Thabico Company v. Kiewit Offshore Services, Ltd. et al

Filing 48

ORDER AWARDING SANCTIONS(Signed by Judge Nelva Gonzales Ramos) Parties notified.(srussell, 2)

United States District Court
Southern District of Texas

ENTERED
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
CORPUS CHRISTI DIVISION

September 26, 2017
David J. Bradley, Clerk

THABICO COMPANY,

§
§
Plaintiff,
§
VS.
§ CIVIL ACTION NO. 2:16-CV-427
§
KIEWIT OFFSHORE SERVICES, LTD., et §
al,
§
§
Defendants.
§
ORDER AWARDING SANCTIONS
On August 7, 2017, this Court issued its Order Granting Sanctions (D.E. 39),
holding that Kiewit Offshore Services, Ltd. and CMF Leasing Co. (jointly Kiewit) were
entitled to sanctions against Thabico Company (Thabico) pursuant to this Court’s
inherent power and for violations of Federal Rule of Civil Procedure 11. D.E. 39.
Pursuant to that Order, Kiewit has now filed its claim for attorney’s fees and costs
applicable to its defense of this federal action. D.E. 40, 41.
DISCUSSION
A. No Cognizable Opposition
Thabico’s attorneys have filed their motion to withdraw (D.E. 36), which is under
advisement. They have not filed a response on behalf of Thabico to Kiewit’s request for
$99,127.16 in sanctions. Thabico, attempting to proceed pro se, filed its Objections,
Responses, and Controverting Evidence (D.E. 42) on August 30, 2017, without any sign
of the participation of its attorneys. That filing contains 117 pages of material offered to
re-litigate either the underlying claims, the order granting sanctions, or both. And while
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it seeks to divert liability for the sanctionable conduct onto its attorneys, it does not
address the only remaining issue before the Court: whether the amount of the sanctions
Kiewit seeks is supported by the evidence.
Additionally, Thabico’s response is set out under the signature of Binh V. Nguyen,
President of Thabico, pro se. The response is supported by three declarations, each of
which recites that the signatory has no legal training. D.E. 42, p. 16 (Binh Van Nguyen,
President, ¶ 20), p. 21 (Kim Chi Ngyuen, cousin of President, ¶ 6), and p. 27 (Edwin
Tran, independent businessman, ¶¶ 8, 10). Thabico, as an incorporated entity, may not
appear pro se and must be represented by an attorney. E.g., Southwest Exp. Co., Inc. v.
I.C.C., 670 F.2d 53, 55-56 (5th Cir. 1982). Consequently, Kiewit has filed its Motion to
Strike Docket Entry 42 as a document filed by a corporate entity without legal
representation. D.E. 43. The Court GRANTS the motion (D.E. 43) and STRIKES
Thabico’s pro se objections (D.E. 42).
B. Parameters of Sanctions Award
The only remaining question is the amount of attorney’s fees and costs that should
be awarded to Kiewit for the sanctioned conduct outlined in the Court’s Order Granting
Sanctions (D.E. 39). The Supreme Court has written extensively on the parameters of
such sanctions awards when made pursuant to a federal court’s inherent powers. See
Chambers v. NASCO, Inc., 501 U.S. 32, 33-35 (1991). The following principles apply
here:
(1)

Because it is a matter of vindicating judicial authority, the award is
not tied to any fee-shifting substantive law or state policies;

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(2)

The Court may, but is not required to, consider the application of
sanctions under Federal Rules of Civil Procedure 11 to discreet acts;

(3)

The award should reflect the frequency and severity of the abuses of
the judicial system and the need for deterrence;

(4)

The award should be based upon evidence that reflects whether the
fault lies with the party or its attorney; and

(5)

The award should be compensatory rather than punitive—calibrated
to the incremental losses caused by the acts on which the order is
based, recognizing when defense of a claim would have been
required regardless of sanctionable conduct.

Id.; Goodyear Tire & Rubber Co. v. Haeger, 137 S. Ct. 1178, 1186 (2017). The court
should apply a ―but for‖ causation standard when exercising its inherent authority, while
being mindful of the context of the abuse.
―The essential goal‖ in shifting fees is ―to do rough justice,
not to achieve auditing perfection.‖ Accordingly, a district
court ―may take into account [its] overall sense of a suit, and
may use estimates in calculating and allocating an attorney's
time.‖ The court may decide, for example, that all (or a set
percentage) of a particular category of expenses—say, for
expert discovery—were incurred solely because of a litigant's
bad-faith conduct. And such judgments, in light of the trial
court's ―superior understanding of the litigation,‖ are entitled
to substantial deference on appeal.
Goodyear Tire & Rubber Co., 137 S. Ct. at 1187 (citations omitted). Acknowledging its
previous decision in Chambers, the Supreme Court again held that, if the sanctionable
conduct implicates the filing of the case from its inception, then the entire expense
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incurred in defending may be awarded as a sanction. Goodyear Tire & Rubber Co., 137
S.Ct. at 1187-88.
As detailed in the Order Granting Sanctions (D.E. 39), this action was the third
lawsuit that Thabico and/or its agent Triumph Wood Product, Inc. filed against Kiewit
regarding the crane transaction.

