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finding $200 an hour reasonable for junior associates
Summary of this case from Spencer v. City of N.Y.Opinion
04 Civ. 2576 (SHS).
August 24, 2010
OPINION ORDER
This is an application for attorneys' fees and costs pursuant to 42 U.S.C. § 1988 and post-judgment interest pursuant to 28 U.S.C. § 1961. For the reasons set forth below, this Court awards plaintiff $386,126.32 in attorneys' fees and $6,039.56 in costs, plus post-judgment interest on an earlier award to run from November 3, 2006.
I. BACKGROUND
Plaintiff Automobile Club of New York, Inc. commenced this action in 2004 to challenge the City of New York's tow truck licensing scheme ("Scheme"). On March 24, 2006, following a three-day bench trial, Judge Richard Owen of the United States District Court for the Southern District of New York permanently enjoined the City from enforcing its Scheme against tow truck operators from outside the City on the ground of federal preemption. Automobile Club v. Dykstra, 423 F. Supp. 2d 279 (S.D.N.Y. 2006). In the same order, Judge Owen awarded plaintiff — the prevailing party — its attorneys' fees pursuant to 42 U.S.C. § 1988. Id. at 287.
A subsequent order from Judge Owen, dated November 3, 2006, specifically awarded $651,856 in attorneys' fees and $6,293.98 in expenses ("First Award"), on the basis that "plaintiff is the successful party here and has benefited many others as well in the now `national' towing field." Automobile Club of New York, Inc. v. Dykstra, No. 04 Civ. 02576 (RO), 2006 WL 3208585, at *1 (S.D.N.Y. Nov. 3, 2006). Two weeks later, Judge Owen granted a stay of this First Award pending defendants' appeals. The United States Court of Appeals for the Second Circuit ultimately affirmed the district court's determinations, "holding that the enforcement of the City's licensing Scheme against out-of-city tow truck operators is preempted by 49 U.S.C. § 14501(c)(1) and that the district court was within its discretion in its award of attorneys' fees and expenses." Automobile Club v. Dykstra, 520 F.3d 210, 212 (2d Cir. 2008), cert. denied, 129 S.Ct. 176, 172 L.Ed.2d 44 (2008).
The Second Circuit wrote that "although a preemption claim under 49 U.S.C. § 14501(c) does not give rise to a federal right enforceable under § 1983, see Loyal Tire, 445 F.3d at 150, [Automobile Club's] dormant Commerce Clause claim supports the district court's award of fees, see Maher v. Gagne, 448 U.S. 122, 132, 100 S.Ct. 2570, 65 L.Ed.2d 653 (1980) (section 1988 fees may be awarded where `the plaintiff prevails on a wholly statutory, non-civil-rights claim pendent to a substantial constitutional claim')." 520 F.3d at 217.
However, this litigation did not end there. Plaintiff subsequently requested the entry of a final judgment, as well as additional attorneys' fees. Following the transfer of this action to this Court, on December 24, 2008, this Court directed the entry of a final judgment that defined the scope of the preemption and granted plaintiff the $651,856 in attorneys' fees and $6,293.98 in expenses that Judge Owen had explicitly awarded it on November 3, 2006 in the First Award, "plus an award of fees and expenses not covered by the [First Award] in an amount to be determined later." Judgment of Dec. 24, 2008. Automobile Club appealed from that judgment, and approximately one year later the Second Circuit held in a summary order that this Court's December 24, 2008 final judgment improperly narrowed the scope of Judge Owen's post-trial determination. Automobile Club v. Dykstra, 354 Fed. Appx. 570, 2009 WL 4281645 (2d Cir. Dec. 2, 2009). The Second Circuit also remanded the issue of post-judgment interest on plaintiff's fee award for this Court to consider in the first instance. Id.
Plaintiff now moves for $429,029.22 in attorneys' fees and $6,039.56 in costs not covered by the First Award, plus post-judgment interest pursuant to 28 U.S.C. § 1961 from March 24, 2006 — the date Judge Owen awarded attorneys' fees to plaintiff but did not set the amount due. Automobile Club's present request for fees and costs covers post-trial proceedings before the district court, two fully briefed and argued appeals to the Second Circuit, opposing a petition for a writ of certiorari to the United States Supreme Court, and extensive motion practice, including this application. Plaintiff has prevailed at each step of this litigation and before each court that has heard this matter.
