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Ambac Assurance Corporation v. Adelanto Public Utility Authority

United States District Court, Second Circuit

August 29, 2013



JOHN F. KEENAN, District Judge.

Before the Court is Plaintiff Ambac Assurance Corporation's ("Ambac" or "Plaintiff") request for reimbursement of attorneys' fees and expenses. In an Opinion and Order dated January 11, 2013, the Court granted Plaintiff's motion for summary judgment as to liability and damages on its claim for reimbursement, and as to liability on its claims for specific performance and reimbursement of expenses. The Court further held that "Ambac is thus entitled to summary judgment as to liability, with the amount to be determined in later proceedings." Id . Unable to reach a resolution on damages, Defendant, Adelanto Public Utility Authority ("Defendant" or "Authority"), and Ambac briefed the issue of attorneys' fees and the Court held a hearing on August 23, 2013.

I. Background

The Court presumes familiarity with the facts, as set forth in the summary judgment opinion. See Ambac Assurance Corp. v. Adelanto Pub. Util. Auth., No. 09 Civ. 5087, 2013 WL 139557 (S.D.N.Y. Jan. 11, 2013). In granting summary judgment for Ambac, the Court found the agreement at issue was enforceable, including the following obligation assumed by the Authority:

To reimburse [Ambac] immediately and unconditionally upon demand for all reasonable expenses incurred by [Ambac] in connection with the enforcement by [Ambac] of the [Authority's] obligations under this Agreement, including, but not limited to, fees (including professional fees), costs and expenses incurred by [Ambac] which are related to, or resulting from any breach by the [Authority] of its obligations hereunder.

Id. at *7.

Ambac seeks an award of $1, 693, 815.19 for attorneys' fees and expenses it paid to Patterson Belknap Webb & Tyler ("Patterson Belknap") between February 27, 2009 and December 31, 2012. This sum includes: (1) $1, 500, 628.80 in fees and expenses billed by Patterson Belknap, and (2) $193, 186.39 in expenses billed by an outside vendor, Driven, which maintained an ediscovery database.

The Authority does not question the reasonableness of Patterson Belknap's hourly rates, but rather objects to the "generally excessive hours on matters throughout the case." The Authority hired an expert on New York attorney's fees, Judith Bronsther ("Bronsther"), to evaluate Ambac's invoices. In her declaration to the Court, Bronsther recommends "a reduction of at least $520, 175 in legal fees and $26, 705.44 in disbursements." The Court will analyze each of Bronsther's objections that form the basis for her recommendation.

II. Discussion

A. Applicable Law

Because the Court has already determined that Ambac is due reimbursement and interest from the Authority, the only remaining inquiry is whether the requested fees are reasonable. The operative agreement is governed by New York law, so the Court will apply New York law to the reimbursement request.

In New York, it is well established that "any attorney... who applies for court-ordered compensation... must document the application with contemporaneous time records... specify[ing], for each attorney, the date, the hours expended, and the nature of the work done." New York State Ass'n for Retarded Children, Inc. v. Carey , 711 F.2d 1136, 1148 (2d Cir. 1983). The Court's task is to make "a conscientious and detailed inquiry into the validity of the representations that a certain number of hours were usefully and reasonably expended." Lunday v. City of Albany , 42 F.3d 131, 134 (2d Cir. 1994). The critical inquiry is "whether, at the time the work was performed, a reasonable attorney would have engaged in similar time expenditures." Grant v. Martinez , 973 F.2d 96, 99 (2d Cir. 1992) (citation omitted), cert. denied, 506 U.S. 1053 (1993).

Additionally, if a court finds that claimed hours are "excessive, redundant, or otherwise unnecessary, " it should exclude those hours from its calculation. Hensley v. Eckerhart , 461 U.S. at 434. However, the Supreme Court noted in Hensley that "[t]here is no precise rule or formula for making these determinations." 461 U.S. at 436. Finally, the party seeking fees bears the burden of establishing that the number of hours for which compensation is sought is reasonable. Cruz v. Local Union No. 3 of Int'l Bhd. of Elec. Workers , 34 F.3d 1148, 1160 (2d Cir. 1994).

B. Analysis

Patterson Belknap has submitted a plethora of records detailing its work over this four-year litigation. From its inception in 2009, the filings made by Patterson Belknap have included an answer to the amended complaint, two motions to dismiss, and cross motions for summary judgment. In addition, discovery lasted for months and involved a series of motions for protective orders, which were also briefed.

i. "High Minimum Increments"

The Authority first objects to Patterson Belknap's bill on the grounds that some of the attorneys billed in increments of thirty minutes, rather than the generally accepted quarter-hour increments. For this, the Authority argues, the Court should cut the fee across the board by twenty percent.

This objection is without merit, as the Authority has misinterpreted the billing increments. At some points in the invoices, a biller's time entry may be in a half-hour block, but at other times, it is in fifteen or twenty minute increments. This supports the conclusion that the timekeeping was accurate, but that ...

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