United States of America v. Acquest Transit LLC
Filing
222
DECISION AND ORDER granting 153 Motion for Attorney Fees in the amount of $30,815 to be paid by Defendants. Signed by Hon. Leslie G. Foschio on 6/29/2016. (SDW)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
________________________________________
UNITED STATES OF AMERICA,
Plaintiff,
DECISION
and
ORDER
v.
ACQUEST TRANSIT LLC,
ACQUEST DEVELOPMENT, LLC,
MR. WILLIAM L. HUNTRESS,
09-CV-55S(F)
Defendants.
________________________________________
APPEARANCES:
LORETTA E. LYNCH
UNITED STATES ATTORNEY GENERAL
Attorney for Plaintiff and Consolidated Defendants
BRADLEY L. LEVINE, SCOTT BAUER and
SIMI BHAT, Trial Attorneys
Environmental and Natural Resources Division
U.S. Department of Justice
601 D Street, NW
Washington, DC 20530-0001
SNELL & WILMER, LLP
Attorneys for Defendants
BRADLEY R. CAHOON, of Counsel
15 W. South Temple, Suite 1200
Salt Lake City, Utah 84101
RUPP BAASE PFALZGRAF CUNNINGHAM LLC
Attorneys for Defendants
MATTHEW D. MILLER, of Counsel
424 Main Street, Suite 1600
Buffalo, New York 14202
In this action pursuant to the Clean Water Act, 33 U.S.C. § 1251 et seq., (“The
Clean Water Act” or “the Act”) alleging Defendants had unlawfully polluted wetlands
located on Defendants’ property, Plaintiff obtained, on July 15, 2009, a preliminary
injunction prohibiting, as relevant, Defendants from “placing additional fill or performing
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any additional earthmoving work at the property.” Dkt. 26 at 20. Upon discovering
apparent violations of the injunction by of altering and tilling a portion of the property the
court found, after a two-day hearing, Defendants in violation of the injunction, and
awarded sanctions in the amount of a $25,000 fine and attorneys fees and costs
incurred by Plaintiff in obtaining such relief. Dkts. 76, 83, 105 (“the Preliminary
Injunction”). By papers filed November 7, 2011, Plaintiff requests $72,587.50 in
attorneys fees and $3,515.34 in related costs for services performed by Plaintiff’s
attorneys, then members of the U.S. Department of Justice’s Environment and Natural
Resources Division (“ENRD”), specifically Eric Hostetler, Scott Bauer, Christina
Richmond, and Madeline Fleisher, at the hourly rate of $200 for Mr. Hostetler and Mr.
Bauer and $150 for Ms. Richmond and Ms. Fleisher (“Plaintiff’s attorneys”). Dkt. 153 at
5. Although Plaintiff’s attorneys do not, as government attorneys, maintain
contemporaneous hourly-based time records, Dkt. 153 at 6, Plaintiff’s attorneys
provided estimates of the time expended in prosecuting the Preliminary Injunction
based on an ENRD attorney time keeping system. Dkt. 153-4 ¶ 7. According to the
record, Plaintiff’s attorneys filed 10 documents, including four briefs and a
memorandum, and two responses to Defendants’ objections to the undersigned’s
Reports and Recommendations (Dkt. 87, 92). Additionally, Plaintiff’s attorneys
participated in a two-day evidentiary hearing conducted by the court, Dkt. 153 at 6-7,
involving three witnesses and several photographs of the Defendants’ property. Id.
Plaintiff’s attorneys seek reimbursement for Mr. Hostetler’s 111.5 hours; Mr. Bauer’s 24
hours; Ms. Richmond’s 242.5 hours; and Ms. Fleisher’s 60.75 hours, Dkt. 153 at 8, and
related travel expenses and other costs such as hearing transcripts in the total amount
of $3,515.34 (“Plaintiff’s Application”).
2
In opposition, Defendants contend that the court should defer making any award
until the question of whether Defendants’ property falls within the definition of waters of
the United States, the so-called “jurisdictional” question remaining to be adjudicated in
the case is decided, Dkt. 166 at 3, 4-5, and that the reimbursement sought by Plaintiff is
insufficiently documented and otherwise excessive. Id. at 6-9.1 Alternatively,
Defendants maintain that any award be paid to the court pending determination of the
“jurisdictional” question. Dkt. 166 at 9. In particular, Defendants contend that Plaintiff’s
attorneys failed to submit contemporaneous hourly-based time records, id. at 6, and that
the Plaintiff’s attorneys’ block time recapitulations are insufficiently detailed. Id. at 7.
Defendants therefore urge that the court exercise its discretion to make an across-theboard reduction in order to arrive at a more reasonable time for the Plaintiff’s attorneys’
involvement in obtaining the Preliminary Injunction. Id. at 8-9.
