United States District Court, S.D. West Virginia, Huntington Division
MEMORANDUM OPINION AND ORDER
A. Eifert, United States Magistrate Judge
December 27, 2017, this Court entered a Memorandum Opinion
and Order sanctioning Defendant for making material
misrepresentations during the discovery process, which
significantly increased Plaintiffs' costs of litigation.
(ECF No. 1111). In recompense, the Court awarded Plaintiffs
attorneys' fees and costs and expert fees and costs
attributable to Ford's discovery misconduct. The matter
was referred to the undersigned United States Magistrate
Judge to determine the appropriate amount of fees and costs
to be awarded to Plaintiffs. (Id. at 20).
December 29, 2017, the undersigned issued a briefing
schedule. (ECF No. 1120). The parties have now completed
their briefing, and the matter is ready for resolution. In
their brief, Plaintiffs ask for fees and costs in the total
amount of $692, 225.52. (ECF No. 1166 at
15). Ford counters by arguing that once duplicative,
excessive, vague, and unsupported amounts are deducted from
Plaintiffs' request, they are entitled to an award of
$223, 610.97. (ECF No. 1152 at 20).
undersigned notes that the law governing awards of
attorneys' fees and costs in this circuit is well
established. Moreover, the issues in dispute are clear;
therefore, oral argument would not assist the Court in
resolving the matter. For the reasons that follow, the Court
ORDERS Defendant, Ford Motor Company
(“Ford”), to pay Plaintiffs the sum of
$488, 028.31 in sanctions. Ford is further
ORDERED to make this payment within
thirty (30) days of the date of this Order.
Court has concluded that Plaintiffs are entitled to
reimbursement of attorneys' fees for time associated with
preparing, negotiating, and arguing the source code
protective order entered in this litigation, as well as
pursuing Plaintiffs' motion for sanctions. In addition,
Plaintiffs seek reimbursement of travel time to and from a
secured room in Dearborn, Michigan where their counsel and
experts were required to go in order to review source code
produced by Ford. According to affidavits supplied by
Plaintiffs, the total amount of attorneys' fees sought is
$351, 256.63. (ECF No. 1143 at 6-7).
response, Ford concedes that Plaintiffs are entitled under
the Court's order to attorneys' fees related to: (1)
negotiating the source code protective order, (2) traveling
to Dearborn, Michigan to use the secured source code room,
and (3) drafting and arguing the motion for sanctions. (ECF
No. 1152 at 2). However, Ford contends that Plaintiffs have
not limited their fee application to those tasks.
Furthermore, Ford argues that the number of attorney hours
claimed by Plaintiffs is extreme, and the requested hourly
rates substantially exceed reasonable, appropriate, and
prevailing rates in this jurisdiction. (Id. at 2-3).
After subtracting duplicative and excessive hours, and
reducing the hourly rates to “reasonable”
amounts, Ford asserts that Plaintiffs are entitled to
attorneys' fees in the amount of $77,
824.25. (ECF No. 1152 at 20).
parties agree that when calculating an award of
attorneys' fees in this circuit, the court must follow a
three-step process. McAfee v. Bozcar, 738 F.3d 81,
88 (4th Cir 2013) (“The proper calculation of an
attorney's fee award involves a three-step
process.”) First, the court must “determine a
lodestar figure by multiplying the number of reasonable hours
expended times a reasonable rate.” Robinson v.
Equifax Information Services, LLC, 560 F.3d
235, 243 (4th Cir. 2009) (citing Grissom v. The Mills
Corp., 549 F.3d 313, 320 (4th Cir. 2008)). The burden of
establishing a reasonable rate and demonstrating that a
reasonable number of hours was expended rests with the party
seeking attorneys' fees. McGee v. Cole, 115
F.Supp.3d. 765, 771 (S.D. W.Va. 2015) (citing Hensley v.
Eckerhart, 461 U.S. 424, 433 (1983)). The United States
Court of Appeals for the Fourth Circuit (“Fourth
Circuit”) has enumerated twelve factors to consider
when determining a lodestar figure, including the following:
(1) the time and labor expended; (2) the novelty and
difficulty of the questions raised; (3) the skill required to
properly perform the legal services rendered; (4) the
attorney's opportunity costs in pressing the instant
litigation; (5) the customary fee for like work; (6) the
attorney's expectations at the outset of the litigation;
(7) the time limitations imposed by the client or
circumstances; (8) the amount in controversy and the results
obtained; (9) the experience, reputation and ability of the
attorney; (10) the undesirability of the case within the
legal community in which the suit arose; (11) the nature and
length of the professional relationship between attorney and
client; and (12) attorneys' fees awards in similar cases.
