Plaintiff Flagship Theatres of Palm Desert LLCs Reply In Support of Plaintiffs Motion For Attorneys FeesReplyCal. Super. - 2nd Dist.July 26, 2006Electronically FILED by § 1 A N nn W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 uperior Court of California, County of Los Angeles on 02/19/2019 12:06 PM Sherri R. Carter, Executive Officer/Clerk of Court, by S. Watson,Deputy Clerk Thomas L. Boeder, Admitted Pro Hac Vice TBoeder@perkinscoie.com Elvira Castillo, Admitted Pro Hac Vice ECastillo@perkinscoie.com Cara Wallace, Admitted Pro Hac Vice CWallace @perkinscoie.com PERKINS COIE LLP 1201 Third Avenue, Suite 4900 Seattle, WA 98101-3099 Telephone: 206.359.8000 Facsimile: 206.359.9000 Donald J. Kula, Bar No. 144342 DKula@perkinscoie.com Donna Strain, Bar No. 305599 DStrain @perkinscoie.com PERKINS COIE LLP 1888 Century Park East, Suite 1700 Los Angeles, CA 90067 Telephone: 310.788.9900 Facsimile: 319.788.3399 Attorneys for Plaintiff Flagship Theatres of Palm Desert, LLC dba Cinémas Palme d’Or SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF LOS ANGELES FLAGSHIP THEATRES OF PALM DESERT, LLC dba CINEMAS PALME D’OR, Plaintiff, V. CENTURY THEATRES, INC. and CINEMARK USA, INC,, Defendants. Case No. SC090481 Assigned for all purposes to the Honorable Lisa Hart Cole PLAINTIFF FLAGSHIP THEATRES OF PALM DESERT, LLC’S REPLY IN SUPPORT OF PLAINTIFF’S MOTION FOR ATTORNEY'S FEES Date: March 5, 2019 Time: 8:30 a.m. Dept.: O Complaint filed: July 26, 2006 Trial date: April 2, 2018 Reservation ID: 180627326255 142732476.6 FLAGSHIP REPLY IN SUPPORT OF MOTION FOR ATTORNEY'S FEES CASE NO. SC090481 AN Un Bs W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Page L IN TR CIRC TTIRENIN ccs somes AR RE EAS 7 II. ARGUMENT Loot sae sree 8 A. Attorney’s Fee Awards for Prevailing Plaintiffs in Antitrust Cases Are 1721018 7110 8 B. Cinemark’s Proposed Reductions to Flagship’s Lodestar and Additional Downward Adjustments Invite Error..........cooceeiiiiiiniiiniciiceeecececenne 10 C- Flagship’s Lodestar Is Reasonable and Reflects Work Necessary to Advance and Protect Its Interests Against Cinemark’s Anticompetitive CONAUCT «iii eee eee see sae eee 11 1. Flagship’s Lodestar Is Supported by Adequate and Reliable DOCUMBIE ATION yi evs swunswanpensusns ossesmansssvens sss aes ss ves S555 WER UeH HoT SS FINEUIREVETT 58 12 a. The Use of Block Billing Is Not a Basis for Reduction of Flagship’s Lodestar..........ccccevvienieiiiiiiinienieciececeee e e 13 b. The Arithmetic Errors in Some of Flagship’s Modified Single-Task Entries Have Been Corrected..........cocceevveeneenvennnenne 16 2, Flagship’s Lodestar Reflects Time Expended by Flagship’s Timekeepers Which Was Reasonable and Necessary.........c.ccccceevvveennnenen 17 a. Time Expended Reflects Efficiency and Was Not Intentionally Inflated.........ccccooviiniiiiiiiiiceeen 17 b. Time Expended on Depositions, Dispositive Motions, and Trial Work Was Reasonable and Necessary ........ccccccoeeenieeneenen. 19 Cc. Time Expended on the Spoliation Appeal Was Reasonable ANA NECESSATY eevee cites et rs ee sree enna 23 D. Flagship’s Lodestar Should Not Be Reduced But Instead Is Deserving of a IMULEPIIET «covets etcetera ects ee sree sees saae sane eae enna 24 1. A Reduction Is Not Appropriate Because Flagship’s Claims Were All Related and Involved the Same Common Core of Facts .................... 24 2. A Reduction Based on Proportionality to Flagship’s Awarded Damages Is Inappropriate in Antitrust Cases........ccccevvveerveeveeneerneeennenn 26 3. Flagship’s Fee Award Should Be Multiplied to Fulfill the Goals of the CartWrTZht ACE........coiiiiiiiiienie cece eee 29 II. CONCLUSION... eects eee sree sabe eect ee sate sabe este sree sree sane 33 FLAGSHIP REPLY IN SUPPORT OF MOTION FOR 142732476.6 “2- ATTORNEY'S FEES TABLE OF CONTENTS CASE NO. SC090481 AN Un Bs W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES Page(s) CASES 569 E. Cty. Boulevard LLC v. Backcountry Against the Dump, Inc., 6 Cal. APP. Sth 426 (2016)...ccuuiieieiieeeie eee ste eee e sabes ebe atest ee sbae enna anneeeseens 9 Auto. Prod. PLC v. Tilton Eng’g, Inc., 855 F. Supp. 1101 (C.D. Cal. 1994) ....ooiiiiieeie ee eerste seers see eevee 18, 27 Beech Cinema, Inc. v. Twentieth Century Fox Film Corp., 480 F. Supp. 1195 (S.D.INLY. 1979) eee eee ere sees seas 27 Bernardi v. Cty. of Monterey, 167 Cals App: ATH 1379 CLONE) usm sums ssnwsnsn oosossnn moss onus se 5 5553575 5055555 505455558 S555 57545 S355 SHSRHER 18.55 26 Brown v. Fairleigh Dickinson Univ., S60 F. Supp. 391 (DN. 1983) eee eee sbeebs sabe e aes 11 Brown v. Stackler, 612 F.2d 1057 (7th Cir. 1980)...ccuiiiuiiiiiiiiieeiie eee e see sbbe sabe anneas 9,10 Bruckman v. Parliament Escrow Corp., 190 Cal. App. 30 1S 11GB Ficnsoms cssmnnensoimus oss sme oss oes 5s osm sama 11 Building a Better Redondo, Inc. v. City of Redondo Beach, 203 Cal. APP. 4th 852 (2012)... e ts eee sabes esa eee 13 Carver v. Chevron U.S.A. Inc., 119 Cal. App. 4th 498 (2004)......eiiieieeiie eects eters sate eie estes sb eesabe este ese ee nseesaae ens 8,9 Chavez v. City of Los Angeles, AT Cal. 4th 970 (2010) «eerie eters atest estes sabe ebe estes bee sbte esse ene e esas esas enna anne 28 Christian Research Inst. v. Alnor, 165 Cal. App. 4th 1315 (2008).....ueieiieeiieeieeieeetee cites sree ete st ee sat este e sees ste esbee sev enns 14 Cinetopia, LLC v. AMC Entm’t Holdings, Inc., No. 18-2222-CM-KGG, 2018 WL 6804776 (D. Kansas Dec. 27, 2018) .....cccceeeveeevveeecrreennen. 31 Cobb Theatres III, LLC v. AMC Entm’t Holdings, Inc., No. 1:14-CV- 182-ELR-WE]J, 2015 WL 10891939 (N.D. Ga. Nov. 6, 2015) ...c..ceevveeerrenee. 31 Collins v. City of L.A., 205 Cal. App. 4th 140 (2012) cnet ee teeter estes sbaeeebe erase ee saee eens 11 Covenant Mutual Ins. Co. v. Young, 179 (Cal Apis Sl 3 18 11 BGT cusensanussenssissownoonssessssnsssorsaess sss isis se oomass 500000510500 AEH SS 5 HS 0% 9 FLAGSHIP REPLY IN SUPPORT OF MOTION FOR -3- ATTORNEY'S FEES 142732476.6 CASE NO. SC090481 AN Un Bs W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES (continued) Page(s) Darling Int’l, Inc. v. Baywood Partners, Inc., No. C-05-3758 EMC, 2007 WL 4532233 (N.D. Cal. Dec. 19, 2007) ...ccceeveerieereaieenieeniienn 19 Env’t Prot. Info. Ctr. v. Cal. Dep’t of Forestry & Fire Prot., 190 Cal. App. 4th 217 (2010) ...ceeiieiieeeie ters stee er esas sabes erases see eee 25,26 Farrar v. Hobby, 506 ULS. 103 {1DGD) conn smssnon mms sonsn oo somss ws 5505555 555555.56 5055555 S45555% 18 5555558 55035. 50 35555508 SR5553859 28 Flagship Theatres of Palm Desert, LLC v. Century Theatres, Inc., 198 Cal. App. 4th 1366 (2011)..cecuiieiiiiiieeie e e eee 22,30, 31 Flagship Theatres of Palm Desert, LLC v. Century Theatres, Inc., No. B257148, 2016 WL 3091192 (Cal. App. May 24, 2016)......cccceeceerieierienieeeeeeeiee ee 23 Foxv. Vice SS Elects, B20) ERT (17 cosomscscansonsosnsssosuss common resssssssoesos cr en ss 0A 5 SRB AMO 11 Gates v. Deukmejian, 987 F.2d 1392 (9th Cir. 1992)... teste seater sate eee sate eee 10 Harman v. City & Cty. of San Francisco, 136 Cal. Appi. AH. 1279 (RODE) rssns sums mss. os sons cov is 555558 555555 £55555 18 5555558 S5R055.503555 5508 SR5553859 25 Harman v. City & Cty. of San Francisco, 158 Cal. App. 4th 407 (2007). ..eeeieeeiieeiie ceases eee eee sete eases ee saae eee 10, 25, 27, 28 Hasbrouck v. Texaco, Inc., 879 F.2d 632 (Oth Cir. 1989)... sete seats sbee sabe e sees eee saee ee 8 Hensley v. Eckerhart, AG ToS AA: {1D BO, crs cwmoousososessmsnsssorses sss os sass son a A 5 AE SSIES IES SBR 10, 25 In re Marriage of Nassimi, 3 Cal. APP. Sth 667 (2016)...ccueieeiieiieiie eects eee sbte sabe ese esses eaaeenbe anne 14 Int’l Wood Processors v. Power Dry, Inc., S98 F. Supp. 299 (D.S.C. 1984)... eee eee steers saae eee 29 Jaramillo v. Cty. of Orange, 200 Cal. APP. 4th 811 (2011). ueieiiiiiieiie cites e e eset sebe erases saan 13, 14 Kerkeles v. City of San Jose, 243 Cal. APP. 4th 88 (2015). .eeeeeie ieee ee eee esses sees esas passim FLAGSHIP REPLY IN SUPPORT OF MOTION FOR -4- ATTORNEY'S FEES 142732476.6 CASE NO. SC090481 AN Un Bs W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES (continued) Page(s) Knutson v. Daily Review, Inc., 479 F. Supp. 1263 (N.D. Cal. 1979) wooo ceases eesti severe 27,29 La. Power & Light Co. v. Kellstrom, SO F.3d 319 (5th Cir. 1995)... ieee eee ete sees etree sae ee saves esate ee sabe ae sabe ee ssae ens 27 Martino v. Denevi, L82 Cal. Apifie 3A 583 COBEN: cs suum. onsssn.nsusnses swmsnn sn mss sss 6 50505555 £55555 18 5555558 Sram. 12, 13, 15,22 Moreno v. City of Sacramento, 534 F.3d 1106 (9th Cir. 2008)......ccccvieeeiieeeiieeiiie eerie errs e ta esar eases e esae e ssse ee sasea ssseessssessssees 17 O’Bannon v. Nat’l Collegiate Athletic Ass'n, 739 F. App’ X 890 (9th Cir. 2018) ..eovieeiiieiieiieiie cites eesti ee 13,28 Pierce v. Cty. of Orange, 903 PF. Supp. 2d. 1017 CL Cals ZO 2 enmmsssemomssmsomnsosmmonsn om o m s s esms abe 14 PLCM Grp. v. Drexler, 22 Cal. 4th 1084 (2000) ...veeereeeerieeetieeeitieeetee estes eetae sre erases aeesssaessssaessssaessaeeesss eessse essseens 12 Redwood Theatres, Inc. v. Festival Enters., Inc., 200 Cal. Apps 30 GBT (UDB. cvmsnonsnosnss swans sons ors is 5555555 555055.505555 5505 $55555538 SASHES 555558 00 SHH3358 85 30 Robertson v. Fleetwood Travel Trailers of California, Inc., 144 Cal. App. 4th 785 (2000).....c..eeeitieiiieeieeieeetie ei eerte ert ee s te sabe e esti esate setae s e stes esas enna anne 27 Saxer v. Philip Morris, Inc., S54 Cal. APP. 3A 7 (1975) iii e eet sabe sateen ee tee sateen 8 Serrano v. Priest, 20 Calls, 3 28 CLIFT ssarsowsnwssnnnssmsossssmnessossoas ass ovsaess55a5 465 05008155 558548 03 REAH HAR HAAR R ARS NH RABEO 10 Serrano v. Unruh, 32 Cal. 3d 621 (1982) coerce ete sree sree sree etree sates saree sarees sarees sabe e enna 7,9,11 Thayer v. Wells Fargo Bank, N.A., 92 Cal. APP. 4th 819 (2001)..ueiiiieiie ects ee eters sates erase ee sae enbe anne 12 Theme Promotions, Inc. v. News Am. Mktg. FSI, Inc., 731 F. Supp. 2d 937 (N.D. Cal. 2010) ..cccueiiiiiieiiiieeiieetee teeta ees passim Twin City Sportservice, Inc. v. Charles O. Finley & Co., 676 F.2d 1291 (9th Cir. 1982) ....uviiiiie cies see sates save eeeare eee passim FLAGSHIP REPLY IN SUPPORT OF MOTION FOR -5- ATTORNEY'S FEES 142732476.6 CASE NO. SC090481 AN Un Bs