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Tomovich v. Wolpoff & Abramson

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA


August 7, 2009

CATHARINE J. TOMOVICH A/K/A CATHIE J. TOMOVICH, PLAINTIFF,
v.
WOLPOFF & ABRAMSON, L.L.P., DEFENDANT.

The opinion of the court was delivered by: Barbara L. Major United States Magistrate Judge

ORDER (1) GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR ATTORNEY'S FEES AND ) EXPENSES AND (2) SETTING SETTLEMENT DISPOSITION CONFERENCE. [Doc. No. 29]

On April 21, 2009, Plaintiff filed a motion for attorneys' fees and expenses incurred during the instant action. Doc. No. 29 (Motion). Defendant opposed the motion, Doc. No. 31 (Opp'n), and Plaintiff filed a reply, Doc. No. 33 (Reply). The Court set a hearing date of June 9, 2009, and took the matter under submission. Doc. No. 32. Plaintiff's motion for attorney's fees and expenses is GRANTED IN PART AND DENIED IN as follows.

BACKGROUND

This case concerns allegedly-wrongful debt collection practices by Defendant, a debt collector. In August 2008, Plaintiff filed a complaint alleging violations of the Fair Debt Collection Practices Act (FDCPA), and California's Rosenthal Fair Debt Collection Practices Act. Doc. No. 1 (Complaint). Defendant's alleged wrongdoing arises from efforts to collect money owed by Plaintiff, including phone calls and letters, some of which improperly stated that Defendant would commence litigation against Plaintiff if she failed to satisfy the debt. Id.

Approximately six months after Plaintiff filed the Complaint, the case settled. Doc. No. 25. In the interim, the parties attended a settlement conference with this Court, and Plaintiff filed two unopposed motions to compel, which, because the case settled shortly thereafter, were denied as moot. Doc. Nos. 16, 20, 28. Pursuant to a consent decree, on April 16, 2009, this Court assumed jurisdiction over the case, including the jurisdiction to adjudicate fee disputes arising from the settlement agreement. Doc. No. 27.

DISCUSSION

Plaintiff requests an award of $73,389 in fees incurred by attorneys Elizabeth Arleo and Shaun Khojayan, as well as $2,250 in paralegal fees, and $5,138.45 in litigation expenses. Reply at 10. In sum, Plaintiff requests $80,777.45 for prosecuting this action and recovering fees. Plaintiff calculates the attorneys' fees by the lodestar method, which multiplies an attorney's hourly rate by the number of hours they expended. Motion at 2; Hensley v. Eckhart, 461 U.S. 424, 433 (1983) (describing lodestar method).

Plaintiff states that Ms. Arleo expended 140.3 hours on the matter, including on the fees motion and reply, at the rate of $385/hour. Reply at 10 (total hours); Motion at 2 (hourly rate). Plaintiff also requests compensation for 53.5 hours of Mr. Khojayan's time, at an hourly rate of $420. Reply at 10; Motion at 2. Of the 193.8 total requested attorney hours, much of the time was spent on discovery, approximately 80.7 hours. Arleo Decl. at 4-5 (approximately 52.5 hours spent by Ms. Arleo on discovery); Khojayan Decl.,*fn1 Ex. 2 ("Khojayan Timesheet," claiming approximately 28.2 hours for discovery-related work).

Plaintiff argues that the requested sum is reasonable. In support, she cites her attorneys' "aggressive and efficient" and "precise and thoughtful" work, Reply at 7, and argues that her attorneys should be "rewarded fully, not punished, for their exceptional skill, preparation and effort," id. at 4. Based on the positive result obtained, the undesirability of FDCPA cases, and her attorneys' experience, Plaintiff requests an award of all claimed fees and expenses. Doc. No. 29-2 (memorandum accompanying motion, "Pl. Mem.") at 7-9.

Defendant argues that the requested fees are unreasonable and excessive, and requests that the Court award no more than $20,000 to Plaintiff's attorneys. Opp'n at 4, 12-16. In support, Defendant characterizes Plaintiff's attorneys' work as "boilerplate copies of other pleadings and discovery requests routinely used by Plaintiff's counsel in prosecuting other similar non-complex cases." Id. at 2-3. Defendant also contests Ms. Arleo's and Mr. Khojayan's hourly rates. Both sides submit expert declarations supporting their respective positions on these rates. Arleo Decl., Ex. 3; Opp'n, Exs. 1-9.

