Ferrara et al v. Professional Pavers Corp. et al
Filing
35
ORDER ADOPTING REPORT AND RECOMMENDATIONS. For the reasons set forth in the attached Order, the court overrules plaintiffs' objection and adopts Judge Reyes' Report and Recommendation in its entirety as the opinion of the court. According ly, the court grants plaintiffs' Motion for Default Judgment and orders that judgment be entered in favor of plaintiffs and against defendant AAP in the amount of $233,590.59 for unpaid benefit contributions; $262,567.42 for pre-judgme nt interest through February 15, 2013, plus per diem interest at the rate of $115.09 until entry of final judgment to be calculated by the Clerk of the Court; liquidated damages in the amount equal to pre-judgment interest as calculated by the C lerk of the Court at the time final judgment is entered; $9,054.19 for unpaid audit fees; $58,418.00 for attorneys' fees; $7,154.57 for costs; less the $15,000 settlement between plaintiffs and defendants Professional Pavers and Lopes; and post-judgment interest pursuant to 28 U.S.C. § 1961. Plaintiffs' request for injunctive relief is denied. The Clerk of Court is respectfully requested to enter judgment in accordance with this Order and to close this case. Counsel for plaintiffs is respectfully requested to serve a copy of this Order on all defendants and note service on the docket no later than March 29, 2013. Ordered by Judge Kiyo A. Matsumoto on 3/23/2013. (Tolentino, Raymond)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
------------------------------------X
JOSEPH A. FERRARA, SR., et al., as
Trustees and Fiduciaries of the Local
282 Welfare Trust Fund, the Local 282
Pension Trust Fund, the Local 282
Annuity Trust Fund, the Local 282 Job
Training Trust Fund, and the Local
282 Vacation and Sick Leave Trust
Fund,
NOT FOR PUBLICATION
ORDER ADOPTING REPORT
AND RECOMMENDATION
Plaintiffs,
- against -
11-CV-1433 (KAM)(RER)
PROFESSIONAL PAVERS CORP., AAP ARTIN
ARCHITECTURAL PAVERS CORP., and
DUARTE N. LOPES,
Defendants.
------------------------------------X
MATSUMOTO, United States District Judge:
On March 23, 2011, the Trustees and Fiduciaries of the
Local 282 Welfare, Pension, Annuity, Job Training, and Vacation
and Sick Leave Trust Funds (“plaintiffs” or the “Funds”)
commenced this action against Professional Pavers Corp.
(“Professional Pavers”), AAP Artin Architectural Corp. (“AAP”),
and Duarte N. Lopes (“Lopes”) pursuant to Sections 502(a)(3) and
515 of the Employee Retirement Income Security Act of 1974
(“ERISA”), 29 U.S.C. §§ 1132(a)(3), 1145. (See ECF No. 1,
Complaint dated 3/21/11 (“Compl.”).)
In their Complaint,
plaintiffs seek recovery of unpaid employee benefit
contributions, liquidated damages, interest, and related
attorneys’ fees and costs from AAP based upon AAP’s “alter ego
and single or joint employer relationship” with Professional
Pavers. 1 (See Compl. at 2.)
On March 30, 2011, plaintiffs properly served AAP with
the Summons and Complaint in accordance with Federal Rule of
Civil Procedure 4. (See ECF No. 3, Executed Summons as to AAP
entered 4/4/11.)
On May 6, 2011, plaintiffs filed a Motion for
Entry of Default against AAP pursuant to Federal Rule of Civil
Procedure 55(a), upon AAP’s failure to answer or otherwise
defend against the Complaint. (See ECF No. 7, Motion for Entry
of Default as to AAP dated 5/6/11.)
On May 9, 2011, the Clerk
of Court entered default against AAP. (See ECF No. 10, Entry of
Default entered 5/9/11.)
On July 9, 2012, pursuant to Rule
55(b)(2), plaintiffs filed a Motion for Entry of Default
Judgment against AAP. (See ECF No. 19, Motion for Default
Judgment as to AAP dated 7/9/12 (“Default Mot.”); ECF No. 20,
Declaration of Theresa Cody in Support of Default Mot. dated
7/3/12 (Cody Default Decl.”); ECF No. 21, Declaration of Ken
1
On December 18, 2012, the court entered a Revised Stipulation of
Dismissal and dismissed with prejudice all claims asserted by plaintiffs
against defendant Professional Pavers and defendant Lopes pursuant to a
settlement agreement dated July 24, 2012. (See ECF No. 24, Plaintiffs’
Settlement Agreement with Professional Pavers & Lopes dated 7/24/12; ECF No.
25, Stipulation of Dismissal between Plaintiffs & Defendants Professional
Pavers & Lopes dated 7/25/12; ECF No. 27, Stipulation & Order of Settlement
between Plaintiffs & Defendants Professional Pavers and Lopes dated 12/7/12;
ECF No. 28 Revised Stipulation & Order of Dismissal entered 12/18/12.)
2
Jones in Support of Default Mot. dated 7/9/12 (“Jones Default
Decl.”); ECF No. 22, Declaration of Michael Adler in Support of
Default Mot. (“Adler Default Decl.”); ECF No. 23, Memorandum in
Support of Pls.’ Default Mot. dated 7/9/12 (“Default Mem.”).)
