Schoolcraft v. The City Of New York et al

Filing 666

REPLY MEMORANDUM OF LAW in Support re: 641 MOTION for Reconsideration re; 638 Memorandum & Opinion,,,, THE COURTS ORDER ON ATTORNEYS FEES. . Document filed by Adrian Schoolcraft. (Norinsberg, Jon)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-------------------------------------------------------------------------------X
ADRIAN SCHOOLCRAFT,
Plaintiff,

-against-

10 CV 6005 (RWS)

THE CITY OF NEW YORK, et al.

Defendants.
---------------------------------------------------------------------------------X

REPLY MEMORANDUM OF LAW IN SUPPORT OF THE NORINSBERG
TEAM’S MOTION FOR PARTIAL RECONSIDERATION OF THE
COURT’S ORDER ON ATTORNEYS’ FEES

JON L. NORINSBERG
225 Broadway, Suite 2700
New York, New York 10007
J on@nori ns bergl aw. com
JOSHUA P. FITCH
GERALD M. COHEN
COHEN & FITCH LLP
233 Broadway, Suite 1800
New York, N.Y. 10279
[e-mail]
[e-mail]

TABLE OF CONTENTS
Pages
PRELIMINARY STATEMENT…………………………………………………………..……1
ARGUMENT………………………………………………………………………………..……3
I. THE COURT’S REDUCTION OF RATES BASED ON LAW FIRM SIZE IS
INCONSISTENT WITH SUPREME COURT PRECEDENTS ON THIS
ISSUE………………………………………………………………………………..……3
A. The Supreme Court Has Expressly Rejected a Cost-Based Analysis of Rates as
Being Contrary to the Legislative Intent of Section of
1988………………………………………………………………………..….…..3
II. THE COURT’S RELIANCE ON EASTERN DISTRICT RATES FROM FOUR YEARS
AGO TO SET CURRENT SOUTHERN DISTRICT RATES IS CONTRARY TO THE
LAW IN THIS CIRCUIT……………………………………………….......................…..5
A. The Second Circuit Has Expressly Held that Hourly Rates in the Eastern District
Are “Substantially Lower” Than Rates in the Southern District…………………...5
III.

THE COURT’S RELIANCE ON THE JOHNSON FACTORS IS CONTRARY TO
THE SUPREME COURT’S HOLDING IN PERDUE…………………..……………6
A. The Supreme Court Expressly Rejected the Use of the Johnson Factors in
Determining a Reasonable Hourly Rate…………………...………………………6
B. The Second Circuit Has Never Addressed the Question of Whether of Not Arbor
Hill is Still Good After Perdue………………………………………………….…7
C. Plaintiff Argued for the Perdue Methodology in his Original Motion…………….8

IV.

DEFENDANTS’ OBJECTIONS TO THE “NEW EVIDENCE” OFFERED BY
PLAINTIFF, SUBMITTED FOR THE LIMITED PURPOSE OF CORRECTING
CERTAIN UNSUPPORTED FACTUAL FINDINGS, ARE BASELESS……………8
A. The Retainer Agreements Were Offered to Show that Counsel’s Rates Were Not
Merely “Theoretical” or “Opening Bids in a Negotiation.”………………………..8
B. The Bonelli Evidence was Offered to Show that Plaintiff’s Counsel Did, In Fact,
Forego Other Work As a Result of the Schoolcraft Case…………………………..9

CONCLUSION............................................................................................................................10

