Opinion
21-cv-6675 (CM) (OTW)
07-24-2024
GERARD SILLAM and ALDRIC SAULNIER, Plaintiffs, v. LABATON SUCHAROW LLP and CHRISTOPHER KELLER, Defendants.
OPINION & ORDER
ONA T. WANG, UNITED STATES MAGISTRATE JUDGE:
I. INTRODUCTION
Defendants Labaton Sucharow LLP and Christopher Keller (collectively “Defendants”) brought this motion for dispositive and non-dispositive (monetary) sanctions against Plaintiff Sillam pursuant to the Court's inherent authority and Fed.R.Civ.P. 37(a)(5), respectively. Specifically as to the non-dispositive relief sought under Rule 37(a)(5), Defendants seek an award of at least $146,280 in attorneys' fees and costs incurred in connection with motion practice regarding Plaintiffs' depositions in France. (ECF 138 at 14); see also ECF Nos. 45, 60.
For the following reasons, Defendants' motion for monetary sanctions in the amount of $146,280 is GRANTED. Defendants are awarded a total of $146,280 in fees, broken down as follows: (1) $2,370 for costs and fees associated with Defendants' drafting of Sillam's declaration; (2) $41,213 for Defendants' preparation for and conducting of Sillam's deposition; and (3) $102,697 for motion practice ensuing from Defendants' discovery of Sillam's 2023 Complaints.
II. BACKGROUND
For the reasons articulated in my April 22, 2024 Opinion and Order, I had previously found that Sillam should be sanctioned for his bad faith violation of promises made in his February 16, 2023 Declaration (the “Declaration,” ECF 104-4), which was proffered and signed in consideration of and for Sillam being deposed in France. (ECF 134), Sillam v. Labaton Sucharow LLP, No. 21-CV-6675 (CM) (OTW), 2024 WL 1717960 (S.D.N.Y. Apr. 22, 2024). Sillam objected to my finding pursuant to Fed.R.Civ.P. 72(a); Judge McMahon overruled his objections on June 24, 2024. (ECF 152), Sillam v. Labaton Sucharow LLP, No. 21-CV-6675 (CM) (OTW), 2024 WL 3104492 (S.D.N.Y. June 24, 2024) (“Sillam II”). After finding that, at a minimum, monetary sanctions were warranted, I directed Defendants to file submissions to support the amount of a monetary sanction.
Sillam, represented by new counsel, filed an opposition that raised largely the same objections and arguments as he raised in response to my Orders to Show Cause and in the objections to my April 2024 Order. Specifically, Sillam's generic and conclusory arguments ask the Court to consider-without a single citation to Defendants' submissions or to any relevant case law-“whether all aspects of this task were directly related to addressing Sillam's conduct or if some components were part of routine legal preparation” (ECF 145 at 13), that additional costs of conducting the deposition in France “may encompass routine legal preparations inherent in international depositions,” (id.), that any allocation “should accurately reflect the reasonable costs directly attributable to Sillam's conduct, without encompassing routine legal expenses,” (id.), and whether, after discovering Sillam had violated the Declaration, “all claimed expenses were directly attributable to Sillam's conduct or if some were part of routine legal proceedings.” Id. at 14. (all emphases added). Sillam then requests that “any monetary sanction should be meticulously tailored to reflect only the reasonable costs directly resulting from Sillam's conduct.” Id. (emphasis added).
III. DISCUSSION
A. The Fees Sought Are Within the Scope of the April 2024 Order
Fed. R. Civ. P. 37(a)(5) “applies to [an] award of expenses” made in connection with motions for orders compelling disclosure or discovery and in connection with depositions under Fed.R.Civ.P. 37(a)(1) and (a)(3)(C). Where a motion to compel is granted, Rule 37(a)(5)(A) provides that “the court must, after giving an opportunity to be heard, require the party or deponent whose conduct necessitated the motion, the party or attorney advising that conduct, or both to pay the movant's reasonable expenses incurred making the motion, including attorney's fees.” Id. “[I]t is widely accepted that an award of expenses under Rule 37(a)(5)(A) is mandatory unless one of . . . three exceptions applies.” Wager v. G4S Secure Integration, LLC, 19-CV-3547, 2021 WL 293076, at *4 (S.D.N.Y. Jan. 28, 2021). These exceptions are: “(i) the movant filed the motion before attempting in good faith to obtain the disclosure or discovery without court action; (ii) the opposing party's nondisclosure, response, or objection was substantially justified; or (iii) other circumstances make an award of expenses unjust.” Fed.R.Civ.P. 37(a)(5)(A)(i)-(iii).
