Freshko Produce Services, Inc. v. ILA Products, Inc. ( 2021 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 FRESHKO PRODUCE SERVICES, INC., No. 1:19-cv-00017-DAD-BAM 12 Plaintiff, 13 v. ORDER GRANTING PLAINTIFF’S MOTION FOR ATTORNEYS’ FEES 14 ILA PRODUCTS, INC., et al., (Doc. No. 70) 15 Defendants. 16 17 This matter is before the court on plaintiff Freshko Produce Services, Inc.’s motion for 18 attorneys’ fees. (Doc. No. 70.) Pursuant to General Order No. 617 addressing the public health 19 emergency posed by the coronavirus pandemic, on May 24, 2021, the court took this matter under 20 submission to be decided on the papers. (Doc. No. 71.) Having considered the briefing, the court 21 will grant plaintiff’s motion for attorneys’ fees. 22 BACKGROUND 23 Plaintiff filed this action on January 4, 2019 against defendants ILA Products, Inc. 24 (“ILA”) and HFN CA, Inc. (“HFN”) (collectively “the corporate defendants”) and defendants 25 Jamie Gibson and Kathy Gibson for claims stemming from a series of transactions for the sale of 26 perishable agricultural commodities on credit pursuant to a written credit application (the “Credit 27 Application”) arising under the Perishable Agricultural Commodities Act, 7 U.S.C. § 499a et seq., 28 (“PACA”) and other related claims. (Doc. No. 1 at ¶¶ 13–39, 49–59.) Defendants failed to 1 timely respond to the complaint and the Clerk of the Court therefore entered default against them 2 on February 21, 2019. (Doc. No. 13.) Additional pertinent details of the procedural record may 3 be found in the court’s May 14, 2021 order and will not be repeated herein. (Doc. No. 68.) 4 Plaintiff filed a motion for entry of judgment as to the corporate defendants on December 5 10, 2020. (Doc. No. 67.) Attached to the motion were the parties’ stipulated requests to dismiss 6 defendant Kathy Gibson pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(ii) and for the 7 entry of judgment in favor of plaintiff and against defendant Jamie Gibson in the amount of 8 $181,674.72. (Doc. Nos. 67-3, 67-4.) 9 On May 14, 2021, the court entered an order of default judgment as to the corporate 10 defendants. (Doc. No. 68.) Therein, pursuant to the parties’ settlement agreement and finding 11 good cause, the court also granted the parties’ stipulated request to dismiss defendant Kathy 12 Gibson from this action without prejudice pursuant to Rule 41(a)(1)(A)(ii) and to enter judgment 13 in favor of plaintiff and against defendant Jamie Gibson. (Id.) The court then directed plaintiff to 14 file any motion for attorneys’ fees to recover fees incurred in this action within twenty-eight (28) 15 days from entry of judgment in accordance with the terms of the parties’ settlement agreement. 16 (Id. at 9.) 17 Plaintiff did so on May 21, 2021. (Doc. No. 70.) No opposition was filed, and on July 7, 18 2021, plaintiff filed its reply. (Doc. No. 72.) 19 LEGAL STANDARDS 20 “Congress enacted PACA in 1930 to promote fair trading practices in the produce 21 industry.” Tanimura & Antle, Inc. v. Packed Fresh Produce, Inc., 222 F.3d 132, 135 (3d Cir. 22 2000). PACA had the intent of “preventing unfair business practices and promoting financial 23 responsibility in the fresh fruit and produce industry.” Farley and Calfree, Inc. v. United States 24 Dep't of Agric., 941 F.2d 964, 966 (9th Cir. 1991). “Dealers violate PACA if they do not pay 25 promptly and in full for any perishable commodity in interstate commerce.” 7 U.S.C. § 499b(4); 26 Sunkist Growers, Inc. v. Fisher, 104 F.3d 280, 282 (9th Cir. 1997). 