TABLE OF AUTHORITIES
Pages
Bank of Waunakee v. Rochester Cheese Sales, Inc., 906 F.2d 1185 (7th Cir. 1990) ....... 11
Blum v. Stenson, 465 U.S. 886 (1984) ....................................................................... 1, 2, 3
Concrete Flotation Sys., Inc. v. Tadco Const. Corp., 2010 WL 2539771 (E.D.N.Y. Mar.
15, 2010) ......................................................................................................................... 5
Irish v. City of New York, 2004 U.S. Dist. LEXIS 3770 (S.D.N.Y. Mar. 8, 2004) ........... 2
Johnson v. Diamond State Port Corp., 50 F. App'x 554 (3d Cir. 2002) ........................... 11
Kauffman v. Maxim Healthcare Servs., Inc., 2008 WL 4223616 (E.D.N.Y. Sept. 9,
2008) ............................................................................................................................... 5
Millea v. Metro-N.R.R. 658 F.3d 154 (2d Cir. 2011) ......................................................... 8
Missouri v. Jenkins, 491 U.S. 274 (1989)........................................................................... 2
Moog, Inc. v. United States, No. MISC. CIV-90-215E, 1991 WL 255371 (W.D.N.Y.
Nov. 21, 1991) .......................................................................................................... 6, 10
Perdue v. Kenny A., 130 S. Ct. 1662 (2010) .................................................................. 1, 7
Royal Park Investments SA/NV v. Deutsche Bank Nat'l Trust Co., No.
14CV04394AJNBCM, 2016 WL 5408171…………………………………………...11
Simmons v. New York City Transit Auth., 575 F.3d 170 (2d Cir. 2009) .......................... 4
Siracuse v. Program for the Dev. of Human Potential, No. 07 CV 2205 CLP, 2012 WL
1624291, at (E.D.N.Y. Apr. 30, 2012)............................................................................ 5
Study Logic, LLC v. Clear Net Plus, Inc., 2012 U.S. Dist. LEXIS 135847 ....................... 9
Telecommunications Corp. v. Mr. K's Foods, Inc., No. CIV-88-776E, 1990 WL 159065,
(W.D.N.Y. Oct. 16, 1990)............................................................................................... 6

PRELIMINARY STATEMENT
The law firms of Jon L. Norinsberg, Esq. and Cohen & Fitch LLP (collectively, the “Norinsberg
Team”), respectfully submit this Memorandum of Law in reply to defendants’ opposition to Plaintiff’s
motion for partial reconsideration of the Court’s September 6, 2016 Order (“the Order”) on Plaintiff’s
attorney’s fee award. As we set forth in our original motion, there are two central grounds for granting
reconsideration: i) the Supreme Court has expressly rejected a cost-based approached for determining
hourly rates. Blum v. Stenson, 465 U.S. 886, 894 (1984); and ii) the Supreme Court has expressly
rejected the Johnson factors as a basis for determining a reasonable hourly rate. Perdue v. Kenny A.,
130 S. Ct. 1662, 1669 (2010).
Rather than substantively address these arguments, defendants offer a hodgepodge of frivolous
objections and erroneous claims to avoid discussing the merits of the motion. First, defendants attempt
to distract the Court with a series of baseless procedural objections. Yet, the “new evidence” defendants
complain about was offered for a very limited purpose, namely, to refute certain factual findings made
by the Court that were unsupported by the record. And the “new arguments” that defendants complaint
about were, in fact, raised in our original motion for attorneys’ fees. Defendants play a game of
semantics in claiming otherwise.
Defendants’ arguments fail on the merits as well. The Supreme Court has made it clear that
Section 1988 does not authorize a Court to reduce hourly rates based on the size of a law firm.
Defendants have no answer for Blum and Jenkins. Instead, defendants engage in a game of “make
believe” and ask the Court to find that the Supreme Court’s holdings do not actually mean what they
say. Yet, defendants’ position is “flatly contradicted” by the legislative history of Section 1988, and
should be rejected here as well. Blum, 465 U.S. at 894.

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Defendants also have no answer for Plaintiff’s arguments under Simmons v. New York City
Transit Auth., 575 F.3d 170, 172 (2d Cir. 2009), which makes it clear that Eastern District rates are
“substantially lower” than Southern District rates. Rather than acknowledge this fact, defendants falsely
claim that there is no quantifiable difference between the billing rates in the two districts. Yet, the
Second Circuit has expressly held otherwise. (Id.) So too have multiple district courts. Defendants’
untenable legal position – which they attempt to hide by burying it in a footnote in the middle of the
brief – fails as a matter of law.
Lastly, defendants construct an elaborate “straw man” to get around the Supreme Court’s ruling
in Perdue. Defendants exhaustively argue that Arbor Hill is still good law in this Circuit. Yet, this
misses the mark. The issue here is not whether the entire Arbor Hill decision is still good law, but
rather, whether that portion of the decision which relied on the Johnson factors is still good law. In light
of the Supreme Court's criticism of Johnson as being “subjective,” giving “very little actual guidance to
district courts,” placing “unlimited discretion in trial judges” and producing “disparate results,”
Perdue, 559 U.S. at 550-51, it would appear clear that Johnson – and by extension, that portion of Arbor
Hill which relied on Johnson – is no longer good law, and is not an appropriate basis for reducing our
billing rates by 35%.

