GCM AIR GROUP LLC, a Nevada limited liability company v. Chevron U.S.A. Inc., a Pennyslvania Corporation, No. 3:2007cv00168 - Document 105 (D. Nev. 2009)

Court Description: ORDER GRANTING D Chevron USA Inc's 77 Motion for Attorney Fees. Signed by Judge Brian E. Sandoval on 6/24/2009. (Copies have been distributed pursuant to the NEF - DRM)

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1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 D ISTR IC T O F NEVA DA 8 9 GCM AIR GROUP,LLC,a Nevada Limi ted LiabilityCom pany, 10 Plainti#, l1 v. 12 CHEVRON U.S.A.,INC.,a Pennsylvania 13 Corporation, 14 15 Defendant. ) ) ) ) ) ) ) ) ) ) ) 3:07-cv-0O168-BES-RAM ORDER Currently before the Coud isDefendantChevron U.S.A.Inc.'s ('ichevron'')Motionfor 16 17 Attorney'sFees (#77)filed on April8,2009. PlaintiffGCM AirGroup,LLC ('GCM'')filed an Oppositionto Defendant'sMotionforAttorney's Fees (#84)on April21,2009,and Chevron 18 filed a Reply inSuppod ofits MotionforAttorneysFees(#95)on May 5,2009. 19 GCM AIR GROUP LLC, a Nevada limited liability company v. Chevron U.S.A. ...Pennyslvania Corporation 20 21 22 23 24 25 26 27 28 Doc. 105 BACKG RO UND The padiesare fam iliarwith the facts ofthiscase.As such,the Courtwillonly state the facts necessary to determ ine the currentm otion forattorney's fees. ln 2005,G CM and Chevronentered into an EnvironmentafAgreementforthe purpose of m onitoring and rem ediating contam ination thatoccurred as a result ofChevron's retail service station operations on a piece ofpropedy acquired by GCM. (MotionforAttorney's Fees (#77)atExhibitF).According to the EnvironmentalAgreement,the padieswished ''to provide forthe necessary investigation,site assessm ent,and clean-up''ofthe contam ination on two adjacent parcels. Ld-u In the contract,the parties agreed that Chevron would investigate,m onitorand remediate the contam ination located on the propedies acquired by Dockets.Justia.com 1 GCM as directed oragreed to by the W ashoe County DistrictHeaIth Depadm ent. 1 J= . 2 The Environm entalAgreem entincluded a clause relating to attorney'sfees.According 3 to paragraph 13 ofthatagreem ent,if''any party to this Agreementshould bring an action 4 againsttheotherto enforcetheterms ofthisAgreem ent,the substantially prevailing padyshall 5 be entitled to receive such a sum as reasonable attorney's fees as shallbe determ ined by a 6 Coud ofcompetentjurisdiction in said proceeding.''. 1 -(. t.atExhibitF,p.5. 7 O nApril4,2007,G CM filed a IawsuitagainstChevron based onthe contam ination and 8 remediation ofthe subjectpropedies. OnAugust20,2007,GCM filed a Second Amended 9 Complaint(#16)which alleged 17 causes ofaction againstChevron. These claims were 10 based both in contractand in tort. On March 25,2009,the Coud entered an Order(#74) 11 grantingChevronsummal' yjudgmentonaII17claims.Chevron now seeksattorney'sfeesin 12 the am ount of $367,596,35 pursuant to the attorney's fees provision in the padies' 13 Environm entalAgreem ent. 14 15 ANA LYSIS A federalcourt''applies state Iaw in a diversity action to determ ine w hetheran aw ard 16 ofattorneys'feesisallowed.'Canada LifeAssur.Co.v.Lapeter,563F.3d 837,847(9th Cir. 17 2009). In Nevada,a coud 'tcannotaward attorneyfees unlessauthorized by statute,rule or 18 contract.''FrankSettelmever& Sons,Inc.v,Smith& Harmer,Ltd.,197 P.3d 1051,1059(Nev. 19 2008). In this case,the partieshave a contractualprovisionwhichprovidesforan award of 20 attorney'sfees to the prevailing padyasto the enforcementofthe Environm entalAgreem ent. 21 1. A ppod ionm ent 22 Chevron is seeking adorney's fees pursuantto the Environm entalAgreement in the 23 amountof$367,596.35.According to Chevron,eventhough G CM only broughtthree specific 24 claim s relating to the breach of the Envircnm entalAgreem ent, it is entitled to aIIof i ts 25 reasonable attorney'sfees incurred in the defense ofthis case because '' the facts underlying 26 a1Iof the claims are intertwined such that it is im practicable to appodion costs between 27 padicularclaims.''