United States District Court, D. Arizona
G. Campbell Senior United States District Judge.
Two Brothers Distributing, Inc. (“Two Brothers”)
and ten associated gasoline retailers (the “Station
Plaintiffs”) sued Valero Marketing and Supply Company
(“Valero”) asserting various claims. Doc. 29. The
Court granted summary judgment for Valero on all claims, and
the judgment was affirmed on appeal. Docs. 155, 161, 172.
has filed a motion for attorneys' fees and litigation
costs. Doc. 174. The motion is fully briefed, and no party
has requested oral argument. Docs. 175, 177. The Court will
grant the motion in part and award Valero $1, 579, 124.37 in
attorneys' fees, $310, 862.77 in expert fees, and $48,
809.44 in other litigation costs.
Brothers and Valero executed multiple distributor marketing
agreements (“DMAs”) between 2007 and 2016 for the
sale of gasoline. Doc. 155 at 2-4. These DMAs included an open
price term which stated that Two Brothers “shall pay to
[Valero] that price specified by [Valero] from time to
time.” Id. at 2-3. After purchasing gasoline
from Valero, Two Brothers would sell it to the Station
Plaintiffs. Doc. 29 ¶ 4.
filed this case in May 2015 alleging that Valero manipulated
the open price term to overprice the gasoline it sold to Two
Brothers. Doc. 1-1. Plaintiffs asserted that Valero sought to
decrease Plaintiffs' profits and drive them from the
Maricopa County market. Doc. 155 at 5.
DMAs provide for the award of litigation costs in the event
of a suit between Two Brothers and Valero:
Attorneys' Fees. In the event of any lawsuit
between [Valero] and [Two Brothers] arising out of or
relating to the transactions or relationship contemplated by
this Agreement (regardless whether such action alleges breach
of contract, tort, violation of a statute or any other cause
of action), the substantially prevailing party shall be
entitled to recover its reasonable costs of suit including
its reasonable attorneys' fees. If a party substantially
prevails on some aspects of such action but not others, the
court may apportion any award of costs or attorneys' fees
in such manner as it deems equitable.
Doc. 115-2 at 126 (2007 DMA), 214 (2010 DMA); see
also Doc. 16-2 at 86-87 (2013 DMA containing
substantially similar provision); Doc. 115-2 at 264-65 (2016
DMA containing substantially similar provision).
renewed motion requests $1, 781, 078.75 in attorneys'
fees, $445, 354.09 in expert fees, and $49, 209.44 in other
litigation costs. Doc. 174 at 2. Valero supports its motion
with a certificate of consultation, the terms of
counsel's representation, itemized billing records and
invoices, and an affidavit from lead counsel Jeffrey Wolf.
Docs. 174-1 to -4.
Arizona law, “[i]n any contested action arising out of
a contract, express or implied, the court may award the
successful party reasonable attorney fees.” A.R.S.
§ 12-341.01(A). Fees may be awarded at the trial
court's discretion. See Andra R Miller
Designs LLC v. U.S. Bank NA, 418 P.3d 1038, 1045
12-341.01(A) does not apply when parties “have provided
in their contract the conditions under which attorneys'
fees may be recovered.” Am. Power Prods., Inc. v.
CSK Auto, Inc., 396 P.3d 600, 604 (Ariz. 2017). An award
of attorneys' fees governed by a contract is mandatory,
Castle v. Barrett-Jackson Auction Co., LLC, 276 P.3d
540, 544 (Ariz.Ct.App. 2012), and enforced according to the
terms of the contract, F.D.I.C. v. Adams, 931 P.2d
1095, 1105 (Ariz.Ct.App. 1996). But “a contractual
provision providing for an award of unreasonable
attorneys' fees will not be enforced.” See
McDowell Mountain Ranch Cmty. Ass'n, Inc. v. Simons,
165 P.3d 667, 671 (Ariz.Ct.App. 2007). The Court may consider
several factors in assessing reasonableness. See
Fees Related to Two Brothers' Claims.
concede that the DMAs require an award of reasonable
attorneys' fees and litigation expenses. Doc. 175 at 10.