W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES (continued) Page(s) U.S. Football League v. Nat'l Football League, 887 F.2d 408 (2d Cir. 1989) ....uiiiiecieie cesses etter seers eevee eer ae ee eaaae eee 8,27,28 Vo v. Las Virgenes Municipal Water Dist., 79 Cal. App. 4th 440 (2000)....ccciiee aii eeeteeeeeeeteeeeeese ee sibe es essa e ssbb ee abe s naae es 27 Wershba v. Apple Computer, Inc., 91. Cal. Apt. 400224 CUO Yix50 ssn sows swans sess oss 255535045 555555550555 55.30 5455558 SH83355-49 SE53R50 HSHH5H38 55 32 STATUTES Cal. Bus. & Prof. Code § 167500) ..uuveiieiiiiiiiiiiiieeee eects eeeeere eee eee essere area se s ee earanae es 8, 14 FLAGSHIP REPLY IN SUPPORT OF MOTION FOR -6- ATTORNEY'S FEES laZiieales CASE NO. SC090481 A N nn W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 I. INTRODUCTION This was a hotly contested, high-risk litigation lasting twelve years, requiring two separate trips to the Court of Appeal and a five-week jury trial. As happens when a case proceeds all the way through trial, there is a winner and a loser. Flagship won, and Cinemark! lost. By any measure, a $3.75 million judgment, plus costs and attorneys’ fees, is a substantial victory. Cinemark’s attempt to portray the result in any other manner is disingenuous, particularly given their refusal to pursue settlement. Cinemark knew that in taking this case to trial and not settling it risked both an unpredictable damages award from a jury and having to pay Flagship’s reasonable attorneys’ fees for the course of the twelve-year litigation. Cinemark nonetheless chose to go to trial. At no point did Cinemark offer to settle the matter for anything close to the amount of damages asserted in the case, let alone the resulting judgment and fee award it would incur if it lost at trial. And Cinemark does not deny or rebut in its opposition that Flagship offered to settle the matter in 2006 for simply a change in Century’s film licensing policy which would have allowed films to play day and date at the Palme and the River. Century refused this early offer and then Century, and later Cinemark, chose to fight tooth-and-nail for twelve years. They chose to continue this fight even after the Court of Appeal decisions in favor of Flagship in 2011 and 2016. In choosing to defend the case by ratcheting up the tone, tenor, and tenaciousness of the litigation by hiring one of the largest law firms in the country, Cinemark cannot now complain of the cost of the litigation. Serrano v. Unruh, 32 Cal. 3d 621, 638 (1982) (“Serrano IV’) (losing party in a fee-shifting case “cannot litigate tenaciously and then be heard to complain about the time necessarily spent by the plaintiff in response”). It was the new defense style and strategy starting in 2012 that resulted in the spike in the expense of litigation, not the change in billing arrangement between Flagship and Perkins Coie. As the victor, and particularly under these circumstances, Flagship is entitled to a substantial fee award. ! For convenience, “Cinemark” refers collectively to both Century and Cinemark, except where the context requires Cinemark or Century to be identified individually. FLAGSHIP REPLY IN SUPPORT OF MOTION FOR Te ATTORNEY'S FEES 142732476.6 CASE NO. SC090481 A N nn W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 Given Cinemark’s vigorous (but unsuccessful) attempt to avoid a loss in this case, it is no surprise that Cinemark now argues for large-scale or whole-cloth reductions to Flagship’s requested fees. But, as addressed below, Cinemark’s proposed reductions are not supported by the facts or the law-in particular, Cinemark almost entirely ignores attorney’s fee precedents in antitrust cases. The extensive billing records submitted demonstrate that Flagship’s legal team expended the time that was reasonable and necessary to advance Flagship’s interests. Because antitrust plaintiffs are “entitled to recover a reasonable attorney’s fee for every item of service which, at the time rendered, would have been undertaken by a reasonable and prudent lawyer to advance or protect his client’s interest in the pursuit of a successful recovery of anti-trust damages,” so too should Flagship fully recover its requested fees. See Theme Promotions, Inc. v. News Am. Mktg. FSI, Inc., 731 F. Supp. 2d 937, 941 (N.D. Cal. 2010) (quotations and citation omitted). IL. ARGUMENT A. Attorney’s Fee Awards for Prevailing Plaintiffs in Antitrust Cases Are Mandatory Cinemark’s position that Flagship should be denied fees altogether is both remarkable and extreme when measured against the legal standards that apply in antitrust cases. California’s principal antitrust statute, the Cartwright Act, provides that a successful plaintiff “shall be awarded a reasonable attorneys’ fee.” Cal. Bus. & Prof. Code § 16750(a) (emphasis added). While the court has discretion as to the amount of the attorney fee award, “[a]n award of attorney’s fees to the injured party [in an antitrust case] is mandatory.” U.S. Football League v. Nat’l Football League, 887 F.2d 408, 411 (2d Cir. 1989); see also Hasbrouck v. Texaco, Inc., 879 F.2d 632, 635 (9th Cir. 1989).> An award of attorney’s fees in antitrust cases is also unilateral, meaning it is available to a successful plaintiff but not to a successful defendant. Carver v. Chevron U.S.A. Inc., 119 Cal. App. 4th 498, 503 (2004) (citing Cal. Bus. & Prof. Code § 16750(a)). 2 “The Cartwright Act is patterned upon the federal [antitrust laws] . . . ; thus cases decided under the latter act are applicable as an aid to decision interpreting the former.” Saxer v. Philip Morris, Inc., 54 Cal. App. 3d 7, 19 (1975) FLAGSHIP REPLY IN SUPPORT OF MOTION FOR ~8. ATTORNEY'S FEES 142732476.6 CASE NO. SC090481 A N nn W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 Mandatory, unilateral fee-shifting provisions under the Cartwright Act or federal antitrust laws “‘are created by legislators as a deliberate stratagem for advancing some public purpose, usually by encouraging more effective enforcement of some important public policy.” Id. at 504 (quoting Covenant Mutual Ins. Co. v. Young, 179 Cal. App. 3d 318, 324 (1986)); see also 1-1 CA Antitrust and Unfair Competition § 1.01A (2017 ed.) (unilateral fee-shifting provisions serve as a strong indication of the Legislature’s intent to use its antitrust laws to advance public rather than private interests). In practice, this type of provision accomplishes two goals. First, it “insulate[s] treble damage recovery from expenditures for legal fees.” Twin City Sportservice, Inc. v. Charles O. Finley & Co., 676 F.2d 1291, 1312 (9th Cir. 1982). Second, it encourages injured parties to broadly and effectively enforce the Cartwright Act “in situations where they otherwise would not find it economical to sue.” Carver, 119 Cal. App. 4th at 504 (quoting Covenant, 179 Cal. App. 3d at 325 (emphasis added)). Despite the mandatory nature of an attorney’s fee award to an injured plaintiff under the Cartwright Act, Cinemark urges the Court to entirely deny Flagship of any fees. See Defts. Century Theatres, Inc. & Cinemark USA, Inc.’s Opp. to Pl. Flagship Theatres of Palm Desert, LLC’s Mot. for Atty’s Fees filed January 16, 2019 (“Opposition”) at 6, 16. But the cases Cinemark cites do nothing to advance this position. First, two of the cases are inapplicable because they do not involve a mandatory, unilateral fee-shifting provision such as the one that applies here. Serrano IV, 32 Cal. 3d at 624, n.1 (concerning discretionary private attorney- general fee award); Brown v. Stackler, 612 F.2d 1057, 1058 (7th Cir. 1980) (concerning discretionary civil rights fee award). Second, with one exception, the courts affirmed the trial courts’ fee awards-in other words, there were no denials of fees. Serrano IV, 32 Cal. 3d at 635 (affirming fee award); 569 E. Cty. Boulevard LLC v. Backcountry Against the Dump, Inc., 6 Cal. App. 5th 426, 429 (2016) (affirming fee award). Incredibly, in Serrano IV, the Supreme Court did the opposite of what Cinemark encourages here and remanded the case for reconsideration by the trial court for its denial of compensation for services related to preparing a fee motion. See 32 Cal. 3d at 635, 639; see infra note 3. And in the one instance where fees were denied, the court affirmed the trial court’s denial of an attorney’s fee award for a “plain and simple case” that FLAGSHIP REPLY IN SUPPORT OF MOTION FOR 0. ATTORNEY'S FEES 142732476.6 CASE NO. SC090481 A N nn W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 would be disposed of by the decision in another case and most of the attorney’s billed time consisted of motions for extension of time because the parties were “simply await[ing] the outcome [in the other case]. Brown, 612 F.2d at 1058-59. Given the 12-year life span of this case and the complex antitrust issues involved, there are no parallels to be drawn between Brown and this case. Cinemark’s proposal to completely deny Flagship’s fees should be flatly rejected. B. Cinemark’s Proposed Reductions to Flagship’s Lodestar and Additional Downward Adjustments Invite Error Cinemark proposes large-scale percentage reductions to Flagship’s fees without any meaningful explanation on which the Court can rely. While courts have broad discretion to set a fee award, that discretion is not unlimited. Serrano v. Priest, 20 Cal. 3d 25, 49 (1977) (“Serrano IIT”). A court must provide a “a concise but clear explanation of its reasons for the fee award.” Hensley v. Eckerhart, 461 U.S. 424, 437 (1983); e.g., Harman v. City & Cty. of San Francisco, 158 Cal. App. 4th 407, 414-15 (2007) (“Harman II”) (affirming trial court award of attorney’s fees where fees exceeded damages because trial court described in “detailed fashion” the factors it considered when deciding not to reduce fees beyond prevailing party’s own concessions). But a court’s decision to make reductions to a “large fee request[] [is] subject to heightened scrutiny.” Gates v. Deukmejian, 987 F.2d 1392, 1400 (9th Cir. 1992). A court abuses its discretion when it makes large-scale percentage reductions to a fee award without also providing a “clear” explanation for those reductions. Id. at 1401-02; e.g., Kerkeles v. City of San Jose, 243 Cal. App. 4th 88, 103-04 (2015) (reversing