27 ///// 28 ///// 1 In particular, “perishable agricultural commodities, inventories of food or other derivative 2 products, and any receivables or proceeds from the sale of such commodities or products, are to 3 be held in a non-segregated floating trust for the benefit of unpair sellers.” Tanimura & Antle, 4 Inc., 222 F.3d at 136; see also 7 U.S.C. § 499e(c)(2). Any failure to “make full payment 5 promptly” in respect to a transaction is unlawful pursuant to 7 U.S.C. § 499b(4), and any 6 violation of § 499b subjects the buyer to liability for any damages caused by the violation. 7 7 U.S.C. § 499e(a). 8 “Although an express statutory basis for attorneys’ fees does not exist under PACA, the 9 Ninth Circuit has found attorneys’ fees proper when an enforceable contract exists giving the 10 [PACA claimant] a right to attorneys’ fees.” Chong’s Produce, Inc. v. Pushpak Rest. Inc., No. 11 15-cv-04923-HRL, 2017 WL 990585, at *4 (N.D. Cal. Feb. 27, 2017). PACA provides in the 12 relevant part: 13 Perishable agricultural commodities received by a commission merchant, dealer, or broker in all transactions, and all inventories of 14 food or other products derived from perishable agricultural commodities, and any receivables or proceeds from the sale of such 15 commodities or products, shall be held by such commission merchant, dealer, or broker in trust for the benefit of all unpaid 16 suppliers or sellers of such commodities or agents involved in the transaction, until full payment of the sums owing in connection with 17 such transactions has been received by such unpaid suppliers, sellers, or agents. Payment shall not be considered to have been 18 made if the supplier, seller, or agent receives a payment instrument which is dishonored. 19 20 7 U.S.C. § 499e(c)(2) (emphasis added.) The Ninth Circuit has interpreted the emphasized 21 provision as allowing for the recovery of contractually due reasonable attorneys’ fees and costs. 22 Middle Mountain Land & Produce Inc. v. Sound Commodities Inc., 307 F.3d 1220, 1223 (9th Cir. 23 2002) (“A fair reading of the statute brings contractually due attorneys’ fees and interest within 24 the scope of the statute’s protection of ‘full payment owing in connection with the [perishable 25 agricultural commodities] transaction.’”) Thus, where a valid contract exists, which contains an 26 express provision providing for the payment of attorneys’ fees incurred in collecting sums due 27 pursuant to its terms in a PACA case, it is enforceable. See Chong’s Produce, Inc., 2017 WL 28 990585, at *4; Church Bros. v. Garden of Eden Produce, LLC, No. 5:11-cv-04114 EJD, 2012 WL 1 1155656, at *3 (N.D. Cal. Apr. 5, 2012) (awarding attorneys’ fees in PACA claim pursuant to 2 parties’ contract); Sequoia Sales, Inc. v. P.Y. Produce, LLC, No. CV 10-5757 CW (NJV), 2011 3 WL 3607242, at *7 (N.D. Cal. July 29, 2011). 4 A district court also “has discretion to award reasonable prejudgment interest to a PACA 5 claimant when there is not a contract between the parties, if such award is necessary to promote 6 the interest of the claimant.” Prime Time Sales, LLC v. Glob. Fresh Produce, LLC, No. 1:20-cv- 7 0229-DAD-JLT, 2020 WL 3605617, at *6 (E.D. Cal. July 2, 2020), report and recommendation 8 adopted, No. 1:20-cv-00229-DAD-JLT, 2020 WL 4607284 (E.D. Cal. Aug. 11, 2020) (citing 9 Middle Mountain Land, 307 F.3d at 1225–26). 