Themis Capital, LLC et al v. Decocratic Republic of Congo et al
Filing
224
OPINION & ORDER re: 218 MOTION for Attorney Fees filed by Des Moines Investments LTD., Themis Capital, LLC: For the foregoing reasons, the Court grants plaintiffs' motion for an award of fees and costs as further set forth in this order. Accordingly, plaintiffs may recover a total of $3,469,940.68, less the amount billed for fees and costs between October 3 and October 22, 2013. This amount is recoverable solely from the DRC. The Clerk of Court is direc ted to terminate the motion pending at docket number 218. The parties are directed to meet and confer promptly as to the tabulation of fees and costs consistent with this Opinion & Order, and to submit, by September 11, 2014, a proposed order with respect to fees and costs that reflects the rulings herein. The Court's intention is to promptly sign such an order and then to close this case. (Signed by Judge Paul A. Engelmayer on 9/4/2014) (tn)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
X
----------------------------------------------------------------------:
THEMIS CAPITAL and DES MOINES
:
INVESTMENTS LTD.,
:
:
Plaintiffs,
:
-v:
:
DEMOCRATIC REPUBLIC OF CONGO and
:
CENTRAL BANK OF THE DEMOCRATIC
:
REPUBLIC OF CONGO,
:
:
Defendants.
:
:
---------------------------------------------------------------------- X
09 Civ. 1652 (PAE)
OPINION & ORDER
PAUL A. ENGELMAYER, District Judge:
On July 9, 2014, the Court entered judgment in favor of Themis Capital, LLC (“Themis”)
and Des Moines Investments, Ltd. (“Des Moines”) (collectively, “plaintiffs” or “Themis”) in
their breach-of-contract lawsuit against the Democratic Republic of the Congo (the “DRC”) and
the Central Bank of the Democratic Republic of the Congo (“Central Bank of the DRC”)
(collectively, “defendants”). Dkt. 213; Themis Capital, LLC v. Democratic Republic of Congo,
No. 09 Civ. 1652 (PAE), 2014 WL 3360709 (S.D.N.Y. July 9, 2014) (“July 9, 2014 Opinion”).
The Court held that plaintiffs were entitled to recover the principal, interest, and compound
interest on debt that had been restructured—pursuant to a Restructuring Credit Agreement
(“Credit Agreement”)—in 1980, and which had gone unpaid since 1990.
The Court, however, reserved judgment on plaintiffs’ application for the reimbursement
of attorneys’ fees and costs. The Court directed the parties to brief those issues. On August 8,
2014, plaintiffs submitted a motion for such fees and costs, Dkt. 218, an accompanying
memorandum of law, Dkt. 219 (“Themis Br.”), and a declaration in support, Dkt. 220
(“Hranitzky Decl.”). On August 15, 2014, defendants filed a memorandum of law in opposition.
Dkt. 223 (“DRC Br.”).
For the reasons that follow, the Court approves an award to plaintiffs from defendant
DRC, representing attorneys’ fees and costs. However, as described in this decision, the Court
has reduced the size of, and excluded discrete items from, plaintiffs’ application. The Court also
holds that the award of fees and costs runs solely against the DRC, and not against co-defendant
the Central Bank of the DRC.
I.
Defendant Responsible for Paying Fees and Costs
At the outset, defendants seek a ruling that plaintiffs may recover an award for attorneys’
fees and costs solely from the DRC—and not the Central Bank of the DRC. The basis for this
argument is that under the Credit Agreement, only the “Obligor” is responsible for paying such
fees and costs, and the DRC alone is defined as the “Obligor.”
The Court agrees with defendants. The relevant provision of the Credit Agreement states
that:
The Obligor agrees to pay, in the currency in which incurred:
...
(iv) to each Bank and Agent upon its demand all out-of-pocket expenses (including,
without limitation, all counsel fees and court costs, stamp taxes, duties and fees)
incurred in connection with investigating any Event of Default or enforcing this
Agreement or suing for or collecting any overdue amount payable by the Obligor
hereunder or otherwise protecting its rights in the event of any failure by the
Obligor or Bank of Zaire to comply with the provisions [of the Credit Agreement.]
Credit Agreement § 12.05(a) (emphasis added). The Credit Agreement defines the Republic of
Zaire as the “Obligor,” see Credit Agreement at R-1; it is undisputed that the DRC is the
successor-in-interest to the Republic of Zaire. Accordingly, any award for attorneys’ fees and
costs is binding solely on the DRC, not the Central Bank of the DRC.
2
This ruling is consistent with the Court’s July 9, 2014 Opinion, which held, inter alia,
that the DRC and the Central Bank of the DRC are jointly and severally liable for all damages
awarded to plaintiffs. See 2014 WL 3360709, at *30–31. The basis of that ruling was that two
provisions in the Credit Agreement—§ 9.01 and § 8.03—expressly make “the Central Bank of
the DRC legally responsible for paying plaintiffs the principal and interest owed them.” Id. at
*30. By contrast, here, no provision in the Credit Agreement analogously obliges the Central
Bank of the DRC to pay the fees and costs that plaintiffs incurred in enforcing the agreement.
Accordingly, plaintiffs may recover the award for attorneys’ fees and costs only from the DRC,
and not from the Central Bank of the DRC.
II.
Assessment of Plaintiffs’ Fee Application
In their application for fees and costs, plaintiffs request a total of $4,197,131.54, broken
down as follows:
$3,793,121.35 in fees for attorneys and support staff;
$273,371.63 in costs for expert witnesses, translators, and interpreters; and
$130,638.56 in other litigation costs.
Defendants object to plaintiffs’ request on three grounds: that (1) certain categories of fees
should be excluded from the fee award (“category objections”); (2) the amount requested in
attorneys’ and support staff fees is unreasonable (“fee reasonableness objections”); and (3) the
amount requested for experts and other litigation costs is unreasonable (“cost reasonableness
objections”). The Court addresses each objection in turn.
3
A.
Category Objections
1.
