Richmond v. SW Closeouts Inc et al

Filing 49

Memorandum Opinion and Order granting 46 Motion for Attorney Fees filed by Simon Nicholas Richmond. (Ordered by Magistrate Judge David L Horan on 8/16/2016) (mem)

IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
SIMON NICHOLAS RICHMOND,
Plaintiff,
V.
SW CLOSEOUTS, INC., ET AL.,
Defendants.

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No. 3:14-cv-4298-K

MEMORANDUM OPINION AND ORDER
Plaintiff Simon Nicholas Richmond (“Plaintiff”) has filed an Application for
Attorneys’ Fees (the “Application”). See Dkt. No. 46. United States District Judge Ed
Kinkeade has referred the Application to the undersigned United States magistrate
judge for determination pursuant to 28 U.S.C. § 636(b). See Dkt. No. 47.
For the reasons explained below, the Court GRANTS Plaintiff’s Application.
Background
Plaintiff filed a Motion to Compel Discovery Responses and Request for
Sanctions (the “MTC”), requesting the Court to enter an order compelling Defendants
SW Closeouts Inc. and Quang Ho Nhat Nguyen (“Defendants”) to respond to nineteen
requests for production and fifty-one interrogatories. See Dkt. No. 42. Judge Kinkeade
referred the MTC to the undersigned for determination. See Dkt. No. 43.
On June 2, 2016, the Court entered a Memorandum Opinion and Order
Granting in Part and Denying in Part Plaintiff’s Motion to Compel Discovery
Responses and Request for Sanctions. See Dkt. No. 45. Specifically, the Court ordered
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Defendants to produce all responsive documents to Plaintiff’s requests for production
but only compelled Defendants to answer Plaintiff’s first twenty-five interrogatories,
pursuant to the limit established by Federal Rule of Civil Procedure 33(a)(1). See id.
at 11.
The Court explained that “Federal Rule of Civil Procedure 37(a)(5)(A) provides
that, if a motion to compel is granted ... the court must, after giving an opportunity to
be heard, require the party ... whose conduct necessitated the motion, the party or
attorney advising that conduct, or both to pay the movant’s reasonable expenses
incurred in making the motion, including attorney’s fees, except that the court must
not order this payment if: (i) the movant filed the motion before attempting in good
faith to obtain the disclosure or discovery without court action; (ii) the opposing party’s
nondisclosure, response, or objection was substantially justified; or (iii) other
circumstances make an award of expenses unjust.” Id. at 8 (quoting FED. R. CIV. P.
37(a)(5)(A). As the Court further explained, Federal Rule of Civil Procedure 37(a)(5)
also provides that, if a motion to compel “is granted in part and denied in part, the
court may ... after giving an opportunity to be heard, apportion the reasonable
expenses for the motion.” FED. R. CIV. P. 37(a)(5)(C).
The Court determined that the conditions that would preclude payment under
Rule 37(a)(5) are not present in connection with Plaintiff’s MTC. See Dkt. No. 45 at 12.
As the Court explained, “[a]ccordingly, the Court will, pursuant to Rule 37(a)(5)(C),
apportion the reasonable expenses for the MTC by ordering that Defendants SW
Closeouts, Inc. and Quang Ho Nhat Nguyen are required to pay, jointly and severally,
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Plaintiff Simon Nicholas Richmond his reasonable attorneys’ fees and costs incurred
in making his Motion to Compel Discovery Responses and Request for Sanctions [Dkt.
No. 42], limited specifically to the reasonable attorneys’ fees and costs incurred in
drafting and filing the MTC as to Plaintiff’s Post-Judgment Requests for Production
and the first 25 numbered interrogatories in Plaintiff’s Interrogatories in Aid of
Judgment. But this award does not include any attorneys’ fees or costs that Plaintiff
incurred prior to the deadline for Defendants to serve objections and responses to
Plaintiff’s Post-Judgment Requests for Production and Plaintiff’s Interrogatories in Aid
of Judgment, including any attorneys’ fees or costs incurred in connection with
Plaintiff’s counsel’s preparing and propounding the discovery requests at issue. And
