Old Navy, LLC v. Center Developments Oreg., LLC
Filing
72
OPINION AND ORDER: Old Navy's Motion for Attorney Fees 57 is granted in part in the amount of $179,340.51, its Bill of Costs 63 is denied, and its Motion to Correct or, Alternatively, Amend Judgment 60 is denied. Signed on 8/8/2012 by Judge Garr M. King. (pc)
UNITED STATES DISTRICT COURT
DISTRICT OF OREGON
PORTLAND DIVISION
Civil Case No. 3:11-472-KI
OLD NAVY, LLC,
Plaintiff,
v.
CENTER DEVELOPMENTS OREG.,
LLC,
Defendant.
Robert C. Weaver, Jr.
Adam R. Kelly
Garvey Schubert Barer
Eleventh Floor
121 S.W. Morrison Street
Portland, OR 97204-3141
Attorneys for Plaintiff
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OPINION AND ORDER ON
ATTORNEY FEES, BILL OF
COSTS, AND AMENDING THE
JUDGMENT
Dwain M. Clifford
Ball Janik LLP
101 SW Main St., Ste. 1100
Portland, OR 97204-3219
Attorney for Defendant
KING, Judge:
On June 13, 2012, I signed an Opinion and Order granting Old Navy’s motion for
summary judgment, and I signed the Judgment in Old Navy’s favor in the amount of
$572,480.72, plus interest at the rate of .18%, and attorney fees to be determined. I also denied
Center Developments Oreg., LLC’s (“CDO”) cross-motion for summary judgment and dismissed
its affirmative defenses and counterclaims with prejudice. I directed the parties to confer about
the amount of Old Navy’s attorney fees and costs and to submit a proposed order within 14 days.
Alternatively, I ordered, “[i]f the parties are unable to agree, Old Navy’s [sic] shall submit a
motion for attorney’s fees and costs within 14 days and CDO shall file a response within 7 days.”
O&O 21. The Opinion and Order and the Judgment were not “entered” until the next day.
Pending before me are Old Navy’s Motion for Attorney Fees [57] and Bill of Costs [63].
Old Navy seeks $210,988.83 in attorney fees (including $6,000 estimated for final resolution of
issues in the case) and $1,052.07 in related nontaxable expenses. It also seeks $13,093.92 in
costs. Also pending before me is Old Navy’s Motion to Correct or, Alternatively, Amend
Judgment [60] to add pre-judgment interest in the amount of either $136,999.23 (pursuant to a
provision in the Lease) or $108,295.51 (under ORS 82.010). CDO objects to the amount of
attorney fees and costs requested by Old Navy, and disputes that Old Navy is entitled to prejudgment interest.
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LEGAL STANDARDS
I.
Attorney Fees
“In a diversity case, the law of the state in which the district court sits determines whether
a party is entitled to attorney fees[.]” Carnes v. Zamani, 488 F.3d 1057, 1059 (9th Cir. 2007).
Under Oregon law, the “party that prevails” in a contract dispute is entitled to “reasonable
attorney fees in addition to costs and disbursements” if the contract specifically provides for
them. ORS 20.096(1). Here, the contract allows for “costs of suit and reasonable attorney’s
fees,” and Old Navy is the prevailing party. Compl. Ex. 1, Art. 27.11. The only remaining
inquiry is whether Old Navy’s request is reasonable. Benchmark Nw., Inc. v. Sambhi, 191 Or.
App. 520, 523, 83 P.3d 348 (2004).
The following factors are relevant to determining the reasonableness of the fees to which
a party is entitled by contract. Hanna Ltd. P’ship v. Windmill Inns of Am., Inc., 223 Or. App.
151, 165 n.7, 194 P.3d 874 (2008).
(1) A court shall consider the following factors in determining whether to award
attorney fees in any case in which an award of attorney fees is authorized by
statute and in which the court has discretion to decide whether to award attorney
fees:
(a) The conduct of the parties in the transactions or occurrences that gave
rise to the litigation, including any conduct of a party that was reckless,
willful, malicious, in bad faith or illegal.
(b) The objective reasonableness of the claims and defenses asserted by
the parties.
(c) The extent to which an award of an attorney fee in the case would deter
others from asserting good faith claims or defenses in similar cases.
(d) The extent to which an award of an attorney fee in the case would deter
others from asserting meritless claims and defenses.
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(e) The objective reasonableness of the parties and the diligence of the
parties and their attorneys during the proceedings.
(f) The objective reasonableness of the parties and the diligence of the
parties in pursuing settlement of the dispute.
(g) The amount that the court has awarded as a prevailing party fee under
ORS 20.190.
(h) Such other factors as the court may consider appropriate under the
circumstances of the case.
