Keycorp v. Holland et al
MEMORANDUM OPINION AND ORDER granting in part and denying in part 131 Motion for Attorney Fees filed by Keycorp. The Court orders that Defendant Martin Mbeteni's counsel is required to, by 12/15/2017, pay Plaintiff KeyCorp $7,827.75 for its reasonable expenses, including attorneys' fees, incurred in preparing and filing of Plaintiff KeyCorp's Motion for Sanctions Against Defendant Martin Mbeteni. (Ordered by Magistrate Judge David L. Horan on 2/15/2017) (epm)
IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
ALLISON HOLLAND, et al.,
MEMORANDUM OPINION AND ORDER
Plaintiff KeyCorp (“KeyCorp” or “Key”) filed a Motion for Sanctions Against
Defendant Martin Mbeteni [Dkt. No. 91] (the “Sanctions Motion” or “Motion for
Sanctions”) under Federal Rule of Civil Procedure 37(b). United States District Judge
Sidney A. Fitzwater referred the Sanctions Motion to the undersigned United States
magistrate judge for hearing, if necessary, and recommendation or determination
pursuant to 28 U.S.C. § 636(b). See Dkt. No. 92.
In a November 10, 2016 Memorandum Opinion and Order, the Court granted
Plaintiff KeyCorp’s Motion for Sanctions Against Defendant Martin Mbeteni [Dkt. No.
91]. See Dkt. No. 103. The Court, finding that no other circumstances make an award
of expenses unjust, ordered that, under Federal Rule of Civil Procedure 37(b)(2)(C),
Defendant Martin Mbeteni’s counsel must pay the reasonable expenses, including
attorneys’ fees, that Plaintiff KeyCorp incurred in preparing and filing the Sanctions
Motion. See Dkt. No. 103 at 18.
Mbeteni’s counsel and KeyCorp’s counsel were ordered to confer, but were
unable to reach an agreement, as to the amount of attorneys’ fees and costs to be
awarded to KeyCorp. See Dkt. No. 125. KeyCorp therefore filed an Application for
Attorneys’ Fees, see Dkt. No. 131 (the “Application”), as the Court directed, see Dkt. No.
103 at 18-19. Mbeteni filed a response, see Dkt. No. 152, and KeyCorp has filed a reply,
see Dkt. No. 153.
For the reasons and to the extent explained below, the Court GRANTS in part
and DENIES in part Plaintiff’s Application.
As the Court previously explained, the Sanctions Motion ultimately arises out
of the Court’s ruling on KeyCorp’s August 24, 2016 Motion for Expedited Discovery and
Rule 34 Examination of Computer Systems [Dkt. No. 30] (the “Expedited Discovery
Motion”) but, more particularly, KeyCorp contended that Mbeteni violated the Court’s
October 26, 2016 Memorandum Opinion and Order [Dkt. No. 87], which granted in
part and denied in part KeyCorp’s Motion to Compel Defendant Mbeteni’s Responses
to Plaintiff’s Discovery Requests [Dkt. No. 77] (the “Mbeteni MTC”).
Judge Fitzwater ruled on the Expedited Discovery Motion separately as to
Defendant Allison Holland, who had agreed to a consent order that Judge Fitzwater
entered, see Dkt. No. 57; see also Dkt. No. 56 at 1 n.1 (“Plaintiff and defendant Allison
Holland  have agreed to a schedule governing expedited discovery and a Rule 34
examination of computer systems. The court will enter an order that applies to Holland
after plaintiff and Holland comply with the court’s September 6, 2016 order.”), and as
to Mbeteni, as to whom Judge Fitzwater granted the Expedited Discovery Motion
“based on [KeyCorp’s] showing of good cause,” Dkt. No. 56 at 1.
In the September 14, 2016 Order as to Defendant Martin Mbeteni, the Court
ordered that “Mbeteni has 15 days from the date of this order to respond to plaintiff’s
written discovery requests already served” and that “Plaintiff may conduct Rule 34
forensic inspections of Mbeteni’s computer networks, workstations, devices, and email
accounts on notice of seven business days” and that “Mbeteni shall facilitate plaintiff’s
forensic expert to do the following: A. Image the home computers of Mbeteni; B.
Capture all webmail accounts of Mbeteni; and C. Capture all mobile and personal
devices of Mbeteni.” Id. at 1-2.
The Court also previously entered a Stipulated Protective Order (the “SPO”) that
provides, among other things, that “[i]t governs any document, information, or other
thing furnished by any party to any other party”; that “[t]he protections conferred by
this Stipulation and Order cover not only Protected Material (as defined above), but
also (1) any information copied or extracted from Protected Material; (2) all copies,
excerpts, summaries, or compilations of Protected Material; and (3) any testimony,
conversations, or presentations by Parties or their Counsel that might reveal Protected
Material”; that “[t]he failure to designate any document or information as confidential
will not be deemed to waive a later claim as to its confidential nature, or to stop the
producing party from designating such information as confidential at a later date in
writing and with particularity”; that “[i]nformation designated as Confidential
Information or Highly Confidential Attorneys’ Eyes Only Information may only be used
for purposes of preparation, trial, and appeal of this action”; that “[t]he existence of this
Protective Order must be disclosed to any person producing documents, tangible
things, or testimony in this action who may reasonably be expected to desire
confidential treatment for such documents, tangible things or testimony”; that “[a]ny
such person may designate documents, tangible things, or testimony confidential
pursuant to this Protective Order”; that “[t]he terms of this Order are applicable to
information produced by a Non-Party in this action and designated as
“CONFIDENTIAL” or “HIGHLY CONFIDENTIAL – ATTORNEYS’ EYES ONLY”; that
“[s]uch information produced by Non-Parties in connection with this litigation is
protected by the remedies and relief provided by this Order”; and that “[n]othing in
these provisions should be construed as prohibiting a Non-Party from seeking
additional protections.” Dkt. No. 13 at 4, 5, 7, 9-10.
The SPO further provides that “[t]he disclosure of privileged or work-product
protected documents, electronically stored information or information is not a waiver
of the privilege or protection from discovery in this case or in any other federal or state
proceeding” and that “[t]his Order shall be interpreted to provide the maximum
protection allowed by Federal Rule of Evidence 502(d).” Id. at 8.
In the Mbeteni MTC, KeyCorp sought an order compelling Mbeteni “to provide
complete responses to Key’s First Set of Requests for Admission and Interrogatories
and First Set of Requests for Production of Documents within seven days of the filing
of this Motion in furtherance of the expedited discovery already ordered by the Court”
and “to produce all responsive documents and amend his formal responses” and
awarding KeyCorp “all expenses, including attorneys’ fees and costs, incurred in
connection with this Motion and the related discovery dispute.” Dkt. No. 77 at 1.
