ARNEAULT et al v. O'TOOLE et al
Filing
240
MEMORANDUM OPINION that the Court adopts the Special Masters Final Report and Recommendation, subject to modification, to the extent stated herein. Defendant Ambrose is awarded $78,353.25 in counsel fees and $1,408.47 in costs. Defendants Nicholas C. Scott and Scotts Bayfront Development, Inc. are awarded $45,072.50 in attorneys fees and $2,106.98 in costs. Signed by Magistrate Judge Susan Paradise Baxter on 12/2/16. (lrw)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
EDSON R. ARNEAULT, et al.,
Plaintiff,
v.
KEVIN O’TOOLE, et al.,
Defendants.
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Case No. 11-95 ERIE
Magistrate Judge Baxter
MEMORANDUM OPINION1
M.J. Susan Paradise Baxter
Presently pending in the above-captioned matter are the requests for attorneys’ fees and
costs of certain Defendants who prevailed, in part, in the underlying litigation. The matter was
referred to a Special Master, who issued a Report and Recommendation as to an appropriate fee
award. Plaintiffs and the prevailing Defendants have each raised various objections to the
Report and Recommendation. For the reasons that follow, the Court will adopt the Special
Master’s recommendations in part and will award fees and costs, as set forth herein.
I. INTRODUCTION
This litigation was commenced in 2011 by Plaintiffs Edson R. Arneault (“Arneault”) and
Gregory Rubino (“Rubino”), who sought redress against twenty-six (26) separate Defendants for
alleged civil rights violations and related wrongdoing in connection with the licensing and
operation of Presque Isles Downs, a casino in Erie, Pennsylvania. Among the named Defendants
were Nicholas C. Scott and Scott’s Bayfront Development, Inc. (collectively, the “Scott
1
In accordance with the provisions of 28 U.S.C. §636(c)(1), the parties to this action voluntarily consented to
having a United States Magistrate Judge exercise jurisdiction over this matter. (See ECF Nos. 123, 124, 125, 126,
127, 128, 129, and 130.)
1
Defendants”) and their attorney, Leonard Ambrose (“Ambrose”). In their operative pleading,
Plaintiffs asserted eleven causes of action, including claims against Ambrose and the Scott
Defendants for conspiracy to violate Plaintiffs’ civil rights (Amended Complaint Count X) and
defamation (Amended Complaint Count XI).
On March 28, 2012, the Honorable Sean J. McLaughlin dismissed all of Plaintiffs’
federal civil rights claims with prejudice, including the conspiracy claim at Count X, for failure
to state a claim upon which relief could be granted. The court declined to exercise supplemental
jurisdiction over the remaining state law claims, including the defamation claim at Count XI.
Accordingly, those claims were dismissed without prejudice to Plaintiffs’ right to pursue them in
state court. See generally Arneault v. O’Toole, 864 F. Supp. 2d 361 (W.D. Pa. 2012).
Thereafter, all of the named Defendants – including Ambrose and the Scott Defendants -- sought
attorneys’ fees. (ECF Nos. 86, 87, 89, 90, 91, 93 and 94.)
Following Judge McLaughlin’s resignation from the bench, the case was transferred to
the Honorable Arthur Schwab and, subsequently, to the undersigned by consent of the parties. In
the meantime, Judge Schwab had referred the Defendants’ motions for attorneys’ fees to Special
Master Arthur H. Stroyd, Jr. (ECF No. 120). By Order dated December 11, 2013 (ECF No.
142), this Court adopted Special Master Stroyd’s recommendation that the motions for counsel
fees be granted (ECF No. 131) in amounts that would be determined through subsequent
proceedings.
Certain of the Defendants subsequently settled their claims against Plaintiffs for counsel
fees and, thereafter, Special Master Stroyd filed a Report and Recommendation addressing the
remaining claims (ECF No. 207). As of this writing, the only outstanding claims for attorneys’
2
fees are those being asserted by Ambrose and the Scott Defendants. Ambrose seeks to recover
$87,057.47 in fees and costs,2 while the Scott Defendants seek to recover $79,726.98.
In his Report and Recommendation, Mr. Stroyd recommended that Ambrose be awarded
$41,901.22 in counsel fees and $1,408.47 in costs.3 (R&R ¶¶ 119 and 129, ECF No. 207.) As
for the Scott Defendants, he recommended an aggregate award of $48,410.00.4 (Id. ¶155.) In
arriving at these figures, Mr. Stroyd made the following findings and conclusion, either explicitly
or implicitly:
the relevant community for purposes of determining a reasonable billing rate is
Erie/Northwestern Pennsylvania (id. at ¶¶ 54, 104, 134);
based on the nature of this litigation and the respective credentials of the prevailing
Defendants’ counsel, an hourly rate of between $150 and $350 would be reasonable
for the Erie/Northwest Pennsylvania legal market (id. at ¶¶ 59, 106);
the appropriate lodestar figure for Ambrose’s counsel fees was $83,802.45 (id. at
¶118);
the lodestar should be reduced by fifty percent (50%) to account for the fact that
approximately one-half of the time Ambrose’s counsel spent defending this lawsuit
would have been incurred even in the absence of the frivolous claim at Count X (id.
at ¶128);
the appropriate lodestar figure for the Scott Defendants’ counsel fees was $96,820.00
(id. at ¶153); and
2
Ambrose and the Scott Defendants are “prevailing parties” – and therefore eligible for
a fee award -- as to the §1983 conspiracy claim at Count X of the Amended
Complaint, but they are not “prevailing parties” as to the defamation claim at Count
XI (R&R ¶¶ 24-26);
the lodestar should be reduced by fifty percent (50%) to account for the fact that
approximately one-half of the time the Scott Defendants’ counsel spent defending this
Ambrose’s petition originally sought $94,076.44 in fees and costs. He has since modified his request.
3
Neither side appears to object to the Special Master’s recommendation that Ambrose be awarded $1,408.47 in
costs. Accordingly, the Court will adopt that recommendation without further discussion.
4
This figure is based on a percentage of the aggregate amounts billed to the Scott Defendants by their legal counsel.
Because those aggregate amounts included both costs and fees, it appears that a certain, unspecified portion of the
recommended award is attributable to costs.
3
lawsuit would have been incurred even in the absence of the frivolous claim at Count
X (id. at ¶154).
Objections to the Report and Recommendation have been filed by the Scott Defendants,
Plaintiffs, and Ambrose. (See ECF Nos. 210, 212, and 213, respectively.) The parties have also
filed their responses in opposition to, and in support of, the various objections. (See ECF Nos.
214, 215, 216, 217, 220.) As a result, the relevant issues have been sufficiently joined and are
ripe for resolution.
II. STANDARD OF REVIEW
A District Court reviews de novo the factual findings and legal conclusions in a Special
Master's Report and Recommendation. See Fed. R. Civ. P. 53(f)(3)(“The court must decide de
novo all objections to findings of fact made or recommended by a master” unless the parties
stipulate, with court approval, that findings will be reviewed for clear error or will be final.); Fed.
R. Civ. P. 53(f)(4)(“The court must decide de novo all objections to conclusions of law made or
recommended by a master.”). In acting on the Special Master's Report and Recommendation,
“the court...may adopt or affirm, modify, wholly or partly reject or reverse, or resubmit to the
Master with instructions.” Fed. R. Civ. P. 53(f)(1). See also Koninklijke Philips Elecs. N.V. v.
ZOLL Lifecor Corp., No. 12-1369, 2016 WL 2983654, at *2 (W.D. Pa. May 24, 2016) (citing
Fed. R. Civ. P. 53(f)).
III. DISCUSSION
The pending fee requests find their genesis in 42 U.S.C. §1988, which authorizes the
District Court to award “a reasonable attorney’s fee as part of the costs” to the prevailing party in
a §1983 lawsuit. See 42 U.S.C. §1988(b). When awarding attorney’s fees and costs under
Section 1988, courts within the Third Circuit use the “lodestar” method. See Maldonado v.
4
Houstoun, 256 F.3d 181, 184 (3d Cir. 2001). The first step in this process is to calculate “the
product of the hours reasonably expended and the applicable hourly rate for the legal services.”
Pub. Interest Research Grp. of N.J., Inc. v. Windall, 51 F.3d 1179, 1185 (3d Cir.1995) (citing
Hensley, 461 U.S. at 433). The “party seeking attorney fees bears the ultimate burden of
showing that its requested hourly rates and the hours it claims are reasonable.” Interfaith Cmty.
Org. v. Honeywell Int'l, Inc., 426 F.3d 694, 703 n.5 (3d Cir. 2005) (citing Rode v. Dellarciprete,
892 F.2d 1177, 1183 (3d Cir.1990)). To satisfy this burden, the party seeking fees is initially
required to submit evidence supporting the hours worked and the rates claimed. Id. To the
extent it seeks to challenge the fees sought, “the opposing party must then object ‘with sufficient
specificity’ to the request.” Id. (quoting Rode, (892 F.2d at 1183)).
“A District Court has substantial discretion in determining what constitutes a reasonable
rate and reasonable hours, but once the lodestar is determined, it is presumed to be the reasonable
fee.” Lanni v. New Jersey, 259 F.3d 146, 149 (3d Cir. 2001) (citing Rode, 892 F.2d at 1183).
“Following a determination of the lodestar, either party may seek adjustment. If that party meets
the burden of proving that an adjustment is appropriate, the lodestar amount may be increased or
reduced at the discretion of the District Court.” Id. (citing Rode, 892 F.2d at 1183).
While counsel fees may be awarded to a prevailing defendant in a civil rights action, any
such award must be related to “costs that the defendant would not have incurred but for the
frivolous claims.” Fox v. Vice, 563 U.S. 826, 829 (2011). A court must therefore determine
“whether the costs would have been incurred in the absence of the frivolous allegation.” Id. at
838.
