Summary
denying attorney's fees for travel time and costs related to travel to this District by Philadelphia-based lawyer in an IDEA case
Summary of this case from K.F. v. New York City Department of EducationOpinion
03 Civ. 8135 (WHP)
02-09-2011
UNITED STATES OF AMERICA, ex rel. DANIEL FELDMAN, Plaintiff/Relator, v. WILFRED VAN GORP & CORNELL UNIVERSITY MEDICAL COLLEGE, Defendants.
MEMORANDUM & ORDER
:
Relator Daniel Feldman ("Feldman" or "Relator") filed this action pursuant to the False Claims Act ("FCA"), 31 U.S.C. § 3729 et seq. against Dr. Wilfred van Gorp ("van Gorp") and Cornell University Medical College ("Cornell" and, together, "Defendants"). Following an eight-day trial, a jury returned a verdict in favor of Feldman on three of his five claims. Feldman now moves for an award of attorneys' fees pursuant to 31 U.S.C. § 3730(d)(2). For the following reasons, Feldman's motion is granted in part and denied in part.
BACKGROUND
Familiarity with this Court's prior opinions is presumed. See United States ex rel. Feldman v. Van Gorp, 03 Civ. 8135 (WHP), 2010 WL 5094402 (S.D.N.Y. Dec. 9, 2010); United States ex rel. Feldman v. Van Gorp, 03 Civ. 8135 (WHP), 2010 WL 2911606 (S.D.N.Y. July 8, 2010); United States ex rel. Feldman v. Van Gorp, 03 Civ. 8135 (WHP), 2010 WL 1948592 (S.D.N.Y. May 3, 2010); United States ex rel. Feldman v. Van Gorp, 674 F. Supp. 2d 475 (S.D.N.Y. 2009); Feldman v. Van Gorp, 03 Civ. 8135 (WHP), 2008 WL 5429871 (S.D.N.Y. Dec. 19, 2008).
I. The Litigation
Feldman filed this qui tam action claiming that Defendants submitted false claims to obtain federal research funds administered by the National Institute of Health. Feldman alleged five distinct series of false claims: one arising out of the initial grant application, and four based on subsequent yearly renewal applications and progress reports. Feldman claimed that Defendants' representations in the application and progress reports differed materially from actual implementation of the grant. A jury returned a verdict in favor of Feldman on three of the five claims. This Court awarded damages in the amount of $887,714. That amount was considerably less than the $1,359,000 sought by Feldman.
II. Fees and Costs
Feldman's attorneys, Salmanson Goldshaw, seek fees totaling $726,711.25 and an additional $37,927.87 in costs. Feldman seeks reimbursement of $3,121.47 for expenses incurred as a result of the litigation. (Mot. for Attorneys' Fees, Costs and Expenses ("Mot.") 2; Relator's Supplemental Declaration in Support of Motion for Attorneys' Fees, Costs and Expenses ("Relator's Supp. Decl.") ¶ 1.) The attorneys' fee calculation was based on the following figures:
| Legal Professional | Position | Hourly Rate | Hours | Fee |
|---|---|---|---|---|
| Michael J. Salmanson | Shareholder | $495.00 | $563,458.50 | |
| Scott B. Goldshaw | Shareholder | $400.00 | 132.15* | $52,860.00 |
| Michele M. Rovinsky | Associate | $250.00 | 33.70 | $8,425.00 |
| Katie R. Eyer | Associate | $275.00 | 140.10* | $38,527.50 |
| Brian C. McGoldrick | Paralegal | $90.00 | 260.80 | $23,472.00 |
| Laura M. Zulick | Paralegal | $90.00 | 100.05 | $9,004.50 |
| Christopher Chancler | Paralegal | $90.00 | 99.50 | $8,955.00 |
| Delvita Reid | Paralegal | $90.00 | 28.00 | $2,520.00 |
| Subtotal | $707,222.50 |
This figure represents the sum of hours requested in the initial Motion for Attorneys' Fees and subsequent Relator's Supplemental Petition.
