Pinpoint IT Services, LLC v. Atlas IT Export Corp., No. 2:2010cv00516 - Document 111 (E.D. Va. 2013)
Court Description: OPINION AND ORDER re 99 Report and Recommendations. GRANTED in part and DENIED in part 35 First MOTION for Attorney Fees by Pinpoint IT Services, LLC. TAKEN UNDER ADVISEMENT 37 First MOTION for Sanctions by Pinpoint IT Services, LLC. The C ourt, having reviewed the record, considered the objections filed by Plaintiff, reviewed the R&R for clear error, and made de novo findings with respect to the portions objected to, does hereby ADOPT AND APPROVE the findings and recommendations set f orth in the Report and Recommendation of the United States Magistrate Judge, as supplemented and amended by this Order. For the reasons stated above, this Court GRANTS in part and DENIES in part Plaintiff's Motion for Attorneys' Fees and T AKES UNDER ADVISEMENT Plaintiff's Motion for Sanctions. Accordingly, Defendant is ORDERED to pay Plaintiff $25,508 in attorneys' fees. It is SO ORDERED. Signed by District Judge Mark S. Davis on 7/25/13. Copies distributed to allcounsel of record 7/26/13. (ldab, )
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Pinpoint IT Services, LLC v. Atlas IT Export Corp. Doc. 111 UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA Norfolk Division PINPOINT IT SERVICES, LLC, Plaintiff, v. CIVIL ACTION NO. 2:10cv516 ATLAS IT EXPORT CORP., Defendant. OPINION AND ORDER This matter is before the Court on Pinpoint Services, LLC's {"Plaintiff") objections to the United States Magistrate Judge's Report Court and Recommendation grant Attorneys' in part Fees ("R&R"), and and deny deny in which part Plaintiff's recommended Plaintiff's Motion Having completed a careful review of the R&R, ADOPTS AND APPROVES supplemented Plaintiff's Attorneys' and amended Motion Fees"), its for findings by this Attorneys' ECF No. 35, and 1927 ("Motion for Motion for for Sanctions. recommendations, and Accordingly, Costs as the ("Motion for is GRANTED in part and DENIED in part and Plaintiff's Motion for Sanctions § this this Court hereby Order. Fees that Sanctions"), ECF Pursuant No. 37, is to 28 TAKEN U.S.C. UNDER ADVISEMENT. I. The parties procedural FACTUAL AND PROCEDURAL HISTORY have filed background as no objections to detailed in the R&R. the factual and Upon review of Dockets.Justia.com such background, the Court finds no clear error. section of the R&R entitled "Background" accurate statement history. Additionally, to supplement relevant the events of this the Court factual that case's and have the is hereby adopted as an factual finds that procedural occurred Therefore, and procedural is appropriate it history since the as to issuance those of the with the Magistrate Judge's R&R. On October 24, 2012, Plaintiff filed a motion Bankruptcy Court in Puerto Rico seeking relief from an automatic stay placed on the proceedings in the instant case on the ground that the second-filed Rico was proceeding action in Pinpoint IT Services, violation LLC) , BAP No. Cir. 29, without 2013). exception, The directs concurrently duplicative litigation and filed action is decision." (1st Cir. The District of PR 12-090, proceeding first the the of Puerto "first-filed rule." LLC v. Atlas IT Export, IT Export, Jan. in that in a "[w]here two waste LLC slip op. "first-filed at (In re Atlas 2 (B.A.P. 1st although rule," not actions are identical federal of Court courts, judicial entailing resources, the generally preferred in a choice-of-venue Cianbro Corp. v. Curran-Lavoie, Inc., 814 F.2d 7, 11 1987). Bankruptcy Court denied Plaintiff's motion, stating that when a creditor is seeking relief to proceed in litigation, "the most important factor is the effect on the administration of the estate." In re Atlas IT Export, slip op. at 2-3. lifting the "interfere On that point, stay with in the judicial economy." Plaintiff the United Circuit 2013, the Eastern the District case" ruling Bankruptcy of and Virginia would be would "against of the Bankruptcy Court the to Appellate Panel for Panel"). Id. On January 29, ("Bankruptcy Appellate First the Bankruptcy Appellate Panel determined that Plaintiff's appeal was interlocutory and, for lack of jurisdiction. this dismissal First accordingly, Id. at 6-7. to the United States Circuit, where the dismissed the appeal Plaintiff has appealed Court of Appeals for the briefing includes now-completed argument on the applicability of case. PR 12-090, at 3. appealed States BAP No. the Bankruptcy Court found that bankruptcy Id. LLC, the "first-filed rule" to this Plaintiff's appeal remains pending at this time. II. STANDARD OF REVIEW The scope of a magistrate judge's authority is defined by statute, and types referrals The of Supreme magistrate includes of judge's matters authority over § 636(b)(1)(B). ability from the Court pretrial the is the hear and district court. 