Bear Ranch, LLC v. Heartbrand Beef, Inc. et al

Filing 341

MEMORANDUM AND ORDER granting 327 request for additional attorneys' fees.(Signed by Judge Gregg Costa) Parties notified.(arrivera, 4)

United States District Court
Southern District of Texas

ENTERED
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
VICTORIA DIVISION
BEAR RANCH, LLC,
Plaintiff,
VS.
HEARTBRAND BEEF, INC.,
AMERICAN AKAUSHI
ASSOCIATION, INC.,
and ROBERT BEEMAN.

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July 12, 2018
David J. Bradley, Clerk

CIVIL ACTION NO. 6:12-CV-14

Defendants.
MEMORANDUM AND ORDER
This ruling addresses HeartBrand’s request for attorneys’ fees not sought in
prior motions. Docket Entry No. 327. The Court previously awarded HeartBrand
attorneys’ fees, expenses, and costs for work performed through March 31, 2016,
in the amount of $3,259,972.93. Bear Ranch, LLC v. Heartbrand Beef, Inc., 2016
WL 3549483, at *5 (S.D. Tex. June 30, 2016), aff’d, 885 F.3d 794, 804 (5th Cir.
2018); Docket Entry No. 275 at 6. HeartBrand now pursues $115,259.44 in fees
and costs related to (1) the fee litigation in this Court after March 31, 2016, (2) the
appeal of the fee award, (3) litigation of post-trial motions after March 31, 2016,
and (4) data-hosting expenses after that date. Docket Entry Nos. 331; 335 at 7.
Courts must determine whether a fee award is reasonable. See La. Power &
Light Co. v. Kellstrom, 50 F.3d 319, 327–28 (5th Cir. 1995); Arthur Anderson &

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Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997). One judge has called
the task “among the most challenging” federal district judges perform. John F.
Grady, Reasonable Fees: A Suggested Value-Based Analysis for Judges, 184
F.R.D. 131, 131 (1999). The multiple rounds of fee litigation in this case certainly
show it is among the most frustrating.
The Court has already addressed the reasonableness of the fees as a general
matter in this case. Bear Ranch, 2016 WL 3549483, at *3–*5. It reviewed
whether HeartBrand’s requested fees bore a rational relationship to the complexity
of the case (they did) and whether the rates charged were consistent with the
prevailing market (they were). Id. Indeed, although it challenges the fees related
to the earlier fee litigation and raises other minor objections, Bear Ranch does not
contest the general reasonableness of HeartBrand’s latest request. Docket Entry
No. 334; cf. Kellstrom, 50 F.3d at 328 (noting that when an attorney’s billing rate
is not contested it is prima facie reasonable). In light of its familiarity with this
complex and contentious case, the Court approves as reasonable the additional fee
request. Fee and cost issues disputed by the parties are addressed below.
I.

The Fees Incurred Contesting Attorneys’ Fees Before this Court
HeartBrand requests $44,497.60 for fees and costs incurred litigating

attorneys’ fees before this Court after March 31, 2016. Docket Entry No. 335 at 2;
see Kellstrom, 50 F.3d at 336 (finding a court may award fees for time spent

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litigating a fee request). But that amount includes a mistake per the Court’s
calculations. After Bear Ranch identified an error in HeartBrand’s attorneys’ fees
calculation of $9,188.75, Docket Entry Nos. 330–1 at 2; 335 at 2, HeartBrand
reduced its fee request by the entirety of that error. But the original request was
calculated using a 85.78% discount rate.

The percentage corresponds to the

amount of attorneys’ fees this Court awarded in its June 30, 2016 order compared
to HeartBrand’s segregated fee request. Docket Entry No. 331 at 4. The erroneous
$9,188.75 should have been discounted as well, so the reduction would only be
$7,882.11 ($9,188.75 x .8578). As such, HeartBrand’s corrected request for this
category of fees and costs stands at $45,804.24 ([$44,497.60 + $9,188.75] –
[$9,188.75 x .8578]).
Bear Ranch contends that HeartBrand is not entitled to even that reduced
amount because HeartBrand refused, in its 2015 request, to segregate fees as Texas
law requires. Docket Entry No. 334 at 3 (citing Tony Gullo Motors I, L.P. v.
Chapa, 212 S.W.3d 299, 311 (Tex. 2006)).