(Reply (#95)at3).Chevronassertsthatthe core ofaIIofGCM'S causes 28 ofaction are tied to the Environm entalAgreem entbecause thatagreem entdictated the term s 2 1 ofthe rem ediation following the contam ination on the site $. Chevronthenassedsthatthe . . 2 remediation and contam ination form the basis ofallthe otherclaim s asseded againstit A s . 3 such,Chevron claim s thataIIofthe causes ofaction are interrelated and thatits costs to 4 defend againstthe allegations relating solely to the Environm entalAgreem ent cannot be 5 carved out.l 6 GCM does notdispute thatChevron isentitled to attorney'sfees based onthe provision 7 in the Environm entalAgreem ent However,G CM argues that only three claim s in the . 8 amended com plaintrelatetothatspecificcontract Basedonthis,G CM arguesthatchevron's . 9 motion for attorney's fees ''improperly requests fees that are not associated (with)the 10 EnvironmentalAgreement.''(Plaintiff'sOppositionto Defendant'sMotionforAttorney'sFees 11 (#84)at3). Because the EnvironmentalAgreementt'callsonlyforattorney'sfeesto enforce 12 thatspecific agreem ent,''G CM statesthatChevron is ''notentitled to fees spentin connection 13 to the otherportions ofthe lawsuit' 'Ld=. . 14 UnderNevada Iaw,appodionm entofattorney's fees is notmandatory when the fees 15 were incurred forrepresentation on an issue com m on to b0th a cause ofaction in which fees 16 are properand one in whichthey are notallowed See Mavfield v.Koronhli,124 Nev 34,184 . . 17 P.3d 362,369 (Nev.zoo8ltadoptingthe reasoning setforth inAbdallah v United Sav.Bank, . 18 51Cal.Rptr.zd 286(CaI.Ct.App.1996)).InMavfield,the Nevada Supreme Courtheld thati 'in 19 anaction inw hich a plaintiffpursues claim s based on the sam e factualcircumstancesagainst 20 m ultiple defendants, it is within the district court's discretion to determ ine whether 21 appoftionm ent is rendered im practicable by the interrelationship ofthe claims againstthe 22 multiple defendants.''!#= 'The districtcourtm ust, how ever,attem ptto appodion the costs . 23 before determ ining thatappodionm entis im practicable ' 'Ld=.AlthoughMavfield dealtwi ththe . 24 issue ofappodionm entas to m ultiple defendants, the Nevada Suprem e Courtadopted the 25 26 Mqreover,Chevron notesthatthe .-majority ol.Chevron,sattorney feeexpenditureswere 27 incurre d i n dlscovery ''andlûrnlo singledepositionwasfocused entirelyon adefenseofaparticular ,, claim. Rather,thejepositionsand otherdiscoverywerealIundertakenfor<:thediscoveryofand nseagaînstthe sam e underlying issuesand factscom m on to both GCM 'Scontractandtortclaim s'' 28 def Ld e = .at5. . 3 l reasoning ofthe Cali fornia CourtofAppeals when itdecided the sam e issue faced by this 2 Coud in Abdallah,51 Cal.Rptr.zd at293. 3 ln Abdallah,the issue presented before the courtwas whetheran award ofattorney's 4 fees had to be reduced because the respondents were entitled to attorney'sfees only on the 5 contractcause ofaction and notthe related tortand RICO causes ofaction 51 Cal.Rptr.2d . 