Opinion
No. 2:16-cv-02077 JAM-EFB
03-31-2017
EAGLE SYSTEMS AND SERVICES, INC., Plaintiff, v. INTERNATIONAL ASSOCIATION OF MACHINISTS, DISTRICT LODGE 725, Defendant.
ORDER GRANTING INTERNATIONAL ASSOCIATION OF MACHINISTS, DISTRICT LODGE 725'S MOTION FOR ATTORNEYS' FEES
The fight between Eagle and Union continues. Plaintiff Eagle Systems and Services, Inc. ("Eagle") punched first when it allegedly violated the Collective Bargaining Agreement ("CBA"). Defendant International Association of Machinists, District Lodge 725 ("Union") hit back by prevailing in arbitration. Eagle, unshaken, filed a complaint in this Court to vacate that award. ECF No. 1. Feeling sucker punched, Union moved to dismiss and counter moved to confirm the award. ECF No. 7. This Court declared Union the winner by a TKO and awarded attorneys' fees. Order, ECF No. 25. Having reviewed the parties' briefs, see Mot., ECF No. 27; Opp'n, ECF No. 28; Reply, ECF No. 29, the Court now sets the amount of the attorneys' fees awarded to Union at $17,584.50.
This motion was determined to be suitable for decision without oral argument. E.D. Cal. L.R. 230(g). The hearing was scheduled for February 21, 2017. --------
I. OPINION
Because this Court's previous Order details the underlying dispute that generated this litigation, the Court will not repeat the facts. See generally Order. Equally important, although Eagle "did not challenge the Court's [bad faith] ruling," see Opp'n at 1, Eagle still disputes whether its conduct constituted an unjustified refusal to abide by an arbitration award. This Court already concluded it did. See Order at 18-20 (explaining Eagle sought to frustrate the award by unjustifiably refusing to abide by the arbitrator's decision). Eagle does not get a second bite at the apple.
A. Lodestar Method
When evaluating requests for attorneys' fees, the court always begins by calculating the lodestar amount, which involves multiplying the number of hours reasonably expended by a reasonable hourly rate. See Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). A court should exclude from this initial calculation any "excessive, redundant, or otherwise unnecessary" hours expended. See id. at 434.
But the inquiry does not end there. There remain other factors that may compel a court to "adjust the fee upward or downward." See id. These include:
(1) the time and labor required; (2) the novelty and the difficulty of the questions involved; (3) the skill requisite to perform the legal service properly; (4) the preclusion of other employment by the attorney due to acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the "undesirability" of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases.Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 70 (9th Cir. 1975), abrogated on other grounds by City of Burlington v. Dague, 505 U.S. 557 (1992). These Kerr factors, however, are often subsumed within the lodestar amount, so courts must ensure they account for any potential overlap. See Cunningham v. Cty. of Los Angeles, 879 F.2d 481, 487 (9th Cir. 1989). And, finally, this district's Local Rule 293(c)(13) adds one more factor: "[S]uch other matters as the Court may deem appropriate under the circumstances."
The party seeking fees should provide documentary evidence showing "the number of hours spent, and how it determined the hourly rate(s) requested." McCown v. City of Fontana, 565 F.3d 1097, 1102 (9th Cir. 2008). Then the opposing party must submit specific rebuttal evidence "challenging the accuracy and reasonableness of the hours charged or the facts asserted by" the moving party. Gates v. Gomez, 60 F.3d 525, 534-35 (9th Cir. 1995).
B. Analysis
Union requests $32,968.75 in attorneys' fees, arguing that these were reasonably and necessarily incurred, especially given labor arbitration's compensation and deterrence goals. See generally Mot. Union contends that the Court need not make a lodestar adjustment. See id. at 8. As further explained below, the Court disagrees.
1. Hourly Rates
To determine the reasonableness of the hourly rates requested, a court looks to the prevailing market rates in the relevant community for "similar work performed by attorneys of comparable skill, experience, and reputation." Blum v. Stenson, 465 U.S. 886, 895 (1984); Chalmers v. City of Los Angeles, 796 F.2d 1205, 1210—11 (9th Cir. 1986). The relevant community is generally the forum in which the district court sits—not where counsel's firm resides. Barjon v. Dalton, 132 F.3d 496, 500 (9th Cir. 1997). The "burden is on the fee applicant to produce satisfactory evidence—in addition to the attorney's own affidavits—that the requested [hourly] rates are in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation." Blum, 465 U.S. at 895 n.11.
