D'OTTAVIO v. SLACK TECHNOLOGIES
Filing
66
OPINION. Signed by Judge Noel L. Hillman on 12/28/2022. (alb, )
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UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
GINO D’OTTAVIO,
individually and on behalf of
all others similarly
situated,
Plaintiff/CounterDefendant,
1:18-cv-09082-NLH-AMD
OPINION
v.
SLACK TECHNOLOGIES,
Defendant/
Counterclaimant.
APPEARANCES:
GINO D’OTTAVIO
38 CHANCELLOR PARK DRIVE
MAYS LANDING, N.J. 08330
Plaintiff/Counter-Defendant pro se
PAUL JEFFREY BOND
MARK S. MELODIA
HOLLAND & KNIGHT LLP
2929 ARCH STREET
SUITE 800
PHILADELPHIA, PA. 19104
On behalf of Defendant/Counterclaimant
HILLMAN, District Judge
Pending before the Court is Defendant Slack Technologies’
(“Defendant”) supplemental submission in support of its request
for attorney’s fees and costs.
(ECF 64).
For the reasons
expressed below, Defendant’s motion will be granted in part and
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the Court will award fees and costs totaling $160,602.37.
I.
Background
The facts of this case have been articulated in the Court’s
prior opinions, (ECF 36; ECF 55; ECF 62), and will not be
reviewed in detail here.
On May 11, 2018, Plaintiff Gino
D’Ottavio (“Plaintiff”) filed the underlying complaint alleging
that Defendant violated the Telephone Consumer Protection Act
(“TCPA”), 47 U.S.C. §§ 227 et seq., by sending him numerous
unsolicited text messages. (ECF 1).
Defendant responded in its
answer that Plaintiff is a serial filer of TCPA claims and
solicited 1,590 text messages from Defendant to manufacture a
lawsuit and asserted four counterclaims: (1) willful and wanton
misconduct, (2) common-law fraud, (3) breach of express
contract, and (4) breach of the implied covenant of good faith
and fair dealing.
(ECF 6).
Plaintiff ultimately moved to
dismiss the complaint with prejudice while claiming that he did
not solicit text messages from Defendant, (ECF 31; ECF 31-1 at
1), which the Court granted, (ECF 36; ECF 37).
With respect to Defendant’s counterclaims, the Court
granted Plaintiff’s counsel’s second motion to withdraw, (ECF
45), and Defendant moved for summary judgment, citing
Plaintiff’s failure to participate in discovery, (ECF 48; ECF 50
at ¶¶ 14-15; ECF 52 at 1).
After Plaintiff failed to respond to
the Court’s order to show cause why his answer to counterclaims
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should not be struck and default entered against him for failure
to participate in discovery, (ECF 54 at 4-5), the Court filed an
opinion holding that entry of default judgment against Plaintiff
was warranted pursuant to Federal Rule of Civil Procedure 37 and
provided Defendant with an opportunity to supplement the record
with support for its counterclaims and requested damages, (ECF
55 at 6-8; ECF 56).
After Defendant filed its supplemental brief and affidavit
regarding damages, the Court issued an opinion and order
entering default judgment against Plaintiff as to Defendant’s
breach-of-contract counterclaim, 1 declining to award damages due
to Defendant’s failure to provide support for its requested fees
and costs, and providing thirty days for Defendant to supplement
its application for attorney’s fees and costs.
63).
(ECF 62; ECF
Pending before the Court are Defendant’s supplemental
brief in support of its request for attorney’s fees, (ECF 64),
and supporting declaration and other exhibits, (ECF 65; ECF 651; ECF 65-2; ECF 65-3).
The basis for awarding Defendant attorney’s fees and costs in
this matter is contractual. Defendant’s User Terms of Service
state that “[i]n any action or proceeding to enforce rights
under the User Terms, the prevailing party will be entitled to
recover its reasonable costs and attorney’s fees.” (ECF 6-4 at
4).
1
3
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II.
Discussion
A. Jurisdiction
The Court has jurisdiction over Defendant’s counterclaims
because the parties are of different states and the amount in
controversy exceeds $75,000.00.