Work Between October 3 and November 12, 2013
Defendants first argue that fees should not be granted for the “entire period between
October 3 and November 12, 2013.” DRC Br. at 3. As defendants note, the original deadline set
by the Court for the parties’ joint pretrial order (“JPTO”) was October 22, 2013. Dkt. 159. On
October 3, 2013, plaintiffs’ counsel, Dechert LLP (“Dechert”), informed counsel for defendants,
DLA Piper LLP (“DLA Piper”), that plaintiffs agreed to waive the issue of actual authority and
to submit the case on the papers without a live trial. The parties then worked together on the
JPTO based on this shared understanding. On October 22, 2013, however, Dechert informed
DLA Piper that plaintiffs had changed course, that plaintiffs would no longer waive the actual
authority argument, and that a live trial was therefore necessary on that point. The same day, the
Court held a telephone conference with the parties to address this issue. The Court permitted
plaintiffs to pursue the claim of actual authority and granted plaintiffs’ request for an extension
of time, until November 12, 2013, to submit the JPTO. Dkt. 162. However, in recognition that
plaintiffs’ change of course had potentially inconvenienced defense counsel, the Court directed
plaintiffs to “reimburse defendants for reasonable out-of-pocket costs (not fees), which
defendants and defendants’ counsel expended due to their reliance on plaintiffs’ statement, on
October 3, 2013, but now repudiated, that it was waiving the issue of actual authority.” Id.
Based on this sequence of events, defendants argue that, because plaintiffs’ change of
strategy was responsible for the extra work that each side did preparing the JPTO, plaintiffs
ought not be reimbursed for the fees or costs that plaintiffs incurred between October 3 and
November 12, 2013. This, defendants represent, would reduce plaintiffs’ reimbursable fees by
$450,326.50. DRC Br. at 3.
4
The Court agrees with defendants that plaintiffs’ fee application should be reduced to
reflect this circumstance, but does not agree as to the scope of the proposed remedy. Plaintiffs
ought not be reimbursed for any fees or costs incurred during the period when the parties were
working under the assumption that actual authority had been waived and would not be an issue in
the case—i.e., the period beginning on October 3, 2013 and extending up to and including
October 22, 2013. In the interest of clarity, the Court categorically excludes all fees and costs
incurred by plaintiffs’ counsel during this period, even though some work during this period
assuredly related to projects or issues unaffected by plaintiffs’ change of position as to actual
authority, and even though some of plaintiffs’ counsel’s work on October 22, 2013 likely postdated counsels’ call with the Court, in which the Court authorized plaintiffs to litigate the issue
of actual authority. This order applies to the fees and costs both of Dechert, plaintiffs’ lead
counsel, and Miller & Wrubel P.C. (“Miller & Wrubel”), which also represented plaintiffs.
However, there is no charter for excluding, from the sum to be reimbursed, fees and costs
incurred after October 22, 2013, by which point plaintiffs’ position as to actual authority had
come to rest. The DRC properly is responsible for reimbursing plaintiffs for fees and costs
incurred after October 22, 2013.
As discussed below, the Court is not equipped itself to tabulate the sum of fees and costs
incurred by plaintiffs between October 2 and October 22, 2013. The Court will therefore leave it
to the parties to tabulate that figure.
2.
“Second Generation” Compound Interest
Defendants next argue that plaintiffs are not entitled to fees related to their claim for
“second generation” compound interest. DRC Br. at 3. Defendants argue that plaintiffs are
entitled to fees and costs only to the extent they were the “prevailing party” in this litigation.
5
Because plaintiffs did not prevail on their claim for “second generation” compound interest, see
July 9, 2014 Opinion, 2014 WL 3360709, at *1 (“plaintiffs are not entitled to recover any
compound interest on such compound interest”), defendants argue that plaintiffs may not recover
fees or costs incurred in pursuit of that claim.
The Court rejects this argument, for a number of independent reasons. First, defendants,
relying on Green v. Torres, 361 F.3d 96 (2d Cir. 2004), wrongly depict it as a hard and fast rule
that reimbursement may not be had for fees and costs associated with a failed claim. Green
states only that a district court “may exclude any hours spent on severable unsuccessful claims.”
361 F.3d at 98 (emphasis added). It does not require a district court to do so. See Rozell v. RossHolst, 576 F. Supp. 2d 527, 538 (S.D.N.Y. 2008) (“Reasonable paying clients may reject bills for
time spent on entirely fruitless strategies while at the same time paying their lawyers for
advancing plausible though ultimately unsuccessful arguments.”). Moreover, Green arose in the
context of awarding fees to a successful plaintiff in a case brought under 42 U.S.C. § 1983, under
which the payment of fees is, by statute, expressly limited to the “prevailing party.” See 42
U.S.C. § 1988(b) (“[T]he court, in its discretion, may allow the prevailing party . . . a reasonable
attorney’s fee.”). But the Credit Agreement here is not cast in those terms, but in broader ones:
It commits the Obligor to pay “without limitation, all counsel fees and [costs] . . . incurred in
connection with investigating any Event of Default or enforcing this Agreement or suing for or
collecting any overdue amount payable by the Obligor hereunder or otherwise protecting its
rights in the event of any failure by the Obligor or Bank of Zaire to comply with the provisions
[of the Credit Agreement.]”
In any event, on the facts of this litigation, plaintiffs’ claim for compound interest does
not afford a basis for reducing the fees and costs for which plaintiffs are to be reimbursed.
6
Plaintiffs clearly prevailed not only in their effort to enforce the Credit Agreement so as to
recoup the principal amount of their loans to the DRC, but also in their effort to receive interest
on that principal sum, and indeed also compound interest on interest on principal. The only
recovery which plaintiffs sought but failed to receive was for “second generation” compound
interest. This aspect of the case, however, was a far cry from the “central relief sought.” Indeed,
it was not briefed with any distinctness: The briefs for both sides barely referenced the issue of
“second generation” compound interest, treating it instead as bound up in plaintiffs’ broader bid
for compound interest (which defendants resisted, but on which, as noted, plaintiffs largely
prevailed). Instead, the line drawn between first- and second-generation compound interest was
drawn largely by the Court itself, based on its independent analysis of the Credit Agreement.
