The Regulatory Fundamentals Group LLC v. Governance Risk Management Compliance, LLC et al

Filing 152

OPINION & ORDER: The Court awards The Regulatory Fundamentals Group a total of $366,099.81 in fees and expenses. The Court awards $296,059.13 in fees from Spears & Imes, which is calculated by multiplying each person's reasonable rate by his or her share of the 1,031.65 hours, as outlined above. It further awards $60,433.00 in fees from Fross Zelnick which is calculated by multiplying each person's reasonable rate by his or her share of the 129.2 hours, as outlined above. Finally, it awards $6,576.32 in litigation expenses incurred by Spears & Imes, and $3,031.36 in expenses incurred by Fross Zelnick. (Signed by Judge Katherine B. Forrest on 9/24/2014) (djc)

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ELECTH\J\TCALLY FILED

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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THE REGULATORY FUNDAMENTALS
GROUP LLC,

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Plaintiff,
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13 Civ. 2493 (KBF)

GOVERNANCE RISK MANAGEMENT
COMPLIANCE, LLC d/b/a MANHATTAN
ADVISERS, et al.,

OPINION & ORDER

Defendants.
------------------------------------------------------------ )(

KATHERINE B. FORREST, District Judge:
On June 25, 2014, the Court ruled from the bench that defendant Gregory V.
Wood had engaged in willful and malicious spoliation by destroying a large number
of documents that were highly relevant to this copyright infringement action. (6/25
Tr.I 64.) On August 5, 2014, the Court outlined its rationale for awarding plaintiffs
motion for sanctions, and further ordered plaintiff to provide a submission detailing
attorneys' fees and expenses incurred in litigating the action. (ECF No. 146).
The plaintiff timely filed its submission along with contemporaneous billing
records on August 22, 2014. (ECF No. 148). Plaintiff asks for $378,357.94 in fees
and expenses, broken down as $308,296.26 in fees and $6,576.32 in expenses for
work done by Spears & Imes LLP, and $60,454.00 in fees and $3,031.36 in expenses

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Citations to "6/25 Tr." refer to the transcript of June 25, 2014.

for work done by Fross Zelnick Lehrman & Zissu, P.C. ("Fross Zelnick")
(Declaration of David Spears, ECF No. 148 iii! 11-13 ("Spears Deel.").)
On September 2, 2014, the Court Ordered defendant to provide a response to
plaintiffs submission not later than September 11, 2014. (ECF No. 149.)
Defendant failed to do so. The Court thus treats plaintiffs submission regarding
attorneys' fees and expenses as unopposed.
For the reasons stated below, the Court grants The Regulatory
Fundamentals Group LLC fees and expenses in the amount of $366,099.81.

I.

LEGAL STANDARD
A district court has "considerable discretion" in determining what constitutes

a reasonable fee award. Arbor Hill Concerned Citizens Neighborhood Ass'n v. Cnty.
of Albany, 522 F.3d 182, 190 (2d Cir. 2008). A reasonable fee award should be
based on a "reasonable hourly rate,'' which is "the rate a paying client would be
willing to pay,'' as determined based on a holistic assessment of all of the
circumstances at issue in the case. Id. at 190. The "presumptively reasonable fee"
is the "product of a reasonable hourly rate and the reasonable number of hours
required by the case," and is known as the "lodestar." Millea v. Metro-N. R.R. Co.,
658 F.3d 154, 166 (2d Cir. 2011). The court may adjust the lodestar upward or
downward based on its assessment of the specific circumstances at issue in the case.
LeBlanc-Sternberg v. Fletcher, 143 F.3d 7 48, 764 (2d Cir. 1998).
A reasonable hourly rate is one in line with rates "prevailing ... in the
community for similar services by lawyers of reasonably comparable skill expertise

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and reputation." McDonald ex rel. Prendergast v. Pension Plan of the NYSA-ILA
Pension Trust Fund, 450 F.3d 91, 96 (2d Cir. 2006) (quoting Blum v. Stenson, 465
U.S. 886, 895 n.11 (1984)). The relevant community is "the district in which the
reviewing court sits." In re Agent Orange Prod. Liab. Litig., 818 F.2d 226, 232 (2d
Cir. 1987). In determining the reasonable hourly rate, the court may rely on its
knowledge of hourly rates at private firms. See Miele v. N.Y. State Teamster Conf.
Pension & Ret. Fund, 831 F.2d 407, 409 (2d Cir. 1987).
In recent years, New York district courts have approved rates for experienced
law firm partners in the range of $500 to $800 per hour.

