United States District Court, D. Arizona
ORDER
HONORABLE ROSEMARY MARQUEZ, UNITED STATES DISTRICT JUDGE
Pending
before the Court is Defendants' Rule 68 Statement of
Costs (Doc. 186), Plaintiff's Motion for Attorneys'
Fees and Non-Taxable Expenses (Doc. 187), and Plaintiff's
Bill of Costs (Doc. 184).[1] Following an eight-day jury trial in which
Plaintiff sought relief for civil rights violations and
intentional torts, a verdict was entered in Plaintiff's
favor on two Fourth Amendment unreasonable search claims. The
verdict was in favor of Defendants on the remaining two civil
rights claims and six intentional tort claims. The instant
motions followed.
I.
Defendants' Rule 68 Statement of Costs
Defendants
request that they be awarded $11, 044.00 in costs and
reasonable expert fees pursuant to Ariz. R. Civ. P. 68(d) and
A.R.S. § 12-332. (Doc. 186.) The Court will apply the
corresponding federal rules, as federal procedural law
governs this case. See e.g. Granny Goose Foods, Inc. v.
Brotherhood Teamsters & Auto Truck Drivers, 415 U.S.
423, 437 (1974) (“once a case has been removed to
federal court, it is settled that federal rather than state
law governs the future course of proceedings”).
Plaintiff's response to the Motion seeks primarily to
have the Court find that Defendants' offer of judgment
was not in compliance with Rule 68 of the Federal Rules of
Civil Procedure by specifically providing that it is not
inclusive of costs, and thus not enforceable here. (Doc. 191
at 3.) Plaintiff also argues that Defendants are not entitled
to Rule 68 costs because the judgment plus Plaintiff's
attorneys' fees exceeded the offer at the time it was
made. (Doc. 191 at 5.) The remainder of Plaintiff's
response is directed at the discrepancies between the federal
rule and the corresponding state rule governing recovery of
costs following a settlement offer. (Doc. 191 at 4-5.)
Defendants'
Offer Letter (Doc. 186-1), which is dated November 23, 2016,
offers to accept judgment against Defendants and in favor of
Plaintiff in the amount of $75, 000.00. (Doc. 186-1 at 2.) In
addition, the Offer Letter provides that Plaintiff must waive
any claim to “separate or additional award of attorney
fees and/or costs, including attorney fees pursuant to 42
U.S.C. §§ 1983 and 1988.” (Doc. 186-1 at 2.)
Rule 68
provides that if an offer of settlement is made but not
accepted and “the judgment that the offeree finally
obtains is not more favorable than the unaccepted offer, the
offeree must pay the costs incurred after the offer was
made.” Fed.R.Civ.P. 68(d). “The award is
mandatory; Rule 68 leaves no room for the court's
discretion.” United States v. Trident Seafood
Corp., 92 F.3d 855, 859 (9th Cir. 1996).
Plaintiff
contends that the proper comparison for determining
entitlement to Rule 68 costs is “(1) the offer made
(including costs and attorneys' fees)[, ] with (2) the
judgment award plus accrued costs and attorneys' fees at
the offer date.” (Doc. 191 at 3.) On that basis,
Plaintiff asserts that Defendants have not bettered their
offer because Plaintiff had accrued more than $75, 000 in
attorneys' fees by the offer date. (Doc. 191 at 3-4.)
Defendants agree that this is the proper measure. (Doc. 195
at 11 (“the court must determine the Plaintiff's
entitlement to attorney's fees, if any, and based on a
proration of that amount, determine whether the State
Defendants have beaten their Offer”).) “Where a
Rule 68 offer explicitly states that it is inclusive of
prejudgment interest and pre-offer costs and attorneys'
fees, the judgment to which the offer is compared must
include these items if they are awarded.” Champion
Produce, Inc. v. Ruby Robinson Co., 342 F.3d 1016, 1020
(9th Cir. 2003). An offer may include an amount to cover the
substantive claim and an amount for accrued costs up to the
offer date, without an itemization of those respective
amounts. Marek v. Chesny, 473 U.S. 1, 6 (1985).
However, to be a valid Rule 68 offer, it may not
“implicitly or explicitly provide that the judgment
not include costs[.]” Id. In any
case, a Rule 68 offer must allow “judgment to be
entered against the defendant for both damages caused by the
challenged conduct and for costs.” Id. The
figures to be compared where, as here, the offer precludes a
recovery of any “separate or additional” costs
must be the settlement offer against the judgment obtained
plus pre-offer costs, inclusive of attorneys'
fees.[2]
Id. at 7, 9.
