Opinion
17-MC-360 (AT) (RWL)
11-17-2023
ESSAR STEEL ALGOMA INC., Plaintiff, v. SOUTHERN COAL SALES CORPORATION, et al., Defendants.
REPORT AND RECOMMENDATION TO HON. ANALISA TORRES: ATTORNEY'S FEES
ROBERT W. LEHRBURGER, UNITED STATES MAGISTRATE JUDGE.
Essar Steel Algoma, Inc. (“Algoma”) has submitted an application for attorney's fees at the direction of the Court. The application is unopposed. Having considered the Algoma's submissions, and with due consideration for the governing legal principles, I recommend that Algoma be awarded $154,701.90 in attorney's fees and $1,339.68 in costs against Defendants.
The Defendants are Southern Coal Sales Corporation n/k/a Nevada Holdings, Inc. (“Southern Coal”); Bluestone Resources, Inc. (“Bluestone”); James C. Justice Companies, Inc.; James C. Justice Companies, LLC; Bluestone Industries, Inc.; Bluestone Coal Corporation; Bluestone Mineral, Inc.; Bluestone Energy Sales Corporation; A&G Coal Corporation; Tams Management, Inc.; Encore Leasing, LLC; Justice Family Farms, LLC; and Southern Coal Corporation (collectively the “Justice Parties”).
Background
Algoma commenced this action for breach of contract in September 2017 based on Defendants' failure to deliver coal of the quantity and quality required by the parties' supply agreement. Three years later, Algoma and the Defendants entered into a Settlement Agreement of Algoma's claims, which the Court so-ordered on September 23, 2020. (Dkt. 186.) The Settlement Agreement entitles Algoma to recover its reasonable attorney's fees in seeking enforcement after Defendants' default. (Id. § 14.)
In 2021, Defendants breached the Settlement Agreement by failing to pay the agreed settlement amounts or deliver coal of equivalent value. Algoma then moved to enforce the Settlement Agreement. (See Dkts. 187, 198-99.) On October 18, 2022, I issued a Report and Recommendation (the “R&R”) recommending that Algoma's motion be granted and that judgment be entered in Algoma's favor in the amount of $5.75 million, plus interest and reasonable attorney's fees. (Dkt. 212.) Following briefing on Defendants' objections to the R&R, on August 2, 2023, the Court issued an order (the “Order”) overruling the objections, adopting the R&R, granting Algoma's motion to enforce the Settlement Agreement, and directing Algoma to submit an application for attorney's fees. (Dkt. 215.) Algoma filed the requisite application and supporting materials on September 22, 2023. (Dkts. 220-22.) Defendants did not respond. (See Dkt. 223.)
Discussion
Algoma seeks an award of $154,701.90 in fees and $1,339.68 for reimbursement of costs. (Butscha Decl. ¶ 31.)
“Butscha Decl.” refers to the Declaration of Mark R. Butscha filed on September 22, 2023 at Dkt. 222.
The traditional approach to determining a fee award is the “lodestar” calculation -the number of hours expended multiplied by a reasonable hourly rate. See Healey v. Leavitt, 485 F.3d 63, 71 (2d Cir. 2007); Tackie v. Keff Enterprises LLC, No. 14-CV-2074, 2014 WL 4626229, at *6 (S.D.N.Y. Sept. 16, 2014). The Second Circuit has held that “the lodestar ... creates a ‘presumptively reasonable fee.'” Millea v. Metro-North Railroad Co., 658 F.3d 154, 166 (2d Cir. 2011) (quoting Arbor Hill Concerned Citizens Neighborhood Association v. County of Albany, 522 F.3d 182, 183 (2d Cir. 2008); and then citing Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 552 (2010)); see also Stanczyk v. City Of New York, 752 F.3d 273, 284-85 (2d Cir. 2014) (reaffirming Millea). To arrive at a lodestar calculation, “[t]he party seeking an award of [attorney's] fees should submit evidence supporting the hours worked and rates claimed.” Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). Algoma has submitted such evidence in the form of the Butscha Declaration and copies of contemporaneous records of time expended by specific attorneys. (See Butscha Decl. ¶¶ 7-30 and Ex. 1.)
Hourly Rates: Courts generally assess the reasonableness of a proposed hourly rate by considering the prevailing market rate for lawyers in the district in which the ruling court sits. Polk v. New York State Department of Correctional Services, 722 F.2d 23, 25 (2d Cir. 1983). “The rates used by the court should be current rather than historic hourly rates.” Reiter v. MTA New York City Transit Authority, 457 F.3d 224, 232 (2d Cir. 2006) (internal quotation marks omitted). “[C]ourts may conduct an empirical inquiry based on the parties' evidence or may rely on the court's own familiarity with the rates if no such evidence is submitted.” Wong v. Hunda Glass Corp., No. 09-CV-4402, 2010 WL 3452417, at *2 (S.D.N.Y. Sept. 1, 2010) (internal quotation marks omitted).