Plaintiff's notice of motion dated October 7, 2009, requested $430,174.22 in attorneys' fees and $6,663.60 in costs. However, plaintiff later reduced its request to $429,029.22 in attorneys' fees and $6,039.56 in costs. See Pl.'s Reply in Supp. of Second Appl. For Attorneys' Fees.
II. DISCUSSION
A. Attorneys' Fees and Costs 1. Legal Standard
The court has the discretion to award "reasonable" attorneys' fees and costs to "the prevailing party" in an action such as this with a substantial constitutional claim. 42 U.S.C. § 1988(b); see Automobile Club, 520 F.3d at 217. The court, "in exercising its considerable discretion," should calculate a "presumptively reasonable fee" based on a reasonable hourly rate that a "paying client would be willing to pay." Arbor Hill Concerned Citizens Neighborhood Ass'n v. Cnty. of Albany, 522 F.3d 182, 190 (2d Cir. 2008). While taking into account any relevant "case-specific variables," a district court "should also bear in mind that a reasonable, paying client wishes to spend the minimum necessary to litigate the case effectively." Id. "If the court finds that the fee applicant's claim is excessive or insufficiently documented, or that time spent was wasteful or redundant, the court may decrease the award, either by eliminating compensation for unreasonable hours or by making across-the-board percentage cuts in the total hours for which reimbursement is sought." Wise v. Kelly, 620 F. Supp. 2d 435, 442 (S.D.N.Y. 2008) (citing Hensley v. Eckerhart, 461 U.S. 424, 434 (1983)).
With respect to the evaluation of time sheets and expense records, "it is less important that judges attain exactitude, than that they use their experience with the case, as well as their experience with the practice of law, to assess the reasonableness of the hours spent." Amato v. City of Saratoga Springs, 991 F.Supp. 62, 65 (N.D.N.Y. 1998) (citing Clarke v. Frank, 960 F.2d 1146, 1153 (2d Cir. 1992)). Moreover, the Second Circuit has determined that the district court is not required to "set forth item-by-item findings concerning what may be countless objections to individual billing items" Lunday v. City of Albany, 42 F.3d 131, 134 (2d Cir. 1994) (per curiam), particularly when the billing records are voluminous, as they are in this action. See also New York State Ass'n for Retarded Children, Inc. v. Carey, 711 F.2d 1136, 1146 (2d Cir. 1983) (In cases "with voluminous fee applications, courts have recognized that it is unrealistic to expect a trial judge to evaluate and rule on every entry in an application.").
2. Attorneys' Hourly Rates
This Court finds that the attorneys' rates — ranging from approximately $200 per hour for junior associates to $425 per hour for partners with substantial litigation experience — are consistent with what attorneys in New York City would charge and what a willing client would pay. See Arbor Hill, 522 F.3d at 183. Indeed, the Second Circuit has affirmed essentially the same rates for the same set of lawyers in the First Award. See Automobile Club, 520 F.3d at 217.
3. Number of Hours Spent
The court considers the reasonableness of the number of hours the attorneys spent on the litigation, as well as the reasonableness of their rates. Plaintiff's attorneys should spend the minimum time necessary to litigate the case effectively, see Arbor Hill, 522 F.3d at 190, and the court may reduce the award if it finds that the time spent was excessive, wasteful, or redundant, Wise, 620 F. Supp. 2d at 442. The City contends that plaintiff's attorneys devoted too many lawyers to this case and billed more hours than necessary to litigate this case effectively. After considering defendants' objections, this Court finds that the time entries are generally reasonable. As Judge Owen noted in his earlier opinion, defendants "took issue with virtually everything on the merits," including fee applications, 2006 WL 3208585 at *1, and since the date of that opinion in 2006, Automobile Club's litigation success has only grown.
