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Youngevity International, Corp. v. Smith

United States District Court, S.D. California

May 7, 2018

YOUNGEVITY INTERNATIONAL, CORP., et al., Plaintiffs,
v.
TODD SMITH, et al., Defendants. Name Position

          ORDER GRANTING IN PART AND DENYING IN PART PLANTIFFS' EX PARTE MOTION FOR ATTORNEYS' FEES AND COSTS [ECF NO. 286]

          Hon. Jill L. Burkhardt United States Magistrate Judge

         Before the Court is Plaintiffs' and Counterclaim Defendants' (“Youngevity” or “Plaintiffs”) Ex Parte Motion for Attorneys' Fees and Costs (“Motion for Fees”). (ECF No. 286-1.) Defendants and Counterclaim Plaintiffs, Wakaya, et al. (“Wakaya” or “Defendants”) oppose the Motion for Fees. (ECF No. 334.) For the reasons set forth below the Motion is GRANTED in part and DENIED in part.

         I. BACKGROUND

         The instant Motion for Fees comes to the Court following the grant of Plaintiffs' request for fees and costs incurred in the making of a motion for a protective order and sanctions. (See ECF No. 246.) On October 23, 2017, the Court granted in part and denied in part Youngevity's Motion for Protective Order and Sanctions (“Motion for Protective Order”). (Id. at 12-14, 18.) In its Motion for Protective Order, Youngevity argued that Wakaya impermissibly provided incorrect legal advice to a third party deponent, improperly urged the witness to invoke his Fifth Amendment rights, intimidated the witness with allusions to criminal liability, and sought information relating to securities violations outside the proper scope of discovery. (ECF No. 179.) On September 28, 2017, the Court held a hearing on the matter. (ECF No. 207.) The Court expressed concern about the propriety of counsel's conduct in the deposition and issued a protective order foreclosing Wakaya from inquiring into alleged instances of insider trading, but denied Youngevity's requests to strike deposition testimony and issue monetary sanctions against Wakaya's counsel. (ECF No. 246 at 13-15, 17.) The Court granted Youngevity's request for its “reasonable fees and costs incurred in researching, drafting, and finalizing Youngevity's motion to compel, as well as those incurred in preparing for and attending the September 28, 2017 hearing” under Federal Rule of Civil Procedure Rule 37(a)(5). (Id. at 18.)

         Youngevity now requests an award of $23, 509.62, [1] which is comprised of $18, 974.75 in attorneys' fees for researching, drafting, and finalizing the Motion for Protective Order and the Reply in Support of Motion for Protective Order (“Reply”), and preparation for and attendance at the September 28, 2017 hearing on the Motion for Protective Order; $1, 103.75 in costs associated with the Motion, Reply, and hearing; and $3, 531.00 in attorneys' fees incurred in the preparation of the instant Motion for Fees. (ECF No. 286-1 at 3.)

         II. LEGAL STANDARDS

         Federal Rule of Civil Procedure 37 states that if a motion is granted, the court may “require the party . . . whose conduct necessitated the motion . . . to pay the movant's reasonable expenses incurred in making the motion, including attorneys' fees.” Fed.R.Civ.P. 37(a)(5)(A). The Court “must calculate awards for attorneys' fees using the ‘lodestar method.'” Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 978 (9th Cir. 2008). The lodestar method is calculated by “multiplying the number of hours the prevailing party reasonably expended on the litigation by a reasonable hourly rate.” Id. District courts “[have] a great deal of discretion in determining the reasonableness of the fee.” Hensley v. Eckerhart, 461 U.S. 424, 437 (1983). The Ninth Circuit also identifies a variety of factors the Court might consider in determining whether the requested fees are reasonable:

1) time and labor required, 2) the novelty and difficulty of the questions involved, 3) the skill requisite to perform the legal service properly, 4) the preclusion of other employment by the attorney due to acceptance of the case, 5) the customary fee, 6) whether the fee is fixed or contingent, 7) time limitations imposed by the client or the circumstance, 8) the amount involved and the results obtained, 9) the experience, reputation, and ability of the attorneys, 10) the “undesirability” of the case, 11) the nature and length of the professional relationship with the client, and 12) awards in similar cases.