Applying
this rule to Defendants' November 23, 2016 offer,
Defendants' statement that “Plaintiff waives any
claim to a separate or additional award of attorney fees
and/or costs” means that the $75, 000.00 offer was
inclusive of pre-offer costs and attorneys' fees as
awardable under 42 U.S.C. §§ 1983 and 1988.
Plaintiff received a jury verdict in his favor of $5, 002.00
(see Doc. 182), and, as discussed in Sec. II below,
Plaintiff is entitled to reasonable attorneys' fees and
costs as part of his recovery. Thus, if Plaintiff had accrued
costs and fees in excess of $69, 998.00 by the date of the
Defendants' offer, then Defendants are not entitled to
collect Rule 68 costs because Plaintiff has bettered their
offer.
Based
upon the affidavits and billing statements attached to
Plaintiff's Motion for Attorneys' Fees and
Non-Taxable Expenses (Doc. 187) and Bill of Costs (Doc. 184),
and the Court's consideration and adjustment of the
claimed fees for reasonableness, Plaintiff had incurred $129,
165.40[3] in
reasonable attorneys' fees and costs by the offer date,
which means that Plaintiff bettered Defendants' offer by
$59, 167.40. Therefore, Defendants are not entitled to
receive costs incurred following their Rule 68 Offer. The
Motion will be denied.[4]
II.
Plaintiff's Motion for Attorneys' Fees
Plaintiff
states that he “is eligible and presumptively entitled
to his fees and costs in this matter as the prevailing party
on his § 1983 civil rights claims[.]” (Doc. 187 at
5.) Plaintiff asserts that his attorneys' rates are
reasonable (Doc. 187 at 8-11), and that the Court should not
adjust the requested fees based on his limited success at
trial (Doc 187 at 11-17). He requests a total of $459,
289.68[5] in
attorneys' fees and costs.
Defendants
respond in opposition, arguing that in light of
Plaintiff's limited success at trial, Plaintiff's
request is “unreasonable in the extreme.” (Doc.
195 at 1.) In support of their position, Defendants
misconstrue the jury's verdict to argue that the jurors
did not unanimously agree in Plaintiff's favor on any
issue. (Doc. 195 at 3.) Defendants also present a chronology
of settlement offers in this matter, with settlement figures
from both parties ranging from $12, 000.00 (Doc. 195 at 4) to
$312, 000.00 (Doc. 195 at 6.) In sum, Defendants argue that,
in light of the “trivial size of the verdict”
(Doc. 195 at 7), Plaintiff should not receive an award of
attorneys' fees; alternatively, Defendants argue that the
amount of any attorneys' fees award should be reduced
based both on Plaintiff's limited success and
Plaintiff's attorneys' “grossly inflated”
hourly rate. (Doc. 195 at 11.)
Plaintiff
replies that the Court should not look abstractly at the
amount of the award received, but rather, should consider the
award relative to the amount sought. (Doc. 197 at 2.) He
asserts that he “never requested more than $10, 000.00
in settlement of his damages claim during the pendency of the
lawsuit.” (Id.) In addition, Plaintiff
contends that a full award of fees would not be the
“windfall” the Farrar court cautioned
against. See Farrar v. Hobby, 506 U.S. 103, 115
(1992) (“fee awards under § 1988 were never
intended to produce windfalls to attorneys” (internal
quotations omitted)).
A.
Plaintiff's Entitlement to Attorneys' Fees
Under
the “American Rule, ” “each party in a
lawsuit ordinarily shall bear its own attorney's fees
unless there is express statutory authorization to the
contrary.” Hensley v. Eckerhart, 461 U.S. 424,
429 (1983). For civil rights lawsuits brought under 42 U.S.C.
§ 1983, parties who prevail on the merits of their civil
rights claim are entitled to a fee award under 42 U.S.C.
§ 1988. Farrar, 506 U.S. at 109. “[T]he
touchstone of the prevailing party inquiry must be the
material alteration of the legal relationship of the
parties.” Farrar, 506 U.S. at 111 (quoting
Texas State Teachers Ass'n v. Garland Indep. Sch.
Dist., 489 U.S. 782, 792-93 (1989)). “In short, a
plaintiff ‘prevails' when actual relief on the
merits of his claim materially alters the legal relationship
between the parties by modifying the defendant's behavior
in a way that directly benefits the plaintiff.”