Nevertheless, because of its concerns about excessive hours spent on this case, the Court finds that an across-the-board fee reduction often percent is appropriate. See Lunday, 42 F.3d at 134; Wise, 620 F. Supp. 2d at 442. The following examples of overbilling justify the ten percent reduction.
a. Travel Time
Travel time should be compensated at a reduced hourly rate in this district, see, e.g., Knoeffler v. Town of Mamakating, 126 F. Supp. 2d 305, 313-14 (S.D.N.Y. 2000) (collecting cases), because travel time is widely recognized as less productive than regular time, Pascuiti v. New York Yankees, 108 F. Supp. 2d 258, 271 (S.D.N.Y. 2000). However, plaintiff's bills do not usually segregate travel time from more substantive time, and time spent in travel appears to have been billed at the attorneys' full hourly rates. ( See e.g., Decl. of Erach F. Screwvala dated Oct. 6, 2009 ("Screwvala Decl."), Ex. LL.) While the lack of entries for travel time are not pervasive, time spent traveling should nonetheless be compensated at a reduced hourly rate.
b. Fee Applications
Prevailing parties are entitled to reimbursement for time spent by their attorneys in preparing fee applications. See Gagne v. Maher, 594 F.2d 336, 343-44 (2d Cir. 1979), aff'd, 448 U.S. 122 (1980). If in exercising its discretion, however, the Court finds that "the fee claims are exorbitant or the time devoted to presenting them is unnecessarily high, the judge may refuse further compensation or grant it sparingly." Id. at 344; see also Greenbaum v. Handelsbanken, N.Y., 998 F.Supp. 301 (S.D.N.Y. 1998), U.S. Dist. LEXIS 2608, at *20, n. 17 (reduction of fees for preparing affidavits and collecting data related to fee application because such work is "ministerial"). Plaintiff seeks over $10,000 — representing approximately 40 hours of work at regular rates — for preparation of each of its two fee applications. (Screwvala Decl., Exs. B, D, LL.) The Court finds this claim to be unnecessarily high.
c. Excessive Time for Particular Tasks and Other Noncompensable Time
The Court's review of billing statements and time records also reveals several instances where attorneys spent what appears to be excessive time on particular tasks. For example, in preparation for a March 2008 oral argument before the Second Circuit, more than a handful of attorneys billed over 100 hours, including time incurred for that task ten months before the oral argument itself. ( Id., at Exs. DD, JJ.) Additionally, attorneys devoted more time than necessary — over 20 hours — to drafting a short proposed final judgment on narrow issues. ( Id., at Ex. LL; Decl. of Michael F. Fitzgerald dated Oct. 7, 2009, Ex. A.) The time sheets also include some time spent acquainting new attorneys with the case, ( see, e.g., Screwvala Decl., Exs. B, HH, LL), as well as $1200 in time charges for an attorney to attend a City Council hearing about tow regulation, ( id., at Ex L). Because a certain amount of time and effort for which the compensation sought is excessive, plaintiff is awarded $386,126.32, which reflects a ten percent reduction from the amount requested.
4. Costs
Plaintiff seeks an award of costs totaling $6,039.56. The Second Circuit has held that an award of attorneys' fees pursuant to 42 U.S.C. § 1988 should include "those reasonable out-of-pocket expenses incurred by attorneys and ordinarily charged to their clients." LeBlanc-Sternberg v. Fletcher, 143 F.3d 748, 763 (2d Cir. 1998). The City opposed plaintiff's initial request for various costs that allegedly comprised office overhead. In its reply, plaintiff lowered its claimed disbursements to reflect a reduction in photocopying and elimination of staff overtime, meal, and miscellaneous expenses. Because this Court finds that plaintiff's revised application for disbursements is reasonable, plaintiff is awarded $6,039.56 in costs.
B. Post-judgment Interest
This Court has not previously addressed the subject of post-judgment interest in this litigation. In its 2009 summary order, the Second Circuit remanded the action "for the district court to determine in the first instance whether Auto Club is entitled to post-judgment interest and, if so, the method by which such interest is properly calculated." 354 Fed. Appx. at 573. Accordingly, this Court now finds that plaintiff is entitled to post-judgment interest on the First Award from November 3, 2006.
