Securities and Exchange Commission v. Kiselak Capital Group LLC et al

Filing 136

Memorandum Opinion and Order granting 126 Request for Attorney Fees filed by Receiver. The court ORDERS that Receiver, Lars Berg, have and recover from Rosen the amount of $14,194.00. (Ordered by Judge John McBryde on 2/3/2012) (npk)

U.S. DISTRICT COURT
NORTHERN DISTRICT OF TEXAS

FILED

IN THE UNITED STATES DISTRICT
NORTHERN DISTRICT OF TEXA
FORT WORTH DIVISION

SECURITIES AND EXCHANGE
COMMISSION,

§

CLERK, U.S. DISTRICT COURT
by _ _---;c;:-_
Deputy

§
§
§

Plaintiff,

FEB -32012

§

VS.

§

NO. 4:09-CV-256-A

§

KISELAK CAPITAL GROUP, LLC,
ET AL.,

§
§
§

Defendants.

§

MEMORANDUM OPINION
and
ORDER
Came on for consideration the request filed by Receiver,
Lars Berg, on December 2, 2011, for attorney's fees pursuant to
Rule 37 (b) (2) (c) of the Federal Rules of civil Procedure.

In the

request, Receiver asks that Robert Rosen ("Rosen"), former
counsel to defendant Jeffrey Sykes ("Sykes"), be required to pay
the reasonable fees incurred by the Received caused by the
failure of Sykes to comply with the court's discovery order of
July 21, 2011.

Having considered the parties' filings, the

record in this case, and applicable legal authorities, the court
has concluded that the request for attorney's fees should be
granted and that Receiver should be awarded a total fee of
$14,194.00.

I.

Background
The court will provide only a summary of the facts relevant
to the request for attorney's fees, as the background of the
preceding events has already been adequately set out in the
court's orders dated July 21, 2011 ("July 21 Order"), September
20, 2011 ("Sept. 20 Order"), September 21, 2011 ("Sept. 21
Order"), and September 29, 2011 ("Sept. 29 Order") .
On June 23, 2009, the Securities and Exchange Commission
("SEC") filed a complaint against Sykes, along with three other
defendants,l for various violations of the securities trading
laws and regulations.

A final jUdgment was issued on October 15,

2009, making Sykes jointly and severally liable for a total of
$26,308,657.35.

Receiver, who was appointed to collect the

judgment on behalf of the SEC, unsuccessfully sought to obtain
information about Sykes's assets through post-judgment discovery.
On July 8, 2011, Receiver filed the first motion to compel.

The

court granted that first motion to compel in the July 21 Order,
requiring compliance on August 8, 2011.

Sykes waited until

August 9, 2011, to file a response, in which he asserted for the

IThe three other defendants, the Kiselak Capital Group, LLC, Michael J. Kiselak, and
Gemstar Gapital Group, Inc., were not party to the underlying discovery dispute or this request
for attorney's fees.
2

first time his Fifth Amendment privilege from self-incrimination
as an objection to each and every interrogatory and request for
production of documents.

Sykes then filed a motion to stay

proceedings and for protective order.
On August 31, 2011, Receiver filed an opposition to Sykes's
motion to stay proceedings and for protective order.

Receiver

also filed on the same day a second motion to compel, seeking to
enforce the terms of the court's July 21 Order mandating that
Sykes provide the requested discovery.

Sykes finally provided

the requested discovery on October 4, 2011.
In the underlying discovery dispute, Receiver filed two
motions to compel discoverYi Sykes filed one motion to stay
proceedings and for protective orderi and Receiver filed an
opposition to Sykes's motion to stay proceedings and for
protective order.

Receiver seeks an award of attorney's fees

from Rosen to cover Receiver's work related to the second motion
to compel filed on August 30, 2011, the opposition to the motion
to stay proceedings and for protective order filed on August 30,
2011, and the request for attorney's fees filed on December 2,
2011.
During a telephone conference on October 5, 2011, the court
stated that it would give the parties an opportunity to resolve
any dispute over the amount of attorney's fees for the work
3

Receiver did to obtain discovery from Sykes.