k, Malletier v. Artex

Creative Int'l Corp., 687 F. Supp. 2d 347, 360 (S.D.N.Y. 2009) ($540 for partner with
24 years of experience); Union of Orthodox Jewish Congregations of Am. v. Royal
Food Distribs. Ltd. Liab. Co., 665 F. Supp. 2d 434, 437 (S.D.N.Y. 2009) ($735 for
partner); Sub-Zero, Inc. v. Sub Zero N.Y. Refrigeration & Appliances Servs., Inc.,
No. 13-CV-2548, 2014 WL 1303434, at *8-9 (S.D.N.Y. Apr. 1, 2014) ($485 for partner
with 16 years of experience). New York district courts have also recently approved
rates for law firm associates in the range of $200 to $450 per hour. Malletier, 687
F. Supp. 2d at 361-62 (noting that associate rates of $390 to $4 70 "fall at the very
top of the spectrum of reasonable hourly rates for associates," and approving
associate rates ranging from $200 to $390.10 as reasonable).
An applicant for an award of attorney's fees generally must submit
"contemporaneous time records" that "specify, for each attorney, the date, the hours
expended, and the nature of the work done." N.Y. State Ass'n for Retarded

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Children, Inc. v. Carey, 711F.2d1136, 1148 (2d Cir. 1983). District courts have
"some limited discretion to make exceptions to the hard-and-fast rule." Scott v. City
of New York, 626 F.3d 130, 133 (2d Cir. 2010). When a court makes such an
exception, "it should not award the full amount requested." F. H. Krear & Co. v.
Nineteen Named Trustees, 810 F.2d 1250, 1265 (2d Cir. 1987).
An award of attorney's fees for preparing and litigating the fee application
itself is inappropriate if the applicant spends an "inordinate amount of time"
preparing the fee application due to "their failure to keep better records." Carey,
711 F.2d at 1148.
Expenses incurred in the course of litigation should also be itemized so that
the reviewing court can determine whether each cost was in fact necessary to the
success of the litigation. See U.S. for Use & Benefit of Evergreen Pipeline Const.
Co., Inc. v. Merritt Meridian Const. Corp., 95 F.3d 153, 173 (2d Cir. 1996) (refusing
to grant the request for photocopying costs because the requesting party had not
itemized the cost).
II.

DISCUSSION
A. Billing Rate
The plaintiff was represented by two law firms to prosecute its copyright

action: Spears & Imes, and Fross Zelnick, which specializes in intellectual property
law. (Spears Deel.

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3.)

Plaintiff did not provide the Court with information on the qualifications of
its personnel. Its submission, however, provides details on the rates charged.

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Spears & Imes billed work on this matter at its prevailing rates, less a 15% courtesy
discount. 2 (Spears Deel.

ii 11.) David Spears, a partner, billed at an hourly rate of

$815. (Spears Deel. Ex. 1.) Justin Deabler, of counsel, billed at an hourly rate of
$525. (Id.) Benjamin T. Alden, an associate, billed at an hourly rate of $350. (Id.)
Richard Benjamin, an associate, billed at an hourly rate of $325. (Id.) Paralegals
Erin McConnell, Ned Cunningham, Jackson Dartez, Matthew Schoenfeld, and
Diane Konz all billed at an hourly rate of $195. (Id.) Each of these rates is then
reduced with a 15% discount. 3
Fross Zelnick billed its work at its prevailing rates. 4 (Spears Deel.

ir 12.)

Roger Zissu, a partner, billed at an hourly rate of $675. (Spears Deel. Ex. 2.) David
Donahue, a partner, billed at an hourly rate of $525 in 2013 and $545 in 2014. (Id.)
Jennifer Insley-Pruitt, an associate, billed at an hourly rate of $345 in 2013 and
$390 in 2014. (Id.) Mario Ortiz, a paralegal, billed at an hourly rate of $255. (Id.)
Yuoseph Karzoan, a paralegal, billed at an hourly rate of $225 in 2013 and $235 in
2014. (Id.)
The Court finds no reason to question the reasonableness of the attorneys'
billing rates. The rates are in line with current market rates for attorneys with

2 The Court has thoroughly reviewed the billing records submitted by plaintiff. From March 2013 to
July 2014, Spears & Imes worked a total of 1031.65 hours. Multiplying each individual's billing rate
with his or her respective hours worked totals $363, 140.25. Spears & Imes requests fees totaling
$308,296.26. (Spears Deel. iJ 11.) Although the firm states that it discounted its rates by 15%, its
requested total in fact reflects a discount of a fraction more than 15%.
3 The Court accordingly calculates each attorney's rate as follows: David Spears at $692.75, Justin
Deabler at $446.25, Benjamin T. Alden at $297.50, Richard Benjamin at $276.25. The paralegals'
rates are discussed below.
4 Fross Zelnick Lehrman & Zissu, P.C. does not explicitly break out its hourly rates; however, the
Court has gleaned these rates from dividing each individual's charges by their hours worked.