Farrar, 506 U.S. at 111-12. An enforceable damages
award, including only nominal damages, requires a defendant
to modify its conduct to a plaintiff's benefit and
therefore suffices for the plaintiff to be considered the
prevailing party. Id. at 112-13.
Once a
party has been determined to be a ‘prevailing
party' a court should consider the degree of a
party's success in assessing the propriety of a fee
award. Farrar, 506 U.S. at 114. Following such
consideration, a court may award full fees, lowered fees, or
no fees. Farrar, 506 U.S. at 155. However,
Farrar only directs a court to consider the
extent of success of the prevailing party; the
Farrar exception to the general rule that the
prevailing party is entitled to fees is applicable only where
the relief is de minimis. Morales v. City of San
Rafael, 96 F.3d 359, 362-63 (9th Cir. 1996) (amended by
Morales v. City of San Rafael, 108 F.3d 981 (9th
Cir. 1997) (mem.)). Other considerations for determining the
propriety of an award under the Farrar de minimis
exception are “‘the significance of the legal
issues on which the plaintiff claims to have prevailed'
and the ‘public purpose' the plaintiff's
litigation served.” See Id. at 363.
Where
punitive damages are awarded in addition to nominal damages,
only “special circumstances” that would
“render an award unjust” may justify denying a
prevailing plaintiff attorneys' fees. Thomas v. City
of Tacoma, 410 F.3d 644, 648 (9th Cir. 2005). A court
should consider two factors in determining whether such
special circumstances exist: “(1) whether allowing
attorney fees would further the purposes of § 1988 and
(2) whether the balance of the equities favors or disfavors
the denial of fees.” Id. (quoting Gilbrook
v. City of Westminster, 177 F.3d 839, 878 (9th Cir.
1999)). In Thomas, the Ninth Circuit remanded after
determining that the district court abused its discretion by
not awarding fees despite the plaintiff's “clear
victory on one of his claims for relief[.]”
Thomas, 410 F.3d at 649. The Ninth Circuit, quoting
Hensley, instructed the district court to limit the
award by only awarding fees for work done on the successful
claim and on all those claims not entirely distinct from the
successful claim. Thomas, 410 F.3d at 649 (quoting
Hensley, 461 U.S. at 440). Claims are related if
they “involve a common core of facts or are based on
related legal theories[, ]” and a plaintiff should
recover to the extent of the relatedness. Thomas,
410 F.3d at 649. However “a determination that certain
claims are not related does not automatically bar an award of
attorney's fees associated with those unrelated
claims[.]” Aguirre v. Los Angeles Unified School
Dist., 461 F.3d 1114, 1122 (9th Cir. 2006).
“[W]ork performed in pursuit of [] unrelated claims may
be inseparable from that performed in furtherance of the
related or successful claims.” Id.
Plaintiff's
three-page complaint alleged civil rights violations based in
the Fourth, Fifth, and Fourteenth Amendments, as well as the
intentional torts of false imprisonment, assault, battery,
false arrest, and malicious prosecution. (Doc. 1-3 at 2-4.)
The complaint does not allege a specific dollar figure in its
request for damages, nor did Plaintiff present the jury with
any specific damage request, so it cannot be said that
Plaintiff was unsuccessful relative to the amount of
damages he sought. Ultimately, Plaintiff was successful on
his constitutional claim that Defendant conducted
unreasonable searches in violation of the Fourth Amendment.
(See Doc. 182.) This success resulted from a jury
verdict in Plaintiff's favor for which the jury awarded
$1.00 in nominal damages and $2, 500.00 in punitive damages,
and a directed verdict for which the jury gave the same
award. (See Doc. 171, 174.) Based upon this award,
Plaintiff is properly considered the “prevailing
party.” Although Defendants argue that Plaintiff's
limited success should preclude his receipt of attorneys'
fees, his success was certainly not de minimis, nor
was it technical[6] (Doc. 195 at 6), such that the
Farrar exception is applicable. Plaintiff received
punitive damages, and the Court does not find special
circumstances that would render Plaintiff's
attorneys' fee award unjust. Accordingly, Plaintiff is
entitled to reasonable attorneys' fees and costs.