For these reasons, the Court declines to reduce the award of fees and costs to reflect
plaintiffs’ unsuccessful attempt to obtain second-generation interest.
3.
Plaintiff’s July 24, 2013 Letter
Finally, defendants seek to strike the fees and costs associated with Dechert’s drafting of
a July 24, 2013 letter to the Court regarding plaintiffs’ “subsequently aborted request for
summary judgment.” DRC Br. at 5. In that letter, plaintiffs asked the Court, with expert
discovery having concluded, for leave to permit them to renew their motion for summary
judgment. Dkt. 156. At a conference with the parties on August 1, 2013, however, the Court
concluded, and plaintiffs appeared to come to agree, that it would be more time- and costeffective to resolve the issues of actual and apparent authority at a bench trial.
The Court declines to penalize plaintiffs for proposing to attempt to resolve this case at
summary judgment, even if the Court eventually decided that a bench trial was the better and
more efficient course. See Rozell, 576 F. Supp. 2d at 538. Plaintiffs’ advocacy of summary
7
judgment was legitimate and indeed helped focus the Court on the pros and cons of the casemanagement options available to it. There is no basis to suggest that plaintiffs’ proposal to move
for summary judgment was the product of bad faith or dilatory conduct. Defendants’ application
to reduce plaintiffs’ fee award on that ground is, therefore, denied.
B.
Fee Reasonableness Objections
Next, defendants assert that the amount that plaintiffs seek in fees for attorneys and
paralegals is unreasonable.1 Defendants argue that both the number of hours, and the hourly
rates at which plaintiffs seek to be compensated, are unreasonable.
“Under New York law, ‘when a contract provides that in the event of litigation the losing
party will pay the attorneys’ fees of the prevailing party, the court will order the losing party to
pay whatever amounts have been expended by the prevailing party, so long as those amounts are
not unreasonable.’” Antidote Int’l Films, Inc. v. Bloomsbury Pub., PLC, 496 F. Supp. 2d 362,
364 (S.D.N.Y. 2007) (quoting F.H. Krear & Co. v. Nineteen Named Trustees, 810 F.2d 1250,
1263 (2d Cir. 1987)). “A variety of factors informs the court’s determination of whether a
requested amount of attorneys’ fees is reasonable or unreasonable, including the difficulty of the
questions involved; the skill required to handle the problem; the time and labor required; the
lawyer’s experience, ability and reputation; the customary fee charged by the Bar for similar
services; and the amount involved.” Id. (citation omitted). District courts have broad discretion
to determine both the reasonable number of compensable hours and the reasonable hourly rate.
See Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). Plaintiffs are to be compensated only for
1
Defendants depict plaintiffs as claiming that they are entitled to attorneys’ fees and costs
“without limitation,” as opposed to only “reasonable” attorneys’ fees. DRC Br. at 5–6.
Plaintiffs, however, plainly state that they are entitled only to reasonable fees and costs, and their
brief is substantially devoted to arguing why their requests are in fact reasonable. See Themis
Br. at 5–21.
8
“hours reasonably expended on the litigation,” and not for hours “that are excessive, redundant,
or otherwise unnecessary.” Id. at 433–34.
Here, plaintiffs’ request—prior to the exclusion the Court has made for the October 3–22,
2013 period—is for $3,729,973.82 in attorneys’ fees ($3,590,185.07 billed by Dechert and
$139,788.75 billed by Miller & Wrubel) and $314,319 in fees for legal assistants, office support,
and office administrative staff ($307,736.72 billed by Dechert and $6,582.28 billed by Miller &
Wrubel).2 Hranitzky Decl. Ex. D. The total request for fees paid to Dechert and Miller &
Wrubel, therefore, equals $4,044,292.82. Defendants propose that these fees be reduced, acrossthe-board, by (1) one-third to account for unreasonable hours, and (2) 20% to account for
unreasonable rates.
The Court has closely, and at length, examined plaintiffs’ counsels’ billing records,
particularly those of Dechert, which did the vast majority of work on plaintiffs’ behalf. The
Court does not believe there is a basis for the sizeable across-the-board adjustments that
defendants pursue. However, there is a basis for more targeted reductions to the proposed fee
award, as detailed below.
1.
Number of Hours Billed for Attorneys
First, some reduction is merited in light of the sheer number of attorney timekeepers who
billed time on the case. A total of 48 attorneys from Dechert billed time on this case. This
consisted of 10 partners, one counsel, one senior attorney, 32 associates, two law clerks, one staff
attorney, and one summer associate. See Hranitzky Decl. Ex. D. The Court does not fault
2
For attorneys’ fees, plaintiffs seek reimbursement for persons with the following job titles:
Partner, Counsel, Senior Attorney, Associate, Law Clerk, Staff Attorney, and Summer Associate.
See Hranitzky Decl. Ex. D.
9
plaintiffs for such staffing. The case lasted for five years, during which time some turnover of
personnel, particularly at junior levels, was inevitable. It also called upon a variety of litigation
skill-sets. Inevitably, however, with that many attorneys, some inefficiency creeps in, as new
entrants to the case are required to get up to speed, and to learn relevant facts, law, and strategy.
To address these problems, plaintiffs have proposed to “voluntarily exclude[] the
majority of hours worked by various Dechert employees who spent less than ten hours working
on this matter, or who billed less than $2,000 to it.”3 Themis Br. at 22. However, plaintiffs’
formulation—in which they state that they have excluded “the majority of hours worked” by
such attorneys—leaves unclear to the Court which specific employees, and which specific hours,
have been excluded.
In the Court’s judgment, two separate, more substantial excisions are warranted to take
account of these inefficiencies and to address the DRC’s legitimate concern about overstaffing.