KeyCorp reported that on July 29, 2016, it “propounded the following on Mbeteni: 1)
Plaintiff’s First Set of Requests for Admission and Interrogatories and 2) Plaintiff’s
First Set of Requests for Production of Documents.” Id. at 3-4.
In the Mbeteni MTC, KeyCorp contended that “Mbeteni failed to produce any
documents in response to Key’s Requests for Production, failed to properly admit or
deny a Request for Admission, and failed to verify Answers to Interrogatories. Key’s
attempts to resolve the dispute with Mbeteni were unsuccessful.” Id. at 1. More
specifically, KeyCorp reported that “Mbeteni produced not a single document to
[KeyCorp] and may be improperly withholding documents” and that “Mbeteni failed
to admit or deny Request for Admission No. 23, and did not produce a verification of
his Answers to Interrogatories.” Id. at 4. KeyCorp requested that the “Court compel
Mbeteni to immediately produce responsive documents, clarify if he is withholding
documents from production, admit or deny Request for Admission No. 23, and produce
Mbeteni’s verification of his Answers to Interrogatories.” Id. at 3.
Following oral argument on the Mbeteni MTC, the Court ordered, in relevant
part, as follows:
KeyCorp explains that “Mbeteni produced no documents in
response to [KeyCorp’s] Requests for Production of Documents,” “raised
no objection nor provided responsive documents to Document Request No.
1,” and, “[i]n response to Document Requests Nos. 5, 6, 8, and 11, ...
stated that the documents sought are already in [KeyCorp’s] possession
pursuant to the forensic inspection being performed in this case.” Dkt.
No. 77 at 5.
Mbeteni responds that he has “agreed to conform his responses and
has in fact served those conformed responses on Key Corp and all counsel,
on October 20, 2016 as promised” and therein “indicates that he has no
responsive documents in his possession but any responsive documents
may be found during the forensic inspection and will be produced in that
process.” Dkt. No. 82 at 3. According to Mbeteni, he “does not have any
responsive documents in his possession, custody or control other than
those subject to the current forensic inspection.” Id. at 5. Mbeteni
contends that KeyCorp’s motion to compel “should be denied because
Mbeteni indicates that he has no responsive documents in his possession
but any responsive documents may be found during the forensic
inspection and will be produced in that process but this response was not
satisfactory to Key on the basis of mere speculation.” Id.
In reply, KeyCorp asserts that “Mbeteni must comply with his
basic obligations to participate in discovery, and yet the way he moves the
target around makes it clear that he has not.” Dkt. No. 85 at 1.
Here, the Court’s orders permit KeyCorp to serve document
requests and, separately, to engage in forensic inspections. See Dkt. No.
56 at 1-2; Dkt. No. 57 at 1, 2. In the face of those orders, neither Holland
nor Mbeteni have shown that the discovery sought through the document
requests served on each of them is unreasonably cumulative or
duplicative or can be obtained from some other source that is more
convenient, less burdensome, or less expensive.
But the motivation for these motions to compel is to provide
documents in advance of depositions scheduled for the first days of
November, in advance of the November 11, 2016 submission date as to
KeyCorp’s preliminary injunction motion. The Consent Order as to
Holland provides that “Holland’s counsel shall provide Plaintiff’s counsel
with any and all objections to production, in writing, within 7 days after
the date upon which all such forensic inspection results have been
provided to Holland’s counsel.” Dkt. No. 57 at 3. At oral argument,
Holland’s counsel and KeyCorp’s counsel agreed that final word that data
from Holland’s iPhone would be inaccessible came down on October 24,
2016. The Court agrees with Holland’s counsel that Holland therefore has
until October 31, 2016 to comply with the requirements of paragraph 9
of the Consent Order [Dkt. No. 57].
Holland’s counsel also affirmed to the Court at oral argument that,
as part of counsel’s review of “all documents and information imaged
and/or captured from Holland’s computer networks, workstations,
devices, and email accounts,” id. at 2, Holland’s counsel would review
those documents and information for responsive to KeyCorp’s First Set
of Requests for Production of Documents to Holland and would provide
KeyCorp with a document production and information as required by
Rule 34(b)(2)(E) by October 31, 2016. Mbeteni’s counsel likewise affirmed
that she is engaged in the same process and will, within the time frame
allowed for her review and objections to the copy of the documents, data,
and information that are the results of the searches run by KeyCorp’s
forensic expert, pursuant to the search protocol attached to KeyCorp’s
opposition [Dkt. No. 70-6], pursuant to KeyCorp’s forensic inspections of
Mbeteni’s computer networks, workstations, devices, and email accounts.
Under the circumstances, the Court will, pursuant to Rule 26(b)(1)
and 26(b)(2), order Holland and Mbeteni to review the documents and
information provided to them by KeyCorp’s forensic expert within the
time allowed by the relevant order [Dkt. Nos. 57 and 72], subject to any
extensions to which KeyCorp agrees, and to provide to KeyCorp the
documents and information as required by Rule 34(b)(2)(E) that is
responsive to KeyCorp’s First Set of Requests for Production of
Documents to each defendant, subject to any objections that have been
raised and are not overruled in this order, by the deadline provided for
objections under the relevant order [Dkt. Nos. 57 and 72].
Mbeteni and Holland otherwise have ongoing supplementation
obligations under Federal Rule of Civil Procedure 26(e)(1) to produce any
responsive documents or information within their respective possession,
custody, or control, and this order is entered without prejudice to
KeyCorp’s filing any future motion to compel.
Dkt. No. 87 at 20-24.
According to the Sanctions Motion, “[d]espite Key’s numerous good faith
attempts to complete discovery in this case, Mbeteni ha[d] refused to comply with his
discovery obligations”; “[h]e failed to comply with this Court’s Order of October 25,
2016 (Doc. No. 87) which, among other things, compelled Mbeteni’s production of
documents by no later than October 31, 2016”; “Mbeteni’s failure to comply with the
Order prevent[ed] Key from moving forward with this case, prevents Key from
conducting a meaningful deposition of Mbeteni, and prevent[ed] Key from conducting
a meaningful deposition of Defendant Allison Holland”; and “Mbeteni’s foot-dragging
has increased the cost of this litigation in both dollars and time.” Dkt. No. 91 at 3.
KeyCorp requested “that this Court impose sanctions against Mbeteni, order
appropriate compliance, and order Mbeteni to pay costs incurred by his
According to KeyCorp, the October 26, 2016 Memorandum Opinion and Order
[Dkt. No. 87] “provides that, to facilitate his production of documents, Mbeteni would
– at his request – complete a review of documents generated through [KeyCorp’s]
forensic inspection of his computers, electronic devices, and webmail”; “[KeyCorp’s]
forensic consultant, [Business Intelligence Associates, Inc. (“BIA”)], had already made
about 14,000 documents available to Mbeteni through a web-based review platform”;
“Mbeteni agreed – and the Court ordered – that Mbeteni would finish reviewing the
documents by October 31, coding the documents that are responsive and not
privileged”; but “Mbeteni did not produce any documents to [KeyCorp] by the October
31, 2016 deadline.” Id. at 4.