In addition, Salmanson Goldshaw seeks to recover fees for travel time at a 50% discounted rate, as follows:
| Legal Professional | Position | Hourly Rate | Hours | Fee |
|---|---|---|---|---|
| Michael J. Salmanson | Shareholder | $247.50 | 60.50 | $14,973.75 |
| Scott B. Goldshaw | Shareholder | $200.00 | 12.00 | $2,400.00 |
| Michele M. Rovinsky | Associate | $125.00 | 6.00 | $750.00 |
| Katie R. Eyer | Associate | $137.50 | 6.00 | $825.00 |
| Brian C. McGoldrick | Paralegal | $45.00 | 12.00 | $540.00 |
| Subtotal | $19,488.75 |
DISCUSSION
I. Legal Standard
31 U.S.C § 3730(d)(2) provides that "[i]f the Government does not proceed with an action under this section, the person bringing the action or settling the claim shall . . . receive an amount for reasonable expenses which the court finds to have been necessarily incurred, plus reasonable attorneys' fees and costs." 31 U.S.C. § 3730(d)(2). The question of how much to award as attorneys' fees is left to the discretion of the district court. Reed v. A.W. Lawrence & Co., 95 F.3d 1170, 1183 (2d Cir. 1996). "The most useful starting point for determining the amount of a reasonable fee is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate." Hensley v. Eckerhart, 461 U.S. 424, 434 (1983). This figure is called the "presumptively reasonable fee" or "lodestar." See Grant v. Martinez, 973 F.2d 96, 99, 101 (2d Cir. 1992); Arbor Hill Concerned Citizens Neighborhood Ass'n v. Cty. of Albany, 522 F.3d 182, 186-90 (2d Cir. 2008). In determining a reasonable hourly rate, a district court must "bear in mind all of the case-specific variables . . . relevant to the reasonableness of attorneys' fees" including those set forth in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974). Arbor Hill, 522 F.3d at 190.
These factors are: (1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the level of skill required to perform the legal service properly; (4) the preclusion of employment by the attorney due to acceptance of the case; (5) the attorney's customary hourly rate; (6) whether the fee is fixed or contingent; (7) the time limitations imposed by the client or the circumstances; (8) the amount involved in the case and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the "undesirability" of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases. Johnson, 488 F.2d at 717-19.
Courts may not compensate counsel for hours that are "excessive, redundant, or otherwise unnecessary." Hensley, 461 U.S. at 434. The court can reduce a fee award "by specific amounts in response to specific objections." United States ex rel. Miller v. Bill Harbert Int'l Constr., Inc., 601 F. Supp. 2d 45, 50 (D.D.C. 2009). However, "the Court can also reduce fees 'by a reasonable amount without providing an item-by-item accounting.'" Miller, 601 F. Supp. 2d at 50 (quoting Role Models Am., Inc. v. Brownlee, 353 F.3d 962, 973 (D.C. Cir. 2004)). "Culling through the minutiae of the time records each time a fee petition is submitted . . . would be impossible 'lest [the Court] abdicate the remainder of its judicial responsibilities for an indefinite time period.'" Miller, 601 F. Supp. 2d at 50-51 (quoting Cobell v. Norton, 407 F. Supp. 2d 140, 166 (D.D.C. 2005)).
Defendants do not dispute the reasonableness of Feldman's proffered rates, and this Court finds them reasonable. Moreover, aside from the specific objections discussed below, Defendants do not dispute the reasonableness of the number of hours expended on this litigation. Thus, this Court begins its analysis with a presumptively reasonable fee of $726,711.25.
II. Attorneys' Fees
A. Travel Time
Defendants argue that because Feldman hired counsel from Philadelphia rather than New York, he should not be entitled to attorneys' fees for travel time. Under the "forum rule," "courts should generally use the hourly rates employed in the district in which the reviewing court sits in calculating the presumptively reasonable fee." Simmons v. N.Y. City Transit Auth., 575 F.3d 170, 174 (2d Cir. 2009). However, a corollary to this rule is that expenses and fees related to travel must be excluded from an award of attorneys' fees if "the hypothetical reasonable client who wishes to spend the least amount necessary to litigate the matter . . . would have retained local counsel." Imbeault v. Rick's Cabaret Int'l, Inc., 08 Civ. 5458 (GEL), 2009 WL 2482134, at *8 (S.D.N.Y. Aug. 13, 2009). Here, there is no indication that qualified counsel was unavailable in New York, or that New York counsel was unlikely to achieve similar success. Thus, a hypothetical reasonable client would have chosen New York counsel in order to prevent unnecessary travel costs, and this Court will not award attorneys' fees for time spent travelling between Philadelphia and New York.
Feldman cites cases in which an award of attorneys' fees included travel-related fees and expenses for out-of-state counsel. See, e.g., Scott v. Hand, 07 Civ. 0221 (TJM), 2010 WL 1507016 (N.D.N.Y. Apr. 15, 2010). However, the corollary rule excluding fees for travel time is more consistent with Simmons because it "promotes cost-consciousness, increases the probability that attorneys will receive no more than the relevant market would normally permit, and encourages litigants to litigate with their own pocketbooks in mind, instead of their opponents'." Simmons, 575 F.3d at 176. In any case, hours spent travelling by out-of-district attorneys are not hours "reasonably expended" where competent counsel is available within the district.