It was filed after Thabico, separately and through

Triumph, had an opportunity to test its claims against Kiewit, ending in summary
judgment. This lawsuit was filed as an end-run around that summary judgment, in lieu of
appeal, seeking a more sympathetic forum. Thus this Court finds that the bad faith
circumstances under which this action was filed triggered Kiewit’s entire defense, placing
all of its attorney’s fees and expenses in consideration for this sanctions award.
The Court also notes that Kiewit seeks sanctions only against Thabico, and not its
attorneys. D.E. 29. In its initial response to the motion, Thabico revealed its effort to
recover against Kiewit through baseless speculation of wrongdoing and its refusal to
settle the claims during the first state court matter, which would have mitigated Kiewit’s
defense costs. There is no evidence that Thabico’s attorneys acted against its instructions
in pursuing this third action. At the same time, the Court acknowledges that the attorneys
necessarily share some of the blame for repeatedly advancing baseless theories against
Kiewit. Thus the Court is compelled to award sanctions in an amount less than one
hundred percent (100%) of Kiewit’s defense costs.
C. Evidence and Award
The fee applicant bears the burden to show that the requested fee is reasonable.
E.g., Riley v. City of Jackson, Miss., 99 F.3d 757, 760 (5th Cir. 1996). Kiewit, as
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applicant, offered evidence in the form of (a) the Affidavit of David S. Bland, (b)
counsel’s fee statements, and (c) the summary of fee statements. See D.E. 40-1, 41, 41-1.
Kiewit seeks a total of $99,127.16, representing the entirety of its defense costs for this
action. This amount is based on fees charged under a lodestar method with varying
hourly rates for the four attorneys and two paralegals that make up the defense’s legal
team, along with Westlaw, Pacer, and travel expenses.
Lodestar Fee. The Court finds that the lodestar method of assessing fees—
equivalent to the hourly rate charged here—is appropriate in this case. By that method,
each attorney or paralegal1 charged a reasonable hourly rate that is multiplied by the
number of hours expended on the case. The resulting lodestar calculation of the total fee
is presumed reasonable. Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 553–54 (2010).
Bland & Partners staffed this case with two partners, two associates, and two
paralegals. But the bulk of the work was done by associate, Jack E. Byrom, together with
partner Robert P. Vining. See D.E. 41-1. This staffing structure is appropriate for this
case. Personnel rates are $355 to $415 for partners, $245 to $265 for associates, and
$160 to $170 for paralegals.

These rates are appropriate and customary in this

geographical area for the type of work required. The lodestar calculation is appropriate
on its face.

1

The paralegal time billed in this case is for work ordinarily done by attorneys. D.E. 41.

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Case Adjustments. The fee rendered by the lodestar method does not require any
adjustments based on this particular case. The Court treats the twelve factors2 used to
temper a fee amount as follows:
(1) Time and labor required for the litigation: the total of 288.1 hours is
not out of line with the nature of Thabico’s changing and relentless
persistence in meritless claims against Kiewit;
(2) The novelty and difficulty of the questions presented:

the Court

agrees with David S. Bland, the supervising partner on this case, that
the legal issues presented here were not particularly complex, but the
manner in which they were pursued complicated their defense. D.E.
40-1, ¶ 5;
(3) The skill required to perform the legal services properly:

the

adequacy of Kiewit’s representation is reflected in the Court’s docket
sheet and hearings held—solid work that did not require anything
extraordinary in addition to what should be expected by the hourly
rates;
(4) The preclusion of other employment by the attorney due to acceptance
of the case: this case was more time-consuming than it should have
been, which is adequately reflected in the hours used in the lodestar
calculation;
2

Cobb v. Miller, 818 F.2d 1227, 1231 n.5 (5th Cir. 1987) (citing Johnson v. Georgia Highway Exp., Inc., 488 F.2d
714, 717-19 (5th Cir. 1974), abrogated by Blanchard v. Bergeron, 489 U.S. 87 (1989) (addressing fee applications
in civil rights cases).

