Total E&P USA, Inc. v. Marubeni Oil & Gas (USA), Inc. et alMOTION for Attorney FeesS.D. Tex.February 25, 20191 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION TOTAL E&P USA, INC. * CIVIL ACTION NO. Plaintiff * 4:16-cv-02674 * v. * JUDGE VANESSA GILMORE * MARUBENI OIL & GAS (USA) INC. * Defendant * ******************************************* MARUBENI OIL & GAS (USA) LLC’S MOTION FOR ATTORNEY’S FEES AND COSTS Marubeni Oil & Gas (USA), LLC (“MOGUS”), as the prevailing party in the above- captioned matter, hereby submits this Motion for Attorney’s Fees and Costs pursuant to Federal Rule of Civil Procedure 54(d). MOGUS requests an award of $2,198,333.84 in reasonable attorney’s fees and $629,524.27 in costs, which represents the fees and costs that MOGUS has paid in this case from inception to date.1 INTRODUCTION After a nine-day trial in this matter, the jury returned a verdict finding that MOGUS is entitled to damages from Total E&P USA, Inc. (“Total”) through June 30, 2017 in the amount of $21,649,695.36.2 The parties agreed in the pretrial order to submit all issues related to attorney’s fees and costs to the Court after the jury’s verdict.3 Under the MC 305 Operating Agreement (the 1 This motion includes MOGUS’s attorney’s fees and costs incurred through January 31, 2019. At the conclusion of all post-trial proceedings and any appeals, MOGUS will file a supplemental motion to recover any additional attorney’s fees and costs incurred after that date, including any fees and costs incurred during trial and in any post- trial proceedings. 2 Dkt. 293. 3 See Dkt. 254, at p. 9. Case 4:16-cv-02674 Document 306 Filed on 02/25/19 in TXSD Page 1 of 14 2 “MC 305 OA”) which governs this dispute, MOGUS is entitled to recover “attorney’s fees, court costs, and other costs in connection with the collection of unpaid amounts” due from Total.4 LAW AND ARGUMENT Federal Rule of Civil Procedure 54(d) requires a party seeking attorney’s fees and related expenses to submit a motion within 14 days after the entry of judgment that specifies the amount sought, as well as “the judgment and the statute, rule or other grounds entitling the movant to the award.”5 MOGUS’s entitlement to an award under Rule 54(d)6 is provided specifically in Exhibit C, Section I.3.B of the MC 305 OA, whereby the parties agreed: [E]ach Party shall pay its proportion of all bills within fifteen (15) days of receipt date. If payment is not made within such time, the unpaid balance shall bear interest compounded monthly using the U.S. Treasury Bill three month rate plus 3% in effect on the first day of the month for each month that the payment is delinquent or the maximum contract rate permitted by the applicable usury laws in the jurisdiction in which the Joint Property is located, whichever is the lesser, plus attorney’s fees, court costs, and other costs in connection with the collection of unpaid amounts. Interest shall begin accruing on the first day of the month in which the payment was due.7 MOGUS is therefore entitled to recover attorney’s fees, court costs, and other costs in connection with Total’s breach. The amounts of these fees and costs are described below and supported by the declarations of Paul J. Goodwine, Exhibit A hereto, and Joelle F. Evans, Exhibit B hereto. 4 MOGUS Trial Exhibit 1, at p. 143 (¶ I.3.B. of Exhibit C to the MC 305 OA). 5 Fed. R. Civ. Proc. 54(d). 6 In addition, Alabama law, which governs this dispute (See Dkt. 228) provides that attorney’s fees may be awarded if authorized by statute, contract, or special equity. Regions Bank v. Lowrey, 101 So. 3d 210, 220 (Ala. 2012) (citing Hart v. Jackson, 607 So. 2d 161, 163–64 (Ala. 1992)) (“In Alabama, attorney fees are to be awarded only if they are provided for by statute, contract, or special equity.”). 