Carefully read, Defendants’ contentions do not dispute Defendants are subject to
sanctions based on the court’s finding Defendants willfully violated the Preliminary
Injunction. Rather, Defendants argue the unresolved “jurisdictional” question should
excuse Defendants’ violations on the theory that if it is ultimately determined that the
wetlands on Defendants’ property are not within the purview of the Clean Water Act
because of the absence of sufficient geologic and hydrologic connections to waterways
that are subject to federal protection under the Act, the basis for the Plaintiff’s suit would
be removed, and Defendants could not therefore be guilty of having violated the
Preliminary Injunction. Dkt 166 at 5 (“Reserving decision will prevent additional
unnecessary prejudice to . . . [Defendants] that will inevitably result if . . . [Defendants]
1
This matter was stayed on November 17, 2011, Dkt. 155. Defendants’ opposition to Plaintiff’s
Application was filed July 15, 2013. The stay was lifted on June 29, 2015, Dkt. 196.
3
[are] forced to pay fees and costs to the government for time spent in connection with
improperly obtaining an injunction related to property over which it cannot lawfully assert
jurisdiction.”). This notion is based on a fundamental misunderstanding of the nature
and purpose of preliminary injunctive relief pursuant to Fed.R.Civ.P. 65(a) which is, of
course, to preserve the status quo until the merits of a case are determined in order to
avoid potential irreparable injury to a plaintiff pending the outcome of the case. BiosafeOne, Inc. v. Hawks, 524 F.Supp.2d 452, 461 (S.D.N.Y. 2007) (“A trial court has
discretion to fashion a preliminary injunction that will preserve the status quo pending a
trial on the merits.” (citing Arthur Guinness & Sons, PLC v. Sterling Pub. Co., 732 F.2d
1095, 1099 (2d Cir. 1984))). It is basic that a party subject to preliminary injunction has
a duty to comply therewith unless the injunction is modified before the party subject to
the injunction attempts to act in violation of it. GTE Sylvania, Inc. v. Consumers Union
of the United States, Inc., 445 U.S. 375, 386 (1979) (applying as “established doctrine
that persons subject to an [preliminary] injunctive order . . . are expected to obey that
decree until it is modified or reversed, even if they have proper grounds to object to the
order.”) (citing cases). “Even though the restraining order or injunction is entered by the
court erroneously or irregularly it must be obeyed until it is withdrawn or dissolved and
the failure to obey is no less contempt because the order or injunction is subsequently
found to have been irregularly or erroneously entered.” William de Funiak, HANDBOOK
OF MODERN EQUITY
(Little Brown and Company 1956). See also Matrix Essentials, Inc.
v. Quality King Distributors, Inc., 324 Fed.Appx. 22, 25 (2d Cir. 2009) (“Generally,
injunctions and restraining orders must be obeyed until overturned, and failure to do so
is punishable as contempt even though the order is later overturned.”) (internal citation
omitted). This fundamental rule is based on the need to maintain “‘respect for the
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judicial process.’” GTE Sylvania, Inc., 445 U.S. at 387 (quoting Walker v. City of
Birmingham, 388 U.S. 307, 321 (1967)). Failure to comply, regardless of the eventual
outcome of the case on the merits, amounts to a contempt of the court issuing the
injunction severely undermining the court’s authority and its ability to effectively exercise
its equitable power. See GTE Sylvania, Inc., 445 U.S. at 386.2 Condoning such a
reproach to the court equitable power by excusing a party’s violation ab initio, because
the party had eventually prevailed on the merits, seriously impairs the court’s ability to
fairly and accurately determine the merits of the action, as may well have occurred in
this case by the Defendants’ tampering with the topographical features of the wetland
property as found by the court which is the subject of Plaintiff’s lawsuit and the
prevention of which was the purpose of the Preliminary Injunction. In this case, the
court found that coercive sanctions against Defendants were required because
Defendants’ violations had altered substantial portions of the property, through
Defendants’ unauthorized tilling, crop growing, tree plantings, and a drainage ditch
alteration. Dkt. 76 at 15-18. Thus, accepting Defendants’ argument may encourage a
defendant to risk violating a preliminary injunction, hoping, like Defendants, to ultimately
prevail as to the merits and avoid sanctions, thereby vitiating the very purpose of the
injunction. A result so contrary to well-established tenets cannot be allowed.
Defendants’ requests that the court should defer consideration of Plaintiff’s Application
until a final determination on the merits of the “jurisdictional issue,” or direct payment
into a court fund are accordingly without merit.
2
Although, an injunction issued by a court without jurisdiction over the subject matter of the case cannot
be the basis of a sanction for its violation, see Emery Air Freight Corporation v. Local Union 295, 449
F.2d 586, 592 (2d Cir. 1971) (“if a court is ‘without jurisdiction’ to enter a restraining order, the order is
void and violations may not be punished . . ..”), the “jurisdiction issue” Defendants reference is the
question of applicability of the Act to Defendants’ property, not to subject matter jurisdiction of the court
over this case.
5
Turning to Defendant’s contention that Plaintiff’s Application is insufficiently
supported, Defendants’ contention that in a case, like this one, involving government
attorneys, attorneys fees may not be awarded without supporting contemporaneous
time records is also without merit. See Perez v. Lasership, Inc., 2015 WL 8750965, at
**2, 7 (D. Conn. Dec. 14, 2015) (finding that U.S. Dep’t of Labor lawyers accounted for
time expended on enforcement of the matter using contemporaneous time entries as
part of department’s Matter Management System satisfied contemporaneous record
keeping requirement supporting award of attorneys fees) (applying New York State
Ass’n. for Retarded Children, Inc. v. Carey, 711 F.2d 1136, 1148 (2d Cir. 1983)
(requiring contemporaneous time records for award of reasonable attorneys fees)).
