United States District Court, S.D. New York
BENIHANA, INC., as successor to BENIHANA NATIONAL CORP., Petitioner,
BENIHANA OF TOKYO, LLC, as successor to BENIHANA OF TOKYO, INC., Respondent.
OPINION & ORDER
A. ENGELMAYER, DISTRICT JUDGE.
decision, in this latest in a long-running series of lawsuits
between two entities owning aspects of the operations of the
Benihana restaurant empire, resolves an application for
attorneys' fees and costs. Petitioner Benihana, Inc.
("BI") seeks an order directing respondent Benihana
of Tokyo, LLC ("BOT") to pay BI for the fees and
costs it reasonably incurred in attempting to enforce a
permanent injunction that this Court entered on July 15,
2016, Dkt. 42 (the "Injunction"). On June 14, 2017,
following an evidentiary hearing conducted on June 6 and 14,
2017, the Court, in a lengthy bench decision, found BOT in
civil contempt for its failure to comply with the Injunction.
Dkt. 84. The Court put in place a detailed regime of
sanctions to coerce compliance with the Injunction. The Court
also ordered that BOT pay the reasonable legal and
investigative fees that BI reasonably incurred in connection
with its efforts to establish violations of, and obtain
compliance with, the Injunction.
remaining issue is the amount of the award of fees and costs.
BI has requested a total award of $1, 062, 251.34, reflecting
fees and expenses across its two law firms, while BOT argues
that BI is entitled to no more than $49, 918. Following its
close examination of BI's request, the Court holds that
although BI reasonably incurred substantial fees and costs in
establishing BOT's contempt with the Injunction, to
assure reasonableness, BI's request must be pruned. The
end result is that BI is awarded a total of $634, 680.04.
Court assumes familiarity with the facts and the baroque
procedural history of this case and the related litigation
between BI and BOT. The Court has summarized these in various
decisions and in its June 14, 2017 bench ruling. The Court
sets forth here only the background most central to the
present fee dispute.
September 18, 2015, BI filed a petition seeking the partial
confirmation and partial vacatur of an award resulting from
an arbitration before the American Arbitration Association
between BI and BOT. BOT had initiated that arbitration on
January 13, 2014. BOT sought a declaration that, contrary to
BI's claim, BOT had not breached the License Agreement
between the parties in connection with BOT's operation of
a Benihana restaurant in Honolulu, Hawaii. BOT also sought a
judgment that BI's termination of BOT under the License
Agreement as the franchisee entitled to operate that
restaurant was unjustified. On September 18, 2015, the
arbitral panel, by a 2-1 vote, issued its award. It found
that BOT had committed numerous material breaches of the
License Agreement, justifying entry of injunctive relief
against BOT, but that, based on the panel's
interpretation of the terms of the License Agreement,
BI's termination of BOT's license had not been
15, 2016, the Court confirmed the arbitral award in full. The
Court thereby entered, as a court order, the Injunction,
which tracked the terms of the injunction embodied in the
arbitral award. See Dkt. 42. The Injunction obliged
BOT to comply with various aspects of the parties'
the ensuing approximately one half year, BI, largely through
its outside counsel and its agents, including professional
investigators, actively monitored BOT's activities and
BOT's compliance-and, dismayingly often, its failure to
comply-with the Injunction. BI discovered widespread and
continuing breaches of the Injunction by BOT. The record,
which includes extensive and detailed correspondence between
BI's counsel and BOT, reflects BI's persistent and
vigorous attempts to put BOT on notice of its breaches and
BI's attempts to induce BOT to cure these breaches
without need for recourse to this Court. As chronicled in the
Court's detailed bench ruling on June 14, 2017, these
efforts had only limited success and rectified BOT's
breaches in only discrete areas of breaching conduct.
January 9, 2017, nearly six months after entry of the
Injunction, BI filed in this Court a motion for sanctions and
for a finding that BOT was in civil contempt for violating
various terms of the Injunction, and included supporting
declarations and factual materials. Dkts. 55-57. BOT opposed
the motion and included declarations. Dkts. 60-62. On April
25, 2017, the Court notified the parties that it would
entertain contempt sanctions only as to conduct post-dating
the Court's entry of the Injunction on July 15, 2016, but
not as to conduct occurring between the date of the arbitral
award and the Court's confirmation of it. Dkt. 68. The
Court also ascertained from counsel that they wished the
Court to resolve BI's claims of contempt through a
hearing with live testimony, not based solely on the
parties' documentary submissions.
6 and 14, 2017, the Court held an evidentiary hearing at
which it heard live testimony and received numerous exhibits.
On June 14, 2017, the Court issued a detailed bench opinion
making findings of fact and holding that BOT was in civil
contempt of court. To coerce BOT's compliance with the
Injunction going forward, the Court instated a regime of
financial sanctions intended to incent BOT to comply as to
four key areas of conduct in which the Court had found
violations of License Agreement terms as incorporated in the
Injunction. These involved the Honolulu restaurant's (1)
regular menus, (2) holiday menus, (3) signage, and (4)
photographs furnished to patrons of the restaurant. Relevant
here, the Court also ruled that BOT must pay the legal and
investigative fees that BI had reasonably incurred in
bringing about BOT's compliance with the Injunction.
28, 2017, BI filed its application for attorneys' fees in
the form of declarations submitted by its lead counsel, Alan
H. Fein, Esq., Dkt. 86 ("Fein Decl"), of the Miami,
Florida law firm Stearns Weaver Miller Weissler Alhadeff
& Sitterson, P.A. ("Stearns Weaver"), and by
its local counsel, Nicole Gueron, Esq., Dkt. 85 ("Gueron
Deck"), of Clarick Gueron Reisbaum LLP ("Clarick
Gueron"). The declarations reported the firms' fees
and costs incurred and, as exhibits, attached counsel's
contemporaneous time records, regular billing rates and
professional biographies. On July 12, 2017, BOT filed a
memorandum of law in opposition to BI's fees request.
Applicable Legal Standards
determine a reasonable attorneys' fee, a court uses the
lodestar approach, in which the court determines a
"presumptively reasonable fee" by calculating the
number of hours reasonably expended by counsel on the
litigation and multiplies that number of hours by a
reasonable hourly rate. E.g., Millea v. Metro-North R.R.
Co., 658 F.3d 154, 166 (2d Cir. 2011) (quotation
omitted). "The district court enjoys broad discretion in
determining the amount of a fee award." Vincent v.
Comm 'r of Social Sec, 651 F.3d 299, 307 (2d Cir.
determining the reasonable hourly rate, the Court's
analysis is guided by the market rate "prevailing in the
community for similar services by lawyers of reasonably
comparable skill, experience and reputation." Blum
v. Stenson,465 U.S. 886, 895 n. 11 (1984). The relevant
community is the district in which the district court sits.
Arbor Hill Concerned Citizens Neighborhood Ass'n v.
Cty. of Albany,522 F.3d 182, 190-91 (2d Cir. 2008). The
determination of the reasonable hourly rate is a
case-specific inquiry and may sometimes require a court to
conduct an evidentiary hearing when "it is evident that
the material facts necessary to determine the fee award are
genuinely in dispute and cannot be resolved from the
record." Vincent, 651 F.3d at 308 (quoting
Farbotko v. Clinton Cty.,433 F.3d 204, 209 (2d Cir.
2005) (modifications omitted)). The Court is to evaluate the
evidence offered by the parties and may, of course, take
"judicial notice of the rates awarded in prior cases and
the court's own familiarity with the rates prevailing in
the district." Farbotko ...