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ARGUMENT
I. THE COURT’S REDUCTION OF RATES BASED ON LAW FIRM SIZE
IS INCONSISTENT WITH SUPREME COURT PRECEDENTS ON THIS
ISSUE.
A.

The Supreme Court Has Expressly Rejected a Cost-Based
Analysis of Rates as Being Contrary to the Legislative Intent of
Section 1988.

“The argument that small firms should be compensated at a lower rate is but a variant of
positions already rejected by the Supreme Court.” Irish v. City of New York, 2004 U.S. Dist. LEXIS
3770, *13 (S.D.N.Y. Mar. 8, 2004) (emphasis supplied). Indeed, both Blum v. Stenson, 465 U.S. 886
(1984) and Missouri v. Jenkins, 491 U.S. 274 (1989), expressly rejected a cost-based approach to
determining market rates as contrary to the legislative history of Section 1988. In fact, the Supreme
Court in Blum held that such an approach was “flatly contradicted” by the legislative history of Section
1988. Blum, 465 U.S. at 894. Thus, “there is nothing in the legislative history” of Section 1988 to
support “the assumption that [because] larger law firms carry a larger overhead … [they] should
command a higher rate.” Irish, 2004 U.S. Dist. LEXIS 3770 at *12.
Instead of addressing the merits of Plaintiff’s position, defendants attempt to distract the Court
with a series of baseless objections. First, defendants contend, falsely, that Plaintiff never addressed this
issue in his original motion. In fact, the opposite is true. Not only did Plaintiff make this argument, but
he expressly argued that counsel’s billing rates should be comparable to the rates of partners in large
law firms. See Pl. Mem. at 24 (“[A] review of the average billing rates for partners in New York law
firms lends further support for the requested rates for Plaintiff’s Counsel.”).

In support of this

argument, Plaintiff’s counsel cited the 2013-2014 National Law Journal Billing Survey (Master Decl.,
Ex. Z), and noted that this “survey is often used by federal courts to determine appropriate hourly rates.”

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(Pl. Mem. at 24, n.7) (collecting cases). Thus, Defendants’ suggestion that this is a newly raised
argument is patently false.
Second, defendants attempt to distort the plain meaning of Blum and Jenkins by suggesting,
falsely, that these cases do not answer the question of “whether the court may consider the size of a law
firm with respect to market rates.” (Def. Recon. Opp. at 15). Yet, in both cases, the Supreme Court
emphatically rejected the notion that the costs of providing legal services – whether by a large firm,
small firm or not-for-profit firm – is a relevant factor in determining reasonable hourly rates in a given
market. See Blum, 465 U.S. at 895 (The “statute and legislative history establish that ‘reasonable fees
under §1988 are to be calculated according to the prevailing market rates in the relevant community,
regardless of whether Plaintiff is represented by private or nonprofit counsel.”) (emphasis supplied). It
follows, a fortiori, that the costs of running a large law firm cannot be used as a basis for reducing the
hourly rates of smaller firms.

Indeed, such a position is “flatly contradicted” by Section 1988’s

legislative history. (Id. at 894)
Here, the Court found that the small size of Plaintiff’s firms warranted a reduction in their hourly
billing rates. Schoolcraft, 2016 WL 4626568, at * 7 (S.D.N.Y. Sept. 6, 2016) (“Primary Counsel are all
solo or small-firm practitioners whose practices are incomparable to large law-firms employing
thousands of attorneys, where rates factor in massive overhead.”); Ibid. (noting that counsel’s
“comparison[] to the rates of large law firms …. works equally to [their] detriment.”). In so holding, we
respectfully submit that the Court overlooked the Supreme Court’s decisions in Blum and Jenkins 1 –
and we respectfully request that the Court reconsider its ruling in light of these two decisions.

