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SCHOLASTIC, INC. v. STOUFFER

United States District Court, Southern District of New York


February 27, 2003

SCHOLASTIC, INC., J.K. ROWLING, AND TIME WARNER ENTERTAINMENT COMPANY, L.P., PLAINTIFFS/COUNTERCLAIM DEFENDANTS,
V.
NANCY STOUFFER, DEFENDANT/COUNTERCLAIM AND CROSSCLAIM PLAINTIFF, V. ABC CORPORATIONS (1 THROUGH 99), CROSSCLAIM DEFENDANTS.

The opinion of the court was delivered by: Allen G. Schwartz, District Judge.

MEMORANDUM ORDER

By order dated September 17, 2002, the Court granted summary judgment to plaintiffs in the above entitled action. In such order, the Court also found that plaintiffs were entitled to an award of attorneys' fees incurred in the defense of defendant Nancy Stouffer's Lanham Act counterclaims. See Scholastic Inc. v. Stouffer, 221 F. Supp. 3d 435, 444 (S.D.N.Y. 2002) ("September Order"). By application dated December 12, 2002, the two law firms representing plaintiffs, Q'Melveny & Myers LLP and Frankfurt Kurnit Klein & Selz, P.C.*fn1, jointly request that the Court award fees totaling $1,648,095.77.*fn2 For the reasons set forth below, the Court orders awards plaintiffs attorneys' fees of $576,408.52.

In determining the proper fee award, the Court begins by noting that the amount of such award is within the Court's discretion. See Patsy's Brand, Inc. v. I.O.B. Realty, Inc., 317 F.3d 209, 222 (2d Cir. 2003). The Court also notes that although this action involved several claims, asserted by both plaintiffs and defendant, the Court's September order only awarded plaintiffs the attorneys' fees incurred in the defense of Stouffer's trademark claims. Thus, all of the fees incurred before Stouffer filed her Answer and Counterclaims (September 8, 2000) will not be included in the fee award. Based on the time records submitted by both law firms such fees total $90,935.60. Specifically, the O'Melveny firm billed a total of $26,045.60 in fees prior to September 8, 2000. (See Supplemental Declaration of Dale Cendali, January 28, 2003, Exh. 1; Declaration of Dale Cendali, December 12, 2002 at 5-6 (listing individual attorneys' hourly rates)). Dale Cendali (partner) billed 19 hours at $400 per hour, for a total of $7,600 in fees; Claudia Ray (counsel) billed 38.4 hours at $284 per hour, for a total of $10,905.60 in fees; Christopher Murray (partner) billed 2.2 hours at $425 per hour, for a total of $935 in fees; Joanne Darkey (associate) billed 16.5 hours at $255 per hour, for a total of $4,207.50 in fees; and Lauren Rasmus (associate) billed 13.7 hours at $175 per hour, for a total of $2,397.50 in fees. (See id.). The Frankfurt Kurnit firm billed a total of $64,890 in fees prior to September 8, 2000. (See Supplemental Declaration of Edward Rosenthal, dated January 28, 2003, Exh. A). Edward Rosenthal (partner) billed 131.6 hours at $375 per hour, for a total of $49,350 in fees; and Jessie Beeber (associate) billed 77.7 hours at $200 per hour, for a total of $15,540 in fees. (See id.).*fn3

The Court also finds the total fees billed by the O'Melveny firm to be excessive in several respects. First, while O'Melveny requests fees based on the hours billed by attorney Paul Cirino (a former O'Melveny associate), the contemporaneous time records submitted by the firm contain no entries for work performed by Cirino. (Compare Cendali Decl., December 12, 2002 at 5 with Cendali Supplemental Decl., January 28, 2003, Exh. 1). Thus, the Court declines to award the O'Melveny firm the $59,227.20 in fees attributed to time billed by Cirino. See New York State Assoc. for Retarded Children v. Carey, 711 F.2d 1136, 1147-48 (2d Cir. 1983) (holding that attorneys' fees will only be awarded when such fees are documented by contemporaneous time records); see also Nat'l Distillers Prods. Co., LLC v. Refreshment Brands, Inc., 2002 WL 1766548, at *2 (S.D.N.Y. July 20, 2002) (awarding attorneys' fees based on contemporaneous time records in a Lanham Act action).

