Base Metal Trdg Inc v. OJSC Novokuzketsky

UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_________________________
No. 01-30605
SUMMARY CALENDAR
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BASE METAL TRADING, LTD.,
Plaintiff-Appellant,
v.
OJSC "NOVOKUZKETSKY" ALUMINUM FACTORY; ET AL.,
Defendants,
TRANS-WORLD (ALUMINUM), INC.,
Defendant-Appellee
______________________________________________________________________________
Appeal from the United States District Court for the
Eastern District of Louisiana
(00-CV-2236-F)
______________________________________________________________________________
December 19, 2001
Before REYNALDO G. GARZA, JOLLY, and WIENER, Circuit Judges.
REYNALDO G. GARZA, Circuit Judge:1
In this appeal, we review a district court's award of attorneys' fees under Louisiana law.
For the following reasons, we find no error. Accordingly, we affirm the award.
1
Pursuant to 5th Cir. R. 47.5, the Court has determined that this opinion should not be
published and is not precedent except under the limited circumstances set forth in 5th Cir. R.
47.5.4.
I.
In December 1999, Appellant Base Metal Trading, Ltd. ("Base Metal"), obtained an
arbitration award against Defendant, OJSC "Novokuzketsky" Aluminum Factory ("NKAZ"), in
the Commercial Arbitration Court of Moscow Chamber of Commerce and Industry. On July 30,
2000, Base Metal filed a complaint against NKAZ in the Eastern District of Louisiana to enforce
the arbitration award and obtained from the court a writ to attach cargo allegedly manufactured
by NKAZ. The cargo was attached on August 1.
Appellee, Trans-World (Aluminum), Inc. ("TWA"), claimed ownership of the cargo and
challenged the attachment. Through the New York law firm of Curtiss-Mallet, Prevost, Colt &
Mosle, L.L.P., TWA provided Base Metal with documentation of TWA's ownership and tried to
handle the matter without litigation. When amicability failed, TWA hired the New Orleans law
firm of Lemle & Kelleher, L.L.P., as local counsel and authorized it to effect a release of the
cargo as soon as possible. Because the cargo was to be delivered to a warehouse in Kentucky,
time was of the essence,.
Through its local counsel, TWA filed a motion in the Eastern District of Louisiana to
dissolve the writ of attachment and to assess damages for what it claims was a wrongful
attachment. On August 11, 2000, Base Metal voluntarily released the cargo. The district court
later held that the attachment had been wrongful under Louisiana law and that Article 3506 of the
Louisiana Code of Civil Procedure entitled TWA to damages. The district judge then referred the
case to the magistrate to determine the amount of the damages.
In her original report and recommendation, the magistrate judge set TWA's fees and costs
at $19,607.65. Base Metal filed a motion to alter or amend the report and recommendation,
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arguing that it contained miscalculations in TWA's award. The magistrate court corrected the
miscalculations in a supplemental report and recommendation and reduced TWA's attorneys' fees
to $19,514.65. The district court then approved both the original and supplemental reports and
recommendations and awarded $19,514.65 in fees and costs to TWA. From that decision, Base
Metal appeals.
II.
When reviewing a district court's assessment of attorneys' fees, this Court is bound to
clearly established standards of review. The district courts have broad discretion in determining
the appropriate award for attorneys' fees, and this Court will normally review the award for abuse
of discretion. See Volk v. Gonzalez, 262 F.3d 528, 534 (5th Cir. 2001); Gold, Weems, Bruser,
Sues & Rundell v. Metal Sales Mfg. Corp., 236 F.3d 214, 219 (5th Cir. 2000); Riley v. City of
Jackson, 99 F.3d 757, 759 (5th Cir. 1996); Watkins v. Fordice, 7 F.3d 453, 457 (5th Cir. 1993).
We review the supporting factual findings for clear error and the supporting conclusions of law de
novo. Volk, 262 F.3d at 534; Gold, 236 F.3d at 216–17, 219; Riley, 99 F.3d at 759.