“[T]he range of rates that plaintiff's counsel actually charge their clients . is obviously strong evidence of what the market will bear.” Rozell v. Ross-Holst, 576 F.Supp.2d 527, 544 (S.D.N.Y. 2008); see also Lilly v. County Of Orange, 910 F.Supp. 945, 949 (S.D.N.Y. 1996) (“The actual rate that counsel can command in the market place is evidence of the prevailing market rate”). And, “[e]vidence that the client ‘actually paid' the fees requested is ‘compelling evidence of a reasonable market rate.'” Charlestown Capital Advisors, LLC v. Acero Junction, Inc., No. 18-CV-4437, 2021 WL 1549916, at *2 (S.D.N.Y. Apr. 20, 2021) (quoting Danaher Corp. v. Travelers Indemnity Co., No. 10-CV-0121, 2014 WL 4898754, at *2 (S.D.N.Y. Sept. 30, 2014)). At the same time, “the Court retains some responsibility to discipline the market if necessary by stepping into the shoes of the reasonable, paying client, who wishes to pay the least amount necessary to litigate the case effectively.” Charlestown Capital, 2021 WL 1549916, at *2 (internal quotation marks, citations, and brackets omitted).
A reasonable rate is not determined in a vacuum. Rather, “the ‘reasonable' compensation of an attorney depends on the factors of the case at bar, including the nature of the case and the difficulty of the questions presented.” VR Optics, LLC v. Peloton Interactive, Inc., No. 16-CV-6392, 2021 WL 1198930, at *3 (S.D.N.Y. March 30, 2021). “The inquiry is ‘case-specific,' Townsend v. Benjamin Enterprises, Inc., 679 F.3d 41, 59 (2d Cir. 2012), meaning that a reasonable rate for a routine task in a simple case may be quite different from a reasonable rate for a complex task in a challenging case, even when performed by the same firm or the same attorney.” Charlestown Capital, 2021 WL 1549916, at *2 (citing cases).
Algoma is represented in this action by the law firm Thompson LLP and seeks reimbursement of fees for seven billed time-keepers, consisting of four partners and three junior associates. (Butscha Decl. ¶ 20; see also generally id. Ex. 1.) The rates are as follows:
(Butscha Decl. ¶¶ 23-29 and Ex. 1.)
Timekeeper
Title
2022 Rate
2023 Rate
Mark Butscha
Partner
$565
$610
Kip Bolin
Partner
$680
$725
Jeremy Campana
Partner
$660
$700
Emily Mathieu
Partner
$805
$805
Arielle Hooks
Associate
$300
$300
Rebecca Pronesti
Associate
N.A.
$345
Stanton Williams
Associate
$290
$290
The Butscha Declaration does not distinguish between 2022 and 2023 rates for attorneys Mathieu, Hooks, Pronesti, and Williams, instead referring to their having the same rate for “the relevant time period.” (Butscha Decl. ¶¶ 26-29.) Based on a review of the billing records, it appears that all of those attorneys except Pronesti billed time for the instant matter in both 2022 and 2023. As Pronesti billed time for only 2023, her rate for 2022 is designated as not applicable (“N.A.”).
The Court has reviewed the years of experience and area of focus of each of the personnel for whom fees are sought. The rates reflect a range of seniority and experience commensurate with their respective timekeepers. Indeed, the rates sought are quite reasonable for commercial litigation of the type at issue here and are well below the $1,000-plus rates that are “not uncommon” in complex litigation in New York even as of almost a decade ago. Themis Capital v. Democratic Republic of Congo, No. 09-CV-1652, 2014 WL 4379100, at *7 (S.D.N.Y. Sept. 4, 2014); see, e.g., Phyto Tech Corp. v. Givaudan SA, No. 18-CV-6172, 2023 WL 1437714, at *7 (S.D.N.Y. Jan. 31, 2023) (deeming reasonable the average discount rates of partners ranging from $897.50 to $1,079.97 per hour). To be sure, the case as a whole is not particularly complex and is a relatively straight-forward action for breach of contract. That said, the case did have certain complexities, such as assessing the relationships between the various Defendants. In any event, the rates charged fall within the range of rates for attorneys in New York with comparable experience and positions. Accordingly, the Court finds the rates charged to be reasonable for this case.
Hours Worked: To determine the compensable hours, “the court must examine the hours expended by counsel and the value of the work product of the particular expenditures to the client's case.” Tlacoapa v. Carregal, 386 F.Supp.2d 362, 371 (S.D.N.Y. 2005) (citing Gierlinger v. Gleason, 160 F.3d 858, 876 (2d Cir. 1998)). “In making this examination, the district court does not play the role of an uninformed arbiter but may look to its own familiarity with the case and its experience generally as well as to the evidentiary submissions and arguments of the parties.” Gierlinger, 160 F.3d at 876. “The relevant issue ... is not whether hindsight vindicates an attorney's time expenditures, but whether, at the time the work was performed, a reasonable attorney would have engaged in similar time expenditures.” Grant v. Martinez, 973 F.2d 96, 99 (2d Cir. 1992); see also Mugavero v. Arms Acres, Inc., No. 03-CV-5724, 2010 WL 451045, at *6 (S.D.N.Y. Feb. 9, 2010) (same).
