United States of America v. $1,026,781.61 In Funds From Florida Capital Bank, No. 2:2009cv04381 - Document 268 (C.D. Cal. 2013)
Court Description: MEMORANDUM OPINION AND ORDER by Magistrate Judge Marc L. Goldman: GRANTING IN PART AND DENYING IN PART CLAIMANTS' MOTION FOR ATTORNEY FEES 237 : (See document for details.) Accordingly, for the reasons set forth above, it is ordered that Plaintiff pay Claimants' their attorney fees and costs in the amount of $290,189.54. In view of the order staying judgment pending appeal entered this date, this order shall also be stayed. (rla)
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1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 CENTRAL DISTRICT OF CALIFORNIA 8 SOUTHERN DIVISION 9 10 UNITED STATES OF AMERICA,, Plaintiff, 11 12 13 v. $1,026.781.61 IN FUNDS FROM FLORIDA CAPITAL BANK, 14 Defendant. 15 ) ) ) ) ) ) ) ) ) ) ) Case No. CV 09-04381-MLG and related case, Case No. SACV 09-00716-MLG MEMORANDUM OPINION AND ORDER GRANTING IN PART AND DENYING IN PART CLAIMANTS MOTION FOR ATTORNEY FEES 16 17 I. Introduction 18 On November 20, 2012, in this civil forfeiture proceeding initiated 19 by the United States, the Court entered an Opinion and Order granting 20 the motion for summary judgment brought by Claimants Lonnie Kocontes and 21 Katherine Kern. See U.S. v. $1,026,781.61 in Funds from Florida Capital 22 Bank, Nos. SACV 09 04381 MLG, SACV 09 00716 MLG.1 On January 8, 2013, 23 Claimants filed a motion for award of attorney fees pursuant to 28 24 U.S.C. § 2465(b)(1)(A). 25 Claimants seek a total award of more than $800,000.00 which 26 consists of the following: (1) approximately $565,000 in fees for David 27 Michael and Edward Burch, Claimants current attorneys, using a standard 28 1 The parties are familiar with the facts and procedural history of this case, and only the relevant portions will be repeated here. 1 lodestar analysis and enhancing that lodestar figure by 2.0, plus 2 $22,550.92 in costs incurred; (2) $65,000 for work by John Cogorno and 3 Lynne Patterson of Mendoza & Associates, Claimants attorneys from July 4 2009 to June 2011; (3) $100,073.51 in fees and costs incurred by the Law 5 Office 6 $74,266.35 7 (Claimants Reply at 1.) of Mark in Werksman, costs paid Claimants original to investigator private attorney; Susan and (4) McQueen. 8 The Government concedes that Claimants are entitled to recover 9 reasonable attorney fees, but argues that the amount Claimants seek is 10 excessive and inadequately documented, and should therefore be reduced. 11 12 II. Discussion 13 A. The Civil Asset Forfeiture Reform Act 14 The Civil Asset Forfeiture Reform Act ( CAFRA ) provides, in 15 pertinent part, in any civil proceeding to forfeit property under any 16 provision of Federal law in which the claimant substantially prevails, 17 the United States shall be liable for (A) reasonable attorney fees and 18 other litigation costs reasonably incurred by the claimant. . . . 28 19 U.S.C. § 2465(b)(1)(A). Here, where the Court granted Claimants Motion 20 for Summary Judgment, it is undisputed that Claimants substantially 21 prevailed and are therefore entitled to recover reasonable attorney 22 fees. 23 B. The Amount of Fees Requested 24 1. Lodestar Legal Standard 25 Attorney fees under CAFRA are calculated using the lodestar method. 26 United States v. $186,416.00 in U.S. Currency, 642 F.3d 753, 755 (9th 27 Cir. 2011). The lodestar is calculated by multiplying the number of 28 hours the prevailing party reasonably expended on the litigation by a 2 1 reasonable hourly rate. Caudle v. Bristow Optical Co. Inc., 224 F.3d 2 1014, 1028 (9th Cir. 2000) (citing Morales v. City of San Rafael, 96 3 F.3d 359, 363 (9th Cir. 1996)). The fee applicant bears the burden of 4 establishing entitlement to an award and documenting the appropriate 5 hours expended and hourly rates. Henslev v. Eckerhart, 461 U.S. 424, 6 437 (1983). 7 The court has the discretion to evaluate the reasonableness of the 8 number of hours claimed by a prevailing party. Sorenson v. Mink, 239 9 F.3d 1140, 1145 (9th Cir. 2001); Gates v. Deukmejian, 987 F.2d 1392, 10 1398 (9th Cir. 1992). [H]ours may be reduced by the court where 11 documentation of the hours is inadequate; if the case was overstaffed 12 and hours are duplicated; if the hours expended are deemed excessive or 13 otherwise unnecessary. Chalmers v. City of Los Angeles, 796 F.2d 1205, 14 1210 (9th Cir. 1986), amended on other grounds, 808 F.2d 1373 (1987). 