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similar titles at New York law firms, and rates that have been approved by courts
in this district, as outlined above. The $815 billing rate of David Spears falls in the
high end of what this district has approved; however, the 15% discount leaves the
billing rate of the founding law firm partner under $700 and squarely in the range
of what New York district courts have approved for experienced law firm partners.
The billing rates for the paralegals, however, are too far outside the range of
rates approved in this district. See, e.g., Themis Capital v. Democratic Republic of
Congo, No. 09 Civ. 1652(PAE), 2014 WL 4379100, at *8 (S.D.N.Y. Sept. 4, 2014)
(reducing paralegal hourly billing rates of up to $340 down to $125, as "the caselaw
reflects that paralegal billing rates of between $90 and $125 are more in line with
the prevailing market rates in this District"); Union Cent. Life Ins. Co. v. Berger,
No. 10 Civ. 8408(PGG), 2013 WL 6571079, at *5 (S.D.N.Y. Dec. 13, 2013) (reducing
paralegal hourly billing rates between $185 and $225 down to $125); Lucerne
Textiles, Inc. v. H .C.T. Textiles Co., Ltd., No. 12 Civ. 5456(KMW)(AJP), 2013 WL
174226, at *6 (S.D.N.Y. Jan. 17, 2013) (reducing paralegal hourly billing rates of
$265 down to $140); Sidley Holding Corp. v. Ruderman, No. 08 Civ.
2513(WHP)(MHD), 2009 WL 6047187, at *25-26 (S.D.N.Y. Dec. 30, 2009) (reducing
paralegal hourly billing rates of $195 down to $125). As plaintiff has failed to
provide any information regarding the paralegals' expertise or experience to justify
rates ranging from $195 to $255, the Court has reduced the hourly billing rate for
all paralegals in this action to $125.

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B. Hours
The billing records submitted by plaintiff are arranged in chronological order.
(Spears Deel. Exs. 1 and 2.) Although these records include a breakdown of
attorney hours and rates for each billing cycle, they do not include a summary
totaled across all billing periods. The Court, therefore, reviewed the submissions
and found the following:
Spears & Imes billed a total of 1,031.65 hours. Of those hours, Benjamin T.
Alden accounted for 502.5, Erin McConnell accounted for 187.2, David Spears
accounted for 113, Richard Benjamin accounted for 105.95, Ned Cunningham
accounted for 98.25, Jackson Dartez accounted for 13.25, Matthew Schoenfeld
accounted for 9.5, Diane Konz accounted for 1.25, and Justin Deabler accounted for
0.75.
Fross Zelnick billed a total of 129.2 hours. 5 Of those hours, David Donahue
accounted for 85.2 hours, Jennifer Insley-Pruitt accounted for 40.1, Yuoseph
Karzoan accounted for 3.3, Roger Zissu accounted for 0.3, and Mario Ortiz
accounted for 0.3.
These hours reflect work done on a variety of litigation matters, including,
but not limited to: sending a cease and desist letter, filing an amended complaint,
briefing a motion to dismiss, briefing and arguing a motion for summary judgment,
and researching, briefing, and arguing a motion for spoliation. (Spears Deel.

iii!

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Fross Zelnick Lehrman & Zissu, P.C. has sua sponte deducted a number of hours worked from the
total billed.
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10.) None of these hours reflect fees incurred in the preparation of plaintiffs
attorney's fees submission. (Spears Deel.

i! 13.)

The Court has reviewed the documentation submitted by plaintiff, and finds
that all time billed is supported by contemporaneous time records that show the
dates worked, the hours expended, and the nature of the tasks completed by each
person. In the end, the spoliation turned a straightforward commercial dispute into
a far more serious issue requiring plaintiff to sustain significant attorney's fees and
expenses. As defendants have not raised any objections to the tasks or hours billed,
and as the Court has undertaken an independent review of the record and
considered all relevant factors, the time billed by both law firms used by plaintiff is
found to be reasonable.
C. Expenses
Spears & Imes incurred $6,576.32 in total expenses to litigate this action. 6
(Spears Deel.

ir 11.)

Fross Zelnick incurred $3,031.36 in total expenses to litigate

this action. 7 (Id.) These expenses are broken down into monthly or periodic
billings, and cover services including, but not limited to: hearing transcripts,
deposition transcripts, subpoena fees, copying, outside printing, online research,
delivery services/messengers, local travel, meals, telephone, postage, court fees,

6 The Court has looked carefully at the individual billing submission and calculates that the reported
expenses in the monthly or periodic billing records suggest a total of $16,372. 79 in expenses by
Spears & Imes. (Spears Deel. Ex. 1.) As plaintiff only asks for $6,576.32 (Spears Deel. 'if 11), the
Court's calculation will reflect this lesser amount.
7 This total amount is supported by the itemized billing submission. (Spears Deel. Ex. 2.)

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incidentals, and other professionals. (Id.) The Court finds these expenses to be
appropriately itemized and entirely reasonable.
III.

CONCLUSION
The Court awards The Regulatory Fundamentals Group a total of

$366,099.81 in fees and expenses. The Court awards $296,059.13 in fees from
Spears & Imes, which is calculated by multiplying each person's reasonable rate by
his or her share of the 1,031.65 hours, as outlined above. It further awards
$60,433.00 in fees from Fross Zelnick which is calculated by multiplying each
person's reasonable rate by his or her share of the 129.2 hours, as outlined above.
Finally, it awards $6,576.32 in litigation expenses incurred by Spears & Imes, and
$3,031.36 in expenses incurred by Fross Zelnick.

SO ORDERED.
Dated:

New York, Ntjw York
September~, 2014
KA THERINE B. FORREST
United States District Judge

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