A court thus should exclude from the lodestar calculation “excessive, redundant or otherwise unnecessary hours.” Quaratino v. Tiffany & Co., 166 F.3d 422, 425 (2d Cir. 1999); see also Luciano v. Olsten Corp., 109 F.3d 111, 116 (2d Cir. 1997) (“If the district court concludes that any expenditure of time was unreasonable, it should exclude these hours from the lodestar calculation”). Fees may also be reduced for other reasons, such as when the court finds billing entries overly vague, obscured by block billing, incomplete, or indicative of work that more appropriately should have been performed by someone more junior. See, e.g., Vista Outdoor Inc. v. Reeves Family Tr., No. 16-CV-5766, 2018 WL 3104631, at *7-9 (S.D.N.Y. May 24, 2018) (reducing fees due to, inter alia, block billing, overstaffing, excessive conferencing, and clerical work performed by attorneys); LBBW Luxemburg S.A. v. Wells Fargo Securities LLC, 2016 WL 5812105, at *8 (S.D.N.Y. Sept. 22, 2016) (reducing fees based on “vague entries and block billing entries”).
Between approximately January 2022 and September 2023, Thompson Hine billed (or was in the process of billing for the most recent month) Algoma a total of 297 hours in connection with enforcing the Settlement Agreement. (Butscha Decl. ¶ 19 and Ex. 1.) The Court has reviewed the records and finds the time spent to be reasonable. The work performed is of the nature and type that would be expected for enforcement of a settlement agreement such as the one at issue here. The principal work performed included consulting with the client; planning strategy; preparing the motion to enforce and related correspondence; responding to cross-motion by Defendants for relief from judgment; preparing for and attending oral argument; researching and drafting opposition papers to Defendant's objections to the R&R; and preparing the instant application for fees. The time spent, broken down by each individual and supported by contemporaneous documentation, was reasonably necessary for Algoma's efforts to enforce the Settlement Agreement.
The time also was appropriately distributed among timekeepers of different seniority. The majority of work was performed by attorney Butscha, who had the lowest billing rate among the partners, and associate Williams, who started on the case as a law clerk, and had the lowest billing rate of all. In contrast, the highest biller, partner Matthieu, accounted for only a handful of hours. It also bears noting that the invoices reflect assorted entries for both partners and associates for which no fee was charged, presumably based on Thomson Hine's determination that the particular task either was not necessary or not appropriately billed for some other reason. Those no-cost entries reflect discretion and attention by the law firm to reasonable billing practices.
In sum, based on the foregoing, as well as Defendants not having challenged any of the fees sought, the Court is satisfied that both the billing rates and hours expended are reasonable. Accordingly, Algoma is entitled to recover $154,701.90 in attorney's fees.
Algoma also is entitled to recover its disbursements in having prevailed on enforcement of the Settlement Agreement. See Fed.R.Civ.P. 54(d)(1) (entitling prevailing party to costs “[u]nless a federal statute, these rules, or a court order provides otherwise”). Algoma seeks recovery of $1,339.68 in costs, primarily for fees incurred for use of the LEXIS legal database service. (See Butscha Decl. ¶ 31 and Ex. 1.) Such costs are routinely awarded. See, e.g., Malletier v. Artex Creative International Corp., 687 F.Supp.2d 347, 365 (S.D.N.Y. 2010) (awarding costs such as filing fees, shipping costs, and research fees) (citing Arbor Hill Concerned Citizens Neighborhood Association v. County of Albany, 369 F.3d 91, 98 (2d Cir. 2004)). The Court has reviewed Algoma's submissions and finds sufficient proof of the costs paid and that they are recoverable. Accordingly, Algoma should be awarded $1,339.68 in costs.
CONCLUSION
For the foregoing reasons, I recommend awarding Algoma attorney's fees in the amount of $154,701.90 and costs in the amount of $1,339.68 in connection with its enforcement of the Settlement Agreement.
SERVICE
Within three days after entry, Algoma shall serve this Report and Recommendation on Defendants. Within seven days after entry, Algoma shall file proof of service.
OBJECTIONS AND RIGHT TO APPEAL
Pursuant to 28 U.S.C. § 636(b)(1) and Rules 72, 6(a), and 6(d) of the Federal Rules of Civil Procedure, the parties shall have fourteen (14) days to file written objections to this Report and Recommendation. Any party shall have fourteen (14) days to file a written response to the other party's objections. Any such objections and responses shall be filed with the Clerk of the Court, with courtesy copies delivered to the Chambers of the Honorable Analisa Torres, United States Courthouse, 500 Pearl Street, New York, New York 10007, and to the Chambers of the undersigned, at United States Courthouse, 500 Pearl Street, New York, New York 10007. Any request for an extension of time for filing objections must be addressed to Judge Torres. Failure to file timely objections will result in a waiver of the right to object and will preclude appellate review.