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Valueselling Associates, LLC, A California Limited Liability Company v. Kevin Temple

June 10, 2011

VALUESELLING ASSOCIATES, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY;
AND SALES VISION, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY,
PLAINTIFFS,
v.
KEVIN TEMPLE, AN INDIVIDUAL; ENTERPRISE SELLING GROUP,
FORM OF ENTITY UNKNOWN; AND DOES 1 THROUGH 50, INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: Hon. Jeffrey T. Miller United States District Judge

ORDER GRANTING DEFENDANTS' MOTION FOR ATTORNEYS' FEES AS MODIFIED Doc. No. 19

Plaintiffs ValueSelling Associates, LLC ("VSA") and Sales Vision, LLC ("SVL") filed the instant suit in federal court on July 9, 2009 against Defendants Kevin Temple and Enterprise Selling Group ("ESG"), alleging various causes of action related to Plaintiffs' purchase of certain trademarked and copyrighted material from Defendants and a related consultancy agreement between the parties. (Doc. No. 1.) Defendants filed a motion for an order to compel arbitration and dismiss the case, based on the arbitration clauses contained in three different contracts between the parties. (Doc. No. 4.) The court granted Defendants' motion. (Doc. No. 11.) Defendants now move the court to recover attorneys' fees and costs incurred in connection with their successful motion to compel arbitration. (Doc. No. 19.)

Pursuant to CivLR 7.1(d), the court determines this matter is appropriate for resolution without oral argument. For the reasons set forth below, the court hereby GRANTS Defendants' motion, subject to the modifications described herein.

I. BACKGROUND*fn1

Plaintiffs are the owners of certain trademarked and copyrighted materials comprising a process known as the ValueSelling Program. Plaintiffs initially signed a contract to acquire the ValueSelling Program from Defendant Temple and his co-owners in June 2003 (the "Purchase Agreement"). The parties subsequently entered into another agreement in July 2003, whereby Temple was to remain on as an independent consultant to SVL for the next three years (the "Consultancy Agreement"). However, a dispute arose between Plaintiffs and Temple in July 2007. The parties agreed to a settlement that would terminate their relationship (the "Confidential Settlement Agreement"). Plaintiffs nevertheless brought suit against Temple and ESG-a company that Temple formed in 2007-in July 2009, claiming that Defendants misappropriated Plaintiffs' trade secrets and infringed upon certain of Plaintiffs' intellectual property rights.

On September 3, 2009, Defendants moved for an order compelling Plaintiffs to submit their dispute to arbitration and dismissing the case. (Doc. No. 4.) Defendants' motion was based on the arbitration clauses contained in the Purchase Agreement, Consultancy Agreement, and Confidential Settlement Agreement. On November 5, 2009, the court granted Defendants' motion and dismissed the case. (Doc. No. 11.) Plaintiffs subsequently commenced arbitration proceedings against Defendants, during which Defendants sought to recover attorneys' fees and costs incurred in connection with their motion to compel arbitration. (See Doc. No. 18 p.2.) However, after the arbitrator declined to exercise jurisdiction over the matter, Defendants were able to reopen the case before this court for the limited purpose of bringing a motion for attorneys' fees. (Id. at p.8.) That motion is now before the court. (Doc. No. 19.)

II. DISCUSSION

There appears to be no contention over the fact that Defendants are entitled to recover attorneys' fees based on their successful motion to compel arbitration. (See Doc. No. 19-1 pp. 5-6; Doc. No. 20 p.1.) Rather, the parties' disagreement centers on what amount is "reasonable" under the circumstances.

In California, "[i]t is well settled that a trial court is vested with wide discretion in fixing the amount to be awarded to a prevailing party for attorneys' fees."*fn2 Rogel v. Lynwood Redevelopment Agency, No. B219626, 2011 WL 1632038 at *1 (Cal. Ct. App. May 2, 2011). In making this determination, the court ordinarily begins with the "lodestar," i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate. . . . The reasonable hourly rate is that prevailing in the community for similar work. The lodestar figure may then be adjusted, based on consideration of factors specific to the case, in order to fix the fee at the fair market value for the legal services provided. Such an approach anchors the trial court's analysis to an objective determination of the value of the attorney's services, ensuring that the amount awarded is not arbitrary.

PLCM Grp. v. Drexler, 22 Cal. 4th 1084, 1095 (2000).

