Id.
There are many other examples of inconsistencies such these, and there are also several
instances in which Luby’s attorneys seem unable to agree exactly how long particular meetings
or conversations lasted. For instance, on September 25, 2013, Mr. Kingston lists a charge for a
0.3 hour “[t]eleconference with B. Lamping and G. Wagoner re damage calculations.” Id. at 34.
On that same date, Mr. Lamping, apparently referring to this same telephone conference, lists a
0.8 hour “[t]elephone call with J. Kingston and G. Wagoner re rebuttal expert report.” Id. Mr.
Wagoner’s time sheet makes no mention on that date of a conference with Mr. Lamping or Mr.
Kingston. (ECF No. 159-6 at 14).
The difficulty in determining the reasonableness of these time entries is exacerbated by
Luby’s attorneys’ use of “block billing,” which “occurs when an attorney lists several activities
under one time entry.” EEOC v. Convergys Cust. Mgmt. Gr., Inc., 2006 WL 2345541 (E.D. Mo.
July 7, 2006). The problem with the use of this billing method by Luby’s attorneys is that it is
nearly impossible to figure out how much time was spent on the uncorroborated communications
and how much time was spent on other activities.
The Court therefore has removed time entries that reflect these infirmities and
inconsistencies by subtracting the dollar amount reflected in each entry from the requested
award. Where problematic task descriptions were included without demarcation in a block of

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other tasks, the Court has removed the entry in its entirety. This has resulted in a reduction of
$109,975.
b. Overlawyering
Where the billing entries are easier to understand, it becomes evident that this matter was
overlawyered. Generac has pointed out a specific example of overlawyering in its sur-reply: that
“Luby needlessly had two attorneys [Mr. Wagoner and Mr. Lamping] present during at least 11
out of 17 depositions[.]” (Generac Sur-reply, ECF No. 182, at 8). This assertion is supported by
the billing records of both Thompson Coburn and Shumaker. On April 24, 2013, for example,
Mr. Lamping billed 8.3 hours for preparation for and attendance of the deposition of Paul
Bowers. (ECF No. 159-1 at 23). Mr. Wagoner billed 6.4 hours on that date for attendance at the
same deposition and preparation for another. (ECF No. 159-6 at 10). It is not clear either from
the vague time entries or from the filings related to this Motion why the attendance of two
attorneys was required. Therefore, each instance of Mr. Wagoner’s duplicative deposition
attendance, including time spent preparing for those depositions, has been removed. Again,
where such attendance or preparation appears as one task in a block of others, the entire entry has
been removed. This has resulted in a reduction of $40,864.
There are also numerous instances in which it appears that several attorneys worked
redundantly on the same project. From May 10, 2012 through May 25, 2012, Mr. Lamb, Mr.
Lamping, and Mr. Wagoner all billed substantial time for the drafting of Luby’s response to
Generac’s motion to dismiss. (ECF No. 159-1 at 12; ECF No. 159-6 at 6). The generalized
entries, most of which list task descriptions along the lines of “[d]raft opposition to motion to
dismiss[,]” (ECF No. 159-6 at 6, 5/20/2012 Entry), do not indicate why two partners and one
senior associate were required for completion of this task. Similarly, nothing in the record

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indicates why the attention of three partners and one senior associate—Mr. Wagoner, Mr.
Kingston, Mr. Lamping, and Mr. Lamb—was necessary or reasonable in relation to the summary
judgment motions. Nor is it apparent why the attendance of Mr. Wagoner, Mr. Kingston, Mr.
Lamping, and Mr. Lamb was required for the entirety of the trial. Entries such as these reflect,
based on the Court’s familiarity with the issues and proceedings in this case, unreasonable
overlawyering. Luby was free to retain as many attorneys as it wished, but it may not charge
Generac for its excesses. Removal of each entry that reflects overlawyering, including removal
of entire entries where such redundancies are part of a larger block of time, has resulted in a
reduction of $220,562.50.
3. Result Achieved
The final factor that requires a substantial reduction is the result ultimately achieved by
Luby’s attorneys. Luby cites several Missouri cases in support of its contention that “[b]inding
Missouri precedent precludes a reduction in Luby’s fee award based on the size of the damage
award at trial.” (Luby Reply, ECF No. 179, at 6). Luby’s contention misstates Missouri law. It is
true that in Missouri “there is no established principle that the fee may not exceed the damages
awarded[.]” (Luby Reply at 7 (citing Berry, 397 S.W.3d at 431)). But the Missouri Supreme
Court has made clear, at least in the MMPA context, that “[o]ne consideration in determining the
amount of attorneys’ fees is the result achieved[,]” Berry, 397 S.W.3d at 431, and that “[t]he fee
should bear some relation to the award[.]” O’Brien v. B.L.C. Ins. Co., 768 S.W.2d 64, 71 (Mo.
1989) (en banc). Luby requested over $6 million dollars in damages. The jury awarded it
$50,000. This jury award followed settlement discussions in which Generac indicated it would