(2) A court shall consider the factors specified in subsection (1) of this section in
determining the amount of an award of attorney fees in any case in which an
award of attorney fees is authorized or required by statute. In addition, the court
shall consider the following factors in determining the amount of an award of
attorney fees in those cases:
(a) The time and labor required in the proceeding, the novelty and
difficulty of the questions involved in the proceeding and the skill needed
to properly perform the legal services.
(b) The likelihood, if apparent to the client, that the acceptance of the
particular employment by the attorney would preclude the attorney from
taking other cases.
(c) The fee customarily charged in the locality for similar legal services.
(d) The amount involved in the controversy and the results obtained.
(e) The time limitations imposed by the client or the circumstances of the
case.
(f) The nature and length of the attorney’s professional relationship with
the client.
(g) The experience, reputation and ability of the attorney performing the
services.
(h) Whether the fee of the attorney is fixed or contingent.
ORS 20.075(1)-(2).
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Under Oregon law, “[r]easonable attorneys’ fees include such costs as
photocopies, computer-aided research, and deposition costs that are directly billed to and
paid for by the client.” Robinowitz v. Pozzi, 127 Or. App. 464, 470-71, 872 P.2d 993
(1994). Additionally, Federal Rule of Civil Procedure 54(d)(2)(A) allows for the
recovery of “nontaxable expenses” when they are not recoverable as taxable costs under
28 U.S.C. § 1920, but when they are typically charged to a fee-paying client. Chalmers v.
City of L.A., 796 F.2d 1205, 1216 n.7 (9th Cir. 1986), amended by 808 F.2d 1373 (9th Cir.
1987).
II.
Costs
An award of costs is generally governed by federal law. In re Merrill Lynch
Relocation Mgmt., Inc., 812 F.2d 1116, 1120 n.2 (9th Cir. 1987). Federal Rule of Civil
Procedure 54(d)(1) provides, in part: “Unless a federal statute, these rules or a court
order provides otherwise, costs–other than attorney’s fees–should be allowed to the
prevailing party.” Expenses which may be taxed as costs against a losing party are
enumerated in 28 U.S.C. § 1920, as follows:
A judge or clerk of any court of the United States may tax as costs the
following:
(1) Fees of the clerk and marshal;
(2) Fees for printed or electronically recorded transcripts necessarily
obtained for use in the case;
(3) Fees and disbursements for printing and witnesses;
(4) Fees for exemplification and the costs of making copies of any
materials where the copies are necessarily obtained for use in the case;
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(5) Docket fees under section 1923 of this title;
(6) Compensation of court appointed experts, compensation of
interpreters, and salaries, fees, expenses, and costs of special interpretation
services under section 1828 of this title.
However, the discretion to grant costs does not include the authority to tax costs
beyond those authorized by statute or contract. Crawford Fitting Co. v. J.T. Gibbons,
Inc., 482 U.S. 437, 445 (1987). Thus, the discretion granted under Rule 54(d) allows a
court to decline to tax costs, but does not authorize a court to award excess costs in the
absence of a “specific congressional command.” Id. at 442. Nevertheless, Crawford “did
not prevent courts from interpreting the phrases used in § 1920.” Alflex Corp. v.
Underwriters Lab., Inc., 914 F.2d 175, 178 (9th Cir. 1990) (citation omitted) (per curiam).
III.
Amending the Judgment
Under Federal Rule of Civil Procedure 60(a), the court “may correct a clerical
mistake or a mistake arising from oversight or omission whenever one is found in a
judgment, order or other part of the record.”
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DISCUSSION
This case involved what I found to be clear and unambiguous Lease provisions. I
held in favor of Old Navy, finding it was entitled to pay Alternate Rent under the clear
terms of the Lease and, as a result, was entitled to a judgment in the amount of
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$572,480.72. Nevertheless, I think CDO’s characterization of the judgment as a
“windfall” is somewhat accurate. While there is no question in my mind that Old Navy is
entitled to judgment in its favor, Old Navy conceded it was “unaware” of any actual
damages it suffered as a result of the closure of the Key Store triggering this lawsuit. See
Clifford Decl. in Supp. of CDO’s Mot. for Summ. J. Ex. 22, Ravel Dep. 101:23-103:2
[30]. Additionally, just as I could not read the terms of the Lease “leniently” as CDO
asked, so must I strictly interpret the requirements for attorney fees, costs, and prejudgment interest.
I.
Attorney Fees and Costs
A.