28 United States has authority governed "dispositive" to concerning by determine U.S.C. held matters See Gomez v. United States, § 636. that a "nondispositive" § 636(b)(1)(A), pretrial two is while set 490 U.S. his forth 858, in 873- 74 (1989). some Motions for attorneys' circumstances, category. 2011) fall the See Reddick v. White, (unpublished) . caution, into the fees dispositive, course of action was to Judge treat § and out determined of the motion as 194 an that in 636(b)(1)(B), 456 F. App'x 191, Accordingly, Magistrate and sanctions may, (4th Cir. abundance the of appropriate dispositive and to submit a report and recommendation to this Court. For dispositive motions, magistrate hearings, judge and to to conduct submit recommendations." a district court may "designate a . . 28 U.S.C. hearings, including . proposed findings § 636(b)(1)(B). evidentiary of fact and "[A]ny party may serve and file written objections to such proposed findings and recommendations" § 636(b)(1). novo within fourteen (14) The district court is review of "those portions objection is made." Id. of days after service. Id. then required to make a de the report ... to which As to portions of the R&R not objected to, a district court "must xonly satisfy itself that there is no clear error on the face of the record in order to accept the recommendation.'" Diamond v. Colonial Life & Accident Ins. Co., 416 (4th Cir. F.3d 310, 315 2005) (quoting Fed. R. Civ. P. 72 Advisory Committee's Note). Ill. In the R&R. this case, Plaintiff DISCUSSION Plaintiff argues filed that three timely objections to the Magistrate Judge erred by recommending that reimbursement preparation of of reimbursement fees this Court: (1) the attorneys' its of Motion only a deny Plaintiff's fees for and costs Default percentage of request for incurred in the Judgment; (2) Plaintiff's and costs associated with the preparation of grant attorneys' its Response to Defendant's Motion to Set Aside Default and to Change Venue (ECF No. Strike 16) ("Motion to Set Aside Default") Defendant's Memorandum Certify Entry of Default (3) deny Plaintiff's in (ECF No. separate Opposition 18) Motion and its Motion to to the Motion ("Motion to Strike"); for Sanctions and under U.S.C. § 1927, which sought reimbursement of the attorneys' to 28 fees expended to defend the suit brought by Defendant in the District Court of Puerto Rico. A. Objection to Recommended Denial of Attorneys' Fees for Plaintiff's Motion for Default Judgment Plaintiff moved for reimbursement of the attorneys' and costs Judgment, it incurred relying awarded such fees on in preparing several when cases dilatory its from tactics Motion this for fees Default District that constituted bad faith conduct sufficient to justify the imposition of sanctions. ECF No. 99 at 7-8 (citing Blair v. Shenandoah Women's Ctr. Inc., 757 F.2d 1435 (4th Cir. 1985); Am. Sci. & Eng'g, LLC, 606 F. Supp. 2d 617 v. First Care, Inc. v. Autoclear, (E.D. Va. 2008); Carefirst of Md., P.C. , 422 F. Supp. 2d 592 (E.D. Va. 2006)). Inc. The R&R found resulting not rise cited by Judge that in to the only the alleged "isolated and same level Plaintiff. recommended Id. that Plaintiff's attorneys' Id. The misconduct Plaintiff as at in the relatively the 8. conduct instant brief in there is "no delays," the Accordingly, three the basis" case, did cases Magistrate for awarding fees against defense counsel personally. did Finding no clear error, not object to this recommendation. this Court ADOPTS AND APPROVES the same. The R&R did not address whether the alleged misconduct supported an award of attorneys' fees and costs against Defendant. Having considered the question de novo, in light of the cases cited in support of Plaintiff's motion, the Court finds that it does not, for the same reasons stated in the R&R with respect to the award sought against defense counsel personally. Although Plaintiff relied on Defendant's alleged misconduct as the reimbursement of attorneys' case recognizing under Federal conditions on reimbursement incurred by the Rule an order of the the basis fees and costs, Court's of primary and its Procedure setting reasonable aside and See cited one to such fees ECF 1987). The Magistrate Judge found that impose as and No. (citing Lolatchy v. Arthur Murray, Inc., 816 F.2d 951, Cir. seeking discretion, 55(c), default, attorneys' non-defaulting party. for it also inherent power Civil counsel's 36 the costs at 4 954 (4th Plaintiff's reliance on Reviewing Lolatchy this was Court's well Opinion Motion to Set Aside Default, taken. and ECF Order No. granting 99 at 8. Defendant's the Magistrate Judge found that, in balancing the six factors set forth in Payne ex rel Clazada v. Brake, 430 Plaintiff this F.3d to Court Motion fees Strike move 204-05 for Set Aside and and its (4th Cir. reimbursement implicitly to those 198, costs on to the fees and costs, of Defendant's its grant Defendant's associated response and certain of conditioned Default 2006), with Motion in reimbursement Plaintiff's to inviting Set Motion Aside clear error, this Court adopts and approves to Default. Defendant has not objected to this factual finding and, no of finding the same. Indeed: In determining whether to exercise its discretion to set aside a default, . . . a district court has inherent power to impose a reasonable condition on the [defendant] in order to avoid undue prejudice to the opposing party. . . . 