6 at293. The courtheld that''kalpportionmentofa fee award between fees incurred on a 7 contractcause ofaction and those incurred on othercauses ofaction iswithinthe trialcourt's 8 discretion.'Ld= UnderCalifornia Iaw,iiattorney'sfeesneednotbe apportionedwhenincurred 9 forrepresentation on an issue com monto both a cause ofaction in which fees are properand 10 one in which they are notallowed ' 'Ld=.As such,whenclaims are ''inextricably intertwined,'' . 11 a courtm ay find that i t is ''impracticable, i f not im possible, to separate the m ultitude of 12 conjoined activities into compensable ornoncompensable time units.''Ldu - 13 In this case,the Coud finds that the causes of action asserted in GCM 'S Second 14 Am ended Com plaintare so intertwined thatit is im practicable to appodion the fee award 15 based on tim e incurred defending the contractcause of action from the other rem aining 16 claim s. Specifically,the allegations of G C M 'S com plaint center on Chevron's contam ination 17 and remediation ofthe subjectpropedies.These factualassedions underlie aII17ofGCM'S 18 causes of action and are at the core of GCM 'S claims for breach of the Environmental 19 Agreement. 20 As to GCM 'S breach of contract claim s, aIIthree are based on the same factual 21 assedion thatChevron allegedly failed to rem ediate the property in a tim ely and reasonable 22 m anner.z G CM alleged that as to the Lease Agreem ent, Site Access Agreement, and 23 Environm entalAgreement,Chevron failed to perform its obligations in a ''tim ely, diligent, 24 com petentand reasonable manner, such thatG CM has been denied the use and occupancy 25 26 z In its Opposition to Chevron,sM otion forSum m ary Judgm entT G CM assertsthatitentered 27 intotheSiteAccessAjreementandEnvironmentalAyreementi'sothatChevroncouldremediatethe contam inated property.,Ld at9. Inthissame tilingsGCM arguesthatChevron wasliable forbreach 28 ofallthreeseparatçagreem entsbased on thesamefactualallegations-specitically,thecontam ination and rem ediation ottheproperty.Ld, at7-1S. - .. - 4 1 ofboth''ofi tspropedies.(SecondAmended Complaint(#16)at13).Moreover,GCM alleged 2 thatdue to Chevron's contam ination ofthe properties,S'as wellas its protracted, dilatory, 3 incom petentand inefficientRemediation efforts, GCM has been unable to Iease and/orsell 4 the Properties.''Ld= As a resultofChevron'scontam ination and negligentremediation efforts, . 5 G CM alleged thatChevron breached ''each and everyagreem entinvolving''the site, and that 6 GCM incurred consequentialdam ages ''in the form ofIost rents, out ofpocketexpenses, 7 propedy taxes,utilities,and otherm aintenance,attorneys fees and costs,engineering fees 8 and costs,Iostprofits and dim inution in value ''Ld=.at14. ,see also (Plaintiffs Response in 9 Oppositionto Defendant's MotionforSummaryJudgment(#61)at7).BecauseaIIofGCM'S . l0 breach ofcontractclaims relate specifically to Chevron's contam ination and alleged failure to 11 properlyrem ediate the property,the Coudfindsthatitcannotappodionattorney'sfeesam ong l2 those claims. Rather, they are based on the sam e factual circum stances m aking 13 appodionm ent im practicable. 14 Moreover,a review ofthe tod causes ofaction show thatthey are based on the sam e 15 allegations ofcontam ination and remediation SeveralofGCM 'Stod claim srelate to property . 