See 28 U.S.C. 1332(a); see also
Barefoot Architect, Inc. v. Bunge, 632 F.3d 822, 836 (3d Cir.
2011) (“Generally speaking, the dismissal of the complaint ‘will
not preclude adjudication of a counterclaim over which the court
has an independent basis of jurisdiction.’” (quoting Rengo Co.
Ltd. v. Molins Mach. Co., Inc., 657 F.2d 535, 539 (3d Cir.
1981)).
B. Lodestar Analysis
“The starting point for determining the amount of a
reasonable fee is the lodestar, which courts determine by
calculating the ‘number of hours reasonably expended on the
litigation multiplied by a reasonable hourly rate.’”
McKenna v.
City of Phila., 582 F.3d 447, 455 (3d Cir. 2009) (quoting
Hensley v. Eckerhart, 461 U.S. 424, 433 (1983)).
“The hourly
rate to be determined is a reasonable rate at the time of the
fee application, not at the past dates when services may have
been rendered.”
Warner v. Twp. of S. Harrison, No. 09–6095,
2013 WL 3283945, at *7 (D.N.J. June 27, 2013).
Generally,
unless the special expertise of distant counsel is necessary or
local counsel is unwilling to accept the case, “the relevant
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rate is the prevailing rate in the forum of the litigation.”
See Interfaith Cmty. Org. v. Honeywell Int’l, Inc., 426 F.3d
694, 705 (3d Cir. 2005).
The forum rate in this vicinage is
that of the Philadelphia/New Jersey legal market.
Sidewinder
Films, LLC v. Sidewinder Films, LLC, No. 19-13992, 2022 WL
6964829, at *8 (D.N.J. Oct. 11, 2022).
In addition to identifying a reasonable forum rate, courts
must also review hours expended and exclude billed hours that
are “excessive, redundant, or otherwise unnecessary.”
582 F.3d at 455 (quoting Hensley, 461 U.S. at 434).
McKenna,
Lodestar
calculations contemplate burden-shifting analyses in which
parties opposing the awarding of fees make specific objections,
“[t]he court may not reduce an award sua sponte; rather, it can
only do so in response to specific objections made by the
opposing party.”
See Interfaith Cmty. Org., 426 F.3d at 711
(citing Bell v. United Princeton Props., Inc., 884 F.2d 713, 719
(3d Cir. 1989)); see also Virtua Health, Inc. v. Diskriter,
Inc., No. 19-21266, 2020 WL 4282752, at *5 (D.N.J. July 27,
2020) (noting that the opposing party failed to address the
reasonableness of the fees sought and thus the court was not
obligated to review the proponent’s billing records “line by
line”); N.V.E., Inc. v. Palmeroni, No. 06–5455, 2012 WL 3961342,
at *5 (D.N.J. Sept. 10, 2012) (declining to reduce time entries,
despite the court’s belief that they were excessive, finding
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that the “Court cannot, of its own accord, reduce time entries
to which [the opponent] did not specifically object”).
III. Analysis
Defendant seeks to recover $160,729.69 in legal fees and
$1,247.13 in costs incurred in this matter for a total of
$161,976.82.
(ECF 64 at 10).
In consideration of the proffered
support for the rates, hours, and related expenses sought, the
Court will award $160,602.37.
A. Applicable Rates
Two attorneys – Paul Bond and Mark Melodia – represented
Defendant throughout this case, first at the law firm of Reed
Smith and then at Holland & Knight.
(Id. at 4; ECF 65 at ¶ 8).
Bond had sixteen years of experience when this matter began and
currently serves as an equity partner and member of Holland &
Knight’s Data Strategy, Security & Privacy Team, (ECF 65 at ¶
10), while Melodia serves as the head of the firm’s Data
Strategy, Security & Privacy Team and is also an equity partner
who possessed thirty years of experience when this case started,
(id. at ¶ 11).
During their representation, Bond’s rate
remained at $600.00 per hour and he expended 142.4 total hours
on this case, 43.4 while at Reed Smith and 99.0 with Holland &
Knight.
(Id. at ¶¶ 13, 26).
