United States District Court, D. Arizona
DOUGLAS L. RAYES UNITED STATES DISTRICT JUDGE
the Court is Plaintiff/Counter-Defendant Massage Envy
Franchising, LLC's (MEF) Motion for Attorneys' Fees
and Non-Taxable Costs. (Doc. 68.) The motion is fully
briefed, and the Court heard oral argument on April 15, 2016.
For the following reasons, MEF's motion is granted in
a franchisor of independently owned and operated massage
therapy clinics. Defendants/Counterclaimants Doc Marketing,
LLC and its managing member George Lohmann, Jr. (Defendants)
are former MEF franchisees. In June 2014, MEF terminated
Defendants' franchise agreements, leading Lohmann to file
a wrongful termination complaint in the Western District of
Texas. MEF and Lohmann resolved their dispute through a
Settlement Agreement, which, as relevant here, created a
process for appraising and selling Defendants' two
case involved MEF's efforts to compel Defendants to
cooperate with the sale of the clinics. MEF successfully
obtained a temporary restraining order and preliminary
injunction compelling Defendants to cooperate with MEF to
ensure that the clinics were sold according to the terms and
procedures of the Settlement Agreement. Defendants filed
numerous counterclaims, but the parties eventually reached a
global settlement resolving this matter. MEF now moves for
$148, 224.44 in attorneys' fees and $1, 103.84 in
non-taxable costs pursuant to a fee-shifting provision in the
Settlement Agreement, which provides that the prevailing
party in a dispute involving or relating to the Settlement
Agreement shall be entitled to its reasonable attorneys'
fees. (Docs. 68, 92.)
reasonable attorneys' fees are sought pursuant to a
contractual provision, a fee award must be supported by proof
of what is reasonable. Schweiger v. China Doll Rest.,
Inc., 673 P.2d 927, 931 (Ariz.Ct.App. 1983) (citing
Crouch v. Pixler, 320 P.2d 943, 946 (Ariz. 1958)).
“A fee award calculated by a lodestar
method-multiplying a reasonable hourly rate by the number of
hours expended-is presumptively reasonable.” Flood
Control Dist. of Maricopa Cty v. Paloma Inv. Ltd.
P'ship, 279 P.3d 1191, 1212 (Ariz.Ct.App. 2012).
Once the prevailing party makes a prima facie case that the
fees requested are reasonable, the burden shifts to the party
opposing the fee request to establish that the amount
requested is clearly excessive. If that party fails to make
such a showing of unreasonableness, the prevailing party is
entitled to full payment of the fees. If, however, the party
opposing the award shows that the otherwise prima facie
reasonable fee request is excessive, the court has discretion
to reduce the fees to a reasonable level.
Geller v. Lesk, 285 P.3d 972, 976 (Ariz.Ct.App.
2012) (internal citations omitted).
the prevailing party because it obtained all the relief it
sought in this litigation through the temporary restraining
order and preliminary injunction. See Watson v. Cty. of
Riverside, 300 F.3d 1092, 1096 (9th Cir. 2002).
Accordingly, MEF is entitled to its reasonable attorneys'
fees pursuant to the Settlement Agreement's fee-shifting
analyzing the reasonableness of a requested fee award, the
Court begins by determining the billing rate charged by the
attorneys who worked on the case. Schweiger, 673
P.2d at 931. “[I]n corporate and commercial litigation
between fee-paying clients, there is no need to determine the
reasonable hourly rate prevailing in the community for
similar work because the rate charged by the lawyer to the
client is the best indication of what is reasonable under the
circumstances of the particular case.” Id. at
931-32. However, “upon the presentation of an opposing
affidavit setting forth the reasons why the hourly billing
rate is unreasonable, the court may utilize a lesser
rate.” Id. at 932.
attorneys and one paralegal performed work on behalf of MEF.
Cynthia Ricketts, co-founding and named partner of Sacks,
Ricketts & Case LLP (SRC) billed at an hourly rate of
$495, which was discounted from her standard hourly rate of
$550. (Doc. 69, ¶¶ 4-5.) Robert Bader, Of Counsel
with SRC, billed at an hourly rate of $430, discounted from
his standard hourly rate of $475. (Id., ¶ 7.)
Amit Rana, a litigation associate with SRC, billed at an
hourly rate of $225, discounted from his standard hourly rate
of $250. (Id., ¶ 8.) Natalya Ter-Grigoryan, a
litigation associate with SRC, billed at an hourly rate of
$315, discounted from her standard hourly rate of $350.
(Id., ¶ 9.) Claudia Barajas, a paralegal with
SRC, billed at an hourly rate of $158, discounted from her
standard hourly rate of $175. (Id., ¶10.) Barry
Heller, a partner with DLA Piper LLP, billed at an hourly
rate of $639.60, discounted from his standard hourly rate of
$785. (Doc. 70, ¶¶ 4, 7.) Finally, Richard
Greenstein, a partner with DLA Piper, billed at an hourly
rate of $589, discounted from his standard hourly rate of
$730. (Id., ¶¶ 5, 8.)
fees are presumptively reasonable because they are the fees
that MEF agreed to pay. Although Defendants argue that these
rates are too high, they do not specify the reasons why the
rates are unreasonable. Indeed, Defendants' counsel
Jeffrey Goldstein submitted a declaration challenging the
reasonableness of the overall fee award while assuming that
the hourly rates charged by MEF's attorneys are