Both Blum and Jenkins were cited in Plaintiff’s original fee application. (Docket No. 561, at 16, 19, and
20)
1

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II. THE COURT’S RELIANCE ON EASTERN DISTRICT RATES FROM
FOUR YEARS AGO TO SET CURRENT SOUTHERN DISTRICT RATES
IS CONTRARY TO THE LAW IN THIS CIRCUIT.
A.

The Second Circuit Has Expressly Held that Hourly Rates in the
Eastern District Are “Substantially Lower” Than Rates in the
Southern District.

In reducing Plaintiff’s counsel’s billing rate by 35%, the Court noted that such rates were
“consistent with the awards Primary Counsel received in the past from contested fee applications”
(Schoolcraft, 2016 WL 4626568 at *7). However, such prior awards were in the Eastern District, not
the Southern District. The Second Circuit has held that rates in the Eastern District are “substantially
lower” than rates in the Southern District. Simmons v. New York City Transit Auth., 575 F.3d 170, 172
(2d Cir. 2009). It follows, then, that the Norinsberg Team’s awards in the Eastern District in 2012 were
“substantially lower” than what their comparable rates would have been in the Southern District in 2012,
much less in 2016. Since the Court relied upon Eastern District rates from four years ago to establish a
current billing rate in the Southern District, we respectfully submit that the Court overlooked the Second
Circuit’s decision in Simmons.
In opposing this argument, the City once again plays it “fast and loose” with the truth,
suggesting, falsely, that there are no cases which “quantify” the difference in rates between the Eastern
and Southern Districts. (Def. Recon. Opp. at 18, n.15). In fact, the Second Circuit did exactly that in
Simmons. It reduced an award by 21% to quantify the “substantially lower” rates found in the Eastern
District. Other courts have reached a similar conclusion. See, e.g., Siracuse v. Program for the Dev. of
Human Potential, No. 07 CV 2205 CLP, 2012 WL 1624291, at *27 (E.D.N.Y. Apr. 30, 2012) (reducing
counsel’s rates by 21%, “[to] account[] for the difference between the prevailing rates in the Southern
and Eastern Districts.”); Concrete Flotation Sys., Inc. v. Tadco Const. Corp., 2010 WL 2539771, at *3
(E.D.N.Y. Mar. 15, 2010), report and recommendation adopted, 2010 WL 2539661 (E.D.N.Y. June 17,
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2010) (recognizing a “a sharp distinction in rates for attorneys' fees between these two districts”)
(emphasis supplied). Based on Simmons, the Court should reconsider the rates assessed to Cohen &
Fitch LLP and Jon Norinsberg in this case, and make an upward adjustment that accounts for the higher
billing rates in the Southern District.
III.

THE COURT’S RELIANCE ON THE JOHNSON FACTORS IS
CONTRARY TO THE SUPREME COURT’S HOLDING IN
PERDUE.
A.

The Supreme Court Expressly Rejected the Use of the Johnson
Factors in Determining a Reasonable Hourly Rate.

In deciding that a 35% reduction in hourly rates was warranted, the Court relied upon the
“Johnson factors” to support its conclusion. Schoolcraft, 2016 WL 4626568 at *5. However, the
Supreme Court has expressly rejected the Johnson method as a basis for determining a reasonable hourly
rate. Perdue v. Kenny A., 130 S. Ct. 1662, 1669 (2010). The Supreme Court concluded that the
Johnson approach was flawed because it set “attorneys’ fees by reference to a series of sometimes
subjective factors [that] placed unlimited discretion in trial judges and produced disparate results.”
Perdue, 130 S. Ct. at 1672 (citation omitted).
In light of the Supreme Court's criticism of Johnson as being “subjective,” giving “very little
actual guidance to district courts,” placing “unlimited discretion in trial judges” and producing
“disparate results,” Perdue, 559 U.S. at 550-51, we respectfully submit that Johnson – and by extension,
that portion of Arbor Hill which relied on Johnson -- was not an appropriate basis for reducing our
billing rates by 35%. In particular, the Court’s consideration of the “reputational benefits that might
accrue from being associated with the case” (Schoolcraft, 2016 WL 4626568 at *5) would appear to be
directly at odds with Perdue, which prohibits the evaluation of fees “on an impressionistic basis”
because the “major purpose of the lodestar method—providing an objective and reviewable basis for

