United States District Court, S.D. New York
April 16, 2014
NAUTILUS NEUROSCIENCES, INC., Plaintiff,
JAMES L. FARES, Defendant.
Jonathan Keith Cooperman, Esq., Kelley Drye & Warren, LLP, New York, NY, for Plaintiff.
Eric M. Eusanio, Esq., Frenkel Lambert Weiss Weisman & Gordon, LLP, New York, NY, Peyton J. Healey, Esq., Powers Taylor, LLP, Dallas, TX, for Defendant.
OPINION AND ORDER
SHIRA A. SCHEINDLIN, District Judge.
Nautilus Neurosciences, Inc. ("Nautilus") brought this action to recover money owed by defendant James L. Fares ("Fares") under a Promissory Note dated January 15, 2010. In an Opinion and Order dated December 11, 2013, I granted Nautilus's motion for summary judgment and held Fares liable for the full amount due under the Promissory Note, namely $75, 000, plus interest and reasonable attorneys' fees. I directed Nautilus to submit a request for reasonable attorneys' fees with supporting documentation within thirty (30) days. On January 10, 2014, Nautilus submitted a motion for attorneys' fees and disbursements in the amount of $121, 748.04. For the following reasons, Nautilus's motion for attorneys' fees is GRANTED.
II. LEGAL STANDARD
"[T]he fee applicant bears the burden of establishing entitlement to an award and documenting the appropriate hours expended and hourly rates." "The district court retains discretion to determine... what constitutes a reasonable fee.'" In determining the amount of a fee award, courts must calculate the "lodestar" figure - "the product of a reasonable hourly rate and the reasonable number of hours required by the case" - which represents the "presumptively reasonable fee." "In reducing the lodestar' amount, the court may exclude the excessive and unreasonable hours from its calculation by making an across the board reduction, or percentage cut, in the [number] of hours."
A reasonable rate is generally the "prevailing market rate for counsel of similar experience and skill to the fee applicant's counsel." "The reasonable hourly rate for such calculation is determined by the rates prevailing in the community in which the action or proceeding arose for the kind and quality of services furnished." In making this determination, a court may consider "rates awarded in prior cases and the court's own familiarity with the rates prevailing in the district." The burden is on the movant to show "by satisfactory evidence - in addition to the attorney's own affidavits - that the requested hourly rates are the prevailing market rates."
In calculating the reasonable number of hours expended "the court takes account of claimed hours that it views as excessive, redundant, or otherwise unnecessary.'" In doing so, the court "may look to its own familiarity with the cage and its experience generally as well as to the evidentiary submissions and arguments of the parties.'" This analysis "turns not on what appears necessary in hindsight, but on whether at the time the work was performed, a reasonable attorney would have engaged in similar time expenditures."
Finally, attorneys' fees awards "include those reasonable out-of-pocket expenses incurred by attorneys and ordinarily charged to their clients.'" "Litigants may recover photocopying costs, but... must make clear what documents were copied, how many copies were made, the cost per page charged for copying, and why the copies were necessary.'" Legal research expenses "are compensable on a fee application if the firm regularly bills its clients for them'" and if they are adequately documented.
Nautilus argues that "the hourly rate and number of hours Nautilus's attorneys spent on this case, primarily responding to Fares's motion to stay, defenses, and counterclaim are reasonable, ... and therefore, Nautilus should be awarded its entire amount of attorneys' fees and disbursements." Fares contests the reasonableness of both the hourly rate and the hours expended, and asks the Court to reduce the requested fee award.
A. Hourly Rates
Nautilus retained attorneys from the New York office of Kelley Drye & Warren LLP. In 2013, the firm's hourly rates for attorneys in its New York office ranged from $285 for junior associates to $855 for senior partners. The customary hourly rates of the two attorneys most involved with the case - Jonathan K. Cooperman, the lead litigator, and Jessica Klarfeld, a litigation associate - were $670 and $375, respectively. In this litigation, Kelley Drye also gave Nautilus a ten percent discount. In support of the motion, Nautilus's counsel submitted invoices for services it rendered in defending the underlying action for non-payment of the Promissory Note.
After graduating from Williams College in 1982 and Syracuse University College of Law in 1985, Cooperman was admitted to the New York Bar in 1986 and to the Bar of this Court a year later. He began working at Kelley Drye in September 1985 and has been a member of the firm since January 1996. By his own account, Cooperman has "extensive experience handling commercial litigation" in this and other courts. Jessica Klarfeld graduated from Duke University in 2006 and received her J.D. from Georgetown in 2011. She was a summer associate with Kelley Drye after her second year of law school and has been an associate at the firm since September 2011.