5
A. Plaintiffs’ Preliminary Objections
1. Ex parte Communications
As a preliminary matter, the Court will consider Plaintiffs’ objection to certain ex parte
communication that the Special Master had in connection with these proceedings. In particular,
Plaintiffs note that Mr. Stroyd communicated with this Court once when he requested that the
MTR Defendants submit their invoices for ex parte, in camera review (Text Order dated 5/22/14)
and again when he sought an extension of his deadline for filing the Report and
Recommendation (Text Order dated 5/29/14). Plaintiffs further note that Mr. Stroyd had
additional, unspecified communications with the Court, as reflected on his invoice. Finally,
Plaintiffs note that the MTR Defendants submitted invoices to the Special Master on May 22,
2014 but failed to copy Plaintiffs on the accompanying correspondence. Plaintiffs insist that
these various communications were “wholly inappropriate” and constitute error on the part of the
Special Master.
Pursuant to Federal Rule of Civil Procedure 53, a master “must not have a relationship to
the parties, attorneys, action, or court that would require disqualification of a judge under 28
U.S.C. §455, unless the parties, with the court’s approval, consent to the appointment after the
master discloses any potential grounds for disqualification.” Fed. R. Civ. P. 53(a)(2). To that
end, a master – prior to appointment -- must submit an affidavit disclosing any basis that may
exists for disqualification under §455.5 Fed. R. Civ. P. 53(b)(3)(A). In this case, Mr. Stroyd
5
Pursuant to 28 U.S.C. §455(a), a judge “shall disqualify himself in any proceeding in which his impartiality might
reasonably be questioned.” 28 U.S.C. §455(a). Under subsection (b), a judge “shall also disqualify himself” in the
following circumstances:
(1) Where he has a personal bias or prejudice concerning a party, or personal knowledge of disputed
evidentiary facts concerning the proceeding;
6
complied with the strictures of Rule 53 and 28 U.S.C. §455 by filing an affidavit attesting to the
fact that he had no personal bias or prejudice in this matter; no personal knowledge of disputed
evidentiary facts; no prior attorney-client relationship with any of the parties herein; no
economic or other interest in the litigation, and no other disqualifying conflicts. (See ECF No.
119.)
Insofar as this Court’s communications with Mr. Stroyd are concerned, Plaintiffs have
failed to demonstrate any impropriety that would warrant the removal of Mr. Stroyd, a wholesale
rejection of his Report & Recommendation, or a recusal of the undersigned. Notably, Plaintiffs
have not raised any argument for disqualification under § 455. Instead, Plaintiffs appear to argue
that Mr. Stroyd’s communications violated Federal Rule of Civil Procedure 53. This argument is
baseless.
(2) Where in private practice he served as lawyer in the matter in controversy, or a lawyer with whom he
previously practiced law served during such association as a lawyer concerning the matter, or the judge or
such lawyer has been a material witness concerning it;
(3) Where he has served in governmental employment and in such capacity participated as counsel,
adviser or material witness concerning the proceeding or expressed an opinion concerning the merits of
the particular case in controversy;
(4) He knows that he, individually or as a fiduciary, or his spouse or minor child residing in his
household, has a financial interest in the subject matter in controversy or in a party to the proceeding, or
any other interest that could be substantially affected by the outcome of the proceeding;
(5) He or his spouse, or a person within the third degree of relationship to either of them, or the spouse of
such a person:
(i) Is a party to the proceeding, or an officer, director, or trustee of a party;
(ii) Is acting as a lawyer in the proceeding;
(iii) Is known by the judge to have an interest that could be substantially affected by the outcome of
the proceeding;
(iv) Is to the judge's knowledge likely to be a material witness in the proceeding.
Id. at §455(b). Grounds for disqualification under §455(a) are waivable, while those under §455(b) are not. See id.
at §455(e).
7
Pursuant to Rule 53(b)(2)(B), an order appointing a master must indicate, among other
things, “the circumstances, if any, in which the master may communicate ex parte with the court
or a party.” Fed. R. Civ. P. 53(b)(2)(B). The Advisory Committee notes to the 2003
amendments recognize that ex parte communications between a master and the court present
“troubling questions.” Fed. R. Civ. P. 53, Advisory Committee Notes (2003 Amendments).
While observing that “[o]rdinarily the order [appointing the master] should prohibit such
communications,” id., the Advisory Committee also recognized that “there may be circumstances
in which the master’s role is enhanced by the opportunity for ex part communications with the
court.” Id. Ultimately, Rule 53 “does not directly regulate these matters” and “requires only that
the court exercise its discretion and address the topic in the order of appointment.” Id.
In this case, Judge Schwab’s order appointing Mr. Stroyd expressly stated that “the
Special Master may communicate with the Court ex parte on all matters as to which the Special
Master has been empowered to act.” (Order dated 9/6/13, ECF No. 120.) All of the
communications between Mr. Stroyd and the undersigned pertained directly to matters within the
scope of Mr. Stroyd’s appointment. This Court has not obtained any extrajudicial information
concerning the parties or this litigation that would warrant disqualification of the undersigned
pursuant to §455. Moreover, the Court’s review is plenary as to both the factual and the legal
determinations set forth in the Special Master’s Report and Recommendation. Consequently, the
Court finds no merit to Plaintiff’s objection insofar as it is premised on communications that may
have occurred between Mr. Stroyd and this Court.
Similarly, to the extent the MTR Defendants communicated with Mr. Stroyd on an ex
parte basis in connection with submitting their billing records under seal, the Court is not
persuaded that this constituted grounds for the removal of Mr. Stroyd under either §455 or Rule
8
53. The Advisory Committee’s notes acknowledge that, while ex parte communications between
a master and the parties should generally be discouraged or prohibited, they “may prove useful
..., as with in camera review of documents to resolve privilege questions.” Fed. R. Civ. P. 53
(Advisory Committee Notes)(2003 Amendments). This is precisely the type of ex parte
communication which occurred in this case. In any event, however, the point is now moot, as
Plaintiffs have reached a settlement with the MTR Defendants relative to their request for
counsel fees.
2. The Special Master’s Finding that Plaintiffs’ Claims Were Frivolous
Plaintiffs also object to Mr. Stroyd’s determination that the §1983 claims asserted against
Ambrose and the Scott Defendants were frivolous. This particular finding was set forth in Mr.
Stroyd’s prior Report and Recommendation of October 4, 2013 (ECF No. 131). This Court
adopted that R&R in its Order of December 11, 2013 (ECF No. 142), wherein the Court granted
the Defendants’ motions for attorney fees in amounts yet to be determined.
To the extent Plaintiffs are seeking to relitigate an issue in this case that was previously
decided, their objection is in the nature of a motion for reconsideration. While district courts
have the inherent power to reconsider interlocutory decisions, “‘[c]ourts tend to grant motions
for reconsideration sparingly and only upon the grounds traditionally available under
Fed.R.Civ.P. 59(e).’” Deeters v. Phelan Hallinan & Schmieg, LLP, Civil Action No. 3:11–252,
2013 WL 6524625, at *2 (W.D. Pa. Dec.12, 2013) (quoting A & H Sportswear Co., Inc. v.
Victoria's Secret Stores, Inc., CIV. A. 94–7408, 2001 WL 881718, at *1 (E.D. Pa. May 1, 2001))
(alteration in the original). Reconsideration is generally appropriate where: (1) there has been
an intervening change in the controlling law; (2) there is new evidence that was not previously
available; and (3) there is a need to correct a clear error of law or prevent manifest injustice. See
9
Max's Seafood Café ex rel. Lou–Ann, Inc. v. Quinteros, 176 F.3d 669, 677 (3d Cir.1999);
Deeters, 2013 WL 6524625, at *2. Because courts have a strong interest in the finality of their
rulings, a motion for reconsideration should not be used as a vehicle for merely expressing
dissatisfaction with a prior ruling. Deeters, supra, at *2; D'Angio v. Borough of Nescopeck, 56
F. Supp. 2d 502, 504 (M.D. Pa. 1999). Nor should a motion for reconsideration be used “as a
means to reargue matters already argued and disposed of or as an attempt to relitigate a point of
disagreement between the Court and the litigant.” Ogden v. Keystone Residence, 226 F. Supp. 2d
588, 606 (M.D. Pa. 2002). See also Deeters, supra, at *2.
Plaintiffs have failed to establish that any of the circumstances warranting
reconsideration are present here. Instead, they proffer only their own personal survey of the case
law to support the unremarkable proposition that awards of counsel fees to a prevailing
defendant in a civil rights case is the “exception, rather than the rule.” (Pls.’ Objections at ¶186,
ECF No. 212.)
Upon consideration of Plaintiffs’ arguments, the Court remains unpersuaded that its prior
ruling was clearly erroneous or will result in any manifest injustice to Plaintiffs. Consequently,
Plaintiffs’ objection is overruled.
B. Defendant Ambrose’s Fee Petition
Special Master Stroyd determined that the appropriate lodestar amount for Ambrose’s fee
request was $83,802.45. (R&R ¶118.) Mr. Stroyd arrived at this figure by making the following
determinations as to the reasonable hourly rates for, and reasonable number of hours expended
by, each of Ambrose’s attorneys:
10
Attorney
William Pietragallo, II
Robert R. Leight
Jeanette H. Ho
Peter S. Wolff
TOTAL
Hours
35.24
38.1
250.2
85.85
Rate
$350.00
$232.00
$186.00
$186.00
Totals
$12,334.00
$8,877.30
$46,537.20
$16,053.95
$83,802.45
After arriving at this lodestar figure, Special Master Stroyd concluded that a fifty percent
(50%) reduction of the lodestar was appropriate on the theory that approximately one-half of the
time expended by Ambrose’s counsel defending this lawsuit would have been spent even in the
absence of the frivolous §1983 claim. Based on these calculations, Mr. Stroyd recommended
that Ambrose be awarded $41,901.22 in counsel fees.
