Stein v. 1-800 Flowers.Com, Inc.

Filing 28

ORDER: For the reasons stated in the attached Order, the motion for attorney's fees 27 is denied without prejudice. The Court grants leave for Plaintiff to make a renewed application for fees and costs consistent with this Order, which must be filed by April 8, 2019. Defendant must file any opposition to such an application by April 22, 2019. So Ordered by Magistrate Judge Sanket J. Bulsara on 3/7/2019. (Silberstein, Hope)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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SHIVA STEIN,
Plaintiff,
-against-

MEMORANDUM
AND ORDER
16-CV-6252-RRM-SJB

1-800-FLOWERS.COM, INC.,
Defendant.
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BULSARA, United States Magistrate Judge:
On November 10, 2016, Plaintiff Shiva Stein (“Stein”) brought this action seeking
to enjoin a proxy vote on certain proposals in connection with Defendant 1-800Flowers.com, Inc.’s (“Flowers”) annual shareholder meeting. (Complaint (“Compl.”)
dated Nov. 10, 2016, Dkt. No. 1). On December 1, 2016, the Honorable Roslynn R.
Mauskopf denied Stein’s motion for a preliminary injunction. (Minute Entry dated Dec.
1, 2016). On February 24, 2017, Stein informed the Court that she intended to
voluntarily dismiss the action and file a motion for attorney’s fees and expenses “based
on the common benefit doctrine.” (Letter dated Feb. 24, 2017 (“February Letter”), Dkt.
No. 23). Stein filed that motion on March 22, 2018. (Mot. for Attorney Fees (“Mot.”),
dated Mar. 22, 2018, Dkt. No. 27). For the reasons stated below, the motion for
attorney’s fees is denied without prejudice to renewal.
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
Stein filed this direct stockholder action on November 10, 2016, alleging that
Flowers had violated Section 14(a) of the Securities Exchange Act, 15 U.S.C. § 78n(a),
and Securities and Exchange Commission (“SEC”) Rule 14a-9, 17 C.F.R. § 240.14a-9,
which prohibits false or misleading statements or omissions in proxy materials. (Compl.

¶¶ 1, 11, 19). Stein’s claims involved two proposals for shareholder approval set forth in
the proxy statement; one of these proposals sought to amend Flowers’s certificate of
incorporation. (Id. ¶¶ 3, 13). Judge Mauskopf denied Stein’s motion for a preliminary
injunction to enjoin the proxy vote and issued a Memorandum & Order that stated the
reasons for her ruling, including that Stein had failed to demonstrate irreparable harm.
(Mem. & Order dated Dec. 2, 2016, Dkt. No. 19, at 1).
After Judge Mauskopf’s ruling, Stein told Flowers she intended to amend her
complaint; Flowers contemplated filing a motion to dismiss. (See Letter and Stipulation
dated Jan. 26, 2017; Dkt. No. 22). On February 24, 2017, however, Stein informed
Judge Mauskopf that she intended to voluntarily dismiss the action pursuant to Federal
Rule of Civil Procedure 41(a)(1)(A)(i) because Flowers had taken measures that,
according to Stein, mooted her claims. (February Letter at 1). The measures included
the filing of a corrected version of Flowers’s certificate of incorporation in its quarterly
report (Form 10-Q). (Id. at 3). Stein claimed that the filing of the correct certificate not
only resolved her claims—which were based on the inaccurate certificate Flowers had
previously filed with the SEC—but also conferred a common benefit on Flowers and its
stockholders, a benefit Stein had helped bring about by discovering the correct
certificate. (Id. at 2–3). Stein argued that by conferring this common benefit, she was
entitled to attorney’s fees. (Id. at 3). Flowers filed a response, arguing that the Court
should not award Stein any attorney’s fees. (Letter in Response dated Feb. 27, 2017,
Dkt. No. 24).
After almost a year of inactivity, Judge Mauskopf ordered Stein to advise the
Court whether she still wished to pursue her motion for attorney’s fees. (Order dated
Jan. 11, 2018). In response, the parties proposed a briefing schedule, (Proposed
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Scheduling Order dated Jan. 25, 2018), and the motion was filed, along with Flowers’s
opposition and Stein’s reply, on March 22, 2018, (Mot.). Stein, whose attorneys took
her case on a contingency basis, asks for $145,650 in attorney’s fees and $12,809.66 in
unreimbursed expenses. (See Pl.’s Mem. in Supp. (“Pl.’s Mem.”), attached as Ex. 1 to
Mot., at 16; Decl. of A. Arnold Gershon (“Gershon Decl.”), attached as Ex. 2 to Mot.,
¶¶ 3–4). In computing the total lodestar amount, Stein used an hourly partner rate of
$770 and an associate rate of $460. (Gershon Decl. ¶ 3). Stein’s motion did not include
any contemporaneous records or invoices of the time spent, the work done, or the
expenses incurred.
DISCUSSION
Stein’s motion for attorney’s fees is deficient because it lacks necessary
submissions regarding fees and costs and uses an unreasonable hourly rate to compute
the fees sought.
I.

