The Fashion Exchange LLC v. Hybrid Promotions, LLC et al

Filing 341

MEMORANDUM OPINION & ORDER re: 337 LETTER MOTION to Seal Document 333 Memorandum & Opinion addressed to Magistrate Judge Ona T. Wang from Mark J. Rosenberg dated October 8, 2019. filed by Target Corporate Services, Inc., Family Dollar Services, Inc., Beall's Department Stores, Inc., Popsugar, Inc., Marshalls of MA, Inc., Big 5 Sporting Goods Corporation, BJ'S Wholesale Club, Inc., Belk, Inc., Hybrid Promotions, LLC, Zumiez, Inc., The Sp orts Authority, Inc., Belk Stores Services, Inc., Macy's Merchandising Group, Inc., Dick's Sporting Goods, Inc., Urban Outfitters, Inc., The Finish Line, Inc., Jarrod Dogan, Jeff Caldwell, Gap Apparel, LLC, Wal-Mart Store s, Inc., Dillard's, Inc., Nordstrom, Inc., Tween Brands, Inc., Dollar General Corporation, Sears Brands, LLC, Shopko Stores Operating Co., LLC, Old Navy, LLC, The Wet Seal Retail, Inc., J.C. Penney Corporation, Inc., Foreve r 21 Retail, Inc., World of Jeans & Tops, Macys.com, Inc., Boscov's Department Store, LLC, Costco Wholesale Membership, Inc., Ross Stores, Inc., Pacific Sunwear of California, Inc., BDSRCO, Inc., Spencer Gifts LLC, Kohls Depa rtment Stores, Inc., Jimmy Jazz, Inc., Rue 21, Inc., Hibbett Sporting Goods, Inc., The Cato Corporation, Sport Chalet, Inc., Sports Holdings, Inc., Gavin Dogan, Lord & Taylor Holdings LLC, Bloomingdale's Inc., Foot Locker, Inc., Dillard International, Inc., The TJX Companies, Inc., Hot Topic, Inc., Macy's Retail Holdings, Inc., Bob's Stores, LLC, National Stores, Inc. Accordingly, Defendants' counsel's motion to seal is DENIED, and Def endants are directed to re-file those records, Exhibits B & C to the Rosenberg Declaration at ECF 337-1, on the docket. For the foregoing reasons, Defendants are hereby awarded $9,128.60 in fees and costs. Plaintiff and its counsel shall be held jointly and severally liable for this amount, and are directed to pay this amount within 30 days of the date of this Order. Defendants shall file Exhibits B & C to the Rosenberg Declaration on the docket within 7 days of this Order. (Signed by Magistrate Judge Ona T. Wang on 11/4/2019) (rro)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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THE FASHION EXCHANGE LLC,
Plaintiff,
-againstHYBRID PROMOTIONS, LLC, et al.,
Defendants.
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14-CV-1254 (SHS) (OTW)
MEMORANDUM
OPINION & ORDER

ONA T. WANG, United States Magistrate Judge:
On September 26, 2019, the Court granted Defendants’ motion for sanctions related to
Plaintiff’s counsel’s conduct at the October 30, 2018 deposition of Jack Saadia. (ECF 333). As a
result, the Court ordered Plaintiff and Plaintiff’s counsel to be jointly and severally liable for half
of Defendants’ attorney’s fees and costs in taking the initial October 30 deposition of Mr.
Saadia and in bringing the sanctions motion. (Id. at 13). Defendants’ counsel has now submitted
attorney declarations, billing records, and invoices in support of claimed fees and costs, as
directed by the Court. (ECF 334-337).
I.