Both Ambrose and Plaintiffs object to various aspects of the Special Master’s
recommendations. Ambrose contends that Mr. Stroyd erred by: (a) improperly reducing the
hourly rates of his attorneys; (b) improperly awarding only half of the fees that Ambrose
incurred in connection with the Plaintiffs’ appeal; (c) improperly awarding only half of the fees
that Ambrose incurred in connection with litigating the instant fee petition; and (d) failing to
reimburse Ambrose for all of the reasonable fees that were generated in connection with
obtaining a dismissal of the §1983 claim at the District Court level. Plaintiffs, on the other hand,
contend that Special Master Stroyd erred by: (i) awarding too high an hourly fee to Ambrose’s
lead attorney; (ii) awarding fees related to Ambrose’s “unnecessary” participation in the
appellate proceedings; (iii) failing to exclude hours billed in connection with “unnecessary” factgathering work; (iv) failing to otherwise properly limit the fee award in accordance with Fox v.
Vice; and (v) failing to reduce the lodestar based on the real “threat of injury” that Ambrose’s
conduct posed to Plaintiffs. As discussed below, certain of the parties’ objections have merit.
11
1. Hours Reasonably Expended By Counsel
In arriving at his recommended fee award, Special Master Stroyd examined the billing
records of Ambrose’s attorneys for evidence of excessive, redundant, or otherwise unnecessary
charges. Mr. Stroyd concluded that counsels’ entries generally reflected a reasonable
expenditure of time.6 As set forth above, Mr. Stroyd found that the following numbers of hours
were reasonably expended by Ambrose’s attorneys: 35.24 hours for Mr. Pietragallo; 38.1 hours
for Mr. Leight; 250.2 hours for Ms. Ho, and 85.85 hours for Mr. Wolff. These figures
encompass hours that were charged in defense of Ambrose at both the district and appellate court
levels, as well as time charged by counsel in connection with the instant fee petition.
a) HOURS SPENT WORKING ON PLAINTIFFS’ APPEAL
Plaintiffs object that the lodestar figure should not include any time that Ambrose’s
attorneys billed in connection with their participation in appellate proceedings because, in
Plaintiffs’ opinion, Ambrose’s participation was unnecessary. This Court does not agree.
First, the issues that Plaintiffs raised on appeal directly implicated Ambrose’s legal
interests. Plaintiffs argued, in part, that the District Court had erred when it determined that
Arneault did not plead viable due process or First Amendment retaliation claims. These issues
directly impacted Ambrose, as the alleged due process and First Amendment violations were the
underpinning for Arneault’s conspiracy claim against Ambrose in Count X. Indeed, Plaintiffs
expressly argued to the court of appeals that, because the District Court had erred in dismissing
Counts I through III, and because the District Court had dismissed Count X (along with other
6
There is one minor exception: Special Master Stroyd opined that 8.2 hours of Ms. Ho’s work in connection with
the appellate proceedings should be excluded as unnecessary and duplicative. (R&R ¶¶ 17, 118 and n.17.) Ambrose
does not challenge this particular adjustment, and the Court will therefore incorporate it into the relevant lodestar
calculation.
12
counts) on the basis that it was dependent on Counts I through III, the District Court’s dismissal
of Count X should be reversed as well. (See Pls.’ Principal Appellate Br. at 80.)
Plaintiffs also argued on appeal that the District Court had erred in refusing to let them
amend their complaint. Had this argument been accepted by the Court of Appeals, Plaintiffs
would have been able to reassert their conspiracy claims against Ambrose and the other named
Defendants, thereby prolonging the litigation. Ambrose therefore had an incentive to
demonstrate – on as many bases as possible -- that the conspiracy claims suffered from
deficiencies that could not be remedied by way of a curative amendment. To that end, he quite
reasonably attempted to persuade the Court of Appeals that: the Plaintiffs’ Section 1983
conspiracy claims were barred by the statute of limitations; Rubino had waived any attempt to
contest this defense by failing to raise a challenge on appeal; Plaintiffs did not allege facts
sufficient to support a plausible conspiracy between Ambrose and the government defendants;
and any attempt to replead Count X would have been futile. Plaintiffs’ suggestion that
Ambrose’s appellate arguments were unnecessary to a resolution of the appeal is belied by the
fact that they fully engaged his arguments in their reply brief to the Court of Appeals.7
Plaintiffs nevertheless insist that Ambrose acted unreasonably by independently litigating
the foregoing issues through his own counsel, as opposed to simply relying on the government
Defendants’ counsel to protect his rights. Again, the Court is not persuaded. The government
Defendants’ attorneys did not represent Ambrose for purposes of the appeal, and the fact that
there was a joint defense agreement in place did not guarantee that the appellate court would
7
Specifically, Plaintiffs took the position that: (i) the manner in which the appellate issues were framed did not
constitute a waiver of Plaintiffs’ right to challenge the dismissal of the conspiracy claim at Count X (Reply Br. at
21-22); (ii) the conspiracy claim at Count X was not barred by the applicable statute of limitations (Reply Br. at 2328); and (iii) the District Court abused its discretion in finding that further amendment would be futile because
Plaintiffs could “allege with greater particularity the nature, structure, and extent of the conspiracies alleged in
Counts VII and X.” (Reply Br. at 29.)
13
have recognized the government Defendants’ counsel as authorized to speak on Ambrose’s
behalf. Furthermore, Ambrose asserted grounds for an affirmance of the District Court’s
dismissal of Count X that were separate and distinct from the arguments raised by the
government Defendants. In sum, Ambrose’s rights could have been prejudiced had he not
participated in the appeal and, consequently, this Court agrees with Special Master Stroyd that
the time billed for this aspect of the litigation was generally reasonable, appropriate, and
compensable.
b) APPLICATION OF FOX V. VICE
As a related matter, the Court must consider whether hours that were otherwise
reasonably expended by Ambrose’s counsel are nevertheless non-compensable pursuant to the
Supreme Court’s ruling in Fox v. Vice, 563 U.S. 826 (2011).8 In accordance with Fox, any
award must be related to “costs that the defendant would not have incurred but for the frivolous
claims.” 563 U.S. at 829. The dispositive inquiry is “whether the costs would have been
incurred in the absence of the frivolous allegation.” Id. at 838.
In this case, the Special Master applied the rule of Fox by first calculating the lodestar
amount and then applying an across-the-board, fifty percent (50%) reduction of that amount
under the theory that half of the time billed by Ambrose’s attorneys would not have been
incurred in the absence of the frivolous conspiracy claim. Both Plaintiffs and Ambrose object to
Special Master Stroyd’s application of Fox in this manner. Ambrose contends that Plaintiffs
should pay the entirety of the $22,417.50 in fees he incurred relative to Plaintiffs’ appeal9 as well
8
Special Master Stroyd treated the fee allocation issue as grounds for adjustment to the lodestar figure. Because
Fox addresses the question of whether fees are properly awardable in the first place, the Court will address the
allocation issue as part of its initial lodestar calculation.
9
Ambrose calculates these fees as follows:
14
the entirety of the $13,700 in fees he incurred in litigating the instant fee petition.10 As to the
remainder of his fee request, Ambrose argues that the 50% reduction produced an undeserved
windfall to Plaintiffs because he had already limited his fee petition in accordance with Fox. On
the other hand, Plaintiffs insist that the Special Master’s recommended fee award improperly
includes charges that Ambrose would have necessarily incurred in defense of the nonfrivolous
defamation claim.
As an initial point, the Court finds Ambrose’s objections meritorious insofar as they
relate to the fees he incurred in connection with Plaintiffs’ appeal and his litigation of the instant
fee petition. Absent the §1983 claim at Count X, Ambrose would not have incurred these legal
charges. Accordingly, all of the hours reasonably billed for those activities should be included as
part of the lodestar calculation.
A closer question is presented with respect to hours that were billed in connection with
Ambrose’s defense of Count X at the District Court level. To reiterate, “the dispositive
question” is “whether the costs would have been incurred in the absence of the frivolous
allegation.” Fox, 563 U.S. at 838. Ambrose represents that he reasonably incurred $49,461.50
Attorney
William Pietragallo, II
Robert R. Leight
Jeanette H. Ho
Peter S. Wolff
TOTAL
10
Hours
2.45
1.6
46.9
58.9
109.85
Rate
$350.00
$250.00
$200.00
$200.00
Totals
$857.50
$400.00
$9,380.00
$11,780
$22,417.50
Rate
$350.00
$250.00
$200.00
$200.00
Totals
$175.00
$175.00
$12,980
$440.00
$13,770.00
Ambrose calculates these fees as follows:
Attorney
William Pietragallo, II
Robert R. Leight
Jeanette H. Ho
Peter S. Wolff
TOTAL
Hours
.5
.7
64.9
2.2
68.3
15
in legal fees in connection with his defense of Count X prior to Plaintiffs’ appeal. These fees are
broken down as follows:11
Attorney
William Pietragallo, II
Robert R. Leight
Jeanette H. Ho
Peter S. Wolff
TOTAL
Hours
31.29
32.2
134.55
17.75
215.79
Rate
$350.00
$250.00
$200.00
$200.00
Totals
$10,951.50
$8,050.00
$26,910.00
$3,550.00
$49,461.50
As to these charges, Ambrose contends that his fee petition complies with Fox because it:
(1) excluded work that was unrelated to the defense of the frivolous Section 1983 claims; (2)
excluded work that would have been performed if Plaintiffs had only brought the defamation
claim; and (3) included only half the hours attributable to activities that may have pertained to
both the §1983 claim at Count X and the defamation claim at Count XI.
Plaintiffs object that many of the time entries set forth in Ambrose’s legal bills pertain to
work that counsel would necessarily have had to perform even if Plaintiffs had only asserted the
defamation claim. As to these entries, Plaintiffs argue, it was not sufficient for Ambrose to
simply cut the number of hours in half. Instead, Plaintiffs insist that the entirety of these entries
must be excluded from the fee calculation, pursuant to the rule of Fox. In Plaintiffs’ estimation,
Ambrose’s fee petition includes 272.5 hours of non-compensable work, some of which was cut
in half by Ambrose, and some of which was not. (See ECF No. 217 at p. 8; ECF No. 200 at pp.