Union states the requested rates "reflect the market rates . . . in the Bay Area and Sacramento Valley." Mot. at 4. Although Eagle does not challenge the hourly rates Union seeks, See Opp'n at 2 (disputing only the hours expended), the Court finds it unreasonable to, as Union does, treat the Bay Area and Sacramento Valley as the same "community." Indeed, courts in this district treat the two separately. See Jones v. Cty. of Sacramento, No. 09-1025, 2011 WL 3584332, at *8 (E.D. Cal. Aug. 12, 2011); Beecham v. City of West Sacramento, No. 07-1115, 2009 WL 3824793, at *4 (E.D. Cal. Nov. 16, 2009).
This distinction matters because the parties litigated the case—the case underlying Union's Motion for Attorneys' Fees—in Sacramento where this Court sits. See Barjon, 132 F.3d at 500. Because it would be unreasonable to accept rates based on a market different from where the case was litigated, the Court rejects any hourly rates based on Bay Area rates. See Beecham, 2009 WL 3824793 at *4. Only the Sacramento market rate is appropriate here.
a. Partners
Union asks the Court to accept David Rosenfeld's $775 hourly rate. Mot. at 4-5. Rosenfeld is a named shareholder of the firm Weinberg, Roger & Rosenfeld with "over forty years" experience. Gray Decl. ¶ 8. Union cites two cases to support its argument. The first, Barbosa v. Cargill Meat Sols. Corp., though instructive, is not binding authority in that this was a more complex case filed in the District's Fresno division. 297 F.R.D. 431, 452 (E.D. Cal. 2013). "Cases litigated in Fresno . . . do not establish the prevailing market rates in the Sacramento community." Johnson v. Allied Trailer Supply, No. 13-1544, 2014 WL 1334006, at *5 (E.D. Cal. Apr. 3, 2014); Jadwin v. Cty. of Kern, 767 F. Supp. 2d 1069, 1124—29 (E.D. Cal. 2011) (holding that Fresno division, not Sacramento division, was relevant legal community to be used in selecting appropriate hourly rates). The second case, although litigated in Sacramento Superior Court, is also unhelpful. See Procter v. Auto Care. Union did not attach this state court case to its supporting declaration and the Court is unable to ascertain why the state court approved Rosenfeld's rate. And, notably, the only declaration submitted here does not state that $775 is the prevailing rate in Sacramento for a lawyer with Rosenfeld's experience.
This makes it difficult for the Court to blindly accept Union's requested rate, especially when a judge in this district recently determined $530 a reasonable rate for partners with 40 years of experience. See Nat'l Grange of the Order of Patrons of Husbandry v. California State Grange, No. 14-676, 2016 WL 4765061, at *3 (E.D. Cal. Sept. 12, 2016). Because Union has not met its burden, and because Rosenfeld's rate partially derives from Bay Area rates, see Gray Decl. ¶ 14, the Court will compensate Rosenfeld at a $530 hourly rate.
Union also requests a $650 hourly rate for Matthew Gauger, another shareholder-partner. Gray Decl. ¶ 9. Gauger heads the firm's Sacramento office and has 27 years of experience representing labor unions. Id.
Once again, Union's cited authority does not support this requested rate. For the reasons explained above, the Court will not accept the rates approved in Barbosa or Procter. And, again, Gauger's requested $650 rate also stems, in part, from Bay Area market rates. Gray Decl. ¶ 14.
Judges in this district have regularly approved hourly rates of $400 or more for partners or experienced attorneys. See, e.g., National Grange, 2016 WL 4765061 at *3 (accepting unopposed $450 requested rate for party with 35 years of experience); Estrada v. iYogi, Inc., No. 13-1989, 2016 WL 310279, at *6 (E.D. Cal. Jan. 26, 2016) (approving $400 requested rate for partners with as much as 19 years of experience); Trulsson v. Cty. of San Joaquin Dist. Attorneys' Office, No. 11-2986, 2014 WL 5472787, at *6 (E.D. Cal. Oct. 28, 2014) (accepting $450 hourly rate for experienced attorney).