Plaintiffs challenge the reasonableness of the requested
legal fees. Doc. 175 at 10.
consider the following factors when addressing the
reasonableness of a proposed attorneys' fee award: (1)
time and labor required of counsel; (2) novelty and
difficulty of the questions presented; (3) skill requisite to
perform the legal service properly; (4) preclusion of other
employment by counsel because of the acceptance of the
action; (5) customary fee charged in matters of the type
involved; (6) whether the fee contracted between the attorney
and the client is fixed or contingent; (7) time limitations
imposed by the client or the circumstances; (8) amount of
money, or the value of the rights, involved and the results
obtained; (9) experience, reputation and ability of counsel;
(10) “undesirability” of the case; (11) nature
and length of the professional relationship between the
attorney and the client; (12) awards in similar actions; and
(13) any other matters deemed appropriate under the
circumstances. LRCiv 54.2(c)(3).
argues that these factors show the requested fees to be
reasonable. Doc. 174 at 12-17. Specifically, it asserts that
over four years the attorneys on the case familiarized
themselves with ten years of events, multiple contracts, and
numerous theories of liability, and analyzed tens of
thousands of documents, including years of bankruptcy filings
by eight of the Station Plaintiffs. Doc. 174 at 13. Further,
counsel deposed ten witnesses and obtained discovery from
eleven parties. Id. Valero argues that although
Plaintiffs' claims were not novel, they were factually
complex, covering a decade of transactions and communications
and eleven Plaintiffs. Id. The legal team possessed
years of experience dealing with disputes between fuel
suppliers and distributors and retailers. Id. at 14.
Valero's legal counsel's rates are reasonable and in
accord with lawyers and legal professionals in this community
with similar experience. Id. at 16. The hours
expended were reasonable because Plaintiffs sought nearly $30
million in damages. Id. And the requested fee is
consistent with cases dealing with similar issues and
complexity. Id. at 17.
do not challenge these arguments. See Doc. 175 at
10-15. Nor do they challenge counsel's billing rates.
See Id. Plaintiffs instead assert that the overall
time charged is excessive and duplicative, but that it is not
practical to identify each and every disputed time entry or
expense item. Id. at 11. They instead proceed to
summarize the number of hours Valero's counsel spent on
various tasks without explanation as to why those hours were
excessive and unreasonable and without offering any
alternatives. Id. at 11-13. The Court will address
only the tasks challenged by Plaintiffs, and will accept
Valero's time records on all other tasks as reasonable.
See LRCiv 54.2(3)(f) (attorney opposing a motion for
an award of attorneys' fees shall separately identify
each and every disputed time entry or expense item).
Motion to Dismiss.
note that Valero's counsel spent 86 hours preparing its
motion to dismiss before conferring with Plaintiffs to
identify curable deficiencies. Id. at 11. After
Plaintiffs filed an amended complaint, Valero's counsel
spent another 37.4 hours on the motion before filing it.
Id. Plaintiffs appear to argue that spending
substantial time both before and after the conference was
unreasonable. See id.
counters that the 86 hours of work before the conference were
necessary to facilitate a meaningful discussion. Doc. 177 at
9. After that discussion, Plaintiffs only withdrew one claim
and actually added two new claims. Id. The 37.4
hours after the conference were not spent finalizing the
motion, but researching and addressing the new claims.
Id. Valero emphasizes that the hours were necessary
to address the “nine legally complex claims” in
the complaint and to draft a 23-page motion with
approximately 200 pages of exhibits. Id.
also argues that Plaintiffs have failed to comply with Local
Rule 54.2, which requires the opposing party to
“separately identify each and every disputed time entry
or expense item.” Doc. 177 at 7-8. Nor does Plaintiffs
posit what amount of time would have been reasonable in light
of the nature of the case. Id. at 8.
Court will not reduce the hours spent on the motion to
dismiss. Plaintiffs have not explained which hours or tasks
were unreasonable, and the Court cannot conclude that the
total hours were excessive when the case included multiple,
complex claims. Nor can the Court conclude that hours devoted
before the conference were excessive. To explain why they
thought Plaintiffs' claims were subject to dismissal,
Defendants were required to analyze those claims. The
conference did not eliminate most of the claims on which work
had been performed, and added two more claims that required
additional work. Plaintiffs have not shown that the time
spent on the motion to dismiss was excessive.
Reply in Support of Motion to Dismiss.
note that Valero's counsel spent 35 hours preparing its
reply in support of its motion to dismiss. Doc. 175 at 11.
Then, two senior partners each billed 1.1 hours analyzing the
Court's motion to dismiss order. Id. at 12.
Valero counters that Plaintiffs have failed to identify any
specific time entry that was inadequate. Doc. 177 at 9.
Further, they fail to explain why it was unreasonable for the
“two lead partners on a multi-million dollar case to
familiarize themselves with the Court's 11-page order,
which resolved what claims would remain in the case, provided