Timeliness
CDO contends Old Navy’s attorney fees motion and Bill of Costs should be
denied as untimely. I ordered Old Navy to file its motion for attorney fees “within 14
days” if the parties were unable to agree on an amount. I signed the Opinion and Order
on June 13, but it was not entered on the docket until June 14. Old Navy filed its motion
on June 28. As Old Navy points out, the Court did not serve the parties with a copy of
the Opinion and Judgment until June 14 when the documents were entered on the docket.
It was not my intention to give Old Navy 13 days to file its motion. Furthermore, Federal
Rule of Civil Procedure 54(d) provides that a claim for attorney fees must be made by
motion and must “be filed no later than 14 days after the entry of judgment.” I intended
my order to be consistent with this rule. I find the motion and Bill of Costs to be timely.
B.
Amount of Attorney Fees
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Old Navy seeks $210,988.83 in attorney fees (including $6,000 estimated for final
resolution of pending issues in the case) and, pursuant to Federal Rule of Civil Procedure
54(d)(2)(A) and state law, $1,052.07 in expenses not taxable under 28 U.S.C. § 1920.
Under ORS 20.075, in evaluating whether Old Navy’s attorney fee request is
reasonable, I consider the eight factors in subsection (1) and the eight factors in
subsection (2). The first seven factors in subsection (1) are either neutral or irrelevant,
and neither party points to any additional considerations I should evaluate under factor
(h).
With respect to subsection (2), I note factor (c) directs me to consider the “fee
customarily charged in the locality for similar legal services.” To do that, I consult the
Oregon State Bar’s Economic Survey from 2007, in which the hourly rate for one of Old
Navy’s attorneys falls below the 75th percentile for attorneys practicing in the
Business/Corporate Litigation area, as well as below the rates charged by attorneys with
similar years of practice. Similarly, the hourly rate for Old Navy’s lead attorney falls
squarely between the 75th and 95th percentile, both for attorneys practicing in the
Business/Corporate Litigation area and by years of practice. Oregon State Bar, 2007
Economic Survey 28-29, available at
http://www.osbar.org/_docs/resources/07EconSurvey.pdf. Accordingly, Old Navy’s
attorneys’ hourly rates are appropriately calculated for each attorney’s experience level
and I find no need to adjust them.
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Factors (d) and (h) weigh in favor of Old Navy’s attorneys as they were fully
successful in their efforts, and their lead attorney has vast experience and a top-notch
reputation. Factors (b), (e), (f) and (h) are either neutral or irrelevant.
In the end, factor (a) is most crucial to my consideration of Old Navy’s motion. In
evaluating the “time and labor required in the proceeding,” I think a comparison of Old
Navy’s and CDO’s attorney fees is a helpful measure to some extent–particularly when
both sides were performing the same tasks in undertaking discovery and in filing crossmotions for summary judgment. For example, Old Navy spent 255 hours on summary
judgment-related tasks, while CDO spent 100 hours. As CDO points out, the parties had
the same law and the same documents at their disposal, but Old Navy spent more than
twice as long preparing its summary judgment submissions.
CDO also argues that it spent fewer than 35 hours responding to Old Navy’s
document requests, producing over 21,000 documents, while Old Navy spent 134 hours,
producing only 2,395 documents. I do take note of the disparity, although this reason
alone does not cause me to reduce Old Navy’s fee request. The time invested by Old
Navy to produce fewer documents may have meant Old Navy better separated the wheat
from the chaff. Furthermore, as Old Navy explains, it was required to review large
numbers of documents because The Gap, Inc., of which Old Navy is a subsidiary,
combines some of its services to its more than 3,000 retail stores. As a result, counsel
had to work with approximately 15 records custodians in responding to CDO’s discovery
requests.
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Another consideration under factor (a) weighs in favor of a fee reduction–the
“novelty and difficulty of the questions.” The primary issues presented on summary
judgment were not complex, requiring only an interpretation of the meaning of the Lease
and a determination about whether one of the provisions was a liquidated damages clause.
No particular skill or expertise was required and Old Navy had the easier case to make on
both issues. I conclude the total hours incurred were more than necessary.
In sum, a reduction of 15 percent is appropriate, to account for the undue
summary judgment-related time and the fact that the fees requested are high in light of the
fairly straightforward legal issues presented.1 Applying the reduction, Old Navy is
entitled to $179,340.51 in attorney fees.
Additionally, Old Navy is not entitled to $1,052.97 in related nontaxable expenses
because it failed to provide any documentation substantiating the travel, lodging, meals
and transportation costs. Corridean v. Restore Finan. Servs. Network, LLC, No. CV-06524-HU, 2007 WL 1989622, at *4 (D. Or. July 6, 2007) (request for nontaxable expenses
“not properly supported as reasonable and necessary”). Finally, Old Navy asks that I
consider its $8,472.03 expense to a third-party vendor to process electronically-stored
documents as a nontaxable expense, if I deny it as a cost under 28 U.S.C. § 1920. Since
Old Navy has failed to provide documentation of the expense and failed to attest that it
was a cost it would typically bill its fee paying client, I will not award recovery of this
expense.