15 The court must consider, among other factors, the complexity of the case 16 or the novelty of the issues, the skill required to perform the service 17 adequately, the customary time expended in similar cases, and the 18 attorney s expertise and experience. Widrig v. Apfel, 140 F.3d 1207, 19 1209 (9th Cir. 1998); Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 20 69-70 (9th Cir. 1975). 21 Once the court has established the number of hours reasonably 22 expended, it must determine a reasonable hourly rate. Under CAFRA, the 23 moving party must show that the hourly rates charged are in line with 24 those prevailing in the community for similar services by lawyers of 25 reasonably comparable skill, experience and reputation. United States 26 v. $60,201.00 U.S. Currency, 291 F.Supp.2d 1126, 1130 (C.D. Cal. 2003) 27 (quoting Sorenson, 239 F.3d at 1145). [A]ffidavits of the [claimants'] 28 attorney[s] and other attorneys regarding 3 prevailing fees in the 1 community, and rate determinations in other cases ... are satisfactory 2 evidence 3 Financial, Inc., 523 F.3d 973, 980 (9th Cir. 2008) (internal citation 4 and quotation marks omitted). Additionally, the actual fee agreement can 5 be considered when determining a reasonable rate. $186,416.00 in U.S. 6 Currency, 642 F.3d at 755. of the prevailing market rate. Camacho v. Bridgeport 7 In arriving at an appropriate attorney fee award, district courts 8 must show their work with respect to calculations and specify 9 reasons for not awarding costs. Padgett v. Loventhal, No. 10-16533, 10 2013 WL 491024, at *6-7 (9th Cir. Feb. 11, 2013.) 11 2. Michael and Burch 12 a. Reasonable Hourly Rate 13 Michael and Burch began representing claimants on June 20, 2011. 14 (Doc. 67.) Claimants contend that rates of $600 per hour for Michael and 15 $300 per hour for Burch are reasonable. (Mot. for Fees at 3, 12-14.) 16 They explain that as a civil forfeiture case involving allegations of 17 homicide, 18 specialized knowledge, experience, and skill. Claimants argue that 19 Michael s high fee is appropriate given his approximately twenty years 20 of experience bringing federal and state forfeiture cases. They have 21 produced declarations stating that $600 per hour is indeed a reasonable 22 rate for experienced forfeiture attorneys in California. (Decl. of 23 Attorney David M. Michael ( Michael Decl.), Ex. 2 at 4-5, Ex. 3 at 2.) 24 They also contend that $300 per hour is a reasonable rate for Burch as 25 a junior attorney. (Declaration of Edward M. Burch ( Burch Decl. ).) The 26 Government responds that Michael s experience does not justify such a 27 high hourly rate, which is unreasonable in light of the current economic 28 climate. (Opp. at. 7-11.) this case presented unusual 4 circumstances requiring 1 The Court is persuaded by Claimants arguments that $600.00 per hour 2 is an appropriate rate for Michael. This rate is within the range 3 recognized as reasonable by other decisions in civil forfeiture actions 4 in California, and is consistent with recognized rates for attorneys 5 with Michael s years of experience more generally. See, e.g., United 6 States 7 2:09 cv 05672, 2012 WL 5272281, at *12-13 (C.D. Cal. Oct. 18, 2012) 8 (discussing evidence showing that experienced civil forfeiture attorneys 9 in the Los Angeles legal community customarily charge between $450 and 10 $650 per hour, and concluding that $450, rather than the $500 requested, 11 was 12 forfeiture case); United States v. $17,700.00 in U.S. Currency, No. 08- 13 4518, Doc. 53 (C.D. Cal. Dec. 19, 2008) (order granting claimant s 14 motion for attorney fees, finding that a rate of $550 in 2008 is 15 reasonable for an experienced civil forfeiture attorney in Los Angeles); 16 see also Bond v. Ferguson Enters., Inc., No. 1:09 cv 1662, 2011 WL 17 2648879 at *11 13 (E.D. Cal. June 30, 2011) (discussing Laffey Matrix 18 which reflects an 8-10 year lawyer rate of $522 and a 20+ year lawyer 19 rate of $709). Though Michael s rate is at the high end, this is 20 justified 21 complexity of the present case. Additionally, the Government concedes, 22 and the Court finds, that $300 per hour is a reasonable rate for an 23 attorney with Burch s experience. (Opp. at 9.) a v. 2008 reasonable by his rate Toyota for extensive Rav the 4 Sports experienced civil Utility attorney forfeiture Vehicle, in a experience No. simple and the b. Reasonable Hours 24 25 One The Government argues the number of hours should be reduced because 26 there is duplication of tasks by 27 documentation of the hours spent and tasks performed, and entries that 28 reflect clerical work. (Opp. at 12-19.) 