By Order dated August 31, 2012, the court referred plaintiffs’
Motion for Default Judgment to Magistrate Judge Ramon E. Reyes,
Jr. for a Report and Recommendation. (See ECF No. 26, Order
dated 8/31/12.)
On February 15, 2013, Judge Reyes issued a Report and
Recommendation (“R&R”), recommending that default judgment be
entered against AAP and that plaintiffs be awarded damages,
reasonable attorneys’ fees, interest, and costs. (See ECF No.
29, Report & Recommendation dated 2/15/13 (“R&R”).)
On February
19, 2013, plaintiffs served a copy of the R&R on AAP. (ECF No.
31, Certificate of Service of R&R on AAP dated 2/19/13.)
As
explicitly noted at the end of the R&R, any written objections
to the R&R were to be filed within fourteen days of service of
the R&R. (R&R at 23); see 28 U.S.C. § 636(b)(1); Fed. R. Civ. P.
72(b)(2).
On March 1, 2013, plaintiffs filed a timely objection
to the R&R and properly served that objection on AAP. (See ECF
No. 32, Objection to R&R dated 3/1/13 (“Pls.’ Obj.”); ECF No.
33, Declaration of Michael Adler in Support of Objection (“Adler
3
Obj. Decl.”); ECF No. 34 Certificate of Service of Pls.’ Obj.
and Adler Obj. Decl. entered 3/1/2013.)
To date, AAP has not
filed any objections to the R&R and has not responded to
plaintiffs’ objection, and the time to do so has expired.
For the following reasons, the court respectfully
overrules plaintiffs’ objection and affirms and adopts Judge
Reyes’ R&R in its entirety as the opinion of the court.
BACKGROUND
The detailed facts of this case, which are undisputed
by AAP, have been set forth previously in Judge Reyes’ R&R.
As
such, the court repeats the relevant facts here only as
necessary to address plaintiffs’ limited objection to Judge
Reyes’ R&R.
I.
Plaintiffs’ Motion for Default Judgment
In their default motion, plaintiffs seek an award of
reasonable attorneys’ fees pursuant to ERISA and the applicable
Restated Agreement and Declaration of Trust (“Trust Agreement”).
(Default Mem. at 12; Cody Default Decl., Exh. A, Trust
Agreement, art. IX § 3(a), at 30 (“Attorney’s fees in collection
actions . . . shall be equal to the actual amount to be billed
to the Trustees by their counsel for work performed in
connection with this matter . . . .”)); see 29 U.S.C.
§ 1132(g)(2)(D) (“In any action under this subchapter by a
4
fiduciary for or on behalf of a plan to enforce section 1145 of
this title in which a judgment in favor of the plan is awarded,
the court shall award the plan . . . reasonable attorney’s fees
and costs of the action, to be paid by the defendant . . . .”).
Specifically, plaintiffs request attorneys’ fees based on the
following hourly rates:
(1)
partners at $370 prior to July 2011 and at $400
thereafter;
(2)
associates at $275 prior to July 2011;
(3)
senior associates at $375 as of July 2011;
(4)
junior associates at $275 as of July 2011; and
(5)
paralegals at $90 prior to July 2011 and at $110
thereafter. 2
(See Default Mem. at 12-14; Adler Default Decl. ¶ 50.)
Plaintiffs maintain that these requested hourly rates
are reasonable because such rates “are in line with or less than
those charged by other firms performing similar work within the
Eastern and Southern Districts of New York.” (Default Mem. at
12-13 (citing cases); see also Adler Default Decl. § 52.)
Plaintiffs further contend that their requested rates reflect
the “unique expertise” and experience of their attorneys from
Cohen, Weiss and Simon LLP (“CWS”), a law firm “engaged almost
2
On July 1, 2011, plaintiffs’ counsel increased the rates of some
of their professionals, at least with respect to their client, the Funds.
(See Adler Default Decl. ¶ 50.)
5
exclusively in the representation of labor unions and employee
benefit plans.” 3 (Adler Default Decl. § 52.)
Plaintiffs also itemize the tasks performed by their
legal counsel in litigating this action. (Default Mem. at 13-14;
Adler Default Decl. § 51.)
Plaintiffs argue that two particular
tasks — computing the damages owed by AAP and preparing the
default motion — were “extremely complicated” in light of the
discovery conducted, the settlement agreement, and the
“multitude of audits, credits, and payments.” (Adler Default
Decl. § 51; see also Default Mem. at 13-14.)
II.
The Report and Recommendation
As Judge Reyes noted in his R&R, “[i]n evaluating the
reasonableness of attorneys’ fees, the Second Circuit applies a
‘presumptively reasonable fee,’ determined [in part] by a
‘reasonable hourly rate.’” (R&R at 16 (quoting Finkel v. Omega
Commc’n Servs., Inc., 543 F. Supp. 2d 156, 164 (E.D.N.Y.
3
Plaintiffs set forth the law school almae matres, graduation
dates, and years of ERISA-related experience of their CWS attorneys as
follows: Thomas N. Ciantra, a 1987 Harvard Law School graduate, has been
practicing in the labor and employee benefits field since 1989; Joseph J.