2-6 and Ex. A.)
11
In their response in opposition to Ambrose’s fee petition (ECF No. 200), Plaintiffs argued that Ambrose could not
recover fees incurred in connection with his counsels’ review and analysis of the original and amended complaints,
because this work would have been performed even in the absence of the §1983 claim at Count X. (See id. at p. 6.)
Ambrose conceded this point in his reply brief. (See ECF No. 202 at p. 5.) Accordingly, the chart does not include
time that Ambrose’s counsel spent reviewing and analyzing the pleadings in this case.
16
The parties’ objections implicate the following questions: (i) whether a generalized
“across-the-board” reduction of attorney hours can be an acceptable means of applying the rule
of Fox, and (ii) if so, whether the Special Master properly applied such a reduction in this case.
The Court answers the first inquiry in the affirmative. As a general matter, the Court is
not persuaded that Fox requires the type of line-item analysis proposed by Plaintiffs, nor is the
Court convinced that Fox requires all of the challenged time entries to be excluded in their
entirety. The Supreme Court expressly recognized in Fox that, while a fee applicant must submit
appropriate documentation to meet his burden of establishing entitlement to an award, ”trial
courts need not, and indeed should not, become green-eyeshade accountants.” 563 U.S. at 838.
Rather, “[t]he essential goal in shifting fees (to either party) is to do rough justice, not to achieve
auditing perfection.” Id. To that end, “trial courts may take into account their overall sense of a
suit, and may use estimates in calculating and allocating an attorney’s time.” Id. Accordingly,
with respect to time entries that could conceivably relate to both the frivolous claim at Count X
and the nonfrivolous claim at Count XI, the Court concludes that it is acceptable under Fox to
account for any additional costs that are solely and exclusively attributable to the frivolous claim
by applying an appropriate across-the-board reduction to the number of hours that were
otherwise reasonably billed.
The next question to be answered, then, is whether the Special Master correctly applied
this principle when he applied an across-the-board fifty percent (50%) reduction to the lodestar
figure. In this case, Special Master Stroyd based his fee allocation on his overall sense of the
suit, as follows:
In accordance with these teachings of Justice Kagan [in Fox v. Vice], Defendant
Ambrose’s counsel estimated that approximately 50% of the time that was spent
in defending against the claims in this lawsuit would not have been spent in the
absence of the frivolous claims in Count X (Doc. No. 197), and that calculation
17
conforms with the objective analysis of those time entries that has been
independently conducted at this time, in that approximately half of the fees
incurred in defending Defendant Ambrose would have been incurred in the
absence of the frivolous claims in Count X.
(R&R ¶128.) Based on this reasoning, Mr. Stroyd first calculated a lodestar figure (i.e.,
$83,802.45), then proceeded to reduce Ambrose’s lodestar fee by fifty percent, resulting in an
award of $41,901.22.
Ambrose contends that the Special Master erred in this regard. According to Ambrose,
he never conceded that a general across-the-board reduction of 50% was appropriate; rather, he
simply recognized that, with respect to certain of the charges incurred at the District Court level,
it was appropriate to cut counsels’ time entries in half in order to account for that portion of the
legal fees that would have been incurred even in the absence of the §1983 claim. Because these
billing cuts were already figured into his fee petition, Ambrose argues that it was error for the
Special Master to apply an additional 50% reduction to the lodestar figure.
The Court agrees that the Special Master’s recommendation improperly excludes certain
fees which Ambrose is entitled to recover. For the reasons previously discussed, this Court is of
the view that Ambrose is entitled to recover all of the fees he reasonably incurred relative to the
appellate proceedings and all of the fees he incurred relative to the instant fee petition. With
regard to the legal work performed at the District Court level in defense of Count X, the Court is
generally satisfied that Ambrose’s fee petition sets forth, with sufficient accuracy, the number of
attorney hours that would not have been billed but for Plaintiffs’ inclusion of the frivolous §1983
claim.12 Implicit in Ambrose’s fee petition is the assumption that, with regard to tasks that
involved legal work on both Counts X and XI, the inclusion of the §1983 claim essentially
doubled the amount of work that counsel had to perform. Based on this Court’s review of the
12
One exception, as discussed herein, pertains to fact-gathering work, which will be excluded from the Court’s
lodestar calculation.
18
record and its sense of the underlying litigation, the Court finds that this is a reasonable estimate
and an acceptable method of applying the rule of Fox.
In arguing to the contrary, Plaintiffs basically assume that Ambrose’s defense of the
§1983 claim was entirely coextensive with his defense of the defamation claim – that is, any
work performed in defense of Count X would necessarily have been performed to the same
extent in defense of Count XI. The Court is not convinced that this is a fair assumption.
Although the two claims were factually related, they were not identical. Indeed, it could
reasonably be argued that the presence of the federal conspiracy claim significantly complicated
Ambrose’s defense insofar as the conspiracy claim premised his liability on actions allegedly
taken in concert with various government officials. The elements of a defamation claim, of
course, differ substantially from the elements of a §1983 conspiracy claim, the essence of which
is an agreement to deprive a person of federally protected rights.13 In defending Arneault’s
defamation claim, Ambrose’s chief argument was that he never made any defamatory statements
about Arneault. By contrast, Ambrose defended Arneault’s §1983 conspiracy claim by arguing
that Arneault had failed to allege the requisite predicate constitutional violations under First
Amendment, due process, and/or equal protection theories. In defending the defamation claim
brought by Rubino, Ambrose argued that the challenged statements were privileged, that he was
immune under the Noerr-Pennington doctrine, and that the defamation claim was time-barred.
To a limited extent, these defenses – most notably Noerr-Pennington immunity -- overlapped
with Ambrose’s defenses on the §1983 claim. However, Ambrose also defended Rubino’s
13
To prove defamation, the plaintiff must establish: (1) the defamatory character of the communication; (2) its
publication by the defendant; (3) its application to the plaintiff; (4) the recipient’s understanding of its defamatory
meaning; (5) the recipient’s understanding of the statement as it was intended to be applied to the plaintiff; (6)
special harm resulting to the plaintiff from its publication; and (7) abuse of a conditionally privileged occasion. See
42 Pa. Const. Stat. Ann. §8343(a). By contrast, “[i]n order to prevail on a conspiracy claim under § 1983, a plaintiff
must prove that persons acting under color of state law conspired to deprive him of a federally protected right. . . .”
Watson v. Sec'y Pennsylvania Dep't of Corr., 436 F. App’x 131, 137 (3d Cir. 2011) (citation omitted). See also
Alfred v. New Jersey, No. 13-0332 (RBK) (AMD), 2016 WL 6136576, at *6 (D.N.J. Oct. 20, 2016).
19
§1983 claim by arguing that there were no allegations in Plaintiffs’ pleading to support a
plausible conspiracy. While Ambrose also argued a statute of limitations defense relative to the
§1983 claim, the federal rules of law governing this defense differ somewhat from the state rules
of law that govern the statute-of-limitations issue on a defamation claim.
In sum, Ambrose’s defense theories relative to Count X were not entirely co-extensive
with his defense theories relative to Count XI. To the extent time was billed for matters such as
attorney-client conferences, discussions on case strategy, legal research, preparation of the
motions to dismiss, analyzing Plaintiffs’ response, and/or preparing for oral argument, it is not
unreasonable on this record to assume that approximately one-half of counsels’ time would have
been devoted solely and exclusively to Ambrose’s defense of the Section 1983 claim.14
Nevertheless, the Court will sustain Plaintiffs’ objection insofar as the Special Master’s
recommended fee award included time billed for “fact-gathering work.” Plaintiffs originally
sought to exclude this item on the grounds that it was completely unnecessary for purposes of
Ambrose’s motions to dismiss and the issues subsequently raised on appeal. Plaintiffs reasoned
that, because a Rule 12(b)(6) motion is adjudicated solely on the basis of the allegations in the
claimants’ pleading, any factual investigation was irrelevant to this phase of the defense. In his
reply brief in support of his fee petition, Ambrose agreed to reduce his fee petition by excluding
the amounts billed for the time counsel spent gathering facts about the Plaintiffs’ claims.15 In
14
The Court also notes that Ambrose challenged Plaintiffs’ original and amended complaints based on alleged
violations of Federal Rule of Civil Procedure 8(d)(1). Had Plaintiffs only asserted a defamation claim against
Ambrose, there would have been no basis for bringing the claim in federal court. Presumably, the claim would have
been litigated in state court, and federal Rule 8(d)(1) would not have been implicated.
15
Those charges, as set forth in the billing statements of Ambrose’s counsel, are broken down as follows:
Attorney
William Pietragallo, II
Robert R. Leight
Jeanette H. Ho
Hours
2
3.4
8.1
Rate
$375.00
$250.00
$200.00
20
Totals
$750
$850
$1,620
making this concession, Ambrose acknowledged that these fees would have been incurred even
in the absence of the frivolous §1983 claim. Despite Ambrose’s concessions that he would
eliminate these charges from his fee petition, it appears that the Special Master included them
when calculating the number of compensable hours billed. In this Court’s view, the time that
counsel spent gathering facts should be excluded from any fee award, consistent with Ambrose’s
initial concession and the rule of Fox. The Court will therefore remove these hours from the
lodestar calculation.
Based on the foregoing discussion, the Court finds that Ambrose’s attorneys reasonably
billed a total of 377.34 hours in defense of the §1983 claim at Count X. The Court further finds
that this work would not have been performed but for the presence of the §1983 claim. These
hours are broken down as follows:
Attorney
William
Pietragallo, II
Robert R. Leight
Jeanette H. Ho
Peter S. Wolff
Total Hours
Hours
Reasonably
Spent on Defense
at the District
Court Level
Hours
Reasonably
Spent Working
on the Appeal
Hours
Reasonably
Spent Working
on the Fee
Petition
Total
Number of
Hours
Reasonably
Expended
29.29
28.8
126.45
14.65
199.19
2.45
1.6
46.9
58.9
109.85
.5
.7
64.9
2.2
68.3
32.24
31.1
238.25
75.75
377.34
2. Reasonable Hourly Rates for Ambrose’s Attorneys
Having determined the number of reasonable hours billed by Ambrose’s counsel in
defense of the frivolous §1983 claim, the Court must next determine the applicable billing rates.