5 Burch and Michael, inadequate 1 The Court has reviewed Michael and Burch s time entries and does 2 not observe duplication of tasks or inadequate explanation of the tasks 3 performed. However, many of Burch s entries include clerical activities. 4 Activities that can be classified as secretarial or clerical in nature 5 generally cannot be recovered as attorney's fees under the lodestar 6 methodology. Nadarajah v. Holder, 569 F.3d 906, 921 (9th Cir. 2009) 7 (disallowing 8 obtaining transcripts, assembling and organizing documents pertaining to 9 exclusion of evidence, and other clerical tasks ); Jones v. Metro. Life recovery for research regarding filing procedures, 10 Ins. Co., 11 recovery 12 copying ); Keith v. Volpe, 644 F.Supp. 1312, 1315 16 (C.D. Cal. 1986) 13 (disallowing 14 tagging, or copying documents). Here, Burch s following entries, among 15 others, include clerical tasks: court copies to goldman . . . e-file, 16 courtesy copy of supp brief on 9/14 and 10/5/11; chambers copies to 17 goldman of all msj docs and exhibits on 8/5 -6/12; e-file and chambers 18 copy on 9/26/12; and Change of Address Notice . . . eFile, print 19 chambers copies on 10/19/12. (Supp. Burch Decl. Ex. 1.) These clerical 20 tasks are listed as part of bulk time entries that include other tasks, 21 and thus it is not possible to separate out the length of time Burch 22 spent on each clerical task. Reviewing Burch s time entries as a whole, 23 it is appropriate to reduce the total hours spent by 10% to account for 24 the time spent on clerical tasks. 845 F.Supp.2d 1016, 1027 (N.D. Cal. 2012) (disallowing for filing recovery or for retrieving time electronic spent on court organizing, documents or transporting, 25 Accordingly the Court finds that Michael s 286.6 hours and Burch s 26 334.125 hours (the 371.25 requested less 10%), is a reasonable amount of 27 time. 28 // 6 1 c. Costs Incurred by Michael and Burr 2 Plaintiff seeks costs incurred by Michael and Burch in the amount 3 of $22,550.92. (Supp. Burch Decl. at Ex. 2.) The costs include various 4 copying and mailing charges, translation service fees, and fees for the 5 services of five experts. Claimants explain that the services provided 6 by three of the experts, Dr. Terri Haddix, Dr. Sabir Bhimji, and Dr. 7 Scott Plantz, which included evaluating the autopsy report, were crucial 8 in undermining the Government s theories about the homicide. (Claimants 9 Reply Brief at 20.) However, Claimants do not provide any explanation of 10 the services provided by Dr. David M. Posey and Dr. Bill Smock. When 11 asked about these experts at the hearing held on February 19, 2013, 12 Michael could not recall whether he had retained these experts nor 13 anything about the services they provided. Accordingly, the $4,558.88 14 total in fees and expenses related to their services will not be 15 awarded. The remaining costs of $17,992.04 will be awarded, as they 16 appear reasonable and appropriately documented. 17 d. Multiplier 18 After calculating the lodestar, the Court must determine whether 19 this is one of the rare circumstances in which the lodestar must be 20 adjusted upward or downward by an appropriate multiplier because it 21 does not adequately take into account a factor that may properly be 22 considered in determining a reasonable fee. Perdue v. Kenny A. Ex rel. 23 Winn, 559 U.S. 542, 130 S.Ct. 1662, 1673 (2010). Here, Claimants seek a 24 multiplier of 2.0 of the lodestar figure for Burch and Michael based on 25 the undesirability of the case, the fact that the case was taken on 26 contingency fee, and the Government s unnecessary protraction of the 27 litigation. (Mot. for Fees at 14-18.) 