First, the Court will exclude all time entries by all attorneys who billed less than 25 hours total to
the case. By the Court’s calculation, this would remove 34 Dechert attorneys from the bill—nine
partners, one senior attorney, 22 associates, one law clerk, and one summer associate. See
Hranitzky Decl. Ex. D. Plaintiffs would then be reimbursed for the hours billed by 14 Dechert
3
Plaintiffs claim that these exclusions result in a “reduction of $251,171.47 from the fees sought
by Plaintiffs.” Id. For this reason, plaintiffs state, the amount of their request for attorneys’ fees
is $3,793,121.35, not $4,044,292.82. The Court’s review of the Hranitzky Decl. Ex. D, however,
does not substantiate this math. Even eliminating all hours worked by Dechert attorneys who
billed 10 hours or fewer to the case reduces the overall request by only $44,573.40. It appears to
the Court that the $251,171.47 reduction plaintiffs contemplate is substantially comprised of time
excluded for other reasons.
10
attorneys—one partner, one counsel, 10 associates, one law clerk, and one staff attorney. This
adjustment would, by the Court’s calculation, reduce plaintiffs’ fee award by $102,217.77.4
Second, the Court will reduce by 10%, across the board, the hours for the remaining
Dechert attorney timekeepers. This reduction achieves two purposes. First, it reflects the
staffing inefficiencies addressed above. Second, although by and large Dechert’s time entries
were admirably clear and sufficiently detailed, this adjustment takes account of occasional (but
far from widespread) instances of block billing, or vague time entries, that the Court has noted in
the course of reviewing Dechert’s time entries.
In addition, with respect to two Dechert attorney timekeepers, the Court is reducing the
hours worked by 20%, rather than by 10%. These are the attorneys who billed 1,314.30 hours
and 806.50 hours, respectively, to the case. The Court has no reason whatsoever to doubt that
these attorneys worked these hours, and that they did so diligently, productively, and with
complete professionalism. However, defendants are correct that these two attorneys, as a formal
matter, have engaged in fairly frequent “block billing,” which the Court defines as grouping
multiple tasks into a single billing entry, so as to leave unclear how much time was devoted to
each constituent task. On many occasions, these two attorneys compressed more than five hours
of work on multiple tasks into a single time entry, without specifying the time spent on each task.
For instance: (1) 10.5 hours to “prepare for and attend deposition of professor Songa, follow up
re waiver issues, communications with plaintiffs’ counsel, prepare outline for central bank dep,
review documents produced” (Oct. 22, 2012); (2) 9.0 hours for “tel con with H Tether to discuss
4
This steps also eliminates the 12 hours billed by a summer associate for which plaintiffs seek to
recover from the DRC. In the Court’s experience, clients often will not pay for the work of
summer associates. The Court’s judgment, apart from the fact that the hours worked by this
summer associate were below the 25-hour cutoff that the Court has set, is that the DRC ought not
be required to pay for them either.
11
response to Butler report, draft outline of H Tether report to send to the expert, review DRC law
expert report and discuss same with the experts, follow up re travel logistics and dep
arrangements for DRC law experts, meet with [colleagues] to review the task list” (Aug 2, 2013);
(3) 9.3 hours for “finalize pretrial filings, numerous communications with defense counsel,
review and suggest revisions to summary exhibit, arrange for copying of exhibits, review draft
letter to the court, review Red Barn calculations, review dep designations” (Oct. 21, 2013); (4)
8.2 hours for “team meeting in New York for discovery plan, drafting letter to the court,
exchanging emails regarding discovery” (Aug. 7, 2012); (5) 7.1 hours for “research case law in
response to motion to amend answer, research proof of assignment case law, review letter to
court” (March 4, 2013); and (6) 9.1 hours for “drafting and editing pretrial filings, findings of
fact, conclusions of law, deposition designations” (Oct. 16, 2013).
By the standards used in this District in fee-shifting cases, these entries are impermissibly
broad. To be sure, there is no per se rule against block billing, see Rodriguez v. McLoughlin, 84
F. Supp. 2d 417, 425 (S.D.N.Y. 1999), but to justify imposing an award of attorney’s fees on an
opposing party, counsel must provide enough information for the Court, and the adversary, to
assess the reasonableness of the hours worked on each discrete project. The block billing at
issue here effectively prevented the Court, and the DRC, from independently assessing whether
the time spent on each task was reasonable. Accordingly, the Court decreases the total number
of compensable hours for these two attorneys by 20%. See Kirsch v. Fleet Street, Ltd., 148 F.3d
149, 173 (2d Cir. 1998) (upholding 20% reduction in fee award because of “vagueness,
inconsistencies, and other deficiencies in the billing records,” including block billing); Abeyta v.
City of New York, No. 12 Civ. 5623 (KBF), 2014 WL 929838, at *5 (S.D.N.Y. Mar. 7, 2014)
(“[G]iven the vague nature of certain entries in the spreadsheet documenting the hours worked
12
by defendants’ counsel, the Court hereby decreases the total number of hours for which
compensation is sought by 10%.”); Wise v. Kelly, 620 F. Supp. 2d 435, 452 (S.D.N.Y. 2008)
(reducing fees by 25% because certain entries were too vague to enable the court to assess their
reasonableness).
The Court estimates that these adjustments—reducing the compensable hours for
Dechert’s attorneys by 10% and, in two instances, by 20%—will reduce the overall recovery for
Dechert’s attorneys’ fees by an additional $490,846.68. See Rodriguez, 84 F. Supp. 2d at 425
(“Upon finding that counsel seeks compensation for excessive hours, ‘the court has discretion
simply to deduct a reasonable percentage of the number of hours claimed as a practical means of
trimming fat from a fee application.’”) (quoting Kirsch, 148 F.3d at 173). With these
adjustments having been made, in an exercise of the Court’s discretion and based on its careful
review, the Court is confident that the resulting attorney hours were well spent, entirely
reasonable, and tightly targeted on relevant tasks. They are thus appropriately reimbursed by the
DRC.
2.