On the same day,

the court granted the motion of Rosen and John Wallace to
withdraw as counsel for Sykes. 2
Receiver and Rosen were unable to reach an agreement as to
the fees that Rosen should be required to pay.

On December 2,

2011, Receiver filed a request for attorney's fees against Rosen.
In the request, Receiver noted that Sykes had insufficient funds
and asked that Rosen be required to pay the reasonable expenses,
including reasonable attorney's fees, that were incurred by the
receivership by reason of Sykes's failure to comply with the
court's July 21 Order.

Receiver stated that under Rule

37(b) (2) (C), the court could award attorney's fees against the
attorney advising a disobedient party.

Receiver argued that the

award was warranted, because it was Rosen's advice that created
the very situation that led to the need for the second motion to
compel.
Receiver attached an affidavit and time sheet with a table
detailing the hours expended on the efforts to obtain discovery
from Sykes, along with the reasonable hourly rates charged by
Receiver, and Mary Smith ("Smith"), an associate at Receiver's
law firm who also worked on the matter.

Req. for Attorneys'

2New counsel's entry of appearance was filed, and Edwin Tomko and Jeffrey Ansley
became new counsel for Sykes.
4

Fees, App., Ex. A., Berg Decl.

Receiver requested a total of

$10,746.50 for attorney's fees, with $8,890 allocated to 25.4
hours of work done by Receiver and $1,856.50 allocated to 7.9
hours of work completed by smith and supervised by Receiver.

rd.

On January 12, 2012, Rosen filed an opposition memorandum in
response to Receiver's request for attorney's fees, arguing that
Sykes did comply with the July 21 Order, and even if Sykes had
not been in compliance, Rosen was under no obligation to pay
Receiver any amount in attorney's fees.

Rosen contended that

Sykes was substantially justified in his decision to disregard
the July 21 Order and assert his Fifth Amendment right, and that
the award of fees under these circumstances would be unjust.
Specifically, Rosen argued that his advice to his former client
to assert the Fifth Amendment privilege against selfincrimination was well-founded on case law, and pointed to
Supreme court precedent in Maness v. Meyers, 419 U.S. 449 (1975),
as a shield to any discovery sanction against Rosen.

To bolster

his claim that his advice was given in good faith, Rosen attached
an appendix that included an affidavit describing his
communications with Receiver, and a copy of Sykes's responses to
the written discovery and a subpoena from Receiver dated August
10, 2009.

5

Receiver filed a reply and attached another affidavit and
time sheet, requesting an additional $4,200 for 12 hours of work
Receiver expended on drafting the reply to Rosen's response.
Reply Br., Supplemental Berg Decl.

In the reply, Receiver argued

that Maness did not apply, because Rosen's advice to Sykes to
ignore the discovery requests was not substantially justified or
provided in good faith.

Given that, Receiver argued, Rule 37

made the award of attorney's fees mandatory in this case.
The court now turns to the applicable standard, and applies
the standard to the circumstances of this case.
II.
Analysis
A.

Standard
1.

Rule 37 Discovery Sanctions for Noncompliance with
Court Order

Receiver has requested pursuant to Rule 37(b) (2) (C) of the
Federal Rules of Civil Procedure that he recover the reasonable
expenses incurred by Receiver when Sykes failed to comply with
the July 21 Order.

Rule 37(b) (2) (C) grants the court authority

to award reasonable expenses, including attorney's fees, when a
party fails to obey an order of the court requiring that the
party provide discovery:
If a party or a party's officer, director, or managing
agent--or a witness designated under Rule 30(b) (6) or
6

31(a) (4)--fails to obey an order to provide or permit
discovery, including an order under Rule 26(f), 35, or
37(a), the court where the action is pending may issue
further just orders.

. Instead of or in addition to the orders
above, 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)

(emphasis added) .

Rule 37(b) (2) (C) therefore mandates the award of attorney's
fees, unless the failure to comply with the court order was
"substantially justified," or "other circumstances make an award
of expenses unjust."

Id.