Unfortunately, that does not end the analysis. While Feldman's attorneys billed a total of $19,488.75 in travel time, not all of it related to travel between Philadelphia and New York. The following travel time of Salmanson is compensable: (1) travel to Potomac, MD to depose Defendants' expert, James Pike (3 hours); (2) travel to Columbus, OH to depose Defendants' expert/fact witness Robert Bornstein (3 hours); (3) travel to Washington D.C. for the deposition of Dr. Stoff (4 hours); and (4) travel to Baltimore, MD for the deposition of Dr. Kimes (4 hours). At a 50% billing discount for 14 hours, Salmanson is entitled to $3,465 in attorneys' fees for travel. In addition, because Rovinsky's and Eyer's rates are based on Philadelphia—not New York City—market rates, the "corollary" to the forum rule does not apply, and Feldman may recover the travel expenses associated with these attorneys in the amount of $1,575. Overall, Salmanson Goldshaw is entitled to $5,040 in attorneys' fees for travel time. Thus, the lodestar is reduced by $14,448.75.
Defendants also assert that Salmanson is not entitled to 15.50 hours for travel time included under four invoices for "professional services." However, Salmanson has affirmed that two of these entries did not incorporate travel time. (See Salmanson Supp. Decl. ¶ 4.) Salmanson cannot, on the other hand, verify whether the remaining two entries included travel time and concedes that an additional six hours of his time should constitute "travel time." Accordingly, the lodestar is reduced by an additional $2,970.
Feldman asserts that the lodestar should be reduced by $1,485 to account for 50% hourly billing rate for attorney travel time. However, because this travel was between Philadelphia and New York City, Feldman may not recover any fees for this time.
In sum, based on the above reductions in travel time hours, this Court reduces the presumptively reasonable fee by $17,418.75, to a total of $709,292.50.
B. Relator's Degree of Success
In determining whether partial success requires a downward adjustment of the presumptively reasonable fee, this Court conducts a two-step inquiry. "At step one of this analysis, the district court examines whether the plaintiff failed to succeed on any claims wholly unrelated to the claims on which the plaintiff succeeded. The hours spent on such unsuccessful claims should be excluded from the calculation." Grant, 973 F.2d at 101. "At step two, the district court determines whether there are any unsuccessful claims interrelated with the successful claims. If such unsuccessful claims exist, the court must determine whether the plaintiff's level of success warrants a reduction in the fee award." Grant, 973 F.2d at 101. If a plaintiff has obtained "excellent results," the attorney should be fully compensated. Grant, 973 F.2d at 101 (citing Hensley, 461 U.S. at 435). "A plaintiff's lack of success on some of his claims does not require the court to reduce the lodestar amount where the successful and the unsuccessful claims were interrelated and required essentially the same proof." Murphy v. Lynn, 188 F.3d 938, 952 (2d Cir. 1997). Moreover, where "the successful and unsuccessful claims are 'inextricably intertwined' and 'involve a common core of facts or [are] based on related legal theories,' it is not abuse of discretion for the court to award the entire fee." Reed, 95 F.3d at 1183.
Here, the successful and unsuccessful claims were interrelated. Although each of the five alleged false claims was discreet—occurring in separate applications and progress reports at yearly intervals—liability for each depended on that claim's relationship to the same common core of facts: the actual implementation of the program funded by the grant. These facts cannot be segregated neatly into the yearly intervals set by the application and progress reports. Rather, many of the program's shortcomings—such as the time spent on research and the time spent with HIV/AIDS patients—were alleged to continue throughout the course of the grant. Moreover, the legal theories on which each of the five false claims are based were not just related, but identical: violation of §§ 3729(a)(1), (a)(2), and (a)(7) of the FCA. Liability under each of these sections requires a showing that the defendant "(1) made a claim, (2) to the United States government, (3) that is false or fraudulent, (4) knowing of its falsity, and (5) seeking payment from the federal treasury." Mikes v. Strauss, 274 F.3d 687, 695 (2d Cir. 2001). Thus, work performed on the separate claims cannot be easily partitioned. Accordingly, the claims were not wholly unrelated, and this Court declines to subtract the unsuccessful claims from the lodestar calculation.
Defendants argue that a fee of over $700,000 is excessive because a reasonable litigant would not expend this sum in order to recover damages of $887,000. However, "a presumptively correct lodestar figure should not be reduced simply because a plaintiff received a low damage award," and the ratio of attorneys' fees to damages in this case is well within acceptable limits. See Grant, 973 F.3d at 99, 101-02 (upholding a fee award of $512,590 where the case settled for only $60,000). In addition, Defendants argue that the fee is excessive because the damage award fell short of the $1,359,000 Feldman sought. However, the awarded damages to Feldman are substantial and not a mere "technical victory." See Lunday v. City of Albany, 42 F.2d 131, 135 (2d Cir. 1994) (court did not abuse discretion awarding attorneys' fees of $115,425, where plaintiff sought $7,130,000 but was awarded only $35,000).
