Universal Instruments Corporation v. Micro System Engineering, Inc. et al

Filing 426

SUMMARY ORDER - That attorneys' fees in the amount of $3,008,990.92 are imposed against Universal. Signed by Senior Judge Gary L. Sharpe on 6/4/2018. (jel, )

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
________________________________
UNIVERSAL INSTRUMENTS
CORPORATION,
Plaintiff,

3:13-cv-831
(GLS/DEP)

v.
MICRO SYSTEMS ENGINEERING,
INC. et al.,
Defendants.
________________________________
SUMMARY ORDER
On February 7, 2018, the court granted defendants’ motion for
attorneys’ fees in an amount to be determined by subsequent briefing.1
(Dkt. No. 421.) The issue is now fully briefed. (Dkt. Nos. 422, 425.) As is
par for the course with these parties, their positions are far apart;
defendants request $6,404,214.68, (Dkt. No. 422 at 1), while Universal
argues that defendants are entitled to $1,793,343.23, (Dkt. No. 425 at 25).
For the following reasons, the proper fee award lies somewhere in the
middle: $3,008,990.92.

1

The court presumes a basic familiarity with the underlying facts and procedural history
of this action, which is set forth in the court’s Summary Order dated August 8, 2017. (Dkt. No.
396.)

The Copyright Act provides that a court may award reasonable
attorneys’ fees to the prevailing party at its discretion. See 17 U.S.C.
§ 505. To determine a reasonable amount of attorneys’ fees, courts use
the lodestar method: the product of a reasonable hourly rate and the hours
reasonably spent on the case. See Millea v. Metro-North R.R. Co., 658
F.3d 154, 166 (2d Cir. 2011); Miller v. City of Ithaca, 3:10-cv-597, 2017 WL
61947, at *2 (N.D.N.Y. Jan. 5, 2017). Generally, the district court relies on
the prevailing hourly rate from the district in which it sits in calculating the
lodestar. See Arbor Hill Concerned Citizens Neighborhood Ass’n v. Cty. of
Albany & Albany Cty. Bd. of Elections, 522 F.3d 182, 191 (2d Cir. 2008).
However, “a district court may use . . . some rate in between the
out-of-district rate sought and the rates charged by local attorneys . . . in
calculating the presumptively reasonable fee if it is clear that a reasonable,
paying client would have paid those higher rates.” Id.; see Bergerson v.
N.Y. State Office of Mental Health, 652 F.3d 277, 289-90 (2d Cir. 2011). In
determining what a reasonable client would be willing to pay, the court
considers several factors, including:
(1) the time and labor required; (2) the novelty and difficulty of the
questions; (3) the level of skill required to perform the legal
service properly; (4) the preclusion of employment by the attorney
2

due to acceptance of the case; (5) the attorney’s customary hourly
rate; (6) whether the fee is fixed or contingent; (7) the time
limitations imposed by the client or the circumstances; (8) the
amount involved in the case 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 relationship with the client; and (12) awards in similar
cases.
Broadcast Music, Inc. v. Northern Lights, Inc., 555 F. Supp. 2d 328, 333
(N.D.N.Y. 2008) (quoting Arbor Hill, 522 F.3d at 186 n.3).
Additionally, a district court may use a percentage deduction of the
requested fees “as a practical means of trimming fat from a fee
application.” McDonald ex rel Prendergast v. Pension Plan of the
NYSA-ILA Pension Tr. Fund, 450 F.3d 91, 96 (2d Cir. 2006) (internal
quotation marks and citation omitted). In determining the appropriate fee,
district courts have substantial deference and may use estimates based on
their overall sense of a suit. See Fox v. Vice, 563 U.S. 826, 838 (2011)
(“The essential goal in shifting fees . . . is to do rough justice, not to
achieve auditing perfection.”).
For the pre-summary judgment period, defendants were represented
by Kolisch, Hartwell P.C. and billed a total of 10,231 hours at hourly rates
from $95.00 to $485.00, resulting in a bill of $2,434,784.96. (Dkt. No. 422

3

at 12-13.) However, after a self-imposed reduction2 of all hours that lead
attorney David Cooper logged in light of the defendants’ unreasonableness
during the discovery stages of this litigation, defendants request
$1,325,426.46 in fees for this period. (Id. at 12, 13.)
Universal does not contest defendants’ proffered hourly rates, (Dkt.
No. 425 at 17 n.5), but argues that “a 50% reduction is warranted” for
“ineligible time . . . and time attributed to bad faith discovery conduct, time
related to MSEI’s countersuit, failed motions, clerical work . . . redundant
trial preparation time . . . [and] vague and block-billed entries,” (id. at 4).
For the most part, the court agrees with defendants that “[t]he number of
hours Kolisch Hartwell billed was . . . reasonable in light of the lengthy
procedural history of this case, the complex legal and factual issues it
raised, and the amount in controversy,” especially given that “Kolisch
Hartwell’s lawyers managed a substantial discovery process in which the
parties produced over one million pages of documents, took or defended
[forty-one] depositions, and extensively briefed dispositive motions.” (Dkt.

2

Defendants redact Cooper’s billing entries such that it is impossible for the court to determine
whether they were reasonable in the first instance. As such, it is a stretch to label these omissions a
“46% reduction.” (Dkt. No. 422 at 12-13.) Nonetheless, it can be reasonably inferred that most of the
billing entries associated with the lead attorney on the case were reasonable, and thus this self-imposed
penalty is factored into the court’s reduction below.