The burden rests on the party who

failed to comply with the order to show that an award of
attorney's fees would be unjust or that the opposing party's
position was sUbstantially justified. 3

poly-America, L.P. v.

Stego Indus., L.L.C., No. 3:08-CV-2224-G, 2011 WL 1583913, at *2
(N.D. Tex. Apr. 26, 2011).

3The court notes that recovery of attorney's fees could also be had under Rule 37(a)(5)(A).
Rule 37(a)(5)(A) awards attorney's fees to a party who successfully brings a motion to compel or
a party who successfully opposes a motion for protective order. Fed. R. Civ. P. 37(a)(5)(A).
Rule 26(c)(3), which governs motions for protective orders, applies the provisions of Rule
37(a)(5)(A) to the grant or denial of a motion for protective orders. See Rose v. First Colony
Cmty. Servs. Ass'n. Inc., 199 F.3d 440,1999 WL 1068252, at *1 (5th Cir. Oct. 22, 1999)
(referring to Rule 37(a)(5) as its predecessor, Rule 37(a)(4».
7

B.

Discussion
In his opposition memorandum, Rosen contends that he should

not be required to pay attorney's fees to Receiver since (1)
Sykes adequately responded to the discovery requests and complied
with the court's July 21 Order;4 and (2) even if these responses
were inadequate and non-compliant, Sykes was substantially
justified in asserting his Fifth Amendment right in response to
the discovery.5

Furthermore, Rosen contends that (3) the

circumstances would make an award of fees unjust, because Rosen
acted in good faith in advising Sykes to assert his Fifth
Amendment right, and because the Supreme Court's decision in
Maness protects Rosen from being penalized for providing such
advice. 6
The court, after evaluating each argument in turn, concludes
that none of them has any merit.

This argument appears under subheading A of Rosen's opposition memorandum, titled
"Mr. Sykes did comply with the July 21,2011 Court Order." Opp. Mem. of Rosen at 7-8.
4

This argument appears under subheading B.1, titled "Mr Sykes's Supposed Failure to
Comply with the Court's July 21,2011 Order was Substantially Justified." Id. at 8-10.
5

These arguments appear under subheading B.2, titled "Other Circumstances Make an
Award of Expenses Unjust," and under subheading C, titled "The United States Supreme Court
Strongly Disfavors Punishing an Attorney for Advising a Client to Assert his Fifth Amendment
Right." Id. at 11-13.
6

8

1.

The Inadequacy of Sykes's Responses

First, Rosen argued that Sykes "adequately responded to
discovery and complied" with the July 21 Order, because Sykes
"asserted his right against self-incrimination in accordance with
the Supreme Court's interpretation of the Fifth Amendment."

Opp.

Mem. of Rosen at 8.
Rosen's description of Sykes's conduct glosses over the true
chain of the events leading up to this dispute.
Sykes complied with court's July 21 Order.
did not begin with the July 21 Order.

Rosen claims

However, this dispute

On the contrary, Sykes was

presented with several opportunities to respond to Receiver's
interrogatories and requests for production throughout May
through July 2011, but instead repeatedly chose to do nothing.
Then, even after the court issued the July 21 Order, Sykes
refused to comply with its requirements mandating a response on
August 8.

In his overdue and incomplete response filed on August

9, he gave no basis for why a blanket assertion of his Fifth
Amendment privilege, raised for the first time, could protect him
from disclosing standard identifying information such as his
address.
It is apparent to the court that Sykes's answers and
responses did not adhere to the standards governing answers and
responses under the Federal Rules of Civil Procedure.
9

"Each

interrogatory must, to the extent it is not objected to, be
answered separately and fully in writing under oath."
R. civ. P. 33(b) (3).

An evasive or incomplete disclosure is

treated as a failure to answer or respond.
37(a) (4).

See Fed.

Fed. R. civ. P.

"The grounds for objecting to an interrogatory must be

stated with specificity.

Any ground not stated in a timely

objection is waived unless the court, for good cause, excuses the
failure."

Fed. R. civ. P. 33 (b) (4) .