Nevertheless, Feldman's success was not complete. "If . . . a plaintiff has achieved only partial or limited success, the [lodestar] may be an excessive amount . . . even where plaintiff's claims were interrelated." Hensley, 461 U.S. at 436. Given the substantial commonalities between the successful and unsuccessful claims, this Court declines to reduce the lodestar by the percentage of unsuccessful claims. However, the Court finds that a 15% reduction in the lodestar is appropriate. See Greenbaum v. Svenska Handelsbanken, N.Y., 998 F. Supp. 301, 307 (S.D.N.Y. 1998) (reducing the lodestar by 10% where the plaintiff prevailed on claims for sex discrimination and retaliation but failed on claims for sexual harassment and age discrimination). Accordingly, Feldman is entitled to $602,898.63 in attorneys' fees.
III. Costs
A. Travel Costs and Pro Hac Vice Motions
Descending to the granular level, Defendants next challenge travel costs incurred by Feldman's attorneys. "[A]wards of attorneys' fees . . . under fee-shifting statutes . . . normally include those reasonable out-of-pocket expenses incurred by the attorney and which are normally charged fee-paying clients." Reichman, 818 F.2d at 283; Betancourt v. Giuliani, 325 F. Supp. 2d 330, 335 (S.D.N.Y. 2004). Feldman seeks to recover a total of $8,988.51 in travel costs. However, for the same reasons that the Feldman is not entitled to attorneys' fees for travel time, he is not entitled to recover costs related to travel between Philadelphia and New York. Because competent counsel was available within the district, these travel costs were not reasonably incurred.
Accordingly, this Court subtracts $8,152.72 from the total costs. Relator is also not entitled to costs related to delivery of boxes of exhibits and demonstratives from Philadelphia to New York City for trial, and then back to Philadelphia, in the amount of $2,675. Lastly, this Court subtracts costs related to Salmanson's pro hac vice motion, in the amount of $1,238 ($1,188 for preparation of the motion and $50 in costs for Certificates of Good Standing). In sum, this Court subtracts $12,065.72 in travel-related costs from Feldman's recoverable costs.
In making this determination, this Court finds that the Relator may be reimbursed for the following travel expenses, totaling $835.79: $140.19 for travel to the Kimes deposition; $126.60 for travel to the Pike deposition, $155.00 for travel to the Bornstein deposition; $137.00 for Eyer's travel to New York City on July 2, 2010 (this expense entry was $274 for travel for two people; this Court assumes for these purposes that one-half of this entry was for Eyer's travel expenses); $160 for Eyer's travel to New York City on July 7, 2010 (this expense entry was $320 for travel for two people; this Court again assumes that one-half of this entry was for Eyer's travel expenses); and $117 for Rovinsky's travel to New York City on February 6, 2008. Although the Relator's summary of travel hours (discussed above) indicates that additional travel expenses might be recoverable, these expenses cannot be determined with certainty from the expense reports submitted to this Court.
B. Copying Costs
Finally, descending even further to the microscopic level, Defendants challenge Feldman's photocopying costs. They argue that only certain photocopying and reproduction costs are "taxable" under 28 U.S.C § 1920 and that Feldman has provided insufficient detail for this Court to determine which of Relator's photocopying costs are taxable here. However, fee shifting statutes permit recovery of costs beyond those considered "taxable" under § 1920. Reichman v. Bonsignore, Briganti & Mazzotta P.C., 818 F.2d 278, 283 (2d Cir. 1987). This includes costs related to photocopying and reproduction. See, e.g., Betancourt, 325 F. Supp. 2d at 335-36. Moreover, Relator has submitted a detailed itemized accounting of its photocopying costs, which this Court finds sufficient to support an award of copying costs. C. Feldman's Reasonable Expenses
The False Claims Act permits recovery of "reasonable expenses which the court finds to have been necessarily incurred." 31 U.S.C. § 3730(d)(2). This Court has reviewed Feldman's expenses and finds that they were reasonable and necessarily incurred. Accordingly, Feldman is entitled to compensation for $3,121.47 in expenses resulting from this litigation.
CONCLUSION
Motion practice over prevailing party fees is too often a time-consuming endeavor requiring counsel and the Court to sift through minutiae. And it is always ancillary to the main event—a merits determination of the lawsuit. This motion is no exception. While the fee application has been pruned, this Court cannot help but wonder whether everyone's time might have been better spent.
Relator Daniel Feldman's Motion for Attorneys' Fees, Costs and Expenses is granted in part and denied in part. Feldman's attorneys are awarded $602,898.63 in attorneys' fees and $25,862.15 in costs. Feldman is awarded his reasonable expenses in the amount of $3,121.47. The Clerk of Court is directed to terminate the motion pending at docket entries #146 and #164. Dated: February 9, 2011
New York, New York
SO ORDERED:
/s/_________
WILLIAM H. PAULEY III
U.S.D.J. All Counsel of Record