C.
1
Bill of Costs
CDO represents that its fees totaled $137,500.
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Old Navy seeks $13,093.92 in costs pursuant to 28 U.S.C. § 1920. CDO objects,
arguing Old Navy did not comply with Local Rule 54-1(a)(1) because it did not “file an
affidavit and appropriate documentation” in support of its Bill of Costs. Old Navy filed
an affidavit in support of its attorney fees in which it referenced the need for copies and
the use of two third-party vendors to copy documents and to electronically process
documents, but I have, for example no documentation with which to assess the cost per
page, the cost for labor, and whether any of the copies were made for the convenience of
the attorneys. See Kelly v. U.S. Bank, No. CV-08-1421-AC, 2011 WL 2934023, at *2
(D. Or. June 21, 2011) (no supporting documentation); Corridean, No. CV-06-524-HU,
2007 WL 1989622, at *4 (same holding; also describing messenger fees and postage as
not recoverable under § 1920); Symantec Corp. v. CD Micro, Inc., No. CV-02-406-KI,
2005 WL 1972563, at *5 (D. Or. August 12, 2005) (denying copy costs due to lack of
documentation explaining purpose for copies); Hunt v. City of Portland, No. CV-08-802AC, 2011 WL 3555772, at *12 (D. Or. Aug. 11, 2011) (labor for third-party vendor to
scan, copy and number documents not recoverable); Race Tires Am., Inc. v. Hoosier
Racing Tire Corp., 674 F.3d 158, 171-72 (3rd Cir. 2012) (only certain tasks constituted
“copying;” other services performed by electronic discovery vendor were not recoverable
under § 1920).
Old Navy’s Bill of Costs is denied.
II.
Amend the Judgment
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Old Navy seeks an amendment of the Judgment to allow for pre-judgment
interest. While I believe there are questions as to whether the facts of this case justify
pre-judgment interest, I do not have to reach that issue because I conclude Old Navy
failed to adequately plead its entitlement to pre-judgment interest.
Facts sufficient to state a claim for pre-judgment interest must be specifically pled
in the plaintiff’s complaint, and a specific request for pre-judgment interest must be pled
in the prayer of the complaint, before pre-judgment interest may be awarded. See
Emmert v. No Problem Harry, Inc., 222 Or. App. 151, 158, 192 P.3d 844 (2008); STronix v. Submedia, LLC, No. CV-08-272-PK, 2010 WL 331785, at *5 (D. Or. Jan. 28,
2010) (complaint read “S-Tronix is entitled to recover pre-judgment interest”);
PacifiCorp v. Nw. Pipeline GP, __ F. Supp. 2d __, 2012 WL 2903976 (D. Or. July 16,
2012) (complaint does not seek interest); Brinker v. Chambers, No. CV-09-1342-SU,
2011 WL 1344122 (D. Or. Mar. 2, 2011) (pled “prejudgment interest”).
Although Old Navy contends its Complaint “clearly requested prejudgment
interest,” I find only a request for “interest.” Compare Mem. in Supp. of Pl.’s Mot. to
Correct 2 with Compl. ¶ 27 (prayer for damages of “not less than $526,000, plus
interest”). Furthermore, it did not identify the Lease as the basis for a pre-judgment
interest award, or ORS 82.010. In fact, I specifically reviewed the Complaint and the
parties’ briefing prior to drafting the Judgment to determine whether Old Navy requested
pre- or post-judgment interest and, not having seen any specified basis or request for prejudgment interest, I awarded post-judgment interest.
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Old Navy argues its demand for “interest” should be sufficient, but I believe a
strict construction of the pleading requirements in this case is appropriate for a number of
reasons. First, as I mentioned at the outset, Old Navy suffered no actual damage as a
result of CDO’s actions. Additionally, pre-judgment interest increases the monetary risk
a defendant faces in litigating a case–the additional hazard here was between $108,295
and $136,999–which may prompt a defendant to take a different tact in resolving a case.
I note, too, that the requested contractual and statutory rates are significantly higher than
prevailing interest rates.
I find there is no basis to amend the Judgment.
CONCLUSION
Old Navy’s Motion for Attorney Fees [57] is granted in part in the amount of
$179,340.51, its Bill of Costs [63] is denied, and its Motion to Correct or, Alternatively,
Amend Judgment [60] is denied.
IT IS SO ORDERED.
DATED this
8th
day of August, 2012.
/s/ Garr M. King
Garr M. King
United States District Judge
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