10 DISCUSSION 11 Here, the parties previously stipulated that plaintiff is entitled to attorneys’ fees and costs 12 in an amount according to proof pursuant to the provisions of California Code of Civil Procedure 13 § 685.040.1 (Doc. No. 67-4.) The parties further stipulated that plaintiff would file a motion for 14 attorneys’ fees, seeking to recover all fees and costs incurred, pursuant to Local Rule 293, and 15 that interest shall accrue on the unpaid amount of the judgment from the date of entry of the 16 court’s May 14, 2021 order (Doc. No. 68), until paid at the legal rate. (Id.) 17 Furthermore, the Credit Application in this case contains an express provision providing 18 for the payment of attorneys’ fees incurred in collecting sums due pursuant to its terms. (Doc. 19 20 1 Federal Rule of Civil Procedure 69(a)(1) provides that 21 [a] money judgment is enforced by a writ of execution, unless the court directs otherwise. The procedure on execution—and in 22 proceedings supplementary to and in aid of judgment or execution—must accord with the procedure of the state where the 23 court is located, but a federal statute governs to the extent it applies. 24 “The Ninth Circuit has held that motions for fees incurred in obtaining judgments are ‘supplemental proceedings’ such that Rule 69(a)(1) applies.” WB Music Corp. v. Royce Int’l 25 Broad. Corp., No. EDCV 16-600 JGB (SPx), 2020 WL 8174627, at *2 (C.D. Cal. Nov. 20, 2020). California law provides that a “judgment creditor is entitled to the reasonable and 26 necessary costs of enforcing a judgment.” Cal. Civ. Proc. Code § 685.040. “Attorneys’ fees 27 incurred in enforcing a judgment are not recoverable under § 685.040 ‘unless otherwise provided by law.’” China Branding Grp. Ltd. v. Tony Bobnlinski, No. 2:20-cv-06759-RGK-JC, 2021 WL 28 1678976, at *1 (C.D. Cal. Mar. 31, 2021). 1 No. 1 at 15) (“The undersigned further agrees to pay a reasonable attorneys’ fee and all other 2 costs and expenses incurred in collection of any obligation of the undersigned pursuant hereto.”) 3 Now plaintiff seeks attorneys’ fees totaling $21,390.00 incurred in pursuing this action but does 4 not appear to request any costs. (Doc. No. 70-1 at 2.) 5 After reviewing the Credit Application in this action and observing that this pending 6 motion is unopposed, the court concludes that the fee-shifting provision of the Credit Application 7 is sufficient to support plaintiff’s request for attorneys’ fees. California law also allows for 8 attorneys’ fees to be awarded when permitted by contract to the “prevailing party” on a claim to 9 enforce the contract. Cal. Civ. Code § 1717. The court finds that defendants are liable for 10 plaintiff’s reasonable attorney fees and now turns to calculation of the lodestar amount to cross- 11 check the reasonableness of the requested attorneys’ fee award. 12 A. Reasonableness of Plaintiff’s Counsel’s Rates 13 “The Supreme Court has stated that the lodestar is the ‘guiding light’ of its fee-shifting 14 jurisprudence, a standard that is the fundamental starting point in determining a reasonable 15 attorney’s fee.” Van Skike v. Director, Office of Workers’ Comp. Programs, 557 F.3d 1041, 1048 16 (9th Cir. 2009) (quoting City of Burlingtion v. Dague, 505 U.S. 557, 562 (1992)); see also Rouse 17 v. Law Offices of Rory Clark, 603 F.3d 699, 704 (9th Cir. 2010), abrogated on other grounds by 18 Marx v. General Revenue Corp., 568 U.S. 371 (2013). Accordingly, a district court is required 19 “to calculate an award of attorneys’ fees by first calculating the ‘lodestar’ before departing from 20 it.” Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 982 (9th Cir. 2008) (quoting Caudle v. 21 Bristow Optical Co., 224 F.3d 1014, 1028 (9th Cir. 2000)). “The ‘lodestar’ is calculated by 22 multiplying the number of hours the prevailing party reasonably expended on the litigation by a 23 reasonable hourly rate.” Id. at 978 (quoting Ferland v. Conrad Credit Corp., 244 F.3d 1145, 24 1149 n.4 (9th Cir. 2001); see also Moreno v. City of Sacramento, 534 F.3d 1106, 1111 (9th Cir. 25 2008) (“The number of hours to be compensated is calculated by considering whether, in light of 26 the circumstances, the time could reasonably have been billed to a private client.”); Caudle, 224 27 F.3d at 1028; Morales v. City of San Rafael, 96 F.3d 359, 363 (9th Cir. 1996). Applying these 28 standards, “a district court should exclude from the lodestar amount hours that are not reasonably 1 expended because they are ‘excessive, redundant, or otherwise unnecessary.’” Van Gerwen v. 2 Guarantee Mut. Life Co., 214 F.3d 1041, 1045 (9th Cir. 2000) (quoting Hensley, 461 U.S. 424, 3 434 (1983)); see also Tahara v. Matson Terminals, Inc., 511 F.3d 950, 955 (9th Cir. 2007). 4 The lodestar figure is presumptively reasonable. City of Burlingtion, 505 U.S. at 562 5 (“We have established a ‘strong presumption’ that the lodestar represents the ‘reasonable’ fee . . 6 ..”); Rouse, 603 F.3d at 704; Crawford v. Astrue, 586 F.3d 1142, 1149 (9th Cir. 2009). 7 Accordingly, “[a]djustments to the lodestar amount are allowed only if circumstances warrant . . . 8 and are reserved for rare or exceptional cases.” Rouse, 603 F.3d at 704 (internal quotation marks 9 and citations omitted). In light of these governing standards, any adjustments to the lodestar must 10 be carefully tailored, drawing from a finite pool of factors relevant to the reasonableness 11 determination and only to the extent a factor has not been subsumed within the lodestar 12 calculation. See Camacho, 523 F.3d at 982 (citing the factors set out in Kerr v. Screen Extras 13 Guild, Inc., 526 F.2d 67, 70 (9th Cir. 1975)). Those factors include the preclusion of other 14 employment by the attorney due to acceptance of the case; time limitations imposed by the client 15 or the circumstances; the amount involved and the results obtained; the “undesirability” of the 16 case; the nature and length of the professional relationship with the client; and awards in similar 17 cases. Rouse, 603 F.3d at 705; see also Ballen v. City of Redmond, 466 F.3d 736, 746 (9th Cir. 18 2006). 19 Here, plaintiff’s counsel represents that three attorneys and one paralegal worked on this 20 case. (Doc. No. 70-2 at 2.) Those individuals billed at hourly rates of $350 for the most senior 21 attorney, $250 for the junior and mid-level attorneys, and $150 for a paralegal with more than 30 22 years of experience. (Id.) Moreover, plaintiff’s counsel has voluntarily wrote off $425.00 of time 23 they deemed as duplicative and/or unnecessary, and both attorneys Vote and Lisieski request 24 hourly rates less those they customarily charge. (Id. at 2–3.) 25 According to the billing records and declaration of counsel, plaintiff’s attorneys’ fees 26 sought2 are reflected in the chart below: 27 28 2 These totals also include the time spent preparing the pending motion. (Doc. No. 70-2 at 2–3.) 1 Position and Hours Years of Rate Total Name Worked 2 Experience Kurt F. Vote Attorney, >30 years $350 29.2 $10,220.00 3 Christopher A. Lisieski Attorney, 7 years $250 13.2 $3,300.00 Hunter C. Castro Attorney, 3 years $1,350.00 4 - $425.00 $250 5.4 (write-offs) 5 = $925.00 Sherri L. Large Paralegal, >30 years $150 46.3 $6,945.00 6 Total Fees: $21,390.00 7 8 The court finds that the rates employed by plaintiffs’ counsel in calculating the lodestar 9 are generally lower than those that have been approved in other Eastern District of California 10 cases. See Emmons v. Quest Diagnostics