Legal Standard.

In FDCPA actions, the prevailing party may be awarded "reasonable attorney's fee as determined by the court." 15 U.S.C. § 1692k(a)(3). "The fee applicant bears the burden of documenting the appropriate hours expended in the litigation and must submit evidence of those hours worked." Gates v. Deukmejian, 987 F.2d 1392, 1397 (9th Cir. 1992) (citing Hensley, 461 U.S. at 433, 437). "The party opposing the fee application has burden of rebuttal that requires submission of evidence to the district court challenging the accuracy and reasonableness of the hours charged ..." Id. at 1397-98 (citations omitted).

There is a strong presumption that the lodestar figure is reasonable. City of Burlington v. Dague, 505 U.S. 557, 562 (1992). However, courts routinely reduce the lodestar figure to reflect the nature of the case. See Blum v. Stevenson, 465 U.S. 886, 888 (1984) (court may cut lodestar to arrive at reasonable fee);Tutor-Saliba Corp. v. City of Hailey, 452 F.3d 1055, 1065 (9th Cir. 2006) (listing factors to consider when determining fee awards); Kerr v. Screen Extras Guild, , 526 F.2d 67, 69-70 (9th Cir. 1975). When a court decides that reductions are warranted, it may "make across-the-board percentage cuts either in the number of hours claimed or in the final lodestar figure," Gates, 987 F.2d at 1399, and/or "exclude from the initial fee calculation hours that were not reasonably expended," Hensley, 461 U.S. at 433-34. When making such reductions, a court must "provide a concise but clear explanation of its reasons for the fee awards." Id. at 437.

Hourly Rates.

When determining a reasonable hourly rate, courts compare the requested amount with the rate "prevailing in the community for similar services of lawyers with reasonably comparable skill, experience, and reputation." Blum, 465 U.S. at 895. Plaintiff requests $385/hour for Ms. Arleo and $420/hour for Mr. Khojayan. Pl. Mem. at 7. In light of the simple nature of the instant case, these rates are excessive.

In support of her attorneys' requested rates, Plaintiff largely relies on a declaration by William Hensley, submitted in another fees motion pending in this District. Arleo Decl., Ex. 3 (Hensley Decl.) (filed in Gonzales v. Arrow Financial Services, LLC, 05cv171-JAH (RBB) (S.D. Cal. Jan. 28, 2005)). However, Mr. Hensley's statements do not pertain to the instant case.*fn2 First, Gonzales is a significantly more complicated case; a years-long class action that proceeded to trial, and involved a class certification challenge, multiple dispositive motions, and motions in limine. This case, on the other hand, is a simple one. It concerns a single plaintiff and a single defendant, and the action's factual basis is almost entirely comprised of five allegedly improper debt-collection letters and a number of phone calls to Plaintiff. Complaint. Discovery was straightforward, and Plaintiff took only one deposition. Arleo Decl. at 4-5. Similarly, Plaintiff's claims are not complex, and several of them could be resolved by answering simple factual questions, i.e., did Defendant cease certain debt-collection communications after Plaintiff requested that it do so. Complaint.

Second, Mr. Hensley's declaration compares Plaintiff's attorneys with those of the nation's largest law firms, concluding that the attorneys' hourly rates "would be gauged by the rates applicable to complex litigation in the top civil/commercial firms in the San Diego County community." Hensley Decl at 5. Most notably, Mr. Hensley justifies Plaintiff's attorneys' hourly rates by comparing them to those charged in the 2001-08 Enron securities class-action litigation, prosecuted by Coughlin Stoia Geller Rudman & Robbins LLP. Hensley Decl. at 13-14. Fees charged in that case, a historic and notoriously complex action, in no way inform the reasonable hourly rate in this case. Nor does this case compare to the "complex litigation" undertaken by the nation's largest firms. Hensley Decl. at 5. Although the rates of local attorneys practicing at large firms may help determine reasonable fees, Plaintiff fails to sufficiently compare the rates those attorneys would charge in similar cases, i.e., simple FDCPA litigation. Hensley Decl.