Carter v. Caleb Brett LLC, 757 F.3d 866, 869 (9th Cir. 2014) (citing Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 70 (9th Cir. 1975)).

         A. Reasonable Hourly Rates

         When determining a reasonable hourly rate, a court should consider the prevailing rate for similar work in the relevant community. Camacho, 523 F.3d at 979 (citing Barjon v. Dalton, 132 F.3d 496, 500 (9th Cir. 1997)). Generally, “the relevant community is the forum in which the district court sits.” Id. Rates outside of the relevant forum should only be used when “local counsel was unavailable, either because they are unwilling or unable to perform because they lack the degree of experience, expertise, or specialization required to handle properly the case.” Id. (citing Barjon, 132 F.3d at 500).

         Although determining a reasonable hourly rate for lawyers' services can be difficult, “the established standard when determining a reasonable hourly rate is the ‘rate prevailing in the community for similar work performed by attorneys of comparable skill, experience, and reputation.'” Camacho, 523 F.3d at 979 (quoting Barjon, 132 F.3d at 502). “[T]he burden is on the fee applicant to produce satisfactory evidence-in addition to the attorney's own affidavits-that the requested rates are in line with those prevailing in the community.” Camacho, 523 F.3d at 980. See also Blum v. Stenson, 456 U.S. 886, 895 n.11 (1984). Satisfactory evidence of the prevailing market rate can include “[a]ffidavits of the [requesting] attorney[s] and other attorneys regarding prevailing fees in the community, and rate determinations in other cases.” Camacho, 523 F.3d at 980 (quoting United Steelworkers of Am. v. Phelps Dodge Corp., 896 F.2d 403, 407 (9th Cir. 1990)). The party opposing the fees and costs application has the “burden of rebuttal that requires submission of evidence to the district court challenging the accuracy and reasonableness of the . . . facts asserted by the prevailing party in its submitted affidavits.” Camacho, 523 F.3d at 980 (quoting Gates v. Duekmejian, 987 F.2d 1392, 1397-98 (9th Cir. 1992)).

         B. Reasonable Hours Expended

         The moving party has the burden of producing “billing records to establish the number of hours it requested is reasonable.” Gonzalez v. City of Maywood, 729 F.3d 1196, 1202 (9th Cir. 2013). The moving party should exercise billing judgment to exclude hours that are excessive, redundant, or otherwise unnecessary. Hensley, 461 U.S. at 434; Costa v. Comm'r of SSA, 690 F.3d 1132, 1135 (9th Cir. 2012). Largely, a court should defer to the “winning lawyer's professional judgment as to how much time he was required to spend on the case.” Chaudhry v. City of Los Angeles, 751 F.3d 1096, 1111 (9th Cir. 2014) (quoting Moreno v. City of Sacramento, 534 F.3d 1106, 1112 (9th Cir. 2008)).

         District courts have discretion to reduce the number of hours that were not reasonably expended. Hensley, 461 U.S. at 434; see also Gates, 987 F.2d at 1399. When determining whether the number of hours expended is reasonable, the court may take into account: (1) the novelty and complexity of the issues; (2) the special skill and experience of counsel; (3) the quality of representation; and (4) the results obtained. Cabrales v. County of Los Angeles, 864 F.2d 1454, 1464 (9th Cir. 1988); see also Kilopass Tech., Inc. v. Sidense Corp., 82 F.Supp.3d 1154, 1170 (N.D. Cal. 2015). Where a district court imposes a reduction in fees, the court should provide a “concise but clear” explanation of its reasoning. Moreno, 534 F.3d at 1111 (citing Hensley, 461 U.S. at 437). A district court can also “impose a small reduction, no greater than 10 percent-a ‘haircut'-based on its exercise of discretion and without a more specific explanation.” Id. at 1112.