But work on recoverable and

unrecoverable claims may be so inextricably intertwined that it need not be
segregated. Navigant Consulting, Inc. v. Wilkinson, 508 F.3d 277, 298 (5th Cir.
2007). Indeed, after reviewing submissions related to the initial fee request, this
Court determined that “most of the work incurred by HeartBrand cannot be
segregated.” Bear Ranch, LLC v. Heartbrand Beef, Inc., 2016 WL 1588312, at *5

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(S.D. Tex. Apr. 20, 2016). Although some of that work was ultimately segregable,
the Court will not now reduce the additional fee request because HeartBrand failed
to segregate initially. The segregation issue was complex given the number of
claims and counterclaims and the fact that much of the work overlapped. And, of
course, HeartBrand would have incurred fees related to segregating its work even
had it not first argued the claims were nonsegregable. See, e.g., Docket Entry Nos.
275; 279; 285.
Bear Ranch also contests HeartBrand’s request for $251.94 in PACER fees1
and $94.35 in printing costs related to litigating the attorneys’ fees request. Docket
Entry No. 334 at 7.

One wonders if the attorney time Bear Ranch spent

challenging this expense (and what it may have to pay for HeartBrand’s defense of
it) exceeds the amount at issue. But the Court shouldn’t be surprised about that
given the no-holds-barred nature of this litigation.
In any event, back to the issue the Court must decide: HeartBrand actually
seeks only $294.73 in costs, Docket Entry No. 330–1 at 2—85.78% of those
incurred litigating the attorneys’ fees request. Cf. Bear Ranch, 2016 WL 3549483,
at *3 (reducing HeartBrand’s requested vendor costs and expenses by applying the
percentages used to discount its attorneys’ fees). In addition to the attorneys’ fees
HeartBrand is owed under the contract, it shall recover “any other costs incurred in

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The figure Bear Ranch uses is slightly higher than the $249.24 HeartBrand claims in PACER costs. See Docket
Entry No. 330–1 at 2.

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enforcing the terms of this agreement.”2 Bear Ranch, 2016 WL 1588312, at *3
(quoting Docket Entry No. 72–5 at 5). As the Court has noted, it may award costs
for time spent litigating a cost or fee request. Bear Ranch, 2016 WL 3544983, at
*3 n.4 (citing Kellstrom, 50 F.3d at 336). The printing costs HeartBrand incurred
are attributable to a 629-page print job on April 21, 2016. Docket Entry No. 330–2
at 6. HeartBrand contends that those pages were timesheets its attorneys reviewed
pursuant to this Court’s order from the day before.

That order instructed

HeartBrand to submit within ten days a revised fee request segregating work
attributable to damages on the fraud claim and proposing a percentage of the
remaining amount that would have been incurred absent the unrecoverable claims.
Docket Entry No. 335 at 5. The PACER costs were likewise incurred litigating the
original fee request.
The Court finds HeartBrand is entitled to $294.73 in printing and PACER
costs incurred after March 31, 2016 for time spent litigating the original fee
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The Fifth Circuit has yet to determine whether prevailing parties are entitled to PACER fees under the federal cost
statute, 28 U.S.C. § 1920. Zastrow v. Hous. Auto M. Imports Greenway, Ltd., 695 F. App’x 774, 780 (5th
Cir. 2017). Some district courts draw a distinction between costs incurred performing research
(unrecoverable) and those sustained making copies of documents for use in litigation (recoverable).
Compare Maher v. Vaughn, Silverberg & Assocs., LLP, 2015 WL 1807056, at *4 (W.D. Tex. Apr. 20,
2015) (denying PACER charges related to searching and accessing the database), with U.S. ex rel.
DeKort v. Integrated Coast Guard Sys., LLC, 2013 WL 1890283, at *4 (N.D. Tex. Mar. 27, 2013)
(awarding costs for “courtesy copies of motions, trial briefs, and exhibits provided to the Court” and
PACER printing charges). That distinction makes sense; PACER can be used as an online research
tool like Westlaw and Lexis. The “overwhelming weight of authority in this and other circuits”
rejects the view that a party can recover costs for computerized legal research. Honestech, Inc. v.
Sonic Sols., 725 F. Supp. 2d 573, 581–82 (W.D. Tex. 2010) (collecting cases); see, e.g., Ferrara v.
4JLJ, LLC, 2017 WL 1130080, at *4 (S.D. Tex. Mar. 27, 2017) (declining to reimburse defendant for
costs incurred doing research on Westlaw and Pacer). But the issue is irrelevant in this case because
the costs are not being sought under the statute. Instead, they are sought under the contract, which
allows for the recovery of any costs incurred to enforce the agreement.

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request. Accordingly, HeartBrand is entitled to $45,804.24 in attorneys’ fees and
costs incurred for fee litigation after March 31, 2016.
II.

The Fees Incurred Preserving the Fee Award on Appeal
HeartBrand also seeks the $38,455.45 it spent preserving the fee award. 3

Docket Entry No. 331 at 6.