Because
all of Plaintiff's claims arose from one traffic stop and
the accompanying searches and arrest, all of the claims arose
from a common core of facts such that they are at least
somewhat “related.” Despite the facial
relatedness due to the underlying set of facts, there were
two primary legal theories propounded by Plaintiff: those
based upon constitutional civil rights violations and those
based in tort. Further breaking up the claims, Plaintiff was
successful on his Fourth Amendment unreasonable search
constitutional claim based on two distinct acts; he was
unsuccessful on his unreasonable seizure and excessive force
constitutional claims.
Plaintiff
was able to isolate certain entries in the billing statements
for attorney Graham as having been done in furtherance of his
unsuccessful claims. (Doc. 187-4 at 36 (indicating that all
entries marked with an asterisk were “[w]ork that was
totally or partially related to claims on which plaintiff was
not successful.”).) Such entries account for 43.6
hours, or approximately 4.25 percent of the total hours
claimed by attorney Graham. None of the other billing
statements included designations for unrelated work. Because
these items were not inseparable on an item-by-item level
from the other work, it is appropriate to reduce
Plaintiff's requested hours based upon these entries.
Further, the Court will assume that if at least 4.25 percent
of the hours expended by attorney Graham were in pursuit of
claims upon which Plaintiff was ultimately unsuccessful, at
least 4.25 percent of the hours expended by attorney Risner
and paralegal Ruiz were similarly spent. The Court will
excise these hours from the total requested hours for
attorney Graham, and reduce attorney Risner and paralegal
Ruiz's total hours by 4.25 percent in order to arrive at
the total hours used for calculating the lodestar.
B.
Calculating the Award
Following
a determination as to a party's entitlement to a fee
award, a court must then calculate a reasonable fee.
Vogel v. Harbor Plaza Ctr., LLC, 893 F.3d 1152, 1158
(9th Cir. 2018). “‘A ‘reasonable' fee
is a fee that is sufficient to induce a capable attorney to
undertake the representation of a meritorious civil rights
case'” and should be based upon the
“prevailing rate in the community for similar
work[.]” Id. (quoting Perdue v. Kenny A.
ex rel. Winn, 559 U.S. 542, 552 (2010)). A court
calculates a reasonable fee by multiplying the number of
hours reasonably expended by a reasonable hourly rate; this
figure is called the lodestar, and once calculated, may be
adjusted based on a number of factors. Vogel, 893
F.3d at 1158. “In calculating the lodestar, district
courts have a duty to ensure that claims for attorneys'
fees are reasonable and a district court does not discharge
that duty simply by taking at face value the word of the
prevailing party's lawyer for the number of hours
expended on the case.” Id. at 1160. Plaintiff
bears the burden of producing “satisfactory evidence-in
addition to the attorney's own affidavits-that the
requested rates are in line with those prevailing in the
community.” Camacho v. Bridgeport Fin., Inc.,
523 F.3d 973, 980 (9th Cir. 2008).
1.
Lodestar Calculation
Plaintiff
contracted with counsel to pay $400.00 for every attorney
hour, and $90.00 for every paralegal hour expended on his
case contingent on receipt of an award.[7](Doc 187-2 at 2-3.)
Consistent with this contract, Plaintiff requests $400 per
hour for attorneys Graham and Risner, $90 per hour for
paralegal and translator Ruiz, and $60 per hour for legal
assistant Graham. (See Doc. 187 at 11.) In support
of these hourly rates, Plaintiff submits affidavits by each,
justifying the relevant rate based on each's respective
experience. Also attached to the Motion is a
2013[8]
publication promulgated by the State Bar of Arizona, which
lists billing rates in a number of different categories.
(Doc. 187-3 at 2-6.) The report indicates that the median
hourly billing rate in Arizona is $255 per hour and that the
average is $280. In every specifically reported category
applicable to Plaintiff's counsel, the requested $400
rate is above the 75th percentile, and in a few cases is at
the 95th percentile of the reported rates.[9] (See Doc. 187-3
at 2-3.) Both attorneys Graham[10] and Risner[11] have extensive experience in civil
rights litigation and have otherwise demonstrated that they
are entitled to a fee above the median for attorneys in the
community. The Court finds that $375 per hour is a reasonable
hourly rate for attorneys Graham and Risner.
Fees
for work performed by non-attorneys such as paralegals and
legal assistants may be included in an award of reasonable
attorneys' fees if it is the prevailing practice in the
relevant community to bill such fees separately. Trustees
of Constr. Indus. & Laborers Health & Welfare Trust
v. Redland Ins. Co., 460 F.3d 1253, 1256-57 (9th Cir.