4

No. 422 at 13.) However, given defendants’ unreasonable conduct
previously identified by the court, (Dkt. No. 421 at 5-6), and after reviewing
the specific entries highlighted by Universal, (Dkt. No. 425, Attach. 1 at 1315, 16-22, 23-52, 53-55, 56-57), the court also agrees that an across-theboard percentage reduction is appropriate. Given the circumstances, a
thirty percent reduction is proper to offset excessive, redundant, or
otherwise unnecessary billing entries. See Fox, 563 U.S. at 838; Hensley
v. Eckerhart, 461 U.S. 424, 434 (1983); Levy v. Powell, No. CV–oo–4499,
2005 WL 1719972, at *6 (E.D.N.Y., July 22, 2005).
Accordingly, after a $397,627.94 reduction to their fee application,
defendants are awarded $927,798.52 for the pre-summary judgment
period.
Defendants also seek $5,078,788.22 in fees for the post-summary
judgment period, during which time MSEI retained attorneys from Sullivan
& Cromwell, MTA retained attorneys from Kaplan Rice LLP, and both
parties retained an attorney from Nixon Peabody LLP. (Dkt. No. 422 at 6,
14.) In sum, defendants argue that an award of out-of-district rates are
reasonable given (1) that these rates were actually paid by the clients in
the ordinary course; (2) the complexity of the case; (3) the severe
5

consequences they faced; (4) the attorneys’ expertise in litigating highstakes intellectual property cases; and (5) the results achieved. (Id. at 1418.) Universal contends that the requested hourly rates are unreasonable
because firms in the district with comparable intellection property and
litigation expertise could have taken the case and defendants fail to make a
particularized showing to support out-of-district rates. (Dkt. No. 425 at 1018.) Additionally, Universal contends that a “50% reduction . . . is
warranted to address the sheer excess of professionals working on the
case, the time [d]efendants’ trial counsel had to spend to get up to speed,
vague and block billing entries, and entries [related to state law claims] that
are ineligible for fee shifting.” (Id. at 18.)
For the post-summary judgment period, the court agrees with
Universal that it would be unreasonable to award attorneys’ fees at a rate
common to New York City—primarily because there are firms within this
District capable of handling such matters and obtaining similar results.
(Dkt. 425 at 13-14.) Instead, Universal’s hourly rates table provides rates
that are within reasonable range of in District rates. (Id. at 17-18). Given
the particularized showing of defendants’ attorneys’ expertise, (Dkt. No.
422 at 15, 17), the length of time spent on the case, (id. at 2-10), the
6

severe business consequences defendants faced, (id. at 2), the results
obtained, (id. at 8-10), and that the client actually paid New York City rates
during the course of the litigation, (id. at 11), an award of attorneys’ fees at
the higher end of the prevailing district rate is reasonable. As such, the
court adopts the following rate table that reflects the court’s estimate,
based on its overall sense of the suit, of the presumptively reasonable rate
for each category of timekeepers presented by defendants:
Requested
Rate

Reasonable
Rate

Hours

Andrew C. Rose, Esq.

$585

$450

325.5

Kevin Dayer (Paralegal)

$225

$150

2.1

David B. Tulchin, Esq.

$1,445

$450

654.25

Thomas C. White, Esq.

$978

$450

943.25

Adam R. Brebner, Esq.

$1,041

$400

602

Anuja D. Thatte, Esq.

$723

$280

802.75

Jacob B. Lieberman, Esq.

$723

$280

892.25

Additional Sullivan &
Cromwell Lawyers

$595-$847

$280

111.75

Legal Assistants

$145-$349

$150

1,544.25

$361

$150

20.5

$302-$361

$150

267

$950

$450

390.6

Timekeeper

Research Librarians
E-Discovery Staff
Howard Kaplan, Esq.

7

Marie. E. Christiansen, Esq.

$375

$280

494.75

Ian Misrok (Paralegal)

$170

$150

209

Alan Pfeffer, Esq.

$325

$280

88.6

Ann-Marie Tesar, Esq.

$325

$280

181.6

Cathy Faber (Paralegal)

$185

$150

26.75

(Id., Attach. 1 ¶ 17; Attach. 2 ¶¶ 30, 32-39, 43; Attach. 3 ¶¶ 10-12, 19, 21.)
The product of these reasonable rates and hours results in a lodestar
of $2,312,436. In order to trim the fat identified by Universal, (Dkt. No. 425
at 19-25), a ten percent reduction is proper. See McDonald ex rel
Prendergast, 450 F.3d at 96; United States ex rel. Rubar v. Hayner Hoyt
Corporation, 5:14–cv–830, 2018 WL 566448, at *7 (Jan. 25, 2018
N.D.N.Y.).
Accordingly, after a $231,243.60 reduction to the lodestar,
defendants are awarded $2,081,192.40 for the post-summary judgment
period.
WHEREFORE, for the foregoing reasons, it is hereby
ORDERED that attorneys’ fees in the amount of $3,008,990.92 are
imposed against Universal; and
ORDERED that the Clerk provide a copy of this Summary Order to

8

the parties.
IT IS SO ORDERED.
June 4, 2018
Albany, New York

9