The opinion of the court was delivered by: RICHARD HOLWELL, District Judge
MEMORANDUM OPINION AND ORDER
Defendant/interpleader-plaintiff Merrill Lynch, Pierce, Fenner
& Smith Incorporated ("Merrill Lynch") seeks reimbursement for
$67,708.30 in attorneys' fees and $1,389.01 in costs for legal
services rendered by Dorsey & Whitney LLP in connection with its
counterclaim for interpleader. For the reasons set forth below,
the Court grants Merrill Lynch attorneys' fees in the amount of
$51,000, and costs in the amount of $1,389.01.
On March 27, 2003, plaintiff Landmark Chemicals, S.A.
("Landmark") initiated an action against Merrill Lynch seeking to
recover approximately $1.2 million held in a Merrill Lynch
account by a third company, Cinderella Limited. Merrill Lynch
responded by interpleading Cinderella Limited and a third party,
Ms. Violetta Nicol, who also claimed an interest in the contested
funds. Merrill Lynch then moved to be discharged from the action
pursuant to Rule 22 of the Federal Rules of Civil Procedure.
After concluding that Merrill Lynch had "no beneficial interest"
in the funds, the Court granted the discharge motion on the
condition that the funds be transferred to an account maintained
by the Court. Merrill Lynch met that condition. The Court deferred ruling on the question of
attorneys' fees and costs, and turns to that issue now.
Attorneys' fees are commonly awarded to an innocent stakeholder
who successfully initiates a suit as an interpleader under Rule
22. Algemene Bank Nederland, N.V. v. Soysen Tarim Urunleri Dis
Ticaret Ve Sanayi, A.S., 748 F. Supp 177, 183-84 (S.D.N.Y. 1990)
(citing A/S Krediit Pank v. Chase Manhattan Bank, 303 F.2d 648,
649 (2d Cir. 1962)). To recoup attorneys' fees and costs, a court
must find (1) a disinterested stakeholder, (2) who has conceded
liability, (3) has deposited the disputed funds into court, and
(4) has sought a discharge from liability. Septembertide Publ'g,
B.V. v. Stein & Day, Inc., 884 F.2d 675, 683 (S.D.N.Y. 1989).
Merrill Lynch has plainly met these requirements and is therefore
entitled to recover its reasonable attorneys' fees and costs in
this case. (See Transcript of Feb. 17, 2005 Hearing).
District courts have broad discretion when calculating a fee
awarded. Pressman v. Estate of Steinvorth, 886 F. Supp. 365,
366-67 (S.D.N.Y. 1995) (citations omitted). In determining the
amount of attorneys' fees awarded, courts typically weigh several
factors. Smith Barney, Harris Upham & Co., Inc. v. Connolly,
887 F. Supp. 337, 346 (D.Mass. 1994). Relevant factors may
include the complexity of the case, whether the stakeholders
performed any unique services to the court or claimant, good
faith and diligence on the part of the stakeholder, whether the
services rendered benefited the stakeholder, and to what extent
the stakeholder protracted the proceedings. Id.; see
generally, 7 Charles Alan Wright & Arthur R. Miller, Federal
Practice & Procedure § 1719 (3d ed. 2001) ("Wright & Miller").
Typically, the District Court determines the amount awarded by
multiplying a reasonable number of hours by a reasonable hourly
rate. DiFilippo v. Morizio, 759 F.2d 231, 234 (2d Cir. 1985). In the present case, Merrill Lynch submitted a request for
$67,708.30 in attorneys' fees, based on approximately 250
billable hours, and $1,389.01 in costs. Merrill Lynch's proposed
hourly rates range from $285.00 to $590.00 per hour (less a 15%
discount), although the average rate for all charges is at the
low end of that spectrum. Having reviewed Merrill Lynch's
submissions in this case, as well as awards in similar cases, the
Court finds the proposed hourly rates to be commensurate with
those typical in the prevailing community. See eg. Yurman
Design, Inc. v. PAJ, Inc., 125 F. Supp. 2d 54, 58 (S.D.N.Y.
2000) (approving rates of $278.50 per hour for associates, and
$520.69 per hour for partners in a copyright case).
However, the Court concludes that 250 hours in billable time is
somewhat excessive. See e.g. Estate of Ellington v. EMI
Catalogue Partnership, 282 F. Supp. 2d 192, 194 (S.D.N.Y. 2003)
(stating, "the typical interpleader claim does not involve
extensive or complicated litigation, and thus fees should be
relatively modest.") (internal quotation marks omitted). This
conclusion is supported by a review of attorneys' fees awards in
similar cases involving stakeholder discharges. See e.g. Johnson
v. Electrolux Corp., 763 F. Supp 1181, 1189 (D. Conn. 1991)
(awarding $1,000 in an interpleader action); Chemical Bank v.
Richmul Associates, 666 F. Supp. 616, 620 (S.D.N.Y. 1987)
(awarding $7,357.16 for 65 hours work); Estate of Ellington, at
195 (S.D.N.Y. 2003) (awarding $9,000 in fees and $1,000 in
costs); Pressman, at 370-71 (S.D.N.Y. 1995) (awarding a total
of $2,719.11 for 44.5 listed hours of billed work). To be sure,
the Court recognizes that Merrill Lynch faced procedural
complications in bringing its discharge action, for example by
having to serve foreign parties; the Court also acknowledges that
the discharge motion was opposed and fully litigated. Landmark,
therefore, bears some responsibility for the protracted nature of
the proceedings. See Merrill Lynch, Pierce, Fenner & Smith, Inc.
v. Clemente, 98 Civ. 1756, 2001 WL 536929 (S.D.N.Y. May 21,
2001) (awarding fees and expenses of $263,964 in interpleader action with multiple
foreign defendants); Wright & Miller, § 1719 (courts should
consider whether claimants improperly protracted the
proceedings). Nevertheless, in light of the fact that the Court
has found Landmark to be the proper recipient of the funds, the
attorneys' fees awarded to Merrill Lynch should be kept within
reason. Estate of Ellington, at 194 (citing John Hanconck Mut.
Life Ins. Co. v. Doran, 138 F. Supp. 47, 50 n. 2 (S.D.N.Y.
1956)). Upon a careful review of the billing entries submitted
with Merrill Lynch's application, the Court concludes that time
charges should be reduced by approximately 25% resulting in a fee
award of $51,000 for the services rendered in connection with the
interpleader action. The Court also awards $1,389.01 in costs for
a total of $52,389.01 to be paid from the fund.
© 1992-2005 VersusLaw ...