superior court reduction to mandatory attorney fees based on large-scale percentage reduction without explanation). Unable to escape the statutory requirement for a mandatory fee award in this case, supra Part II.A, Cinemark proposes a 75% reduction to Flagship’s proposed fees without any meaningful explanation for the amounts of reduction requested. Instead, Cinemark asks the Court to rely on its own expert witness’s “holistic approach” to evaluating fee awards. Opposition at 26 (citing Glynn Decl., {{ 11(c), 31, 32, 43). But Cinemark’s approach is deeply flawed. It cites only a few examples but argues for wholesale reductions in the entirety of submitted billing FLAGSHIP REPLY IN SUPPORT OF MOTION FOR -10- ATTORNEY'S FEES 142732476.6 CASE NO. SC090481 A N nn W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 statements. If a party is going to seek a reduction based on review of specific entries, any reduction is limited to those entries and not applied pro rata basis across all entries. Further, an entry-by-entry review is not necessary or expected, or the preferred method, for evaluating a fee request. See Fox v. Vice, 563 U.S. 826, 838 (2011) (holding that judges need not be “green- eyeshade accountants” but instead provide “rough justice”). Rather, the preferred methodology in long-running large, complex cases is application of the substantive factors provided in California Rules of Professional Conduct, Rule 1.5 (formerly Rule 4-200 until November 1, 2018). See Reply Rebuttal Decl. of Kenneth Moscaret dated February 14, 2019 (“Moscaret Reply Decl.”) 29. To reduce Flagship’s fee award based on Cinemark’s proposed approach would be to err. E.g., Collins v. City of L.A., 205 Cal. App. 4th 140, 159 (2012) (trial court abused its discretion by reducing fee award based on expert’s facially overbroad conclusions); Kerkeles, 243 Cal. App. 4th at 101-04 (trial court’s fee award was arbitrary where it was based on “wholesale adoption of the defense opposition, which itself only generally protested . . . that the hours expended were unjustifiably excessive”). C. Flagship’s Lodestar Is Reasonable and Reflects Work Necessary to Advance and Protect Its Interests Against Cinemark’s Anticompetitive Conduct Cinemark’s hyperbolic attack on the reasonableness of time expended by Flagship is likewise problematic because, as the prevailing party in this factually difficult, hard-fought, legally complicated case, Flagship “is entitled to recover a reasonable attorney’s fee for every item of service which, at the time rendered, would have been undertaken by a reasonable and prudent lawyer to advance or protect his client’s interest in the pursuit of a successful recovery of anti-trust damages.” See Theme Promotions, 731 F. Supp. 2d at 941 (quotations omitted and emphasis added) (citing Twin City Sportservice, 676 F.2d at 1313 (awarding attorney’s fees pursuant to the Cartwright Act and determining the lodestar based on California law)).> Not only 3 Flagship’s fees for attorney time expended on the fee motion are also compensable. “[I]t has been held that when an amount of attorney’s fees is statutorily authorized, the reasonable expenses of preparing the application for fees should be included in the award.” Bruckman v. Parliament Escrow Corp., 190 Cal. App. 3d 1051, 1062 (1987) (citing Brown v. Fairleigh Dickinson Univ., 560 F. Supp. 391, 414 (D.N.J. 1983)); see also Serrano IV, 32 Cal. 3d at 639 (holding that “absent circumstances rendering the award unjust, fees recoverable under [Private FLAGSHIP REPLY IN SUPPORT OF MOTION FOR -11- ATTORNEY'S FEES 142732476.6 CASE NO. SC090481 A N nn W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 do Cinemark’s attacks on Flagship’s billing methods fail because Flagship’s billing records provide sufficient and reliable information about how time was expended in the case, but also because all time spent on this case was reasonable and necessary to advance Flagship’s and the public’s interests in this case and to enforce California’s antitrust laws. 1. Flagship’s Lodestar Is Supported by Adequate and Reliable Documentation As an initial matter, and contrary to Cinemark’s assertion, a prevailing plaintiff is not required to present evidence of the precise amount of time spent on each task for which it seeks attorney’s fees.* “In California, an attorney need not submit contemporaneous time records in order to recover attorney fees . ...” Martino v. Denevi, 182 Cal. App. 3d 553, 559 (1986). There is no required level of detail that counsel must achieve. See PLCM Grp. v. Drexler, 22 Cal. 4th 1084, 1098 (2000) (“We do not want a [trial] court, in setting an attorney’s fee, [to] become enmeshed in a meticulous analysis of every detailed facet of the professional representation. It ... 1s not our intention that the inquiry into the adequacy of the fee assume massive proportions, perhaps dwarfing the case in chief.” (alterations in original and citation omitted)). Here, Flagship presented detailed billing records covering a 12-year litigation period involving 4 case dispositive motions, 2 appeals, 60 depositions, and a 5-week trial. Flagship provided the Court with a “listing of detailed time keeper and hourly rate data from the Perkins Coie accounting department” for all time entries related to this case except for certain voluntary exclusions. Decl. of Thomas L. Boeder dated October 16, 2018 (“Boeder Decl.”) 16-17. The time entries for each timekeeper included the date of work, narrative description of work, billed hours (to the tenth of an hour), billing rate, and amount billed (billing rate multiplied by billed hours). Id. 16, Ex. A. In total, Perkins Coie submitted documentation for 9,701 billing entries Attorney General Act] ordinarily include compensation for all hours reasonably spent, including those necessary to establish and defend the fee claim.”). Accordingly, Flagship requests a total of $709,000 in fees related to the preparation and defense of its requested attorney’s fee. See Reply Declaration of Thomas L. Boeder dated February 15, 2019 (“Boeder Reply Decl.) qq 2-3. 4 Nor does the case on which Cinemark relies for this assertion, Thayer v. Wells Fargo Bank, N.A., 92 Cal. App. 4th 819, 833 (2001), suggest a plaintiff must demonstrate the reasonableness of time expended by its attorneys on a fask-by-task basis. Rather, the Thayer court asserts that the lodestar calculation is determined by “multiplying the number of hours reasonably expended by counsel by a reasonable hourly rate.” Id. That decision is devoid of the type of task-by-task analysis Cinemark asserts ought to apply here. FLAGSHIP REPLY IN SUPPORT OF MOTION FOR -12- ATTORNEY'S FEES 142732476.6 CASE NO. SC090481 A N nn W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 that reflect the time expended over 12 years to advance Flagship’s and the public’s interests, and to enforce the antitrust laws. Suppl. Decl. of Thomas L. Boeder filed December 21, 2018 (“Boeder Suppl. Decl.”) 4. Flagship has more than met its burden to demonstrate the reasonableness of its fees. See Denevi, 182 Cal. App. 3d at 559-60. a. The Use of Block Billing Is Not a Basis for Reduction of Flagship’s Lodestar a) Cinemark Misrepresents the Scope of Block Billing Without quantifying it, Cinemark argues that Perkins Coie’s billing entries “consist largely of vague, ‘block billed’ entries.” Opposition, at 6. In fact, only 32% of the Perkins Coie’s billing entries were block billed, and these billing entries were far from vague. See Suppl. Decl. of Donald J. Kula dated February 19, 2019 (“Kula Supp. Decl.”) | 2-3, Ex. G; see also Moscaret Reply Decl. qq 3-8 (describing the three types of billing formats-true single-task entries, modified single-task entries, and true block-billed entries-setting forth examples of each and then quantifying that only 32.3% of the billing entries at issue, representing only 30.2% of the total billed fees, were block billed).> Cinemark’s block billing arguments are therefore limited to less than a third of the billing entries, and less than a third of the fees, at issue. (ii) Block Billing Is Appropriate in This Case Where No Apportionment of Fees Is Necessary Cinemark’s attack on the 32% of the billing entries with block billing is unwarranted because a plaintiff’s use of block billing does not render the time expended by its attorneys per se unreasonable. Jaramillo v. Cty. of Orange, 200 Cal. App. 4th 811, 830 (2011); e.g., Building a Better Redondo, Inc. v. City of Redondo Beach, 203 Cal. App. 4th 852, 872 (2012) (trial court did not err by declining to reduce the number of hours allowed in calculating the fee award even where counsel’s billing records were comprised of block billing entries); O'Bannon v. Nat'l Collegiate Athletic Ass’n, 739 F. App’x 890, 895, n.5 (9th Cir. 2018) (trial court did not err in overruling defendant’s objections to block billing); see also Moscaret Reply Decl. qq 10-12. Indeed, a reduction to an attorney’s fee award “may not be appropriate ‘if individual tasks are > Of the 9,701 total billing entries submitted, 3,132 were true block-billed entries. Of the $14,902,465.45 in fees that make up the lodestar figure requested by Flagship, $4,501,275.15 (or 30.2%) was block billed. See Kula Suppl. Decl. 3; Moscaret Reply Decl. 7. FLAGSHIP REPLY IN SUPPORT OF MOTION FOR -13- ATTORNEY'S FEES 142732476.6 CASE NO. SC090481 A N nn W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 specified” and the entries are ‘detailed enough for the Court to assess the reasonableness of the hours billed.”” See Pierce v. Cty. of Orange, 905 F. Supp. 2d 1017, 1030-31 (C.D. Cal. 2012); see also Moscaret Reply Decl. |] 10-12. Block billing is problematic, unlike here, in cases where “there is a need to separate out work that qualifies for compensation” under a fee-shifting statute and work that does not qualify. E.g., Jaramillo, 200 Cal. App. 4th at 830; Christian Research Inst. v. Alnor, 165 Cal. App. 4th 1315, 1319-20 (2008) (using block billing as a basis for reducing a fee award only to the extent it obscured the nature of the work and whether such work was compensable under the mandatory, fee-shifting statute); see also In re Marriage of Nassimi, 3 Cal. App. 5th 667, 696 (2016) (noting that block billing makes it difficult for the trial court to determine which time entries are related to compensable claims). For example, in Christian Research-a case on which Cinemark relies-the court of appeals affirmed a trial court’s reduction to a fee award, in part, because the defendant’s block-billed narratives included compensable and non-compensable tasks. 