Vitale, a 1989 Fordham University Law School graduate, has been practicing in
the labor and employee benefits field since 1990; Elizabeth O’Leary, a 1996
graduate of Cornell Law School, has been practicing in the labor and employee
benefits field since 1998; David R. Hock, a 1999 American University
Washington College of Law graduate, has been representing labor unions and
employee benefit plans since 2000; Michael S. Adler, a 2002 George Washington
University Law School graduate, has been practicing in the labor and employee
benefits field since 2003; Zachary N. Leeds, a 2004 Harvard Law School
graduate, has been practicing in the labor and employee benefits field since
2005; and Danya Ahmed, a 2010 Pennsylvania State University Dickinson School
of Law graduate, has been practicing in the labor and employment practice
since 2011. (Adler Default Decl. ¶ 52.)
6
2008)).)
After looking to the prevailing hourly rates in this
district, Judge Reyes determined that “[r]ecent opinions have
found that reasonable hourly rates for this district range from
$300-450 per hour for partners, $200-300 for senior associates,
$100-200 for junior associates, and $70-80 for legal
assistants.” (Id. at 16-17 (citing cases).)
Because plaintiffs’ requested hourly rate for the
partners fell within the range of reasonable hourly rates in the
Eastern District, Judge Reyes recommended $400 per hour for
partner time. (Id. at 17.)
The requested amounts for senior
associates, junior associates, and paralegals fell outside the
relevant ranges and were therefore reduced. (Id.)
Recognizing
“the demonstrated skill and experience of counsel in preparing
this case,” Judge Reyes “recommend[ed] rates at the upper end of
the typical awards in this District: $300 per hour for senior
associates, $200 per hour for junior associates, and $80 per
hour for paralegals.” (Id.) 4
4
Further, Judge Reyes found that the billed hours requested by
plaintiffs were reasonable. (Id. at 19.) Judge Reyes reasoned that
this case is an atypical default judgment, insofar as
AAP Artin is found to share an alter ego/single
employer relationship with Professional Pavers, which
. . . appeared and defended against this action. By
virtue of this relationship, the time expended in
litigating this case against Professional Pavers and
Lopes is attributable to AAP Artin, notwithstanding
the latter’s default.
(Id. at 18.)
7
III.
Plaintiffs’ Objection
In their sole objection to the R&R, plaintiffs
challenge Judge Reyes’ reduction of their requested hourly rates
for the period after July 1, 2011, when plaintiff’s counsel
increased their billing rates. (See Pls.’ Obj. at 2.)
Specifically, plaintiffs challenge Judge Reyes’ hourly rate
reduction in the following amounts: a reduction of $75 per hour
for senior and junior associates, and a reduction of $30 per
hour for paralegals. (See id. at 2, 7.)
Conceding that this
district “has never established uniform rates to be awarded in
ERISA cases, and [that] fee awards have fluctuated with respect
to the hourly rates that have been approved in the past,” (id.
at 3), plaintiffs contend that their requested hourly rates are
what reasonable clients would be willing to pay, (id. at 2
(quoting Arbor Hill Concerned Citizens Neighborhood Ass’n v.
Cnty. of Albany, 493 F.3d 110, 117 (2d Cir. 2007), amended on
other grounds, 522 F.3d 182 (2d Cir. 2008)), and “are entirely
consistent with the range of hourly rates that this Court has
approved as reasonable in similar ERISA actions,” (id.)
Thus,
plaintiffs assert that their requested “rates should be approved
as reasonable, particularly given that the Report acknowledges
the ‘demonstrated skill and experience of counsel in preparing
this case.’” (Id. at 2 (quoting R&R at 17).)
8
Plaintiffs then cite and rely upon a plethora of cases
purporting to demonstrate that their requested hourly rates for
associates and paralegals are reasonable. (Id. at 3-5.)
Specifically, plaintiffs assert that the R&R’s “recommended
rates . . . are substantially lower than the hourly rates that
this Court has previously approved for these same Trustees with
respect to the hourly rates that they have negotiated with their
attorneys.” (Id. at 3.)
Additionally, plaintiffs contend that
“as far back as 2006, other benefit fund trustees have been
awarded fees comparable or higher than the requested rates here
on ERISA default motions.” (Id. at 4.)
Moreover, plaintiffs
argue that the R&R’s “recommended reductions are commensurate,
and in certain instances, below the hourly rates that . . . have
been reported in cases that were decided prior to the negotiated
July 2011 rate increase.” (Id. at 4-5.)
In addition, plaintiffs emphasize that this action is
“different in kind than an ordinary default application” in
light of the many depositions and the irregular and detailed
portions of the default motion that Judge Reyes found
convincing. (Id. at 5.)
In particular, plaintiffs cite La
Barbera v. Best Friends Trucking Co., No. 07-CV-4226, 2010 WL
1692509, at *2 (E.D.N.Y. Apr. 27, 2010), for the proposition
that it is reasonable to award hourly rates higher than the
9
prevailing rates in cases involving “‘time-consuming and
painstaking’” work, such as here. (Pls.’ Obj. at 5-6.)