However, recent, local cases provide guidance. In 2007, a court in this district awarded Ms. Arleo $350/hour for her work on another FDCPA case. Langley v. Check Game Solutions, 2007 WL 2701345 at *7 (S.D. Cal. Sept. 13, 2007). Ms. Arleo also received $350/hour in Hess v. Ramona Unified School District, 2008 WL 5381243 at *3 (S.D. Cal. Dec. 19, 2008) However, both of those cases were more complex than this one. Hess, a multiple-plaintiff Title IX action against a school district, required more than two years to resolve, and largely centered on a hotly-contested preliminary injunction. There, Ms. Arleo was awarded $350/hour, because of the "complexities and circumstances of the case." Ibid. Similarly, Langley involved counter-claims, a motion to compel, and a motion to dismiss. Langley, 2007 WL 2701345. In contrast, the instant case was simple, resolved within a matter of months, and entailed nothing more than two unopposed motions to compel, which were rendered moot when the case settled shortly thereafter. Doc. No. 28.

Furthermore, Plaintiff repeatedly states that her attorneys, particularly Ms. Arleo, are experienced in FDCPA litigation. See e.g., Pl. Mem. at 8 ("Plaintiff's counsel is experienced and able counsel. Elizabeth Arleo has extensive experience prosecuting consumer, FDCPA and other class actions"). In light of this experience, prosecuting a non-complex FDCPA case like this one should not be unduly challenging, such that Plaintiff's attorneys merit increased compensation.

The Court also notes the non-complex nature of some of the work for which the attorneys billed: for example, 4.2 hours preparing an "evidentiary timeline," Arleo Decl., Ex. 1 ("Arleo Timesheet") at 2-3 (1/2/09-2/3/09), 1.5 hours to efile documents, id., and .5 hours to "research, revise and finalize Complaint and summons to ensure documents have defendant's correct information and address," Khojayan Timesheet at 1 (8/6/08).

For the reasons given above, this case is less factually and procedurally complex than the two in which Ms. Arleo was awarded $350/hour. The court therefore finds $300/hour to be reasonable for Ms. Arleo. Similarly, based on the simplicity of this case and the nature of the work required of the attorneys, the Court finds a rate of $350/hour to be reasonable for Mr. Khojayan.

Discovery.

The Court is concerned about the large number of hours billed for discovery, particularly given the lack of voluminous documents and the fact that Plaintiff required only one deposition. See also Langley, at *7 (court "particularly concerned" about time spent by Ms. Arleo on discovery). Ms. Arleo spent approximately 52.5 hours on discovery, Arleo Timesheet at 4-5, and Mr. Khojayan spent approximately 28.2 hours, Khojayan Timesheet, for a total of 80.7 hours. Of this time, Mr. Khojayan spent approximately 10.6 hours preparing for a 2.5 hour deposition. Khojayan Timesheet (12/8/08-1/7/09). Including travel time, conferring with Ms. Arleo, and Ms. Arleo's telephonic appearance, Plaintiff requests reimbursement for 16.5 hours related to the deposition. Khojayan Timseheet; Arleo Timesheet(1/27/09). Although the deposition yielded an important admission, Khojayan Decl. at 1-2, the amount of time surrounding the deposition, more than four hours per hour of questioning, is unreasonable. The Court therefore reduces time claimed for the deposition by 33%, and subtracts 4.1 hours from Mr. Khojayan's, and .7 hours from Ms. Arleo's, total claims.

The remaining 64.2 hours spent on discovery largely concerned written discovery, including two motions to compel and a protective order. Arleo Timesheet; Arleo Decl. at 4-5; Khojayan Timesheet. In light of the case's factual and legal simplicity, including that of the allegations, the time spent on written discovery is unreasonable. For example, Plaintiff fails to demonstrate the necessity for, or fruitfulness of, three sets of written discovery, each of which required an inordinate number of attorney hours. Nor do Plaintiff's attorneys' billing statements reflect sufficient efficiency to merit a full fee award.

Examples of this inefficiency include .8 hours billed by Mr. Khojayan to "prepare and finalize personal appearance deposition subpoena," an activity that should take an experienced attorney a matter of minutes, and 5.7 hours to prepare a protective order, which also should be a routine matter for an experienced attorney. Khojayan Timesheet (8/8/08, subpoena); Arleo Timesheet (1/9/09-2/18/09, protective order) & Timesheet (1/12/09, same). Mr. Khojayan also bills 1.3 hours to review the third set of discovery which, aside from boilerplate language, only consisted of two questions occupying six lines of text. Khojayan Timesheet (12/12/08-12/15/08, billing); Decl. Stuart, Ex. J (discovery request). This, too, undermines Plaintiff's arguments regarding her attorneys' efficiency.