Post-judgment interest is governed by 28 U.S.C. § 1961(a), which provides that "[i]nterest shall be allowed on any money judgment in a civil case recovered in a district court." The parties here dispute the date of the relevant "money judgment" for purposes of section 1961. Automobile Club contends that post-judgment interest should run from Judge Owen's March 24, 2006 Order and Opinion, which established plaintiff's right to attorneys' fees. The City contends that post-judgment interest should not accrue on the First Award until the court entered a judgment for an amount certain on November 3, 2006.
The Second Circuit has not yet established whether post-judgment interest runs from 1) the date a court determined a party was entitled to attorneys' fees or 2) the date of entry of the judgment determining the exact amount of fees. Other circuits have split on this question. The majority view favors post-judgment interest running from the date the litigant's right to the fees is fixed, even if the exact amount of the fees has not been established. See Associated Gen. Contractors of Ohio, Inc. v. Drabik, 250 F.3d 482, 495 (6th Cir. 2001); La. Power Light Co. v. Kellstrom, 50 F.3d 319, 332 (5th Cir. 1995), cert. denied, 516 U.S. 862 (1995); Friend v. Kolodzieczak, 72 F.3d 1386, 1391 (9th Cir. 1995); BankAtlantic v. Blythe Eastman Paine Webber, Inc., 12 F.3d 1045, 1052-53 (11th Cir. 1994); Jenkins by Agyei v. Missouri, 931 F.2d 1273, 1277 (8th Cir. 1991), cert. denied, 502 U.S. 925 (1991); Mathis v. Spears, 857 F.2d 749, 760 (Fed. Cir. 1988). The rationale of those cases is that the fee-paying party "suffers no prejudice from any delay in quantifying the award because it has use of the money in the interim and because the statutory interest rate is tied to the U.S. Treasury Bill rate." Jenkins, 931 F.2d at 1277. This approach also "deters use of the appellate process by the judgment debtor solely as a means of prolonging its free use of money owed the judgment creditor." Mathis, 857 F.2d at 760.
However, other circuits have held — correctly, in this Court's view — that prior to the date the amount of attorneys' fees is actually quantified, the damages are unliquidated and therefore are not a "money judgment" within the meaning of section 1961. 28 U.S.C. § 1961(a) ("Interest shall be allowed on any money judgment in a civil case received in a district court."). See Eaves v. Cnty. of Cape May, 239 F.3d 527, 534-35 (3d Cir. 2001); MidAmerica Fed. Savings Loan Ass'n v. Shearson/American Exp., Inc., 962 F.2d 1470, 1476 (10th Cir. 1992); Fleming v. Cnty. of Kane, 898 F.2d 553, 565 (7th Cir. 1990); see also Collins v. Stolzenberg, 970 F.Supp. 303, 305 (S.D.N.Y. 1997). As the Supreme Court has noted, "the purpose of post-judgment interest is to compensate the successful plaintiff for being deprived of compensation for the loss from the time between the ascertainment of damage and the payment by the defendant." Kaiser Aluminum Chem. Corp. v. Bonjorno, 494 U.S. 827, 835 (1990) (citation omitted).
Furthermore, in lengthy litigations such as this one, attorneys may charge substantial fees for work performed well after a court first establishes a party's right to attorneys' fees. Fee-paying parties should not be charged with interest on attorneys' fees from a date long before those fees were earned. When there are multiple awards of fees, post-judgment interest from the dates the amounts are fixed especially makes sense.
Accordingly, Automobile Club is entitled pursuant to 28 U.S.C. § 1961 to post-judgment interest on the First Award from November 3, 2006, not March 24, 2006.
III. CONCLUSION
For the reasons set forth above, the Court grants plaintiffs motion for attorneys' fees in the amount of $386,126.32, along with costs in the amount of $6,039.56. Post-judgment interest runs on the First Award from November 3, 2006.
Dated: New York, New York
SO ORDERED: