United States District Court, Southern District of New York
September 30, 2002
KOAM PRODUCE, INC. PETITIONER,
DIMARE HOMESTEAD, INC. RESPONDENT.
The opinion of the court was delivered by: Stanton, District Judge.
Opinion and Order
Pursuant to the statute, DiMare moves for an award of $73,250
in attorneys fees plus $7,067.67 in costs and expenses, totaling
$80,317.67. Although that amount is over sixteen times the
compensatory award made by the Secretary of Agriculture
($4,800), the importance of the principle at stake far exceeds
the amount of the award. The work required to be done by the
lawyers was substantial, the result was successful, and the
charges are not unreasonable.
The proceedings in this court included: (1) a motion to vacate
the Secretary of Agriculture's decision, based on an alleged
conflict of interest because both the bribed inspectors and the
Judicial Officer held positions under the Department of
Agriculture; (2) a non-jury trial de novo of the merits, based
upon an extensive Stipulation of Fact prepared by counsel, and
their briefs; (3) a post-trial motion for a new trial, based on
alleged errors; and (4) preparation of the fee application and
reply to Koam's opposition. Together with the preparation, court
conferences, and other necessary incidental work, 307.6 hours of
work were required. Thus, the $73,250 of legal fees represents a
blended rate of $238 per hour.
As stated in Frankie Boy Produce Corp. v. Sun Pacific
Enterprises, No. 99 Civ. 10158(DLC), 2000 WL 1532914 at *1
(S.D.N.Y. Oct. 17, 2000):
[U]nder the Perishable Agricultural Commodities Act
("PACA"), 7 U.S.C. § 499a et seq. when a decision
Secretary is appealed to a district court, the
"[a]ppellee shall not be liable for costs in said
court and if appellee prevails he shall be allowed a
reasonable attorney's fee to be taxed and collected
as part of his costs." 7 U.S.C. § 499g(c). If the
appellee prevails, an award of attorney's fees is
mandatory; it is not within the discretion of the
district court. See Robinson Farms Co. v.
D'Acquisto, 962 F.2d 680, 684 (7th Cir. 1992); see
also Tray-Wrap, Inc. v. Meyer Tomatoes, No. 90 Civ.
7688(DLC), 1996 WL 54321 at *2 (S.D.N.Y. Feb. 9,
Koam argues that the PACA's provision is unconstitutional
(". . . the appellant, here the petitioner, is denied due
process." Opposition, ¶ 7) because it allows for fees to an
appellee but not to an appellant. That contention is meritless.
Congress recognized that in almost every case the amount of the
Secretary's award would be less than the cost of appeal to, and
trial de novo in, a federal district court. Accordingly, it
provided for attorneys fees and costs to a prevailing appellee,
regardless of whether the appellee was a shipper or a purchaser.
That involves no denial of due process to either party. The
provision is meant to provide means for both shippers and buyers
to defend their rights under the statute, regardless of how
small the amount in controversy. If the costs of defending its
favorable decision by the Secretary were not reimbursed to a
prevailing appellee, then the losing party could destroy the
value of the Secretary's award, by merely noticing an appeal. As
between shippers and buyers, the statute is neutral.
Koam's Other Objections
Several of Koam's objections stem from its assertion that
DiMare's use of out-of-town counsel (with consequent travel,
communication with local counsel, need for pro hac vice
admission etc.) was a "luxury and not a necessity." Opposition ¶
3. On the contrary, it is normal that an out-of-state shipper
will employ its main counsel from outside New York. There is no
a priori reason why an out-of-state shipper should be
compelled to rely solely upon New York counsel, with whom it is
almost sure to be unfamiliar. Representation by out-of-state
counsel should be viewed as the normal course of business, not a
luxury. See Frankie Boy, 2000 WL 1532914 at *2 ("Where an
out-of-state defendant . . . is forced to defend itself in a
lawsuit in New York, it is reasonable and expected for that
defendant to be represented by out-of-state and local
Most of Koam's remaining objections are inconsequential,
e.g., that some conversations were not charged for, that some
portions of entries were blacked out to preserve attorney-client
confidentiality, and that the Florida Fruit & Vegetable
Association may have assisted in paying for the litigation.
Generally, the reasonableness of the fee is calculated without
regard to who paid it. Additionally, while it is true that
Colucci & Umans' expenses are for unidentified purposes and thus
should not be allowed, it seems that no application has been
made for them.
The rates charged by Colucci & Umans and Rynn & Janowsky are
approved as reasonable. Colucci & Umans' attorneys fee in the
total amount of $5,785 is approved, and Rynn & Janowsky's
attorneys fee in the amount of $67,465 is approved. Their bill
for costs in the amount of $7,067.67 may be presented for
taxation by the clerk in the usual course.
Prejudgment interest at ten percent per annum from November
16, 2000, the date of the award, and the $300 handling fee
awarded by the Judicial Officer of the United States will be
allowed. See Frank
ie Boy, 2000 WL 1532914 at *3 ("The ten percent rate of
interest comports with awards in comparable cases and is not
unreasonable.") (citing cases).
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