28 // 7 1 The Supreme Court has noted that an enhancement may be appropriate 2 if the litigation is exceptionally protracted. Perdue, 130 S.Ct. at 3 1674. Here, while there were some delays due to the government s 4 discovery-related dilatory conduct, they did not result in exceptional 5 delay overall. As the Government notes in its Opposition, prior to the 6 entry of summary judgment, the trial was still scheduled to take place 7 on January 15, 2013, the date originally set by District Judge Selna 8 just prior to the parties consent to proceed before a magistrate judge. 9 (Doc. 163.) Furthermore, Michael and Burch did not begin to represent 10 Kocontes until June 20, 2011, and therefore were not affected by any 11 delays prior to that date. 12 Regarding the factors of undesirability and contingency, the Ninth 13 Circuit has stated that the district court should apply a multiplier 14 when the fee applicant establishes that the prevailing party would have 15 faced 16 adjustment for risk and that it is difficult to find counsel for this 17 class of contingency fee cases. Fischel v. Equitable Life Assur. Soc y 18 of the United States, 307 F.3d 997 (9th Cir. 2002) (citing Fadhl v. City 19 & Cnty. of San Francisco, 859 F.2d 649, 650 (9th Cir. 1988) (per 20 curiam)). Here, Claimant Kocontes has submitted a declaration outlining 21 his 22 ( Kocontes Decl. ) at 3; see also Michael Decl. Ex. 2 at 7.) However, 23 the fact that Kocontes was able to quickly secure three sets of counsel 24 throughout the course of these proceedings undermines this contention. 25 Nor is the Court persuaded that a multiplier is warranted by the 26 factors that Claimants contend made the case undesirable. (See Mot. for 27 Fees at 14-15.) The difficulty of the case, including the fact that it 28 involved a homicide and foreign documents, is reflected in the high substantial difficulty difficulties finding in counsel. finding (Declaration 8 counsel of without Lonnie an Kocontes 1 hourly rates awarded to Burch and Michael, which may not have been 2 appropriate in a more straightforward proceeding. Likewise, fees were 3 awarded for the extra time Michael and Burch were required to spend 4 organizing the complex discovery material and obtaining translations. As 5 these 6 calculation, they do not warrant an upward adjustment. See Perdue, 559 7 U.S. at 542. factors were already taken into account in the lodestar e. Total Amount for Michael and Burch 8 9 Thus, Claimants are entitled to an award of attorney fees for the 10 services of Michael and Burch in the amount of $272,197.5,2 plus costs 11 of $17,992.04, for a total of $290,189.54. This number is appropriate 12 for the reasons discussed above. Additionally, it is reasonable in light 13 of the fee agreement prepared by Burch and Michael, though never signed 14 by the Claimants. See $186,416.00 in U.S. Currency, 642 F.3d at 755 (fee 15 agreement can be considered when determining a reasonable fee under the 16 lodestar approach). This document provided that Claimants would pay a 17 $9,000 flat fee plus a contingency fee of one third of the net recovery 18 if obtained at or after the filing of a motion for summary judgment or 19 trial, with an amount not to exceed $250,000. (Reply at 2.) Under this 20 agreement, the clients would not have had to pay more than $250,000 in 21 fees, even if the case had progressed through trial. Here, where the 22 case was resolved on summary judgment, it would be anomalous to grant an 23 award of fees far higher than what the clients were obligated to pay if 24 the case had concluded successfully after trial. 3. John Cogorno and Lynne Patterson 25 26 Claimants retained John Cogorno and Lynne Patterson of Mendoza & 27 2 28 This number is the sum of Michael s 286.6 hours at a rate of $600 per hour, and Burch s 334.125 hours at a rate of $300 per hour. 9 1 Associates in July 2009, and discharged them in June 2011, based on the 2 belief that they were not handling the case effectively. (Mot. for Fees 3 at 2.) Claimants claim that they paid a flat fee of $65,000 to Mendoza 4 & Associates, and contend that they have no way of ascertaining any time 5 sheets that Cogorno or Patterson may have kept. (Reply at 2.) However, 6 [t]he fee applicant bears the burden of establishing entitlement to an 7 award and documenting the appropriate hours expended and hourly rates. 