. Under these standards, Sykes's filing of the August 9
pleading could hardly have been considered to be complete or
sufficiently specific.

As the court explained in its Sept. 20

Order, Sykes's answers and responses were inadequate, and the
objections he put forth were too vague to demonstrate the grounds
of his Fifth Amendment privilege.

That conclusion remains

unchanged, and the court is still of the view that Sykes failed
to adequately respond to the discovery requests or to comply with
the July 21 Order.
2.

No Substantial Justification

Having concluded that Sykes did not comply with the July 21
Order, the court turns to the next point raised by Rosen.

In

this argument, Rosen contended that even if Sykes's responses
failed to comply with the July 21 Order, Sykes was sUbstantially

10

justified in asserting his Fifth Amendment right, in order to
prevent self-incrimination in an ongoing criminal investigation.
The court finds this point to be baseless as well.

The mere

fact that evidence might be used in a later prosecution will not
support a claim of self-incrimination.
Roundtree, 420 F.2d 845, 852

See united States v.

(5th Cir. 1969).

In its Sept. 20

Order, the court stated:
Even if the court were to entertain the notion the
Sykes has not waived his privilege, his assertion fails
for lack of specificity.
In raising such an objection,
a party must selectively invoke the privilege against
self-incrimination and "object with specificity to the
information sought from him."
[See SEC v. First Fin.
Group of Texas, Inc., 659 F.2d 660, 668 (5th Cir.
1981) .]
Sept. 20 Order at 15.
Sykes neglected to give the court "any reason to believe
that a responsive answer or an explanation for his refusals to
respond would present a danger of self-incrimination."
16.

Id. at

Although Sykes attached a grand jury subpoena from March 17,

2010, he utterly failed to provide any additional context, such
as whether he testified before the grand jury or even responded
to that subpoena.

As the Sept. 20 Order explained, the court was

thus not convinced that a true danger to self-incrimination
existed.

11

The court likewise remained unpersuaded by Sykes's motion
for reconsideration, which attached an affidavit from Rosen
describing a telephone conversation he had on September 21, 2011,
with a federal prosecutor about a criminal investigation
involving Sykes.

Sept. 29 Order at 2.

In its Sept. 29 Order,

the court determined that the motion for reconsideration and
affidavit provided insufficient information to show there was a
significant overlap between the discovery sought in the civil
case and the issues in the criminal case.
In light of its earlier conclusions, the court believes that
Sykes's position in asserting the privilege and disregarding the
July 21 Order was not substantially justified.

A party's

discovery conduct is found to be "'substantially justified' under
Rule 37 if it is a response to a 'genuine dispute, or if
reasonable people could differ as to the appropriateness of the
contested action. '"
F.2d 1154, 1163

Devaney v. Continental Am. Ins. Co., 989

(11th Cir. 1993)

487 U.S. 552, 565 (1988).

(citing to Pierce v. Underwood,

Rosen has not shown that reasonable

people could genuinely differ on whether Sykes was bound to
comply with the Rules and the July 21 Order.

Accordingly, the

court concludes that Sykes was not sUbstantially justified in
refusing to comply, and Rosen cannot avoid paYment of attorney's
fees on this basis.
12

3.

No Circumstances Making an Award Unjust

In the alternative, Rosen argued that other circumstances
would make an award of reasonable expenses against Rosen unjust.
To support this claim, Rosen argued that Sykes and Rosen were
acting in good faith, and Rosen's belief that it was in Sykes's
best interest to assert the Fifth Amendment right "was certainly
reasonable as he found a plethora of authority to support it."
opp. Mem. of Rosen at 11.

According to Rosen, a lawyer who

counsels disobedience to a court order acts within ethical bounds
so long as he has a good-faith basis for believing the order is
invalid.

Rosen further argued that Maness stood for the

principle that counsel should not be punished for advising a
client in good faith to assert his Fifth Amendment right even if
doing so would mean non-compliance with a court order.

Id. at

12-13 (citing to 419 U.S. at 465-66, 70).
The court disagrees with such a position.