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be willing to settle within a range of $200,000-$250,000.3 This result warrants a substantial
reduction. While Generac’s suggestion of a 90% total reduction is too high in light of the factors
discussed above that favor a significant award of attorneys’ fees, a 75% reduction in this
particular instance is appropriate given that Luby recovered only 0.08% of the amount it sought.
The Court therefore awards Luby attorneys’ fees in the amount of $89,364.88.
B. Costs
In addition to its request for attorneys’ fees, Luby has requested payment for actual costs
incurred by it in this matter, which Luby claims amount to $221,466.90. (Motion ¶ 3). This total
is composed of $34,759.50 for Trial Support Costs; $13,663.59 for Travel & Meal Expenses;
$148,861.26 for Expert Witness Fees; $15,183.30 for Electronic Discovery Management;
$2,707.50 for Mediation Costs; and $6,291.75 for Paralegal Fees. These costs, according to
Luby, should be awarded as “actual costs of the action” under § 407.755.
Before determining which of Luby’s requested categories may be recovered as actual
costs, the Court notes that a lack of sufficient proof requires the denial of costs in two of Luby’s
categories. Luby requests $34,759.50 in Trial Support Costs and $15,183.30 for Electronic
Discovery Management. (Motion ¶ 3). The charges for Trial Support Costs are based in part on
hourly rates charged by support staff at Thompson Coburn. (ECF No 159-1 at 8, ¶ 21). But the
billing sheets Luby has filed provide no support for the conclusion that the hourly rates were
reasonable. Nor can the Court conclude based on those time sheets that the time spent or tasks
performed were reasonable. The requested charges for Electronic Discovery Management are
subject to a similar problem. While Luby has provided invoices from the data storage company
its attorneys used, (ECF No. 159-4 at 1-31), there is insufficient information to determine
While Luby asserts that Generac never made a “firm offer” of settlement, (Luby Response to Sur-reply,
ECF No. 183-1, at 2), it does not dispute Generac’s claim that Generac indicated $200,000 and $250,000
would be an acceptable settlement range.
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whether the amounts paid for those services were reasonable. Therefore, Luby cannot recover
any of the amounts requested in these two categories regardless of whether they would fall under
the definition of actual costs.
Luby has, however, provided sufficient information to support its requests in the
remaining categories. Because the expenses in each category were incurred specifically in
relation to this action, they fall within the “actual costs” definition of § 407.755. The only
determination left to be made, therefore, is whether the amounts requested are reasonable.
1. Travel & Meal Expenses
Luby asks the Court to award $13,663.59 for Travel & Meal Expenses. (Motion ¶ 3). A
significant amount of travel was inevitable in this case, which involved out-of-town co-counsel
and travel for depositions. Two reductions are merited. First, the Court has already eliminated
Mr. Wagoner’s billing entries for duplicative attendance of several depositions. The Court also
eliminates the corresponding travel entries. This results in a reduction of $3,708.26. Generac is
also correct to identify as unreasonable charges for Mr. Lamping’s and Mr. Shumaker’s stays at
a luxury hotel in Milwaukee and for a dinner at Ruth’s Chris in Nashville. (Thompson Coburn
Receipts, ECF No. 159-5, at 17; Shumaker Receipts, ECF No. 159-6, at 25, 31). The entries
corresponding to the stays in Milwaukee have therefore been reduced by 30%. The Ruth’s Chris
bill has been reduced by 50%. This results in a total reduction of $527.70.4 The remaining
charges, however, seem reasonable. Luby is therefore awarded $9,427.63 for Travel & Meal
Expenses.