7 MOGUS Trial Exhibit 1, at p. 143 (¶ I.3.B. of Exhibit C to the MC 305 OA). (emphasis added). On December 22, 2017, MOGUS filed its Motion for Partial Summary Judgment on Liability, seeking “summary judgment finding TOTAL liable to pay its 50% share of decommissioning expenses associated with the MC 305 Wells, plus interest, costs, and attorneys’ fees.” Dkt. 151, at ECF p. 39 (emphasis added). This Court granted MOGUS’s motion. Dkt. 230. Case 4:16-cv-02674 Document 306 Filed on 02/25/19 in TXSD Page 2 of 14 3 A. Total owes MOGUS $2,198,333.84 in attorney’s fees. The calculation of reasonable attorney’s fees under Rule 54(d) involves a two-step process.8 First, the district court must multiply the attorney hours worked by an hourly rate the Court deems reasonable.9 The product of this calculation is called the lodestar, which the district court then either accepts or adjusts upward or downward, depending on the circumstances of the case. There is a strong presumption that the lodestar calculation is reasonable.10 The second step involves a consideration of the twelve Johnson factors to make any adjustments to the award.11 These factors include: (1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the skill requisite to perform the legal service properly; (4) the preclusion of other employment by the attorney due to acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved 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.12 I. Step 1: Calculate the Lodestar Based on the number of attorney hours worked multiplied by the applicable hourly rates, Total owes MOGUS $2,198,333.84 in attorney’s fees. 8 Louisiana Power & Light Co. v. Kellstrom, 50 F.3d 319, 323 (5th Cir. 1995). 9 Bank of Am., N.A. v. World of Smiles, 2017 WL 4118871, at *2 (E.D. La. Sept. 18, 2017). 10 Watkins v. Fordice, 7 F.3d 453, 458 (5th Cir. 1993). 11 See Johnson v. Ga. Highway Express, Inc., 488 F.2d 714, 717–19 (5th Cir. 1974). 12 Id. Case 4:16-cv-02674 Document 306 Filed on 02/25/19 in TXSD Page 3 of 14 4 a. The attorney hours worked are reasonable. For over 30 months, each side aggressively prosecuted its claims and vigorously defended against claims alleged by the other side. MOGUS’s counsel expended approximately 5,900.7 hours litigating this case since its inception. The number of hours worked were both reasonable and necessary because the litigation has been protracted and labor intensive. Initially, MOGUS sought to arbitrate this dispute. However, on August 18, 2016 – the day before MOGUS was to file for arbitration – Total filed two separate, but identical, state court petitions in Harris County seeking declaratory judgment, one for MC 305 and one for MC 348. On August 24, 2016, TOTAL filed a third declaratory judgment action in Harris County involving the CEPS. MOGUS was then required to file motions to remove the three actions to the Southern District of Texas,13 which Total opposed14 and MOGUS justified through motion practice.15 Total was also opposed to MOGUS’s motion to consolidate the three actions in an effort to save litigation expenses.16 After this case had been pending for a few months, MOGUS filed a motion for partial summary judgment as to Total’s liability under the MC 305 OA.17 In response, Total filed a motion pursuant to Federal Rule of Civil Procedure 56(d) arguing that it needed to conduct discovery to respond to MOGUS’s motion.18 The Court granted Total’s Rule 56(d) motion, and Total proceeded to conduct far-reaching discovery on MOGUS. In this case alone, Total propounded at least 58 requests for production, 42 requests for admission, and 14 interrogatories on MOGUS. MOGUS’s counsel spent thousands of attorney 13 See Dkt. 1; see also Dkt. 1 (Case No. 16-2671); Dkt. 1 (Case No. 16-2678). 14 Dkt. 2. 15 See Dkt. 15; see also Dkt. 92 (denying Total’s motion to remand). 16 Dkt. 7. 17 Dkt. 25. 