KeyCorp further explained that, “[o]n October 31, 2016, [KeyCorp’s] forensic
expert, BIA, reported that as of that afternoon Mbeteni had reviewed just 735 of the
14,000 documents hosted in BIA’s database”; that, “[l]ater that day, at 8:25 p.m.
Eastern Time, Mbeteni communicated to BIA that Mbeteni had located 175 documents
to produce and wanted to start making a rolling production”; that, “[l]ater that night,
[KeyCorp] advised Mbeteni that Mbeteni had produced no documents in violation of
the Court’s Order, which was not surprising since Mbeteni had reviewed fewer than
1,000 documents out the 14,000 documents in the database”; and that KeyCorp
“advised that it could not and would not depose Mbeteni on Friday, November 4, and
had already agreed with Holland to reschedule her deposition (due to Mbeteni’s
discovery delay).” Id. at 5 (emphasis removed).
According to KeyCorp, “[o]n November 1, 2016, Mbeteni produced Martin
Mbeteni’s First Rolling Production To [KeyCorp’s] Requests For Production (‘First
Rolling Production’), supplementing his response to Key’s Document Request No. 8
only, but produced no documents to Key,” and, “[a]ccording to the First Rolling
Production, ‘The specific documents with their control numbers as listed below shall
be turned over to counsel for KeyCorp through KeyCorp’s expert, BIA, as soon as BIA
can produce them electronically through Relativity. Any future information that is
responsive, shall be produced in the next rolling production on the 7th day from this
production….’” Id. (emphasis removed).
In its November 10, 2016 Memorandum Opinion and Order, the Court,
[a]fter carefully considering the parties submissions in connection with
the Sanctions Motion and the undersigned’s own familiarity with the
proceedings leading up to the orders on the Motion for Protective Order
in Favor of Lularoe for U by Ebonie and Jennifer™ or to Modify/limit the
Order [Document 56] Scheduled to Be Enforced on October 4, 2016 [Dkt.
No. 65], KeyCorp’s Motion to Compel Defendant Holland’s Responses to
Plaintiff’s Discovery Requests [Dkt. No. 76], and KeyCorp’s Motion to
Compel Defendant Mbeteni’s Responses to Plaintiff’s Discovery Requests
[Dkt. No. 77], ... determine[d] that Mbeteni has violated the Court’s
October 26, 2016 Memorandum Opinion and Order [Dkt. No. 87] by
failing to complete to fully “review the documents and information
provided to them by KeyCorp’s forensic expert within the time allowed by
the relevant order [Dkt. Nos. 57 and 72], subject to any extensions to
which KeyCorp agrees, and to provide to KeyCorp the documents and
information as required by Rule 34(b)(2)(E) that is responsive to
KeyCorp’s First Set of Requests for Production of Documents to” Mbeteni
by October 31, 2016. Dkt. No. 87 at 24.
The record does not support Mbeteni’s assertion that KeyCorp
extended the October 31 deadline, where Mbeteni reports that an
agreement to a rolling production beyond that date was apparently
reached during the October 25, 2016 oral argument. But no such
agreement was reached during that oral argument, in which KeyCorp’s
counsel participated only by telephone, and, in any event, the Court’s
October 26, 2016 Memorandum Opinion and Order [Dkt. No. 87] did not
order or authorize Mbeteni to comply beyond October 31, 2016. That
order made clear that “the Court’s orders permit KeyCorp to serve
document requests and, separately, to engage in forensic inspections”;
that, “[i]n the face of those orders, neither Holland nor Mbeteni have
shown that the discovery sought through the document requests served
on each of them is unreasonably cumulative or duplicative or can be
obtained from some other source that is more convenient, less
burdensome, or less expensive”; and that Mbeteni would be permitted to
review and produce, by October 31, from the search results from the
forensic image only because “the motivation for these motions to compel
is to provide documents in advance of depositions scheduled for the first
days of November, in advance of the November 11, 2016 submission date
as to KeyCorp’s preliminary injunction motion.” Id. at 22, 23.
Under these circumstances, the Court [found] that Mbeteni
violated the Court’s October 26, 2016 Memorandum Opinion and Order
[Dkt. No. 87], without substantial justification, by failing to fulfill his
discovery obligations by October 31 as this Court ordered him to do (and
as his counsel committed to doing at the October 25 oral argument) and
that Rule 37(b)(2) sanctions that are just and specifically related to the
matter at issue in the discovery order are warranted.
The Court further determine[d] that KeyCorp adequately conferred
before filing the Sanctions Motion and that further conferring would not
have avoided the need for the motion where Mbeteni disagreed that he
was out of compliance with the Court’s order and would not agree to
proposals to extend deadlines and move depositions to avoid the need for
filing the motion. And the Court determine[d] that, on this record and
under the circumstances, there is no basis for sanctions against KeyCorp.
Any unhappiness or frustration that Mbeteni may have at KeyCorp’s
having sued him, seeking preliminary injunctive relief, and seeking (and
having obtained) authorization for expedited discovery have no bearing
on what the Court’s October 26, 2016 Memorandum Opinion and Order
[Dkt. No. 87] required and whether Mbeteni has complied with that
discovery order. Neither does KeyCorp’s having filed motions to extend
certain deadlines. As to Mbeteni’s suggestion that KeyCorp should be
sanctioned based on the parties’ not having conferred on a scheduling
proposal, the Court further note[d] that KeyCorp’s request to extend the
due date for the parties’ scheduling proposal has now been granted.
See Dkt. No. 101.
The Court determine[d] that the least severe sanction adequate to
achieve Rule 37(b)(2)’s purposes of reimbursing KeyCorp and deterring
violations of the Court’s discovery orders is to order (1) that Defendant
Martin Mbeteni must produce all responsive documents as ordered in the
Court’s October 26, 2016 Memorandum Opinion and Order [Dkt. No. 87]
by no later than November 21, 2016, in order to permit depositions of
Defendants Martin Mbeteni and Allison Holland by December 14, 2016;
(2) that Section 4 of the September 15, 2016 Consent Order Granting
Motion for Expedited Discovery & Motion for Rule 34 Examination of
Computer Systems as to Defendant Allison Holland [Dkt. No. 57] is
amended to provide that the Motion for Preliminary Injunction [Dkt. No.
23] shall be deemed submitted for decision on December 19, 2016; and
(3), finding that no other circumstances make an award of expenses
unjust, that Defendant Martin Mbeteni’s counsel must pay the
reasonable expenses, including attorneys’ fees, that Plaintiff KeyCorp
incurred in preparing and filing of its Motion for Sanctions Against
Defendant Martin Mbeteni [Dkt. No. 91].