Finally, plaintiffs argue “that the substantial
reduction in the recommended hourly rate runs contrary to
ERISA’s remedial purpose, which . . . requires the Trustees to
pursue aggressive collection efforts.” (Id. at 6 (citing
cases).)
Plaintiffs instead maintain that their requested
hourly rates “are fully consistent with and a product of the
work required of the Trustees to fulfill their fiduciary
obligations under ERISA.” (Id.)
STANDARD OF REVIEW
In reviewing a Report and Recommendation, a district
“court may accept, reject, or modify, in whole or in part, the
findings or recommendations made by the magistrate judge.” 28
U.S.C. § 636(b)(1).
Where a party makes specific and timely
objections to a magistrate judge’s findings or recommendations,
the district court must apply a de novo standard of review to
the portions of the R&R to which the objection is made. Mazzei
v. Abbott Labs. & Co., No. 10-CV-1011, 2012 WL 1101776, at *1
(E.D.N.Y. Apr. 2, 2012) (citing Fed. R. Civ. P. 72(b)(3); Arista
Records, LLC v. Doe 3, 604 F.3d 110, 116 (2d Cir. 2010)); see
also 28 U.S.C. § 636(b)(1).
Where no proper objection to a Report and
10
Recommendation has been timely made, the district court “‘need
only satisfy itself that that there is no clear error on the
face of the record.’” Jarvis v. N. Am. Globex Fund, L.P., 823 F.
Supp. 2d 161, 163 (E.D.N.Y. 2011) (quoting Wilds v. United
Parcel Servs., 262 F. Supp. 2d 163, 169 (S.D.N.Y. 2003)); see
also Urena v. New York, 160 F. Supp. 2d 606, 609-10 (S.D.N.Y.
2001).
Moreover, where “the objecting party makes only
conclusory or general objections, or simply reiterates the
original arguments, the Court will review the report and
recommendation strictly for clear error.” Zaretsky v. Maxi-Aids,
Inc., No. 10-CV-3771, 2012 WL 2345181, at *1 (E.D.N.Y. June 18,
2012) (internal quotation marks omitted); see also Soley v.
Wasserman, 823 F. Supp. 2d 221, 228 (S.D.N.Y. 2011).
DISCUSSION
The court has reviewed de novo the portion of the R&R
that is specifically addressed in plaintiffs’ sole objection to
Judge Reyes’ reduction of plaintiff’s requested hourly rates.
As explained below, the court adopts the hourly rates
established in the R&R, overrules plaintiffs’ objection, and
supplements Judge Reyes’ analysis as set forth below.
Furthermore, the court has reviewed the factual and legal
conclusions of the portions of the R&R to which no objection has
been made for clear error.
Having found none, the court adopts
11
and affirms Judge Reyes’ well-reasoned, legally supported, and
thorough R&R in its entirety.
I.
De Novo Review of the Reduced Hourly Rates
A.
Applicable Law
Although an award of reasonable attorneys’ fees is
mandatory in this action pursuant to 29 U.S.C. § 1132(g)(2)(D)
and the Trust Agreement, the court has the sound discretion to
determine the reasonable hourly rates applied to the time
expended by plaintiffs’ attorneys. See La Barbera v. Tadco
Constr. Corp., 647 F. Supp. 2d 247, 253-54 (E.D.N.Y. 2009).
In
Arbor Hill, the Second Circuit explained that, when determining
the reasonableness of attorney's fees, the preferred course is
for the court,
in exercising its considerable discretion,
to bear in mind all of the case-specific
variables that [the Second Circuit] and
other courts have identified as relevant to
the reasonableness of attorney's fees in
setting a reasonable hourly rate.
The
reasonable hourly rate is the rate a paying
client would be willing to pay.
In
determining what rate a paying client would
be willing to pay, the district court should
consider, among others, the Johnson factors; 5
5
The twelve factors set forth by the Fifth Circuit in Johnson v.
Ga. Highway Express, Inc. are: (1) the time and labor required; (2) the
novelty and difficulty of the questions; (3) the skill required to perform
the legal service properly; (4) the preclusion of other employment by the
attorney due to acceptance of the case; (5) the customary fee; (6) whether
the fee is fixed or contingent; (7) time limitations imposed by the client or
the circumstances; (8) the amount involved and the results obtained; (9) the
experience, reputation, and ability of the attorneys; (10) the
“undesirability” of the case; (11) the nature and length of the professional
12
it
should
also
bear
in
mind
that
a
reasonable, paying client wishes to spend
the minimum necessary to litigate the case
effectively. The district court should also
consider that such an individual might be
able to negotiate with his or her attorneys,
using
their
desire
to
obtain
the
reputational benefits that might accrue from
being associated with the case.
493 F.3d at 117-18 (emphasis in original).
“In considering
these case-specific factors, the court approximates the market
rates ‘prevailing in the community for similar services of
lawyers of reasonably comparable skill, experience, and
reputation.’” Carco Grp., Inc. v. Maconachy, No. 05-CV-6038,
2011 WL 6012426, at *2 (E.D.N.Y. Dec. 1, 2011) (quoting Cruz v.
Local Union No. 3 of IBEW, 34 F.3d 1148, 1159 (2d Cir. 1994)).