To calculate a reasonable hourly rate, the court must generally look to the prevailing market rate
Peter S. Wolff
TOTAL
3.1
16.6
$200.00
21
$620
$3,840
in the relevant litigation forum. See Interfaith Cmty. Org. v. Honeywell Int’l, Inc., 726 F.3d 403,
413 (3d Cir. 2013).16 In determining the prevailing market rate, “a court must assess the
experience and skill of the prevailing party’s attorneys and compare their rates to the rates
prevailing in the community for similar services by lawyers of reasonably comparable skill,
experience, and reputation.” Loughner v. Univ. of Pittsburgh, 260 F.3d 173, 180 (3d Cir. 2001)
(internal quotation marks and citation omitted).
The prevailing party bears the burden of establishing counsels’ reasonable rate. Public
Interest Research Group of New Jersey, Inc. v. Windall, 51 F.3d 1179, 1185 (3d Cir. 1995). In
doing so, counsel “may not rest on their own affidavits to support a claimed rate; rather, they
must submit evidence that the requested rates fall within the norm of attorneys in the relevant
community.” I.W. v. School Dist. of Phila., Civil Action No. 14-3141, 2016 WL 147148, at *5
(E.D. Pa. Jan. 13, 2016) (citation omitted); see also Washington v. Phila. Cnty. Court of
Common Pleas, 89 F.3d 1031, 1035 (3d Cir. 1996) (“The prevailing party bears the burden of
establishing by way of satisfactory evidence, in addition to the attorney’s own affidavits, that the
requested hourly rates meet this standard.”).
As Special Master Stroyd recognized, the applicable forum in this case is Erie/
Northwestern Pennsylvania, which would exclude the Pittsburgh legal market. See Buffington v.
PEC Mgmt. II, LLP, Civ. No. 1:11-cv-229 Erie, 2014 WL 670854, at *5 (W.D. Pa. Feb. 20,
2014) (Hon. Maurice B. Cohill concluding that Erie/Northwestern Pennsylvania was the relevant
legal forum for an Erie case, as opposed to the Western District of Pennsylvania generally, and
opining that “the two districts are separate and distinct in their legal markets and supporting
resources and certainly have different economic situations”). Therefore, it was Ambrose’s
16
Two exceptions, not applicable here, exist where it can be shown either that there is a need for the special
expertise of counsel from a distant district or that local counsel are unwilling to handle the case. See Interfaith
Cmty. Org. v. Honeywell Int'l, Inc., 726 F.3d 403, 413 (3d Cir. 2013).
22
burden to establish that his counsels’ billing rates were reasonable for the Erie/Northwestern
Pennsylvania legal market; however, Ambrose failed to do so. In support of his fee petition,
Ambrose submitted only the affidavits of his own attorneys and, moreover, he submitted these
affidavits as evidence that the attorneys’ billing rates were reasonable for the “Pittsburgh legal
market.” (ECF No. 197, ¶16.) Ambrose did not establish that the requested billing rates for his
attorneys were reasonable market rates for the essential character and complexity of the services
rendered in Erie/Northwestern Pennsylvania.
When a prevailing party does not satisfy his burden to produce satisfactory evidence of a
reasonable hourly rate within the relevant legal forum, “the district court must exercise its
discretion in fixing a reasonable hourly rate.” Washington, 89 F.3d at 1036; see also Loughner,
260 F.3d at 180 (“Having rejected the prevailing party’s evidence of rates, the District Court was
free to affix an adjusted rate.”). Here, Special Master Stroyd determined that a reasonable hourly
rate for attorneys practicing in Erie would be in the range of $150 to $350. He then concluded
that $350 would be a reasonable hourly rate for Mr. Pietragallo. Because this figure was
approximately 93 percent (93%) of the rate that Ambrose had requested, Mr. Stroyd applied a
proportionate reduction to the requested rates of Ambrose’s other attorneys. He concluded that
$232 (i.e., 93% of $250) was a reasonable hourly fee for Mr. Leight, and $186 (i.e., 93% of
$200) was a reasonable hourly fee for Ms. Ho and Mr. Wolff.
Both Ambrose and Plaintiffs object to Mr. Stroyd’s billing rate determination. Plaintiffs
object to the use of a $350 hourly rate for Mr. Pietragallo, while Ambrose objects to Mr. Stroyd’s
proportionate reduction of the other attorneys’ hourly rates.
Plaintiffs’ objection is well-taken to the extent that Mr. Stroyd arrived at his fee
assessment without any reference to the evidentiary record. “The matter of an attorney’s
23
marketplace billing rate is a factual question.” Washington, 89 F.3d at 1035. A district court
“may not dispose of such a factual question ‘based upon a generalized sense of what is
customary or proper, but rather must rely upon the record.’” Smith v. Phila. Housing Auth., 107
F.3d 223, 226 (3d Cir. 1997) (quoting Coleman v. Kaye, 87 F.3d 1491, 1510 (3d Cir. 1996)).
In this case, the only direct evidence concerning fee rates in the Erie/Northwestern
Pennsylvania market comes from the fee petitions of the MTR Defendants and the Scott
Defendants, insofar as these petitions include billing information for Erie-area practitioners.
This evidence shows that two Erie lawyers, James T. Marnen, Esq. and Christopher J. Sinnott,
Esq., served as local counsel for the MTR Defendants in connection with this litigation, and each
billed their clients at $250 per hour, which was reportedly their customary rate. (See ECF No.
193-1 at Ex. 6, ¶¶ 6a and 6b.) Although the record does not expound on the credentials of these
local attorneys, the court can attest to the fact that both Mr. Marnen and Mr. Sinnott are skilled
litigators who are highly-regarded in the Erie legal community. Another prominent Erie lawyer,
Ronald DiNicola, Esq., served as counsel to the Scott Defendants. The record reflects that Mr.
DiNicola billed at the rate of either $275 or $220 per hour, depending on the nature of the
services rendered. (ECF No. 192-1, Ex. B.) Like Messrs. Marnen and Sinnott, Mr. DiNicola is a
well-regarded lawyer with considerable practical experience.
The record also reflects that Mr. Pietragallo is the managing partner of Pietragallo
Gordon Alfano Bosick & Raspanti, LLP and has practiced law for over forty years. He has a
number of professional credentials to his credit, as set forth in his affidavit. Mr. Pietragallo
represents that, at the time his firm was retained in this case, Ambrose’s insurer agreed to pay
him $375 per hour, a fee lower than his normal hourly rate. The insurance carrier also agreed to
retain Mr. Leight at a rate of $250 per hour and Ms. Ho and Mr. Wolff at a rate of $200 per hour,
24
respectively. Mr. Leight has practiced law since 1981, while Ms. Ho has practiced since 1991
and Mr. Wolff has practiced since 2008. Notably, in their response to Ambrose’s fee petition,
Plaintiffs acknowledged that “counsel for Defendant Ambrose have sought hourly rates ranging
from $200 per hour to $325 per hour,” and they conceded that “those rates below $275 per hour
are reasonable for the Erie market.” (Pls.’ Resp. to Ambrose’s Fee Pet. at 12, ECF No. 200.) The
record also reflects that Plaintiffs did not object to Ms. Ho’s hourly rate when Ambrose sought
reimbursement for her fees in connection with an unsuccessful mediation session before
Magistrate Judge Mitchell. (See Order dated April 17, 2014 at pp. 5-6 ECF No. 188; Ambrose
Mot. for Attorney Fees, ECF Nos. 172; Ambrose Sealed Ex. A, ECF No. 178.)
Based on the available evidence of record, the Court agrees with Plaintiffs that a billing
rate of $350 per hour is somewhat excessive for the Erie/Northwestern Pennsylvania market,
particularly in light of the nature of this litigation. Although Plaintiffs’ pleading was extremely
lengthy and somewhat factually convoluted, the governing legal principles were relatively
straightforward and did not depend upon novel or complex issues of law. At the same time,
however, the Court recognizes that Mr. Pietragallo is an accomplished litigator of considerable
skill and experience who, like Mr. Marnen, began practicing law over forty years ago. As
discussed, Ambrose’s insurance carrier agreed to pay Mr. Pietragallo $375 per hour for his
services, and Mr. Pietragallo accepted this reduced rate as a courtesy to Ambrose. (ECF No.
197-4, ¶ 13.) As Ambrose notes, insurance carriers regularly hire outside counsel and are
therefore presumably familiar with competitive market rates within the relevant fora.
Consequently, the fact that Ambrose’s insurance carrier agreed to pay Mr. Pietragallo $375 per
hour in this case provides some support for a higher rate than was billed by the Erie attorneys in
this case. In addition, a comparative analysis of the various rates charged by the Erie attorneys
25
in this litigation suggests that Mr. Marnen’s billing rate was arguably lower than it could have
been, given his considerable reputation, skill, and litigation experience.
In light of all the foregoing considerations, the Court finds that $300 per hour is an
appropriate hourly rate for Mr. Pietragallo, based on his level of skill, his reputation, his
experience, and the nature of this litigation. Further, this rate is generally in line with the range
of hourly fees that have recently been awarded to experienced counsel in other cases within this
forum. See, e.g., Buffington, 2014 WL 670854, at *6 (finding that reasonable attorney fee rate
was $300 per hour in a disability discrimination case); Meyers v. Penn N. Centers for Advanced
Wound Care, P.C., No. CIV. 11-182 ERIE, 2014 WL 3535550, at *12 (W.D. Pa. July 16, 2014)
(reasonable hourly rate was $275 for experienced and skilled litigator who successfully
prosecuted a non-complex Wage Payment and Collection Law claim); United Refining Co.