it does not include any fees or costs incurred in connection with Plaintiff’s requests for
admission....” Id. at 12-13.
The Court noted that “Plaintiff requests an order requiring Defendants to pay
attorneys’ fees in the amount of $8,455.00 and expenses in the amount of $433.92, but
... has not fully explained the specific basis for these requested amounts or the
reasonableness of the underlying hours and timekeepers’ rates – and, of course, could
not have done so without the benefit of the directions in this order.” Id. at 13. The
Court ordered Plaintiff to file an application for attorneys’ fees and costs to be awarded
under Rule 37(a)(5). See id.
Plaintiff filed this Application on June 23, 2016. See Dkt. No. 46.
The Court ordered Defendants to file their response to the Application by July
14, 2016. See Dkt. No. 45 at 14. Defendants did not respond to Plaintiff’s Application,
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and their time to do so has expired. See id.
Legal Standards
The undersigned has authority to enter a nondispositive order granting
attorneys’ fees as a sanction under Federal Rule of Civil Procedure 37. See Dkt. No. 47;
28 U.S.C. § 636(b); Merritt v. Int’l Bhd. of Boilermakers, 649 F.2d 1013, 1016-17 (5th
Cir. Unit A 1981) (per curiam).
“This Court uses the ‘lodestar’ method to calculate attorney’s fees.” Heidtman
v. Cnty. of El Paso, 171 F.3d 1038, 1043 (5th Cir. 1999) (citing Fender v. Zapata
Partnership, Ltd., 12 F.3d 480, 487 (5th Cir. 1994)); Saizan v. Delta Concrete Prods.,
Inc., 448 F.3d 795, 800 (5th Cir. 2006). The lodestar is calculated by multiplying the
number of hours an attorney reasonably spent on the case by an appropriate hourly
rate, which is the market rate in the community for this work. See Smith & Fuller,
P.A. v. Cooper Tire & Rubber Co., 685 F.3d 486, 490 (5th Cir. 2012). “A reasonable
hourly rate is the prevailing market rate in the relevant legal community for similar
services by lawyers of reasonably comparable skills, experience, and reputation.”
Norman v. Hous. Auth. of City of Montgomery, 836 F.2d 1292, 1299 (11th Cir. 1988)
(citing Blum v. Stenson, 465 U.S. 886, 895-96 n. 11 (1984)). The relevant legal
community is the community in which the district court sits. See Tollett v. City of
Kemah, 285 F.3d 357, 368 (5th Cir. 2002).
The party seeking reimbursement of attorneys’ fees bears the burden of
establishing the number of hours expended through the presentation of adequately
recorded time records as evidence. See Watkins v. Fordice, 7 F.3d 453, 457 (5th Cir.
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1993). The Court should use this time as a benchmark and then exclude any time that
is excessive, duplicative, unnecessary, or inadequately documented. See id. The hours
remaining are those reasonably expended. See id. There is a strong presumption of the
reasonableness of the lodestar amount. See Perdue v. Kenny A., 559 U.S. 542, 552
(2010); Saizan, 448 F.3d at 800.
After calculating the lodestar, the Court may either (1) accept the lodestar figure
or (2) decrease or enhance it based on the circumstances of the case, taking into
account what are referred to as the Johnson factors. See La. Power & Light Co. v.
Kellstrom, 50 F.3d 319, 324, 329 (5th Cir. 1995); Johnson v. Ga. Highway Express, Inc.,
488 F.2d 714, 717-19 (5th Cir. 1974), overruled on other grounds by Blanchard v.
Bergeron, 489 U.S. 87, 90 (1989). The Johnson factors are: (1) the time and labor
required; (2) the novelty and difficulty of the legal issues; (3) the skill required to
perform the legal service properly; (4) the preclusion of other employment by the
attorney as a result of taking the case; (5) the customary fee; (6) whether the fee is
fixed or contingent; (7) time limitations imposed by the client or other circumstances;
(8) the monetary amount involved and the results obtained; (9) the experience,
reputation, and ability of the attorneys; (10) whether the case is undesirable; (11) the
nature and duration of the professional relationship with the client; and (12) awards
in similar cases. See Johnson, 448 F.2d at 717-19; see also Saizan, 448 F.3d at 800.