Generally, the “community” is defined as the district in which
the court sits. E.g., Arbor Hill, 493 F.3d at 111; Polk v. N.Y.
State Dep’t of Corr. Servs., 722 F.2d 23, 25 (2d Cir. 1983);
U.S. Bank, N.A. v. Byrd, 854 F. Supp. 2d 278, 286 (E.D.N.Y.
2012).
The prevailing market rate in the community is then
used “in calculating the lodestar, or what the Second Circuit is
now calling the ‘presumptively reasonable fee.’” Lynch v. Town
of Southampton, 492 F. Supp. 2d 197, 210-11 (E.D.N.Y. 2007)
relationship with the client; and (12) awards in similar cases. 488 F.2d 714,
717–19 (5th Cir. 1974), abrogated on other grounds by Blanchard v. Bergeron,
489 U.S. 87 (1989).
13
(citing Blum v. Stenson, 465 U.S. 886, 895 (1984)), aff’d, 2008
WL 5083010 (2d Cir. Dec. 2, 2008) (summary order).
In
determining the prevailing market rates, the court should rely
on the hourly rates awarded in comparable actions in Eastern
District opinions and on its own knowledge of the prevailing
rates in this district. See La Barbera v. Smith, No. 08-CV-3983,
2011 WL 7139122, at *2 (E.D.N.Y. Dec. 7, 2011) (citing Finkel v.
Universal Sec. Sys., No. 10-CV-4520, 2011 WL 5402070, at *9
(E.D.N.Y. Sept. 9, 2011), adopted by 2012 WL 314003 (E.D.N.Y.
Feb. 1, 2012).
B.
Analysis and Application
Recently, reasonable hourly rates in this district
have ranged from approximately $200–300 for senior associates,
$100–$200 for junior associates, and $70-$100 for paralegals.
See, e.g., Chen v. Cnty. of Suffolk, No. 07-CV-3698, 2013 WL
827711, at *12 (E.D.N.Y. Mar. 7, 2013) (citing cases); Spence v.
Ellis, No. 07-CV-5249, 2012 WL 7660124, at *5 (E.D.N.Y. Dec. 19,
2012) (collecting cases), adopted by 2013 WL 867533 (E.D.N.Y.
Mar. 7, 2013).
Because default actions are generally simpler
and more straightforward than other legal matters, Eastern
District opinions have frequently found that reasonable hourly
rates in ERISA-default actions are closer to the lower end of
these ranges. See Gesualdi v. Magnolia Pro Trucking Inc., No.
14
11-CV-4082, 2012 WL 4036119, at *9 (E.D.N.Y. Aug. 20, 2012)
(“Specifically, in ERISA default cases, courts in this District
have consistently approved rates that are closer to the lower
range of fees allowed.”) (citing and collecting cases), adopted
sub nom. by Gesualdi v. Magnolia P R O Trucking Inc., 2012 WL
4035779 (E.D.N.Y. Sept. 11, 2012).
Thus, in recent ERISA-
default actions, Eastern District opinions have generally found
that reasonable rates are approximately $200-$300 for senior
associates, $100-$175 for junior associates, and $70-$90 for
paralegals. See, e.g., Ferrara v. Reliable Indus. II, Inc., No.
11-CV-1434, 2012 WL 6851088, at *6 (E.D.N.Y. Sept. 27, 2012)
(collecting cases), adopted by 2013 WL 146085 (E.D.N.Y. Jan. 14,
2013); La Barbera v. VLF11 Mgmt. Corp., No. 08-CV-2615, 2012 WL
1576109, at *7 (E.D.N.Y. Apr. 3, 2012), adopted by 2012 WL
1576114 (E.D.N.Y. May 4, 2012); Gesualdi v. Stallone Testing
Labs., Inc., No. 10-CV-646, 2010 WL 7066679, at *7 (E.D.N.Y.
Dec. 17, 2010), adopted by 2011 WL 2940606 (E.D.N.Y. July 19,
2011).
Here, plaintiffs seek hourly rates of $375 for senior
associate time, $275 for junior associate time, and $110 for
paralegal time, based on a rate increase to plaintiffs effective
15
July 1, 2011. 6 (Pls.’ Obj. at 2-3.)
All of these requested rates
are well above the ranges for prevailing reasonable hourly rates
in ERISA-default cases in the Eastern District.
Having
considered the prevailing rates in this district, the relative
complexity of this ERISA-default action, the experience and
reputation of plaintiffs’ counsel, and the skill and time needed
to litigate this matter, the court finds that Judge Reyes’
recommended hourly rates of $300 for senior associate time, $200
for junior associate time, and $80 for paralegal time are
reasonable and amply supported by the hourly rates awarded in
other ERISA-default cases in the Eastern District.
C.
Plaintiffs’ Arguments
1.
Case Law Cited by Plaintiffs
In their objection to the R&R, plaintiffs’ primarily
rely on cases purporting to show that their requested hourly
rates are reasonable.
In doing so, plaintiffs cite to six
Southern District opinions that have approved hourly rates
similar to plaintiffs’ requested rates.