To start, Maness

concerns a case in a which a lawyer was cited for criminal
contempt, whereas Rosen is now merely subject to the sanction of
attorney's fees.

Id. at 458.

Additionally, Rosen did not in the

underlying discovery dispute successfully convince the court that
a real danger of self-incrimination loomed for Sykes.

In the

absence of any new arguments introduced by Rosen on this issue,
the court continues to remain unconvinced that Sykes faced the
13

same "substantial possibility of self-incrimination" at stake in
Maness.

Id. at 452.

Most importantly, Rosen's interpretation of Maness
overstates its reach and ignores a key distinction with the
circumstances in this case.

The Supreme Court stated, in

announcing its holding:
[T]he issue is whether in a civil proceeding a lawyer
may be held in contempt for counseling a witness in
good faith to refuse to produce court-ordered materials
on the ground that the materials may tend to
incriminate the witness in another proceeding. We hold
that on this record petitioner may not be penalized
even though his advice caused the witness to disobey
the court's order.
Id. at 464.
The Supreme Court qualified this rule, however, with a goodfaith requirement:
In applying these principles it is important to
note what this case does not involve: . . . there is no
contention here as to lack of good faith or reasonable
grounds for assertion of a Fifth Amendment claim.

[T]here may be instances where advice to plead the
Fifth Amendment could be given in bad faith, or could
be patently frivolous or for purposes of delay, and
such instances would present far different issues from
those here.
Id. at 468, 470, n.9

(emphasis added).

Unlike Maness, in this case there was a contention that
Rosen lacked good faith in advising his client to ignore the
14

discovery requests and to assert his privilege at such a late
date.

The delay tactics employed are ample evidence of this lack

of good faith.

As the court chronicled in its sept. 20 Order,

Sykes's first assertion of the privilege occurred
on August 9, 2011, a total of 57 days after the
original deadline to respond to the discovery requests.
The interrogatories and requests for production of
documents were served upon Sykes, pursuant to Rule
69(b) of the Federal Rules of Civil Procedure, which
governs post-judgment discovery.
Rule 33(b) (2), which
governs the time for answering or objecting to
interrogatories, requires, in pertinent part, that
"[t]he responding party must serve its answers and any
objections within 30 days after being served with the
interrogatories." Rule 34(b) (2) required Sykes to
respond to the requests for production fo documents
within thirty days after service of the requests, and
Sykes was obligated to state in his response any
objection he had to any of the requests.
Sykes ignored the deadlines, as well as the letter
that Receiver sent requesting compliance. After the
court issued an order granting Receiver's motion to
compel and requiring that Sykes respond to the requests
by August 8, 2011, Sykes ignored that order. As the
record shows, Sykes chose not to assert his privilege
until after the deadlines imposed by the Rules of
Procedure had passed--nearly two months after the
interrogatories and requests for production were
served.
This was sixteen months after he knew that his
company was under investigation from the U.S.
Attorney's Office, and twenty-one months after a final
jUdgment had been issued against him.
Sept. 20 Order at 12-13.
The inevitable result of Rosen's position, in allowing
attorneys to advise their clients to ignore court orders, "would
be to cripple orderly processes of trial and appeal on which

15

enforcement of the laws depends."

Kleiner v. First Nat'l Bank of

Atlanta, 751 F.2d 1193, 1207-09 (11th Cir. 1985).

As a

fundamental rule, orders of the court "must be obeyed until
reversed by orderly review or disrobed of authority by delay or
frustration in the appellate process . . . . " united States v.
Dickinson, 465 F.2d 496, 509 (5th Cir. 1972), cert. denied, 414
U.S. 979 (1973).
admonition.

Parties and counsel alike are bound by this

Maness, 419 U.S. at 459.

If the order appears to be

incorrect, the proper course of action lies not in disobedience,
but in seeking review, such as the filing of an appeal. In re
Grand Jury Proceedings, 601 F.2d 162, 168-69 (5th Cir. 1979).
The arguments that Rosen previously raised in defense of
Sykes's non-compliance also cause the court to doubt that his
advice was given in good faith or that it was based on reasonable
grounds.