Dkt. No. 103 at 15-18; see generally Brown v. Bridges, No. 3:12-cv-4947-P, 2015 WL
410062, at *1-*4 (N.D. Tex. Jan. 30, 2015) (explaining that, when a district judge refers
a motion for sanctions to a magistrate judge, the sanction chosen by the magistrate
judge, rather than the sanction sought by the party, governs the determination of
whether Federal Rule of Civil Procedure 72(a) or 72(b) applies and that, when the
magistrate judge finds that dismissal or another sanction disposing of a claim or
defense in unwarranted, the motions should be characterized as non-dispositive and
may be ruled on by the magistrate judge) (followed in Green Hills Dev. Co., LLC v.
Credit Union Liquidity Servs., LLC, No. 3:11-cv-1885-L-BN, Dkt. No. 373 at 2 (N.D.
Tex. Dec. 1, 2016)).
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. 92;
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).
Federal Rule of Civil Procedure 37(b)(2)(A) provides that, “[i]f a party ... fails to
obey an order to provide or permit discovery, ... the court where the action is pending
may issue further just orders. They may include the following: (i) directing that the
matters embraced in the order or other designated facts be taken as established for
purposes of the action, as the prevailing party claims; (ii) prohibiting the disobedient
party from supporting or opposing designated claims or defenses, or from introducing
designated matters in evidence; (iii) striking pleadings in whole or in part; (iv) staying
further proceedings until the order is obeyed; (v) dismissing the action or proceeding
in whole or in part; [or] (vi) rendering a default judgment against the disobedient
party.” FED. R. CIV. P. 37(b)(2)(A)(i)-(vi). Rule 37(b)(2)(C) further requires that,
“[i]nstead of or in addition to the orders [described under Rule 37(b)(2)(A)], the court
must order the disobedient party, the attorney advising that party, or both to pay the
reasonable expenses, including attorney’s fees, caused by the failure, unless the failure
was substantially justified or other circumstances make an award of expenses unjust.”
FED. R. CIV. P. 37(b)(2)(C).
“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). That includes attorneys’ fees awarded as
discovery sanctions under Rule 37. See Tollett v. City of Kemah, 285 F.3d 357, 367 (5th
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,
285 F.3d at 368. Generally, the reasonable hourly rate for a community is established
through affidavits of other attorneys practicing there. See id. But the Court also may
use its own expertise and judgment to make an appropriate independent assessment
of the hourly rates charged for the attorneys’ services. See Primrose Operating Co. v.
Nat’l Am. Ins. Co., 382 F.3d 546, 562 (5th Cir. 2004); Davis v. Bd. of Sch. Comm’rs of
Mobile Cnty., 526 F.2d 865, 868 (5th Cir. 1976); 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).
The party seeking reimbursement of attorneys’ fees bears the burden to “produce
satisfactory evidence – in addition to the attorney’s own affidavits – that the requested
rates are in line with those prevailing in the community for similar services by lawyers
of reasonably comparable skill, experience and reputation,” Blum, 465 U.S. at 896 n.11,
as well as to establish 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. 1993). A movant seeking attorneys’ fees is also “charged with the burden of
showing the reasonableness of the hours billed and, therefore, are also charged with
proving that they exercised billing judgment,” which “requires documentation of the
hours charged and of the hours written off as unproductive, excessive, or redundant.”
Saizan, 448 F.3d at 799 (footnotes omitted).
The Court should use this reported time as a benchmark and then exclude any
time that is excessive, duplicative, unnecessary, or inadequately documented. See
Watkins, 7 F.3d at 457. 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. Further, “[i]f a
party does not object to particular billing entries as inadequately documented, the
court is not obligated sua sponte to sift through fee records searching for vague entries
or block billing. It is a common practice for courts to address only those potentially
inadequate entries brought to the court’s attention.” Hoffman v. L & M Arts, No. 3:10cv-953-D, 2015 WL 3999171, at *5 (N.D. Tex. July 1, 2015).
And the Court should not “eliminate wholesale the services of attorneys without
identifying the particular services which are regarded as duplicative.” Tasby v. Estes,
651 F.2d 287, 289-90 (5th Cir. Unit A July 1981) (internal quotation marks omitted).
“Percentage reductions are appropriate when attorneys impermissibly engage in block
billing or fail to exercise billing judgment” – including by failing to write off time spent
on work that was redundant and in hindsight may have been unnecessary – or “when
a court reduces excessive time spent on particular legal services” or for particular
services that are “duplicative.” Fralick v. Plumbers & Pipefitters Nat’l Pension Fund,
No. 3:09-cv-752-D, 2011 WL 487754, at *13 (N.D. Tex. Feb. 11, 2011); Shepherd v.
Dallas Cty., Tex., No. 3:05-cv-1442-D, 2009 WL 977294, at *2 n.3 (N.D. Tex. Apr. 10,
2009); accord Saizan, 448 F.3d at 799 (“The proper remedy for omitting evidence of
billing judgment does not include a denial of fees but, rather, a reduction of the award
by a percentage intended to substitute for the exercise of billing judgment.” (footnote
omitted)); Cookston v. Freeman, Inc., No. 3:98-cv-2106-D, 1999 WL 714760, at *5 (N.D.
Tex. Sept. 14, 1999).
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.
The Court recognizes that the analysis set forth above, and particularly the
interplay of the lodestar analysis and the Johnson factors, may have been called into
question by the Supreme Court’s decision in Perdue v. Kenny A., 559 U.S. 542 (2010).
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 Perdue decision, has
continued to utilize the approach laid out by this Court. See Black v. Settle Pou, P.C.,
732 F.3d 492, 502-03 (5th Cir. 2013). 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.,829 F.3d 388, 393 (5th Cir. 2016). The Court of Appeals explained that
[w]e agree that Perdue requires courts to first calculate the lodestar;
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
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 393-95.
Perdue, then, did not change the proper method for 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 Federal Rule of Civil Procedure 37(b)(2)(C).