Attorney’s Fees

Although Defendants’ counsel submitted his documented fees and costs, the Court must
still determine what fees are reasonable by comparing the requested fees with the lodestar
amount, an amount that is “the product of a reasonable hourly rate by the reasonable number
of hours required.” See Millea v. Metro-North R. Co., 658 F.3d 154, 166 (2d Cir. 2011). The Court
has “considerable discretion” in determining a reasonable fee. See Matusick v. Erie County
Water Auth., 757 F.3d 31, 64 (2d Cir. 2014). In determining a reasonable hourly rate, the Court

looks at the attorney’s experience in the field, what similar attorneys in the district charge, and
what other clients pay for similar services. Arbor Hill Concerned Citizens Neighborhood Ass’n v.
County of Albany, 522 F.3d 182, 191 (2d Cir. 2008). Similarly, to determine the reasonable
number of hours to be spent, the Court examines whether a “reasonable attorney would have
engaged in similar time expenditures.” Grant v. Martinez, 973 F.2d 96, 99 (2d Cir. 1992). Where
the amount billed is excessive, the Court “should reduce the stated hours accordingly.”
Cocoletzi v. Fat Sal’s Pizza II, Corp., No. 15-CV-2696 (CM) (DF), 2019 WL 92456, at *11 (S.D.N.Y.
Jan. 3, 2019). The burden is on the applicant to show that the claimed hourly rate and hours
spent are reasonable. Blum v. Stenson, 465 U.S. 886, 897 (1984).
A. Hourly Rates
Mark J. Rosenberg and Alan Tenenbaum are both partners, each with nearly thirty years
of experience in litigation. (Declaration of Mark J. Rosenberg (“Rosenberg Decl.”) (ECF 335)
¶¶ 18, 20-21, 31-32). Rosenberg, co-chair of his firm’s Reputation Management practice, seeks
an hourly rate of $580. (Id. ¶ 23). Tenenbaum seeks an hourly rate of $530. (Id. ¶ 31). Because
these are within the range of rates awarded to intellectual property partners with similar
experience, I find that their rates are reasonable. See Filo Promotions, Inc. v. Bathtub Gins, Inc.,
311 F. Supp. 3d 645, 651 (S.D.N.Y. 2018) (approving $610 hourly rate for IP partner with thirty
years’ experience); Broadcast Music, Inc. v. Pamdh Enter., Inc., No. 13-CV-2255 (KMW), 2014
WL 2781846, at 6-7 (S.D.N.Y. June 19, 2014) (approving $570 hourly rate for IP partner with 15
years of experience); GAKM Resources LLC v. Jaylyn Sales Inc., No. 08-CV-6030 (GEL), 2009 WL
2150891, at *8 (S.D.N.Y. July 20, 2009) (approving $650 hourly rate for IP partner with nearly 20
years’ experience).
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Debra Bernstein is counsel with nearly thirty years of experience, practicing primarily in
commercial litigation. (Rosenberg Decl. ¶ 30). Bernstein seeks an hourly rate of $530. (Id. ¶ 29).
This appears to be on the higher end for non-partners, and Defendants’ counsel does not
explain why Bernstein is billed at the same rate as a partner. See Hollander Glass Texas, Inc. v.
Rosen-Paramount Glass Co., Inc., 291 F. Supp. 3d 554, 561 (S.D.N.Y. 2018) (reducing hourly rate
to $500 for IP attorney with 29 years’ experience). Any concern, however, with a high hourly
rate is offset by Defendants’ counsel’s discounting their fees by 10%. (Rosenberg Decl. ¶ 14).
Joel H. Rosner is also counsel at the firm, with roughly fifteen years of experience. (Declaration
of Joel H. Rosner (ECF 336) ¶ 5). Rosner seeks an hourly rate of $450. (Id. ¶ 8). Similar to
Bernstein, Rosner’s rate is on the higher end for non-partners with his length of experience but
the ten percent discount offsets any reasonableness concerns.
In contrast, Defendants’ counsel has failed to proffer any support for the hourly rate of
$250 for paralegal Toni Serrant. Serrant graduated from college in 2007, but there is no
indication how long she has been a paralegal or whether she performed work beyond what is
typically handled by a paralegal. (Rosenberg Decl. ¶ 33). Accordingly, Serrant’s rate will be
reduced to the typically-awarded rate of $75/hour. See Feltzin v. Union Mall LLC, 393 F. Supp.
3d 204, 214 (E.D.N.Y. 2019) (reducing paralegal’s hourly rate to $70 from $115 because $115
was “higher than the normal range awarded in this District” without further support for the
premium); Santos v. El Tepeyac Butcher Shop Inc., No. 15-CV-814 (RA), 2015 WL 9077172, at *2
(S.D.N.Y. Dec. 15, 2015) (“For paralegals, ‘courts in this Circuit have generally found $75 an hour
to be reasonable.’”).

