Opinion
No. CV 99-1476 SC/DJS
April 13, 2000
Joseph Arshawsky, YONGDAHL SADIN, P. C., Albuquerque, N.M., and Daniel Cleavinger, Tierra Amarilla, N.M. Counsel for Plaintiff James Edwards.
Leslie McCarthy Apodaca and Robert G. McCorkle, RODEY, DICKASON, SLOAN, AKIN ROBB, P. A., Albuquerque, N.M. Counsel for Defendant.
MEMORANDUM OPINION AND ORDER
THIS MATTER is before the Court on Plaintiff James Edwards Initial Memorandum in Support of Plaintiffs Request for Payment of Attorneys Fees and Costs, filed April 13, 2000 [Doc. No. 39], and Plaintiffs Itemized Accounting and Declaration in Support of Attorney Fees for David Cleavinger, Esq., filed April 12, 2000 [Doc. No. 36].
David Cleavinger and Joseph Arshawsky are co-counsel for Plaintiff James Edwards (Plaintiff). In addition to Plaintiffs Supporting Memorandum for Attorneys Fees and Costs filed on April 13, 2000 , Joseph Arshawsky and William M. Audet, Esq. each filed supporting affidavits on April 13. Defendant filed its Response in Opposition to Plaintiffs Memorandum in Support of Plaintiffs Request for Payment of Attorneys Fees and Costs on April 28, 2000 . Attached as an exhibit to Defendants response is an affidavit by Defendant co-counsel Leslie McCarthy Apodaca. Plaintiff filed his Reply Memorandum on May 5, 2000 . A Supplemental Affidavit by Plaintiffs co- counsel Joseph Arshawsky also was filed on May 5, 2000 .
Both the initial memorandum and the itemized accounting were filed in response to the Courts Memorandum Opinion and Order, filed March 27, 2000 [Doc. No. 34], requesting evidentiary support for requested attorneys fees and costs. The Court, having read the motions, memoranda, itemized accounting, and affidavits, and being apprised of the applicable law, concludes that Plaintiffs fee motion is partially well-taken. The Court further concludes that Plaintiffs itemized accounting and fee request is not well-taken.
I. BACKGROUND
Plaintiff filed his Class Action Complaint on December 6, 1999, in the First Judicial District Court of the State of New Mexico. Plaintiff filed a First Amended Class Action Complaint on December 8, 1999, altering the name of the plaintiff to James Edwards. (At the time, other related lawsuits were facing Defendant in other jurisdictions.) On December 20, 1999, Defendant filed a Notice of Removal pursuant to 28 U.S.C. § 1332, 1441(a). On December 21, 1999, Defendant filed a Motion to Stay All Proceedings Until the MDL Panel Rules on the Motions to Transfer This and Other Actions Pursuant to 28 U.S.C. § 1407. Plaintiff filed a Motion to Remand to State Court and for Payment of Attorneys Fees and Costs on February 15, 2000 . On March 27, 2000 , I denied Defendants motion to stay and granted Plaintiffs motion to remand, concluding that Defendant had improvidently removed the action and remanding the case to state court pursuant to 28 U.S.C. § 1447(c). Pursuant to § 1447(c), I also awarded Plaintiff his just costs and actual expenses, including attorneys fees, incurred as a result of Defendants improvident removal of the action. However, I concluded that Plaintiffs request for attorneys fees and costs in the amount of $25,300 was facially excessive and the supporting affidavit submitted by Plaintiffs co-counsel Joseph Arshawsky was insufficient. Consequently, I requested that Plaintiff submit evidence of the just and actual nature of the requested fees and costs and allowed Defendant to respond to the submitted proof. Plaintiff now seeks fees and costs in excess of $50,000.