For instance, Rosen claimed that his advice was based

on his mistaken belief that California law controlled discovery.
Mot. for Protective Order at 20.

However, as the court noted in

its Sept. 20 Order, the federal rules or Texas practice, not
California law, govern the post-judgment discovery served.

See

Nat'l Gas Pipeline Co. of Am. v. Energy Gathering, Inc., 2 F.3d
1397, 1405 (5th Cir. 1993); Fed. R. civ. P. 69(a) (2).

The fact

that Rosen was a "securities attorney for over 35 years," Opp.
Mem. of Rosen, App., Rosen Decl. 2, makes it unlikely that he was
16

not privy to this basic procedural rule, or that he was acting in
good faith in providing such erroneous advice.
Under such circumstances, the court concludes that the
imposition of attorney's fees is appropriate.

Had Rosen truly

acted in good faith, he would have advised his client to assert
the privilege in a timely manner.

Moreover, he would have

advised his client to assert the privilege in a sufficiently
specific fashion so as to allow the court to understand the reach
of the privilege.

Rosen did neither of those things.

To be clear, Rosen has not met his burden to show that his
lack of good faith was not at issue in this case, or that his
advice to belatedly assert the privilege was based on reasonable
grounds.

Consequently, the court finds no special circumstances,

and Sykes has identified none, that would render an attorney's
fees award unjust.
4.

Reasonableness of Attorney's Fees

The Supreme Court has indicated that the
calculation is the

~most

useful starting point" for determining

the award of attorney's fees.
424, 433

(1983).

~lodestar"

Hensley v. Eckerhart, 461 U.S.

The lodestar equals

~the

number of hours

reasonably expended on the litigation mUltiplied by a reasonable
hourly rate."
reasonable fee.

rd.

The lodestar is presumed to yield a

La. Power & Light Co. v. Kellstrom, 50 F.3d 319,
17

324

(5th Cir. 1995).

Where Uan attorney's customary billing rate

is the rate at which the attorney requests the lodestar to be
computed and that rate is within the range of prevailing market
rates, the court should consider this rate when fixing the hourly
rate to be allowed. When that rate is not contested, it is prima
facie reasonable."

La. Power & Light, 50 F.3d at 328.

Receiver stated in a sworn declaration that he incurred
$14,946.50 in attorney's fees in the work that he did because of
Sykes's failure to comply with the July 21 Order.

This work

included researching and drafting the motion to compel discovery,
the opposition to the motion to stay proceedings and for
protective order, and the request for attorney's fees.
Br., Supplemental Berg Decl.

Reply

Receiver also stated that he

attempted to resolve his dispute with opposing counsel before
filing the request for attorney's fees.

Req. for Attorneys' Fees

at 2-3.
Receiver has submitted two time sheet tables in support of
the request for attorney's fees.

The first table, attached to

the request, applies to the attorney's fees incurred in filing
the two motions to compel, the opposition to the protective
order, and the request for attorney's fees.

This table indicates

Receiver did the research and prepared the described pleadings
for 25.4 hours of work at a rate of $350 an hour for a total fee
18

of $8,890, and that Smith, an associate at the same firm who was
supervised by Receiver, also did work on the pleadings for 7.9
hours at a rate of $235 an hour for a total fee of $1,856.50.
Req. for Attorneys' Fees, App., Ex. A., Berg Decl.
fee,

The total

for both Receiver and Smith, on the first table, is

$10,746.50.

Id.

The second table is attached to Receiver's reply brief,
which was directed to Rosen's opposition memorandum.

This second

table covers the work Receiver did on the reply brief, and
indicates that Receiver worked on the reply brief for 12 hours at
a rate of $350 an hour, for a total fee of $4,200.
Supplemental Berg Decl.

Reply Br.,

Receiver did not request any upward or

downward adjustment of his fee based on the lodestar, and the
court concludes that under the facts there is no need for such an
adjustment. 7
In Rosen's opposition to the request for attorney's fees, he
does not dispute the necessity for the work or the reasonableness
of the hourly rate.