On April 24, 2024, I found that Sillam had breached the promises made in his Declaration, and held that Sillam would “be directed to pay reasonable fees and costs under Rule 37(a)(5) for: (1) Defendants' drafting and negotiation (if any) of the declaration, (2) preparing for and taking Sillam's deposition, and (3) the motion practice ensuing from their discovery of the 2023 Complaints.” Sillam, 2024 WL 1717960 at *5. I have reviewed the proffered time entries and find that they fall within the scope of work for which Defendants should be compensated in the April 2024 Order.
B. Calculation of a Reasonable Fee Award
Here, I have already found that Defendants are entitled to recover their reasonable expenses incurred in connection with the motion practice regarding Plaintiffs' depositions in France. Sillam, 2024 WL 1717960, at *5. Sillam's opposition to any financial sanction does not challenge any attorney's hourly rate, time spent on any task, or the necessity of any of the tasks described. Instead, Plaintiff asks, in vague, repetitive and conclusory language,that fees should be awarded only for work attributable to Sillam's conduct, and not for “routine legal tasks.” (ECF 145 at 13-14).
Sillam submits yet another declaration (ECF 145-1) in which he blames his former counsel and his French counsel for Sillam's “misunderstanding” of the plain language and purpose of the Declaration. These arguments were previously raised, I addressed them at length in my April 2024 Opinion & Order, and Judge McMahon overruled Sillam's objections. Sillam 2024 WL 1717960, at *3-5; see also Sillam II, 2024 WL 3104492 at *5 (“Frankly, I find this as ridiculous as Judge Wang did. It is conclusive evidence of bad faith.”).
I have reviewed Defendants' submissions at ECF Nos. 138, 139, 140, and 141, in the form of declarations and redacted billing records, and find that all of the time entries relate to work attributable to Sillam's conduct and to uncovering Sillam's 2023 Complaints. I further find that none of these tasks-undertaken to address Sillam's egregiously contumacious conduct-could be characterized as “routine legal tasks.”
Although I do not have a general prohibition on use of generative artificial intelligence tools for brief writing, attorneys have a “gatekeeping role . . . to ensure the accuracy of their filings.” Mata v. Avianca, Inc., 678 F.Supp.3d 443, 448 (S.D.N.Y. 2023). While Sillam's brief does not cite any “fake quotes and citations” (id.) the repetitive language does not present any advocacy; it only restates general principles of law without making argument. This is not helpful to the Court.
I also find that the fees and costs sought are reasonable and fall within the scope of the monetary sanction articulated in the April 2024 Order. Moreover, because this award of fees is a discovery sanction, “the offended adversary's counsel is not being rewarded for its success in the litigation; rather, the adversary is simply being compensated for costs it should not have had to bear.” Klipsch Group, Inc. v. ePRO E-Commerce Limited, 880 F.3d 620, 634 (2d Cir. 2018) (imposing discovery sanctions that included costs and fees associated with the plaintiff's investigation-including a court-ordered forensic examination-into the defendant's failure to initiate a proper litigation hold, failure to promptly disclose documents, and spoliation).
C. Lodestar Calculation
Because a sanction under Fed.R.Civ.P. 37(a)(5) is compensatory, it is not clear that a lodestar calculation is necessary. (Indeed, Sillam has not challenged any of the time entries or hourly rates.) If a lodestar calculation is necessary, however, I find that the hours spent exposing and litigating Sillam's bad faith conduct in discovery, totaling $146,280, is reasonable.
The determination of reasonable hourly rates is a factual issue committed to the court's discretion. Arbor Hill v. Concerned Citizens Neighborhood Ass'n v. Cnty. of Albany & Albany Cnty. Bd. of Elections, 522 F.3d 182, 184. (2d Cir. 2008). A reasonable hourly rate is typically defined as the market rate that a “reasonable, paying client would be willing to pay.” Id. at 184. The equation of reasonable hourly rate and market rate contemplates a case-specific inquiry into prevailing market rates for counsel whose experience and skills are similar to those of the fee applicant's counsel. Farbotko v. Clinton Cnty. of New York, 433 F.3d 204, 209 (2d Cir. 2005). Specifically, courts are instructed to look to the market rates “prevailing in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation.” Gierlinger v. Gleason, 160 F.3d 858, 882 (2d Cir.1998). When making this determination, a court should rely both on evidence as to the rates counsel typically charges, (Farbotko, 433 F.3d at 209), and “its own knowledge of comparable rates charged by lawyers in the district.” Morris v. Eversley, 343 F.Supp.2d 234, 245 (S.D.N.Y. 2004) (citing Ramirez v. N.Y. City Off-Track Betting Corp., No. 93 Civ. 682 (LAP), 1997 WL 160369, at *2 (S.D.N.Y. Apr. 3, 1997)); see also Miele v. New York State Teamsters Conf. Pension & Ret. Fund, 831 F.2d 407, 409 (2d Cir. 1987) (holding that the lower court “had discretion to rely . . . on his knowledge of New York City rates so long as he considered rates charged by comparable lawyers at the private bar”).