II. DISCUSSION
Plaintiff seeks fees, costs, and New Mexico gross receipts tax in the amount of $57,742.92. Of that total amount and excluding gross receipts tax, $3,936.00 is in fees for co-counsel David Cleavinger and $49,288.75 is in fees for co-counsel Joseph Arshawsky and his legal assistant. Defendant challenges Plaintiffs fee request on the grounds that it is based on an unreasonable hourly rate, reflects time spent on matters other than Plaintiffs remand motion, and lacks supporting documentation. Defendant specifically contends that Mr. Arshawskys time records are too vague to support a fee award, Mr. Cleavingers time records duplicate Mr. Arshawskys, and the hourly rates of Mr. Arshawsky and his paralegal are unreasonable. Defendant does not challenge Plaintiffs costs request.
I have not considered any fee or cost of Mr. Arshawsky or his legal assistant billed after April 13, 2000 , as Mr. Arshawsky stated in his reply that he was willing to waive any fee or cost award over that requested in his initial motion.
Mr. Arshawsky requests $1593.35 in costs and $34.47 in gross receipts tax on that amount, for a total of $1627.82. I note that the gross receipts tax rate applied by Mr. Arshawsky to his requested costs amount is lower than that applied by him to his requested fee amount (2.16% versus 5.37%). Because Defendant did not contest the costs request the requested $1627.82 will be awarded in full.
The most useful starting point for determining the amount of a reasonable fee [for an attorney or a legal assistant] is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate (the lodestar amount). Ellis v. University of Kansas Med. Ctr., 163 F.3d 1186, 1202 (10th Cir. 1998) (internal quotations omitted); see Case v. Unified Sch. Dist. No. 233, 157 F.3d 1243, 1249 (10th Cir. 1998). The burden of proof is on the fee applicant. See Ellis, 163 F.3d at 1202.
A. Allowable Hours
Allowable hours are those charges for specific tasks that are properly chargeable and reasonably expended. See Case, 157 F.3d at 1250. Not all hours expended in litigation are usually billed to the client rather attorneys exercise billing judgment. See Ellis, 173 F.3d 1202; Case, 157 F.3d at 1250. The same must be done with a fee application. See Ramos v. Lamm, 713 F.2d 546, 553-54 (10th Cir. 1983). The fee applicant should make a good-faith effort to exclude from a fee request hours that are excessive, redundant, or otherwise unnecessary. . . . Ellis, 163 F.3d at 1202 (internal quotations omitted). The Court also has an obligation to exclude from the lodestar calculation hours not reasonably expended. See id.; see also Carter v. Sedgwick County, Kansas, 36 F.3d 952, 956 (10th Cir. 1994) (court may exclude hours that were unnecessary, irrelevant, or duplicative). Furthermore, the Court is justified in reducing the reasonable number of hours if the attorneys time records are sloppy and imprecise and fail to document adequately how he or she utilized large blocks of time. Case, 157 F.3d at 1250 (internal quotations omitted); see Robinson v. City of Edmond, 160 F.3d 1275, 1281, 1284-85 (10th Cir. 1998).
1. Mr. Arshawsky
I first note that my total of Mr. Arshawskys hours (up to and including April 13, 2000 ) is 144.75, a difference of 1.50 hours from Mr. Arshawskys stated total of 146.25. Mr. Arshawskys time entries are vague and condensed, providing little detail and often lumping together multiple tasks (block-billing). For example, on December 20, 1999, Mr. Arshawsky billed 4.25 hours for [t]elephone calls with R. Stone and B. McCorkle; prepare memo. On December 28, 1999, he billed 6.25 hours for [t]elephone call with J. Daniels; research; telephone call with [national] plaintiffs counsel. The nature or purpose of the research, memorandum, or telephone conversations is not identified nor is it clear how much time was spent on each activity. On December 29, 1999, Mr. Arshawsky billed 5.75 hours for [r]eview[ing] correspondence; research; telephone call with [national] plaintiffs counsel. Again, no further explanatory detail is provided.
The analysis of time entries section in Plaintiffs initial memorandum provides some description of the time Mr. Arshawsky spent on remand-related activity, but not a great deal. For example, Mr. Arshawsky states that the entry for December 20 concerned the telephone call to him from Defendants co-counsel Mr. McCorkle, informing that Defendant had removed the case and inquiring whether Plaintiff would oppose or agree to Defendants intended motion for stay. There is no explanation of the memorandum prepared or of the other telephone conversation or of how these three activities totaled 4.25 hours.