These Southern District
cases, however, are not probative of the prevailing rates in the
Eastern District, where prevailing rates are, as a general
matter, “substantially lower” than the prevailing rates in the
6
Prior to July 1, 2011, all associates were billed at $275 per
hour, without distinguishing between senior and junior associates, and all
paralegals were billed at $90 per hour. (Pl.’s Obj. at 3.)
16
Southern District. Simmons v. N.Y.C. Transit Auth., 575 F.3d
170, 172 (2d Cir. 2009); see also Green v. City of New York, No.
05-CV-429, 2009 WL 3063059, at *9 (E.D.N.Y. Sept. 21, 2009) (“A
survey of more recent Southern District cases suggests that
rates in that district have increased in the past decade and are
now higher than the rates in this District.”).
Moreover, the
court finds that the Southern District cases to which plaintiffs
cite should not serve as the baseline in determining the
reasonable hourly rates that are appropriate in this case. See
Siracuse v. Program for the Dev. of Human Potential, No. 07-CV2205, 2012 WL 1624291, at *24 n.23 (E.D.N.Y. Apr. 30, 2012)
(“Unfortunately, the cases cited . . . are all decisions
rendered in cases brought before the Southern District of New
York.
Since the Court is required by the Second Circuit to
apply reasonable rates from this district, the case law cited is
of marginal assistance.” (citation omitted)).
Instead, plaintiffs’ hourly rates are properly
determined by first looking to the prevailing rates in the
Eastern District. Simmons, 575 F.3d at 172; Arbor Hill, 522 F.3d
at 111; Polk, 722 F.2d at 25. 7
Accordingly, plaintiffs’ reliance
7
In certain circumstances, the court may adjust base hourly rates
to account for a plaintiff that has retained an out-of-district counsel.
“[W]hen faced with a request for an award of higher out-of-district rates, a
district court must first apply a presumption in favor of application of the
forum rule. In order to overcome that presumption, a litigant must
17
on Southern District opinions is misplaced and fails to
demonstrate the reasonableness of plaintiffs’ requested hourly
rates.
Furthermore, the Eastern District cases cited by
plaintiffs fare no better and fail to provide any basis to
depart from Judge Reyes’ reduction of plaintiffs’ requested
hourly rates.
Upon careful review, the court is not persuaded
by any of the Eastern District ERISA-default opinions that have
awarded rates similar to plaintiffs’ heightened rates for the
reasons explained below.
First, the court finds that seven of the cited Eastern
District cases provide little to no reasoning in support of the
reasonable hourly rates awarded to the plaintiff in those cases.
Absent such reasoning, the court finds scant support for the
plaintiffs’ requested rate and, in any event, is unable to
determine whether the cited cases support a heightened hourly
rate in this case under these factual circumstances.
For
example, in two of the cited cases, Gesualdi v. Quadrozzi Equip.
Leasing Corp. and Ferrara v. K&W Logistics LLC, the district
persuasively establish that a reasonable client would have selected out-ofdistrict counsel because doing so would likely (not just possibly) produce a
substantially better net result.” Simmons, 575 F.3d at 175. In this case,
however, plaintiffs have never established, let alone argued, that it was
reasonable for them to retain CWS, an out-of-district counsel. In any event,
the court sees no reason why a local counsel would not have been able to
handle this case and produce a result identical to that obtained by CWS.
18
courts applied hourly rates similar to plaintiffs’ requested
rates without expressly providing the specific basis for
applying such hourly rates. (See Adler Default Decl., Exhs. H &
I, Gesualdi v. Quadrozzi Equip. Leasing Corp., No. 11-CV-115, at
*3 (E.D.N.Y. Dec. 11, 2012); Adler Default Decl., Exh. S,
Ferrara v. K&W Logistics LLC, No. 09-CV-3412, at *3 (E.D.N.Y.
Sept. 30, 2010).)
Likewise, in three of the Eastern District cases cited
by plaintiffs – (1) Ferrara v. Joseph Speizio Excavating Corp.;
(2) Ferrara v. Nexus Mech., Inc.; and (3) Ferrara v. United
Ornamentals Inc. — the district courts applied hourly rates
similar to plaintiffs’ requested rates here without analysis of
the reasonableness of such rates. (See Adler Default Decl., Exh.
F, Ferrara v. Joseph Speizio Excavating Corp., No. 11-CV-764
(E.D.N.Y. Mar. 21, 2012); Adler Default Decl., Exh. D, Ferrara
v. Nexus Mech., Inc., No. 11-CV-2774 (E.D.N.Y. Mar. 12, 2012);
Adler Default Decl., Exh. Q, Ferrara v. United Ornamentals Inc.,
No. 09-CV-3411 (E.D.N.Y. June 23, 2009).)
Moreover, in two of the cited cases, Ferrara v. Atlas
Concrete Structures Corp. and Ferrara v. BD Haulers Inc., the
magistrate judges recommended hourly rates similar to
plaintiffs’ requested hourly rates but did not explain why such
rates were reasonable; nor were any persuasive or controlling
19
authorities cited to justify such heightened rates. (Adler
Default Decl., Exh. K, Ferrara v. Atlas Concrete Structures
Corp., No. 11-CV-2775, at *9 (E.D.N.Y. May 17, 2012); Adler
Default Decl., Exh. C, Ferrara v. BD Haulers Inc., No. 11-CV940, at *9 (E.D.N.Y. Jan. 31, 2012).)