Billing Rate for Attorneys
Second, defendants object to the rates at which the Dechert lawyers billed their hours.
The average hourly rates, for the remaining Dechert attorneys, over the course of the engagement
were as follows: for (1) the one partner, $871.04; (2) the one counsel, $742.84; (3) the
ten associates, $505.555; (4) the one law clerk, $204.89; and (5) the one staff attorney, $388.23.
5
The billing rate for the associates ranged from approximately $380 to $682. See Hranitzky
Decl. Ex. D. But considered cumulatively, the remaining 10 associates on the case averaged a
billing rate of $505.55 per hour. Id.
13
Defendants assert, without citation to case authority, that these “rates are too high and are
therefore unreasonable.” DRC Br. at 7.
The Court disagrees. Based on the relevant factors, including the difficulty of the
questions involved, the skill required to handle the problem, and the lawyer’s experience, ability
and reputation, see Antidote Int’l Films, Inc., 496 F. Supp. 2d at 364, this case is one in which
higher than ordinary rates were justified. This case presented difficult questions of law and fact;
the skill, time, and labor required was substantial; and the experience, ability, and reputation of
the attorneys were high. Plaintiffs’ counsel were required, inter alia, to brief and argue summary
judgment motions dealing with complex issues of sovereign immunity and the actual or apparent
authority of officials of a foreign government to sign debt acknowledgment letters. Counsel
engaged in cross-border fact discovery and deposed various witnesses and experts, before
litigating a bench trial on whether Congolese law granted certain government officials actual
authority to sign the debt acknowledgment letters. Having witnessed the litigation (pretrial and
trial), having been in a position to appraise counsel’s performance firsthand, and having taken
into consideration the factors the Court is required to weigh under New York law, the Court’s
firm judgment is that the rates at which Dechert billed for these estimable professionals were not,
in any sense, unreasonable.6 Further, as plaintiffs note, billing rates substantially above those
charged here, including partner billing rates in excess of $1,000 an hour, are by now not
uncommon in the context of complex commercial litigation. See Hranitzky Dec. Exs. M–V.
And, although not necessary to the Court’s determination, the fact that Themis, the plaintiff, has
paid Dechert’s bills in full at these rates supplies a form of market confirmation as to their
6
The Court’s conclusion that Dechert’s rates in this case were reasonable and appropriate is also
informed by, and consistent with, the Court’s prior experience as a commercial litigator.
14
reasonableness. See Arbor Hill Concerned Citizens Neighborhood Ass’n v. Cnty. of Albany &
Albany Cnty. Bd. of Elections, 522 F.3d 182, 190 (2d Cir. 2008) (“The reasonable hourly rate is
the rate a paying client would be willing to pay.”); Anderson v. YARP Rest., Inc., No. 94
Civ.7543 (CSH) (RLE), 1997 WL 47785, at *2 (S.D.N.Y. Feb. 6, 1997) (“The best evidence of a
reasonable fee rate is the amount actually charged by counsel[.]”) (citations omitted).
Accordingly, the Court rejects defendants’ challenge to the rates billed by Dechert.
Therefore, the only adjustment to the amount requested in Dechert’s attorneys’ fees is to
the number of hours billed. Applying this adjustment, the Court’s calculation is that plaintiffs
are entitled to recover $2,997,120.62 in attorneys’ fees paid to Dechert.
In addition to attorneys’ fees from Dechert, plaintiffs seek to recover for legal work
performed by Miller & Wrubel. After excluding the hours worked by attorneys who billed fewer
than 25 hours, which the Court again finds appropriate as a means of correcting against overall
inefficient staffing, plaintiffs are entitled to recover fees for two attorneys—one partner and one
associate. See Hranitzky Decl. Ex. D. These attorneys’ time records do not present concerns
about block billing or vagueness. The Court will, therefore, not reduce, by any percentage, the
hours claimed by Miller & Wrubel. The Court also finds the rates charged by these lawyers
reasonable. Accordingly, plaintiffs may recover $123,022.75 in the attorneys’ fees paid to Miller
& Wrubel.
In total, across the two firms, plaintiffs may therefore be reimbursed $3,120,143.37 for
attorneys’ fees, less the fees incurred between the period October 3 and October 22, 2013.
3.
Fees for Paralegals
Plaintiffs also seek reimbursement for fees charged for the work of legal assistants
(paralegals) and administrative staff. Here, Dechert billed a total of $286,088 for its paralegals.
15
Hranitzky Decl. Ex. D. A total of 17 paralegals are listed, most of whom billed well under 10
hours. Again, as a corrective for potential staffing inefficiencies over this long case, the Court
will (1) permit reimbursement for the work only of employees who worked at least 25 hours on
the case, which would leave just four paralegals, who billed, respectively, 722, 189, 67.20, and
27.40 hours; and (2) reduce the compensable hours of these four paralegals by 10%.
Plaintiffs also seek $6,582.28 in fees for the five paralegals billed by Miller & Wrubel.
Of the five, four billed fewer than 10 hours; the fifth billed 12.13 hours. The Court will permit
plaintiffs to be reimbursed for the full hours of that fifth paralegal, but, in the interest of
addressing defendants’ valid concerns about overall staffing inefficiency, it will not permit
reimbursement as to the other four paralegals. See supra Part I.B.1. In total, these adjustments
would reduce the total number of hours reimbursed for paralegals from 1091.08 to 917.17.
As to the paralegals’ hourly billing rates, plaintiffs seek reimbursement for rates ranging
from $125 to $340 an hour. Plaintiffs in fact paid these rates to Dechert and to Miller & Wrubel.