Robinson, 560 F.3d at 243-244 (citing Johnson v.
Ga. Highway Express, Inc., 488 F.2d 714 (5th Cir.
second step of the process, the court must subtract from the
lodestar figure “fees for hours spent on unsuccessful
claims unrelated to successful ones.” Grissom,
549 F.3d at 321 (quoting Johnson v. City of Aiken,
278 F.3d 333, 337 (4th Cir. 2002)). Once this calculation is
completed, the court proceeds to the third step, which
consists of the court increasing the step-two figure by
“some percentage of the remaining amount, depending on
the degree of success enjoyed by the [party seeking
fees].” Johnson, 278 F.3d at 337. In this
case, the Court need not formally proceed to the second and
third steps, because the fees and expenses are being awarded
as a discovery sanction, rather than as an award based upon a
successful resolution of the case as a whole. In addition,
Plaintiffs have already performed step two of the process by
reducing the portion of their fee application related to the
motion for sanctions by 50% to account for the fact that they
only succeeded on one of two grounds asserted in the motion.
Therefore, the Court focuses largely upon the lodestar
Reasonable Hourly Rate
calculating reasonable fees, establishing the hourly rate is
generally the critical inquiry.” Wolfe v.
Green, No. 2:08-cv-01023, 2010 WL 3809857 *4, (S.D.
W.Va. Sept. 24, 2010) (quoting Westmoreland Coal Co. v.
Cox, 602 F.3d 276, 289 (4th Cir. 2010)). An hourly rate
is considered reasonable when it is “in line with those
prevailing in the community for similar services by lawyers
of reasonably comparable skill, experience, and
reputation.” Blum v. Stenson, 465 U.S. 886,
890 n. 11 (1984). “[T]he community in which the court
sits is the first place to look to in evaluating the
prevailing market rate.” Rum Creek Coal Sales, Inc.
v. Caperton, 31 F.3d 169, 179 (4th Cir. 1994).
Nevertheless, when an applicant seeks reimbursement of fees
charged by an attorney who primarily practices law in another
jurisdiction, the court may determine that using community
rates, rather than the attorney's home rates, is
inequitable; particularly, when there is an absence of
comparable attorneys in the community. National Wildlife
Federation v. Hanson, 859 F.2d 313, 317 (4th Cir. 1988)
(holding that a fee award based on an extrajurisdictional
rate is appropriate when the complexity and specialized
nature of the case means that no attorney with the requisite
skills is available locally). To determine whether
extrajurisdictional counsel are entitled to the prevailing
hourly rates in their home jurisdiction, the court should
consider the following questions: (1) did counsel provide
services that were not available in the court's
jurisdiction; and (2) did the client make a reasonable choice
in hiring extrajurisdictional counsel, or did the client
select an unreasonably expensive attorney? Id.
Plaintiffs seek reimbursement of fees charged by fourteen
attorneys, with hourly rates ranging from $175 to $950, and
by four paralegals billing between $115 and $275 per hour.
Half of the attorneys and half of the paralegals have
extrajurisdictional home bases. Plaintiffs argue that these
practitioners are entitled to the prevailing hourly rates in
their own communities, because they satisfy the two-part
inquiry set forth in Hanson. (ECF No. 1166 at 6).
According to Plaintiffs, the size and complexity of the
instant action required them to hire a “coalition of
law firms with experience in complex class action litigation,
” which could not be found exclusively in this
jurisdiction. (Id. at 7). Ford counters this
argument by pointing out that a local law firm, Spilman
Thomas & Battle, PLLC, played a leadership role in the
litigation and its billings account for 40% of the fees
sought by Plaintiffs. (ECF No. 1152 at 7). Thus, the instant
action is not so complex that no local lawyer is able to
effectively prosecute it.
undersigned agrees with Ford. Although the subject matter of
this case is complex, both factually and legally, Plaintiffs
have failed to demonstrate that this jurisdiction lacks
experienced lawyers capable of successfully prosecuting
Plaintiffs' claims. As Ford notes, one of Plaintiffs'
leading law firms is located in Charleston, West Virginia,
and as discussed below, Plaintiffs make no showing that
Spilman Thomas & Battle is the only local firm qualified
to handle complex class action litigation. Moreover,
Plaintiffs seek reimbursement of substantial expert fees.