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B. Hours Expended
Defendants billed 49.5 hours in relation to the October 30 Saadia deposition and the
motion for sanctions. (ECF 335 at 3). Plaintiff argues that it should only be liable for the specific
fees incurred for the portions of the deposition where Plaintiff’s counsel made his sanctionable
speaking objections. (ECF 338 at 2). Similarly, because the Court issued sanctions under Rule
30(d)(2), Plaintiff argues that it should only be liable for the time Defendants spent drafting the
section of the brief on Rule 30(d)(2). (Id.). Lastly, Plaintiff argues that Defendants’ use of five
attorneys in this matter is “excessive and unreasonable.” (Id.)
Plaintiff’s arguments mis-read the Court’s decision. The Court ordered that Plaintiff and
its counsel shall be liable for “half of Defendants’ attorney’s fees and costs in taking the
October 30 deposition and bringing their motion for sanctions.” (ECF 333 at 13-14). The order
did not limit the fees to carve out only the portion of the deposition involving speaking
objections or only the fees incurred drafting the portion of the motion that addressed the Rule
30(d)(2) argument. To the extent that Plaintiff wishes the Court to modify its decision to reduce
the sanctions as requested, Plaintiff failed to raise that issue in its opposition brief or in a
motion for reconsideration. 1

The Court will not construe this opposition as a motion for reconsideration because under Local Rule 6.3, any
motion for reconsideration must be filed within 14 days of the Court’s decision on the motion. Instead, Plaintiff’s
opposition was filed more than three weeks after the Court’s decision. Even if the request for reconsideration was
timely filed, “[t]he major grounds justifying reconsideration are ‘an intervening change of controlling law, the
availability of new evidence, or the need to correct a clear error or prevent manifest injustice.’” Virgin Atl. Airways,
Ltd. v. Nat’l Mediation Bd., 956 F.2d 1245, 1255 (2d Cir. 1992) (quoting 18 C. Wright, A. Miller & E. Cooper, Federal
Practice & Procedure § 4478). Plaintiff’s conclusory argument that granting otherwise would be inequitable fails to
satisfy the standard for reconsideration. Cf. Thai-Lao Lignite (Thailand) Co., Ltd. v. Gov’t of Lao People’s Democratic
Republic, No. 10-CV-5256 (KMW) (DF), 2012 WL 5816878, at *9 (S.D.N.Y. Nov. 14, 2012) (“Attorney’s fees may be
awarded for unsuccessful claims as well as successful ones, however, where they are inextricably intertwined and
involve a common core of facts or are based on related legal theories.”).
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In support of its requested fees, Defendants’ counsel submitted contemporaneous
billing records. (Rosenberg Decl., Ex. C). Defendants billed 27.7 hours preparing for and drafting
the sanctions motion, and another 21.8 hours preparing for and attending the Saadia
deposition. (Id.) Although Plaintiff disputes the need for five attorneys to be on this matter,
“[t]he question is not simply how many attorneys worked on the case, but whether their time
was reasonably spent.” See Catanzano v. Doar, 378 F. Supp. 2d 309, 322 (W.D.N.Y. 2005).
The Court finds the 27.7 hours for bringing a sanctions motion to be reasonable.
Defendants’ counsel’s billed entries appropriately include drafting the motion and reply brief,
consulting with a law firm partner on strategy, conducting legal research, and reviewing the
deposition transcript to identify instances of sanctionable conduct. See Sugarman v. Village of
Chester, 213 F. Supp. 2d 304, 311 (S.D.N.Y. 2002) (finding compensable time seeking aid of law
partner and conducting legal research). After reducing the fees for Serrant and imposing the
10% discount given, Defendants’ attorney’s fees for bringing the sanctions motion amounts to
$11,697.30 ([$12,937 fees excl. Serrant + $60 Serrant adjusted fees] x 0.9).
The Court will, however, exclude time spent preparing for the Saadia deposition as the
Court’s sanctions order was limited to time expended “in taking the October 30 deposition.” 2
(ECF 333 at 13). Mr. Rosenberg block-billed the deposition entry, grouping together the
attendance at the deposition with “reviewed documents” and “corresponded with retailers,”
both of which are not entries for attending a deposition. (Rosenberg Decl., Ex. C). A review of
the October 30 deposition transcript shows that the deposition lasted 6 hours and 20 minutes.
Taking Mr. Rosenberg’s hourly rate of $580, Defendants’ attorney’s fees for taking the October

