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Securities and Exchange Commission v. Schooler

United States District Court, S.D. California

April 10, 2017

SECURITIES AND EXCHANGE COMMISSION, Plaintiff,
v.
LOUIS V. SCHOOLER and FIRST FINANCIAL PLANNING CORPORATION, dba Western Financial Planning Corporation, Defendants.

          GRANTING ALLEN MATKINS' SEVENTEENTH INTERIM FEE APPLICATION [ECF NO. 1434]

          Hon. Gonzalo P. Curiel, United States District Judge

         On March 14, 2017, the Court denied the Seventeenth Interim Fee Application of Allen Matkins Leck Gamble Mallory & Natsis LLP, Counsel to Receiver (“Allen Matkins”) and directed Counsel to Receiver to file Supplemental Briefing addressing the Court's concerns. ECF No. 1448. The Court received such briefing on March 20, 2017. ECF No. 1450. Accordingly, and having been satisfied that Counsel to Receiver has cured the defects present in the initial filing, the Court hereby GRANTS Allen Matkins' Seventeenth Interim Fee Application.

         The Court previously denied Allen Matkins' request for fees because it found that Counsel to Receiver had failed to demonstrate that their hourly rates were fair and reasonable in light of prevailing market rates.[1] ECF No. at 1448. The Court attributed this failure to the fact that Allen Matkins had raised the hourly rates of its lawyers by 6.5% without notice and without explanation to the Court. Id. at 7. The Court expressed particular concern about the fact that the overwhelming majority of work on the Receivership had been previously billed at $486.00 per hour and was now being billed at an hourly rate of $517.00. Id.

         The Supplemental Briefing submitted by Counsel to Receiver explains that the 6.5% rate increase is due to an annual adjustment in the law firm's annual rates which it made “in light of increases in operating expenses and the additional skill and experience of their attorneys.” ECF No. 1450 at 3. Allen Matkins added that the firm makes such adjustments each year, effective July 1.[2] Id.

         In light of this new information, the Court finds that Allen Matkins' rates are fair and reasonable. The Court begins by noting that the total fees requested by Allen Matkins include a 10 percent discount, which has been customary throughout the firm's tenure as Counsel to Receiver. See ECF No. 1450 at 3. Accordingly, although Allen Matkins accrued $99, 325.35 in fees during the Seventeenth Application Period, it has only requested $89, 392.82. See ECF No. 1434. The Court further observes that most of the work performed by Counsel to Receiver was billed at $517.00 and that, when taking into account the 10 percent discount, Allen Matkins average rate per hour was $475.75.[3]As such, the Court finds that Allen Matkins' rates are reasonable notwithstanding the fact that Allen Matkins' range of hourly rates, $256.50 - $715.00[4], is higher than comparable professionals.

Lake Coreth Case

Court and Case No.

Receiver's Counsel

Hourly Rates

Docket Nos.

SEC v. Lambert Van Tuig, et al.

USDC-CD Case No. 06-cv-00172

Sheppard Mullin Richter & Hampton LLP

$290-$520

765/774

SEC v. Learn Waterhouse, Inc., et al.

USDC-SD Case No. 04-cv-02037

Ervin Cohen & Jessup LLP

$235-$575

729-3/732

SEC v. Christian Stanley, Inc., et al.

USDC-CD Case No. 11-cv-07147

Dentons U.S. LLP

$211-$531

204-2/211

         ECF No. 1450 at 3. Of the 187.9 hours that Allen Matkins spent on the Receivership this application period, only 22.6 hours (roughly 12%) were billed above $517.50. Given that only a small percentage of Allen Matkins' fees were billed at the higher rates, the Court finds that the firm's 10 percent discount is more than sufficient to bring its compensation within an acceptable range, as evidenced by the fact that the average rate per hour, after incorporating the discount, was $475.75.

         As such, the Court concludes that Allen Matkins' rates represent the fair value of the time, labor, and skill provided, as measured by conservative business standards and in light of comparable rates in this geographic area.

         CONCLUSION

         Having been satisfied that Counsel to Receiver cured the defects in its Seventeenth Interim Fee Application, ECF No. 1434, identified by the Court in its order denying the Seventeenth Interim Fee Application, ECF No. 1448, the Court hereby GRANTS Allen Matkins' Seventeenth Interim Fee Application, ECF No. 1434, and awards fees and costs as set forth in the following table:

Lake Coreth

Applicant

Fees Allowed

% of Fees Incurred[5]

Costs Allowed

% of Costs Requested

Counsel

$99, 325.35

80

$503.96

100

         IT IS SO ORDERED.

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