         III. ANALYSIS

         As noted above, Youngevity requests an award of $23, 509.62, which includes $18, 874.75 in attorneys' fees for researching, drafting, and finalizing the Motion for Protective Order and Reply, and for preparing and participating in the hearing; $1, 103.87 in costs associated with the Motion, Reply, and hearing; and $3, 531.00 in attorneys' fees incurred in submitting the Motion for Fees. (ECF No. 286-1 at 3.) The Court previously determined that an award of Plaintiffs' reasonable attorneys' fees and expenses under Rule 37(a) was appropriate. (ECF No. 246 at 18.) Wakaya argues that the amount of the fees requested is unreasonable because: (1) Youngevity failed to present sufficient evidence to enable the Court to evaluate its request for fees; (2) the claimed hours are excessive; and (3) Youngevity had limited success on its Motion for Protective Order, so they should not be awarded fees and costs for pursuing relief not granted. (ECF No. 334 at 7-11.) Wakaya also argues that Youngevity should not recover for time expended on the Motion for Fees itself because Youngevity failed to meaningfully participate in the meet and confer process. (Id. at 11-12.) For the reasons stated below, the Court GRANTS in part and DENIES in part Plaintiffs' Motion for Fees.

         A. Meet and Confer Efforts

         Defendants argue that Plaintiffs are precluded from an award of fees for time expended on the Motion for Fees because they failed to meaningfully engage in the meet and confer process in accordance with the Court's Local Rules. (Id.) Parties are required to meet and confer in an effort to resolve discovery disputes before asking assistance of the Court. CivLR 26.1.a; J. Burkhardt Civ. Chambers R., Section IV(A). The Court ordered Youngevity to provide Wakaya with detailed fee and cost invoices supporting its claim for reasonable costs and fees by November 10, 2017, and further ordered the parties to “meet and confer over any disputed fees and costs incurred by Youngevity in connection with this motion” no later than November 24, 2017. (ECF No. 246 at 18.) On November 2, 2017, Youngevity's counsel emailed Wakaya's counsel a heavily redacted fee and cost invoice (ECF No. 286-3 at 15-19) and two weeks of potential dates on which Youngevity was available to engage in the meet and confer process in accordance with the Court's Order. (Id. at 8.) Wakaya did not respond to Plaintiffs' November 2, 2017 email until November 17, 2017, leaving just three business days before the national holiday (Thanksgiving) for Plaintiffs to respond and engage in the meet and confer process. (Id. at 7.) On November 20, 2017, Youngevity responded to Wakaya's November 17, 2017 email, stating that they were not “obligated to provide their actual billing entries, ” but were available to meet and confer the next day. (Id. at 6.) Wakaya responded the same day, stating that Youngevity must establish its right to fees by providing sufficient detail to allow the Court and the opposing party to evaluate the fee request under the relevant factors, which Youngevity had failed to do by providing the heavily redacted fees and cost invoice. (Id. at 5.) Wakaya offered Youngevity $2, 500 to resolve the dispute over its fees and costs. (Id.) On November 24, 2017, Youngevity sent Wakaya its unredacted billing entries. (Id. at 5.) The Court finds that although Youngevity did not initially provide the detailed information the Court ordered, Wakaya contributed to the unproductive burning of the available meet and confer window by failing to request more detailed information, or respond in any way, for fifteen days. The Court will not deny Youngevity the fees expended on their Motion for Fees on this basis.

         B. Plaintiffs' Hourly Attorneys' Fees Are Reasonable

         Plaintiffs request hourly rates ranging from $125 per hour to $550 per hour for one paralegal, one law clerk, three associate attorneys ranging in skill and experience, and two partners. (ECF No. 286-1 at 6-9.) Wakaya objects to Youngevity's requested hourly rates on the ground that Youngevity failed to meet its burden to produce satisfactory evidence to establish that its rates are reasonable. (ECF No. 334 at 9.) However, as in United Steelworkers of America, “[a]lthough the defendants disagree with [Plaintiffs'] evidence, they did not support their arguments with any affidavits or evidence of their own regarding legal rates in the community.” United Steelworkers of Am., 896 F.2d at 407. Plaintiffs provided affidavits of its counsels' billing rates and cited probative case law from this district to support their hourly rates. (See generally ECF No. 286-1.) Defendants provide no counterevidence that Plaintiffs' requested rates are unreasonable; they merely argue that Plaintiffs have not met their burden to establish that its rates are reasonable. (ECF No. 334 at 9.) After comparing Plaintiffs' requested rates to similar ...


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