RHN Incorporated v. CNA National Warranty Corporation ( 2021 )

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 RHN Incorporated, No. CV-19-02960-PHX-GMS 9 LEAD CASE Plaintiff/Counter-Defendant, 10 No. CV-19-4516-PHX-GMS v. 11 ORDER CNA National Warranty Corporation, et al., 12 Defendants/Counter- 13 Claimants. 14 CNA National Warranty Corporation, 15 Plaintiff, 16 v. 17 RHN Incorporated, et al., 18 Defendants. 19 20 21 Before the Court is CNAN National Warranty Corporation’s (“CNA”) Motion 22 Supporting Award of Attorneys’ Fees and Non-Taxable Expenses and Memorandum of 23 Points and Authorities. (Doc. 58.) For the following reasons the Motion is granted in part 24 and denied in part. 25 BACKGROUND 26 On April 9, 2020, the Court granted CNA’s motion for sanctions, holding that RHN 27 must “[p]ay CNA the fees and costs it incurred in pursing RHN’s compliance” with the 28 Mandatory Initial Discovery Program (“MIDP”). (Doc. 50 at 4.) The Court directed CNA 1 to “submit documentation in compliance with LRCiv 54.2 for the Court to determine the 2 amount of the sanctions.” Id. In response, CNA filed the instant Motion. CNA’s 3 corresponding documentation requests an award of $45,038.00. (Doc. 60 at 8.) 4 DISCUSSION 5 I. Legal Standard 6 Pursuant to Local Rule 54.2, a party requesting an award of attorneys’ fees and non- 7 taxable expenses must show that it is (A) eligible for an award; (B) entitled to an award; 8 and (C) requesting a reasonable amount of attorneys’ fees. See LRCiv 54.2(c). A party 9 seeking to recover fees must also attach supporting documentation to the memorandum, 10 including (1) a statement of consultation; (2) “a complete copy of any written fee 11 agreement, or a full recitation of any oral fee agreement”; (3) a task-based itemized 12 statement of fees and expenses; (4) an affidavit of moving counsel; and (5) “[a]ny other 13 affidavits or evidentiary matter deemed appropriate under the circumstances or required by 14 law.” LRCiv 54.2(d)(1)–(5). 15 II. Analysis 16 A. Eligibility & Entitlement 17 The MIDP establishes “court-ordered mandatory initial discovery pursuant to the 18 Court’s inherent authority to manage cases.” Gen. Order No. 17-08, at 1. Rule 37(b)(2) 19 applies to these initial disclosures—if a party fails to comply with their discovery 20 obligations “the court must order the disobedient party, the attorney advising that party, or 21 both to pay the reasonable expenses, including attorney’s fees.” Fed. R. Civ. P. 37(b)(2)(C); 22 Gen. Order No. 17-08, at 4. Moreover, federal courts have inherent authority to impose 23 such sanctions for violations of court orders. See Chambers v NASCO, Inc., 501 U.S. 32, 24 45 (1991) (“[A] court may assess attorney’s fees as a sanction for the ‘willful disobedience 25 of a court order.’”). 26 On April 9, 2020, the Court granted CNA’s motion for sanctions, holding that RHN 27 must “[p]ay CNA the fees and costs it incurred in pursing RHN’s compliance with the 28 MIDP.” (Doc. 50 at 4.) RHN does not dispute that, pursuant to this order, CNA is entitled 1 to recover the reasonable attorney’s fees they expended securing RHN’s compliance with 2 the MIDP. 3 B. Reasonable Attorney’s Fees 4 To determine whether fees are reasonable, courts evaluate whether the hourly rates 5 are reasonable, and then whether the time spent on the matter is reasonable. See Kaufman 6 v. Warner Bros. Ent. Inc., 2019 WL 2084460, *11 (D. Ariz. 2019). Reasonableness is 7 typically determined through the “lodestar method,” calculated by “multiplying the number 8 of hours the prevailing party reasonably expended on the litigation by a reasonable hourly 9 rate.” Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 978 (9th Cir. 2008). 