Rather, Rosen's opposition is predicated on

the argument that the fees are not warranted at all, for the
reasons already discussed.

Rosen contends that the request for

7After determining the lodestar, the court must then consider the applicability and weight
of the twelve factors set forth in Johnson v. Ga. Highway Express, Inc., 488 F.2d 714, 717-19
(5th Cir. 1974). The court can make upward or downward adjustments to the lodestar if the
Johnson factors warrant such modifications. See Watkins v. Fordice, 7 F.3d 453 (5th Cir. 1993).

19

fees "must be denied in its entirety," Opp. Mem. of Rosen, but
offers no challenge to reasonableness of the fee as it is
calculated.

Despite the absence of such a challenge from Rosen,

the court will nevertheless conduct its own inquiry into the
reasonableness of the award.
Under Rule 37, a party and its counsel "can only be held
responsible for the reasonable expenses [including attorney's
fees]

caused by their failure to comply with discovery".

Chapman

& Cole & CCP, Ltd. v. Itel Container Int'l B.V., 865 F.2d 676,
687

(5th Cir.), cert. denied, 493 U.S. 872

(1989).

Accordingly,

under Rule 37, Receiver may recover reasonable expenses,
including attorney's fees, for the work on the motion to compel
discovery, the opposition to the motion for protective order, and
the request seeking attorney's fees.

Tollett v. City of Kemah,

285 F.3d 357, 368 (5th Cir. 2002).
The court, after having reviewed the motion to compel
discovery, the opposition to the motion for protective order, and
the request for attorney's fees, finds that most of the total
time expended was reasonably required to perform legal research,
and write and file the above pleadings and responses.

The only

concern the court has involves the work done on January 18, 2012,
that were devoted to "[r]esearch into the Maness line of cases"
and "review [of] additional cases."
20

Reply Br., Supplemental Berg

Decl. 2.

The court is reducing the hours that was devoted to

that work from 4.5 hours to 2.25 hours.

According to the two

declarations, Receiver worked a total of 37.5 hours on the
motions and responses.

To reflect this reduction, the court is

sUbtracting 2.25 hours from 37.5 hours that Receiver worked, so
that the reduced total is 35.25 hours.
For Receiver, the court therefore finds that 35.25 hours was
a reasonable amount of time to perform legal research and prepare
the motion to compel discovery, the opposition to the motion for
protective order, and the request for attorney's fees.

For

Smith, the court finds that 7.9 hours was a reasonable amount of
time of work to perform legal research and prepare the above
pleadings.

The court did not find any charges for duplicative

work between Receiver and smith in the listed hours.
As for the hourly rate, the court believes that the hourly
rates charged, $235 for Smith and $350 for Receiver, are
reasonable given prevailing market rates in this area and the
complexity of the issue.

The court finds that a reasonable

hourly billing rate for the legal work performed by Receiver is
$350 an hour and a reasonable hourly billing rate for an
associate such as Smith is $235 per hour.

Therefore, the court

finds a reasonable total fee for Receiver is $12,337.50 and for
Smith is $1,856.50.

In total, for both, would be $14,194.00.
21

III.
Conclusion and Order
For the reasons discussed above, the court finds that
Receiver is entitled to recovery reasonable expenses, including
attorney's fees, from Rosen, caused by Sykes's failure to comply
with the court's July 21 Order.

Sykes was not substantially

justified in failing to comply with the July 21 Order or in his
asserting his Fifth Amendment privilege long after the deadline
for compliance.

The legal advice that Rosen gave to Sykes unduly

imposed unnecessary burdens on the court and improperly delayed
the efforts to collect the money that Sykes still owed on the
judgment.

Since there is much evidence in the record to support

the contention that Rosen was not acting in good faith in
providing this advice, the court concludes that an award of
attorney's fees against him would not be unjust in these
circumstances.

Accordingly, the request for attorney's fees

pursuant to Rule 37 37{b) (2) (C) should be granted.
Therefore,
The court ORDERS that Receiver, Lars Berg, have and recover
from Rosen the amount of $14,194.00.
SIGNED February 3, 2012.

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