However, unlike in the context of counsel’s legal work, the Court is unpersuaded, and there has
been no showing, that the nature of the paralegal work in this case was unusually complex, so as
to justify billing an above-market rate. And the caselaw reflects that paralegal billing rates of
between $90 and $125 are more in line with the prevailing market rates in this District. See, e.g.,
K.L. v. Warwick Valley Cent. Sch. Dist., No. 12 Civ. 6313 (DLC), 2013 WL 4766339, at *8
(S.D.N.Y. Sept. 5, 2013) (“With respect to paralegal rates, courts in the Southern District
typically award fees for paralegal work in IDEA cases at a rate of $90 or $125 per hour.”); M.C.
ex rel. E.C. v. Dep’t of Educ. of City of N.Y., No. 12 Civ. 9281 (CM) (AJP), 2013 WL 2403485,
at *7 (S.D.N.Y. June 4, 2013) (“$125 per hour . . . is the prevailing market rate in this District for
paralegals”), report and recommendation adopted, No. 12 Civ. 9281 (CM) (AJP), 2013 WL
16
3744066 (S.D.N.Y. June 28, 2013). Plaintiffs do not provide any case support for the much
higher paralegal billing rates they propose to use in calculating their fee award. Accordingly, the
Court will permit reimbursement for paralegals at a rate of $125 an hour. At that rate, plaintiffs
may recover a total of $114,646.25 in paralegal fees—or, about $178,024.03 less than the
$292,670.28 requested.
Finally, plaintiffs request reimbursement for $11,442.75 in fees paid to Dechert for
“Office Support” and $10,205.97 for “Other, Admin.” See Hranitzky Decl. Ex. D. Plaintiffs do
not adequately explain or support these expenses. Accordingly, plaintiffs may not recover them.
4.
Conclusion
For the reasons above, plaintiffs may recover $3,120,143.37 in attorneys’ fees and
$114,646.25 in paralegal fees, for a total of $3,234,789.62, less the amount of fees and costs
incurred during the period from October 3 to October 22, 2013.7
C.
Cost Reasonableness Objections
In addition to attorneys’ and paralegal fees, plaintiffs also request reimbursement for
“costs”—i.e., for experts, translators, and other expenses. Plaintiffs seek a total of $404,010.19
in costs.
1.
Experts
Defendants object to the amount requested for experts on two grounds:
First, they assert that plaintiffs are not entitled to be reimbursed for the costs of experts
who did not testify at trial. Defendants rely on U.S. for Use & Benefit of Evergreen Pipeline
7
Plaintiffs also claim that they incurred fees totaling $28,253.30, which were paid to law firms
in Canada and Hong Kong, for work relating to “the enforceability of a potential default
judgment in those jurisdictions.” See Themis Br. at 22. Plaintiffs have agreed to forego
reimbursement for these fees. Id. at 22 n.5.
17
Const. Co., Inc. v. Merritt Meridian Const. Corp., 95 F.3d 153 (2d Cir. 1996). But that case
involved the shifting of costs associated with fact witnesses, not experts, and pursuant to statute,
not a contractual obligation. See id. at 173. It does not support defendants’ broad claim that a
party’s retention of an expert is subject to reimbursement only where the expert testifies at trial.
Quite the contrary, courts in this District routinely reimburse prevailing parties for the costs of
expert witnesses and consultants, regardless whether the expert testified at trial. See, e.g.,
Weiwei Gao v. Sidhu, No. 11 Civ. 2711 (WHP) (JCF), 2013 WL 2896995, at *6 (S.D.N.Y. June
13, 2013) (granting the full $5,000 requested “for the expert valuation performed by LVP”
because the expense was “reasonable and necessary,” and because the “Fee Sharing Agreement
provides for recovery of ‘other costs incurred’”); Austrian Airlines Oesterreichische Luftverkehrs
AG v. UT Fin. Corp., No. 04 Civ. 3854 (LAK) (AJP), 2008 WL 4833025, at *9 (S.D.N.Y. Nov.
3, 2008) (because the contract “clearly—and undisputedly—provide[d] for reasonable attorneys’
fees ‘and other costs’” and because defendant did not use “duplicative or unnecessary expert
witnesses,” the Court declined to “make any reductions in the costs related to [defendant’s] use
of these witnesses”). And in the Court’s experience, the expertise of such non-testifying experts
may often prove pivotally helpful in educating counsel, shaping litigation strategy, and/or
eliminating areas of controversy. The Court, therefore, denies defendants’ request to limit
recovery to the costs of experts who testified at trial.
Second, defendants claim that the costs billed by plaintiffs’ experts are unreasonable.
The Court’s assessment of that issue is governed by familiar standards. “Courts in this district
assess the reasonableness of expert fees using the same method they do for attorneys’ fees—by
first multiplying the reasonable hourly rate by the reasonable number of hours expended.”
Matteo v. Kohl’s Dep’t Stores, Inc., No. 09 Civ. 7830 (RJS), 2012 WL 5177491, at *5 (S.D.N.Y.
18
Oct. 19, 2012) aff’d, 533 F. App’x 1 (2d Cir. 2013). The party “seeking reimbursement for
expert fees bears the burden of proving reasonableness.” Penberg v. HealthBridge Mgmt., No.
08 Civ. 1534 (CLP), 2011 WL 1100103, at *15 (E.D.N.Y. Mar. 22, 2011) (citation omitted). “If
the parties do not provide sufficient evidence to support the moving party’s interpretation of a
reasonable rate, a court may use its discretion to determine a reasonable fee.” Matteo, 2012 WL
5177491, at *5. “In the face of very limited evidence, a court may, in its discretion, simply apply
an across-the-board reduction of expert’s fees.” Id.; see also Watson v. E.S. Sutton, Inc., No. 02
Civ. 02739 (KMW) (THK), 2006 WL 6570643, at *13 (S.D.N.Y. Aug. 11, 2006) (reducing
expert fees by 50% for lack of detailed information provided in support of proposed fees).
Defendants validly challenge several, but not all, of plaintiffs’ expert expenditures as
insufficiently justified to support full reimbursement. The Court addresses these in turn.