2

Assumedly, time spent preparing for the deposition would still be useful for the subsequent deposition.

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30 deposition is $3,654 ($580 x 6.3 hours). After applying the ten percent discount given to the
client, the attorney’s fees would be $3,288.60.
C. Total Liability
Using the above figures, Defendants’ attorney’s fees amount to $14,985.90 ($11,697.30
+ $3,288.60). Defendants assert in an attorney declaration that they incurred $3,271.30 in
deposition costs. (Rosenberg Decl. ¶ 15). Those costs are reasonable and are not disputed by
Plaintiff. As a result, the total fees and costs are $18,257.20. Half of that amount, Plaintiff’s
liability, therefore is $9,128.60.
II.

Motion to Seal

On October 8, 2019, Defendants’ counsel requested that their billing records be filed
under seal. (ECF 337). Defendants’ counsel only proffered justification for sealing is to protect
“Defendants’ and Defendants’ counsel’s privacy interest.” (Id. at 1).
The Second Circuit has repeatedly recognized the “presumption of access” for judicial
documents. Lugosch v. Pyramid Co. of Onondaga, 435 F.3d 110, 119 (2d Cir. 2006). Such
presumption can be overcome upon a showing that sealing is necessary to “preserve higher
values” and the sealing is “narrowly tailored to serve that interest.” Id. at 120 (quoting In re
New York Times Co., 828 F.2d 110, 116 (2d Cir. 1987)). “Broad and general findings by the trial
court, however, are not sufficient to justify closure.” Id.
Here, Defendants’ counsel’s conclusory assertion of privacy interests in its billing entries
is insufficient to overcome the presumption of public access. Defendants’ counsel has asserted
that they have already redacted entries irrelevant to the instant fee application and information
covered by attorney-client privilege. (ECF 337 at 1). The only remaining unredacted
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information, as a result, are non-privileged billing entries relevant to determining whether
Defendants’ requested fees are reasonable. Defendants’ counsel has not shown how those
entries would infringe on their privacy interests. See Bernsten v. O’Reilly, 307 F. Supp. 3d 161,
170 (S.D.N.Y. 2018) (rejecting as insufficient the movant’s assertion of “generalized ‘privacy
interests’”). Accordingly, Defendants’ counsel’s motion to seal is DENIED, and Defendants are
directed to re-file those records, Exhibits B & C to the Rosenberg Declaration at ECF 337-1, on
the docket.
III.

Conclusion

For the foregoing reasons, Defendants are hereby awarded $9,128.60 in fees and costs.
Plaintiff and its counsel shall be held jointly and severally liable for this amount, and are
directed to pay this amount within 30 days of the date of this Order. Defendants shall file
Exhibits B & C to the Rosenberg Declaration on the docket within 7 days of this Order.
SO ORDERED.

s/ Ona T. Wang
Ona T. Wang
United States Magistrate Judge

Dated: November 4, 2019
New York, New York

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