Laurence May, a partner in the New York office of Cole, Schotz, Meisel, Forman & Leonard,  submitted a declaration in support of Nautilus's motion. May attests that "the hourly rates charged to Nautilus are reasonable and commensurate with the rates charged by attorneys in similarly-sized firms and with similar skill and experience level at firms in New York City." In fact, May believes that "the rate charged for Mr. Cooperman is on the lower end of the spectrum for a New York commercial litigator with his level of experience."
Nautilus provides examples of similar and higher fees approved recently by a court in this District, including $865 for a senior partner who graduated from law school in 1976, $700 for a partner who graduated in 1994, $445 for an associate with two years of experience at the time the action was filed, and $355 for a law clerk awaiting admission to the bar. Cooperman's rate for work performed in 2013 was lower than the above billing rates from 2010 for partners with similar skill, experience, and reputation. Klarfeld's rate was significantly lower than that of the associate in Amaprop, who had a comparable level of experience, and only slightly higher than the law clerk awaiting admission to the bar.
Fares argues that these hourly rates are excessive and in particular that Cooperman's rate should be reduced from $603 to $425. In support of this claim, Fares cites cases from other districts that represent prevailing rates other markets,  or older cases from this District involving discrimination or civil rights claims rather than commercial disputes. Unlike fee awards under civil rights and employment discrimination statutes, which have specific standards for fee awards, Fares freely entered into a Promissory Note with Nautilus in which he agreed to pay attorneys' fees. There is no question that Nautilus acted reasonably in using experienced commercial attorneys in this commercial dispute.
In sum, considering the time and labor required to represent Nautilus, the experience and qualifications of the attorneys, and the prevailing rates in this District, the requested hourly rates for Cooperman and Klarfeld of $603 and $337.50, respectively, are reasonable.
B. Hours Expended
Nautilus also argues that the amount of time its attorneys spent on this matter is reasonable. Over a nine-month period, Cooperman spent 81.9 hours on the case, while Klarfeld spent 162.6 hours. According to Nautilus, not only was the amount of time spent reasonable in light of the "research and drafting required for the various motions, oppositions, and papers, " but Nautilus also hoped to avoid the majority of fees eventually incurred by filing a Motion for Summary Judgment in Lieu of Complaint because "it was the most efficient manner to litigate a straightforward action for non-payment of a promissory note." In response, Fares removed the action to this Court, raised the defense of improper service, brought a motion to stay this action pending the resolution of a related Delaware action, requested extensive discovery that was unrelated to this action, and raised several defenses and a counterclaim that were either withdrawn or dismissed. Nautilus incurred over eighty percent of the legal fees it seeks to recover addressing Fares's unsuccessful motion to stay, as well as Fares's defenses and counterclaim. Therefore, Fares's own actions forced Nautilus to incur significant attorneys' fees.
Fares argues that the number of hours expended is "excessive and unnecessary, " especially when compared to the $75, 000 value of the Promissory Note. Under New York law, "it is rarely proper to award fees in an amount that exceeds the amount involved in the litigation.'" However, "the proportionality standard articulated in [F.H.] Krear [& Co. v. Nineteen Named Trustees] is not a per se rule but rather one guidepost of many in determining the reasonableness of a fee award." "There is a strong presumption that the lodestar figure represents the reasonable fee, even when that figure is disproportional to the amount of damages obtained by the successful plaintiff.'" Fares provides no support for the claim that the fees charged were excessive for any particular task, and fails to respond to plaintiff's assertion that virtually all of the fees were incurred addressing defendant's arguably superfluous affirmative defenses and counterclaims. Fares specifically objects to the reimbursement of fees Nautilus incurred in preparing for a mediation that was cancelled due to a Court scheduling conflict, because that preparation time "provided no benefit to the client." Because the mediation was required by the Court, a reasonable attorney would have been expected to prepare for it. Therefore, this argument has no merit.
Nautilus also seeks $5, 514.39 in disbursements including court fees, administrative fees, photocopying, and legal research costs. These amounts appear reasonable and are adequately documented. They are therefore included in Nautilus's fee award.
In sum, Nautilus seeks $116, 233.65 in attorneys' fees and $5, 514.39 in disbursements for a total award of $121, 748.04. Because the hourly rates of Nautilus's attorneys and the amount of time spent on this case were reasonable, Nautilus is entitled to the entire requested award of $121, 748.04. The Clerk of Court is directed to close Nautilus's motion for attorneys' fees and disbursements (Docket Entry #45).