8 Henslev, 461 U.S. at 437. The fact that Claimants actually paid Mendoza 9 & Associates $65,000 does not alleviate Claimants burden of showing the 10 reasonableness of these fees. Here, there is no evidence in the record 11 from which the Court can determine whether the rates charged and time 12 spent by Cogorno and Patterson were reasonable. Instead, Kocontes s 13 declaration, which details the poor quality of the work performed by 14 these 15 unreasonable. (Kocontes Decl. at 2-3.) Accordingly, Claimants are not 16 entitled to an award of fees paid to Cogorno and Patterson. attorneys, supports a finding that the fees charged were 4. Mark Werksman 17 18 Claimants were initially represented by the law office of Mark 19 Werksman when the government seized the defendant properties in 2008. 20 Because Claimants came to believe that Werksman was not dedicating 21 adequate energy and resources to the case in light of what he was 22 charging, Claimants discharged Werksman in July 2009. Invoices and 23 correspondence indicate that Claimants paid Werksman $95,739.38 in fees,3 24 and $4,334.13 in costs. (Mot. for Fees at 1; Kocontes Decl.) 25 Claimants have not demonstrated that the $100,073.51 total amount 26 3 27 28 This amount consists of a $41,497 retainer plus work from various attorneys billing at rates ranging from $450 to $575 per hour, with the majority of the work being billed at $575 per hour. (Kocontes Decl. Exs. 2, 3.) 10 1 was reasonable. Regarding the number of hours expended, Werksman s time 2 entries, along with the termination letter dated June 15, 2009, make 3 clear that many of the hours billed were for work on Kocontes s criminal 4 cases. (Kocontes Decl., Exs. 1-4.) Claimants are not entitled to 5 attorney fees for such matters. See United States v. Certain Real 6 Property, 579 F.3d 1315, 1319 (11th Cir. 2009) (concluding that the fees 7 incurred in defense of a related criminal action cannot be recovered 8 under CAFRA). Furthermore, Claimants have not shown that Werksman s 9 hourly rate of around $575 per hour was reasonable. Kocontes s 10 declaration itself states that he believed he was being overcharged by 11 Werksman, and Claimants have not offered any evidence to support the 12 reasonableness of Werksman s rate. Indeed, given that Michael s high 13 hourly rate is based on his recognition as an expert in the field of 14 civil forfeiture, it would be anomalous to deem a similar rate for an 15 attorney with no such demonstrated qualifications to be reasonable. 16 Finally, Claimants have not adequately shown the basis for the costs, 17 nor that they were reasonable. 18 As Claimants have failed to meet their burden of demonstrating that 19 the $100,073.51 sought is a reasonable amount, and have not otherwise 20 demonstrated that some lesser amount would be appropriate, they are not 21 entitled to a fee award for the services of Mark Werksman. 22 5. Costs for the Services of Investigator Susan McQueen 23 Claimants seek a total of $74,266.35 paid to private investigator 24 Susan 25 Kanesaki. (Supp. Kocontes Decl. Ex. 1.) The total amount consists 26 principally of a $50,000 retainer and reimbursements for expenses 27 McQueen incurred on trips to Italy. (Supp. Kocontes Decl. Ex. 1.) 28 McQueen, who independently investigated the death of Micki Claimants have failed to demonstrate that the $74,266.35 paid to 11 1 McQueen was 2 explanation for why it was necessary for McQueen to make multiple trips 3 to Italy. It does not appear that McQueen obtained any materials that 4 were not otherwise produced by the Government in discovery; nor does it 5 appear 6 Claimants 7 circumstances, Claimants have not met their burden of showing they are 8 entitled to an award of costs for McQueen s services. that reasonable. her Claimants investigative position in this work have not was forfeiture provided otherwise action. sufficient beneficial Under to these 9 10 III. Conclusion 11 Accordingly, for the reasons set forth above, it is ordered that 12 Plaintiff pay Claimants their attorney fees and costs in the amount of 13 $290,189.54. In view of the order staying judgment pending appeal 14 entered this date, this order shall also be stayed. 15 16 DATED: March 1, 2013 17 18 19 ______________________________ Marc L. Goldman United States Magistrate Judge 20 21 22 23 24 25 26 27 28 12
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