165 Cal. App. 4th at 1324-25. There, the anti-SLAPP statute permits the prevailing defendant on a motion to strike to recover his attorney’s fees related to the anti-SLAPP motion. Id. at 1318. But the anti-SLAPP statute, unlike the Cartwright Act, only permits recovery of attorney’s fees for the motion, not the entire litigation. See id. at 1320. Flagship’s reliance on its timekeepers’ block billing entries to support its fee motion is not problematic because there is no need to distinguish between compensable and non-compensable fees in the instant case. Compare id. All of Flagship’s claims involved a common core of facts regarding Cinemark’s circuit dealing, infra Part I1.D.1, and the claim on which Flagship prevailed at trial is compensable under the Cartwright Act, Cal. Bus. & Prof. Code § 16750(a). (iii) The Block Billing Entries Comply with California Law With respect to its complaints that Flagship’s use of block billing makes it impossible to assess the reasonableness of time expended on various tasks, Cinemark protests too much. Cinemark is seemingly able to determine the amount of time Flagship’s attorneys spent on FLAGSHIP REPLY IN SUPPORT OF MOTION FOR 14- ATTORNEY'S FEES 142732476.6 CASE NO. SC090481 A N nn W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 specific tasks,® such as preparing for depositions or appealing the terminating sanction sought by Cinemark. See, e.g., Opposition at 19-21. Indeed, Cinemark apparently concedes that Flagship’s fees incurred before the contingency fee period-which were documented using block billing entries-are reasonable. Id. (comparing the reasonableness of time expended before and after the contingency-fee period). Moreover, Flagship’s billing entries provide sufficient information about the amount of time expended by its timekeepers to advance the client’s interests at various stages during the 12-year litigation. See Denevi, 182 Cal. App. 3d at 559 (“In many cases the trial court will be aware of the nature and extent of the attorney’s services from its observation of the trial proceedings and the pretrial and discovery proceedings reflected in the file.”). Rather than provide general entries which would make it difficult to determine the reasonableness of Flagship’s fees request, Flagship’s block-billed entries specify individual tasks performed by its timekeepers. This is clear upon review of the “true block-billed” entries that have been compiled in Exhibit G to the Supplemental Declaration of Don Kula. Suppl. Kula Decl. {2, Ex. G. The block-billed entries describe the specific individual tasks performed and the total time incurred for that day. Each billing entry, when considered in its totality, establishes the reasonableness of time expended by the Flagship timekeeper that day. See Moscaret Reply Decl. 93 (listing examples). Flagship’s block-billed entries do more than what is required under California law by providing detailed information about the various tasks performed by its legal team, and those billing entries reflect tasks which a reasonable and prudent lawyer would have undertaken “to advance or protect his client’s interest in the pursuit of a successful recovery of anti-trust damages.” See Theme Promotions, Inc, 731 F. Supp. 2d at 941 (quotations omitted) (citing Twin City Sportservice, 676 F.2d at 1313). ® It should be noted, however, that Cinemark takes great liberties with respect to its characterizations of the amount of time expended during the “contingency fee period” of Flagship’s case. Cinemark’s mischaracterizations are discussed below. See infra Part I1.C.2. FLAGSHIP REPLY IN SUPPORT OF MOTION FOR -15- ATTORNEY'S FEES 142732476.6 CASE NO. SC090481 A N nn W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 b. The Arithmetic Errors in Some of Flagship’s Modified Single-Task Entries Have Been Corrected Cinemark uses a few arithmetic errors in a small percentage of the modified single-task entries as a further attack of Flagship’s block-billed entries. Opposition at 14-15. But one has nothing to do with the other. Modified single-task entries specify the time for each individual task billed. See Moscaret Reply Decl. { 3; Kula Suppl. Decl. 2, Ex. F. The very definition of block-billed entries is that they do not specify the time for individual tasks listed and instead provide simply a total for all tasks stated in the entry. See Moscaret Reply Decl. { 3; Kula Suppl. Decl. 2, Ex. G. Cinemark’s attempt to impugn Perkins Coie’s block billing based on small errors in its modified single-task billing entries smacks of desperation. Cinemark vastly overstates these errors.” See generally Boeder Suppl. Decl. As the chart below indicates, only 104 billing entries-or 1% of all billing entries over the 12-year life span of this case-are of the type that Cinemark complains, i.e., narrative indicates that the amount of time allocated to certain tasks is less than the amount of time billed. Those billing entries are counterbalanced by 47 billing entries where the narrative indicates the amount of time allocated to certain tasks is more than the amount of time billed. Number of Entries Percentage of All Entries Overbilled Entries? 104 1% Underbilled Entries’ 47 <1% Total Billing Entries 9,701 100% See Boeder Suppl. Decl. | 4-6. For these 151 entries, Flagship’s attorneys billed a total of 40.77 hours more than were indicated by the billing narratives. Id. 6. Flagship modifies its requested lodestar downward by $14,777.60 which reflects the net difference in amounts overbilled and underbilled. Id. { 3. ’ Flagship emphasizes that any errors in Flagship’s modified single-task entries do not reflect any intentional inflation by Flagship’s timekeepers for time expended on this case. See also infra Part I1.C.2.a. 8 These are referred to as “positive delta” variance in the Supplemental Boeder Declaration. See Boeder Suppl. Decl. at {5 (“[A] positive delta indicates the Narrative detail [for a time entry] describes an hourly amount less than the amount . . . [b]illed . . ..”). ® These are referred to as a “negative delta” variance in the Supplemental Boeder Declaration. See id. (“A negative delta indicates that the Narrative detail describes an hourly amount greater than [was] [blilled . ...”). FLAGSHIP REPLY IN SUPPORT OF MOTION FOR -16- ATTORNEY'S FEES 142732476.6 CASE NO. SC090481 A N nn W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 2 Flagship’s Lodestar Reflects Time Expended by Flagship’s Timekeepers Which Was Reasonable and Necessary As the injured party, Flagship “is entitled to recover a reasonable attorney’s fee for every item of service which, at the time rendered, would have been undertaken by a reasonable and prudent lawyer to advance or protect his client’s interest in the pursuit of a successful recovery of anti-trust damages.” See Theme Promotions, 731 F. Supp. 2d at 941 (quotations omitted and emphasis added) (citing Twin City Sportservice, 676 F.2d at 1313). But Flagship did more than vindicate its own interests, the litigation advanced important public interests and provided enforcements of the antitrust laws. a. Time Expended Reflects Efficiency and Was Not Intentionally Inflated Flagship flatly rejects Cinemark’s allegation that Flagship intentionally inflated the amount of time it expended on the case during the contingency fee period “to force Cinemark to pay amounts it never would have billed its client.” See Opposition at 17-21. In antitrust cases, just as in civil rights litigation, [i]t must also be kept in mind that lawyers are not likely to spend unnecessary time on contingency fee cases in the hope of inflating their fees. The payoff is too uncertain, as to both the result and the amount of the fee. It would therefore be the highly atypical . . . case where [the] plaintiff's lawyer engages in churning. By and large, the court should defer to the winning lawyer’s professional judgment as to how much time he was required to spend on the case; after all, he won, and might not have, had he been more of a slacker. Kerkeles, 243 Cal. App. 4th at 104 (citing Moreno v. City of Sacramento, 534 F. 3d 1106, 1112 (9th Cir. 2008)). Cinemark’s allegation assumes that Flagship’s counsel believed that the inherent risks of litigation and a contingent fee were outweighed by a high probability of a large recovery in this case. If counsel had such a belief and motivation, there would have been no reason not to take the case on a contingency from the very beginning. That’s not what happened here. This matter was turned into an “involuntary” contingent fee arrangement only when it became obvious that the client had no hope of paying an hourly fee. Boeder Decl. 4. From a strictly economic perspective, movie industry antitrust cases are very poor candidates for counsel seeking a FLAGSHIP REPLY IN SUPPORT OF MOTION FOR «17- ATTORNEY'S FEES 142732476.6 CASE NO. SC090481 A N nn W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 premium return on fees based on a contingent fee. See infra Part I1.D.3. The overwhelming majority of antitrust clearance and circuit dealing cases over time have been won by the defense, not the plaintiff. See Mot. for Atty’s’ Fees filed October 16, 2018 (“Motion”) at 4; see also Boeder Decl. 9. Accordingly, there was no so-called financial “upshot” to proceeding with this case on a contingent basis because contingency in a case such as this was decidedly risky. See Motion at 3 (“Th[e] decision by Perkins Coie [to agree to work on a contingent fee basis] required the firm to forgo regular payment of fees going forward and to assume a high level of financial risk in a complex and very specialized area of the law-indeed a risk that fees in this case might never be paid at all.”). Further, the manner in which Flagship’s counsel managed the case demonstrates efficiency, not intentional pursuit of heavy staffing and overwork that