Therefore, based on the simplicity of the case, the excessive number of hours attributed to routine discovery, and Plaintiff's failure to demonstrate the alleged efficiency of her attorneys, the Court finds the requested hours to be unreasonable and reduces the remaining 64.2 hours spent on discovery by 50%. See Gates, 987 F.2d at 1397 (fee applicant bears burden of showing request is reasonable). Because the billing statements reflect that roughly 30% of those hours were spent by Mr. Khojayan, and 70% by Ms. Arleo, the Court deducts 9.6 hours from Mr. Khojayan's total, and 22.5 hours from Ms. Arleo's total.

The Fees Motion and Reply.

Plaintiff seeks reimbursement for approximately 35 hours spent drafting the instant fees motion and reply, Reply at 10, rendering fees the most time-consuming issue in the case. This request is unreasonable. First, in light of the factual and legal simplicity of the fees arguments, and the lack of novel issues presented, the time claimed is excessive. This is particularly true because Plaintiff's primary support for her attorneys' hourly rates, the Hensley Declaration, already was prepared on behalf of a different fees motion. Second, some tasks which were performed by attorneys should have been performed by a paralegal, i.e., compiling exhibits, Khojayan Decl. II (3/20/09), and 1.5 hours reviewing timesheets, Reply, Ex. 10 (4/15/09). Third, almost half of the hours claimed were expended on two identically- and generically-described, consecutive 8-hour days. Reply, Ex. 10 (5/20/09 & 5/21/09, billing 16 hours to "draft reply brief and Arleo decl in response to defendant's opposition to fee application"). This is insufficiently precise for such a large amount of time.

Therefore, the Court reduces by 50% the 35 hours claimed for the fees motion and reply. See Langley, 2007 WL 2702345 at *7 (finding 20 hours spent on reply in fees dispute "unreasonable"). Based on the respective attorneys' time spent on the fees dispute, the Court therefore reduces Ms. Arleo's total time by 15 hours, and Mr. Khojayan's total by 2.5 hours.

Other Adjustments.

The Court also finds the following hours and expenses to be unreasonable, and deletes or reduces them:

Pre-Complaint Work: Plaintiff's attorneys bill approximately 11.7 hours of pre-complaint research and communication, despite straightforward facts and claims. Arleo Timesheet (1/16/08-8/4/08); Khojayan Timesheet (8/5/08-8/7/08); see also Langley, 2007 WL 2701345 at *7 (in similar FDCPA case, court found all factual information in complaint was within Plaintiff's personal knowledge and could have been "obtained from a one-hour interview (at most) and a review of [Defendant's collection letters]"). The Court reduces this amount by 33%, and thus deducts 2.5 hours from Ms. Arleo's total, and 1.3 hours from Mr. Khojayan's total, based on the proportion of the attorney's pre-complaint work. Administrative Duties: Plaintiff's attorneys request approximately 4.9 hours of attorney-rate compensation for performing administrative duties, i.e., efiling documents, Arleo Timesheets, preparing the civil cover sheet and declaration of service, Khojayan Timesheet (8/5/08), and preparing documents for an attorney service to pick up, Khojayan Timesheet (8/7/08). It is unreasonable for Plaintiff to request attorney rates for administrative duties. The Court therefore deducts 3 hours from Mr. Khojayan's total and 1.9 hours from Ms. Arleo's, and awards this time at the uncontested paralegal rate of $125/hour. Communications: Ms. Arleo bills for 41 calls and emails between herself and Plaintiff, totaling approximately 14.3 hours. Arleo Timesheet. In light of the limited facts underlying the case, Plaintiff's failure to sufficiently justify this amount of communication, and the relatively short duration of the case, this time is unreasonable. The Court thus reduces the claimed time by 40%, and deducts 5.7 hours from Ms. Arleo's total.