Mbeteni’s Motion for Reconsideration
As a threshold matter, Mbeteni’s response to the Application asks the Court to
reconsider the November 10, 2016 Memorandum Opinion and Order [Dkt. No. 103]
because “there was substantial justification for the inability to complete the review in
accordance with the Order of Court due to the overwhelming pressure of trial
preparation and prescheduled deadlines in other cases as noted by the Magistrate
Judge in December 2016 when counsel for Martin Mbeteni was conducting a trial in
the District Court.” Dkt. No. 152 at 2. According to Mbeteni’s latest filing
[a]s at October 25, 2016, counsel for Martin Mbeteni had so many
preexisting conflicts on an overwhelming docket of cases, with
prescheduled deadlines which made it impossible for counsel to complete
the review by October 31st, 2016. Counsel had indicated to the court at
the October 24, 2016 hearing that it would be impossible for her to
complete the review of all documents by October 31st, 2016 and then
requested at least 14 days. The court denied Mbeteni’s motion and only
allowed 7 days. At the hearing, KeyCorp indicated its willingness to agree
to a rolling production but refused to acknowledge this agreement when
it filed its motion for sanctions. Despite her best efforts, Counsel was
unable to complete the review within the time allotted due to several
deadlines, to mention a few:
1. Preparation for trial set for November 15, 2016, Mandatory full
day Mediation on October 14, 2016 in a case set for trial on out of Dallas
2. Drafting of Post Judgment Motion for Reconsideration out of
Dallas County Family Court and Notice of Appeal, preparation of
designation of records for appeal in September 2016, and Contested
Hearing on Motion for Reconsideration and other post Judgment motions
heard on October 11, 2016.
3. Response to Motion for Summary Judgment was due in a case
out of Panola County on October 26th, 2016 and hearing was set for
November 2nd, 2016
4. Response to Motion for Summary Judgment was due in a case
out of the Delaware Supreme Court in New York on October 20th, 2016
and the hearing was set for October 27th, 2016,
5. Pretrial materials were due in September 2016 in the case
pending before the Northern District of Texas across the hall from the
Magistrate Judge’s courtroom and the Courtroom of the Honorable Judge
Fitzwater which went to trial in the first week of December, 2016.
6. Various Immigration filings and appearances at proceedings fell
within the last 3 months of the year when expedited discovery was
Counsel for Mbeteni tried desperately to meet all these deadlines
and to complete the review but when that was not feasible she
commenced a rolling production as she reviewed the documents to try to
meet the deadline. To her surprise, KeyCorp denied the agreement to
receive production on a rolling basis and filed the Motion for Sanctions.
Because KeyCorp denied that there was an agreement, the court granted
the motion for sanctions. Due to her onerous docket, post the motion for
sanctions, Counsel for Mbeteni even had to file a Notice of Conflict with
to get the deposition deadline reset. It was at this hearing that the
Magistrate Judge acknowledged the pressure counsel for Mbeteni was
under, and Mbeteni prays that the court recall this pressure and find that
the failure to complete the review was not due to lack of diligence but
that counsel had substantial justification for failure to comply with the
Order to compel. Neither Mbeteni’s nor his counsel’s conduct were borne
of want of due diligence and the court has the discretion to set aside its
own order upon review of the evidence in hindsight.
Id. at 2-3.
The Court finds no basis for reconsideration of its previous determinations in the
November 10, 2016 Memorandum Opinion and Order. These grounds were not
previously raised but could have been and therefore provide no appropriate basis for
reconsideration. And, regardless, the fact that the deposition that the Court was
required to order Mbeteni to sit for had to be rescheduled because Mbeteni’s counsel
was in trial before United States District Judge Sam Lindsay on December 14, 2016
– and, more generally, counsel’s protestations regarding her workload – do not change
the Court’s determination that the ordered sanctions are appropriate under Rule
37(b)(2)(C) or any of the findings and conclusions supporting that determination.
Neither does Mbeteni’s again repeating the rejected position that KeyCorp had agreed
during the October 24, 2016 hearing to a rolling production, which, again, in any event,
the Court did not order. Accord Dkt. No. 103 at 15-16; Dkt. No. 153 at 1-5.
KeyCorp’s Application for Attorneys’ Fees
Turning then to the merits of KeyCorp’s Application, KeyCorp requests an order
requiring Mbeteni’s counsel to pay its reasonably incurred fees and expenses in the
amount of $10,385.00. See Dkt. No. 131; Dkt. No. 153. This includes “legal fees
incurred by Kaufman & Company and forensic consulting expenses incurred by BIA.”
Dkt. No. 131 at 3.
KeyCorp’s requested fees and expenses
The fees sought consist of work performed by Steven S. Kaufman, a partner in
Cleveland, Ohio with Kaufman & Company who has been a practicing trial lawyer and
litigator for approximately 40 years with extensive trial and injunction proceeding
experience in trade secret lawsuits; Chad D. Cooper, a partner in Cleveland with
Kaufman & Company who has been a practicing trial lawyer and litigator for
approximately 20 years with significant litigation experience in trade secret lawsuits;
Sara Smoter, a junior associate in Cleveland who undertook initial research and
drafting of the Sanctions Motion; and Ashtyn Saltz, the principle associate on the
matter in Cleveland who engaged in subsequent analysis and drafting. See id. at 3-4;
Dkt. No. 131-1 at 1-2. According to the Application, “Kaufman & Company’s overall
staffing of the project directed to obtaining the Court’s Order was divided and assigned
according to level of experience,” where “Chad Cooper directed the drafting and
revising, and Steve Kaufman provided the overall direction and guidance.” Dkt. No.
131 at 4; Dkt. No. 131-1 at 2.
The reported time is attributable to preparing the Sanctions Motion, reviewing
Mbeteni’s Opposition to the Motion for Sanctions, preparing the Reply, and reviewing
the Court’s resulting order. See id.; Dkt. No. 131-1 at 2. KeyCorp seeks 2.8 hours at
$175.00 an hour ($490.00) for the work performed by Smoter; 18.4 hours at $205.00 an
hour ($3,772.00) for the work performed by Saltz; 11.7 hours at $385.00 an hour
($4,504.50) for the work performed by Cooper; and 1.3 hours at $385.00 an hour
($500.50) for the work performed by Kaufman, for a total of $9,267.00. See Dkt. No.
131-1 at 3-5.
KeyCorp’s Application is supported by the Declaration of Chad D. Cooper and,
as proof of the reasonableness of the requested hourly rates, the Declaration of
Jacqueline C. Johnson, a shareholder in Dallas at Littler Mendelson, P.C. and
KeyCorp’s local counsel. See Dkt. Nos. 131-1 & 131-2. Johnson opines that the
requested rates of $385 for partners and $175 and $205 for associates “are reasonable
and within the market range for comparably qualified attorneys practicing in Dallas.”
Dkt. No. 131-2 at 1-2.