Thereafter, the district
courts in both cases approved these recommendations without a de
novo review of the reasonableness of the hourly rates. (See
Adler Default Decl., Exhs. J and B.)
Second, although three of the older cases cited by
plaintiffs provide some analysis and reasoning for awarding
heightened hourly rates, the court finds such reasoning and
analysis unpersuasive in this case.
In King v. Unique Rigging
Corp., No. 01-CV-3797, 2006 WL 3335011, at *4 (E.D.N.Y. Oct. 27,
2006), La Barbera v. Cyn-Ken Driver Serv. Co., No. 06-CV-4445,
2007 WL 2908072, at *8-10 (E.D.N.Y. Oct. 5, 2007), and La
Barbera v. Fed. Metal & Glass Corp., 666 F. Supp. 2d 341, 353-54
(E.D.N.Y. 2009), the magistrate judges recommended hourly rates
similar to some of plaintiffs’ requested rates and provided
analysis for awarding such rates, which were subsequently
adopted by the district courts.
None of these cases, however,
provide a compelling basis to sustain plaintiffs’ objections in
this case; indeed, in King, the magistrate judge acknowledged
that the requested rates were “somewhat higher than the rates
20
charged by others in the field,” but nonetheless awarded the
higher rates after briefly concluding that such heightened rates
were appropriate. 2006 WL 3335011, at *4.
Furthermore, none of the cases to which plaintiffs
cite require this court to apply plaintiffs’ heightened hourly
rates.
Indeed, “an excessive award [that] has been approved in
the past does not bind a subsequent district court performing de
novo ‘reasonableness’ review to that prior determination.”
LaBarbera v. D. & R. Materials, 588 F. Supp. 2d 343, 348-49
(E.D.N.Y. 2008); see also LaBarbera v. Abbey Tool & Indus.
Supply Co., No. 07–CV–3114, 2008 WL 4198546, at *7 (E.D.N.Y.
Sept. 5, 2008) (“I recognize that the Trustees have previously
succeeded in requesting . . . an hourly rate of $250 for the
same attorney who represents them in this case . . . .
[However,] in light of Arbor Hill . . ., past practice is no
longer a sufficient basis for requiring a defendant to subsidize
the plaintiffs' choice of counsel who charges more than other
similarly situated attorneys in this district . . . .”). 8
Third, the court further notes that other recent
opinions in this district undermine plaintiffs’ objection.
8
In
Plaintiffs cite two more unpublished Eastern District opinions,
Ferrara v. High Power Trucking Corp., No. 09-CV-4697 (E.D.N.Y. May 17, 2010)
and La Barbera v. Audax Constr. Corp., No. 02-CV-582 (E.D.N.Y. May 19, 2009).
Neither of these cases provides any persuasive basis to depart from Judge
Reyes’ recommended hourly rates, which the court finds to be reasonable under
the circumstances.
21
fact, the court has located several recent Eastern District
ERISA-default cases, in which CWS was counsel, where courts have
reduced the requested hourly rates to rates even lower than
those recommended by Judge Reyes in this case. See, e.g.,
Gesualdi v. Tapia Trucking LLC, No. 11-CV-4174, 2012 WL 7658194,
at *5 (E.D.N.Y. Oct. 15, 2012) (reducing hourly rates of CWS’s
associates, one of whom was junior associate Ahmed, from $225 to
$150 and $100 and reducing hourly rates of CWS’s paralegals from
$100 to $75), adopted by 2013 WL 831134 (E.D.N.Y. Mar. 6, 2013)
(overruling plaintiffs’ objection to reduced hourly rates);
Gesualdi v. Loriann Trucking Co., No. 11-CV-5984, 2012 WL
3887205, at *9 (E.D.N.Y. July 27, 2012) (reducing hourly rates
of CWS’s junior associates, one of whom was junior associate
Ahmed, from $225 to $100 and $150 and reducing hourly rates of
CWS’s paralegals from $100 to $75), adopted by 2012 WL 3887170
(E.D.N.Y. Sept. 6, 2012); Ferrara v. CMR Contracting LLC, 848 F.
Supp. 2d 304, 314 (E.D.N.Y. 2012) (reducing hourly rates of
CWS’s paralegals from $90 to $75); Ferrara v. Metro D Excavation
& Found., Inc., No. 10-CV-4215, 2011 WL 3610896, at *7 (E.D.N.Y.
July 7, 2011) (reducing hourly rates of CWS’s senior associates
Adler and Leeds from $275 to $250 and reducing hourly rates of
CWS’s paralegals from $90 to $80), adopted by 2011 WL 3625448
(E.D.N.Y. Aug. 16, 2011).
These cases demonstrate that
22
plaintiffs’ requested hourly rates in this case are unreasonably
excessive in this district.
Accordingly, the court finds that
Judge Reyes’ reduced rates are reasonable and, in fact, generous
to plaintiffs’ counsel.