10 A district court has “a great deal of discretion in determining the reasonableness of 11 [a] fee.” Id. Courts may thus, in their discretion, reduce a fee award on “a percentage or 12 across-the-board” basis, rather than examining each line item submitted by counsel, so long 13 as they provide “an explanation for that choice.” Ferland v. Conrad Credit Corp., 244 F.3d 14 1145, 1150 (9th Cir. 2001). 15 CNA seeks an award of attorneys’ fees in the amount of $45,038.00. The amount 16 represents attorney time, and is supported by billing statements specifying hours worked, 17 tasks performed, and rates charged as required pursuant to Fed. R. Civ. P. 54(d)(2) and 18 LRCiv. P. 54.2. (Doc. 58-3.) 19 a. Hourly Rates 20 CNA’s lead counsel, Tina M. Ezzell, has approximately 28 years of civil litigation 21 experience, and charges CNA $335.00 an hour for her services. (Doc. 58-4 at 4.) Her 22 associates, Gaya Shanmuganatha and Jessica Brown have seven and five years of litigation 23 experience respectively, and charge CNA $265.00 an hour for their services. Id. at 3. The 24 Court finds these rates reasonable in the District of Arizona. See, e.g., J & J Sports Prods. 25 Inc. v Patel, No. CV1600234TUCRMBPV, 2018 WL 1609731, at *4 (D. Ariz. Apr. 3, 26 2018) (finding a rate of $325 per hour reasonable in the District of Arizona); Bray v. 27 Maxwell & Morgan PC, No. CV-17-00486-PHX-DGC, 2017 WL 5668269, at *2 (D. Ariz. 28 Nov. 27, 2017) (finding a rate of $325 per hour higher than average rate in the District of 1 Arizona but reasonable for a lawyer with 20 years of experience); Wood v. Betlach, No. 2 CV12-08098-PCT-DGC, 2017 WL 1398552, at *8 (D. Ariz. Apr. 19, 2017) (finding rate 3 of $350 per hour reasonable); O’Neal v. Am.’s Best Tire LLC, No. CV-16-00056-PHX- 4 DGC, 2017 WL 1311670, at *3–4 (D. Ariz. Apr. 5, 2017) (finding hourly rate of $300 5 comparable to prevailing rates in the District of Arizona for supervising attorney with 6 specialized expertise). 7 b. Hours Expended 8 Courts may reduce an attorney’s fee award where “the documentation of hours is 9 inadequate” or where requested hours “are excessive, redundant, or otherwise 10 unnecessary.” Hensley v. Eckerhart, 461 U.S. 424, 433–34 (1983). RHN makes several 11 objections to CNA’s fee request; the Court addresses each of these alleged deficiencies and 12 reduces the award for attorneys’ fees below. 13 i. Fees and Costs Incurred Pursing RHN’s Compliance with 14 the MIDP 15 CNA is entitled to fees and costs it incurred in pursing RHN’s compliance with the 16 MIDP. However, several of the sought fee entries represent fees which would have been 17 incurred regardless of RHN’s noncompliance with the MIDP. CNA concedes that $480.00 18 of the fees sought were inadvertently included because they would have been performed 19 regardless of RHN’s noncompliance. (Doc. 60 at 3.) An additional $86.50 billed prior to 20 RHN’s initial disclosure will also be omitted, as these fees would have been incurred 21 regardless of RHN’s ultimate noncompliance with the Order and reflect general 22 communications about the MIDP. (Doc. 59 at 4–5.) 23 ii. Multiple Timekeepers on the Same Task 24 Fee requests that reflect multiple timekeepers on the same task are not necessarily 25 unreasonable. Courts recognize that it is standard practice for multiple attorneys to review 26 documents and drafts and conference about the strategy and status of a case. See Best W. 27 Int’l, Inc. v. Patel, No. CV 04-2307PHXJAT, 2008 WL 544820, at *4–5 (D. Ariz. Feb. 26, 28 2008). “This is especially so where it appears that a partner and an associate billed for the 1 same task,” because “partners and associates, primarily due to variations in experience, 2 could perform the ‘same task’ but with a different purpose.” Schrum v. Burlington N. Santa 3 Fe Ry. Co., No. CIV 04-0619-PHX-RCB, 2008 WL 2278137, at *12 (D. Ariz. May 30, 4 2008). 