Commercial Litigation and Arbitration

Sanctions — Factors Militating for Reductions in Court-Ordered Attorneys’ Fees

From the sanctions decision of the magistrate judge in Brigham Young Univ. v. Pfizer, Inc., 2009 U.S. Dist. LEXIS 101052 (D. Utah Oct. 28, 2009):

Having concluded that fees and expenses are appropriate, the Court now turns to the reasonableness of BYU's request. At the outset the Court notes that it has reviewed the rates charged by comparable counsel in both the Salt Lake City, and Phoenix areas, and finds the rates charged by BYU's counsel fair and comparable to those of other attorneys. Thus, there is no need for the Court to reduce the rates charged by Plaintiffs' law firms. ***

Pfizer takes issue with BYU's requested fees and costs arguing the $1,681,157.76, as set forth by BYU in its proposed findings, is excessive "because, for example, it includes $202,184.26 in costs that are not adequately documented, at least $512,704.50 for fees associated with document review . . . other excessive fees, and fees associated with work unrelated to preparing its motion for sanctions." The Court agrees with Pfizer's position and reduces BYU's requested fees and costs as follows.

First, the Court declines to award BYU the "associated costs" of $ 202,184.26 set forth in its proposed findings because the associated costs are not set forth in detail in the affidavits.

[Footnote 93] For e.g., see, Lucky Brand Dungarees, Inc. v. Ally Apparel Res. LLC., 2009 WL 466136, * 6 (S.D.N.Y. Feb. 25, 2009) (declining to award other costs that are not set forth in sufficient detail to warrant awarding them).

Next, in Digecor, Inc., v. E.Digital Corp., [2008 WL 803108 (D. Utah March 22, 2008),] my esteemed colleague Judge Nuffer, found that reasonable expenses do "not include expenses of review of documents which is necessary in any document exchange." The Court agrees with this principle. BYU is not entitled to document review expenses.

***In support of its position, Pfizer cites to Liew v. Breen, [640 F.2d 1046 (9th Cir. 1981),] a decision from the Ninth Circuit where the court refused to award fees associated with obtaining a court order versus those fees incurred because of a party's failure to obey the order. The Court finds this case distinguishable from Liew because the Court has concluded that fees are recoverable for BYU's initial Motion to Compel and for Pfizer's failure to comply with the Court's order.

Pfizer next contends that BYU seeks "other excessive and duplicative fees." Such excessiveness, according to Pfizer, includes seeking reimbursement for travel time at a full hourly rate. In Wirtz v. Kansas Farm Bureau Services, Inc., [355 F.Supp.2d 1190 (D.Kan. 2005),] a sister court from this Circuit found that "'travel time should not be compensated at the full hourly rate because such time is inherently unproductive." The Wirtz court went on to state that "travel time is not equivalent to time exclusively devoted to the case while in one's office. On the road, the driver is necessarily distracted, unable to make notes, read or access files. As such, the time is, at the least, not as productive as it would be if the person were seated behind his or her desk."

The Court agrees with this principle and finds that BYU's requested fees and expenses related to travel time should be reduced. *** Some entries consist entirely of travel. Other entries, however, have travel coupled with other work activities that likely occurred outside of travel. For example, on page 10 two travel entries state, "Travel to Salt Lake city; Prepare for oral argument" and "Travel to Utah and meet with Jim Jardine and others RE: oral argument." In comparison the third travel entry on page 10 states, "Travel back to Phoenix."

Given these mixed types of entries it is somewhat difficult for the Court to ascertain exactly how much travel time there is in Plaintiffs' affidavits. But, rather than have Plaintiffs refile their affidavits, which would create another round of briefing on issues already properly before the Court and place additional strain and costs upon all the clients, parties, and the Court, the Court reduces the requested fees involving travel as follows: for entries that outline only travel the Court reduces them by 50%, in similar fashion to the Wirtz court; for time involving travel and other listed work activities the Court reduces the fees sought by 25%. The Court believes this strikes the proper balance between reducing travel time that is not the equivalent to work done in the office, while still recognizing the fact that the some entries in the affidavits support work performed outside of travel. These reductions also address Pfizer's concern that the travel time claimed by BYU is excessive. ***

Next, as noted by Pfizer, BYU "has also sought fees for time spent preparing for and attending depositions." While BYU may not fully explain how preparing for and taking depositions relates to the status hearing, the record reveals their connection to the discovery issues. These depositions relate to Pfizer's compliance with the Court's orders. Thus, the Court finds them properly included within a fees and costs calculation by the Court.

BYU also seeks costs and fees for multiple attorneys attending the same depositions. The Court finds these requests to be excessive. Additionally, the Court further finds that the documented time and requested fees spent in preparation for the two day sanctions hearing, over 611 hours for approximately 6 hours of Court time, excessive. Finally, given Pfizer's conduct in this case, the Court is not convinced that BYU has improperly sought fees for tasks performed by partners that associate or paralegals should have performed.

Based upon the foregoing, the Court reduces the remaining costs and fees sought by BYU by an additional 10%. BYU therefore is awarded $799,106.70 in fees and costs against Pfizer. Coupled with the travel fees and costs awarded previously, this brings the total amount to $852,315.80. This is a substantial sum of money. Yet, given Pfizer's conduct in this case as outlined in detail above, the Court finds such an award is appropriate. The Court is hopeful that such an award will "entice Pfizer to comply with its discovery obligations."

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