Here, Defendants request a total of $26,340 in fees. (Doc. No. 19-1 p.7.) This figure includes both the expense of bringing the motion to compel arbitration itself ($20,090) as well as the costs associated with the instant motion for fees ($6,250). (Id. at pp. 6-7.) According to Defendants, two attorneys from the law firm of Ravin Glovinsky, LLP worked on their case. (Id. at p.6.) The requested fee award was arrived at using a straightforward calculation of the number of hours expended by each of the two attorneys, multiplied by each attorney's respective billing rate. (Id.) Specifically, in bringing the motion to compel arbitration, lead counsel Jason L. Glovinsky worked a total of 46.4 hours, while attorney William W. Ravin worked 7.7 billable hours.*fn3 (Id.) In addition, Mr. Glovinsky had already spent 12 hours, and Mr. Ravin 1 hour, researching, drafting, and filing the instant motion at the time it was filed. (Id. at pp. 6-7.) Moreover, Defendants anticipated that Mr. Glovinsky would spend an additional 3 hours and Mr. Ravin an additional 1 hour reviewing Plaintiffs' opposition and preparing reply papers.*fn4 (Id. at p.7.) According to Defendants, Mr. Glovinsky's billing rate during this period was $350 per hour, while Mr. Ravin's rate was $500 per hour. (Id. at p.6.) These rates were supported by an accompanying declaration provided by Mr. Glovinsky, in which he set forth both his and Mr. Ravin's background and qualifications. (Doc. No. 19-2 ¶ 9.) Mr. Glovinsky states that he has practiced law in California for about 21 years and specializes in business litigation. (Id.) His partner Mr. Ravin has practiced in California for about 39 years. (Id.) According to Mr. Glovinsky, he is "confident that the rates and time charged by [his] firm for this case are reasonable under the circumstances." (Id.)

Thus, the fee request is calculated based on a total of 61.4 hours (46.4 12 3) worked by Mr. Glovinsky at a rate of $350 per hour, and 9.7 hours (7.7 1 1) worked by Mr. Ravin at a rate of $500 per hour. (Doc. No. 19-1 pp. 6-7.) The total amount of $26,340 requested by Defendants is therefore their proposed lodestar. Defendants do not request any enhancements or adjustments to that lodestar figure.

Plaintiffs object to Defendants' calculations on several grounds. First, Plaintiffs argue that the number of hours spent by Defendants' attorneys in preparing and filing the motion to compel arbitration is excessive and unsubstantiated. (Doc. No. 20 pp. 3-4.) Plaintiffs characterize Defendants' motion to compel arbitration as "relatively simple" and argue that, as experienced litigators, Defendants' attorneys should have been "more efficient" in the use of their time. (Id. at p.4.) Plaintiffs also point out that several of the line items in the billing invoices submitted by Defendants in support of their motion relate to work product that was never used. (Id. at p.5.) For example, on September 2-3, 2009, Mr. Ravin billed Defendants for a total of 3.9 hours, part of which was spent preparing an answer to Plaintiffs' complaint that was ultimately never filed. (See Doc. No. 19-2 Exh. E, "Billing Invoices," p.E-21.) In addition, Plaintiffs take issue with Defendants' attorneys' practice of "block billing," which they claim "makes it impossible to determine how much time was spent on each task within [each] entry" on the invoice, and with the numerous redactions of the invoices themselves, some of which completely obscure the nature of the work performed. (Doc. No. 20 pp. 5-6; see, e.g., Billing Invoices at p.E-19 (listing a 0.90 hour block of time worked by Mr. Ravin described only as "[a]nalysis of [REDACTED]" on August 11, 2009).) According to Plaintiffs, the records as presented to the court are simply too vague to support the fee award requested. Finally, Plaintiffs contest Defendants' request for $6,250 in fees related to the instant motion. (Doc. No. 20 p.6.) Plaintiffs argue that not only have Defendants provided no invoices or billing statements to verify their claim of the number of hours worked by counsel on the motion for fees, but the number of hours claimed "is unreasonable for a standard, uncomplicated motion." (Id.) Plaintiffs again emphasize Mr. Glovinsky's and Mr. Ravin's backgrounds, arguing that counsel "are experienced litigators who undoubtedly bring motions for fees on a regular basis." (Id.)

Second, Plaintiffs claim that the hourly rate charged by Defendants' attorneys is also unreasonable. Plaintiffs argue that Defendants bear the "initial burden of producing satisfactory evidence that attorneys of similar experience in the legal community are billing paying clients for similar work at the rates [Defendants] seek[]." (Id. at p.7.) According to Plaintiffs, Defendants have failed to satisfy this burden, producing only "conclusory statement[s]" from their counsel that the rates charged are reasonable. (Id.) Plaintiffs also ...


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