Given that Plaintiffs relied heavily on experts to navigate
the technical aspects of the source code protective order and
assist in locating evidentiary support for the motion for
sanctions, the remaining tasks involved in negotiating the
protective order and pursuing the award of sanctions could
have been accomplished by a number of lawyers who regularly
appear in this Court.
undersigned acknowledges the Fourth Circuit cases cited by
Plaintiffs in which fee awards were calculated using hourly
rates from geographic markets outside the court's
jurisdiction. (ECF No. 1166 at 6-7). However, in each of
these cases, the court's decision was based on more than
just the complexity of the case. In Hanson,
supra, a case filed in eastern North Carolina, the
party seeking attorneys' fees asked the court to apply
Washington, D.C. rates. Unlike the plaintiffs in this case,
however, the Hanson applicant did not rely solely on
the complexity of the case to support its argument; instead
the party produced evidence showing that: (1) its
local counsel was unable to take the case; (2) the nearest
counsel with experience in complex environmental litigation
was located in Washington, D.C.; and (3) the applicant was
unsuccessful in involving a local environmental defense fund.
Accordingly, a sound basis existed for applying Washington,
in Rum Creek Coal Sales, Inc., 31 F.3d at
178-79, the Fourth Circuit held that Richmond, Virginia rates
were appropriate in a West Virginia case, in part due to the
complex nature of the litigation. However, in addition, the
court considered that (1) the Virginia lawyers were the
applicant's regular counsel and were well-versed in the
type of matters litigated; (2) outside counsel was necessary
“since taking on the governor and the police of the
state where the trial court is located, in the middle of a
well-publicized coal miners' strike could be politically
sensitive activity for a local West Virginia firm”; and
(3) a substantial portion of the fees were incurred secondary
to the party's appeal filed in Richmond, Virginia.
Id. at 179.
Friends of Earth, Inc. v. Gaston Copper Recycling
Corp., the court applied Washington, D.C. rates in South
Carolina where the fee applicant demonstrated that
attorneys' services of like quality were not available in
the forum and the selection of attorneys was reasonable under
the circumstances. Friends of Earth, Inc., No.
3:92-2574-MJP, 2007 WL 2363868, at *2 (D.S.C. Aug. 16, 2007).
To establish its right to extrajurisdictional rates, the
applicant supplied affidavits from local attorneys verifying
an absence of available counsel in the jurisdiction capable
of taking such a complex and expensive case on a contingent
fee basis. Furthermore, the applicant used the affidavits to
prove that the Washington, D.C. rates were comparable to
South Carolina rates. Similar affidavits were submitted in
N.C. Alliance for Transp. Reform Inc. v. U.S. Dept. of
Transp., 168 F.Supp.2d 569, 580 (M.D. N.C. 2001)
(relying on an affidavit from local counsel regarding the
dearth of qualified lawyers in the jurisdiction and the
unavailability of those lawyers that were sufficiently
ABT Bldg. Prods. Corp v. National Union Fire Ins.
Co., the court based its decision to apply
extrajurisdictional rates on the fact that the fee applicant
used national counsel with vast institutional knowledge and
prior experience in the same subject matter, noting that the
efficiencies associated with national counsel counterbalanced
their increased hourly rates. In addition, the party seeking
reimbursement demonstrated that it had paid the fees
requested without any expectation of their recovery.
reasonable. ABT Bldg. Prod. Corp., No. CIV.
501CV100-V, 2005 WL 6124839, at *2-3 (W.D. N.C. May 31,
2005), aff'd sub nom. ABT Bldg. Prod. Corp. v.
Nat'l Union Fire Ins. Co. of Pittsburgh, 472 F.3d 99
(4th Cir. 2006). Similar reasons for using New York rates in
a North Carolina case were accepted by the court in
Aventis Crop Science, N.V. v. Pioneer Hi-bred
Intern, Inc., No. 1:00CV463, 2010 WL 2306677, at *5
(M.D. N.C. Jun. 8, 2010) (concluding that applicant's
national counsel provided a unique service to fee applicant
that was not available locally).
contrast to the fee applications in the above-cited cases,
Plaintiffs offer no evidence or focused argument in this
case. In fact, Plaintiffs provide no explanation for how they
selected counsel; no evidence that they searched other local
firms for comparable attorneys; and no corroboration that the
extrajurisdictional attorneys in this case provided a unique
service that could not be offered by less expensive and
equally available counsel. Consequently, while the instant
case certainly requires specialized skill, Plaintiffs have
not adequately supported their request for
determined that the prevailing market rates in the Southern
District of West Virginia should be applied, the undersigned
next considers the evidence submitted by Plaintiffs to
establish the prevailing rates, as well as Ford's
arguments in opposition. As indicated below, the parties are
significantly at ...