According to Defendant, its co-counsel Mr. McCorkle recorded a total of 0. 40 hours for two telephone conversations with Mr. Arshawsky (0.20 hours each) on December 20. This leaves a balance of 3.85 hours for Mr. Arshawskys telephone conversation with R. Stone and preparation of a memorandum.
As to the entries for December 28 and 29, Mr. Arshawsky explains that the hours billed on these two dates related to Defendants request and Plaintiffs agreement for an extension of time to respond or answer until January 5. There is no explanation of why such a decision required research or 12 hours of Mr. Arshawskys time. In addition, Mr. Arshawsky has failed to exercise billing judgment or billed excessive hours for certain tasks. For example, Mr. Arshawsky billed a plethora of hours for preparing correspondence, for reviewing pleadings, motions, correspondence, and articles, and for researching and conversing telephonically with national plaintiffs counsel. Mr. Arshawsky billed approximately 53.50 hours in relation to his preparation of Plaintiffs remand motion and reply. This calculation does not include the time spent by Mr. Arshawsky in relation to Defendants removal, Defendants motion to stay or other MDL Panel action, Defendants (unfiled) motion for an extension of time to respond to the complaint, or the Defendant-initiated letter-writing campaign to the Court concerning the motion to stay and the motion to remand. The remand issue was complicated by Defendants motion to stay and other MDL Panel activity. However, in the end, the issue boiled down to a circuit-split, with the Tenth Circuit law supporting Plaintiffs position. Even allowing for the complexity of the remand issues engendered by the motion to stay and MDL Panel issues, 53.50 hours is an unreasonable expenditure of time for preparation of the remand motion and reply given Mr. Arshawskys extensive experience in litigation of this type and the clarity of the Tenth Circuit law. The excessiveness or poor judgment of Mr. Arshawskys billing is exemplified further by the 19.25 hours in fees he billed for researching and preparing his fee motion and affidavit(s) (not including the 8.50 hours he spent in relation to his reply and supplemental affidavit).
Moreover, Mr. Arshawsky billed for tasks not required to be performed by him at an attorney fee rate. An example is Mr. Arshawskys billing of 4.75 hours on March 27 for reviewing the docket, a telephone call to obtain the Courts opinion in this case, traveling to Santa Fe to pick-up the Courts decision, a telephone call to co-counsel, and reviewing the opinion. Reviewing the docket and calling to obtain the Courts opinion are quick tasks that a non-attorney staff member could have performed. Mr. Arshawsky explains that he had to travel to Santa Fe to obtain the Courts opinion because a messenger was unsuccessful in doing so. However, this is not a task that should be performed by an attorney at attorney rates. The opinion could have been faxed to Mr. Arshawsky by the Clerks Office (with the faxing fee billed) or Mr. Arshawsky could have billed this activity in an amount equivalent to what a messenger would have charged to pick up the opinion.
Therefore, because Mr. Arshawskys time entries are imprecise, with many in block billing format and lacking any explanatory detail, and at times unreasonably expended or devoid of billing judgment, I will reduce the number of hours requested for Mr. Arshawsky by 50 percent.
2. Ms. Pierce
Ms. Pierce is Mr. Arshawskys legal assistant or paralegal. Plaintiff requests compensation for 18.50 hours of Ms. Pierces time. (The requested hours were accurately totaled.) Many of Ms. Pierces time entries suffer from the same defect as Mr. Arshawskys lack of detail or explanation of purpose, block billing format, excessive time, and/or lack of billing judgment. Therefore, I will reduce her hours by 50 percent.