2006). However, if an “attorney's hourly rate
already incorporates the cost of work performed by
non-attorneys, ” then such work is not separately
compensable. Id. at 1257. Some courts in the
District of Arizona have held that separate charges for
secretarial or clerical work are not properly included in an
award of attorneys' fees because such work should be
subsumed in a law firm's overhead. See, e.g.,
Macia, 2014 WL 3747608, at *1; J & J Sports
Prods., Inc. v. Mosqueda, No. CV-12-00523-PHX-DGC, 2013
WL 5336848, at *3 (D. Ariz. Sept. 24, 2013); Schrum v.
Burlington N. Santa Fe Ry. Co., No. CIV 04-0619-PHX-RCB,
2008 WL 2278137, at *12 (D. Ariz. May 30, 2008). However,
other cases have reached the opposite conclusion. See,
e.g., Richards v. Del Webb Cmtys., Inc., No.
CV-11-368-PHX-SMM, 2013 WL 5445440, at *2 (D. Ariz. Sept. 30,
2013) (allowing recovery of fees for services of legal
assistants as part of attorneys' fee award); Skydrive
Ariz., Inc. v. Quattrocchi, No. CV 05-2656-PHX-MHM, 2011
WL 1004945, at *4 (D. Ariz. Mar. 22, 2011) (same). In light
of Plaintiff's counsel's high-end rate and the
retainer/contingent agreement, which only provided for hourly
payment for a paralegal, the Court finds that legal assistant
work (claimed by P. Risner at Doc. 187-8) should have been
subsumed into the overhead and cannot be separately claimed.
The paralegal and translation work, however, claimed by M.
Ruiz at $90 per hour is reasonable as the agreement's
separate provision for such paralegal fees is strong evidence
they are not subsumed in the firm's overhead.
Plaintiff
claims a total of 1, 054.917[12] attorney hours and 208.883
paralegal/translator hours over more than four years of
litigation. Plaintiff supports his request with itemized
descriptions of tasks, which are dated and indicate the
amount of time in hours and minutes that were spent on any
given task. (See Doc. 187-4; Doc. 187-7.) Task-based
itemizations must describe the services rendered sufficiently
for the court to assess the reasonableness of the charge, and
the court may reduce for any inadequate
descriptions.[13] LRCiv 54.2(e)(2). In addition, an
attorney is not permitted to claim hours for purely clerical
tasks that should have otherwise been subsumed into the
firm's overhead. See Missouri v. Jenkins, 491
U.S. 274, 288 n.10 (1989) (reciting the rule that an attorney
may not seek reimbursement for purely clerical tasks at an
attorney rate); Nadarajah v. Holder, 569 F.3d 906,
921 (9th Cir. 2009) (holding that clerical tasks such as
filing and organization “should have been subsumed in
firm overhead rather than billed at paralegal rates”).
The Court has reviewed the itemized descriptions for adequacy
and has reduced the total attorney and paralegal hours based
upon the unreasonableness of the charge or an inadequate
description. See Appendix A.1-3. (detailing
line-item reductions).
For
claimed paralegal hours (Doc. 187-5), billing statements
similarly detail the task performed by date. In addition to
the usual billing statement, however, Plaintiff also includes
“email time calculation” (Doc. 187-6), where he
claims hours spent on emails, totaling 23.9, calculated by
comparing the metadata of when an email as
“created” and when it was “sent.”
(See Doc. 187-6 at 3-4.) Aside from the obvious
shortcomings of that method for calculating the time spent
drafting emails, [14] the paralegal billing statement also
includes description lines like “Emails to and from
Defs counsel” (Doc. 187-5 at 5) and “Emails to
and from Magistrate Velasco's chambers regarding
settlement conference” (Doc. 187-5 at 3). Because the
time periods recorded by paralegal Ruiz and the time
“calculated” from the email metadata overlap, the
Court cannot ascertain which are duplicative and which are
not. Thus, the Court will exclude the time
“calculated” from the metadata from the total of
paralegal hours.
Following
these reductions, the Court reduced the hours claimed by
attorney Graham in preparing the Motion for Fees by 4.25
percent for work done on unsuccessful claims, discussed Sec.
A., supra. See Schwarz v. Secretary of Health
& Human Servs., 73 F.3d 895, 909 (9th Cir. 1995)
(“[A] district court does not abuse its discretion by
applying the same percentage of merits fees ultimately
recovered to determine the proper amount of the ...