The attorneys' hourly rates here are within the reasonable range of experienced litigators within the community, which, in this case, is the Southern District of New York. Amaprop Ltd. v. Indiabulls Fin. Servs. Ltd., No. 10 CIV. 1853 PGG, 2011 WL 1002439, at *6 (S.D.N.Y. Mar. 16, 2011), aff'd, 483 Fed.Appx. 634 (2d Cir. 2012). The hourly rates of counsel, while high in absolute terms, are reasonable in light of the attorneys' backgrounds and experience, as well as the nature of the claims, filed against a well-known law firm and one of its senior partners. See id. at *5-6 (collecting cases).
In Amaprop, decided in 2011 and affirmed in 2012, the court found the following hourly rates to be reasonable: $761 per hour for a senior partner; $616 per hour for a partner; $392 per hour for an associate; $312 per hour for a law clerk awaiting admission; and $251 per hour for a paralegal. 2011 WL 1002439, at *5-6. Here, thirteen years later, Defendants charge comparable and likewise reasonable rates of: $985 per hour for a senior partner; $850 per hour for a partner; and $595 per hour for counsel. (ECF 140 at ¶¶ 4-6). Defendants' French counsel, Reed Smith LLP, has also submitted comparable and reasonable rates, which, at a proffered conversion of €1 to $1.07, amount to: $952.30 per hour for a managing partner; $620.60 per hour for a senior associate; and $428 per hour for a junior associate. (ECF 141 at ¶¶ 3-12).
To determine the number of 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. June 22, 2005) (citing Gierlinger, 160 F.3d at 876). As when determining whether the hourly rate is reasonable, in assessing compensable hours the court “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 Court has reviewed Defendants' supporting billing records and finds the time spent to be reasonable. Defendants seek compensation for a total of 91.5 hours of work performed, broken down as: (1) 2.8 hours for drafting and negotiating Sillam's declaration; (2) 16.1 hours for preparing for and conducting Sillam's deposition; and (3) 72.6 hours for the motion practice ensuing from Defendants' discovery of Sillam's 2023 complaints. (ECF 140 at ¶¶ 4-6). Additionally, Labaton Sucharow's French counsel, Reed Smith LLP, billed a total of 101 hours in connection with preparing for and conducting Sillam's deposition in France, as well as motion practice ensuing from Defendants' discovery of the 2023 Complaints. (ECF 141 at ¶¶ 3-6). The work performed is of the nature, type, and amount that would be expected for experienced attorneys to perform the work resulting from Sillam's conduct. The Court also notes that Reed Smith's hours would have been much lower had Sillam appeared for his deposition in New York, as Defendants' counsel had requested.
D. Defendants' Other Requested Relief
In addition to monetary sanctions, Defendants have also requested that Sillam's claims be dismissed, as non-monetary sanction for his conduct. Judge McMahon has warned Sillam that, if he is “not willing to comply with the rules applicable to all litigants in this court, we will have no choice but to dismiss the lawsuit that he chose to file here.” Sillam II, 2024 WL 3104492 at *6. In light of this warning, I find that monetary sanctions are-at this juncture-sufficient.
Compliance with discovery obligations “is not optional or negotiable; rather, the integrity of our civil litigation process requires that the parties before us, although adversarial to one another, carry out their duties to maintain and disclose the relevant information in their possession in good faith.” Klipsch Group, Inc, 880 F.3d at 630-31. The power to sanction litigants “is necessary in order to prevent undue delays in the disposition of pending cases and to avoid congestion in the calendars of the District Courts.” Penthouse Int'l, Ltd. v. Playboy Enterprises, Inc., 663 F.2d 371, 386 (2d Cir. 1981). This includes the power of dismissal pursuant to Rule 37, which is appropriate “not merely to penalize those whose conduct may be deemed to warrant such sanction, but to deter those who might be tempted to such conduct in the absence of such a sanction.” Agiwal v. Mid Island Mortg. Corp., 555 F.3d 298 (2d Cir. 2009) (citing Nat'l Hockey League v. Metro. Hockey Club, Inc., 427 U.S. 639, 643, 96 (1976)). As Judge McMahon has put Sillam on notice that continued treatment of the federal rules as optional will result in dismissal of his claims, I deem monetary sanctions sufficient censure, at present.
IV. CONCLUSION
For the foregoing reasons, Defendants' motion for attorneys' fees is GRANTED in the amount of $146,280 broken down as follows: (1) $2,370 for costs associated with Defendants' drafting of the Sillam's declaration; (2) $41,213 for Defendants' preparation preparing for and conducting of Sillam's deposition; and (3) $102,697 for motion practice ensuing from Defendants' discovery of Sillam's 2023 Complaints. Plaintiff is directed to pay by Friday, August 30, 2024.
SO ORDERED.