The attorneys' fees awarded here were determined by the reports and recommendations of
a magistrate court. Under Douglass v. United Services Automobile Association, 79 F.3d 1415
(5th Cir. 1996) (en banc), a party that fails to file written objections to the proposed findings,
conclusions, and recommendations in a magistrate judge's report and recommendation shall be
barred from appealing those findings, conclusions, and recommendations, except upon grounds of
plain error. Id. at 1428–29. Under the plain error standard of review, this Court may correct an
error not raised at trial if (1) there is an error; (2) the error is plain; and (3) the error affects
substantial rights. Oden v. Oktibbeha County, 246 F.3d 458, 466 (5th Cir. 2001) (citing Johnson
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v. United States, 507 U.S. 725, 732 (1997)). "If plain error exists, this Court should not exercise
its discretion to correct the error unless 'the error seriously affects the fairness, integrity or public
reputation of judicial proceedings.'" Oden, 246 F.3d at 466 (quoting Johnson, 507 U.S. at 732).
TWA argues that Base Metal failed to file written objections to the magistrate court's
reports and recommendations and that this Court should review the attorneys' fees award only for
plain error. Base Metal did, however, file a motion to alter or amend the original report and
recommendation, and it argues that this Court should treat its motion to alter or amend as a
written objection. Accordingly, Base Metal urges this Court to apply the more typical clear error
standard. Because we conclude that the district court committed no error whatsoever in its
assessment of TWA's attorneys' fees, this Court need not determine which party has proposed the
proper standard of review. Our decision today would be the same under either standard.
III.
We apply state law in assessing attorneys' fees awards in state-based claims. See Specialty
Healthcare Mgt., Inc. v. St. Mary Parish Hosp., 220 F.3d 650, 658 (5th Cir. 2000); United States
ex rel. Cal's A/C & Elec. v. Famous Constr. Corp., 220 F.3d 326, 328 (5th Cir. 2000). TWA's
claim for attorneys' fees stems from its claim for wrongful attachment under Louisiana law, and
Article 3506 of the Louisiana Code of Civil Procedure allows an award for attorneys' fees
incurred in curing a wrongful attachment. Thus, Louisiana law governs the attorneys' fees award
in this case.
In State v. Williamson, 597 So. 2d 439 (La. 1992), the Supreme Court of Louisiana
outlined ten factors for the courts to consider when determining the reasonableness of an
attorneys' fees award. Id. at 442. These factors include: "(1) the ultimate result obtained; (2) the
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responsibility incurred; (3) the importance of the litigation; (4) amount of money involved; (5)
extent and character of the work performed; (6) legal knowledge, attainment, and skill of the
attorneys; (7) number of appearances made; (8) intricacies of the facts involved; (9) diligence and
skill of counsel; and (10) the court's own knowledge." Id.
Base Metal first argues that the district court failed to consider these factors and that the
court considered new, impermissible factors such as "familiarity with the client" and "gathering of
ownership documents." Appellant Br. at 8. We give these arguments short shrift. Even the most
cursory inspection of the original report and recommendation shows a detailed examination of the
Williams factors and a thorough discussion of each in turn. R. at 642–46. Clearly, the magistrate
court considered "familiarity with the client" and "gathering ownership documents" as smaller
pieces of the larger Williams factors.
An in-depth review of the magistrate court's entire analysis is unnecessary, since Base
Metal's appeal focuses on the fact that some of TWA's New York counsel's effort duplicated the
effort of its New Orleans counsel in effecting the release of the attached cargo. In its original
report and recommendation, the magistrate court determined that there was no duplication of
effort at all from August 2, 2001, the day upon which the New York counsel began working on
the matter, and August 6, the day before the first entry for the New Orleans counsel. R. at 644,
645. The magistrate court also found that TWA had an existing relationship with the New York
firm and that the New Orleans firm, with its expertise in Louisiana law and local procedure and
practices, was engaged only after attempts to convince Base Metal to release the cargo voluntarily
had failed. R. at 644. Given the expediency with which the matter needed to be handled, the
magistrate court found that it was reasonable for TWA to use the two firms and that any
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duplication of effort that existed from August 6 through the release of the cargo on August 11
was also reasonable. Id.