Cooper explains that “KeyCorp’s costs and expenses related to the Motion for
Sanctions and Mbeteni’s violation of the Court’s Order (Doc. No. 87) include costs
incurred by [BIA], a Computer Forensics, Electronic Discovery and Information
Management consulting firm retained by KeyCorp for this lawsuit.” Dkt. No. 131-1 at
3. “By way of background, BIA collected electronically-stored information (‘ESI’) from
Mbeteni and Defendant, Allison Holland,” and, “[t]o facilitate Mbeteni’s production of
documents (after they were overdue), BIA agreed to provide hosting and a document
review platform for Mbeteni’s use.” Id. “BIA also provided training for Mbeteni’s
Cooper asserts that “Mbeteni’s failure to complete the BIA-hosted document
review by October 31 (see Doc. No. 87), however, both necessitated KeyCorp’s filing of
the Motion for Sanctions and caused BIA to incur further cahrges in November related
to Mbeteni’s tardy document review.” Id. at 3 (emphasis removed). KeyCorp therefore
seeks to recover expenses based on 1.3 hours expended by BIA’s Joseph Mosely and
Richard Ford at $250.00 an hour ($325.00); 14.1 hours of Relativity document hosting
at $35.00 an hour ($493.50); and 3 hours of Relativity user access at $100 an hour
($300.00), for a total of $1,118.50 in expenses incurred by BIA as forensic costs
associated with the Sanctions Motion. See id. at 5; Dkt. No. 131 at 6.
Cooper’s declaration includes a narrative description of the work done by the
attorneys and by BIA and the number of hours that it took to complete the work. See
Dkt. No. 131-1 at 3-5.
“Mbeteni opposes the application for award of attorney’s fees because plaintiff
padded the bill with duplicated efforts by multiple attorneys for the same task,
included services that were wholly unrelated to the motion for sanctions and would
have been incurred in the ordinary course of reviewing documents, as well as failure
to comply with other requirements under the lodestar method of calculation.” Dkt. No.
152 at 1. According to Mbeteni, “KeyCorp requests that the court approve $10,385.00
in fees for the overstaffed services of four (4) lawyers who allegedly spent varied and
increasing time periods either in the passive role of an observer or drafting/preparing
the same 11-page Motion for Sanctions, proposed order or Reply, including for internal
conferences, phone calls and emails and even for services that took place after the
Order for Sanctions was granted.” Id. at 4; see also id. at 4-7.
Mbeteni further asserts that “KeyCorp has only provided evidence to support the
hourly rate but has failed to produce any evidence in support of reasonableness of the
hours billed for the services as required by lode-star.” Id. at 1. According to Mbeteni,
“KeyCorp has failed to exercise any billing judgment in this case and the affidavits of
counsel are inadequate, by themselves to meet the evidentiary burden to show billing
judgment. There is no evidence of any write off for unproductive, excessive or
redundant hours even though KeyCorp bears the burden of proof. As a result, after
excluding all duplicated efforts, reducing all block billed hours and striking all
unrelated, vague and passive role hours, the court should reduce the hours remaining
by 10 to 30 percent as approved by the Fifth Circuit.” Id. at 16.
And Mbeteni contends that the expenses that BIA incurred were all “Unrelated
Post Order ‘Expenses’ that would have been incurred notwithstanding the Order.” Id.
Mbeteni requests that the Court “limit the hours to those actually spent on the
Motion for Sanctions and exclude all block billed time periods, duplicative, excessive,
passive observer, inadequately documented time records and bills that show lack of
billing judgment” and “strike all expenses as naturally occurring from the review and
arising after the Order for sanctions was granted because these do not constitute
‘costs,’” where “[t]hese expenses would have been incurred notwithstanding the Motion
for Sanctions being filed.” Id. at 8. And, “[i]f the court is inclined to grant an award of
any amount of attorneys’ fees, Mbeteni humbly requests that the court grant a
structured payment plan of $200 per month until paid off as neither he nor his
attorney have the bulk cash to pay more than $200 per month.” Id. at 17.
KeyCorp replies that it
reviewed its bills and identified only those entries pertaining to Key’s
Motion for Sanctions. Key explained in its Application how it reasonably
staffed and managed the work relating to the Motion for Sanctions, and
Key incurred total fees and expenses in the amount of $10,385, including
legal fees incurred by Kaufman & Company and forensic consulting
expenses incurred by BIA. In the Application, Key presented evidence of
the reasonable time expended and of the reasonableness of the hourly
rates charged. Mbeteni presents no evidence that Key’s efforts in dealing
with his abject failure to make discovery should have required less time.
And Mbeteni presents no evidence that Key’s counsel’s rates were
excessive. Key’s method is in accordance with the lodestar method, and
the Court should grant the application in full.
Dkt. No. 153 at 2 (emphasis removed).
Mbeteni does not challenge the reasonableness of KeyCorp’s attorneys’ requested
hourly rates, and the Court finds that the hourly rates of $385.00 for Kaufman and
Cooper, $205.00 for Saltz, and $175 for Smoter are reasonable and within the market
rate for similar services by attorneys of reasonably comparable skills, experience, and
reputation handling this type of litigation in the Dallas area.
The Court now turns to the other lodestar-related matters raised by KeyCorp’s
Application to which Mbeteni objects.
Evidence of reasonableness of hours charged and billing judgment
Mbeteni is correct that Cooper and Johnson did not aver, as KeyCorp asserts in
its Application, that “the hours charged by Kaufman & Company to prepare the
[Sanctions] Motion, review the Opposition to the Motion, draft the Reply, and review
the Court’s Order granting the Motion were fair and reasonable under the
circumstances.” Dkt. No. 131 at 6; accord Dkt. Nos. 131-1 & 131-2.
And, in response to Mbeteni’s assertion that KeyCorp presents no evidence of
exercising billing judgment, KeyCorp responds only that it “reviewed its bills and
identified only those entries pertaining to Key’s Motion for Sanctions” and that it
“explained in its Application how it reasonably staffed and managed the work relating
to the Motion for Sanctions.” Dkt. No. 153.
Judge Fitzwater has rejected a similar reply to a similar argument, albeit in a
For its part, Altec must demonstrate, inter alia, that it exercised
billing judgment. ....
First, in its reply brief, Altec essentially says this: if billing
judgment means writing off fees because they are unproductive,
excessive, or redundant and therefore would be unreasonable to bill to the
client, then the bills sent to the client (Altec) reflect no such fees, and
Altec only seeks to recover the fees billed by its attorneys. See P. Reply
Br. 15 (“Therefore, it is hardly surprising that Altec’s fee bills fail to
reflect such amounts.”). In other words, Altec does not specifically show
that its attorneys exercised billing judgment; it just says that the bills it
receives are necessarily the product of billing judgment and it is only
those fees that it seeks to recover. But at least under federal procedure,
the fee applicant must document the hours written off in the exercise of
billing judgment. See, e.g., Saizan v. Delta Concrete Prods. Co., 448 F.3d
795, 799 (5th Cir. 2006) (“Billing judgment requires documentation of the
hours charged and of the hours written off as unproductive, excessive, or
redundant.”). It is not enough for the fee applicant merely to say that the
fees charged by its attorneys necessarily reflect the exercise of billing
Second, the one fee entry that Altec explicitly points to as reflecting
the exercise of billing judgment is the 9/27/12 entry for 0.4 hours
described as “Assemble and transmit Burr & Forman invoices to
Southwick.” P. App. 131; see P. Reply Br. 13-14. But because billing
judgment involves writing off fees as unproductive, excessive, or
redundant, it is doubtful that this could have been accomplished in 0.4
hours or that the attorney would have described this task as assembling
and transmitting invoices.