5 However, fee requests must not be duplicative or reflect an excessive amount of 6 time spent on a task. See, e.g., Wolfe v. City of Portland, No. 3:12-CV-02035-PK, 2013 7 WL 6002391, at *5 n.1 (D. Or. Nov. 8, 2013) (“To the extent Gaddis was copied on any of 8 those emails, I find it would be duplicative to bill for both Gaddis and Snyder’s time.”); 9 Gauchat-Hargis v. Forest River, Inc., No. 2:11-CV-02737-KJM, 2013 WL 4828594, at *3 10 (E.D. Cal. Sept. 9, 2013) (“While it is reasonable to spend some time coordinating legal 11 resources, it is not reasonable to double or triple-bill a client for internal meetings.”). As 12 such, the Court disallows the following fees where more than two attorneys billed for the 13 same conference: 14 • Jessica Brown’s April 24, 2020 entry of .5 hours for “[c]onference call with Tina 15 Ezzell and Gaya Shanmuganatha regarding RHN’s non-compliant response to the 16 court’s ordering RHN/Nissani to identify all custodians of ESI, plan to draft email 17 to opposing counsel regarding deficient response, potential call with the court 18 regarding RHN/Nissani’s failure to comply with the court order, and plan to 19 disclose documents produced by Doxsee Foster in response to subpoena today.” 20 (Doc. 58-3 at 14.) 21 • Jessica Brown’s May 20, 2020 entry of .6 hours for “[c]all with Tina Ezzell and 22 Gaya Shanmuganatha regarding RHN’s deficient ESI production late last night, 23 requesting information from opposing counsel about the vendor they used for 24 document collection and production, content of teleconference with the court, 25 comparing emails produced by Doxsee Foster with emails produced last night by 26 RHN to determine if RHN produced all correspondence it has with Doxsee Foster, 27 and potential motion for additional sanctions in light of RHN’s failure to comply 28 with court orders.” (Doc. 60-1 at 4.) 1 Similarly, the Court disallows the following hours where more than two attorneys billed 2 for reviewing or writing the same email communications: 3 • Jessica Brown’s February 4, 2020 entry of .1 hours for “[r]ead correspondence 4 from KLDiscovery and Gaya Shanmuganatha regarding RHN’s deficient ESI 5 production and accessing the 224 documents RHN produced.” (Doc. 58-3 at 5.) 6 • Jessica Brown’s February 13, 2020 entry of .1 hours for “[r]ead correspondence 7 from Gaya Shanmuganatha to Heather Watterson and Erika Ahern Curran 8 regarding details of call with Judge Snow and scheduling conference call to 9 discuss strategy including potentially seeking sanctions and/or additional fact 10 discovery.” Id. at 9. 11 • Jessica Brown’s April 30, 2020 entry of .1 hours for “[r]ead detailed email from 12 Gaya Shanmuganatha to opposing counsel regarding opposing counsel’s failure to 13 comply with specific discovery obligations.” Id. at 16. 14 • Jessica Brown’s May 18, 2020 entry of .1 hours for “[c]orrespondence from Gaya 15 Shanmuganatha re: custodians RHN should have identified, cross-referencing “hot 16 documents” from the Doxsee Foster documents with what RHN produces 17 tomorrow, if RHN complies with production requirement. (Doc. 60-1 at 3.) 18 Accordingly, CNA’s fee award will be reduced by $397.50. 19 iii. Secretarial Tasks 20 Tasks that are secretarial or clerical in nature are not recoverable as part of a 21 reasonable attorneys’ fee award. J & J Sports Prods., Inc. v. Mosqueda, No. CV-12-00523- 22 PHX-DGC, 2013 WL 5336848, at *3 (D. Ariz. Sept. 24, 2013) (“Secretarial or clerical 23 work is not properly included in an award of attorneys’ fees.”); Schrum, 2008 WL 2278137, 24 at *12. “The rationale underlying this exclusion is that work that is clerical in nature should 25 be subsumed in a law firm’s overhead.” Schrum, 2008 WL 2278137, at *12 (internal 26 quotation omitted). 