Attorney’s Fees
A.

Contemporaneous Time Records

Stein’s failure to submit contemporaneous time records is fatal to her motion.
See U.S. ex rel. Karlin v. Noble Jewelry Holdings Ltd., No. 08-CV-7826, 2012 WL
1228199, at *4 (S.D.N.Y. Apr. 9, 2012) (“The Relator’s motion [for attorney’s fees and
costs] is fatally deficient because he failed to submit any contemporaneous records when
he filed his motion.”) (report and recommendation); see also Tito v. Rubin & Rothman,
LLC, No. 12-CV-3464, 2014 WL 1092845, at *2 (E.D.N.Y. Mar. 18, 2014) (“When
submitting their fee request, the moving party is required to submit contemporaneous
time records, affidavits, and other materials to support their fee request.”). To recover
fees, attorneys must submit contemporaneous time records that specify “the date, the
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hours expended, and the nature of the work done.” N.Y. State Ass’n for Retarded
Children, Inc. v. Carey, 711 F.2d 1136, 1148 (2d Cir. 1983); see Scott v. City of New York,
626 F.3d 130, 133 (2d Cir. 2010) (“Carey sets out unequivocally that absent unusual
circumstances attorneys are required to submit contemporaneous records with their fee
applications. . . . [E]xceptions are minimal and limited in scope.”).
Stein’s attorneys have provided limited information in their request for attorney’s
fees: a table with the names of the attorneys who worked on the case, their titles, the
number of hours they worked, and their rates. (Gershon Decl. ¶ 3). The documents do
not contain the hours attributable to each task and describe the nature of the work only
in the most general sense. (E.g., id. (“The time was spent on researching the law,
analyzing the facts, . . . drafting the complaint . . . [and] papers, and arguing before this
Court the motion for a preliminary injunction; analyzing the Defendant corporation’s
certificates of incorporation, bylaws, and SEC filings while considering such options as
filing an amended complaint or filing a complaint in . . . Delaware; negotiating with
Defendant’s counsel the filing of the Defendant corporation’s correct certificate[.]”)).
Such general descriptions, without the dates and time for each task, do not satisfy
Carey. Nor has Stein submitted contemporaneous time records. In his declaration,
Arnold Gershon (one of Stein’s attorneys) avers that “[t]he time spent and the work
done is reflected in my firm’s records and are based on accurate and contemporaneously
entered data.” (Id.). Gershon, however, does not include any of these records, and an
attorney’s declaration that he has such records is not sufficient to satisfy the Carey
requirement that the records themselves be provided.
Stein’s deficient fee application requires that the motion be denied. See, e.g.,
Karlin, 2012 WL 1228199, at *6 (denying fee application without prejudice for failure to
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provide timesheets); Genn v. New Haven Bd. of Educ., No. 12-CV-704, 2017 WL
2079648, at *2 (D. Conn. May 15, 2017) (“‘Carey establishes a strict rule from which
attorneys may deviate only in the rarest of cases.’ Plaintiff counsel has deviated from
Carey . . . and has not provided any indication that hers is ‘the rarest of cases’ meriting
such deviation.”) (citation omitted) (quoting Scott, 626 F.3d at 133, and denying fee
application based on attorney’s “work log”); Jerolmon v. Astrue, No. 10-CV-267, 2013
WL 210898, at *2 (D. Conn. Jan. 18, 2013) (“The problem with Plaintiff’s . . . application
for an award of his attorney’s fees is that the . . . Firm has not submitted
contemporaneous time records in support of the application.”); Cablevision Sys. N.Y.C.
Corp. v. Diaz, No. 01-CV-4340, 2002 WL 31045855, at *5 (S.D.N.Y. July 10, 2002)
(denying attorney’s fees because the application only included attorney names,