Melodia’s rate for his 7.3 hours
worked while at Reed Smith was $845.00 per hour, which increased
from $845.00 during his start at Holland & Knight in 2018 to
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$855.00 from September 2018 to September 2019 to $895.50 from
October 2019 to September 2020 to $976.50 beginning in May 2021
for a total of 19.4 hours expended.
(Id. at ¶¶ 13, 21 n.3, 26). 2
In addition to Bond and Melodia, several associate
attorneys billed hours.
At Reed Smith, Bretta T. Oluyede, with
three years of experience at the start of the case, worked 43.4
hours at a rate of $360.00 per hour.
(Id. at ¶¶ 12-13).
Three
associate attorneys at Holland & Knight also contributed hours:
(1) Zalika Pierre, who was a new attorney at the beginning of
her representation, for 42.3 hours at rates of $430.20 per hour
from April 2018 to May 2019, $544.50 from July 2019 to August
2019, and $571.50 from October 2019 through January 2020; (2)
Esther D. Clovis, who had two years of experience when she began
working on the case, for 25.4 hours at rates of $400.50 an hour
in September 2019 and $445.50 from December 2019 to August 2020;
and (3) Sophie Kletzien, presently with two years of experience,
at a rate of $405.00 per hour for 14.5 hours.
(Id. at ¶¶ 23-
26). 3
Bond’s declaration calculates 17.6 hours expended by Melodia on
this case while working at Holland & Knight, (ECF 65 ¶ 26);
however, the summaries provided in the billing records total
19.4 hours, (ECF 65-3). The Court also notes that the billing
records show rates charged by Melodia of up to $1,093.50. (Id.
at 67).
2
Defendant is not seeking hours expended by paraprofessionals
and other staff from either firm, which would have amounted to
an additional $1,471.15. (Id. at ¶¶ 13 n.1, 26 n.4).
3
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In support of the requested rates, Defendant provides
excerpts of the 2022 Real Rate Report by Wolters Kluwer ELM
Solutions, (ECF 65-1), which it correctly notes has been relied
upon in this District, (ECF 64 at 6-7); see also Sabinsa Corp.
v. HerbaKraft, Inc., No: 14-cv-04738, 2022 WL 17446485, at *4
n.3 (D.N.J. Dec. 6, 2022) (recognizing the Real Rate Report as
“generally regarded as the legal industry's leading benchmark
for law firm rates and staffing trends based on actual invoice
data”).
The excerpt provided lists the Philadelphia litigation
partner first-quartile rate at $485.00 per hour, the median rate
at $636.00 per hour, and the third-quartile rate at $837.00 per
hour and the litigation associate first-quartile rate as $365.00
per hour, the median rate at $430.00 per hour, and the thirdquartile rate at $530.00 per hour.
(ECF 65-1 at 8).
The Court,
in exercising its discretion, see McKenna, 582 F.3d at 455,
accepts that the representation provided by attorneys at Reed
Smith and Holland & Knight warrant the third-quartile rates and
notes that the majority of the rates requested fall below those
thresholds.
The two exceptions are all of Melodia’s rates
Pierre’s rates from July 2019 on.
Defendant contends that the Real Rate Report does not
provide fourth quartile rates, which would be applicable to both
Reed Smith and Holland & Knight, and that courts within this
District have awarded fees at rates higher than those requested.
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(ECF 64 at 8, 10 n.7).
The Court finds that the cases cited are
distinguishable from the present matter.
NXIVM Corporation v.
Sutton applied New York law to rates set forth or contemplated
in a retainer agreement, No. 06-1051, 2019 WL 4010859, at *12-13
(D.N.J. Aug. 26, 2019), while In re Schering–Plough Corp.
pertained to a lodestar cross-check of a percentage-of-recovery
award rather than a “full-blown lodestar inquiry,” Nos. 08–397 &
08–2177, 2013 WL 12174570, at *28-29 (D.N.J. Aug. 28, 2013)
(quoting In re AT&T Corp., 455 F.3d 160, 169 n.6 (3d Cir.
2006)).
It may be that the services provided by Reed Smith and
Holland & Knight warrant fourth-quartile rates, but Defendant –
importantly – does not identify what those rates are or whether
the rates requested nonetheless exceed them.