Here, the first expert employed by plaintiffs was Nicaise Chikuru Munyiogwarha
(“Chikuru”). Chikuru was plaintiffs’ testifying expert on DRC law at trial. Plaintiffs seek to be
reimbursed $117,731.69, which they represent to be the fees they paid to Chikuru, and which
appears to reflect a rate of $300 per hour for Chikuru and $200 per hour for his research
assistant. Themis Br. at 24. The amount also reflects travel expenses and value-added taxes
(“VAT”) under Congolese law. Id.
However, the three invoices received from Chikuro that plaintiffs adduce to support the
reasonableness of these costs are woefully inadequate. See Hranitzky Decl. Ex. G. They merely
provide the total amount billed by Chikuru and a terse explanation of services rendered.
Chikuri’s invoice provides absolutely no insight into how he, or his research assistant, spent their
time. Id. It does not even identify the hours worked on this matter by Chikuru (or his research
assistant). These omissions are particularly significant given that Chikuru’s expertise is in law.
19
There is no reason why his invoices could not have described his work in the same manner and
level of detail as expected of a domestic attorney. Further, plaintiffs do not explain the basis
upon which Chikuru chose to bill, for himself and his research assistant, respectively, at hourly
rates of $300 and $200. See Matteo, 2012 WL 5177491, at *5 (listing eight factors for
determining whether an expert’s proposed rate is reasonable, including the expert’s education
and area of expertise, and the cost of living in the particular geographic area).
That said, the Court did review Chikuru’s expert report (and rebuttal report) and his
deposition, and heard his live testimony at trial. It was clear to the Court that Chikuru had
genuine expertise and that he had devoted thoughtful attention and time to the matter. Those
three tasks themselves (the expert report, the deposition, and the trial testimony) perforce took
substantial time. However, apart from the time spent on his deposition and trial testimony, the
Court is unable to reliably estimate the amount of time Chikuru had spent actually working on
the matter. It is also unclear how much of Chikuru’s relevant knowledge was already in hand
before he began work on this engagement.
Because plaintiffs have failed to establish the reasonableness of their bill for Chikuru’s
services, and because plaintiffs have not equipped the Court or the defense with evidence that
would allow it to determine the value of his services, the Court, to assure that the DRC is obliged
to pay only reasonable expenses of plaintiffs, is compelled to substantially reduce the request for
reimbursement as to Chikuru’s time. The Court reduces the bill as to Chikuru by 75%.
Accordingly, plaintiffs may recover $29,432.92 in costs billed by Chikuru.
The second expert employed by plaintiffs was Steven De Backer, a lawyer with Webber
Wentzel, a law firm in South Africa. De Backer billed at a rate of $500 and his colleagues billed
at rates between $85 and $340 per hour. The total bill for Webber Wentzel, for which plaintiffs
20
seek to be reimbursed, was $53,799.99. See Hranitzky Decl. Ex. H. According to plaintiffs, De
Backer and his firm provided “expert consulting services on African law” and acted as a liaison
between Dechert and Chikuru with respect to Chikuru’s expert reports. Themis Br. at 25. In
fact, nearly every item on Webber Wentzel’s bill concerned “liais[ing] with Chikuru” and
attending meetings. See Hranitzky Decl. Ex. H. The only subject of African law relevant to this
litigation was actual authority under Congolese law. Therefore, in total, plaintiffs paid their
expert on DRC law, Chikuru, $117,731.69 for the work surrounding his expert reports and
testimony as to this single issue, and paid Webber Wentzel another $53,779.99 to serve as a
liaison to Chikuru. Chikuru, however, is fluent in English. He could just as easily have spoken
with Dechert’s own attorneys. It is unclear why a liaison with him was necessary. Because
plaintiffs have not justified the fees paid to De Backer, plaintiffs’ request for the reimbursement
of the $53,779.99 paid to Webber Wentzel is denied in its entirety.
The third expert employed by plaintiffs was Harry Tether (“Tether”), who charged $500
per hour. Plaintiffs seek reimbursement for the $49,524.70 in costs paid to Tether for his expert
work, which related to banking practices relevant to the negotiation and restructuring of
defaulted sovereign debt. Plaintiffs employed Tether as an expert to rebut the testimony that
defendants for a time intended to proffer from their expert on sovereign debt, James Butler.
Themis Br. at 18. Defendants ultimately withdrew Butler as an expert; plaintiffs, in response,
withdrew Tether. Tether’s expenses were therefore all incurred in response to defendants’
decision to use Butler as an expert. As to Tether, plaintiffs have submitted detailed invoices and
receipts as evidence of the outlays made to Tether. See Hranitzky Decl. Ex. I. Because the
Court concludes that this evidence is adequate to justify the costs associated with Tether, and
21
because Tether’s rate of $500 per hour is reasonable, plaintiffs may be reimbursed for the
$49,524.70 paid in fees to Tether.
Finally, the fourth expert employed by plaintiffs was John Hargett, a handwriting expert.
Hargett was retained to verify that the signatures on the Acknowledgement Letter were authentic.
At the time Hargett was retained, defendants’ stated position was that they intended to challenge
the authenticity of those signatures. Once defendants withdrew that challenge, plaintiffs ceased
using Hargett’s services. Plaintiffs seek to recover $1,000 for the costs associated with Hargett.
See Hranitzky Decl. Ex. J. Because that fee is reasonable, its recovery is granted.
Accordingly, plaintiffs are entitled to recover a total of $79,957.62 in costs for their
expert witnesses and consultants—$29,432.92 for Chikuru, $49,524.70 for Tether, and $1,000
for Hargett.
2.
Other Costs and Expenses
Finally, defendants assert that plaintiffs’ request for other costs and expenses are
“exorbitant and should be reduced.” DRC Br. at 17.
These costs include, first, $51,335.25 for translation fees. These costs are substantiated
by detailed billing records. See Hranitzky Decl. Ex. K. In the Court’s judgment, such costs were
reasonable to incur in a case that involved the translation of numerous documents from French
into English and that lasted for approximately five years. Plaintiffs’ request to be reimbursed for
these translation costs is, therefore, granted.
The remaining costs sought by plaintiffs total $130,638.56 ($128,054.15 for costs
incurred by Dechert and $2,584.41 for costs incurred by Miller & Wrubel). See Hranitzky Decl.