would be characteristic of “padded” work and hours. See Motion at Part III. A-B. Flagship’s attorney fee expert, Ken Moscaret, confirms the benefits of Flagship’s case management approach. First, he opines that Perkins Coie’s case management was very efficient, particularly for a large law firm in an unusually complex case over an extraordinary and extended period of time. Decl. of Kenneth M. Moscaret dated October 9, 2018 (“Moscaret Decl.”) 55. Notably, 75% of the time in this case was expended by Flagship’s core team, comprised of six attorneys. Id. 49; see Auto. Prod. PLC v. Tilton Eng’g, Inc., 855 F. Supp. 1101, 1103 (C.D. Cal. 1994) (prevailing party exercised proper billing judgment when it requested fees for 37 timekeepers because 97% of time in the case was expended by 8 attorneys and other timekeepers were necessary given the case’s “length and complexity”). Second, he opines that counsel for plaintiff in a contingent fee matter such as this have a strong interest in being as efficient as possible. Moscaret Decl. {{ 33, 56; see Kerkeles, 243 Cal. App. 4th at 104. Defense fee witness Clement Glynn’s opinions to the contrary are unpersuasive for two primary reasons. First, he has no background or credentials suited to opining on details of the management of a complex antitrust case of this magnitude. See Decl. of Clement L. Glynn (“Glynn Decl.”) 3. Second his opinions on the reasonableness of Flagship’s hours are cherry- picked or untethered to the facts of this case. See, e.g., id. { 11.a (illustrating his opinions through FLAGSHIP REPLY IN SUPPORT OF MOTION FOR -18- ATTORNEY'S FEES 142732476.6 CASE NO. SC090481 A N nn W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 hypotheticals not based on the facts of this case) and {25.d (comparing time expended taking two Cinemark depositions to time expended taking six Cinemark depositions). Notably, neither Mr. Glynn nor Cinemark has offered any information whatsoever as to what attorney’s fees were incurred by defense counsel during this litigation-such omissions “strongly suggest[] that [defendant’s] fees compare[] favorably to those incurred by [plaintiff].” See Darling Int’l, Inc. v. Baywood Partners, Inc., No. C-05-3758 EMC, 2007 WL 4532233, at *2 (N.D. Cal. Dec. 19, 2007). b. Time Expended on Depositions, Dispositive Motions, and Trial Work Was Reasonable and Necessary Putting aside Cinemark’s inflammatory allegations of intentional inflation, a careful analysis of the task comparisons made by Cinemark reveals Flagship’s time expended was reasonable and necessary. Each of the task types-depositions, dispositive motions, and trial work-that Cinemark attacks is addressed below, except appeals which are separately addressed in, infra, Part I1.C.2.c. Depositions. Cinemark’s criticisms of time expended on depositions during pre- and post- contingency fee periods are unfair-its so-called comparisons are hardly apples-to-apples and assume depositions were occurring in a vacuum. Take for example the sleight of hand in its “Cinemark Witness Depositions” comparison. See Opposition at 19-20. Cinemark attempts to show Flagship expended less time taking depositions in 2008 as compared to in 2017, but then cherry-picks examples on which its opposition relies and altogether ignores the depositions taken in 2012 and 2013. See id. at 19 (comparing two depositions in 2008 to four depositions in 2017). But the chart below shows the extent of the depositions Flagship took of Century’s and/or Cinemark’s employees over the life of the case was greater than Cinemark, or its fee witness, suggests. 2007/2008 | 2012/2013 2017 # of Depositions 6 9 5 Hours of Testimony 15.5 48.3 19.7 Pages of Testimony 577 1,672 641 Boeder Reply Decl. {7. Those depositions were well-worth the time expended on them, as they provided critical evidence at trial of Cinemark’s failure to engage in film-by-film, theater-by- FLAGSHIP REPLY IN SUPPORT OF MOTION FOR -19- ATTORNEY'S FEES 142732476.6 CASE NO. SC090481 A N nn W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 theater film licensing-trial testimony by deposition designation came from 17 of the 20 Cinemark depositions. Id. Cinemark’s arguments also ignore the ways in which the nature of the case changed over time. For example, between 2008, when the case was only two-years old, and 2013 or 2017, when the case was seven- and eleven-years old, respectively, the facts in the case had grown by considerable proportions. Through 2008, the parties and third parties had produced over 3,000 documents consisting of nearly 11,000 pages. Between 2009 and 2017, the parties and third parties had produced over 270,000 documents consisting of over 1.3 million pages'°- 90x and 118x greater than in the former. Id. §8. Flagship’s attorneys therefore had to expend considerably more time than they did in 2008 to review documents, both to identify potential Cinemark deponents and identify potential documents for use in those depositions. See id. And in 2017, four to five years after the prior round of Cinemark depositions, Flagship’s attorneys had to again review newly produced documents and prior depositions or other case material to identify potential Cinemark deponents and deposition exhibits. See id. Cinemark’s comparison of time expended by Flagship on Cinemark depositions in 2017 to 2008 1s also incomplete because it ignores that in 2007 and 2008, Flagship expended significant time towards settling the case. Id. Although it continued to actively pursue the case, there was an inverse relationship between time expended on discovery, including depositions, and time expended on settlement. See id. This inverse relationship reflected Flagship’s belief that settlement was the most efficient and effective way to secure fair access to first-run films. Unsurprisingly, Cinemark takes the same cherry-picking approach with respect to Flagship’s defense of Mr. Tabor’s and Mr. Mason’s deposition. Flagship had to defend Mr. Tabor and Mr. Mason in a total of 12 depositions (not just four depositions as Cinemark suggests) for nearly 80 hours over the life of the case as Cinemark insisted on taking and retaking their depositions: 1 10 The number of depositions in the case also exploded, notably to include depositions of distributors, Cinemark’s co-conspirators. The parties took and defended 9 depositions through 2008, 33 depositions between 2012 and 2014; and 18 depositions in 2017 and 2018. Id. q 5. FLAGSHIP REPLY IN SUPPORT OF MOTION FOR -20- ATTORNEY'S FEES 142732476.6 CASE NO. SC090481 A N nn W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 2008 2012/2013 2017 # of Tabor Depositions 1 3 2 # of Mason Depositions 1 3 2 Hours of Testimony 5 46.2 26 Pages of Testimony 211 1,510 1,035 Boeder Reply Decl. 6. As the Court saw at trial, Cinemark’s defense to its anticompetitive conduct involved attacking Flagship’s principals for their management technique. Cinemark went even further to dredge up irrelevant, personal information when it took depositions. The amount of time expended by Flagship’s timekeepers to prepare for and defend Mr. Tabor’s and Mr. Mason’s depositions are directly proportional to the abusive number and length of depositions taken by Cinemark of those deponents. Not to mention Cinemark’s fee witness includes in his calculations the time expended by Flagship’s timekeepers preparing for, opposing, and negotiating a person most knowledge deposition that Cinemark then never took. See Glynn Decl. {25.a, Ex. 6 (including numerous billing entries related to motions practice to quash a person most knowledge deposition noticed by Cinemark in his 2013 “Tabor” and “Mason” depositions). Dispositive Motions. Cinemark also attacks the amount of time expended by Flagship’s timekeepers responding to three of Cinemark’s summary judgment motions. See Opposition at 21, n.13. But as the Court acknowledged, this case involved a “complex and unsettled body of law,” see Notice of Ruling Denying Defts.” Mot. for Summ. J., or in the Alternative, Summ. Adjudication filed March 15, 2018, Ex. A (“Summary Judgment Ruling”) at 6, and the briefing on motions for summary judgment in the case reflect those complexities. The amount of time Flagship spent defending against Century’s and Cinemark’s dispositive motions was both necessary and appropriate. In 2008, as opposed to in 2013 and 2017, Century’s summary judgment motion advanced a relatively straight-forward, although erroneous, argument that its clearances against the Palme were per se lawful. See Century’s Memo. of Points & Authorities in Support of Its Mot. for Summ. J., or, in the Alternative, for Summ. Adjudication (“MSJ”) filed May 1, 2008. Its separate statement of undisputed material facts comprised 23 pages and contained 78 facts. See Separate Statement of Undisputed Facts in FLAGSHIP REPLY IN SUPPORT OF MOTION FOR 21- ATTORNEY'S FEES 142732476.6 CASE NO. SC090481 A N nn W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 Support of Century’s Mot. for Summ. J. or, in the Alternative, Summ. Adjudication (“SSUMEF”) filed May 1, 2008. But as the Court of Appeals noted, when it reversed the trial court’s grant of summary judgment, Flagship’s case is a circuit dealing case. Flagship Theatres of Palm Desert, LLC v. Century Theatres, Inc., 198 Cal. App. 4th 1366, 1375 (2011) (“Flagship I). Cinemark’s approach changed drastically in 2014 and 2017. In both years, Cinemark presented a more complicated motion for summary judgment in which Cinemark attempted to shift the summary judgment burden to Flagship, and offered up 193 and 169 so-called undisputed material facts comprising 86 and 95 pages, respectively. See MSJ filed on Dec. 20, 2013; SSUMEF filed December 20, 2013; MS] filed on Sept. 22, 2017; SSUMF filed Sept. 22, 2017; see also Summary Judgment Ruling at 9 (“Cinemark Misstates Summary Judgment Burden”). In 2017, Cinemark also urged the court to dismember Flagship’s circuit dealing claim into 35 discrete conspiracies. Just because Cinemark recycled its failed arguments, does not mean Flagship was required in 2017 to recycle its opposition to Cinemark’s motion. Flagship expended time that was both reasonable and necessary to defeat that motion (and the ones before it). See Kerkeles, 243 Cal. App. 4th at 