Inaccurate Accounting: At the end of his first timesheet, Mr. Khojayan claims the sum of the billed entries equals 39.5 hours. In fact, the entries add up to 35.2 hours. The Court therefore deducts 4.3 hours from Mr. Khojayan's total. In his second timesheet, Mr. Khojayan claims the sum of the billed entries equals 14 hours. In fact, the entries add up to 14.2 hours. The Court therefore adds .2 hours to Mr. Khojayan's total. Also, Ms. Arleo concedes that she billed twice for one hour of the same activities on 2/5/09 and 2/6/09, Reply at 8, n.12, and one hour is thus deducted from her total.

Paralegal Expenses: Plaintiff requests 15.5 hours' compensation for Mr. Khojayan's paralegal, Ms. Rico, to research and make copies of cases regarding Defendant's litigation history. While this research was relevant to the instant case, the time spent was excessive. The Court thus reduces the claimed time by 50%, and deducts 7.2 hours from Ms. Rico's total.

Expenses.

Plaintiff requests $5,138.45 in expenses. Reply at 10. However, many of these expenses are unsupported. Particularly alarming are large online research fees claimed at times the billing attorney conducted little or no research. For example, Ms. Arleo requests $984 in August 2008 Lexis fees, Arleo Decl., Ex. 4, but her timesheet shows no research at that time. Likewise, Mr. Khojayan requests $732 in online research fees on 1/4/09, Khojayan Decl., Ex. 4, but his timesheet for the same day shows only .4 hours of research. Further, that research was on a potential class action, which, because the claim is "unrelated," is non-compensable. Hensley, 461 U.S. at 434-35.

Excepting the research described above, the expenses claimed by Mr. Khojayan are well-supported. Khojayan Decl., Ex. 4. However, many of Ms. Arleo's expenses are not specified beyond "Lexis," "Copy," or "UPS." Arleo Decl., Ex. 4. Although cross-reference with Ms. Arleo's timesheet reveals support for some of the online research expenses, e.g., January 2009, much remains ambiguous. Absent descriptions of what was researched, copied, or shipped, the Court cannot assess the reasonableness of these expenses. A court may reduce requests that are poorly documented or described. Fischer v. SJB-P.D., Inc., 214 F.3d 1115, 1121 (9th Cir. 2000); see also Altergott v. Modern Collection Technologies, 864 F.Supp. 778, 783 (N.D. Ill. 1994) (deducting fees where Plaintiff failed to specify the documents copied and the number of copies made). The Court therefore deducts $1,800, representing the approximate sum of unsupported expenses, from the total award.

Final Award and Order To File Joint Motion to Dismiss.

Plaintiff requests compensation for 140.3 hours expended by Ms. Arleo on this matter. Reply at 10. After making the adjustments described in this Order, 91 hours remain. Plaintiff also requests compensation for 53.5 hours of Mr. Khojayan's time. Reply at 10; Motion at 2. After adjusting the request as described above, 28.9 hours remain. Finally, Plaintiff requests compensation for 18 hours of Ms. Rico's time. Motion at 11. After adjusting the request as described above, 15.7 hours remain.

When multiplied by Ms. Arleo's reasonable hourly rate of $300, Mr. Khojayan's reasonable hourly rate of $350, and Ms. Rico's hourly rate of $125, the Court arrives at a total lodestar figure of $39,377.50 ($27,300 $10,115 $1,962.50).

Plaintiff also requests $5,138.45 in litigation expenses. After adjusting this figure as described above, the Court finds an award of $3,348.45 to be reasonable. When combined with the adjusted lodestar figure of $39,377.50, the Court finds a total award of $42,725.95 to be reasonable. On or before August 31, 2009, Defendant shall remit to Plaintiff $42,725.95 (forty-two thousand, seven-hundred twenty-five dollars and ninety-five cents), and file a notice of payment by September 3, 2009.

The parties are ordered to file a joint motion for dismissal of this case, signed by counsel of record, no later than September 17, . A proposed order on the joint motion for dismissal must be e-mailed to the district judge's chambers*fn3 on the same day.

If the fully executed joint motion for dismissal is not filed by September 17, 2009, then all counsel of record and unrepresented parties are required to appear in person for a Settlement Disposition Conference. The Settlement Disposition Conference will be held on September 22, 2009 at 9:00 a.m. in Courtroom G.

If counsel of record fails to appear at the Settlement Disposition Conference, or the parties fail to file the signed joint motion for dismissal in a timely manner, the Court will issue an Order to Show Cause why sanctions should not be imposed for failing to comply with this Order.

IT IS SO ORDERED.


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