Base Metal argues that, whenever there is any duplication of effort, the district court must
reduce attorneys' fees accordingly. This Court has never held that duplication of effort is
unreasonable per se, and Base Metal cites no case law to suggest that a district court must reduce
attorneys' fees when there is duplication. In Walker v. United States HUD, 99 F.3d 761 (5th Cir.
1996), the attorneys for the prevailing parties in a class action were awarded attorneys' fees under
42 U.S.C. § 1988(b). Id. at 766. This Court affirmed the decision on appeal but modified the
award. Id. at 774. Base Metal points to the following language from that decision to argue that
the district court was required to reduce the attorneys' fees to compensate for the duplication of
effort by TWA's New York and New Orleans counsels: "If more than one attorney is involved,
the possibility of duplication of effort along with the proper utilization of time should be
scrutinized. The time of two or three lawyers in a courtroom or conference when one would do,
may obviously be discounted." Id. at 768 (quoting Johnson v. Georgia Highway Express, Inc.,
488 F.2d 714, 717 (5th Cir. 1974)). This rule, however, is permissive and not mandatory. Its
permissiveness reflects the broad discretion that district courts have in assessing attorneys' fees.
See Watkins v. Fordice, 7 F.3d 453, 457 (5th Cir. 1993). The only mandate placed upon the
district court is to determine "whether particular hours claimed were reasonably expended."
Walker, 99 F.3d at 761 (quoting Alberti v. Klevenhagen, 896 F.2d 927, 932 (5th Cir. 1990)).
Thus, a district court is not required to discount the time of two or three lawyers when one would
do if the court determines that there was a legitimate reason to use more than one. In fact, even
after noting that "compensation is sought for more than one attorney's time at depositions,
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hearings, negotiations, or other activities only if there was a legitimate need for the involvement of
more than one attorney," the Walker Court went on to review each instance of duplication and
found no error in the trial court's decision on those issues. 99 F.3d at 768. Thus, rather than
holding that any duplication of effort requires a reduction in attorneys' fees, Walker held that a
district court has discretion to refuse to reduce attorneys' fees for duplication of effort if the
duplication was not unreasonable.2
Here, the magistrate court found that any duplication of effort in resolving this matter was
reasonable given that time was of the essence. We can find no error, clear or plain, in the
magistrate's reasoning or in any other part of its analysis under Williams. The district court chose
to approve the findings of the magistrate court and impliedly agreed that any duplication of effort
was reasonable under the circumstances. Again, we find no error, clear or plain, in the district
court's decision to approve the reports and recommendations of the magistrate court.
Base Metal's remaining argument is that TWA's New York counsel failed to exercise
"billing judgment," which refers to the standard practice of writing off "unproductive, excessive,
or redundant hours." Walker, 99 F.3d at 769–70. This argument is merely an attempt to couch
the duplication argument, which we have already dispatched, under a different theory. For the
same reasons, it too must fail.
IV.
2
For similar reasons, the other cases cited by Base Metal fail to support its argument to
the contrary. See generally Cates v. Sears Roebuck & Co., 928 F.2d 679 (5th Cir. 1991); Lalla v.
City of New Orleans, 161 F. Supp. 2d 686 (E.D.La. 2001); Major v. Treen, 700 F. Supp. 1422
(E.D. La. 1988); Moody v. Arabie, 498 So. 2d 1081 (La. 1986). Further, although the attorneys'
fees in Walker were assessed pursuant to federal law, Louisiana case law supports the rule that a
duplication of effort between attorneys may be reasonable under certain circumstances. See
Commercial Union Ins. Co. v. James J. Culotta, Inc., 345 So. 2d 561, 563 (La. Ct. App. 1977).
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We AFFIRM the district court's order awarding TWA fees and costs of $19,514.65.
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