“The party seeking a fee award bears the burden of
establishing the reasonableness of the fee.”
Tomasko v. Ira H.
Weinstock, P.C., 357 Fed. Appx. 472, 478 (3d Cir. 2009) (citing
Interfaith Cmty. Org., 426 F.3d at 703 n.5).
The Court, having
concluded that Defendant has not sustained its burden with
respect to the rates of Melodia and Pierre, will therefore
adjust the rates downward to the third-quartile threshold for
each for a total reduction of $1,374.45. 4
See L.J. ex rel. V.J.
Billing records provided by Defendant (ECF 65-2; ECF 65-3),
show that Melodia billed at $845.00 per hour for 7.3 hours while
at Reed Smith and then, while at Holland & Knight, $855.00 per
hour for 14.0 hours, $895.50 per hour for 3.0 hours, $976.50 per
4
9
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v. Audubon Bd. of Educ., 373 Fed. Appx. 294, 297 (3d Cir. 2010)
(“Once a district court finds that the prevailing party has
failed to sustain its burden with respect to a reasonable market
rate, it must use its discretion to determine the market
rate.”).
B. Hours Requested
Having made its determination as to reasonable rates to
apply, the Court moves on to the hours requested.
Defendant
seeks to recoup fees expended over 296.6 billed hours, (ECF 64
at 10), 97.8 from Reed Smith and 198.8 from Holland & Knight,
(ECF 65 at ¶¶ 13, 26). 5
hour for 1.5 hours, and $1,093.50 for 0.9 hours. The Court has
multiplied the difference between these rates and the $837.00
per hour figure supported by the Real Rate Report by the number
of hours at each rate for a total reduction of $926.00.
Similarly, the Court identified 15.1 total hours billed by
Pierre at above the supported $530.00 rate – 6.6 hours at
$544.50 per hour and 8.5 hours at $571.50 per hour. Multiplying
the differences between the sought and supported rates by the
hours worked results in a total reduction of $448.45.
A review of the summaries within Holland & Knight’s billing
records shows that 213.3 hours appear to have been billed by
partners and associates. (ECF 65-3). The Court acknowledges
that Defendant has voluntarily excluded the fees of nonattorneys and an hour of Bond’s time, (ECF 65 at ¶ 26 n.4), but
the difference between the 213.3 hours in the billing records
and 198.8 hours in the declaration are not explained. This
difference does not appear to be merely arithmetic.
The fees for professional services in the billing records total
$120,918.84 and, even subtracting the $1,964.40 voluntarily
excluded, still results in a difference of $2,472.80 between
what is reflected in the billing records and what is sought in
the briefing. Exercising its discretion, and assuming this
discrepancy was not unintentional, the Court will not adjust the
5
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At the outset, the Court notes that Plaintiff has not
participated in this case since his counsel moved to withdraw
three years ago.
As part of this willful blindness to the
proceedings that have continued against him, Plaintiff has not
provided up-to-date contact information, though electronic
filings have continued to be sent to former counsel, and has not
filed any opposition to Defendant’s request for attorney’s fees
and costs.
The Court will therefore not adjust the hours
requested downward sua sponte.
See Interfaith Cmty. Org., 426
F.3d at 711; N.V.E., Inc., 2012 WL 3961342, at *5.
Though the Court is therefore not required to examine
Defendant’s supporting billing records line by line, see Virtua
Health, Inc., 2020 WL 4282752, at *5, it nonetheless reviewed
the submissions and concludes that the hours requested are
reasonable.
Importantly, the Court notes that Defendant’s
billing records appropriately provide sufficient detail of each
task billed for to the tenth of an hour, who performed the work,
and their position and billing rate.
See United Auto. Workers
Loc. 259 Soc. Sec. Dep’t v. Metro Auto Ctr., 501 F.3d 283, 291
(3d Cir. 2007) (“A request for fees must be accompanied by
‘fairly definite information as to hours devoted to various
general activities . . . and the hours spent by various classes
hours sought upward from what Defendant has expressly sought.
