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Paul D. Ceglia v. Mark Elliot Zuckerberg

May 3, 2012

PAUL D. CEGLIA, PLAINTIFF,
v.
MARK ELLIOT ZUCKERBERG, AND FACEBOOK, INC.,
DEFENDANTS.



The opinion of the court was delivered by: Leslie G. Foschio United States Magistrate Judge

DECISION and ORDER

JURISDICTION

This case was referred to the undersigned by Honorable Richard J. Arcara on May 27, 2011, for pretrial matters. The action is presently before the court on Defendants' Supplemental Fee Application (Doc. No. 299), filed February 24, 2012.

BACKGROUND and FACTS*fn1

In this action, Plaintiff Paul D. Ceglia ("Plaintiff" or "Ceglia"), claims that, based on a Work for Hire contract allegedly executed on April 28, 2003, Plaintiff owns 50% of the social networking website Facebook, Inc. ("Facebook"), created by Defendant Mark Elliot Zuckerberg ("Zuckerberg") (together, "Defendants"). In a Decision and Order filed January 10, 2012 (Doc. No. 283) ("Jan. 10, 2012 D&O"), the undersigned granted Defendants' request for sanctions made in connection with Defendants' Accelerated Motion to Compel filed September 1, 2011 Order (Doc. No. 128) (Defendants' Sanctions Request"), imposing on Plaintiff a civil sanction in the amount of $5,000, and awarding Defendants the costs of such motion, including attorney's fees incurred in attempting to obtain Plaintiff's compliance with various discovery orders. On January 20, 2012, Defendants, as directed by the Jan. 10, 2012 D&O, filed their initial Fee Application (Doc. No. 285) ("Initial Fee Application"). In a Decision and Order filed February 14, 2012 (Doc. No. 292) ("Feb. 14, 2012 D&O"), the undersigned awarded Defendants $75,776.70 in attorney's fees, and also granted Defendants' request for an award of attorney's fees incurred in preparing and litigating their Initial Fee Application, directing Defendants file their supplemental fee application within 10 days.

Accordingly, Defendants' Supplemental Fee Application (Doc. No. 299) ("Supplemental Fee Application"), along with the Declaration of Alexander H. Southwell, Esq. (Doc. No. 300) ("Southwell Declaration"), were filed on February 24, 2012. Defendants seeks an award of $38,214.47 in attorney's fees for work performed on the Initial Fee Application by the New York City law firm of Gibson, Dunn & Crutcher, LLP ("Gibson Dunn"), by attorneys Orin S. Snyder, Esq. ("Snyder"), Thomas H. Dupree, Jr., Esq. ("Dupree"), Alexander H. Southwell, Esq. ("Southwell"), Matthew J. Benjamin, Esq. ("Benjamin"), and Amanda M. Aycock, Esq. ("Aycock"). Plaintiff's Response to Defendants' Supplemental Fee Application (Doc. No. 351) ("Plaintiff's Response"), was filed on April 13, 2012. By letter to the undersigned dated April 17, 2012 (Doc. No. 369) ("April 17, 2012 Letter"), Defendants replied in further support of the Supplemental Fee Application. Oral argument was deemed unnecessary.

Based on the following, Defendants' Supplemental Fee Application (Doc. No. 299), is GRANTED in part, and DENIED in part.

DISCUSSION

Courts have permitted parties to recover attorney's fees, including costs and attorney's fees associated with either successfully making or opposing a motion to compel discovery, as well as those incurred in connection with preparing and defending applications for the expenses. See Metrokane, Inc. v. Built, NY, Inc., 2009 WL 637111, at * 3 (S.D.N.Y. Mar. 6, 2009) (granting defendant's fee application seeking attorneys' fees incurred preparing and defending fee application for expenses related to defendant's discovery motions); Rahman v. Smith & Wollensky Restaurant Group, Inc., 2009 WL 72441, at * 7 (S.D.N.Y. Jan. 7, 2009) (awarding defendants 41.2 hours of attorney's fees incurred in connection with fee application for successfully opposing plaintiff's motion to compel discovery). Similarly, in the instant case, the undersigned has permitted Defendants to recover attorney's fees incurred in connection with preparing and defending their Initial Fee Application for the costs incurred in connection with Defendants' Sanctions Request.

1. Lodestar Method

Recently, "[b]oth [the Second Circut] and the Supreme Court have held that the lodestar -- the product of a reasonable hourly rate and the reasonable number of hours required by the case -- creates a 'presumptively reasonable fee.'" Millea v. Metro-North Railroad Company, 658 F.3d 154, 166 (2d Cir. 2011)*fn2 (citing Perdue v. Kenny A., __ U.S. __, 130 S.Ct. 1662, 1673 (2010), and Arbor Hill Concerned Citizens Neighborhood Assoc. v. County of Albany, 522 F.3d 182, 183 (2d Cir. 2008)). Nevertheless, the presumption "may be overcome in those rare circumstances in which the lodestar does not adequately take into account a factor that may properly be considered in determining a reasonable fee." Perdue, 130 S.Ct. at 1673. Attorney's fees awarded as a sanction can vary from the lodestar amount provided the fee is within a range reasonable to achieve its deterrent objective. Eastway Construction Corp. v. City of New York, 821 F.2d 121, 121-22 (2d Cir. 1987). Thus, in determining the amount of attorney's fees to be awarded Defendants on the Supplemental Fee Application, the court commences with the lodestar or "presumptively reasonable fee," which is then adjusted as necessary in consideration of Rule 37's deterrent objective.

In calculating the lodestar amount, the requesting party bears the initial burden of submitting evidence supporting the number of hours worked and the hourly rates claimed. Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). This "lodestar" calculation should exclude fees for work that is "excessive, redundant or otherwise unnecessary," as well as hours dedicated to severable unsuccessful claims. Quaratino v. Tiffany & Co., 166 F.3d 422, 425 (2d Cir. 1999) (citing Hensley, 461 U.S. at 433-35). To prevent the court from reviewing and ruling on each item for which reimbursement is requested, courts have permitted a percentage-based reduction from the number of hours submitted as a means of trimming excess time from the fee request. McDonald v. Pension Plan of the NYSA-ILA Pension Trust Fund, 450 F.3d 91, 96 (2d Cir. 2006) ("A district court may exercise its discretion and use a percentage deduction as a practical means of trimming fat from a fee application.") (internal quotation marks and citation omitted); see Walker v. Coughlin, 909 F.Supp. 872, 881 (W.D.N.Y. 1995) (reducing by 15 % the total hours requested).

In the instant case, the form in which Defendants' Supplemental Fee Application is presented establishes the fees were calculated according to the lodestar method, multiplying the hourly rate of each attorney for whose work Defendants seek payment by the number of hours expended by each attorney on the Initial Fee Application. The hourly rate at which compensation is sought for each attorney has already been discounted by 25%. Supplemental Fee Application at 3 (stating Defendants have voluntarily discounted their hourly rates by 25%). The following schedule sets forth these attorneys' claimed, ...


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