Because the lodestar is presumed to be reasonable, it should be modified only in
exceptional cases. See Watkins, 7 F.3d at 457. Further, the lodestar amount may not
be adjusted due to a Johnson factor that was already taken into account during the
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initial calculation of the lodestar, see Saizan, 448 F.3d at 800, and the lodestar
calculation may take into account several Johnson factors, see Black v. SettlePou, P.C.,
732 F.3d 492, 503 n.8 (5th Cir. 2013).
Additionally, a party seeking attorneys’ fees may only recover for time spent in
preparing the actual discovery motion – that is, the “reasonable expenses incurred in
making the motion, including attorney’s fees.” Fed. R. Civ. P. 37(a)(5)(A).
The Court recognizes that the analysis set forth above, and particularly the
interplay of the lodestar analysis and the Johnson factors, may have called into
question. See Perdue, 559 U.S. at 552-53; S&H Indus., Inc. v. Selander, No.
3:11-cv-2988-M-BH, 2013 WL 6332993, at *2-*3 (N.D. Tex. Dec. 5, 2013). But, the
United States Court of Appeals for the Fifth Circuit, without comment or reference to
the United States Supreme Court’s decision in Perdue, has continued to utilize the
approach laid out by this Court. See Black, 732 F.3d at 502-03; but see In re Pilgrim’s
Pride Corp., 690 F.3d 650, 663-64 (5th Cir. 2012) (analyzing whether any changes
brought about by Perdue apply to bankruptcy attorneys’ fees calculations); but see also
In re ASARCO, L.L.C., 751 F.3d 291, 296 (5th Cir. 2014) (following Pilgrim’s Pride).
And the Fifth Circuit, in a recent published opinion, has rejected the argument
“that Perdue clearly disfavors applying the Johnson factors to determine a fee award
and instead requires the use of only the lodestar.” Combs v. City of Huntington, Tex.,
___ F.3d ____, No. 15-40436, 2016 WL 3878176, at *4 (5th Cir. July 15, 2016). The
Court of Appeals explained that
[w]e agree that Perdue requires courts to first calculate the lodestar;
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indeed, this has long been our practice. See, e.g., League of United Latin
Am. Citizens No. 4552 (LULAC) v. Roscoe Ind. Sch. Dist., 119 F.3d 1228,
1232 (5th Cir. 1997) (“The method by which the district court calculates
an attorneys’ fees award is well established. The district court first
calculates the ‘lodestar.’ ”). But Perdue does not, as Combs contends,
make it impermissible to then consider any relevant Johnson factors.
Perdue cautions against the sole use of the Johnson factors to calculate
a reasonable attorney’s fee but nowhere calls into question the use of
relevant Johnson factors to make this determination. Indeed, Perdue
expressly allows adjustments “in those rare circumstances in which the
lodestar does not adequately take into account a factor that may properly
be considered in determining a reasonable fee.” 559 U.S. at 554, 130 S.
Ct. 1662.
....
And though the lodestar is presumed reasonable, it may be adjusted
where it “does not adequately take into account a factor that may be
properly considered in determining a reasonable fee.” Perdue, 559 U.S. at
554, 130 S. Ct. 1662. .... Perdue, consistent with the Court’s frequent
pronouncements, explains that lodestar enhancements are to be rare. ....
In sum, the district court should begin by calculating the lodestar:
the reasonable hours expended multiplied by a reasonable rate. The
district court may then determine whether any other considerations
counsel in favor of enhancing or decreasing the lodestar. In light of the
“strong presumption” that the lodestar represents a sufficient fee,
enhancements must necessarily be rare. Perdue, 559 U.S. at 553-54, 130
S. Ct. 1662.
Id. at *4-*5.
Perdue, then, did not change the landscape of calculating attorneys’ fees awards
in the Fifth Circuit. Accordingly, the analysis below will take into account the
necessary factors when determining the appropriate amount of attorneys’ fees to be
awarded under Rule 37(a)(5).
Analysis
Plaintiff’s Application requests an order requiring Defendants to pay his costs
and fees in the amount of $2,950.04. See Dkt. No. 46 at 1. Plaintiff calculated the fees