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(5) The customary fee: the rates are appropriate;
(6) Whether the fee is fixed or contingent: the hourly fee sought appears
to be the same as that charged, which is appropriate to the case;
(7) Time limitations imposed by the client or the circumstances: this
element is neutral;
(8) The amount involved and the result obtained: this action involved a
transaction in which Kiewit stood to sell its crane for a price of nearly
one million dollars; Thabico alleged claims by which Kiewit could
suffer a judgment eliminating its right to claim that purchase price or
more. The fees are about one-tenth of the sale price and Kiewit
obtained a complete victory on the merits;
(9) The experience, reputation, and ability of the attorneys: Bland did not
offer details in this regard, but its work on the case reflects appropriate
skill;
(10) The undesirability of the case: this element is neutral;
(11) The nature and length of the professional relationship with the client:
there is no evidence on this issue; and
(12) Awards in similar cases: Keiwit has offered no evidence or authority
on this issue.
Considering all of the factors, the lodestar calculation properly reflects the customary rate
in the community and the peculiarities of this case. No adjustments of the fee, up or
down, is required by the peculiar facts of this case.
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Billing Judgment. The Court must review billing records and exclude all time
that is excessive, duplicative, or inadequately documented. Combs v. City of Huntington,
Texas, 829 F.3d 388, 391–92 (5th Cir. 2016). The Court ordered Kiewit to exclude from
its claim any services rendered with respect to other cases it has defended regarding the
same transaction and Kiewit has largely done so. However, there are some references to
the state court actions, a failure to document any reduction for travel time, one significant
duplicate entry, and a mistake in arithmetic all of which, in the exercise of appropriate
billing judgment should reflect reductions. After a review of the billings, the Court
deducts amounts as follows:
Date

Personnel Service and Reason

10/13/16
12/13/16
12/21/16
1/5/17
1/6/17
1/18/17
1/26/17
1/31/17
8/11/17

Westlaw.

RPV
WR
RPV
DSB
JEB
DSB
JEB
JEB
JEB
RPV
JJ

Duplicate review of complaint
Excessive time to calendar deadlines
Duplicate entry
Reduction for travel time
Reduction for travel time
Reduction for travel time
Reduction for travel time and excess hours
Inclusion of time for state court analysis
Inclusion of time for state court conference
Arithmetical mistake
Inclusion of time for state court records
TOTAL

Amount
$ 71.00
$ 107.25
$ 319.50
$ 630.00
$ 450.50
$ 420.00
$ 980.50
$ 463.75
$ 66.25
$ 73.00
$ 51.00
$ 3,632.75

Kiewit bills for computer-assisted legal research charges through

Westlaw. However, nothing in the evidence reflects that these are actual charges. There
are no bills or receipts attached and nothing to suggest that these are not charges for
services included in a subscription to the service that would be incurred by the attorneys,
regardless of use. The Court is not aware that any of the issues briefed in this case would
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require the use of specialty databases outside a normal subscription. The Court therefore
declines to award computer-assisted legal research charges that are more appropriately
treated as standard overhead. See generally, Int'l Marine, LLC v. FDT, LLC, No. CIV.A.
10-0044, 2015 WL 914898, at *18 (E.D. La. Mar. 3, 2015). The Court deducts the
following amounts:
$ 518.16
$ 195.16
$ 2,791.55
$ 28.63
$ 391.65
$ 68.31
$ 4,387.84
$ 1,621.90
$ 316.43
Total $ 10,319.63
The Court takes Bland & Partners’ total billings of $99,127.16, subtracts
$3,632.75 for billing judgment, and subtracts $10,319.63 for Westlaw charges, rendering
a full fee of $85,174.78.

Thabico is not wholly to blame for the legal strategy

implemented, which resulted in this improper action. However, Thabico supplied the
specious basis for the allegations and sought to benefit from refusing to settle and
pursuing its claims when Kiewit sought to buy its peace—prior to incurring these defense
costs. Therefore, pursuant to its inherent power and Rule 11, the Court awards sanctions
in favor of Kiewit and against Thabico at 75% of the full fee as calculated herein.

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CONCLUSION
Therefore, consistent with its Order Granting Sanctions (D.E. 39), the Court
AWARDS Kiewit Offshore Services, Ltd.3 sanctions against Thabico Company in the
amount of $63,881.09.
ORDERED this 26th day of September, 2017.
___________________________________
NELVA GONZALES RAMOS
UNITED STATES DISTRICT JUDGE

3

While both Kiewit and CMF Leasing Co. filed the motion for sanctions (D.E. 29), the Court notes that the parties
have previously represented that they are related business entities and the evidence consists of statements for legal
services directed only to Kiewit. D.E. 41.

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