Second, as defendant points out (Def. Surreply Memo. in Opposition to the Fee Application at 4-5), certain discrepancies exist between the total number of hours listed in the firm's initial declaration in support of the fee application and the number of hours listed in the contemporaneous time records submitted to the Court. (Compare Cendali Decl., December 12, 2002 at 5-7 with Cendali Supplemental Decl., January 28, 2003, Exh. 1). Specifically, while the initial declaration lists 699.2 hours billed by former O'Melveny associate Michael Holden, the contemporaneous time records show Holden to have billed a total of 666.8 hours.*fn4 This difference of 32.4 hours, when multiplied by Holden's blended hourly rate of $273.50, necessitates the reduction of Holden's fees by $8,861.40.*fn5 Similarly, while plaintiffs' initial application lists a total of 723.7 hours billed by former O'Melveny associate Lauren Rasmus, the time records submitted to the Court show Rasmus to have billed 706.5 hours, a difference of 17.2 hours. When multiplied by Rasmus' blended hourly rate of $194,*fn6 the discrepancy in Rasmus' total hours requires a reduction of her total fees $3,336.80. Finally, although plaintiffs' initial declaration lists a total of 95.4 hours billed by O'Melveny associate Samantha Hetherington, the time records submitted by the firm indicate that she only billed a total of 82.9 hours, a difference of 12.5 hours. When multiplied by Hetherington's blended hourly rate of $191,*fn7 this discrepancy requires a reduction of her total fees by $2,387.50. Accordingly, in recognition of the hours discrepancies for Holden, Rasmus, and Hetherington, the Court reduces O'Melveny's requested award by $14,585.70.

Third, the Court notes that fifteen (15) O'Melveny attorneys and thirteen (13) of the firm's paralegals billed time on this action between June 2000 and October 2002, and a review of the firm's time records indicate that the total amount of fees are excessive.*fn8 (See Cendali Supplemental Decl., January 28, 2003, Exh. 1). For example, the records indicate that in late 2001, O'Melveny began assigning much of the work related to this case to Jennifer Choe, while at the same time significantly decreasing the amount of work handled by other associates who had previously billed many hours in this litigation (such as Lauren Rasmus). Thus, while Choe billed 39.6 hours (at $323 per hour) between October 10 and October 25, 2001, much of that time was spent reviewing documents in order to become familiar with the litigation. (See id.) Choe also billed 38 hours between November 4 and November 9, 2001, with much of that time spent reviewing documents. (See id). While the Court recognizes that some of these fees would have been incurred regardless of which attorneys were assigned to carry out the particular tasks involved, the Court will not hold defendant solely responsible for fees incurred as a result of the O'Melveny firm's decision to change the roster of attorneys assigned to the case. Accordingly, the Court reduces the total fees billed by Choe during these two periods by one-half ($12,532.40).

The Court also notes that O'Melveny has applied to be reimbursed for $807.50 in fees billed by former associate Joshua Thomas. (Cendali Decl., December 12, 2002 at 7). The time records submitted to the Court indicate that these fees resulted from the 2.5 hours (at $323 per hour) that Thomas spent reading background materials related to this action. (See Cendali Supp. Decl., January 23, 2003, Exh. 1 (records July 12, 2001)). However, after familiarizing himself with the background of the litigation, Thomas did not perform any further work on the case. Defendant should not be held responsible for the fees generated by a lawyer who performed no substantive legal work beyond the review of background materials. Accordingly, the Court further reduces plaintiffs' fee award by $807.50.

Fourth, the Court notes that the O'Melveny firm billed a total of $44,881.80 in fees arising out of the preparation of a declaration by one third-party fact witness (Joan Korbin Wright). Specifically, Dale Cendali (partner) billed 37.3 hours at $428 per hour and 10.6 hours at $441 per hour, for a total of $20,639 in fees;*fn9 Claudia Ray (counsel) billed 33.9 hours at $308 per hours, for a total of $10,441.20 in fees; Michael Holden (associate) billed 12.6 hours at $268 per hour, for a total of $3,376.80 in fees; Lauren Rasmus (associate) billed 4.7 hours at $203 per hour, for a total of $954.10 in fees; Jennifer Chose (counsel) billed 15 hours at $323 per hour, for a total of $4,845 in fees; Katy Sabich-Robison (associate) billed 1.8 hours at $268 per hour, for a total of $402 in fees; and Johanna Schmitt (associate) billed 3.9 hours at $203 per hour and 15.6 hours at $220 per hour, for a total of $4223.70 in fees. While recognizing that this particular declaration contained significant factual evidence, the Court finds that the total number of hours (135.4) spent preparing this declaration was excessive. Accordingly, the Court reduces the total fees incurred with respect to this declaration by two-thirds ($29,891.28).

After reducing plaintiffs' fee application as set forth above, the O'Melveny firm's fee request stands at $1,251,105.01,*fn10 and the Frankfurt Kurnit firm's request stands at $479,851.50.*fn11 However, while the Court is mindful of the exceptional, bad faith nature of defendant Stouffer's Lanham Act claims, it also recognizes that Stouffer is an individual of limited means and that this fee application applies only to the work done by the attorneys in defense of the Lanham Act claims. Accordingly, the Court, acting within its discretion, see Patsy's Brand, supra, 317 F.3d at 222, reduces both firms' fee requests by two-thirds: the O'Melveny firm is therefore awarded $416,617.97, and the Frankfurt Kurnit firm is awarded $159,790.55.*fn12 The Clerk of the Court is directed to close the file in this action.

SO ORDERED.


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