'The imposition of conditions as part of granting a Rule 55(c) motion can be used to rectify any prejudice suffered by the nondefaulting party as a result of the default and the subsequent reopening of the litigation.' Powerserve Int'l, Inc. v. Lavi, (quoting 10A Charles A. Kane, Federal Practice 239 F.3d 508, 515 Wright, and Arthur R. Procedure Here, when setting aside default, § (2d Cir. 2001) Miller & Mary Kay 2699, at 169 (1998)). this Court plainly stated that it would "consider any suggestions that are brought before it, such as a motion for reimbursement of Plaintiff's costs associated response 33 at with Plaintiff's to Defendant's motion 37. However, contemplate or as invite Magistrate Judge concluded, Court's and costs order Magistrate was setting Judge to R&R Motion notes, of for not that and an this Plaintiff's the implicit did and not costs Judgment. The reimbursement Plaintiff condition of of this Additionally, default. the fees that ECF No. Court Default accordingly, aside noted strike set aside default." reimbursement Plaintiff's fees to the associated with such motion the did its not file Motion for Default Judgment until after defense counsel had made an appearance and that many of the billing entries associated with the Motion for Default were related to work that had to be completed Id. regardless at 10. of For all of whether the Defendant these reasons, ever appeared. the R&R recommended that this Court deny Plaintiff's Motion for Attorneys' Fees and Costs with respect to its Motion for Default Judgment. Plaintiff objects only to the R&R's factual finding that the attorney for Defendant appeared on December 20, 2010, three days prior to the filing of the Motion for Default Judgment. ECF No. 100 at 5. Plaintiff correctly argues that the Defendant's Notice of Appearance was filed on December 23, 2010, the same However, filed day that Plaintiff although local until December moved for default judgment. Id. counsel's Notice of Appearance was not 23, 2010, counsel 8 did file a motion on December 20, 2010 seeking leave for counsel appear pro hac vice. ECF No. 9. from Puerto Rico to The Court granted this motion by Order entered on December 21, 2010. ECF No. 11. Counsel's pro hac vice motion and this Court's order granting that motion put Plaintiff's was imminently forthcoming and that Defendant would likely seek to set Rule aside of notice, the Civil decision to may counsel on notice Clerk's Procedure continue not have entry of such notice attorneys' fees and costs for default an Notice default have to associated with a Federal counsel's despite exercise informed judgment would not Appearance Plaintiff judgment, unreasonable should of pursuant Although pursuing been a default 55(c). advocacy, motion that in them such zealous that the subsequently filed likely be awarded, were default later set aside. Therefore, despite Plaintiff's factual Court agrees with the Magistrate Judge's review of counsel's the same) that involvement prior Judgment. notice that is this Furthermore, only Court one of deny objection, finding (after de novo Plaintiff the the was aware of to the Motion for filing conclusion R&R's three reimbursement of that the opposing Default Plaintiff bases this was on for recommending attorneys' fees and costs that Plaintiff incurred in preparing and filing the Motion for Default bases, to Judgment. which The Plaintiff Court did not has reviewed object, and the other finds no two clear error in the Attorneys' same. Fees is Accordingly, DENIED as to Plaintiff's those for relating fees Motion to Plaintiff's Motion for Default Judgment. B. Objection to the Recommended Partial Denial of Attorneys' Fees In Motion addition for to those Default costs Judgment, and fees Plaintiff associated sought with its reimbursement of the fees and costs incurred in the preparation of its Motion to Strike and its Default. latter filings, awarded, a to the Defendant's Motion to Set Aside The R&R recommended granting fees associated with the recommended, to Response and Defendant however, finding that specific that did not none object. of the The R&R requested further costs the itemized expenses were not attributed underlying motion and, further, that it unclear what had necessitated the incursion of such costs were largely courier and postage expenses) Court's electronic case filing system. to the this recommended Court Plaintiff's finds no Motion be denial. clear for Attorneys' in Fees light of (which this Plaintiff did not object Reviewing error in was these the is recommendations, same. Accordingly, GRANTED as to those reasonable fees relating to Plaintiff's Motion to Strike and its Response to Defendant's Motion to Set Aside Default with respect to all of the itemized costs requested. 