104. Trial Work. Cinemark attacks one associate’s work at trial. Ms. Wallace did not merely “observ(e] the trial.” See Opposition at 22. She performed necessary tasks, including but not limited to, preparing witness examination and cross-examination outlines, negotiating deposition designations, presenting oral argument, drafting substantive sections of trial briefing, and assisting with the development of and presentation strategy for closing arguments. Boeder Reply Decl. 9. As the Court was able to observe, both parties’ counsel were required to do extensive work outside of the courtroom during trial sessions, in the evenings, and on the weekends to keep up with the brutal pace of the trial itself. See also Denevi, 182 Cal. App. 3d at 559 (“[T]he trial court will be aware of the nature and extent of the attorney’s services from its observation of the trial proceedings”). Cinemark similarly overstates that “numerous associates” attended trial without contribution. See Opposition at 21. Aside from Ms. Wallace, only one other associate was present at trial for three days and then only to assist with in-court presentation of deposition designations. Boeder Reply Decl. { 10. FLAGSHIP REPLY IN SUPPORT OF MOTION FOR 20. ATTORNEY'S FEES 142732476.6 CASE NO. SC090481 A N nn W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 kk xk As the above examples indicate, it was defense counsel’s approach to litigation that greatly increased the amount of time Flagship’s timekeepers expended to present an adequate and winning case at trial. See Motion at 2-3. The real “upshot” to the amount of time Flagship’s timekeepers expended on the case during the post-contingency period is that their efforts served to counterbalance Cinemark’s aggressive defense, and ultimately led Flagship to prevail at trial. Cc. Time Expended on the Spoliation Appeal Was Reasonable and Necessary Cinemark again overreaches in arguing that Flagship should not be awarded fees for time expended on Flagship’s spoliation. See Opposition at 23-24. But excluding time spent on the spoliation issues in this case violates controlling legal principles applicable to attorney’s fee awards in antitrust cases and are contrary to the Court of Appeal decision in this case on the spoliation issue. The time expended on the spoliation appeal was case dispositive. Judge Goodman had issued a terminating sanction. Flagship’s appeal of the spoliation dismissal had to succeed- which it did-for Flagship to have any hope of winning the case. The Court of Appeal decision made clear that the terminating sanction which Cinemark requested, and Judge Goodman granted, was an overreach not justified by controlling law. Flagship Theatres of Palm Desert, LLC v. Century Theatres, Inc., No. B257148, 2016 WL 3091192, at *1, 5, n.5 (Cal. App. May 24, 2016) (“Flagship II’)."' The Court of Appeal, however, did provide an alternative, lesser sanction that prohibited Flagship from offering evidence and claiming damages for a two-year period. Id. at *6. Notably, the Court of Appeal also reversed the award of attorneys’ fees and costs based on the grant of the terminating sanction. Id. Flagship is therefore entitled to recover fees for all time expended as it was reasonable and necessary for Flagship to prevail. See Theme Promotions, 731 F. Supp. 2d at 941 (citing Twin City Sportservice, 676 F.2d at 1313). The other major impact of Cinemark’s decision to demand terminating sanctions, instead of a more reasonable sanction, was that it abruptly stopped a case that was prepped and near- '! For the Court’s convenience, a copy of the Flagship II opinion is attached to the Reply Declaration of Thomas Boeder. See Boeder Reply Decl. | 16, Ex. A. FLAGSHIP REPLY IN SUPPORT OF MOTION FOR 23- ATTORNEY'S FEES 142732476.6 CASE NO. SC090481 A N nn W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 ready for trial. When the case was remanded to the Superior Court and assigned to this Court, Flagship moved for a speedy trial utilizing the previous pretrial preparation. Pl.”s Proposed Case Management Plan filed Jan. 17, 2017. But Cinemark successfully argued new discovery was needed. This led to another round of expensive and time-consuming discovery and yet another summary judgment motion, all which Flagship had to oppose. These are examples of Cinemark’s “no stone unturned” litigation approach. And Cinemark was entitled to take that approach, but now must pay Flagship’s attorneys’ fees necessarily incurred in countering that aggressive defense. D. Flagship’s Lodestar Should Not Be Reduced But Instead Is Deserving of a Multiplier Cinemark asserts that Flagship’s fee award should be reduced arguing that Flagship achieved “limited success.” Opposition at 26-32. That characterization is not even close to the results achieved in this litigation. Flagship was repeatedly and consistently successful: defeating a motion to dismiss at the outset; resurrecting the case twice at the Court of Appeal each after an erroneous ruling from the trial court; defeating an additional motion for summary judgment after the second Court of Appeal decision; winning a jury verdict after a five-week trial resulting in a $3.75 million judgment; and then defeating Cinemark’s extensive post-trial motions.'? Flagship’s private recovery was less than it requested but still substantial at $3.75 million. In addition, the significance of Flagship’s favorable jury verdict for independent theaters, small circuits, their customers, and future enforcement of antitrust laws in the movie theater industry cannot be emphasized enough. 1. A Reduction Is Not Appropriate Because Flagship’s Claims Were All Related and Involved the Same Common Core of Facts Cinemark wrongly urges the Court to further reduce Flagship’s lodestar for various unsuccessful claims. See Opposition at 26, 28 (“Flagship abandoned or lost on most of the theories it asserted.”). But courts only make further lodestar reductions for unsuccessful claims where the prevailing “plaintiff fail[ed] to prevail on claims that were unrelated to the claims on 12 Cinemark’s argument that Flagship “recovered no injunctive relief” ignores that, by the time of trial, Flagship was put out of business by Cinemark. See Opposition at 26, 29. It was Cinemark’s anticompetitive conduct, not the lack of diligence by Flagship to pursue that type of redress, that precluded Flagship from seeking injunctive relief. FLAGSHIP REPLY IN SUPPORT OF MOTION FOR 24- ATTORNEY'S FEES 142732476.6 CASE NO. SC090481 A N nn W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 which he succeeded[.]” Env’t Prot. Info. Ctr. v. Cal. Dep't of Forestry & Fire Prot., 190 Cal. App. 4th 217, 239 (2010) (citing Hensley v. Eckerhart, 461 U.S. 424, 434 (1983)) (alterations in original). An unsuccessful claim is unrelated to a successful one only where the “relief sought on the unsuccessful claim is intended to remedy a course of conduct entirely distinct and separate from the course of conduct that gave rise to the injury on which the relief granted is premised.” Id. at 239-40. Whereas “related claims ‘will involve a common core of facts or will be based on related legal theories.” Id. (citing Harman v. City & Cty. of San Francisco, 136 Cal. App. 4th 1279, 1310 (2006) (“Harman I’)). Thus, work on unsuccessful but related claims is expended “in pursuit of the ultimate result achieved,” and is compensable. See id. at 238; Harman v. City & Cty. of San Francisco, 158 Cal. App. 4th 407, 417 (2007) (“Harman II’) (“Apportionment is not required when the issues in the fee and nonfee claims are so inextricably intertwined that it would be impractical or impossible to separate the attorney’s time into compensable and non- compensable units.” (citation omitted)). All of Flagship’s claims sought redress for the same anticompetitive conduct by Cinemark. Compare, e.g., Compl. {]21, 31-41 (alleging Defendant used its dominant circuit to derive preferential film licensing treatment with purpose of depriving Flagship of first-run film), with Flagship’s Trial Brief filed March 1, 2018 (“Trial Brief”) at 2-16 (asserting Flagship would prove Cinemark engaged in illegal circuit dealing); see also Summary Judgment Ruling at 22 (“[Clircuit dealing is not properly understood as separate wrongful acts, but a continuing course of conduct aimed at eliminating Plaintiff from the market for film licenses.”). Flagship’s claims under the Cartwright Act, for unfair competition, and tortious interference were all based on the same core set of facts and circuit dealing theories, i.e., that Cinemark used its size to undermine film-by-film, theater-by-theater film licensing as between the Palme and the River. See Compl. 43, 48, 52 (incorporating factual allegations described therein to prove its Cartwright Act, unfair competition, and tortious interference claims); First Am. Compl. 45, 50, 54 (same); Suppl. & Second Am. Compl. 47, 52, 56 (same); see also Theme Promotions, 731 F. Supp. 2d at 942 (finding plaintiff’s Cartwright Act, unfair competition, and tortious interference claims were all related and therefore compensable). Cinemark cites no FLAGSHIP REPLY IN SUPPORT OF MOTION FOR -25- ATTORNEY'S FEES 142732476.6 CASE NO. SC090481 A N nn W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 case in support of apportioning the fees for Flagship’s related claims that were based on the same common core of facts. Cinemark also fails to cite any cases supporting denial or reduction of attorney’s fees based on unsuccessful theories. See Opposition at 26, 28. Flagship proceeded to trial under a circuit dealing theory which was, again, focused on the lack of film-by-film, theater-by-theater film licensing and called for per se treatment of Cinemark’s illegal conduct. See, e.g., Trial Brief at 3; P1.’s Brief in Supp. of P1.’s Separately Proposed Jury Instruction filed on April 30, 2018 at 4-5. But the final jury instructions, decided days before closing, required that the jury was presented with two circuit dealing theories (multi-theater film licensing and monopoly leveraging). See Special Verdict Form filed on May 10, 2018 (“Verdict”). Even though the jury found Cinemark liable for only one of the two circuit dealing theories, both theories were related because they focused on Cinemark’s misuse of its circuit size to secure preferential film licensing treatment as between the Palme and the River. E.g., Boeder Reply Decl. { 11, Ex. B at 3144:9-15 and 3295:22-3297:5 (closing argument presenting “overlap[ing]” evidence which supported verdict finding Cinemark was liable for both monopoly leveraging and multi-theater film licensing). Because all of Flagship’s claims were “intended to remedy [the same] course of conduct” and “involve[d] a common core of facts or [were] based on related legal theories,” Flagship’s attorney time expended for all its claims-even the unsuccessful ones-is compensable. See Cal. Dep't of Forestry & Fire Prot., 190 Cal. App. 4th at 239-40; e.g., Theme Promotions, 731 F. Supp. 2d at 942 (finding plaintiff’s Cartwright Act, unfair competition, and tortious interference claims were all related and therefore compensable). 