Third, the attorney declarations in the summary judgment record
do not affirmatively state that any billing judgment was exercised. See P.
App. 70-75; 114-19.
Altec Capital Servs., LLC v. Weir Bros., No. 3:11-CV-3409-D, 2013 WL 866193, at *6-*7
(N.D. Tex. Mar. 8, 2013).
To some extent, provided with adequate narrative descriptions, the Court can
judge for itself the reasonableness of hours expended and attorney work undertaken
and whether the fees were reasonably incurred in preparing and filing the Sanctions
Motion – which is the specific universe of fees caused by Mbeteni’s failure to comply
with the Court’s October 26, 2016 Memorandum Opinion and Order [Dkt. No. 87] that
the Court, in its discretion, determined should be awarded under Rule 37(b)(2)(c).
But the Court cannot assess whether KeyCorp’s attorneys exercised billing
judgment without some evidence, and KeyCorp has not provided any, even in reply.
Contrast Hancock v. Chicago Title Ins. Co., No. 3:07-cv-1441-D, 2013 WL 2391500, at
*9 (N.D. Tex. June 3, 2013). As courts have in prior cases, the Court determines that
10% reduction in the attorneys’ fees requested – after any reductions to specific time
entries based on Mbeteni’s other objections – is appropriate to account for this
omission. See Saizan, 448 F.3d at 800; SCA Promotions, Inc. v. Yahoo! Inc., No.
3:14-cv-957-O, 2016 WL 8223206, at *9-*12 (N.D. Tex. Nov. 21, 2016), rec. accepted,
2017 WL 514545 (N.D. Tex. Feb. 8, 2017); Hoffman, 2015 WL 3999171, at *5.
Alleged block billing
“The term ‘block billing’ refers to the disfavored time-keeping method by which
each lawyer and legal assistant enters the total daily time spent working on a case,
rather than itemizing the time expended on specific tasks. Block billing is disfavored
because it prevents the court from accurately determining the time spent on any
particular task, thus impairing the court’s evaluation of whether the hours were
reasonably expended. For example, a person engaging in block billing would record the
total amount of time spent on a case that day, and then group several tasks under that
single entry, leaving the court unable to determine how much time was devoted to a
given task.” Hoffman, 2015 WL 3999171, at *4 n.5 (citations and internal quotation
marks omitted). This can make it “impossible to conduct meaningful review and
determine the precise number of hours that should be reduced in each time entry due
to vague descriptions.” Barrow v. Greenville Indep. Sch. Dist., No. 3:00-cv-913-D, 2005
WL 6789456, at *12 (N.D. Tex. Dec. 20, 2005).
Mbeteni objects to Saltz’s time entries on November 7, 8, and 9, 2016 as
improper block billing. Saltz billed .20 hours for “[c]orrespondence with Chad Cooper”
and another 4.70 hours on November 7 for “[d]etailed review of Motion for Sanctions
briefing, including exhibits in support thereof and related Court orders in preparation
of Reply in Support of Motion for Sanctions; preparation of initial arguments in
response to Mbeteni’s Opposition; conference with Chad Cooper; receipt and review of
historical correspondence re issues in response to Mbeteni’s Opposition to Motion for
Sanctions.” Dkt. No. 131-1 at 4. Saltz billed 7.10 hours on November 8 for
“[p]reparation of Reply in Support of Motion for Sanctions against Mbeteni; conferences
with Chad Cooper.” Id. Saltz then, on November 9, billed .40 hours for “[r]esearch re
filing requirements re Motion for Sanctions; correspondence with Chad Cooper”;
another 3.90 hours for “[f]urther preparation of Reply in Support of Motion for
Sanctions against Mbeteni; conferences with Chad Cooper; preparation of Declaration
of Chad Cooper in support of the same; preparation of revised proposed Order”; and
another 1.60 hours to “[a]ttend to preparation of exhibits and proposed order in
relation to Reply in Support of Motion for Sanctions against Mbeteni; correspondence
and conference with Candise Gusman.” Id. Saltz’s block-billed time entries account for
17.70 hours of time at $205.00 an hour, or $3,628.50 of the total $9,267.00 in fees that
KeyCorp seeks to recover.
Mbeteni notes that Saltz’s block-billed time entry referring to Candise Gusman
“does not indicate who she is or the subject matter of his discussion with her.” Dkt. No.
152 at 13. In reply, KeyCorp explains that “Ms. Gusman is a paralegal at Kaufman &
Company who was involved in the preparation of exhibits to the reply” and asserts that
“[n]ot only does the involvement of a paralegal reduce costs, but Key also did not seek
reimbursement for her time.” Dkt. No. 153 at 7.
KeyCorp protests that the November 7 and November 9 time entries do not meet
the definition of “block billing” because Saltz recorded multiple time entries on each
of those days. This defense is not well taken – the difficulty is with an attorney’s
grouping several tasks under that single entry, leaving the Court unable to determine
how much time was devoted to a given task. Saltz’s November 7, 8, and 9 time entries
– other than the first November 7 entry that is limited to a single task – potentially
pose this difficulty even though there are multiple time entries for each day.
KeyCorp further replies that these entries do not prevent the Court from
determining the reasonableness of the time expended because they “provide great
detail as to the work that counsel performed and enable the Court to determine the
reasonableness of the hours expended” and do not require the Court to guess how much
time should be allocated to activities pertaining to the Sanctions Motion and how much
should be allocated to unrelated tasks.” Dkt. No. 153 at 6.
The Court agrees. This is not an instance in which the Court is precluded from
determining what part of a block of billed time was spent on legal work related to the
Sanctions Motion as opposed to unrelated work or purely administrative tasks, and
Mbeteni does not complain about or challenge the amount of time spent to accomplish
the listed tasks. Contrast Merrick v. Scott, No. 3:10-cv-2172-D, 2011 WL 1938188, at
*4 (N.D. Tex. May 20, 2011).
Alleged duplicative billing
Mbeteni also complains that many of KeyCorp’s attorneys’ time entries reflect
duplicative services. The Court finds these objections are, in part, not well-taken for
the reasons that KeyCorp explains in reply:
Mbeteni asserts that Key’s Application seeks fees for “duplicate
billing” that should be excluded. Mbeteni is wrong. For example, Mbeteni
claims that because multiple attorneys participated in the preparation of
the reply in support of the Motion for Sanctions, the charges must be
duplicative and therefore excluded. Kaufman & Company, like most law
firms, staffs its projects to effectively utilize its attorneys’ various levels
of experience. In this case, Mr. Saltz, an associate, was tasked with
preparing the initial draft of the reply. Mr. Cooper, a partner, made
revisions and additions to the reply and supporting documents. The work
on the reply was divided to save costs by having as much work as possible
performed by Mr. Saltz, who bills at a lower rate than Mr. Cooper.