18 Dkt. 32. Case 4:16-cv-02674 Document 306 Filed on 02/25/19 in TXSD Page 4 of 14 5 hours reviewing documents and developing privilege logs. Further, in addition to searching and producing all relevant records of MOGUS, Total also required MOGUS (through a motion to compel which was granted)19 to search and produce all relevant records from its parent company in Tokyo. In all, MOGUS searched the records of over 30 document custodians and produced over 500,000 pages of documents to Total. This case also required 27 fact and expert depositions, and many discovery disputes arose during the litigation. For example, Total filed at least three motions to compel,20 disputed MOGUS’s privilege log,21 and served various notices of deposition and document subpoenas on certain MOGUS and Marubeni Corporation individuals located in Japan.22 Resolving these issues required, among other things, considerable motion practice and two hearings before Magistrate Judge Stephen Smith. After the discovery deadline expired, the parties engaged in additional, and substantial, motion practice. On December 22, 2017, MOGUS filed a renewed motion for partial summary judgment on Total’s liability under the MC 305 OA.23 Total also filed two separate motions for summary judgment that day, in which it denied liability under the contract and claimed that its liability had been satisfied through the ATP bankruptcy.24 The parties also disputed the applicable law governing the dispute, which required additional motion practice.25 MOGUS’s summary judgment motions on liability and choice of law were eventually granted.26 19 See Dkts. 72 and 96. 20 See Dkts. 72, 84, and 204. 21 See Dkts. 128 and 134. 22 See Dkts. 67, 68, and 69. 23 Dkt. 151. MOGUS also filed separate motions for partial summary judgment in the above-captioned case related to MC 348 and CEPS because MOGUS’s claims relating to those properties had not yet been severed. See id. at p. 1, n.2; Dkts. 154 and 155. 24 Dkts. 143 and 144. 25 See Dkts. 141, 157, 161, 166, 177, and 187. 26 See, e.g., Dkts. 228 and 230. Case 4:16-cv-02674 Document 306 Filed on 02/25/19 in TXSD Page 5 of 14 6 This case ultimately culminated in a nine-day jury trial that involved complex and technical issues related to the plugging and abandonment of oil and gas wells as well as complex legal issues regarding bankruptcy and predecessor liability. As trial approached, MOGUS filed various motions in limine and Daubert motions.27 MOGUS also worked with Total on a joint pretrial order, proposed jury charges, and a proposed jury verdict in addition to filing its own pre-trial memorandum and witness and exhibit lists. MOGUS also reviewed and objected to Total’s exhibit list consisting of approximately 438 exhibits, prepared deposition designations, prepared counter- designations for Total’s witnesses, and participated in the Court’s docket call in addition to various other court appearances. Additionally, MOGUS engaged in substantial trial preparation, which included among other things preparing an opening statement and preparing for the direct and cross examination of the numerous witnesses involved in this case. Below is an estimated summary of the categories of work performed by MOGUS’s attorneys: Category of Work Performed Fees Answer, counterclaim, remand, and other pre-discovery motions $91,692.69 Non-deposition discovery $451,561.04 Depositions $324,686.21 Discovery disputes $137,100.37 Mediation $67,730.91 Expert reports $119,998.10 Motions for summary judgment $225,276.80 Pretrial order, trial preparation, and trial $596,723.08 Motions in limine and other pleadings $183,564.50 Total $2,198,333.70 Based on the complexity of the issues involved, the amount of discovery, and the extensive motion practice, the hours worked by MOGUS’s attorneys are reasonable. 27 See Dkts. 146, 147, 148, 149, 152, 234, 235, and 237. Case 4:16-cv-02674 Document 306 Filed on 02/25/19 in TXSD Page 6 of 14 7 b. The hourly rates for MOGUS’s attorneys and paralegals are reasonable. MOGUS employed two firms to work on this case: (1) Looper Goodwine P.C. (“LG”) and Schonekas, Evans, McGoey & McEachin, LLC (“SEMM”). Reasonable rates, for purposes of a lodestar analysis, are the “prevailing hourly rate in the community for similar work.”28 Both LG and SEMM billed at hourly rates consistent with or below the market rates in Houston for attorneys of similar skill and experience, and the hourly rates charged are consistent with