2. A Reduction Based on Proportionality to Flagship’s Awarded Damages Is Inappropriate in Antitrust Cases Cinemark also advocates for further reduction to Flagship’s lodestar because the jury awarded less than Flagship requested. But there is no mandate, even in cases of limited success, “that the trial court make an award of attorney fees in an amount that is commensurate with or in proportion to the degree of success” in the litigation. Bernardi v. Cty. of Monterey, 167 Cal. App. FLAGSHIP REPLY IN SUPPORT OF MOTION FOR -26- ATTORNEY'S FEES 142732476.6 CASE NO. SC090481 A N nn W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 4th 1379, 1398 (2008). Courts are not to “reflexively reduce fee awards whenever damages fail to meet a plaintiff’s expectations in proportion to the damages’ shortfall.” Harman II, 158 Cal. App. 4th at 421 (internal citations omitted). Such an approach would undermine the “legislative purpose underlying [antitrust laws] of encouraging the private vindication and enforcement of the antitrust laws.” Knutson v. Daily Review, Inc., 479 F. Supp. 1263, 1268 (N.D. Cal. 1979) (rejecting a percentage-based approach to awarding attorney’s fees); see also Harman II, 158 Cal. App. 4th at 420 (noting that limiting attorney’s fees in cases where attorney’s fees are statutorily mandated would seriously undermine the legislative purpose for enacting such laws). Consistent with the Legislature’s intent, courts have awarded attorney’s fees “far greater than the amount of monetary damages awarded.” Cf. Harman II, 158 Cal. App. 4th at 425-28 (trial court did not err granting fee award of $1.1 million where plaintiff was awarded $30,300 in damages).!* And in antitrust cases, attorney’s fees have been awarded where plaintiff's recovery was nominal or reflected “limited success.” E.g., Nat'l Football League, 887 F.2d at 411-12 (trial court did not err in awarding $5.5 million in attorney’s fees in antitrust case where plaintiff recovered $1.00 pre-trebling); La. Power & Light Co. v. Kellstrom, 50 F.3d 319, 323, 329-31 (5th Cir. 1995) (affirming trial court’s refusal to reduce lodestar figure and fee award of $4.18 million where plaintiff sought $15-17 million in damages but was awarded $500,000 pre-trebling damages from four of five defendants in antitrust case with six years of pretrial preparation and eight weeks of trial); see also, e.g., Auto. Prods. PLC, 855 F. Supp. at 1103 (refusing to reduce lodestar figure in antitrust and patent case where plaintiff only received a portion of damages sought); Beech Cinema, Inc. v. Twentieth Century Fox Film Corp., 480 F. Supp. 1195, 1197-98 (S.D.N.Y. 1979) (awarding $72,850 in fees in move industry antitrust case based on the lodestar figure “notwithstanding the fact that it exceeds the amount of the jury’s verdict” of $48,933). 13 A fee award well in excess of the damage award is also appropriate where, as here, the defendant never makes a reasonable settlement offer and instead aggressively litigates the case. See Vo v. Las Virgenes Mun. Water Dist., 79 Cal. App. 4th 440, 444-45 (2000) (affirming fees award of 10x amount of jury verdict based in part on “defendant’s nonsettlement posture”); see also Robertson v. Fleetwood Travel Trailers of Cal., Inc., 144 Cal. App. 4th 785, 822-23, n.25 (2006) (concluding court can consider defendant’s low settlement offer in deciding fee award). FLAGSHIP REPLY IN SUPPORT OF MOTION FOR 27 ATTORNEY'S FEES 142732476.6 CASE NO. SC090481 A N nn W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 That Flagship recovered less than it sought is not a basis to reduce its lodestar figure. See Harman II, 158 Cal. App. 4th at 425-28. Indeed, Cinemark cites no case law (because it cannot), and certainly not in the antitrust context, that supports such a decision. Flagship, unlike the plaintiff in Nat’l Football League, recovered substantially more than nominal damages even if the amount was less than what it sought. 887 F.2d at 411-12. Accordingly, this is not a case like those cited by Cinemark where the plaintiff only “formally” prevailed. See Opposition at 27 (quoting Farrar v. Hobby, 506 U.S. 103, 115 (1992) (Powell, J., concurring)). In Farrar, the U.S. Supreme Court found that an attorney’s fee award was inappropriate because the nominal damages awarded ($1) merely gave the plaintiffs a “‘moral satisfaction . . . that [their] rights had been violated’ in some unspecified way” but the nominal damages “highlight[ed] the plaintiff’s failure to prove actual, compensable injury.” 506 U.S. at 114-15. But here, Flagship’s victory was not simply emblematic, it was significant ($3.75 million trebled plus attorneys’ fees and costs). And, Chavez v. City of Los Angeles, 47 Cal. 4th 970, 976 (2010) fairs no better, as attorney’s fees in that case were discretionary rather than like in this case where they are provided for under a mandatory, unilateral fee-shifting statute. Curiously, Cinemark primarily cites civil rights cases, not antitrust cases, in support of a downward adjustment to Flagship’s lodestar. See Opposition at 26-27 & n.18. But civil rights and antitrust laws are designed to achieve different ends and attorney’s fees are awarded under different statutory schemes. See Nat’l Football League, 887 F.3d at 412 (distinguishing the standards that apply to attorney’s fee awards in civil rights cases, which are discretionary, and antitrust cases, which are mandatory). Because the fee-shifting provision of antitrust laws, like the Cartwright Act, are designed to “encourage[e] the detection and cessation of anticompetitive behavior” and to “encourag[e] private parties to bring antitrust actions,” Flagship should recover its attorney’s fees regardless of the amount of damages awarded. See Nat’l Football League, 887 F.2d at 412; see also O'Bannon, 739 F. App’x at 894 (affirming trial court’s determination that the finding of liability and injunctive relief, even though the plaintiffs did not win damages, was an “excellent result,” warranting a $40 million attorney’s fee award). FLAGSHIP REPLY IN SUPPORT OF MOTION FOR <8 ATTORNEY'S FEES 142732476.6 CASE NO. SC090481 A N nn W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 3. Flagship’s Fee Award Should Be Multiplied to Fulfill the Goals of the Cartwright Act Despite Cinemark’s protestations and assertions to the contrary, this case has advanced important public interests. A plaintiff’s success in “establishing an important legal principle or [by making] a substantial contribution to the vindication of important governmental policy, . . . militate[s] against a substantial downward adjustment” to the plaintiff’s lodestar. Knutson, 479 F. Supp. at 1278. This is true even where the plaintiff's recovered damages in an amount far less than what it sought or where a plaintiff’s contributions to antitrust law or government policy are not clearly defined or documented. Id. Rather the plaintiff's success may establish “potentially significant principle[s]” of antitrust law which “may well have ramifications beyond the [plaintiff’s] case.” Id. (emphasis added); see also Int'l Wood Processors v. Power Dry, Inc., 598 F. Supp. 299, 304 (D.S.C. 1984) (refusing to downward adjust the lodestar figure in an antitrust case where there was “no clear indication . . . that the public will not benefit as a result of plaintiff’s efforts”). Broadly speaking, the Flagship litigation encourages fair competition for first-run film licenses, and not just by Cinemark but also by Cinemark’s unnamed co-conspirator distributors. Not only did the jury found Cinemark liable for circuit dealing under a multi-theater film licensing theory, the jury’s verdict calls into question the legality of business practices that Cinemark and distributors testified at trial are widely used throughout the United States. To deny the impact of the jury verdict in this case is to ignore that Cinemark is the third largest exhibitor in the United States, and that its co-conspirator major distributors’ first-run films account for over 80% of domestic box office revenue. See Boeder Reply Decl. 11, Ex. B at 1827:15-21; Decl. of Thomas L. Boeder in Support of Flagship’s Opp. to Defs.” Mot. for J. Notwithstanding the Verdict, or in the Alternative, Mot. for New Trial filed on July 30, 2018, 4, Ex. 3 at 2169:6-10. And, to expect that Cinemark and distributors would admit that this case caused a change in their film licensing practices would be asking too much.!