United States District Court, S.D. New York
August 31, 2005.
RBFC ONE, LLC, Plaintiff,
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
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
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
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
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
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.
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,
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
* * *
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
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 those damages claimed
to date. Moreover, there clearly have to be billing
records used to establish the amount of any
counterclaim for attorneys' fees, which records are
conclusively in the possession of defendants' counsel.
(Docket Item 30, p. 4, Italics in the original.)
That very letter was endorsed by Judge Wood with an order
directing Ms. Freeman to appear in court "accompanied by one of
her firm's partners, who shall be prepared to ensure that Ms.
Freeman complies with Court orders in the future." (Id, p. 6.)
Dorsey & Whitney promptly made amends. Ms. Freeman came with a
senior partner who told Judge Wood that he had brought in two
attorneys to assist Ms. Freeman senior associate Seth Waxman
and partner Mark Sullivan (who later appears to have been largely
replaced by partner Bruce Ewing). He also said: "We will
reimburse plaintiff's counsel if they provide us with a
computation of the time spent in preparing the letter . . . and
in appearing in court." Judge Wood said: "Well, that's a complete
response. Thank you very much." (Docket Item 32, 11/5/04 Tr.
9-10.) In my review of the timesheets, I saw that Dorsey &
Whitney has, appropriately, cut out all of the time spent by its
four attorneys in attending that November 5 hearing. Other cuts
were made for November 4, 10, 11 and 13. The bill for December
2004 has a "Timekeeper Summary" which shows that the firm's
attorneys (in that month of heavy discovery) expended hours
valued at $84,545 and yet the firm has cut that to $59,018; among
other things, it cut all of Mr. Sullivan's time (valued at $9,090
Nevertheless, Plaintiff makes its second and final argument in
opposition to the fee application:
Defendants Are Not Entitled to Recover Fees for Work
That Was Necessitated by Their Counsel's Improper
. . . [D]espite the additional participation of
Messrs. Waxman and Ewing, Ms. Freeman continued to
participate attending all depositions, whether in
state or out,. . . . Such duplication of effort
should not be rewarded. . . .
Plaintiff cannot reasonably (the standard of law and
the contract relied upon by defendants) be expected
to pay for time spent at the above hearings, costs
associate[d] therewith, or for the second attorney
brought in because of counsel's inappropriate
litigation tactics. Adjustments downward should be
made for such cumulative and duplicative
participation. Yet Plaintiff does not point to any specific entries on the
timesheets. I have reviewed the timesheets, and I see no
unreasonably cumulative or duplicative work. This case was
litigated intensively, as could be expected in a case where
Plaintiff had an expert testifying that its compensatory damages
were $49 million. It seems to be undisputed that, for almost each
of the depositions, Plaintiff sent three senior attorneys (Mr.
Novian sometimes via teleconference). (Docket Item 87, ¶ 8.)
Indeed, Plaintiff was fortunate that Ms. Freeman missed a
deadline, because Judge Wood then ruled that Defendants could not
depose two important witnesses for Plaintiff, Linda Nelson and
Alan Spatz, since they were technically non-parties. (Docket Item
34, ¶ 5.)
I find that Dorsey & Whitney litigated this case no more
expensively than it would have if the contract had contained no
fee-shifting clause. Indeed, I believe that Defendants realized
all along that Plaintiff (unlike Defendants) is probably judgment
proof. (The evidence of this is set forth in the motion for a
In my review of the timesheets, I discovered one item that I
have decided to disallow. On 09/27/04, 09/28/04, 09/30/04, and
10/14/04, Ms. Freeman billed a total of $5,355, part of which
involved "Legal research regarding disqualification of F.
Novian," "prepare letter to F. Novian regarding discovery and
disqualification," and similar entries. I am unconvinced that it
would be reasonable to require Plaintiff to pay for work aimed at
possibly disqualifying Plaintiff's primary attorney. Instead of
attempting to apportion the $5,355, I have decided to disallow
all of it.
Accordingly, I order Plaintiff to pay the corporate defendant
Zeeks, Inc. $476,393.00 in attorneys' fees and $103,367.88 in
costs. Zeeks, Inc. should submit a proposed supplemental judgment
on 3 days' notice. If Defendants prevail on appeal, they may
apply for additional fees and costs.
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