2.
Complexity of This Action
Additionally, plaintiffs urge the court to award the
requested rates due to the complex single employer/alter ego
theory of liability pursued in this action.
Plaintiffs
specifically cite to the portion of the R&R that states that
this case encompasses an “atypical default judgment.” (R&R at
18.)
Although the court agrees with both Judge Reyes and
plaintiffs that this default action involves a relatively
complex matter (as far as typical defaults are concerned), the
court has already accounted for that factor by applying
reasonable hourly rates at the higher end of the prevailing
rates in this district.
Plaintiffs further argue that the significant time
consumed in this matter relating to the single employer/alter
ego liability theory should be accounted for in the
reasonableness of the rates. (Id.)
In support of this argument,
plaintiffs cite to Best Friends Trucking, 2010 WL 1692509, at
*2, in which the district court modified in part the magistrate
judge’s recommendation to reduce the plaintiff’s requested
23
attorneys’ fees.
According to plaintiffs, the district court in
Best Friends Trucking explained that, “[d]espite defendant’s
default in this straightforward ERISA action, and despite
[counsel’s] acknowledged expertise in ERISA litigation, the work
required of plaintiffs’ counsel was time-consuming and
painstaking, and resulted in the recovery of a significant
amount of unpaid contributions.” (Pls.’ Obj. at 5-6 (quoting
Best Friends Trucking, 2010 WL 1692509, at *2).)
Plaintiffs, however, mischaracterize the quoted
passage in Best Friends Trucking.
In that quoted passage, the
district court was discussing the reasonableness of the
requested billed hours, not the reasonableness of the requested
hourly rates. Best Friends Trucking, 2010 WL 1692509, at *2.
Accordingly, Best Friends Trucking is inapposite with respect to
this court’s determination of a reasonable hourly rate and does
not support plaintiffs’ contention that the complexity of this
ERISA-default warrants the heightened hourly rates requested by
plaintiffs.
3.
Remedial Purpose of ERISA
Finally, plaintiffs maintain that their requested
rates are reasonable in light of ERISA’s remedial purpose, which
requires plaintiffs “to pursue aggressive collection efforts.”
(Pls.’ Obj. at 6.)
This argument is unavailing and does not
24
support the reasonableness of plaintiffs’ requested rates.
The
court’s reduction of plaintiff’s requested hourly rates in this
case does not “run[] contrary to ERISA’s remedial purpose.”
(Id.)
That ERISA entitles plaintiffs to recover reasonable
attorneys’ fees does not suggest that plaintiffs may recover
excessive attorneys’ fees that are untethered to the prevailing
rates in this district.
Contrary to plaintiffs’ assertion, the
court’s adoption of the R&R’s recommended reasonable hourly
rates is fully consistent with ERISA’s remedial purpose.
II. Clear Error Review
Upon careful review of the R&R, the record before the
court, and the relevant case law, the court finds no clear error
in the portions of the R&R to which no objection has been made. 9
CONCLUSION
For the reasons set forth above and in Judge Reyes’
thorough and well-reasoned R&R, the court grants plaintiffs’
Motion for Default Judgment and orders that judgment be entered
9
In the Preliminary Statement of their limited objection,
plaintiffs briefly state that the R&R “makes no reference to the pre-July
2011 agreed-upon rates, though attorney time in this action was expended
prior to that date.” (Pls.’ Obj. at 2.) This conclusory assertion is not
construed as a formal objection to the R&R, and this matter is therefore
deemed waived on any further judicial review. See 28 U.S.C. § 636(b)(1); Fed.
R. Civ. P. 72(b)(2). Despite the lack of a specific objection, the court, in
an excess of caution, has conducted a de novo review of the record and the
R&R concerning this matter. Although Judge Reyes did not explicitly
reference the pre-July 2011 rates or billed hours in his R&R and did not
provide a detailed basis for his calculations, the court finds that Judge
Reyes accurately computed plaintiffs’ award of reasonable attorneys’ fees and
correctly accounted for hours expended by CWS attorneys prior to July 2011.
25
in favor of plaintiffs and against defendant AAP in the amount
of $233,590.59 for unpaid benefit contributions; $262,567.42 for
pre-judgment interest through February 15, 2013, plus per diem
interest at the rate of $115.09 until entry of final judgment to
be calculated by the Clerk of the Court; liquidated damages in
the amount equal to pre-judgment interest as calculated by the
Clerk of the Court at the time final judgment is entered;
$9,054.19 for unpaid audit fees; $58,418.00 for attorneys’ fees;
$7,154.57 for costs; less the $15,000 settlement between
plaintiffs and defendants Professional Pavers and Lopes; and
post-judgment interest pursuant to 28 U.S.C. § 1961.
Plaintiffs’ request for injunctive relief is denied.
The Clerk of Court is respectfully requested to enter
judgment in accordance with this Order and to close this case.
Counsel for plaintiffs is respectfully requested to serve a copy
of this Order on all defendants and note service on the docket
no later than March 29, 2013.
SO ORDERED.
Dated:
March 23, 2013
Brooklyn, New York
______________/s/
Kiyo A. Matsumoto
United States District Judge
Eastern District of New York
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