* But that is, in fact, what has happened 14 Indeed, at trial, both Cinemark and distributors categorically denied Cinemark was engaged in circuit dealing and balked at the notion that their then-existing film licensing practices were in any way problematic. E.g., Decl. of Peter H. Mason in Supp. of Defts.” Century Theatres, Inc. and Cinemark USA, Inc.’s Mot. for J. Notwithstanding the Verdict, or, in the Alternative, FLAGSHIP REPLY IN SUPPORT OF MOTION FOR 20. ATTORNEY'S FEES 142732476.6 CASE NO. SC090481 A N nn W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 according to small circuit exhibitors. E.g., Boeder Reply Decl. 12, Ex. C (Decl. of Heidi Robertson dated January 25, 2019 at 4) (“[T]he favorable verdict for Flagship has made an important difference in increasing Tristone Cinemas’ access to film at our Palm Desert 10 theater,” the theater that now operates in the same location where the Palme previously operated)). The jury verdict is not the only important product of this case. The Flagship litigation has produced opinions, orders, and jury instructions that address the legality of circuit dealing under the Cartwright Act and the antitrust laws generally. Until 2011, and aside from United States v. Paramount and United States v. Griffith, only one other case provided a significant discussion on the topic of circuit dealing. Flagship I, 198 Cal. App. 4th at 1377, n.6 (noting that a search of “all federal and state court case law found only a handful of cases even potentially touching on the issue” and only Redwood Theatres, Inc. v. Festival Enters., Inc., 200 Cal. App. 3d 687 (1988) “contained [any] useful discussion of the issue”). The dearth of analysis relating to circuit dealing until Flagship I, as the chart below illustrates," likely results from past plaintiffs in movie theater antitrust cases largely bringing actions against distributors and/or exhibitors based on unreasonable clearances, not circuit dealing. I I" I I" I I" I I" Mot. for a New Trial filed July 12, 2018, 2, Ex. A at 1431:21-1434:4, 1434:26-1437:14, 2357:1- 2358:3, 2702:6-2704:1, 2722:20-2724:12. 15 The number of movie theater antitrust cases was identified by conducting a search with the following parameters in Westlaw: “antitrust! s/100 (clearance! OR “circuit dealing”) /p film!” Every case appearing in the search was then reviewed to determine whether the primary allegations involved clearances or circuit dealing. A small percentage raised “other” antitrust allegations which could not be categorized as clearance or circuit dealing cases. FLAGSHIP REPLY IN SUPPORT OF MOTION FOR _30- ATTORNEY'S FEES 142732476.6 CASE NO. SC090481 ~ aN (9 + Ww No 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Percentage of Clearance vs. Circuit Dealing Cases By Decade 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1940- 1950- 1960- 1970- = 1980- | 1990- 2000- 2010- 1949 1959 1969 1979 1989 1999 2009 2019 Other 0 0 1 2 0 0 0 0 ® Circuit Dealing 1 1 0 0 2 0 2 5 ® Clearances 3 14 4 2 8 2 2 1 Mm Clearances HM Circuit Dealing Other Thus, the Flagship I opinion-combined with other orders in this case and the jury verdict- signaled two important things to plaintiffs and courts: (1) that Paramount and Griffith are still good law, and (2) that circuit dealing is a viable cause of action to seek redress for exhibitors’ and/or distributors’ anticompetitive film licensing practices. E.g., Cinetopia, LLC v. AMC Entm’t Holdings, Inc., No. 18-2222-CM-KGG, 2018 WL 6804776, at *4 (D. Kansas Dec. 27, 2018) (citing Flagship I as one of the earliest cases post-Paramount treating circuit dealing as a per se violation of antitrust laws); Cobb Theatres III, LLC v. AMC Entm’t Holdings, Inc., No. 1:14-CV- 182-ELR-WEIJ, 2015 WL 10891939, at *2 (N.D. Ga. Nov. 6, 2015) (granting plaintiff’s request for the production of documents relating to exhibitor’s nationwide film licensing practices and citing similarities with Flagship I's circuit dealing claims as a reason for doing so). The Flagship litigation and the verdict also resolve the unanswered questions of “whether circuit dealing qualifies as a violation of the Cartwright Act” and “whether circuit dealing is a per se violation of the Cartwright Act” or subject to a rule of reason analysis, and identify the “elements of a Cartwright Act claim based on “collective circuit licensing without monopoly leveraging.” Summary Judgment Ruling at 5-6. The need for private enforcement against unfair competition over first-run film licenses by plaintiffs such as Flagship remains high. For example, dozens of independent theaters, small circuits, and other movie theater organization submitted public comments to the U.S. Department FLAGSHIP REPLY IN SUPPORT OF MOTION FOR 31- ATTORNEY'S FEES 142732476.6 CASE NO. SC090481 A N nn W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 of Justice regarding the continuing need for the Paramount Consent Decrees. See, e.g., Boeder Reply Decl. qq 14-16, Exs. E-G. Two themes that emerge from those public comments include: (1) that circuit dealing remains a real threat (or actual reality) in the movie theater industry, and (2) that because of “the tendency of antitrust litigation to be complex, protracted and expensive,” small circuits and independent theaters lack the resources to sue large exhibitors and distributors for circuit dealing. Boeder Reply Decl. J 14, Ex. E at 12, 18-21 (ICA Comments); see also id. 15, Ex. F at 6 (Writers Guild); see also id. { 13, Ex. D (Declaration of F. Matthew Ralph dated February 5, 2019, 4 1-6 (“circuit dealing [cases] are extremely expensive” and statutory attorneys’ fees enable “successful prosecution”)). As Cinetopia, a small circuit of three theaters, put it: lawsuits, like Flagship’s, “are evidence that increased concentration of market power continues to pose a serious threat to the notion of fair competition in the movie industry.” Id. 16, Ex. G at 1-2 (Cinetopia). By making large-scale reductions to a successful plaintiff's attorney fee award or denying lodestar multipliers, courts create disincentives (1) for plaintiffs to privately enforce the Cartwright Act, and (ii) for able attorneys in this specialized area of the law to undertake the risks inherent in a case such as this rather than invest comparable resources to hourly billed, non- contingent fee work.!® See Motion at 9 (citing Wershba v. Apple Computer, Inc., 91 Cal. App. 4th 224, 255 (2001)). But the need for both plaintiffs like Flagship and attorneys like Perkins Coie to litigate cases like this is great. 16 There are four overriding factors that should lead the Court to award a multiplier in this case: (1) the lodestar figure, on its own, is not sufficient to compensate a plaintiff’s counsel for lost value of its time and resources (“time value” or “interest”) in a complex antitrust case such as this one that already has lasted over 12 years; (2) for practical reasons relating to the longevity of this case, calculation of the lodestar is based on historical hourly rates rather than current rates- yielding a much lower lodestar; (3) the lodestar provides no compensation for litigation expenses absolutely essential to prosecution of a complex antitrust case, including those for technological litigation support systems and expert witness fees; and (4) a lodestar fee alone is insufficient to overcome the risk factor relating to contingent rather than hourly billed and paid fees to attract experienced and able complex litigation and antitrust counsel to take on future cases such as this-cases that serve the public’s interest, promote competition, and enforce the Cartwright Act. FLAGSHIP REPLY IN SUPPORT OF MOTION FOR «39 ATTORNEY'S FEES 142732476.6 CASE NO. SC090481 10 11 12 13 14 15 16 17 18 19 20 21 22 43 24 25 26 27 28 The precise contours of Flagship’s impact are still being defined. But it is clear that the Flagship litigation has helped resolve long-unanswered questions about circuit dealing under the Cartwright Act, encourages private enforcement of circuit dealing under the Cartwright Act and federal antitrust laws, and promotes fair competition for movie theater film licenses. Having advanced the public goals of the Cartwright Act, Flagship is most deserving of an award of its attorneys’ fees as requested in the present motion. III. CONCLUSION For the reasons explained in its moving papers and above, Flagship requests that the Court grant Flagship’s Motion, award attorneys’ fees in this case to Flagship, and order judgment against Cinemark in an amount as follows: Lodestar Amount $14,791,480.70 Work Expended on Fee Motion $ 709,000.00 Revised Lodestar Amount $15,500,480.70 Lodestar with 1.4 multiplier $21,700,672.98 DATED: Fe Sug { cS ,2019 PERKINS COIE LLP By: NT XAnws ail NI Thomas L. Boeder Donald J. Kula Elvira Castillo Cara Wallace Donna Strain Attorneys for Plaintiff Flagship Theatres of Palm Desert, LLC dba Cinémas Palme d’Or FLAGSHIP REPLY IN SUPPORT OF MOTION FOR -33- ATTORNEY'S FEES 142732476.6 CASE NO. SC090481 A N nn W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 PROOF OF SERVICE I, Yolanda Mendez, declare: I am a citizen of the United States and employed in Los Angeles, California. I am over the age of eighteen years and not a party to the within-entitled action. My business address is 1888 Century Park East, Suite 1700 Los Angeles, CA 90067. On February 19, 2019, I served a copy of the within document(s): PLAINTIFF FLAGSHIP THEATRES OF PALM DESERT, LLC’S REPLY IN SUPPORT OF PLAINTIFF’S MOTION FOR ATTORNEY'S FEES by placing the document(s) listed above in a sealed envelope with postage thereon fully prepaid, the United States mail at Los Angeles, California addressed as set forth below. by transmitting via e-mail or electronic transmission the document(s) listed above to the person(s) at the e-mail address(es) set forth below. Peter H. Mason, Esq. Lesley Holmes, Esq. Kelsey A. Maher, Esq. NORTON ROSE FULBRIGHT US LLP 555 South Flower Street, 41% Floor Los Angeles, CA 90071 Tel: 213.892.9200 / Fax: 213.892.9494 Email: peter.mason@nortonrosefulbright.com lesley.swanson.holmes @nortonrosefulbright.com kelsey.maher@nortonrosefulbright.com Michael A. Swartzendruber, Pro Hac Vice Barton W. Cox, Pro Hac Vice Nathan Baum, Pro Hac Vice NORTON ROSE FULBRIGHT US LLP 2200 Ross Avenue, Suite 3600 Dallas, TX 75201 Tel: 214.855.8000 / Fax: 214.855.8200 Email: michael.swartzendruber@nortonrosefulbright.com beau.cox @nortonrosefulbright.com Nathan.baum @nortonrosefulbright.com I am readily familiar with the firm's practice of collection and processing correspondence for mailing. Under that practice it would be deposited with the U.S. Postal Service on that same day with postage thereon fully prepaid in the ordinary course of business. I am aware that on PROOF OF SERVICE -34- CASE NO. SC090481 142732476.6 to motion of the party served, service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit. I declare under penalty of perjury under the laws of the State of California that the above 1 1s true and correct. Executed on February 19, 2019. at Los Angeles California. nd A {/ : Yolanda Mendez J 142732476 6 PROOF OF SERVICE CASE NO, SC09048 |