or below those charged to the firms’ other clients. LG’s average hourly rates ranged from $485 to $225 for attorneys and was $100 for paralegals. SEMM’s hourly rates ranged from $575 to $195 for attorneys and $130 to $65 for paralegals. Cases from the Fifth Circuit and the Southern District of Texas confirm that the rates of LG and SEMM are reasonable and consistent with, and in many cases lower than, the normal and customary rates prevailing in the Houston market for attorneys and paralegals of like skill and experience. See, e.g., Miller v. Raytheon Co., 716 F.3d 138, 149 (5th Cir. 2013) (finding that “the reduced hourly rates of $577.50, $542.50, and $280 were reasonable, customary rates.”); Slipchenko v. Brunel Energy, Inc., 2015 WL 338358, at *19 (S.D. Tex. 2015) (J. Rosenthal) (approving hourly rates ranging from $635 to $775 for partners, $415 to $530 for associates, and $240 to $260 for paralegals in ERISA litigation); In re Enron Corp. Sec., Derivative & “ERISA” Litig., 586 F. Supp. 2d 732, 781 and n. 61 (S.D. Tex. 2008) (J. Harmon) (finding that an average hourly rate of $630 for partners was reasonable); see also Michaels Stores Procurement Co. v. DMR Constr., Inc., 2019 WL 399074 (N.D. Tex. 2019) (approving and finding reasonable hourly attorney rates of $675, $575, and $375 and paralegal hourly rate of $225). 28 Combs v. City of Huntington, Texas, 829 F.3d 388, 392 (5th Cir. 2016). Case 4:16-cv-02674 Document 306 Filed on 02/25/19 in TXSD Page 7 of 14 8 MOGUS’s lawyers’ hourly rates are well within the “prevailing hourly rate in the community for similar work.”29 In fact, such rates are comparable with the hourly rates approved by Judge Hittner in a case that involved similar claims. In Apache Corp. v. W&T Offshore Inc., there was a dispute between two current parties to an operating agreement regarding the non- operator’s liability under the contract for costs to decommission certain offshore wells.30 Like MOGUS, Apache, the operator, prevailed at trial and sought attorney fees under an identical contract provision to that in the MC 305 OA.31 Judge Hittner found that the following hourly rates were “reasonable rates” for calculation of the lodestar: $517.41 to $746.50 for partners, $350 to $450 for associates, and $125 to $270 for legal assistants.32 Thus, the attorney fees incurred by MOGUS are certainly reasonable for complex, commercial litigation like this, and are believed to be less than the amount that Total’s attorneys were paid for handling this litigation. Moreover, MOGUS’s counsel exercised good billing judgment. Paul J. Goodwine from LG and Joelle Evans from SEMM were the attorneys in charge for MOGUS in this matter. Mr. Goodwine directed and supervised the work performed by attorneys and paralegals at LG while Ms. Evans directed and supervised the work at SEMM. Throughout the trial, Mr. Goodwine and Ms. Evans ensured that tasks were assigned to personnel who could handle them most efficiently, while taking into account the billing rate of each attorney. This included assigning tasks to associates or paralegals whenever possible. Attorneys with lower billing rates were largely responsible for the significant amount of discovery and motion writing. All attorney and paralegal 29 Combs, 829 F.3d at 392. 30 2017 WL 6326141 (S.D. Tex. 2017). 31 Cf. id. at *5, n.7 (quoting ¶ I.3.B. of Exhibit C to the Apache/W&T operating agreement) with MOGUS Trial Exhibit 1, at p. 143 (¶ I.3.B. of Exhibit C to the MC 305 OA). 