Clinical Labs., Inc., No. 1:13-cv-00474-DAD-BAM, 11 2017 WL 749018, at *8 (E.D. Cal. Feb. 27, 2017) (approving rates between $370 and $495 for 12 associates and $545 and $695 for senior counsel and partners in conducting a lodestar cross- 13 check); Mitchinson v. Love’s Travel Stops & Country Stores, Inc., No. 1:15-cv-01474-DAD- 14 BAM, 2017 WL 2289342, at *7 (E.D. Cal. May 25, 2017) (approving rates between $175 and 15 $400 for attorneys in conducting a lodestar cross-check); Barbosa v. Cargill Meat Sols. Corp., 16 297 F.R.D. 431, 452 (E.D. Cal. 2013) (awarding between $280 and $560 per hour for attorneys 17 with two to eight years of experience, and $720 per hour for attorney with 21 years of 18 experience); Gong-Chun v. Aetna Inc., No. 1:09-cv-01995-SKO, 2012 WL 2872788, at *23 (E.D. 19 Cal. July 12, 2012) (awarding between $300 and $420 per hour for associates, and between $490 20 and $695 per hour for senior counsel and partners). But see Reyes v. CVS Pharm., Inc., No. 1:14- 21 cv-00964-MJS, 2016 WL 3549260, at *12–13 (E.D. Cal. June 29, 2016) (applying rates of 22 between $250 and $380 for attorneys with more than twenty years of experience, and between 23 $175 and $300 for attorneys with less than ten years’ experience); Rosales v. El Rancho Farms, 24 No. 1:09-cv-00707-AWI, 2015 WL 4460635, at *25 (E.D. Cal. July 21, 2015) (awarding between 25 $175 and $300 per hour for attorneys with less than ten years of experience and $380 per hour for 26 attorneys with more than twenty years’ experience); Schiller v. David’s Bridal, Inc., No. 1:10-cv- 27 00616-AWI-SKO, 2012 WL 2117001, at *22 (E.D. Cal. June 11, 2012) (awarding between $264 28 1 | and $336 per hour for associates, and $416 and $556 per hour for senior counsel and partners). 2 | Thus, consideration of the lodestar cross-check fully supports the reasonableness of plaintiff's 3 | attorneys’ fees sought. 4 | A. Reasonableness of Plaintiff’s Counsel’s Hours Expended 5 According to the billing records and declaration of counsel, plaintiff’s counsel worked on 6 | this case for times ranging between 5.4 and 46.3 hours. (Doc. No. 70-2 at 2.) Those individuals 7 | billed approximately 92.3 hours total. The court determines that these hours are clearly 8 | reasonable for initiating and prosecuting this action, including work seeking entry of default 9 | judgment and the ultimate stipulation resolving this action. 10 Plaintiffs counsel also seeks “an additional sum for an appearance at a hearing on this 11 | motion before the Court, if necessary, as well as for the work that will be necessary in enforcing 12 | the judgment thereon.” (Doc. No. 70-1 at 8.) Because the motion was taken under submission 13 || on the papers and required no hearing, the court will not award any additional sum on that basis. 14 | Regarding the enforcement of the judgment, plaintiff's counsel did not provide any 15 | documentation or explanation regarding attorney time anticipated to be spent in that regard and 16 | therefore the court will decline to award any additional fees in that regard at this time. 17 Thus, the court concludes that the attorneys’ fees incurred by plaintiff herein, including 18 | the hourly rate of its counsel and the total number of hours expended in this litigation, are 19 || reasonable. 20 CONCLUSION 21 For the reasons stated above: 22 1. Plaintiff's motion for attorneys’ fees (Doc. No. 70) is granted in the amount of 23 $21,390.00; and 24 2. The Clerk of the Court is directed to close this action. 25 | IT IS SO ORDERED. me □ *° Dated: _ September 2, 2021 Yh AL 27 UNITED STATES DISTRICT JUDGE 28