professional experience, and billing rate), report and recommendation adopted, Order
dated Aug. 7, 2002, Dkt. No. 12.
This is not a minor requirement that the Court enforces to create bureaucratic
hoops for attorneys to jump through. The Court cannot perform its proper review
function—e.g., excluding duplicate entries, reducing unnecessary time, and ensuring
hours were recorded contemporaneously—without the actual billing records. See
Hensley v. Eckerhart, 461 U.S. 424, 433 (1983) (“It remains for the district court to
determine what fee is ‘reasonable.’”); Bogosian v. All Am. Concessions, No. 06-CV-1633,
2012 WL 1821406, at *3 (E.D.N.Y. May 18, 2012) (“[D]eterminations of reasonable
attorneys’ fees . . . require a review of reasonably detailed contemporaneous time
records, as contemplated by [Carey, 711 F.2d at 1148]. In determining the
reasonableness of the number of hours expended, the Court ‘should exclude excessive,
redundant or otherwise unnecessary hours, as well as hours dedicated to severable
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unsuccessful claims.’”) (quoting Quaratino v. Tiffany & Co., 166 F.3d 422, 425 (2d Cir.
1999)) (citation omitted); Karlin, 2012 WL 1228199, at *4 (“[T]he Court is unable to
assess the reasonableness of the attorneys’ fees requested without the contemporaneous
records.”); Poulin v. Astrue, No. 10-CV-1930, 2012 WL 264579, at *3 (D. Conn. Jan. 27,
2012) (“This Court has a duty to review plaintiff’s itemized statement to determine the
reasonableness of the hours requested and to exclude hours that are excessive,
redundant, or otherwise unnecessary.”) (quotations omitted).
The Court also cannot conduct a substantive review of the fees to determine
which hours are compensable under the exception to the American Rule—which
normally prohibits the recovery of fees by the prevailing party—relied on by Stein. Stein
asks the Court to award fees on the basis of a common benefit conferred on Flowers and
its shareholders. (See generally Pl.’s Mem.). Without contemporaneous records, the
Court cannot perform an allocation, to the extent one is necessary, of fees for activities
in furtherance of a common benefit as opposed to those that are not. For example, it
may be appropriate to deny any request for fees incurred in connection with the
preliminary injunction motion—a motion that Stein lost. Cf. Hensley, 461 U.S. at 434–
35 (“In some cases a plaintiff may present in one lawsuit distinctly different claims for
relief that are based on different facts and legal theories. In such a suit, even where the
claims are brought against the same defendants[,] . . . work on one claim will be
unrelated to his work on another claim.”); e.g., Linde v. Arab Bank, PLC, 293 F.R.D.
138, 143 (E.D.N.Y. 2013) (“[T]he lack of specificity [of the time records] impairs the
ability to review the reasonableness of certain items. Also, some time items are not
properly allocated as between compensable and non-compensable activities, or seem
excessive.”).
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Moreover, as a result of the absence of records, Flowers, who opposes a fee
award, (see Def.’s Mem. in Opp’n, attached as Ex. 13 to Mot.), can raise no objections
regarding the time spent and the nature of the work when Stein has produced no
contemporaneous records. See Pastre v. Weber, 800 F. Supp. 1120, 1124 (S.D.N.Y.
1991) (“Noting that such sparse documentation made review of the application and
consideration of objections thereto exceedingly difficult, the Court of Appeals
established the requirement . . . that fee applicants document their applications with
contemporaneous time records[.]”) (emphasis added) (citing Carey, 711 F.2d at 1147–
48).
For these reasons, the Court denies Stein’s attorney’s fees application.
B.