Incentive Sav. Plan v. Morrison, Civil Action No. 1:12-CV-238, 2014 WL 126004, at *4 (W.D.
Pa. Jan. 10, 2014) (finding, based on billing rates of local attorneys, that $250 was a reasonable
hourly rate for counsel in an unsophisticated interpleader action). Although these cases are by no
means identical to the case at bar, they at least provide some basic measure of guidance as to the
prevailing market rate for legal fees in this forum. See Mitchell v. City of Phila., No. 99-6306,
2010 WL 1370863, at *14 (E.D. Pa. Apr. 5, 2010) (noting that, in cases where the fee movant
has no customary rate, the prevailing market rate can be established from other sources,
including, e.g., “the amounts awarded counsel with similar experience in similar litigation”)
(quoting 10 JAMES WM. MOORE ET AL., MOORE’S FEDERAL PRACTICE ¶54.190 (3d ed.
2009)) (internal quotation marks omitted).
Having determined Mr. Pietragallo’s reasonable hourly rate within this forum, the Court
must next determine the appropriate rates for his co-counsel. In making this calculation, Special
26
Master Stroyd first determined the percentage by which it had reduced Mr. Pietragallo’s hourly
fee (i.e., 7%) and then applied a proportionate reduction to the requested hourly fees of Attorneys
Leight, Ho, and Wolff. Ambrose argues that the hourly rates of Attorneys Leight, Ho, and Wolff
should not have been reduced by Special Master Stroyd because Plaintiffs never contested their
billing rates and even conceded that hourly rates below $275 were reasonable for the Erie
market. Ambrose further objects that Special Master Stroyd’s reduction of the requested billing
rates for Attorneys Leight, Ho, and Wolff resulted in these lawyers receiving a lower hourly fee
than certain of MTR’s attorneys, who were less experienced.
Based on the available evidence of record as outlined above, the Court is satisfied that a
rate of $250 per hour for Mr. Leight and $200 per hour for Ms. Ho are reasonable for the
Erie/Northwest Pennsylvania market in light of counsels’ respective skill and experience and the
nature of this litigation. Mr. Wolff, on the other hand, is a less experienced litigator than either
Mr. Leight or Ms. Ho, having earned his law degree in 2008. Most of the time that he billed in
this case was for work performed in 2011 or 2012, when he had been practicing law for only 3 to
4 years. The Court finds that an hourly billing rate of $175 is reasonable for Mr. Wolff and
consistent with the billing rate of other similarly situated lawyers within this forum.
Applying the aforementioned hourly rates to the number of hours reasonably billed yields
a lodestar amount of $78,353.25. This amount can be broken down for each of Ambrose’s
attorneys as follows:
Attorney
William Pietragallo, II
Robert R. Leight
Jeanette H. Ho
Hours
32.24
31.1
238.25
Rate
$300.00
$250.00
$200.00
27
Totals
$9,672.00
$7,775.00
$47,650.00
Peter S. Wolff
TOTAL
75.75
377.34
$175.00
$13,256.25
$78,353.25
3. Reduction of Lodestar
Although the lodestar figure represents the presumptively reasonable fee, a district court
retains discretion to adjust that figure upward or downward upon proof that an adjustment is
appropriate. See Lanni, 259 F.3d at 149. In this case, Special Master Stroyd indicated that
whether the Defendants posed a “real threat of harm” to Plaintiffs was a factor that might affect
his determination as to the propriety of any fee award. See Barnes Fd. v. Twp. of Lower Merion,
242 F.3d 151, 158 (3d Cir. 2001); see also R&R dated May 1, 2014 at ¶¶ 46(e) and 49(e) (ECF
No. 131). Plaintiffs object to the fact that Special Master Stroyd ultimately declined to
recommend a downward departure from the lodestar on this basis.
The Court will overrule Plaintiffs’ objection, as it is not persuaded that Special Master
Stroyd committed error in this respect. The underpinning of Plaintiffs’ argument is that
Ambrose posed a real threat of injury to them insofar as he provided allegedly defamatory
information about them to Thomas Brletic, an agent with the Pennsylvania Gaming
Commission’s Bureau of Investigations and Enforcement. In support of these allegations, they
supplied portions of Brletic’s deposition testimony. The upshot of Plaintiffs’ theory is that: (a)
Ambrose falsely informed Brletic that Rubino had been an unindicted co-conspirator in a large
drug investigation in the 1980s; (b) Ambrose supplied Brletic with certain business records for
Rubino’s business that had been stolen by a former employee; and (c) Ambrose falsely
represented to Brletic that the record demonstrated Arneault’s use of Rubino’s company as a
conduit that funneled payments to an individual named Charles Sack.
28
The Court has thoroughly reviewed the record insofar as it pertains to Plaintiffs’ assertion
that Ambrose posed a real threat of injury to them. (See ECF Nos. 190, 191, 195, 200, 202, 207,
and 212, 214.) It bears repeating that the parties’ fee dispute is occurring in the context of a
determination that Plaintiffs frivolously alleged that Ambrose violated their federal constitutional
rights by conspiring with government gaming officials to deprive Plaintiffs of their due process
rights and/or to retaliate against the Plaintiffs for engaging in protected speech/conduct. Having
reviewed all of the evidence and the parties’ respective arguments on the matter, the Court is not
persuaded that the evidence demonstrates a real threat of constitutional injury as would justify
Plaintiffs’ assertion of their §1983 conspiracy claim against Ambrose or warrant a reduction of
the lodestar figure. Accordingly, the Court will award Ambrose $78,353.25 in counsel fees and
$1,408.47 in costs.
C. The Scott Defendants’ Petition for Counsel Fees
In their fee petition, the Scott Defendants sought to collect $79,726.98 of the $96,820.00
that their counsel, Ronald DiNicola, Esq., had billed from the inception of this case up to the
time of the fee petition. The Special Master ultimately recommended that the Scott Defendants
be awarded $48,410.00.
In arriving at this figure, Special Master Stroyd implicitly utilized the total amount billed
– i.e., $96,820.00 – as the lodestar figure. He determined that “Ronald DiNicola, who practices
in the Erie/Northwest Pennsylvania community, was the only attorney from his firm working on
behalf of the Scott Defendants in this case, and his hourly rate of $275 is reasonable for that
market and will not be adjusted.” (R&R ¶135.) Mr. Stroyd then went on to state that he had
thoroughly reviewed the redacted time reports submitted by Mr. DiNicola and found that they
reflected “reasonably expended time representing [the Scott] Defendants” inasmuch as
29
“excessive, redundant, or otherwise unnecessary charges had been excluded.” (Id. ¶136.) With
regard to the parties’ prior efforts to mediate the attorneys’ fees claims, the Special Master
concluded that “time attributable to the mediation that Judge Mitchell conducted has not been
included.” (Id. ¶137.) He considered the amounts that Mr. DiNicola billed in connection with
Plaintiffs’ appeal to be “appropriate.” (Id. ¶141.) He also approved the hours that defense
counsel had billed for investigating the facts of the case on the grounds that such work was
necessary, appropriate, and prudent. (Id. ¶¶142-145.)
After implicitly accepting the $96,820 figure as an appropriate lodestar, Special Master
Stroyd considered whether adjustments should be made. He rejected Plaintiffs’ argument that
they had acted in good faith and/or out of a concern for a “real threat of injury” in asserting their
§1983 conspiracy claim. (R&R ¶149.) He applied the “but for” test of Fox v. Vice as follows:
153. Counsel for the Scott Defendants estimate[s] that 82.3%
($79,726.98÷96,820) of his time was spent in defending against the claims in this
lawsuit that would not have been spent in the absence of the frivolous claims in
Count X (Doc No 197).[17]
154. That calculation, however, does not conform with this independent,
objective analysis of those time entries, which concludes that approximately 50%
of the total fees of $96,820 would have been incurred in the absence of the
frivolous civil rights claims and that approximately 50% of the fees are
attributable to additional costs that are associated with the unreasonable, frivolous
civil rights claims against the Scott Defendants.
155. After allocating the remaining fees between time that was spent on
the frivolous claims of Count X and the other claims, the undersigned calculates
that $48,410.00 should be reimbursed to the Scott Defendants by Plaintiffs
Arneault and Rubino.
(R&R at ¶¶153-155.)
The Scott Defendants’ sole objection relates to Special Master Stroyd’s finding that only
fifty percent (50%) of the total fees were attributable to their defense of the frivolous civil rights
17
It appears the appropriate reference is to Document No. 192.
30
claim. Plaintiffs, on the other hand, assert numerous objections to the Report and
Recommendation. They claim that Mr. Stroyd erred by: (i) failing to calculate the number of
hours that the Scott Defendants’ counsel spent working on the case, (ii) failing to exclude fees
and costs that had previously been awarded to the Scott Defendants in connection with an
unsuccessful mediation before United States Magistrate Judge Robert Mitchell; (iii) failing to
exclude the fees that the Scott Defendants incurred as a result of their “unnecessary”
participation in the appellate proceedings; (iv) failing to exclude amounts billed in connection
with “unnecessary” fact gathering work; (v) failing to properly limit the fee award in accordance
with Fox v. Vice; and (vi) failing to reduce the lodestar figure based on the “real threat of injury”
that the Defendants’ conduct posed.
This Court has thoroughly reviewed the original fee petition (ECF No. 192), the
Plaintiffs’ response thereto (ECF No. 201), the Scott Defendants’ reply (ECF No. 205), and all of
the parties’ related exhibits, including the disputed billing records. The Court has also
thoroughly reviewed the Report and Recommendation (ECF No. 207) as well as the parties’
various objections, responses, and replies thereto (ECF Nos. 210, 212, 215, 216, and 220).
Finally, the Court has reviewed pertinent parts of both the District Court and appellate court
records, including the Amended Complaint and the parties’ respective briefs before both the
District Court and the U.S. Court of Appeals for the Third Circuit. After conducting this review,
the undersigned finds that certain of the parties’ objections are well-taken, as discussed below.