10 and DENIED Plaintiff to the claimed a preparation $29,204 in of total the attorneys' of relevant fees. which No. at 99 amounts 14-15. The but discounted the total number of recoverable hours billing of Court to to clerical recommended Plaintiff due tasks. granting objects to award the vagueness, fees full the amount finding amount of Plaintiff's original motion. On de novo review, Judge's recommendation. a district court reasonableness of Court the and broad attorneys' fees Id. this requested in 100 at 6. agrees with discretion fees, R&R asks the Magistrate The R&R properly stated that, has the $25,508. only attorneys' ECF No. this of were and Accordingly, vagueness the applied overconferencing, Id. in rates to reasonable, hours hourly related Judge 11.4 the hours filings, ECF that (96) Magistrate by found ninety-six the United to although decide States the Court of Appeals for the Fourth Circuit requires that the district judge consider twelve reasonableness. 235, 243 Express, when addressing Robinson v. Equifax Info. (4th Inc., factors Cir. 2009) (citing 488 F.2d 714 Servs., Johnson (5th Cir. the v. 1974)). issue LLC, 560 F.3d Georgia Highway In analyzing the reasonableness of the fees sought and discounting the same, Magistrate thoroughly Johnson ECF No. Judge factors, 99 at as 13. and they apply A de correctly to novo 11 analyzed the record before review confirms of that the the twelve the Court. the hours submitted by the Plaintiff vagueness, and the Court recommendation to were finds no further discount properly clear the discounted error total in the for R&R's number of hours for overconferencing and the billing of clerical tasks. Accordingly, the R&R appropriately determined the fee award, and Plaintiff's Motion for Attorneys' Fees is GRANTED in the amount of $25,508. C. Objection to the Recommended Denial of § 1927 Sanctions Plaintiff, defense in a separate motion, counsel pursuant to 28 U.S.C. sought § sanctions 1927 against for unreasonably and vexatiously multiplying the proceedings by filing the second action in the District Court of Motion and referred to the Motion for the Magistrate Puerto Rico. Attorneys' Judge and ECF No. Fees then 37. were This initially considered together pursuant to this Court's Opinion and Order entered on April 18, 2012. that ECF No. the Court § 1927 94 at 7 & n.3. exercise because District objects Court to the of this its discretion alleged Puerto The Magistrate Judge recommended to misconduct Rico and recommendation, not deny sanctions under occurred this arguing before Court. that this the Plaintiff Court has inherent authority to sanction conduct occurring before another tribunal. ECF No. Title 28, district court, attorneys who 100 at 7-8. United States Code, Section 1927 allows a federal within the bounds of its discretion, "unreasonably and vexatiously" 12 to sanction multiply judicial proceedings. bad faith E.E.O.C. 28 "a v. U.S.C. § 1927. precondition Great Steaks, The Fourth Circuit has to imposing Inc., 667 fees F.3d under 510, § 522 found 1927." (4th Cir. 2012) . Here, the Court recognizes that, procedural history of sanction Defendant's however, the Court whether sanctions this case, counsel finds under based upon the factual and it has § 1927. under it prudent § 1927 to the authority At this withhold to time, determining are appropriate until the First Circuit has resolved the question of whether this action should remain stayed rule." pending take should proceed Accordingly, Plaintiff's First or Motion Plaintiff's Court The motion of notes, the "first-filed UNDER to 28 ADVISEMENT U.S.C. § 1927, currently pending before however, that its decision advisement under Puerto of TAKES Pursuant the appeal Court light Court Sanctions the outcome of Circuit. District for the in does not impact Rico's authority and discretion the to the to sanction any alleged bad faith conduct as it sees fit. IV. The Court, having CONCLUSION reviewed objections filed by Plaintiff, the record, considered the reviewed the R&R for clear error, and made de novo findings with respect to the portions objected to, does hereby recommendations set ADOPT forth AND in the 13 APPROVE Report the and findings Recommendation and of the United States Magistrate Judge, as supplemented and amended by this Order. For the reasons stated above, DENIES in part Plaintiff's Motion this Court GRANTS in part and for Attorneys' Fees UNDER ADVISEMENT Plaintiff's Motion for Sanctions. Defendant is ORDERED to pay Plaintiff $25,508 and TAKES Accordingly, in attorneys' fees . The Clerk is directed to send a copy of counsel of is to all record. It this Order SO ORDERED. 'iKl&fr /s/ Mark S. Davis United States District Judge Norfolk, Virginia July 9-5 , 2013 14
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