Staffing in this manner is appropriate, and Key should not be penalized
for having two attorneys collaborate on the reply.
Dkt. No. 153 at 8.
But, “[a]s noted, the court should exclude all time that is duplicative,” and “[i]f
more than one attorney is involved, the possibility of duplication of effort along with
the proper utilization of time should be scrutinized.” Wherley v. Schellsmidt, No.
3:12-cv-0242-D, 2014 WL 3513028, at *3 (N.D. Tex. July 16, 2014). The Court is not
persuaded that KeyCorp should recover the time involved in having multiple attorneys
review the Court’s order granting the Sanctions Motion, even allowing that “Mr.
Kaufman, Mr. Cooper, and Mr. Saltz are all counsel of record on this matter who are
charged with being knowledgeable of this Court’s orders.” Dkt. No. 153 at 8.
Indeed, none of that time amounts to “reasonable expenses, including attorneys’
fees, that Plaintiff KeyCorp incurred in preparing and filing of its Motion for Sanctions
Against Defendant Martin Mbeteni [Dkt. No. 91].” Dkt. No. 103 at 18. Accordingly, the
Court will not award any fees for Cooper’s time entries on November 10, 2016 ($77.00
for .20 hours at $385.00 an hour) and November 11, 2016 ($231.00 for .60 hours at
$385.00 an hour) or Kaufman’s time entry on November 10, 2016 ($77.00 for .20 hours
at $385.00 an hour) or Saltz’s time entry on November 10, 2016 ($102.50 for .50 hours
at $205.00 an hour), resulting in a total reduction on this ground of $487.50 in fees.
Allegedly unrelated time entries
Mbeteni also complains about internal conferences among counsel that do not
specify the subject matter of the discussion. The Court credits KeyCorp’s explanation,
as borne out in context and by Cooper’s declaration, that the billed conferences in the
submitted time entries all related to the Sanctions Motion.
But the Court finds that, while perhaps reflecting great care, charging Mbeteni’s
counsel with Saltz’s “[r]esearch re filing requirements re Motion for Sanctions” and
“correspondence with Chad Cooper” on November 9, 2016, eight days after the
Sanctions Motion was filed, is excessive in context. The Court will not award this
$82.00 (.40 hours at $205.00 an hour) in fees.
Allegedly billing by “passive observers”
Mbeteni contends that “Steve Kaufman plays the passive behind the scenes role
and Mbeteni should not be billed for his passive observer roles as follows: (1) November
1, 2016 ‘Review of emails between Chad Cooper and Ms. Offoboche re Mbeteni
discovery’ when he played no part in the preparation of the motion for sanctions. (2)
November 1, 2016 unexplained ‘Email exchange with Chad Cooper’ (3) November 7,
2016 ‘Review of Mbeteni filings and conference with Chad Cooper’ none of which
explains the relationship between the conference and the Motion for Sanctions.” Dkt.
No. 152 at 15.
KeyCorp responds that “Kaufman is the managing partner of Kaufman &
Company and has been a practicing trial lawyer and litigator for approximately 40
years”; that, “[c]ontrary to Mbeteni’s conclusion that Mr. Kaufman was merely a
‘passive observer,’ Mr. Kaufman guided strategy regarding the Motion for Sanctions
and communicated his strategy input to Mr. Cooper”; and that “Mr. Kaufman’s time
was proper.” Dkt. No. 153 at 9.
The detail in these three time entries is somewhat wanting, but the timing and
context, combined with Cooper’s declaration explaining that these, along with the other
time entries, “related to the preparation and filing of Plaintiff’s Motion for Sanctions,”
Dkt. No. 131-1 at 3, adequately address these concerns. The Court finds that these fees
are properly awarded as “incurred in preparing and filing of its Motion for Sanctions
Against Defendant Martin Mbeteni [Dkt. No. 91].” Dkt. No. 103 at 18.
Expenses incurred by BIA in November 2016
The same cannot be said for the expenses, all post-dating the Court’s November
10, 2016 Memorandum Opinion and Order [Dkt. No. 103], that KeyCorp seeks to
recover for work that BIA did or charges it incurred as forensic consulting expenses.
Again, in exercising its discretion in granting the Sanctions Motion and imposing “the
least severe sanction adequate to achieve Rule 37(b)(2)’s purposes of reimbursing
KeyCorp and deterring violations of the Court’s discovery orders,” the Court has
limited the Rule 37(b)(2)(C) award to requiring that “Defendant Martin Mbeteni’s
counsel must pay the reasonable expenses, including attorneys’ fees, that Plaintiff
KeyCorp incurred in preparing and filing of its Motion for Sanctions Against Defendant
Martin Mbeteni [Dkt. No. 91].” Dkt. No. 103 at 17-18.
That does not include the “further charges” that KeyCorp contends that
Mbeteni’s violation of the Court’s October 26, 2016 Memorandum Opinion and Order
[Dkt. No. 87] “caused BIA to incur ... in November related to Mbeteni’s tardy document
review.” Dkt. No. 131-1 at 3. Accordingly, the Court will not award the requested
$1,118.50 in expenses that KeyCorp seeks.
Summary of awarded reasonable expenses, including attorneys’ fees
In sum, the Court calculates the lodestar as follows. After disallowing .80 hours
billed by Cooper, .20 hours billed by Kaufman, and .90 hours billed by Saltz, the
lodestar amount for the services of KeyCorp’s attorneys amount to 2.8 hours at $175.00
an hour ($490.00) for the work performed by Smoter; 17.5 hours at $205.00 an hour
($3,587.50) for the work performed by Saltz; 10.9 hours at $385.00 an hour ($4,196.50)
for the work performed by Cooper; and 1.1 hours at $385.00 an hour ($423.50) for the
work performed by Kaufman, for a total of $8,697.50. See Dkt. No. 131-1 at 3-5. As
explained above, the Court will reduce this by 10% for KeyCorp’s failure to present
evidence of its exercise of billing judgment, for a total lodestar figure of $7,827.75. 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 and finds no basis to
modify it here.
The Court GRANTS in part and DENIES in part Plaintiff KeyCorp’s Application
for Attorneys’ Fees [Dkt. No. 131] and ORDERS that Defendant Martin Mbeteni’s
counsel is required to, by December 15, 2017, pay Plaintiff KeyCorp $7,827.75 for its
reasonable expenses, including attorneys’ fees, incurred in preparing and filing of
Plaintiff KeyCorp’s Motion for Sanctions Against Defendant Martin Mbeteni [Dkt. No.
DATED: February 15, 2017
DAVID L. HORAN
UNITED STATES MAGISTRATE JUDGE
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