3. Mr. Cleavinger
I note first that my total of Mr. Cleavingers hours is 22.8, not 32.8 hours as stated by Mr. Cleavinger. Mr. Cleavingers time entries are sufficient in terms of detail, etc. However, Mr. Cleavingers time appears to be duplicative of Mr. Arshawskys. Cf. Case, 157 F.3d at 1252 (If an attorney is consulting on a case, the assistance provided must be actually necessary or essential to proper representation rather than merely comforting or helpful.). Mr. Cleavingers time entries do not disclose any assistance . . . which was actually necessary to [Plaintiffs] case. Id. (internal quotations omitted). There are no indications that Mr. Cleavinger assisted with the decision whether to file papers with the MDL Panel or assisted with the drafting of any of the stay, extension of time, or remand pleadings. Rather, he appears only to have reviewed materials or pleadings. Therefore, because Plaintiff and his co-counsel have failed to establish that Mr. Cleavingers work was reasonably necessary to Plaintiffs case, none of Mr. Cleavingers time is allowable. Any compensation he seeks for the time he expended must be sought from Mr. Arshawsky or Plaintiff.
B. Hourly Rate
The next step after determining the number of hours reasonably expended is to determine a reasonable hourly rate. The attorneys billing rate, while relevant, is not conclusive. See Ellis, 163 F.3d at 1203. What is determinative is the reasonableness of the rate, as defined by market rates in the relevant community. See id. The requested rate must be in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation. Id. (internal quotations omitted). The same considerations apply to the determination of reasonable billing rates for legal assistants or paralegals. See Case, 157 F.3d at 1249.
1. Mr. Arshawsky
Mr. Arshawskys billing rate in this case is $325 per hour. While he admits that this rate is higher than that charged by most New Mexico attorneys, he contends that the rate is reasonable because of (1) the national nature of his complex, class action litigation practice; (2) the rates for similar services in major legal markets; (3) the rate charged for his services by a former California employer in 1994; (4) the rates he has received in other matters; (5) the rigorous efforts by Defendants eight counsel (including six attorneys of counsel); and (6) the alleged contingent nature of Plaintiffs fees. Mr. Arshawskys first three contentions (as elaborated on by Mr. Arshawsky) that it would be unfair to weigh his rate against other New Mexico attorneys, given the national nature of his practice and that he has only a few cases pending in New Mexico; that his rates are in line with rates in major legal markets outside of New Mexico; and that his current billing rate is consistent with his previous employers billing rate for him in 1994 in California are rejected as contrary to controlling authority. Reasonableness of rates are based on a relevant community standard. The relevant community is New Mexico not the entire United States or major metropolitan areas outside of New Mexico, such as Denver, Los Angeles, or New York City. Consequently, Mr. Arshawskys rate must be compared with the rate of other similarly situated New Mexico attorneys.
Mr. Arshawskys fourth argument that his rate is per se reasonable because it is his customary rate for all class action litigation and because in 1999 he was awarded fees at a rate of $300 per hour is also without merit. An attorneys billing rate is relevant to determining the rates reasonableness but not decisive. The 1999 award of fees for Mr. Arshawsky at a rate of $300 per hour was by a federal district court sitting in New Jersey and thus provides no evidence that Mr. Arshawskys current billing rate is reasonable in regards to the New Mexico market. Mr. Arshawskys final two contentions concern fee enhancements for the contingent and difficult nature of the case (as the latter is demonstrated by the number of, caliber of, and level of effort by Defendants attorneys). Although Defendant failed to respond to these contentions, I conclude that neither contention has merit, as explained below. Mr. Arshawsky cites to two cases to support his contention that he should receive a contingent fee enhancement, neither of which are persuasive or of precedential value.
The first is a New Jersey case which, after a detailed analysis of Supreme Court caselaw, concluded that under New Jersey fee- shifting statutes a court may enhance the lodestar fee in cases in which the prevailing party's attorney's fee arrangement was predominantly contingent on a successful result. See Rendine v. Pantzer, 661 A.2d 1202, 1224, 1228 (N.J.Sup.Ct. 1995). Grounded in state law, this case is unavailing. The second case, which is cited only in the reply, states that in deciding the fee issue the court was guided by the 12 factors set out in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974). See Central Cab Co., Inc. v. Cline, 972 F. Supp. 370, 373 n. 4 (S.D.W. Va. 1997). The continued viability of the Johnson list is unclear. Many of the factors listed in Johnson are accounted for in the lodestar calculation. See Pennsylvania v. Delaware Valley Citizens Council for Clean Air, 478 U.S. 546, 564-65 (1986) (Delaware Valley I) (citing Blum v. Stenson, 465 U.S. 886, 898-901 (1984)); see also Mares v. Credit Bureau of Raton, 801 F.2d 1197, 1201 (10th Cir. 1986) (The many factors for evaluating legal representation set forth in [Johnson], and elsewhere, usually are subsumed within the initial [lodestar] calculation. . . . (quoting Hensley v. Eckerhart, 461 U.S. 424, 434 n. 9 (1983))). Cf. In re Meronk, 249 B.R. 208, 213 (B. A. P. 9th Cir. 2000 ) (Defendant invokes the obsolete laundry list from [Johnson].