Ex. F. The breakdown of this amount is as follows: (1) online research (i.e., Westlaw and Lexis
charges) ($45,334.13); (2) making copies ($25,031.30); (3) ordering transcripts ($16,711.19);
22
(4) travel and accommodations ($16,781.57); (5) meals ($5,835.29); and (6) “miscellaneous”
($20,945.08)—which, in turn, includes legal publication expenses, staff overtime, document
review, and shipping and delivery costs. Id. Defendants object to these costs on the grounds that
plaintiffs fail to itemize these costs or support them with any evidence, such as invoices or other
forms of documentation.
Although plaintiffs could have done a better job coming forward with documentary
corroboration of the fact of these expenses, e.g., for online legal research, defendants do not
dispute that these were incurred. Defendants claim instead that they were unreasonable. Based
on its detailed familiarity with and close attention to this litigation, the Court disagrees. The first
four of these expenses are reasonable both in nature and scale. The Court will permit plaintiffs
to recover for costs that are typical in a complex litigation such as this—i.e., the cost of online
research, making copies, and ordering transcripts. The Court can independently verify that the
legal research required in this case was substantial and that plaintiffs sent the Court large binders
containing courtesy copies of all pleadings and trial exhibits, reflecting voluminous copying.
The Court will also permit plaintiffs to recover the costs of travel and accommodations, which
are justified by the fact that plaintiffs had to travel, inter alia, to take various depositions in this
case and to litigate the bench trial.
The Court will not, however, permit the recovery of the cost to plaintiffs of counsels’
meals or “miscellaneous” expenses. Clients often decline to pay for attorney or legal assistant
meals, and reasonably decline to pay expenses labeled only as “miscellaneous.”
Accordingly, of the $130,638.56 in other expenses requested by plaintiffs, the Court will
permit the recovery of $103,858.19.
23
Therefore, of the $404,010.19 in costs requested, plaintiffs will be permitted to recover a
total of $235,151.06, less the costs incurred between October 3 and 22, 2013.
CONCLUSION
For the foregoing reasons, the Court grants plaintiffs’ motion for an award of fees and
costs as follows:
As to fees:
Plaintiffs will not be reimbursed for any attorney or paralegal fees incurred between
October 3 and October 22, 2013, inclusive;
Plaintiffs will be reimbursed only for fees incurred by: (1) attorneys from Dechert
and Miller & Wrubel who worked at least 25 hours on this matter; (2) paralegals from
Dechert who worked at least 25 hours on this matter; and (3) the paralegal from
Miller & Wrubel who worked 12.13 hours on this matter;
The hours billed by the Dechert attorneys and paralegals who worked at least 25
hours on the case will be reduced by 10% and, in the case of the two attorneys
identified above, these hours will be reduced by 20%;
Plaintiffs will be reimbursed for the hours worked by Dechert and Miller & Wrubel
attorneys at the rates those firms billed plaintiffs, and will be reimbursed for the work
of paralegals at a rate of $125 per hour; and
Plaintiffs will not be reimbursed for fees incurred by “Office Support” or “Other,
Admin.”
Based on the Court’s calculation, plaintiffs may therefore recover $3,234,789.62 in attorneys’
and paralegals’ fees, less the fees incurred between October 3 and October 22, 2013.
As to costs:
Plaintiffs will not be reimbursed for any costs incurred by their law firms between
October 3 and October 22, 2013, inclusive;
Plaintiffs will be reimbursed for 25% of the costs billed by expert Chikuru;
Plaintiffs will not be reimbursed for any costs billed by expert Webber Wentzel;
Plaintiffs will be reimbursed for the full costs billed by experts Tether and Hargett;
24
Plaintiffs will be reimbursed for the full costs of translation services;
Plaintiffs will be reimbursed for all costs associated with legal research, making
copies, ordering transcripts, and travel and accommodations; and
Plaintiffs will not be reimbursed for the cost of meals or “miscellaneous” expenses.
Based on the Court’s calculations, plaintiffs may therefore recover $79,957.62 in costs for expert
witnesses and consultants, $51,335.25 for translators and interpreters, and $103,858.19 for other
litigation expenses—for a total of $235,151.06, less the costs incurred between October 3 and
October 22, 2013.
Accordingly, plaintiffs may recover a total of $3,469,940.68, less the amount billed for
fees and costs between October 3 and October 22, 2013.8 This amount is recoverable solely
from the DRC.
The Clerk of Court is directed to terminate the motion pending at docket number 218.
The parties are directed to meet and confer promptly as to the tabulation of fees and costs
consistent with this Opinion & Order, and to submit, by September 11, 2014, a proposed order
with respect to fees and costs that reflects the rulings herein.9 The Court’s intention is to
promptly sign such an order and then to close this case.
8
As part of this figure, the Court notes, plaintiffs seek reimbursement for fees and costs
associated with the preparation of their application for fees and costs. See Themis Br. at 21.
Defendants do not object to this aspect of the request, and for good reason. In other contexts, the
prevailing party is generally entitled to recover fees incurred in connection with the preparation
of a fee application. See, e.g., Tucker v. City of New York, 704 F. Supp. 2d 347, 358 (S.D.N.Y.
2010) (“Time devoted to a fee application is generally compensable.”) (collecting cases); cf.
Barbour v. City of White Plains, 788 F. Supp. 2d 216, 223 (S.D.N.Y. 2011) (“[T]he law . . .
dictates that a prevailing civil rights plaintiff may include the costs of drafting a motion to
recover fees as part of a fee award.”). Because no reply brief was filed with respect to plaintiffs’
fee application, the compensable time will be measured up to July 31, 2014, which is “the end of
the period for which [plaintiffs seek] attorneys’ fees.” See Themis Br. at 21.
9
The Court has endeavored to calculate accurately the bottom-line fee and cost figures that result
from its rulings herein. However, it is possible that the Court’s math was in error. In that event,
25
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