Hourly Rates

Separate and apart from the other deficiencies in her fee application, the hourly
rates Stein’s attorneys use to calculate the lodestar are unreasonable. “The burden is on
the party moving for attorney’s fees to justify the hourly rates sought.” Brown v. Green
317 Madison, LLC, No. 11-CV-4466, 2014 WL 1237448, at *5 (E.D.N.Y. Feb. 4, 2014)
(citing Hensley, 461 U.S. at 437), report and recommendation adopted, 2014 WL
1237127 (Mar. 25, 2014). That is, “‘the fee applicant [has the burden] to produce
satisfactory evidence—in addition to the attorney’s own affidavits—that the requested
rates are in line with those prevailing in the community for similar services by lawyers of
reasonably comparable skill, experience, and reputation.’” Id. (quoting Blum v.
Stenson, 465 U.S. 866, 896 n.11 (1984)); see also Farbotko v. Clinton Cty., 433 F.3d
204, 208 (2d Cir. 2005) (“The relevant community . . . is the district in which the court
sits.”). Stein’s attorneys have not done so.

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Stein’s attorneys contend that a partner rate of $770 and an associate rate of
$460 are “the usual and customary rates used for each individual attorney in all of our
cases.” (Gershon Decl. ¶ 3). They do not cite any cases from this District where
attorneys were awarded such rates. (See id.; Pl.’s Mem. at 15–16). Nor could they:
“[p]revailing rates for experienced attorneys in the Eastern District of New York range
from approximately $300 to $400 per hour. Some courts have recognized slightly
higher ranges in this district of $300–$450 per hour for partners, $200–$300 per hour
for senior associates, and $100–$200 per hour for junior associates.” Am. Fire & Cas.
Co. v. Scott Elec. Servs., LLC, No. 15-CV-3111, 2017 WL 395207, at *2 (E.D.N.Y. Jan. 9,
2017) (citations, quotations, and alterations omitted) (collecting cases from various
areas of law), report and recommendation adopted, 2017 WL 374728 (Jan. 25, 2017);
accord Libaire v. Kaplan, No. 06-CV-1500, 2011 WL 7114006, at *3 (E.D.N.Y. June 17,
2011) (finding in an Exchange Act case that “[i]n the Eastern District of New York, it has
been determined that reasonable hourly rates are approximately $200–$480 per hour
for partners, $175–$295 per hour for senior associates, [and] $100–$200 per hour for
junior associates[.]”), report and recommendation adopted as modified, 2012 WL
273080 (Jan. 30, 2012).
Should Stein choose to submit a renewed fee application, it must be based on
rates used in this District.
II.

Costs
Stein also fails to include any detailed contemporaneous documentation

regarding the alleged costs. Again, Attorney Gershon provides a table in his declaration
that allocates the $12,809.66 in costs sought into categories such as “Computer
Research,” “Service Fee(s),” “Postage,” and “Telephone.” (Gershon Decl. ¶ 4). Gershon
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avers that “[t]he expenses incurred are reflected in the books and records
contemporaneously prepared by the firm. These books and records are prepared from
expense vouchers, invoices, and other billing records, and are an accurate record of the
expenses incurred.” (Id. ¶ 5). Gershon also states that he “ha[s] reviewed the expenses
for which reimbursement is sought and confirmed that they are reasonably necessary
for the effective and efficient prosecution and resolution of the litigation and reasonable
in amount.” (Id.). Again, the Court cannot accept Gershon’s personal view regarding
the reasonableness of expenses; it is obligated to conduct an independent review. Nor
can the Court award costs without access to underlying invoices. See John v. DeMaio,
No. 15-CV-6094, 2016 WL 7469862, at *12 (E.D.N.Y. Sept. 29, 2016) (“[T]he court
cannot simply take the ledger that plaintiffs’ counsel created at face value without any
additional evidence of the costs alleged therein[.]”), report and recommendation
adopted, 2016 WL 7410656 (Dec. 22, 2016). “[T]he party moving for costs bears the
burden of demonstrating the reasonableness of each charge; failure to provide adequate
documentation of costs incurred will limit, or even defeat, recovery.” Id. Because Stein
has not provided any documentation or invoices supporting her request for costs, the
Court must decline to award costs. See, e.g., Shukla v. Sharma, No. 07-CV-2972, 2010
WL 8435857, at *14 (E.D.N.Y. Dec. 15, 2010) (“[T]he Court cannot base an award upon
amounts requested where the requesting party has not provided adequate
documentation. While counsel has included a breakdown of these costs, some with
supporting invoices, many of the charges lack sufficient documentation to be included in
defendants’ application for costs.”) (citations omitted), report and recommendation
adopted, 2012 WL 607667 (Feb. 24, 2012).

