Summary
ruling that 37.1 hours spent on a motion for contempt and sanctions was not unreasonable
Summary of this case from Stanich v. Hissong Group, Inc.Opinion
Case No. 2:01-cv-00985.
February 3, 2006
ORDER
On May 20, 2003, this court ordered that this employment discrimination matter proceed to arbitration. Over the next two years, plaintiff's attorney, Raymond F. Eichenberger ("Eichenberger"), engaged in dilatory tactics and unprofessional conduct toward the arbitrator and opposing counsel, culminating in his refusal to participate in the court-ordered arbitration against defendant, Circuit City Stores Inc. ("Circuit City").
On July 26, 2005, this court dismissed plaintiff's case with prejudice. Pursuant to 18 U.S.C. § 401(3) and 28 U.S.C. § 1927, this court found Eichenberger in contempt and as a sanction ordered him to reimburse Circuit City for the excess attorney's fees caused by his obstructionist actions.
On November 16, 2005, this court denied Eichenberger's request for a stay of sanctions pending appeal, but reserved ruling on Circuit City's claimed fees because Eichenberger requested itemized time records and the opportunity to file a response.
This court instructed Circuit City to produce its itemized time records and ordered Eichenberger to file his response by December 15, 2005. Eichenberger failed to meet this deadline, filing his response on December 16, 2005. On January 26, 2006, the Sixth Circuit denied Eichenberger's request for a stay pending appeal. Circuit City's claim for attorney's fees is now before this court.
I. Statement of Law
An attorney who multiplies proceedings unreasonably and vexatiously may be required to satisfy personally the excess costs, expenses and attorneys' fees reasonably incurred by his or her opponent as a result of such conduct. See 28 U.S.C. § 1927. Sanctions under § 1927 are not mandatory, but are imposed at the sound discretion of the trial court. Jones v. Continental Corporation, 789 F.2d 1225, 1229 (6th Cir. 1986). Sanctions can be imposed to deter future conduct, compensate the opposing party, and/or punish for unreasonable or vexatious conduct.Kapco Manufacturing Co., Inc., v. CO Enterprises, Inc., 886 F.2d 1485, 1496 (7th Cir. 1989).
The amount of the sanction should be a carefully measured response to the improper conduct. Id. However, the imposing court should take into consideration the sanctioned attorney's assets and his ability to pay. Id.; Jackson v. Law Firm of O'Hara, Ruberg, Osborne and Taylor, 875 F.2d 1224, 1230 (6th Cir. 1989). Considering the resources of the sanctioned party, a district court, in its discretion, may reduce the sanction even when the offended party's expenses are reasonable. Jackson, 875 F.2d at 1230 ["When a fraction of the . . . fees requested is sufficient to deter future violations, it is not an abuse of discretion to award such lesser amount."]. Monetary sanctions should not be used to bankrupt an attorney or drive him from the practice.Id.
II. Background
Pursuant to this court's order, Circuit City seeks reimbursement of $7,822.00 in fees incurred preparing three separate documents. The first, Circuit City's motion for contempt and sanctions (document 64), was billed at $6734.00. The second, Circuit City's memorandum in opposition to plaintiff's motion to remove arbitrator and motion to strike (document 66), was billed at $952.00. Lastly, the first section of Circuit City's memorandum in opposition to plaintiff's motion to dismiss (document 68), was billed at $136.00. Circuit City has not claimed reimbursement for additional expenses such as copies, phone calls, facsimiles, and other costs.
Attached to the fee claim is an affidavit from Circuit City's attorney, David C. Faure ("Faure"), of Porter, Wright, Morris Arthur, L.L.P. ("Porter Wright"). Faure is a senior associate with nine years of relevant work experience. Porter Wright is a large, full-service firm with numerous offices in two states and the District of Columbia. Faure and Mari Jones ("Jones"), a Porter Wright litigation paralegal with 25 years of experience, billed Circuit City at a reduced rate per an agreement between Porter Wright and Circuit City. Under the reduced rate agreement, Faure billed at $170 an hour while Jones billed at $100 an hour.