1. Hours Reasonably Expended By Counsel
(a) FAILURE TO CALCULATE THE AMOUNT OF HOURS REASONABLY BILLED
As an initial point, this Court agrees that Special Master Stroyd strayed from the usual
lodestar methodology by failing to calculate the number of hours reasonably expended by the
31
Scott Defendants’ counsel. Although Mr. Stroyd examined the underlying billing records and
generally found counsels’ expenditure of time to be reasonable, he did not specify the number of
hours reasonably billed by Mr. DiNicola in connection with his defense of this case. Instead, as
noted, Mr. Stroyd implicitly utilized counsel’s aggregate billing figure as the relevant lodestar
figure. This was likely due to the fact that the Scott Defendants themselves offered no proposed
lodestar calculation in their fee petition; instead, they simply appended copies of their invoices to
their petition and then requested a full reimbursement of their “adjusted” billing amounts without
specifying the number of hours involved, the applicable billing rates, or the portion of the bill
that pertained to fees as opposed to costs. Because Mr. DiNicola billed the Scott Defendants at
two different rates depending on the nature of his activities, the number of hours he expended is
not readily calculable from the billing summary attached to the Scott Defendants’ fee petition.
See ECF No. 192-1 at p. 2. Moreover, because Mr. Stroyd calculated his fee award based on the
aggregate figures set forth in the billing summary, his award failed to break down the portion
that was attributable to costs and the portion attributable to fees, thereby further complicating
this Court’s efforts to ascertain the underlying lodestar components.18 This Court’s lodestar
analysis is further complicated by the fact that, in utilizing the amounts “billed” to the Scott
Defendants rather than the lesser “adjusted amount[s] sought,” Special Master Stroyd
inadvertently incorporated into the lodestar certain charges which the Scott Defendants
themselves sought to exclude from their fee petition.
Under these circumstances, this Court is of the view that, even though the Special Master
found Mr. DiNicola’s billing to be generally “reasonable,” his lodestar calculation did not
18
Since the relevant billing records were attached to the petition, this Court conducted a detailed, de novo review of
those records. In doing so, the Court was able to ascertain that the requested award of $79,726.98 appears to consist
of $2,106.98 in costs and 77,620.00 in fees.
32
sufficiently comply with the methodology prescribed by the U.S. Court of Appeals for the Third
Circuit. This Court will attempt to rectify that problem in the analysis laid out below.
(b) FAILURE TO EXCLUDE AMOUNTS PREVIOUSLY AWARDED
As a secondary point, the Court agrees with Plaintiffs that the Special Master’s fee award
indirectly incorporated at least a portion of the fees and costs that were previously awarded to the
Scott Defendants by Magistrate Judge Mitchell in connection with the parties’ failed mediation
on March 20, 2014. (See ECF Nos. 164 and 188). Notably, the instant fee petition sought to
avoid any duplicity in this regard by backing out $2,544.71 from the fee request, which
represented fees and costs previously awarded by Magistrate Judge Mitchell. However, in
utilizing the $96,820.00 billing figure (rather than the “adjusted” $79,726.98 figure) as the
relevant “lodestar” amount, Special Master Stroyd inadvertently placed Magistrate Judge
Mitchell’s prior award back into the equation, because the $79,726.98 figure purposefully
excluded the amounts previously awarded by Magistrate Judge Mitchell, while the $96,820.00
figure did not. Although Mr. Stroyd ultimately halved the $96,820.00 “lodestar” figure, his
award necessarily incorporated at least a portion of the fees and costs that had previously been
awarded by Magistrate Judge Mitchell -- as well as other billed amounts that the Scott
Defendants were not even seeking to recover. Accordingly, adjustments must be made for this
error.19
(c) FAILING TO EXCLUDE TIME SPENT WORKING ON PLAINTIFFS’ APPEAL
Plaintiffs argue that the fee award should exclude all of the time billed by the Scott
Defendants’ counsel in connection with the appellate proceedings because, in Plaintiffs’
19
Plaintiffs object that this error calls into question Mr. Stroyd’s credibility, objectivity, and competence. The Court
perceives no need to jump to such conclusions but, in any event, the point is rendered moot by the fact that the
undersigned is reviewing the fee petitions on a de novo basis and conducting an independent analysis in order to
remedy the aforementioned error.
33
judgment, it was unnecessary for the Scott Defendants to participate in the appeal. This
objection lacks merit and will be rejected.
Insofar as Plaintiffs sought, through their appeal, to reverse the dismissal of Count X
and/or to replead that claim, the Scott Defendants’ legal interests were directly implicated and it
was reasonable for them to participate in the appellate proceedings in order to oppose Plaintiffs’
position. To that end, the Scott Defendants argued that Plaintiffs had waived any claim of error
relative to the dismissal of Count X. Alternatively, they argued that the claim had been properly
dismissed under the pleading standards of Twombly. Moreover, for reasons previously
discussed, it was reasonable for the Scott Defendants to appear in the appellate proceedings
through their own counsel rather than rely on the government Defendants’ attorneys to represent
their interests. Because the Scott Defendants’ alleged liability was premised on the conduct of
Ambrose acting as their “agent,” the Scott Defendants had additional arguments in defense of
Count X that the other Defendants could not assert. Specifically, the Scott Defendants argued
that the conspiracy claim against them was inappropriately based on a theory of respondeat
superior and/or could not survive if the Court of Appeals affirmed the dismissal of similar claims
directed at the “upstream Defendants.” In sum, the Scott Defendants’ participation in the appeal
through their own independent counsel was reasonable and appropriate, and the fees they
incurred in connection with those proceedings will be included in their fee award.
(d) FAILING TO EXCLUDE TIME SPENT GATHERING FACTS
Plaintiffs also object to the Report and Recommendation to the extent Mr. Stroyd
recommended awarding counsel fees for “fact-gathering” work. Given that Plaintiffs’ claims
were challenged and ultimately disposed of pursuant to Rule 12(b)(6), Plaintiffs contend that no
fact-gathering work was needed in order for the Scott Defendants’ to file their Motion to
34
Dismiss, participate in the appeal, or litigate the instant fee petition. By Plaintiffs’ estimate,
approximately 25 hours of legal work were billed to the Scott Defendants for “fact-gathering
work.”20
The Court is not persuaded that fact-gathering work was unnecessary or unreasonable.
Like Mr. Stroyd, the undersigned believes that “it was prudent for these Defendants’ counsel to
investigate, with a possible goal of developing alternative theories for dismissal at the initial
stages of pleading or at a later juncture.” (R&R ¶143.)
On the other hand, given the factual overlap between the conspiracy claim at Count X
and the defamation claim at Count XI, the Court finds that time expended by counsel in “fact
gathering” would likely have occurred even in the absence of the §1983 claim at Count X.
Accordingly, the fees in question will be excluded pursuant to the rule of Fox v. Vice, as
discussed below.
(e) APPLICATION OF FOX V. VICE
In accordance with Fox v. Vice, this Court must ensure that any fee award is limited to
those attorney’s fees that would not have been incurred “but for” the existence of the frivolous
§1983 claim. Consistent with this rule, the undersigned concludes that the Scott Defendants are
entitled to recover all of the fees they reasonably incurred relative to their participation in the
appellate proceedings. By this Court’s calculation, those fees amount to $13,260.50,21 broken
down as follows:
Attorney
Ronald A. DiNicola
Hours
59.9
Rate
$220.00
20
Totals
$13,178.00
Mr. DiNicola’s billing rate for this work was $275 per hour, and the total fees amounted to $6,875.00. (See Pls.’
Opposition to Scott Defs.’ Fee Petition at Ex. E, ECF No. 201-5.)
21
This figure includes all of the hours highlighted on Exhibit D to Plaintiffs’ response in opposition to the Scott
Defendants’ fee petition (ECF No. 201-4), plus .3 hours billed on February 18, 2013, which this Court views as
work related to the appellate proceedings. (See ECF No. 192-1 at p. 63.)
35
Ronald A. DiNicola
TOTAL
.3
60.2
$275.00
$82.50
$13,260.50
In addition, the undersigned concludes that the Scott Defendants are entitled to recover
all of the fees reasonably incurred in connection with their litigation of the instant fee petition,
except for the $1,716.00 that Magistrate Judge Mitchell previously awarded. Excluding that
amount, by this Court’s calculation the Scott Defendants reasonably incurred $8,822.00 in fees22
as a result of litigating the instant fee petition. These fees can be broken down as follows:
Attorney
Ronald A. DiNicola
Ronald A. DiNicola
TOTAL
Hours
39.1
.8
39.9
Rate
$220.00
$275.00
Totals
$8,602.00
$220.00
$8,822.00
The remainder of the Scott Defendants’ fee petition relates to work performed in defense
of Counts X and XI at the District Court level. As discussed above, the Court will exclude
twenty-five (25) hours of work that the Scott Defendants’ counsel spent investigating the
Plaintiffs’ factual averments. This adjustment is warranted in light of the common factual
underpinnings of the defamation and conspiracy claims. Because both claims stemmed from
statements that the Scott Defendants’ then attorney, Leonard Ambrose, allegedly made to gaming
officials, an investigation into the nature and timing of these statements, as well as their impact,
if any, on Plaintiffs’ involvement in the gaming industry, would have been relevant and
necessary for both Counts X and XI.
Although not strictly a Fox v. Vice issue, the Court will also exclude nine (9) hours of
work that were apparently billed by another attorney within Mr. DiNicola’s law firm -specifically, Douglas W. Bordewieck. (See ECF No. 192-1 at pp. 7-8.) The undersigned’s
22
This figure includes most of the hours billed between May 10, 2013 and March 31, 2014 as well as .8 hours billed
by Mr. DiNicola on April 11, 2012. (See ECF No. 192-1 at pp. 45, 65-84.)
36
examination of the billing records suggests that the Scott Defendants attempted to excise Mr.