32 Apache, 2017 WL 6326141, at *7. Case 4:16-cv-02674 Document 306 Filed on 02/25/19 in TXSD Page 8 of 14 9 work was monitored closely to ensure that the work performed and time billed was reasonable and necessary to the prosecution and defense of MOGUS’s claims. Mr. Goodwine and Ms. Evans were also responsible for reviewing the time records, bills, and other invoices in this case. In their good faith billing discretion, and in order to comport with MOGUS’s litigation budget, Mr. Goodwine and Ms. Evans gave certain discounts to MOGUS and wrote off certain fees incurred. MOGUS does not seek to recover costs that were written off or were not charged to it as a result of its attorneys’ billing judgment. Considering the attorneys’ reasonable hours worked, reasonable rates, and billing discretion, MOGUS’s lodestar of $2,198,333.84 is reasonable. II. Step 2: Apply the Johnson Factors MOGUS does not seek an adjustment to the lodestar amount of $2,198,333.84 but, as applied below, the Johnson factors do support the reasonableness of MOGUS’s request for attorney’s fees: a. The time and labor required for the litigation: See above. b. The novelty and difficulty of the questions presented: This case presented complex and technical issues related to the plugging and abandonment of oil and gas wells as well as complex legal issues regarding, among other things, bankruptcy, federal plugging and abandonment regulations, Outer Continental Shelf Lands Act choice- of-law, oil and gas accounting issues, highly technical operations issues, and predecessor liability. c. The skill required to perform the legal services properly: MOGUS’s attorneys have demonstrated the requisite professional skill with respect to both standard and novel problems encountered in this proceeding and have handled all legal issues in an efficient and effective manner. When possible, certain projects have been handled by paralegals or associates. All services performed by paralegals were professional in nature. d. The preclusion of other employment by the attorney due to acceptance of the case: LG’s representation of MOGUS has precluded LG from accepting additional business because of its representation of MOGUS in this case. The hours expended Case 4:16-cv-02674 Document 306 Filed on 02/25/19 in TXSD Page 9 of 14 10 by LG and SEMM have also precluded work for other present and potential clients of the firms. e. The customary fee: See above. f. Whether the fee is fixed or contingent: The fees for the services of LG and SEMM are based upon the time spent on this case and are therefore fixed. g. Time limitations imposed by the client or the circumstances: This matter has involved several time-sensitive issues that have required an exceptional level of diligence and skill by LG and SEMM. This includes responding to the far-reaching discovery propounded by Total within a short time frame. h. The amount involved and the result obtained: MOGUS’s counsel obtained a jury verdict of over $21 million.33 i. The experience, reputation, and ability of the attorneys: LG believes and respectfully submits that its attorneys are highly regarded as experts in the areas of oil and gas and are acknowledged to have significant experience in oil and gas bankruptcies and plugging and abandonment issues. SEMM, moreover, believes and respectfully submits that its attorneys are highly skilled and have significant trial and litigation experience. Such experience and qualifications of MOGUS’s attorneys are described in more detail in the declarations attached hereto as Exhibit A and Exhibit B. j. The “undesirability” of the case: This case has not been undesirable to either LG or SEMM, although it has presented highly complex, and often difficult issues, as noted above. k. The nature and length of the professional relationship with the client: LG began working for MOGUS in April 2015. SEMM was retained by MOGUS in February 2017. l. Awards in similar cases: As explained above, LG and SEMM believe that the fees are in conformity with fees allowed in similar proceedings for similar services rendered and results obtained. The Johnson factors support MOGUS’s lodestar, and MOGUS should be awarded $2,198,333.84 in attorney’s fees. 33 Dkt. 293. Case 4:16-cv-02674 Document 306 Filed on 02/25/19 in TXSD Page 10 of 14 11 B. Total owes MOGUS $629,524.27 in costs. Over the past 30 months of litigation, MOGUS incurred considerable expenses that were essential to litigating this case and to the successful outcome. Under Exhibit C, Section I.3.B. of the MC 305 OA, Total agreed to pay MOGUS for “court costs, and