Here, the Plaintiff’s use of the ENRD attorney record keeping system provides an
adequate basis upon which to determine Plaintiff’s Application. Id. However, as to
Defendants’ contention that the total amount of hours Plaintiff’s attorneys devoted to the
matter is excessive, the court agrees. While there is no gainsaying the importance of
the instant matter raising questions regarding the applicability of the Act to Defendants’
property, nevertheless the court is limited to an award of reasonable attorneys fees.
Perez, 2015 WL 8750965, at *1 (D.Conn. Dec. 14, 2015) (citing Kroshnyi v. U.S. Pack
Courier Servs., Inc., 771 F.3d 93, 108 (2d Cir. 2014)). Here, the proof at the evidentiary
hearing, over which the undersigned presided, was based on three witnesses, including
a local U.S. EPA agent, and several photographs. The testimony was relatively
straightforward and did not require extensive cross-examination. Defendants’ were
represented at the hearing and on post-hearing briefing by two attorneys, Joseph J.
Manna and Diane Marie Roberts. Accordingly, despite the fact that Plaintiff’s attorneys
were required to carefully investigate the merits of Defendants’ suspected violation of
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the Preliminary Injunction, as Plaintiff maintains, Dkt. 167 at 5, the court finds that
Plaintiff’s significantly overstaffed Plaintiff’s prosecution of the enforcement
proceedings. Thus, the court finds that the reimbursable time for Plaintiff’s senior
attorneys should be reduced by 50% from 135.5 hours to 68. The court also reduces by
50% Plaintiff’s request for the time incurred by Plaintiff’s two associate attorneys from
303.25 hours to 152 (rounded) hours. See Perez, 2015 WL 8750965, at *7 (reducing by
50% plaintiff’s fee request to account for the “deficiency” in plaintiff’s time records). See
also Lochren v. County of Suffolk, 344 Fed.Appx. 706, 709 (2d Cir. 2009) (approving in
discretion of district court 25% reduction in attorney fee application based on use of
“unnecessary personnel”); General Electric Company, 1997 WL 397627, at **5-6
(S.D.N.Y. July 3, 1997) (approving 40% reduction in fee application based on, inter alia,
attorney “overstaffing”). Additionally, in the exercise of its discretion the court further
reduces Plaintiff’s request by 25% to account for potential redundancy, fat-trimming and
block-billing. See Scott-Iverson v. Independent Health Association, Inc., 2016 WL
1457881, at *4 (W.D.N.Y. Apr. 14, 2016) (applying 15% fat-trimming reduction to
eliminate possible redundancy and excessive time where attorney used block-billing).
As to the reasonable hourly rate for the time devoted to the matters by the two
senior attorneys, Eric Hostetler and Scott Bauer, the court finds $200/hr. to be
reasonable in this market for counsel like Mr. Hostetler and Mr. Bauer with over 10
years experience at the time of Plaintiff’s sanctions motion. See Williams v. Beemiller,
2010 WL 891001, at *4 (W.D.N.Y. Mar. 10, 2010) (approving $200/hr. for attorneys over
10 years of experience). By the same token, the court finds $150/hr. to be a reasonable
billing rate for associates Ms. Richmond and Ms. Fleisher during the relevant period
with both then having approximately three years of experience. Id. ($150/hr. reasonable
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hourly rate for associate attorneys). Significantly, Defendants do not challenge
Plaintiff’s proposed hourly rates. Multiplied by a reasonable hourly rate of $200/hr.
equals $13,600 (rounded) for Plaintiff’s two senior attorneys. Using the same formula,
the reasonable number of reimbursable hours for Plaintiff’s associate attorneys is 152
(rounded) multiplied by $150/hr. and the reimbursable amount of these attorneys is
therefore $22,800. Added to $13,600, the reimbursable amount for Plaintiff’s two senior
attorneys, results in $36,400 for Plaintiff’s attorneys fees. Reducing by an additional
25% to trim the fat nets $27,300 total reimbursable fees. Additionally, Plaintiff seeks
reimbursement for travel expenses associated with the evidentiary hearing conducted
over two-days in the amount of $2,844.52 plus $670.82 for hearing transcripts, Dkt. 1531 at 8-9; neither amount is opposed by Defendants. Accordingly, the total amount of
Plaintiff’s attorneys fees and costs awarded to Plaintiff in connection with enforcement
of the Preliminary Injunction is $30,815 (rounded).
CONCLUSION
Based on the foregoing, Plaintiff’s Application in the amount of $30,815 to be
paid by Defendants is GRANTED.
SO ORDERED.
/s/ Leslie G. Foschio
________________________________
LESLIE G. FOSCHIO
UNITED STATES MAGISTRATE JUDGE
Dated: June 29, 2016
Buffalo, New York
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