Bordewieck’s hours from their fee petition; however, they inadvertently failed to exclude nine of
Mr. Bordewieck’s hours, as set forth in counsels’ May 5, 2011 invoice. (Id.)23 The hours appear
to be duplicative of work performed by lead counsel, Mr. DiNicola, and they are therefore
appropriately excluded.
The remainder of the time billed at the District Court level amounts to approximately
167.2 hours. Apart from Mr. Bordewieck’s hours, the Court agrees with Mr. Stroyd that, as a
general matter, the billing records reflect time that was reasonably expended in defense of
Counts X and XI; the hours of work performed by Mr. DiNicola do not appear to be excessive,
redundant, or otherwise unnecessary.
Nevertheless, virtually all of Mr. DiNicola’s work at the District Court level has been
challenged by Plaintiffs on the grounds that the fees involved would have been incurred even in
the absence of the frivolous §1983 conspiracy claim. Thus, a question arises as to how the Court
should apply the rule of Fox v. Vice.
Not surprisingly, the parties have differing interpretations of the rule. The Scott
Defendants contend that they are entitled to recover the “majority of the fees expended in this
action,” (Objections ¶6, ECF No. 210), based on the following considerations:
(a) Federal jurisdiction over the Amended Complaint was based upon the federal
question posed by the frivolous section 1983 claim.[ ] Thus, the Scott
Defendants’ legal defense was focused largely on the section 1983 claim, the
dismissal of which eliminated a basis for pendent jurisdiction over the state
law claim. Accordingly, “but for” the frivolous section 1983 claim, the action
as pled was unsustainable and there would have been no fees expended in
connection with the non-frivolous claim.
23
The Court infers that the hours billed on April 22, 24, and 25, 2011 are attributable to work performed by Mr.
Bordewieck because, for each billing entry on those dates, the amount of the charge, when divided by the number of
hours worked, reflects a billing rate of $225 per hour. According to the invoice, Mr. Bordewieck billed at an hourly
rate of $225, while Mr. DiNicola’s hourly rate was $275.
37
(b) The section 1983 claim was far and away the primary thrust of the Amended
Compliant [sic]. For example, of the first one hundred and one (101) pages
(¶¶1-347) of Plaintiffs’ Amended Complaint focusing on the legal and factual
background for the action, one hundred pages (¶¶1-344) are devoted to the
section 1983 conspiracy allegations, while a single page (¶¶345-347)
addresses the defamation claim.[ ] Likewise, the Scott Defendants’ motion to
dismiss the Amended Complaint was focused largely upon the dismissal of
the section 1983 claim (Count X). . . .
(c) In the Memorandum Opinion and Order of March 28, 2012 ..., the District
Court devoted all but one (1) of the seventy-eight (78) pages of the
Memorandum Opinion to Plaintiffs’ section 1983 claims and the phalanx of
arguments made to sustain their dismissal without leave to amend.... The
District Court summarily refused to permit the case to proceed on the basis of
the non-frivolous state law claims.
(d) The Third Circuit addressed the deficiencies of the federal claims, sustained
the District Court order of dismissal and denied Plaintiffs an opportunity to
amend.... The Third Circuit did not address the state law claims....
(Objections of Scott Defs. to Report of Special Master Regarding Award of Attorney’s
Fees ¶5, ECF No. 210 (internal citations and footnotes omitted).)
Plaintiffs argue, and this Court agrees, that the Scott Defendants’ position misapprehends
the rule of Fox v. Vice. In Fox, as here, the court was confronted with a frivolous federal claim,
for which fees were awarded, and a non-frivolous state law claim that had been dismissed by a
federal judge without prejudice so that it might be pursued in state court. The Supreme Court
made clear in Fox that the dispositive consideration in awarding fees was not the parties’ “focus”
in the litigation, 563 U.S. at 839, but the extent to which “the costs would have been incurred in
the absence of the frivolous allegation.” Id. at 838. Accordingly, the number of paragraphs that
Plaintiffs devoted to their §1983 claims in their pleadings, the number of pages in the District
Court’s Rule 12(b)(6) ruling that were devoted to a discussion of the §1983 claims, and the
extent to which the Court of Appeals focused on the §1983 as opposed to the defamation claim
are not dispositive considerations. Furthermore, in applying Fox’s “but for” allocation test, the
38
Court will not assume, as the Scott Defendants appear to do, that Plaintiffs would have attempted
to prosecute their defamation claims in federal court, even in the absence of their §1983 claims.
Based on their flawed assumption, the Scott Defendants erroneously conclude that a dismissal of
the defamation claim from federal court would have been easily obtained absent the presence of
the federal §1983 conspiracy claim and, therefore, virtually all of the fees charged in this case are
solely and exclusively attributable to the §1983 conspiracy claim.
Instead, this Court will allocate fees based on an assumption that, absent the §1983
conspiracy claim, Plaintiffs would have sued the Scott Defendants in state court, and –
notwithstanding the absence of a §1983 claim -- certain of the legal tasks performed in this
federal litigation (or analogous tasks) would have been performed in defense of a properly filed
state court defamation action. Plaintiffs appear to utilize this same assumption and, to that end,
they have provided a line-item assessment of the work performed by Mr. DiNicola that they
believe counsel would have been required to perform even if the §1983 claim had never been
filed. In total, Plaintiffs have identified 272.1 hours of legal work that they believe the Scott
Defendants would have incurred even if the federal conspiracy claim had not been asserted. (See
Doc. 201 at p. 6 and 201-1.)
Having carefully reviewed the billing records at issue as well as the District Court record,
the Court concludes that Plaintiffs’ assessment of excludable legal work is overly broad. While
there is factual overlap between the defamation and conspiracy claims, this has been adequately
accounted for by exclusion of counsel’s fact-gathering work. From a legal perspective, the two
claims were not identical. For the reasons discussed above in relation to Ambrose’s fee petition,
this Court can utilize its “sense of the suit” to achieve a rough approximation of the extent to
which the added §1983 claim drove up legal expenses for the Scott Defendants.
39
Based on this Court’s careful and independent review of the record, as well as its sense of
the underlying lawsuit, the Court concludes that approximately fifty percent (50%) of the fees
that Mr. DiNicola billed for defense work at the District Court level are solely and exclusively
attributable to the presence of the §1983 conspiracy claim.
(f) THE COURT’S CALCULATION OF HOURS REASONABLY BILLED
In light of all the foregoing considerations, this Court concludes that 83.6 hours (i.e., ½ of
167.2 hours) were reasonably billed by Mr. DiNicola in connection with his defense of Count X
at the District Court Level. In addition, 60.2 hours were reasonably billed by Mr. DiNicola in
connection with the appellate proceedings. Finally, 39.9 hours were reasonably billed in
connection with the Scott Defendants’ litigation of the instant fee petition. All of the foregoing
hours would not have been incurred but for the existence of the frivolous conspiracy claim at
Count X of the Amended Complaint.
2. Reasonable Hourly Billing Rate
Having determined the amount of hours reasonably expended by counsel relative to
Count X, the Court must next determine a reasonable hourly fee. The underlying billing records
indicate that Mr. DiNicola generally billed the Scott Defendants at a rate of $275 for work
performed at the District Court Level. He generally billed at a rate of $220 for work performed
in connection with Plaintiffs’ appeal and in litigating the instant fee petition. No challenge has
been made to Mr. DiNicola’s billing rate, and the Court finds that both rates are reasonable.
3. Lodestar Calculation and Possible Adjustments
In light of the foregoing discussion the Court finds that the relevant lodestar figure for the
Scott Defendants’ counsel is $45,072.50. This figure is broken down as follows:
40
Type of Work
District Court
Appeal Work
Appeal Work
Fee Petition
Fee Petition
TOTAL
Hours
83.6
59.9
.3
39.1
.8
183.7
Rate
$275.00
$220.00
$275.00
$220.00
$275.00
Totals
$22,990.00
$13,178.00
$82.50
$8,602.00
$220.00
$45,072.50
Plaintiffs contend that the lodestar figure should be reduced based on their “good faith” in
bringing this lawsuit and the “real threat of injury” that the Scott Defendants posed. The Court is
not persuaded that such a reduction is warranted. Here, Plaintiffs’ claim against the Scott
Defendants was premised entirely upon the conduct of Ambrose, who supposedly acted as their
agent in allegedly conspiring with gaming officials to deprive Plaintiffs of their federal rights. In
this respect, Plaintiffs’ §1983 theory of liability was even more tenuous as to the Scott
Defendants than it was with respect to Ambrose. Having thoroughly reviewed the record, the
Court finds that Plaintiffs have not demonstrated injury or deprivation of a constitutional
magnitude – or any threat thereof -- as a result of the Scott Defendants’ conduct. See Le Beau v.
Libbey-Owens-Ford Co., 799 F.2d 1152, 1158-59 & n.8 (7th Cir. 1986). Accordingly, the Court
finds no basis that would justify a denial of attorneys’ fees or a reduction of the lodestar figure.
4. Award of Costs
The Scott Defendants’ petition incorporates a request for certain costs; however, that
figure has not been broken out in their petition. After a thorough review of the underlying billing
records, the Court has been able to calculate that their requested award includes $2,106.98 in
costs. This figure – taken from the “Adjusted Amount Sought” in the Scott Defendants’ billing
summary -- does not include the $828.71 in costs that was previously awarded by Magistrate
41
Judge Mitchell. Plaintiffs have expressed no objection to the $2,106.98 figure, and those costs
will therefore be awarded.
IV. CONCLUSION
For the reasons stated above, the Court adopts the Special Master’s Final Report and
Recommendation, subject to modification, to the extent stated herein. Defendant Ambrose is
awarded $78,353.25 in counsel fees and $1,408.47 in costs. Defendants Nicholas C. Scott and
Scott’s Bayfront Development, Inc. are awarded $45,072.50 in attorneys’ fees and $2,106.98 in
costs.
/s/ Susan Paradise Baxter
SUSAN PARADISE BAXTER
United States Magistrate Judge
Dated: December 2, 2016
42
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