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Stein’s costs application suffers from other shortcomings. “[S]everal of these
categories are not compensable. An award of costs . . . is generally limited to
[i]dentifiable, out-of-pocket disbursements for items such as photocopying, travel, and
telephone costs[.]” Houston v. Cotter, 234 F. Supp. 3d 392, 412 (E.D.N.Y. 2017)
(quotations omitted); see Teamsters Local 814 Welfare Fund v. Dahill Moving &
Storage Co., 545 F. Supp. 2d 260, 269 (E.D.N.Y. 2008) (Ordinarily, plaintiffs may
recover “[c]osts relating to filing fees, process servers, postage, and photocopying.”); 28
U.S.C. § 1920 (“Taxation of [C]osts”). And “the district court has no discretion to award
costs not authorized by statute or contractual provision.” U.S. ex rel. Evergreen
Pipeline Constr. Co. v. Merritt Meridian Constr. Corp., 95 F.3d 153, 171 (2d Cir. 1996).
Stein seeks much that is not compensable. As but one example, Stein seeks
reimbursement for “Computer Research” costs in the amount of $11,625.87. (Gershon
Decl. ¶ 4). That is not recoverable. “[C]omputer research is merely a substitute for an
attorney’s time that is compensable under an application for attorneys’ fees and is not a
separately taxable cost.” Evergreen Pipeline Constr. Co., 95 F.3d at 173; see DCH Auto
Grp. (USA) Inc. v. Fit You Best Auto., Inc., No. 05-CV-2973, 2006 WL 279055, at *4
(E.D.N.Y. Jan. 10, 2006) (“In the Eastern District of New York, . . . courts routinely
‘disallow applications for electronic research costs.’”) (quoting King v. JCS Enters., Inc.,
325 F. Supp. 2d 162 (E.D.N.Y. 2004)), report and recommendation adopted, Order
dated Feb. 23, 2006, Dkt. No. 20. Without invoices and itemized documentation of
expenses, the Court cannot determine whether the costs are taxable or not recoverable.
There may be other categories of ineligible costs: the face amount of the costs, over
$12,000, is far greater than a case of such limited duration would warrant. But the
Court will limit such determination for another day. At this point, the Court can only
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require that any renewed application for costs be accompanied by documentation, such
as invoices, and some authority that the costs sought are indeed recoverable. See Local
Civ. Rule 54.1(c) (“Items Taxable as Costs.”). The Court therefore denies the present
application for costs without prejudice to renewal.
CONCLUSION
For the reasons stated above, Stein’s application for attorney’s fees and costs is
denied without prejudice. See, e.g., Ehrbar v. Forest Hills Hosp., 131 F. Supp. 3d 5, 37
(E.D.N.Y. 2015) (“The Court denies Defendants’ motion for attorneys’ fees without
prejudice.”).
The Court grants leave for Stein to make a second application for fee and cost
recovery. Stein is directed to file renewed submissions that comply with the
requirements described above by April 8, 2019; Flowers must file any opposition to
those submissions by April 22, 2019.

SO ORDERED.
/s/ Sanket J. Bulsara March 7, 2019
SANKET J. BULSARA
United States Magistrate Judge
Brooklyn, New York

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