The items on that laundry list, however, are now subsumed within more refined analyses. (citation omitted)); Gray v. New York Life Ins. Co., 906 F. Supp. 628, 637 (N.D.Ala. 1995) (Johnson is tattered and torn and has been virtually eliminated by the lodestar model.). Furthermore, although [w]hether the fee is fixed or contingent is a Johnson factor, Johnson, 488 F.2d at 718, fee enhancements based on the contingency no longer may be allowed in federal fee-shifting cases. See City of Burlington v. Dague, 505 U.S. 557, 567 (1992) (contingency fee enhancement not permitted under fee-shifting provisions of Solid Waste Disposal Act and Clean Water Act; adopting Justice Whites opinion in Pennsylvania v. Delaware Valley Citizens Council for Clean Air, 483 U.S. 711, 715-727 (1987) (Delaware Valley II)); see also 19 Solid Waste Dept Mechanics v. City of Albuquerque, No. 99-2172, 2000 WL 1133131 at *2 (10th Cir. Aug. 10, 2000 ) (unpublished disposition) (in civil rights case, in which fees were requested under 42 U.S.C. § 1988, Tenth Circuit concluded that enhancements for contingency are not permitted, citing Dague); Rendine, 661 A.2d at 1219, 1223-24 (noting that Dague rationale applies to all federal fee-shifting cases). Finally, even if still allowable, the Tenth Circuit has stated that an enhancement for a contingency must be viewed with caution and . . . is appropriate only in exceptional cases. Homeward Bound, Inc. v. Hissom Memorial Ctr., 963 F.2d 1352, 1360 (10th Cir. 1992) (citation omitted). The Tenth Circuit has formulated a strict two-pronged test that must be satisfied before contingent fee enhancements may be awarded. See id.
I will deny Mr. Arshawskys request for a fee enhancement based on the alleged contingent nature of the case. First, I am not convinced that such enhancements are allowed in cases such as this after Dague.
Second, even assuming the continued viability of contingent fee enhancements in statutory fee-shifting cases, Plaintiff has not satisfied Homeward Bounds two-pronged test for contingent fee enhancements. Moreover, the 13 nature of Mr. Arshawskys contingent fee arrangement with Plaintiff is ambiguous.
Compare Pl.s Initial Mem. at 7 (Arshawsky is not paid on a monthly basis by Plaintiff, and his rates, thus, should reflect the risk he will not get paid.) with Aff. of Joseph Arshawsky at 2, ¶ 3 (My firms compensation for the services it has rendered in this action is wholly contingent. Any fees and reimbursements of expenses will be limited to such amounts as may be awarded by the Court.) with Pl.s Reply Mem. at 4 (While [P]laintiffs counsel is not working on a contingent fee in the same sense as a personal injury matter, [P]laintiffs counsel is nevertheless at a greater risk than the Rodey law firm of not getting paid unless or until [P]laintiff prevails.). As for the difficult nature of the case enhancement requested, Mr. Arshawsky has provided no authority or evidence to support his position that such an enhancement is warranted. Fee enhancements for the tenaciousness of defense counsel, the special skill and experience of counsel, the quality of representation, the novelty [and] complexity of the issues, and the results obtained are proper only in the rare and exceptional case. Delaware Valley I, 478 U.S. at 564-65 (internal quotations omitted). This is not such a case. No special circumstances exist. The quantity, effort, and prowess of Defendants official and unofficial counsel will be taken into consideration in the lodestar calculation. Therefore, Mr. Arshawskys request for a difficult case fee enhancement will be denied.