III. Discussion
Eichenberger opposes Circuit City's claimed fee of $7,822.00 for two reasons. He argues that Porter Wright billed an excessive amount of time for creating these documents, and that sanctions of this amount cannot be awarded because they go beyond his financial ability to pay.
A) Excessive Time
Eichenberger does not dispute the 6.4 hours spent preparing documents 66 and 68, the memorandum in opposition to plaintiff's motion to remove arbitrator and the memorandum in opposition to plaintiff's motion to dismiss. Instead, he focuses on the 37.1 hours spent preparing document 64, the motion for contempt and sanctions. Eichenberger states that the itemized time records reveal too much drafting and legal research time. He characterizes the time entries as "egregious in padding time and spending too much attorney time at research and writing."
Eichenberger notes that 5.6 hours were spent researching and 19.1 hours were spent drafting. In an attached affidavit, he claims that in over 27 years "he has never spent more than several hours of legal research time or anywhere close to 19 hours drafting time" on a similar document. He further testifies that all three documents could have been researched and drafted in ten hours.
After reviewing Circuit City's claim, the itemized time records, the work produced, and Eichenberger's response, this court finds that Eichenberger's excessive time argument is without merit. The time billed by Porter Wright in preparation of these documents was reasonable and necessary to the defense of this case. The focus of Eichenberger's over billing claim, document 64, is twenty-two pages and contains a five-page background section detailing the four-and-a-half-year history of the case; a seven-page misconduct section describing Eichenberger's inappropriate acts; and an analysis section containing three distinct legal arguments and numerous citations. Attached are forty-eight exhibits which are discussed at length. Simply put, document 64 required significant research, organization, and drafting time to make it presentable for consideration by this court.
Further, this court finds no merit in Eichenberger's claim that all three documents could have been prepared in ten hours. Eichenberger's statement that he has never spent more than several hours performing legal research is unpersuasive at best, but perhaps indicative of a lack of diligence which contributed to his own inexcusable errors in this litigation. By way of example, in his motion to strike and motion for sanctions (document 65), Eichenberger improperly moved for Rule 11 sanctions without complying with the twenty-one day safe harbor provision that is expressly stated in the Rule. He also misread LaPrade v. Kidder Peabody Co., 146 F. 3d 899 (D.C. 1998), citing it for the proposition that federal courts should not interfere with an ongoing arbitration, when in fact, that court reached the exact opposite conclusion. Eichenberger also completely ignored, and obviously failed to research, the cases cited by Circuit City to support its motion for contempt and sanctions.
B. Financial Ability to Pay
Eichenberger seeks a reduced sanction because he is unable to pay $7,822.00. Eichenberger relies on a personal affidavit that states he cannot afford $7,822.00 and does not have any property to sell or assets to liquidate to raise the necessary funds. He also claims that any sanction exceeding several hundred dollars will bankrupt him. To substantiate these self-serving claims, Eichenberger provides no independent evidentiary support or corroborating documents. He has provided no information about his net income or his net worth.
A reduced sanction is not warranted. A lower amount would not reimburse Circuit City for its additional costs and there is no indication that a lower amount would serve the purpose of deterrence.
For these reasons, Eichenberger is ordered to pay Circuit City seven thousand eight hundred twenty two dollars ($7,822.00). In order to relieve any financial strain that this sanction may inflict on Eichenberger, he shall be permitted to pay this amount in three equal installments. The first installment of $2607.33 shall be paid immediately. The second installment of $2607.33 shall be paid three (3) months from today, May 2, 2006. The third and final installment of $2607.34 shall be paid six (6) months from today, August 2, 2006.
IV. Conclusion
For the foregoing reasons, this court finds the fee claim of $7,822.00 to be a reasonable and necessary amount to reimburse Circuit City for the excess costs incurred as a result of Eichenberger's obstructionist actions. Circuit City's motion for attorney fees is well-taken and Eichenberger is hereby ordered to reimburse Circuit City $7,822.00. Payments shall be made according to the pay schedule described above.
It is so ORDERED.