27 CNA’s request for fees includes a May 11, 2020 entry billing for “[r]eview[ing] and 28 confirm[ing] the accuracy of calculations in task-based itemized statement of attorney’s 1 fees.” (Doc. 60-1 at 2.) Confirming the technical calculations of the statement is a clerical 2 task improperly sought as attorney’s fees. CNA also includes two other clerical entries 3 reviewing or creating the itemized list of attorney’s fees. Id. at 2, 8. Accordingly, the fee 4 award will be reduced by $132.50. 5 iv. Discrepancies in Amount of Time Billed 6 “The party seeking an award of fees must adequately describe the services rendered 7 so that the reasonableness of the charge can be evaluated.” LRCiv 54.2(e). However, 8 “[l]awyers working on multiple tasks on the same case on the same day must estimate the 9 breakdown for each task, and they will not always match the estimates of other lawyers.” 10 11333, Inc. v. Certain Underwriters at Lloyd’s, London, No. CV-14-02001-PHX-NVW, 11 2018 WL 1576863, at *7 (D. Ariz. Mar. 30, 2018). “The reality is that ethical lawyers are 12 careful not to bill in any one day more than the total time expended on the services, though 13 the itemization may be approximate as among tasks.” Id. 14 The discrepancies in CNA’s billing between attorneys for the same tasks range from 15 .2–.4 hours. (Doc. 59 at 3.) The Court finds these differences reasonable. Moreover, 16 although RHN alleges that CNA’s request improperly employs block billing, the Court 17 finds very few entries which describe multiple tasks in a single entry, and those that do are 18 described in sufficient detail to ensure that the tasks are fairly billed. See Pure Wafer, Inc. 19 v. City of Prescott, No. CV-13-08236-PCT-JAT, 2014 WL 3797850, at *5 (D. Ariz. July 20 29, 2014) (“[I]n those time entries that contain multiple tasks, the tasks are sufficiently 21 related to each other that their incorporation into the same entry does not violate Local 22 Rules 54.2(e)(1)(B) or 54.2(e)(2).”). 23 v. Billing for Motion for Fees 24 CNA properly seeks an award that includes fees for preparing the instant motion 25 and reply. See U.S. ex rel. U.S. Prefab, Inc. v. Norquay Const., Inc., No. CIV06-1598- 26 PHX-RCB, 2008 WL 2026360, at *2 (D. Ariz. May 9, 2008) (“[T]he court agrees that 27 defendants’ fee request properly includes fees for preparing this motion, as well as fees for 28 preparing the reply.”); Dahn World Co. Ltd. v. Chung, 2006 WL 3313951, at *6 (D. Ariz. || 2006). However, the time CNA spent preparing the fee motion and reply was excessive 2|| and merits reduction. CNA’s application for fees includes 71.4 hours for drafting the motion and reply, totaling $19,761.00. Although this is a complex matter, CNA’s request 4|| for fees was not. The Court had already ruled that CNA was entitled to “fees and costs it || incurred in pursing RHN’s compliance with the MIDP.” (Doc. 50 at 4.) Accordingly, 6 || CNA’s requested fees for the instant motion and reply will be reduced to 20 hours, at a || blended rate of $288.33 an hour. See O’Neal, 2017 WL 1311670, at *5 (finding 57.2 total 8 || hours billed for the attorneys’ fees excessive and reducing the billable hours for the motion 9|| to 20); see also Rivera v. Crema Coffee Co. LLC, No. 5:18-CV-01531-VKD, 2020 WL 4701131, at *5 (N.D. Cal. Aug. 13, 2020) (explaining that most Northern District of 11 || California courts have found spending more than 25 hours on a simple motion for fees || excessive); Dytch v. Lazy Dog Rests., LLC, No. 16-cv-03358-EDL, 2019 WL 3928752, at 13 || *7 (Aug. 16, 2019 N.D. Cal.) (reducing hours spent on fee motion from 94.6 to 34.6 hours). 14 CONCLUSION 15 Accordingly, CNA is granted attorneys’ fees subject to the above reductions. 16 IT IS THEREFORE ORDERED that CNA’s Motion Supporting Award of 17|| Attorney’s Fees and Non-Taxable Expenses and Memorandum of Points and Authorities |) (Doc. 58) is GRANTED IN PART and DENIED IN PART. CNA is awarded $30,427.10 || in fees. 20 Dated this 12th day of January, 2021. 21 Wi 22 A Whacrsay Sooo) 73 Chief United states District Judge 24 25 26 27 28 -8-