Moving to the core of the hourly rate determination, Plaintiff has provided no evidence as to what are the prevailing market rates in New Mexico for lawyers of reasonably comparable skill, experience, and reputation. Defendant contends that the $120-per- hour rate of Mr. Arshawskys co-counsel, Mr. Cleavinger, is within the range of rates customarily paid in New Mexico. Consequently, it contends this is the rate which should be set for Mr. Arshawsky. However, there is no information in the record regarding Mr. Cleavingers legal experience or whether attorney fee rates in Tierra Amarilla are equivalent to those charged in Albuquerque. In the alternative, Defendant contends that Mr. Arshawskys rate should be set no higher than the $180 per hour rate of its co-counsel, Ms. McCarthy Apodaca, who is a New Mexico attorney.
Plaintiff asked Defendants co-counsel for their billing rates and hours. Defendant provided in its response the hourly rate for Ms. McCarthy Apodaca. Plaintiff then requested that Defendant provide the hourly rate of its other New Mexico counsel, Mr. McCorkle, and the hourly rates of its out-of-state counsel. Defendant refused unless leave of court was obtained. Plaintiff requests that the Court order Defendant to submit the hourly rate information or that it grant leave to Plaintiff to conduct discovery on these issues. Plaintiffs request is hereby denied. The fee information requested is irrelevant. There is no evidence in the record that Mr. McCorkle and Mr. Arshawsky are similarly situated, such that Mr. McCorkles hourly rate would be a relevant comparative figure. Not only are the out-of-state counsel Plaintiff refers to of-counsel, and not counsel of record for Defendant, but as out-of-state attorneys their hourly rates are immaterial to the issue of what a reasonable New Mexico fee is.
Because the experience of Mr. Arshawsky and Ms. McCarthy Apodaca are similar, if not equivalent, and given Mr. Arshawskys failure to provide evidence of New Mexico market rates, I conclude that a rate of $180 per hour is a reasonable rate for Mr. Arshawsky in this case.
2. Ms. Pierce
Ms. Pierce is Mr. Arshawskys legal assistant. Mr. Arshawsky avers that she has more than 25 years of experience. Ms. Pierces billing rate is $95 per hour. Plaintiff has provided no evidence that this rate is a reasonable New Mexico rate, even after Defendant contested the rate as high. Defendants co-counsel, Ms. McCarthy Apodaca, submitted an affidavit averring that her firm, the Rodey Firm, bills its paralegal services at $50 to $75 per hour. The Rodey Firm is a New Mexico law firm, and thus its rates provide some evidence of what a reasonable paralegal rate is in New Mexico. Therefore, based on Ms. Pierces experience and the limited information before me as to what New Mexico legal assistant or paralegal rates are, I conclude that a reasonable rate for Ms. Pierce is $75 per hour.
C. Lodestar Calculation
The lodestar calculation, and amounts due, are as follows:
Mr. Arshawsky $180/hr. x 72.38 hrs (144.75 x 0.50 hrs.) = $13028.40 Ms. Pierce $75/hour x 9.25 hrs (18.50 x 0.50 hrs.) = $693.75 Total Fees $13722.15 + gross receipts tax of $736.88 (5.37% x $13722.15) = $ 14459.03
Total Costs $1593.35 + gross receipts tax ($ 34.47) = $ 1627.82
Total Award $14459.03 + $1627.82 = $ 16086.85
NOW, THEREFORE, IT IS ORDERED that Plaintiff James Edwards Initial Memorandum in Support of Plaintiffs Request for Payment of Attorneys Fees and Costs, filed April 13, 2000 [Doc. No. 39], is hereby GRANTED IN PART.
Plaintiff is hereby awarded the sum of $16086.85 for his attorneys fees and costs.
IT IS FURTHER ORDERED that Plaintiffs Itemized Accounting and Declaration in Support of Attorney Fees for David Cleavinger, Esq., filed April 12, 2000 [Doc. No. 36], is hereby DENIED.