On appeal, HeartBrand incurred fees and costs

amounting to $267,237.29. Docket Entry No. 330–1 at 4. It discounts that amount
using the benchmark of pages in the appellate briefing. Of the total pages filed in
HeartBrand’s opening and responsive briefs, 14.39% are attributable to attorneys’
fees. Docket Entry Nos. 330 at 7–8; 331 at 6. When HeartBrand proposed a
similar benchmark for post-trial briefing, the Court found that “point of reference
reasonably reflects the amount of work post-trial that was expended on recoverable
claims.” Bear Ranch, 2016 WL 3549483, at *3. And here, as with the post-trial
briefing, Bear Ranch does not contest that percentage. Docket Entry No. 334 at 8.
But it does again contest various costs, including printing fees totaling
$7,825.65 and PACER costs in the amount of $325. Id. at 8–9. For the same
reasons described above, the Court with one exception awards those costs to
HeartBrand at the 14.39% discount rate. That exception is for the 11,461 page
printing job, which HeartBrand contends was for one copy of the appellate record.
Docket Entry No. 335 at 5. That job cost $7,449.65 because it was done for “color

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HeartBrand does not request appellate fees or costs other than those related to preserving the initial fee award.
Docket Entry Nos. 330 at 7–8; 331 at 6–7; see Bear Ranch, 885 F.3d at 803–04 (upholding the fee award).

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copies @ 0.65 per page,” Docket Entry No. 330–2 at 74, even though emails
provided by HeartBrand suggest that few if any of the pages were in color, see
Docket Entry No. 335–1 at 3. Black and white printing cost HeartBrand 15 cents
per page. See, e.g., Docket Entry No. 330–2 at 6. So printing the record should
have cost $1,719.15 (11,461 x 0.15).

The Court will therefore reduce

HeartBrand’s appellate fee and cost request ($38,455.45) by $824.62 ([$7,449.65 –
$1,719.15] x .1439).
HeartBrand is entitled to $37,630.83 in appellate fees and costs.
III.

The Fees Incurred Litigating Post-Trial Motions Before this Court
For fees and costs related to post-trial filings that occurred after March 31,

2016, HeartBrand requests $29,822.60. Docket Entry No. 331 at 3. As with the
Phase 3 (post-trial) filings discussed in the original fee request, HeartBrand
proposes a discount benchmark that looks to pages in the post-trial briefing
attributable to recoverable claims.

Bear Ranch, 2016 WL 3549483, at *3

(approving of that benchmark). Of 39.25 total pages filed, 16.75—or 40.76%—
addressed recoverable claims on which HeartBrand prevailed. Docket Entry No.
330 at 6. Bear Ranch does not dispute that number, see Docket Entry No. 334 at
10, and HeartBrand is thus entitled to 40.76% of fees and costs incurred litigating
post-trial motions after March 31, 2016.

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Bear Ranch does however contest the $389.77 in PACER fees associated
with this post-trial briefing. Docket Entry No. 334 at 10. But as the Court has
already said here and in prior rulings, the contract allows for the recovery of any
costs associated with enforcing the agreement.

So HeartBrand may recover

PACER fees at the discounted rate.
HeartBrand is therefore entitled to $29,822.60 in post-trial fees and costs
incurred after March 31, 2016.
IV.

The Fees Incurred for Data Hosting
HeartBrand lastly requests $2,483.79 in data-hosting expenses incurred after

March 31, 2016. Docket Entry No. 335 at 7. That amount represents 44% of
HeartBrand’s total data-hosting costs ($5,644.97) for that period. The 44% figure
was the post-trial rate applied to the original fee request.4 While the Court agrees
that HeartBrand is entitled to these costs under the contract and that a post-trial
discount rate should apply, that rate should be the one the Court has applied to
post-trial filings submitted after March 31, 2016. See infra Section III (40.76%).
HeartBrand is thus entitled to $2,300.89 ($5,644.97 x .4076) in data-hosting
costs.
CONCLUSION
The Court awards HeartBrand additional attorneys’ fees and costs totaling

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Bear Ranch suggested using that rate in response to HeartBrand’s contention that the Court should apply the 76%
Phase 2 (trial) rate. Docket Entry No. 334 at 10–11.

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$115,558.56.

Fee Category

Amount Awarded

Prior Fee Litigation

$45,804.24

Appellate

$37,630.83

Post-Trial

$29,822.60

Data Hosting

$2,300.89

Total

$115,558.56

SIGNED this 12th day of July, 2018.

______________________________

Gregg Costa
United States Circuit Judge*

*

Sitting by Designation

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