Once again, Union has not met its burden: It has not offered sufficient evidence showing that $650 is the prevailing rate in Sacramento for a lawyer with Gauger's experience. Because judges in this district accept rates between $400 and $450 for partners with 20 to 35 years of experience, and Gauger has 27 years of experience, this Court finds a $425 hourly rate reasonable.
In sum, the Court will compensate Rosenfeld at a $530 hourly rate and Gauger at a $425 hourly rate.
b. Second-Year Associates
Union asks the Court to accept second-year associate Caitlin Gray's $295 hourly rate. See Gray Decl. ¶ 10. No case cited by Union supports this. See Lodi Mem'l Hosp. Ass'n, Inc. v. Blue Cross of California, No. 12-1071, 2012 WL 3638506, at *9, 11 (E.D. Cal. Aug. 22, 2012) (using Los Angeles and San Francisco market rates, not Sacramento rates, to find $300 hourly rate appropriate for second-year associate); Barbosa, 297 F.R.D. at 452 (E.D. Cal. 2013) (applying $280 hourly rate based on Fresno market).
In fact, judges in this district have found $150-$170 an appropriate hourly billing rate for second-year associates. See, e.g., Cosby v. Autozone, Inc., No. 08-505, 2016 WL 1626997, at *8 (E.D. Cal. Apr. 25, 2016) ($150 for new attorney practicing a little over one year); Orr v. California Highway Patrol, No. 14-585, 2015 WL 9305021, at *4 (E.D. Cal. Dec. 22, 2015) (market rate for second and third year associates between $150 and $170 per hour).
The Court will therefore compensate Gray at a $170 hourly rate. She has been practicing law since only 2015, and Union has not met its burden establishing Gray should receive a rate only $5 less than those awarded for fifth-year associates also practicing labor and employment law. See Cosby, 2016 WL 1626997 at *8 (finding $300 rate reasonable for fifth-year associate).
c. Paralegals
There is some disagreement among judges in this district about reasonable Sacramento market rates for work performed by paralegals. Some have found $75 reasonable. See, e.g., Orr, 2015 WL 9305021, at *4; Joe Hand Promotions, Inc. v. Albright, No. 11-2260, 2013 WL 4094403, at *3 (E.D. Cal. Aug. 13, 2013); Friedman v. Cal. State Emps. Ass'n, No. 2-101, 2010 WL 2880148, at *4 (E.D. Cal. July 21, 2010) (citations omitted). Yet others have found $150 reasonable. Hall v. City of Fairfield, No. 10-0508, 2014 WL 1286001, at *8 (E.D. Cal. Mar. 31, 2014); Endurance Am. Specialty Co. v. Lance-Kashian & Co., No. 10-1284, 2011 WL 5417103, at *31 (E.D. Cal. Nov. 8, 2011); Beecham, 2009 WL 3824793 at *4. Despite this disagreement, having concluded $170/hour is the Sacramento market rate for the second-year associate involved in this case, the Court will compensate paralegals at a $75 hourly rate—a rate judges in this district used recently. See, e.g., Orr, 2015 WL 9305021 at *4.
2. Hours Expended
Union contends spending 93.15 hours on this litigation was reasonable. See Gray Decl., Exh. C. Eagle raises several objections.
a. L-3's Motion to Intervene
Eagle argues time spent preparing and responding to L-3's motion to intervene is excessive and unreasonable because L-3 is an entity separate and distinct from Eagle—an entity neither party to this litigation nor signatory to the CBA. Opp'n at 2. In response, Union blames Eagle for having to address L-3's motion, explaining Union had to respond "because Eagle . . . initiated and pursued this action in the first place." Reply at 2.