16 dam ages suffered asa resultofChevron'salleged m isconducton the Ieased propedy. These 17 include:tortious injul-yto realpropedy,negligence,nuisance,trespass,and strictIiabilityfor 18 ultrahazardous activity. These claims alI relate specifically to the contam ination and 19 rem ediation ofthe si te and are based on the sam e factualcircum stances as G CM 'S breach 20 ofcontractclaims. The rem aining tw o tort claims are for negligentm isrepresentation and 21 tortious interference with prospective econom ic advantage Althoughthesetodsdo notassert . az claim sfordam age to the propedy,they are both based onChevron'scontam ination ofthe site tsfailed rem ediation effods.Specifically, in i 23 and i ts allegation ofnegligentm isrepresentation, 24 GCM argues that Chevron m ade false representations regarding the extent of the 25 contam ination and the status ofthe rem ediation GCM 'S claim fortodious intederence w ith . 26 prospective econom ic advantage alleges that Chevron interfered with a prospective 27 contractual relationship because uncertainties existed relating to the contam ination and 28 rem ediation. A s can be seen, aIIof GCM 'S tort claim s are based on the sam e factual 5 l underpinnings as the breach ofthe Environm entalAgreem ent. 2 Based on the foregoing,the Courtfindsthatappodionm entofa fee award inthism atter 3 is im practicable because the various claim s are inextricably intertwined. AI117 causes of 4 action are based on com m on issues offactand are interrelated to the claim s m ade in G CM 'S 5 breach ofthe Environm entalAgreem ent. Because the claim s are so interrelated,the Court 6 cannotseparateddthe multitudeofconjoinedactivitiesintocompensableand noncompensable 7 tim e units.'' See M avfield,184 P.3d at369. As such,Chevron is entitled to an award of 8 unappodioned reasonable attorney's fees in this m atter. 9 lI. R easonableness 10 Once a pady has established thatitis entitled to an award ofattorney's fees,iililt 11 rem ainsforthe districtcourtto determ ine w hatfee is 'reasonable.'''Hensel v v.Eckerhad,461 12 U.S.424,433 (1983).The Ninth Circuitusesthe''Iodestar'method ofcalculating attorney's 13 fees. See Caudle v.Bristow OnticalCo..Inc ,224 F.3d 1014,1028 (9th Cir.zooollcitation 14 omitted).The Iodestaramountiscalculatedbym ultiplyingthe numberofhourstheprevailing 15 party reasonably expended on the Iitigation by a reasonably hourly rate. Van Gerwen v. l6 Guarantee Mut.LifeCo.,214 F.3d 1041,1045(9thCir.zoo7ltciting Henslev,461U.S.at433). 17 ln determ ining the appropriate Iodestaramount,the districtcoud m ay exclude from the fee 18 requestanyhoursthatare 'iexcessive,redundant,orothel w ise unnecessary,''Ld..at946.In 19 rare and exceptionalcases,the districtcourtmay adjustthe Iodestarupward ordownward 20 using a multiplierbased on facts notsubsumed in the ini tiallodestarcalculation. Ld=.The 21 factorssetoutin LocalRule 54-16 (GLR 54-16,')guide the coud'sanalysis.See Schneiderv. 22 Elko Countv Sheriff's Den't,17 F.supp2d 1162,1166 (D.Nev.1998). 23 A. Hourly Rate 24 In determ ining a reasonable hourly rate,the coud should considerthe skill,experience p.j and reputation ofthe attorney requestingfees.See Chalm ersv.Citv ofLosAnneles,796 F.2d 26 1205,1210-11 (9th Cir.1986). ,see also W elch,48O F.3d at946. The Ninth Circuithas 27 repeatedly held thatthe determ ination ofa reasonable hourly rate S'is notm ade by reference 28 to rates actually charged the prevailing party.'' W elch, 480 F.3d at 946. Rather,the 6 1 reasonable hourly rate should reflect' dthe prevailing m arketrates inthe relevantcom m unity.'' 2 See Bellv.Clackamas Countv,341F.3d 858,868(9th Cir.2003).Addi tionally,underLR 543 16,relevantfactorstoconsiderinclude:(1)the noveltyanddifficultyofthequestionsinvol ved' , 4 (2)the skillrequired' ,(3)the preclusion ofotheremployment' ,(4)the customaryfee;and (5) 5 the experience,reputation,and ability ofthe attorneys. See M r.RooterCorp.v.M r.Plum ber, 6 2008W L 4533978 at*2 (D.Nev.2008). 