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RBFC ONE v. ZEEKS

August 31, 2005.

RBFC ONE, LLC, Plaintiff,
v.
ZEEKS, INC. d/b/a *NSYNC, JUSTIN RANDALL TIMBERLAKE, CHRISTOPHER ALAN KIRKPATRICK, JAMES LANCE BASS, JOSEPH ANTHONY FATONE, JR., JOSHUA SCOTT CHASEZ, et al., Defendants.



The opinion of the court was delivered by: DOUGLAS EATON, Magistrate Judge

OPINION AND ORDER

I will assume that the reader is familiar with my opinion signed on April 26, 2005. RBFC One, LLC v. Zeeks, Inc., 367 F.Supp.2d 604 (S.D.N.Y. 2005). It set forth the factual and procedural background, and granted summary judgment dismissing Plaintiff's remaining claims. The Defendants were still pursuing counterclaims for equitable relief, and I refused to dismiss those.

On May 2, 2005, I held a telephone conference with the attorneys (Farhad Novian for Plaintiff, Bruce Ewing and Helene Freeman for Defendants). They advised me that they were drafting a stipulation for consent judgment on the counterclaims. Mr. Ewing said that Defendants would soon submit an application for attorneys' fees. Mr. Novian said that he would prefer to have the fee application wait until after a decision by the Court of Appeals. I agreed with Mr. Ewing that Defendants could make the application now and supplement it later if the judgment were affirmed.

  The imminent fee application was also mentioned in the Final Judgment signed by me on May 20, 2005 and filed on May 23, 2005.

  On June 6, 2005, the Defendants served and filed two voluminous motions. The first motion (Docket Items 77-79) cites Rule 54(d) (2), F.R. Civ. P. and seeks an order requiring Plaintiff to pay to Defendants the attorneys' fees and costs. The second motion (Docket Items 80-82) cites Rule 7 of the Federal Rules of Appellate Procedure and seeks an order requiring Plaintiff to furnish a bond or equivalent security for costs, including attorneys' fees, that may be incurred by Defendants on appeal.

  On June 29, 2005, Plaintiff faxed, to me and to defense counsel, a 4-page opposition to the first motion and a 7-page opposition to the second motion. It appears that Plaintiff never filed these two oppositions with the Clerk; it should do so as soon as possible.

  On July 8, 2005, the Defendants served and filed reply papers (Docket Items 84-87).

  I will rule on these motions in two separate opinions. This opinion will rule on defendants' motion for attorneys' fees and costs.

  This was a diversity action; Plaintiff is based in California and Nevada, and the Defendants are based in Delaware and Florida. The Second Amended Complaint's first count sought $49,834,000 for alleged breach of contract, namely the Amended Agreement dated as of November 30, 2000 and signed by the parties on or about February 6, 2001.

  A copy of the Amended Agreement is Exhibit 1 to Docket Item 79. Paragraph 21 said that the agreement "has been entered into in the State of New York" and "shall be governed by the laws of the State of New York," and that any lawsuit regarding it "will be brought in the courts located within the State of New York and not elsewhere." Paragraph 23(n) said:
(n) Attorneys' Fees
In the event of an action, including court proceeding, arbitration or other forums for alternate dispute resolution, between the parties to this Agreement concerning the terms of this Agreement, its meaning or application, the prevailing party shall be entitled to receive its costs and reasonable attorneys' fees regarding such action from the non-prevailing party."
  Plaintiff filed this lawsuit on April 26, 2002. Exhibit 3 to Docket Item 79 is a set of detailed timesheets that were submitted to the corporate defendant (generally on a monthly basis) by the New York office of Dorsey & Whitney LLP for services rendered in this lawsuit from May 1, 2002 through April 30, 2005. Ms. Freeman's declaration noted: "The bills, as annexed hereto, have been redacted to eliminate references to time expended for which the client was not charged or for which no payment was expected or for which no recovery [from Plaintiff] is sought. In a few instances, the bill has been redacted to conceal privileged attorney work product. . . . The client [the corporate defendant] has paid these charges or is obligated to pay them." (Docket Item 79, ¶ 7, ¶ 32.) Her declaration also gave a detailed explanation of the hourly rates charged by her and the other attorneys at Dorsey & Whitney, and of the other costs of this litigation. She noted that her firm made a partially successful motion for judgment on the pleadings, then worked on 17 depositions, 14 of which took place out of New York, and then made the successful motion for summary judgment, and also did some preparation for trial since I had set a firm trial date of May 9, 2005.

  Defendants' reply papers annex a timesheet and costs for May 2005, seeking an additional $3,787.42. (Docket Item 87, ¶ 25, Exh. 5.) They elect not to seek anything for the time expended in making the pending motions. (Docket Item 85, p. 5, n. 1.) In total, Defendants seek to recover attorneys' fees in the amount of $481,748.00 and costs in the amount of $103,367.88. (Id., p. 6.)

  Plaintiff does not object to the costs or to the hourly rates. In any event, I find them to be reasonable. See Auscape Intern. v. National Geographic Society, 2003 WL 21976400, at *3-5 (S.D.N.Y. Aug. 19, 2003) (Pitman, M.J.) (approving hourly rates of $450-$495 for partners, $215-$320 for junior associates and $130 for a paralegal), aff'd, 2003 WL 22244953 (S.D.N.Y. Sept. 29, 2003) (Kaplan, J.); National Distillers Products Co., LLC v. Refreshment Brands, Inc., 2002 WL 1766548, at *2 (S.D.N.Y. July 30, 2002) (Buchwald, J.) (approving Dorsey & Whitney's then-existing hourly rates of $350-$405 for partners, $215-$295 for associates, and $170 for paralegals). The Westlaw charges are recoverable as well. See id. at n. 6; see also Davis v. New York City Housing Authority, 2002 WL 31748586, at *13 (S.D.N.Y. Dec. 6, 2002) (Sweet, J.) (discussing two Second Circuit cases).

  Plaintiff's 4-page opposition makes only two arguments. First, it argues:
Defendants Cannot Recover Fees, Because They Did Not Counter Claim for Fees, Thus Plaintiff Was Not on Notice of the Claim for Attorneys' Fees. . . . . Plaintiff . . . was deprived of the opportunity to determine whether it would have undertaken a different strategy given this demand. . . . .
At no time prior to the entry of judgment did defendants move to amend their counterclaim to include a claim for attorneys fees.
  This argument has no merit. It is undisputed that the parties were on actual notice of their contract's clause about attorneys' fees. If Plaintiff had been the prevailing party, it would have claimed its fees. Yet its Second Amended Complaint did not list such a claim as a separate count. Instead, it included the following language in its demand for judgment:
 
4. Upon all Counts hereinabove, the costs and taxable disbursements of this action, including reasonable attorneys' fees where permitted by law,. . . .
The Defendants proceeded in the same fashion in their Answer. They did not list such a claim as a separate counterclaim. Instead, they said:
WHEREFORE, defendants demand judgment against plaintiff:
* * *
B. Awarding defendants the attorneys fees and costs incurred in the defense of this action;
* * *
F. Awarding defendants their costs and expenses incurred in prosecuting their counterclaims.
I find it telling that, on November 3, 2004, Plaintiff wrote to Judge Wood:
Finally, Rule 26(a) (1) (C) requires a "computation of any category of damages claimed by the disclosing party." With respect to that, defendants simply state that "defendants seek to recover its attorneys fees and costs in connection with this action . . . and on its counterclaims to the full extent authorized by the agreements or as allowed by law or by court rules." There is absolutely no "computation" of those damages (as required by the Rule), nor is there any statement as to the amount of ...

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