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that he incurred by multiplying the 19.6 hours worked by the hourly rates of the
attorney and paralegal who billed those hours to arrive at the total of $2,929.00. See
id. Plaintiff also seeks $21.04 in costs pertaining to various mailings to Defendants
regarding the MTC. See id. at 4.
The fees sought consist of work performed by an attorney, Theodore F. Shiells,
and a paralegal from the Shiells Law Firm, P.C. The reported time is attributable to
drafting, editing, and filing Plaintiff’s MTC seeking responses to his first twenty-five
interrogatories and requests for production as well as correspondence with opposing
counsel regarding said discovery. See id. at 3-4. Plaintiff seeks 3.4 hours at $385.00 an
hour ($1,309.00) for the work performed by Mr. Shiells and 16.2 hours at $100.00 an
hour ($1,620.00) for the work performed by his firm’s paralegal, for a total of $2,929.00.
See id. at 1, 3-4.
Plaintiff’s Application is supported by the Declaration of Theodore F. Shiells,
which incorporates his firm’s records and the 2015 American Intellectual Property Law
Association Survey (“AIPLA Survey”) as support. See Dkt. No. 46-1 at ¶¶ 4,6. Mr.
Shiells declares that he has 33 years of intellectual property litigation experience. See
id. at ¶ 3. The AIPLA Survey shows that the average billing rates for intellectual
property attorneys with 25-34 years of experience is between $300 to $500 per hour.
Id. at 8; see also id. at ¶ 4. Though Mr. Shiells explains that his “billing rate [of $385
per hour] is significantly below that of similarly experienced litigators in the area of
patent litigation,” the AIPLA Survey shows that Shiells’ rates are within the range –
not below. Id. at ¶ 4. Mr. Shiells further declares that, based on his experience of
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approximately twenty years of practice in the Dallas area, the paralegal’s rates are
below the average paralegal rates charged in the area. See id. at ¶ 5.
The billing records Mr. Shiells submitted reflect the work that he performed
along with a paralegal. See id. at ¶¶ 3-6.The records include a narrative description of
the work done and the number of hours that it took to complete the work. See id. at ¶
6.
The Court has carefully reviewed these records and finds that the 19.6 total
hours that Plaintiff attributes to briefing, editing, and filing the MTC and
communicating with Defendants’ counsel regarding the MTC are reasonable and
necessary and not excessive, duplicative, or inadequately documented and therefore
were reasonably expended for the tasks for which the Court has determined that
Plaintiff should be awarded his attorneys’ fees.
Mr. Shiells’s declaration contains evidence (the AIPLA Survey) that the
requested rates are in line with those prevailing for similar services by lawyers of
reasonably comparable skill, experience, and reputation. See id. at 4-8. Although the
AIPLA Survey does not indicate which rates are prevalent in this judicial district, see
id., it is well-established that the Court may use its own expertise and judgment to
make an appropriate independent assessment of the hourly rates charged for the
attorneys’ services, see Davis v. Bd. of Sch. Comm’rs of Mobile Cnty., 526 F.2d 865, 868
(5th Cir. 1976); see also Vanliner Ins. Co. v. DerMargosian, No. 3:12-cv-5074-D, 2014
WL 1632181, at *2 (N.D. Tex. Apr. 24, 2014) (noting that the Court is an expert on the
reasonableness of attorneys’ fees); accord Tollett, 285 F.3d at 368.
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The Court finds that hourly rates of $385.00 for a 33-year lawyer and $100.00
for a paralegal are reasonable and within the market rate for attorneys handling this
type of litigation in the Dallas area.
The Court therefore finds the appropriate lodestar here to be calculated as 3.4
hours at $385.00 an hour ($1,309.00) for the work performed by Mr. Shiells and 16.2
hours at $100.00 an hour ($1,620.00) for the work performed by his firm’s paralegal,
for a total of $2,929.00.
The Court has considered the Johnson factors but notes that the lodestar is
presumed to be reasonable and should only be modified in exceptional cases. Here, the
Court notes that Plaintiff does not seek an enhancement of his attorneys’ fees. And the
Court finds that there are no other exceptional circumstances.
The Court further determines that Plaintiff may properly recover his requested
costs incurred in the amount of “$21.04 in postage costs for various certified and
regular mail items sent to Defendants SW Closeouts Inc. and Quang Ho Nhat Nguyen,
related to Plaintiff’s Motion to Compel Discovery Responses.” Dkt. No. 46-1 at ¶ 8. “The
‘expenses’ allowed under Rule 37 include both attorneys’ fees and costs reasonably
incurred in bringing the motion to compel.” Aevoe Corp. v. AE Tech Co., No.
2:12-CV-00053-GMN-NJK, 2013 WL 5324787, at *8 (D. Nev. Sept. 20, 2013).
Conclusion
The Court GRANTS Plaintiff’s Application for Attorney’s Fees and Costs [Dkt.
No. 46] and ORDERS that Defendants SW Closeouts, Inc. and Quang Ho Nhat Nguyen
are required, jointly and severally, to, by September 12, 2016, pay Plaintiff Simon
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Nicholas Richmond his reasonable attorneys’ fees and costs incurred in making his
Motion to Compel Discovery Responses and Request for Sanctions [Dkt. No. 42] in the
amount of $2,950.04.
Not later than September 26, 2016, Plaintiff must file an updated status report
with the Court advising of the status of Defendants’ compliance with this order and the
Court’s Memorandum Opinion and Order Granting in Part and Denying in Part
Plaintiff’s Motion to Compel Discovery Responses and Request for Sanctions [Dkt. No.
45].
SO ORDERED.
DATED: August 16, 2016

_________________________________________
DAVID L. HORAN
UNITED STATES MAGISTRATE JUDGE

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