7 In this m atter,Chevron was represented by the Iaw firm of Filice Brow n Eassa & 8 Mcl-eod LLP.According to its motion forattorney'sfees,' ûldlefense counselhashad a long 9 standing professionalrelationship with Chevron,'and as pad ofthat relationship defense 10 counselcreated iia Iegalteam''itusesto representChevron in Ii tigationmatters.(Motion for 11 Attorney's Fees (#77)at8). The Iegalteam is com prised ofIead counsel,an associate 12 attorney and a paralegalunderIead counsel's supervision.Ld=.''Lead counselforChevron is l3 a litigation partnerwho has been practicingforover25 years.''Ld-. Accordingto its motion, 14 Iead counsel, the associate attorney,and the paralegal's rates are fixed per counsel's 15 agreementwith Chevron and are reasonable as compared to the geographic market.4 !#.. 16 The Iead counselrepresenting Chevron is Richard V .Norm ington. According to M r. 17 Norm ington's affidavit,he ''charged Chevron a rate of$305 perhour''forhis services.This is 18 Mr.Normington's''normalhourly rates''(Declaration ofRichardV.Normington in Supportof 19 DefendantChevronU.S.A.Inc.'sMotionforAttorney'sFees(#79)).Mr.Normingtonattached 20 a brief professionalbiography to his declaration indicating that he has over 25 years of 21 experience S 'in a wide variety ofcivilIitigation matters,with a particularemphasis in the areas 22 oftoxictoddefense,classactions,Supedund,environm entalIitigation,environm entalIaw ,and 23 generalcivilIitigation.''Ld=.atExhibitC.The hourly rate forthe associate attorneyworking on 24 25 3 A sa generalru1e,therelevantcom m unity isthe forum in w hich the districtcourtsits.See llick V.M iller 68F.supp.zd1169,1175(D.Nev.1999)(citingBarionv.Daltons132F 3:1496,500(9thCir. 26 1997)).iatesoutsidethefbrum maybeusedi-iflocalcounselwasunavailable,eitherbecausetheyare unwillingorunableto perform becausetheylaqk thedegreeofexperience?expertiseqorspecializatign 27 requiredtohandleproperlythecase.''Ld=.(quotlngGatesv.Deukmeiian,987F.2d 1392,1405(9thClr. 1992)). 28 The 1aw tirm ofFilice Brown Eassa & M cl-eod LLP is based outofOakland,California. 7 1 2 3 4 the case,M r.DanielJ.Nichols,was$230 perhour'whichisthenormalhourlyratebilled' 'by chols professional the law firm ford'the services ofthis associate.'' $=.According to Mr.Ni . biography, he w as adm itted to practice in California in 2005 and is a 'llitigation attorney specializing in environmental,product liability,and toxic tod Iitigation.'' 1#= atExhibitD. According to M r.Norm ington's affidavit,Mr.Norm ington is fam iliarwith the fees charged by 5 6 otherattorneyswho practice inthe same area and have a sim ilareducationalbackground and experience. According to M r.Norm ington the ratesthey charged Chevron fortheirservices 7 , 8 ''are withinthe range ofratestypicallycharged by such attorneysforsimilarwork.''Ld=. 9 l0 Based onthe foregoing,the Courtfindsthatthe hourly rate charged bydefense counsel was reasonable in Iightofthe skilland experience ofthe adorneys involved,as weilas the difficulty ofthe questions presented in this case and counsel's customary fees.s Defense 11 counselprovided evidence that i ts rates w ere reasonable and custom ary forthis type of l2 13 litigation.Although defense counseldid notpresentevidence thatits rates are reasonable for the relevantcom m unity ofReno,Nevada,the Coud finds in itsow nexperience thatthe hourly l4 15 rates charged bythe aforem entioned O akland attorneys is within the prevailing rates in Reno. 16 SeeIlick,68F.supp.zdat1176(statingthatintheabsenceofanyrelevantevidence regarding 17 whetherthe rates are in line withthose prevailing in the com m unity,the courtm ay use itsown 18 experienceasaguideinbilling matters).Assuch,Chevronisenti tledtoattorney'sfeesbased 19 on the rates subm itted by i ts defense counsel. 