other costs in connection with the collection of unpaid amounts.”34 In the Apache case, this exact provision was interpreted broadly to allow the prevailing party “to recover all categories of costs sought in this litigation under the contract.”35 Thus, under the MC 305 OA, MOGUS is entitled to recover all litigation costs, and a summary of those costs is provided in the chart below: Category Amount Discovery $205,173.75 Transcripts $17,905.93 Mediation $2,504.00 Delivery services/messengers $967.91 Witness fees $18.68 Filing fees $2,066.67 Subpoenas $937.46 Litigation support36 $12,214.25 Meals $2,337.21 Parking $569.26 Pacer/Searches $833.41 Telephone $168.22 Travel expenses (e.g. flights, transportation) $38,125.53 Hotel and lodging $4,279.41 Westlaw/online research $14,653.73 Xerox/outside copying service $11,726.49 Postage $6.50 Expert witness fees $312,645.64 Translators/Interpreters $2,390.22 Total $629,524.27 34 MOGUS Trial Exhibit 1, at p. 143 (¶ I.3.B. of Exhibit C to the MC 305 OA) (emphasis added). 35 Apache, 2017 WL 6326141, at *7; see also See Hancock v. Chicago Title Ins. Co., 2013 WL 2391500, at *13 (N.D. Tex. June 3, 2013) (explaining that costs due under a contract can be broader than taxable costs covered by 19 U.S.C. § 1920). 36 Includes, among other things, costs incurred for trial demonstratives and trial supplies. Case 4:16-cv-02674 Document 306 Filed on 02/25/19 in TXSD Page 11 of 14 12 MOGUS should therefore be awarded $629,524.27 in costs. These costs are further supported by the declarations of Mr. Goodwine, Exhibit A hereto, and Ms. Evans, Exhibit B hereto, and detailed records of these invoices and costs are attached to those declarations. Moreover, many of these litigation costs are also taxable under 28 U.S.C. § 1920. If necessary, MOGUS will file an alternative Bill of Costs seeking those costs pursuant to Section 1920 and Local Rule 54.2 within 14-days of the entry of the final judgment.37 CONCLUSION MOGUS and Total agreed in their contract that attorney’s fees, costs, and any other costs expended to collect Total’s unpaid amounts are recoverable. MOGUS’s attorney fees and costs are directly attributable to the prosecution and defense of MOGUS’s claims and to the successful outcome of this litigation. As such, MOGUS respectfully requests that this Court award MOGUS $2,198,333.84 in reasonable attorney’s fees and $629,524.27 in costs. 37 See LR54.2 (“An application for costs shall be made by filing a bill of costs within 14 days of the entry of a final judgment.”); see also Fed. R. Civ. Proc. 54(d)(1). Case 4:16-cv-02674 Document 306 Filed on 02/25/19 in TXSD Page 12 of 14 13 Respectfully submitted, LOOPER GOODWINE P.C. /s/ Paul J. Goodwine Paul J. Goodwine (Attorney-in-Charge) LA Bar No. 23757; SDTX ID No. 437800 Holly O. Thompson LA Bar No. 31277; SDTX ID No. 2953818 Taylor P. Mouledoux LA Bar No. 31889; SDTX ID No. 1581156 Taylor P. Gay LA Bar No. 35140; SDTX ID No. 3251449 650 Poydras Street, Suite 2400 New Orleans, Louisiana 70130 Telephone: (504) 503-1500 Telecopier: (504) 503-1501 pgoodwine@loopergoodwine.com hthompson@loopergoodwine.com tmouledoux@loopergoodwine.com tgay@loopergoodwine.com -and- SCHONEKAS, EVANS, McGOEY & McEACHIN, LLC Kyle Schonekas LA Bar No. 11817; SDTX ID No. 305350 Joelle F. Evans LA Bar No. 23730; SDTX ID No. 436275 Andrea V. Timpa LA Bar No. 29455; SDTX ID No. 3362943 909 Poydras Street, Suite 1600 New Orleans, LA 70112 Telephone: (504) 680-6050 Telecopier: (504) 680-6051 kyle@semmlaw.com joelle@semmlaw.com andrea@semmlaw.com Attorneys for Marubeni Oil & Gas (USA) LLC Case 4:16-cv-02674 Document 306 Filed on 02/25/19 in TXSD Page 13 of 14 14 CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the above and foregoing pleading has been served on all counsel of record for the parties via e-mail, FedEx and/or by electronic filing in the Court’s electronic filing system on this 25th day of February 2019. /s/ Paul J. Goodwine Paul J. Goodwine Case 4:16-cv-02674 Document 306 Filed on 02/25/19 in TXSD Page 14 of 14