The Court agrees with Eagle. Although neither party cites a case supporting its position, some cases are instructive. The Ninth Circuit has recognized that "courts in this circuit [have held] individuals whose motions to intervene have been denied are not 'parties' . . . ." United States v. City of Los Angeles, No. 02-57097, 2003 WL 22872520, at *1 (9th Cir. Dec. 3, 2003). Here, L-3 was not a party because this Court never granted L-3's motion. See Min. Order, ECF No. 26 (declining to consider L-3's Motion to Intervene as moot). Additionally, in Union's opposition to L-3's motion, Union never requested attorneys' fees. See Donahoe v. Arpaio, No. 10-2756, 2012 WL 2675237, at *4 (D. Ariz July 6, 2012) (granting attorneys' fees for opposing another's motion to intervene, in part, because opposing party asked for fees in opposition brief). Simply put, the Court finds it unreasonable to award fees for time spent opposing a motion by an entity not party to this litigation. ///
b. Matthew Gauger
Eagle contends Union is not entitled to fees for Matthew Gauger's time because Union did not need two shareholder-partners to litigate this case and Gauger's tasks "were menial at best." Opp'n at 3. In response, Union maintains Gauger's work was reasonable because his time was minimal (1 hour) and he was uniquely positioned to handle the tasks. Reply at 2 (explaining he spent 15 minutes handling service of process and 45 minutes preparing Union's fee motion because he had relevant information about prevailing rates for lawyers in Sacramento). Again, neither party cites supporting authority.
The Court agrees with Eagle. Union inadequately addresses why it is reasonable to have a shareholder-partner assist with issues concerning service of process and market-rates. The Court is unpersuaded that only Gauger could have handled these issues, especially with Rosenfeld aboard. At the very least, even as leader of the Sacramento office, Gauger could have directed another where to find material about Sacramento market rates, rather than spend 45 minutes "preparing information about attorney's fees awards . . . ." Reply at 2. It is unreasonable to bill partner-level fees to complete these menial tasks. The Court will not include Gauger's time in its lodestar calculation.
c. Duplicative Time
Eagle argues Union includes duplicative time. Two paralegals and associate Gray reviewed the applicable rules and researched case law to determine due dates triggered by Eagle's Complaint. Opp'n at 2. Union maintains this was not unreasonably duplicative: After paralegal Nathan initially determined due dates, Rosenfeld noticed a potential timing issue, so associate Gray researched the issue and then paralegal Castillo double-checked the due dates. Reply at 2-3.
The Court finds some of this time duplicative. Researching procedural rules differs from merely identifying due dates, so Gray's time was reasonably expended. But, because paralegal Castillo "double checked" the due dates first determined by paralegal Nathan, their time is duplicative. Had the firm researched the timeliness issue before asking a paralegal to prematurely determine due dates, another paralegal would not have had to "double check" those dates. The Court will discount the time paralegal Nathan spent identifying due dates.
d. Union's Motion to Dismiss
Next Eagle contends Union should not receive fees for excessive time spent on drafting Union's Motion to Dismiss. Opp'n at 4. Union maintains this time was reasonable. Reply at 3-4.
The Court agrees with Union. First, in its Complaint, Eagle raised several arguments explaining why this Court should vacate the arbitration award—and each required considerable analysis. Second, to say it is excessive for Union to spend 41 hours drafting a motion to dismiss because it took Eagle only 25 hours to draft an opposition to Union's attorneys' fees motion misses the point: Eagle is comparing apples to oranges. See Opp'n at 4. Given Eagle's numerous arguments, it is no surprise Union took considerable time to sufficiently respond. The Court finds the time spent drafting Union's Motion to Dismiss reasonable.
3. Lodestar Amount
There is a strong presumption that the lodestar amount is the reasonable fee. See United Steelworkers of Am. v. Phelps Dodge Corp., 896 F.2d 403, 406 (9th Cir. 1990). Although Union "does not seek a multiplier," it asks the Court to consider "the need for deterrence." See Mot. at 8 (citing E.D. Cal. L.R. 293(c)(13)). But the Court has already done so when it evaluated whether to award fees in the first place. See Order at 18-20. The Court therefore awards the following in attorneys' fees:
| David Rosenfeld | 8.9 | x | $530 | = | $ 4,717.00 |
| Caitlin Gray | 75.25 | x | $170 | = | $12,792.50 |
| Teresa Alou | 0.25 | x | $ 75 | = | $ 18.75 |
| Judy Castillo | 0.75 | x | $ 75 | = | $ 56.25 |
|---|---|---|---|---|---|
| $17,584.50 |
II. ORDER
For the reasons set forth above, the Court GRANTS Union's Motion for Attorneys' Fees and awards 17,584.50.
IT IS SO ORDERED. Dated: March 31, 2017
/s/ _________
JOHN A. MENDEZ,
UNITED STATES DISTRICT JUDGE