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fees, is undermined.” Perdue, 559 U.S. at 558. Since defendants offered no evidence of these alleged
“reputational benefits” -- and since there was no “specific proof” of such benefits in the record – the
Court’s reliance on this factor was not proper under Perdue. Id. at 555 (“[T]he trial judge should [only]
adjust the attorney's hourly rate in accordance with specific proof”) (emphasis supplied) (alteration
added).
B.

The Second Circuit Has Never Addressed the Question of
Whether or Not Arbor Hill is Still Good Law After Perdue.

Defendants falsely claim that “the Second Circuit has reaffirmed Arbor Hill since Perdue.”
(Def. Recon. Opp. at 9) (citing Millea v. Metro-N.R.R, 658 F.3d 154, 166-7 (2d Cir. 2011)). In fact, the
Second Circuit has done no such thing. The Millea court merely stated that both the Supreme Court and
Second Circuit have held that the lodestar creates a “presumptively reasonable fee.” (Id. at 166-7). There
was no discussion of the Johnson factors in Millea. Nor, for that matter, was there any discussion of the
impact of Perdue on Arbor Hill. In fact, the Second Circuit has never addressed the question of whether
Arbor Hill – or more specifically, that portion which relies on the Johnson factors – remains good law
after Perdue. See Study Logic, LLC v. Clear Net Plus, Inc., 2012 U.S. Dist. LEXIS 135847, *49
(E.D.N.Y. Sept. 21, 2012) (“Arbor Hill has not yet ben revisited by the Circuit in light of Perdue.”). To
the extent that defendants suggest otherwise (Def. Recon. Opp. at 9), this is simply false and should be
rejected.
C. Plaintiff Argued for the Perdue Methodology in his Original
Motion.
Defendants claim that Plaintiff “never before raised” any arguments regarding the proper
methodology for determining reasonable hourly rates. (Def. Recon. Opp. at 5). This is false. In fact, in
Plaintiff’s original motion for attorney’s fees, Plaintiff expressly cited Perdue as the proper legal
standard for determining hourly rates. (Docket No. 561, at 19). Further, Plaintiff wrote that “the only

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method for determining the fee award in this case is ‘the number of hours reasonably expended on the
litigation multiplied by a reasonable hourly rate,’ otherwise known as the lodestar method.” (Ibid.)
(emphasis supplied) (citations omitted). It is absurd to suggest that Plaintiff also needed to address the
flawed Johnson methodology – which had been rejected by the Supreme Court in Perdue – in order to
properly raise this argument on reconsideration.
IV.

DEFENDANTS’ OBJECTIONS TO THE “NEW EVIDENCE”
OFFERED BY PLAINTIFF, SUBMITTED FOR THE LIMITED
PURPOSE OF CORRECTING CERTAIN UNSUPPORTED
FACTUAL FINDINGS, ARE BASELESS.
A. The Retainer Agreements Were Offered to Show that Counsel’s
Rates Were Not Merely “Theoretical” or “Opening Bids in a
Negotiation.”

Defendants object to counsel’s submission of retainer agreements on the ground that such
agreements “could have been submitted in support of the Plaintiff’s fee petition.” (Def. Recon. Opp. at
7). This argument is flawed on several grounds. First, defendants ignore the limited purpose for which
such retainers were offered, namely, to show that the rates requested by Jon Norinsberg ($600.00 per
hour) and Cohen & Fitch LLP ($500.00 per hour) were not merely “opening bid[s] in a negotiation,”
Schoolcraft, 2016 WL 4626568 at *7, as the Court surmised, but in fact, were actual rates charged to
real-life clients. In particular, such evidence was intended to refute the Court’s suggestion that the
requested rates were merely “theoretical” and “the highest number one might suggest to frame the
conversation before the first counter-offer.” Schoolcraft, 2016 WL 4626568 at *7.
Second, defendants never raised the argument that counsel’s requested rates were merely
“opening bid[s]” in a negotiation process, or that a “keen client would have negotiated these rates
down.” Schoolcraft, 2016 WL 4626568 at *7. The Court raised these arguments sua sponte. Having
been presented with a new factual finding that was “outside the adversarial issues presented to the Court
by the parties,” (Moog, Inc. v. United States, No. MISC. CIV-90-215E, 1991 WL 255371, at *1
8

(W.D.N.Y. Nov. 21, 1991)), Plaintiff’s counsel was compelled to submit these retainers to “correct a
manifest error of … fact,” which is clearly a proper basis for reconsideration. MCI Telecommunications
Corp. v. Mr. K's Foods, Inc., No. CIV-88-776E, 1990 WL 159065, at *2 (W.D.N.Y. Oct. 16, 1990)
(citation omitted).
B. The Bonelli Evidence was Offered to Show that Plaintiff’s Counsel Did, In
Fact, Forego Other Work As a Result of the Schoolcraft Case.
Defendants further argue that Plaintiff’s reference to the lucrative $1.1 million dollar settlement
in Bonelli – a case that the Norinsberg Team was forced to turn down as a direct result of the workload
in Schoolcraft – is improper because it “offers brand new factual matter” on an “issue [that] was also
previously briefed.” (Def. Recon. Opp. at 8). This assertion, however, is a complete distortion of the
record and the reconsideration standard. In particular, while a party may not normally advance new
evidence in connection with a motion for reconsideration, it is “appropriate where, for example, the
Court has patently misunderstood a party, or has made a decision outside the adversarial issues
presented to the Court by the parties...” Moog, 1991 WL 255371, at *1.
Here, all three of the Declarations submitted in support of our motion for attorney’s fees
specifically referenced having to forego other matters given the extensive work required in connection
with Schoolcraft’s case. (See Fitch Decl. at ¶ 30, Cohen Decl. at ¶ 44, Norinsberg Decl. at ¶ 22).
Further, defendants never once argued – in their opposition brief or sur-reply – that Plaintiff’s counsel
had failed to show that other business opportunities were lost as a result of the Schoolcraft case. Instead,
the Court sua sponte determined that the time and labor on this case was “not preclusive of other
employment,”2 which was allegedly confirmed by “the appearance of Plaintiff’s counsel on other
matters before this Court during the course of this litigation.” (Schoolcraft, 2016 WL 4626568 at *6). In
fact, Plaintiff’s counsel did not appear on any “other matters” before this Court in the past six years,
2

Johnson factor No. 4

9

except for Stinson v. City of New York, 10 Civ. 4228 (RWS), which was filed prior to Schoolcraft.
Since these factual findings were not based on any evidence in the record, and appear to have been made
“outside the adversarial issues presented to the Court by the parties,” reconsideration of this issue based
on actual evidence is warranted. Johnson v. Diamond State Port Corp., 50 F. App'x 554, 560 (3d Cir.
2002).
CONCLUSION
For the reasons stated above, the Norinsberg Team’s motion for reconsideration should be
granted.3
Dated: New York, New York
October 28, 2016
Respectfully Submitted

_____________/s_____________
JOSHUA P. FITCH
GERAL D M. CO HEN

COHEN & FITCH LLP
Attorneys for Plaintiff
233 Broadway, Suite 1800
New York, N.Y. 10279
[phone]
[e-mail]
[e-mail]
JON L. NORINSBERG

Attorney for Plaintiff
225 Broadway, Suite
2700
New York, N.Y. 10007
[phone]
[e-mail]

3

Since this Reply brief is being submitted solely on behalf of the Norinsberg Team, we do not address any
of defendants’ arguments relating to the Smith Team. (Def. Recon. Opp. at 8-9, 18-25).

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