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of attorneys.’” (quoting Evans v. Port Auth of N.Y. and N.J.,
273 F.3d 346, 361 (3d Cir. 2001))).
The Court further finds
that the hours billed were a reasonable consequence of
Plaintiff’s institution of this action and resulting
investigations and motion practice, which Defendant has credibly
asserted as stemming from an illegitimate, manufactured claim.
For completeness, the Court acknowledges that Defendant was
successful in just one of its four asserted counterclaims,
breach of contract.
Unsuccessful claims based on facts and
legal theories distinct from successful claims cannot be
compensated, therefore courts must determine whether the
successful and unsuccessful claims were related and whether the
prevailing party’s successful outcome provides a satisfactory
basis for basing the fee award on the hours reasonably expended.
See Blakey v. Cont’l Airlines, Inc., 2 F. Supp. 2d 598, 605
(D.N.J. Apr. 9, 1998) (citing Hensley, 461 U.S. at 434-35).
When claims center on the same events and cannot be separated
out claim-by-claim, a court does not abuse its discretion by
declining to adjust the award downward.
See Boles v. Wal–Mart
Stores, Inc., 650 Fed. Appx. 125, 130 (3d Cir. 2016).
Here, the Court concludes that counsel’s representation
broadly “enforce[d Defendant’s] rights under the User Terms,”
(ECF 6-4 at 4), and revolved around the same set of facts –
Plaintiff’s use of an automated feature to send himself text
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messages and create a TCPA claim.
Some of Defendant’s
counterclaims were made in the alternative and failed primarily
because the Court determined that breach of contract was the
appropriate cause of action.
(ECF 62 at 17-18, 23-24 (rejecting
Defendant’s common-law fraud claim as the damages sought flowed
from contract and were barred by the economic loss doctrine and
concluding that Defendant’s counterclaim under the implied
covenant of good faith and fair dealing could not be sustained
as it alleged the same conduct that supported the successful
breach-of-contract counterclaim)); see also Hensley, 461 U.S. at
435 (“Litigants in good faith may raise alternative legal
grounds for a desired outcome, and the court's rejection of or
failure to reach certain grounds is not a sufficient reason for
reducing a fee.
The result is what matters.”).
Defendant’s
counsel produced an excellent result in this matter as its
efforts resulted in Plaintiff moving to dismiss the complaint
and entry of default judgment under a breach-of-contract theory
that has enabled Defendant to recoup its legal fees and costs.
Therefore, the Court will not reduce the hours requested.
C. Costs
Finally, Defendant seeks $1,247.13 in costs; $1,166.72
expended by Holland & Knight and $80.41 spent by Reed Smith.
The Court has reviewed Defendant’s billing records and
calculated that $1,097.82 of Holland & Knight’s costs stemmed
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from online research such as Westlaw and Lexis fees, $54.45 were
from transcript fees, and $14.45 covered copies and postage.
(ECF 65-3).
A total of $47.86 of Reed Smith’s costs were
Westlaw and Pacer fees, with an additional $16.95 for postage
and $15.60 for printing and duplication.
(ECF 65-2).
The Court holds that recovery of such costs is reasonable.
See Einhorn v. Dimedio Lime Co., No. 13–3634, 2015 WL 5920911,
at *3 (D.N.J. Oct. 9, 2015) (permitting recovery of $825.56 in
search, photocopy, postage, and related costs).
Furthermore,
the sum requested is in line with similar costs previously
approved of within the vicinage.
See Sciore v. Phung, 1:19-cv-
13775, 2022 WL 17446505, at *4 (D.N.J. Dec. 6, 2022) (concluding
that $1,039.75 in Lexis costs were compensable as a sanction);
Unite Here, Local 54 v. City of Atlantic City, No. 11–6273, 2012
WL 1455249, at *5 (D.N.J. Apr. 26, 2012) (finding $1,150.82 in
filing and Westlaw fees to be reasonable).
Therefore, the Court
will award the costs requested.
IV. Conclusion
For the reasons stated above, the Court will award
$160,602.37 in attorney’s fees and costs – the $161,976.82
requested minus the Court’s $1,374.45 rate adjustment.
An Order consistent with this Opinion will be entered.
Date: December 27, 2022
At Camden, New Jersey
s/ Noel L. Hillman
NOEL L. HILLMAN, U.S.D.J.
14
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