Mr. Wagoner’s stay in Milwaukee has not been reduced by a percentage because it has been eliminated
entirely.
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2. Expert Witness Fees
Luby next requests $148,861.26 for Expert Witness Fees, a total which combines the fees
of two experts, Mr. David Blackburn and Mr. Thomas Hilton. (Luby Supp. Br. at 12). Luby
seeks $89,749.19 for Mr. Hilton, who testified at trial on the issue of damages, and $59,112.07
for Mr. David Blackburn. Id. Luby intended to call Mr. Blackburn to rebut Generac’s expert but
ultimately determined that Mr. Blackburn would not testify. Id. While expert witness fees are
properly recoverable as actual costs, the amount Luby has requested is unreasonable.
There is sufficient information to conclude that Mr. Hilton’s and Mr. Blackburn’s hourly
rates are reasonable. It is impossible, however, to tell from Mr. Blackburn’s invoices whether the
amount of time he spent working on this matter was also reasonable. The invoices from Mr.
Blackburn’s firm contain only a total of hours worked with no descriptions of how the time was
spent or how much time was spent on particular tasks. (See, e.g., Luby Expert Reports, ECF No.
159-3, at 30). Luby’s contention that Generac’s expert witness billed a similar amount, (Luby
Supp. Br. at 12), is insufficient to overcome this lack of evidence, especially considering that Mr.
Blackburn did not testify. Mr. Blackburn’s conclusory invoices fail to provide a sufficient basis
to support an award of actual costs. It is therefore appropriate to remove all of Mr. Blackburn’s
fees from the final costs award.
Mr. Hilton’s time records are significantly more detailed than Mr. Blackburn’s, but they
present many of the same problems mentioned in relation to the billing entries of Luby’s
attorneys. For instance, the December 13, 2012 entry of Mr. Hilton’s associate lists a conference
call with Mr. Lamping. (ECF No. 159-3 at 40). Mr. Lamping billed no time on that date. (ECF
No. 159-1 at 18). Moreover, such entries often appear in blocks with other tasks, making it
difficult to determine how much time was spent on the other tasks listed. Each of these time

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entries has therefore been removed from the total bill, which has resulted in a reduction of
$29,037.13. A further substantial reduction is appropriate given the damages outcome in the
case. Luby requested over $6 million in damages. The jury, relying on Mr. Hilton’s damages
assessment, awarded $50,000. It would be unreasonable to require another party to pay the fees
of an expert witness whose testimony the jury so thoroughly discredited. The Court therefore
further reduces the total of Luby’s Expert Witness Fees by 75%.
The Court awards Luby a total of $22,437.30 for Expert Witness Fees.
3. Mediation Costs
Luby has also requested $2,707.50 for Mediation Costs. (Motion ¶ 3). Generac has not
challenged this amount, and it is adequately supported by an invoice from the mediator. (Various
TC Bills, ECF No. 159-5, at 47). The Court therefore awards Luby the full amount of $2,707.50
for its Mediation Costs.
4. Paralegal Fees
Finally, Luby has requested $6,291.75 for Paralegal Fees based on Shumaker’s use of a
paralegal for certain tasks. (Motion ¶ 3). Generac has not challenged this request, and both the
hourly rate and time spent appear to be reasonable. The Court therefore awards the full $6,291.75
that Luby has requested.

SUMMARY
1. Attorneys’ Fees = $89,364.88
2. Trial Support Costs = $0
3. Travel & Meal Expenses = $9,427.63
4. Expert Witness Fees = $22,437.30

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4. Electronic Discovery Management = $0
5. Mediation Costs = $2,707.50
6. Paralegal Fees = $6,291.75
Total (Attorneys’ Fees and Actual Costs) = $130,229.06

Accordingly,
IT IS HEREBY ORDERED that Luby’s Motion for Actual Costs and Attorneys’ Fees,
(ECF No. 158) is GRANTED IN PART and DENIED IN PART.
IT IS FUTHER ORDERED that Luby is awarded attorneys’ fees in the amount of
$89,364.88 and actual costs in the amount of $40,864.18.

Dated this 29th day of April, 2014.

/s/ Jean C. Hamilton
UNITED STATES DISTRICT JUDGE

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