20 21 22 23 24 25 B. Hours W orked The pady seeking attorney's fees bears the burden ofsubm itting evidence to support the hours worked and rates claim ed. Van Gerwen,214 F.3d at1045.A districtcourtshould exclude from calculation of the fee award those hours thatare ''excessive,redundant,or othefw ise unnecessary.''Hensley,461 U.S.at434. ,Transno,Inc.v.AiacTransm ission Parts Corn.,768 F.2d 1001,1027 (9th Cir.1985). RelevantLR 54-16 factorsto considerinclude: 26 (1)the resultsobtained andthe amountinvolved' ,(2)thetime and Iaborrequired' ,and (3)the 27 28 5 In its opposition,G CM did not challenge the hourly rate or the num ber of hours worked subm itted by Chevron. 8 1 novelty and difficulty of the questions involved. Although G CM has not contested the 2 reasonableness ofthe hours expended,the Courthas an independentobligation to review 3 them to determ ine ifthey are reasonable in Iightofthe w ork performed. See Sealv.Inc.v. 4 EasvLivinn,Inc.,743 F.2d 1378,1385(9th Cir.1984)(stating thata coud may notuncriticall y 5 accepta fee request). 6 Here,Chevron is seeking fees for 1,689.20 hours incurred during the course ofthe 7 Iitigation. A ttached to C hevron's m otion are the contem poraneous tim e records kept by 8 defense counselin connection with the matter and the periodic bills for services sentto 9 Chevron. (Declaration ofRichard V.Normington in SupportofDefendantChevron U.S.A. 10 Inc.'s Motion forAttorney's Fees (#79)atExhibitA). According to Mr.Normington,in his 11 professionalopinion,''alIofthese services w ere reasonably necessaryto secure the favorable 12 result''thatwas obtained by Chevron. Ld=.at3. Mr.Normington's declaration notes that 13 'ldliscovefy inthis case included many sets ofwritten interrogatories,documentproductions l4 and oraldepositions.The padies exchanged thousands ofpages ofdocum ents. In addition, 15 twenty-eightdeposi tions were taken ofpercipientand exped witnesses,including outofstate 16 w itnesses.'' I J=. In addition to extensive discovery,Chevron also states thatthe parties . 17 engaged in num erous pre-trialm otion work prior to the Court's order granting Chevron 18 summaryjudgmentand attempted to mediate the dispute 19 Afterreviewing the timesheetsum m al 'y ofChevron's counsel,the Courtfinds thatthe 20 totalhours expended by Chevron's attorneys are notexcessive.Thiscase has been ongoing 21 for overtwo years and involved 17 claim s for reliefasserted againstChevron. As noted, 22 discovery in this case was extensive and involved com plicated Iegaland factualissues. In 23 addition,there was pre-trialm otion work,as wellas a m ediation adem pt. M oreover,counsel 24 forChevron obtained a favorable resul tforits clienton aIIthe claim s asseded againstit. As 25 a result,the Courtfinds thatChevron is entitled to attorney's fees forthe 1,689.20 hours 26 incurred during the course ofthis Iitigation. 27 Thus,based on the foregoing,the CoudfindsthatChevron is entitledto attorney'sfees 28 pursuantto the provision in the EnvironmentalAgreem entin the am ountof$367,596.35. 9 CONCLUSION Forthe foregoing reasons, IT IS ORDERED that Defendant Chevron U S.A.Inc.'s . MotionforAttorney's Fees (#77)isGRANTED. oA7.Eo:n i s7q dayofaune,2oo9 . Uni 21 States istrictJudge

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