ONA T. WANG, Magistrate Judge.
On March 15, 2017, Plaintiff ComLab Corp. ("ComLab") brought this action against Defendants Kal Tire and its division Kal Tire Mining Tire Group (collectively, "Defendants" or "Kal Tire"), for breach of contract and related claims. (Compl. ¶ 1, ECF 1.). On September 11, 2018, the Honorable Katherine B. Forrest granted Kal Tire's Motion for Sanctions and dismissed the action with prejudice, directing ComLab to pay Kal Tire's reasonable attorney's fees and costs. (ECF 76). Before me for Report and Recommendation is Kal Tire's Motion to Set the Attorney's Fees and Cost Award. (ECF 85, 88). After a careful review of the parties' submissions, I recommend that Kal Tire be awarded $313,138.67 in fees and costs.
ComLab, a New York information technology corporation, filed its Complaint against Kal Tire, a Canadian tire partnership, on March 15, 2017. (ECF 1). ComLab alleged that Kal Tire breached a contract under which ComLab was to provide 24 months of services for Kal Tire's "MyMTG" intranet portal in exchange for a monthly fee of $20,000. (ECF 1, ¶ 1, 17-19). On June 6, 2017, Defendants moved for judgment on the pleadings, seeking a dismissal based on lack of personal jurisdiction. (ECF 24). Judge Forrest denied the motion. (ECF 32).
On May 2, 2018, Kal Tire moved for spoliation sanctions against ComLab. (ECF 59). On September 11, 2018, Judge Forrest granted Kal Tire's motion, awarding Kal Tire attorney's fees and costs. (ECF 76). Judge Forrest retired from the bench that same day. (Goldberg Decl., Ex. I). On September 12, 2018, the Clerk of the Court entered judgment dismissing the complaint with prejudice. (ECF 77). ComLab filed a notice of appeal on September 27, 2018. (ECF 79).
In her decision, Judge Forrest did not set the amount of the award. (ECF 76). Therefore, on October 19, 2018, Kal Tire wrote to Chief Judge Colleen McMahon requesting permission to submit a motion to establish the amount of Kal Tire's reasonable attorney's fees and costs. (Goldberg Decl., Ex. J). On October 22, 2018, the case was reassigned to Judge Castel, who directed Kal Tire to prepare its fee application, serve it on ComLab, and meet and confer with ComLab to resolve the allocation of the fees before filing a motion. (ECF 81). After an unsuccessful meet and confer, Kal Tire filed its Motion to Set Amount of Attorney's Fees and Costs Award on November 30, 2018. (ECF 84). ComLab filed its opposition on December 12, 2018, (ECF 91), and Kal Tire filed its reply on December 21, 2018. (ECF 95).
The Court first addresses ComLab's argument that Kal Tire's motion is untimely under Federal Rule of Civil Procedure 54, which requires all motions for attorney's fees be made "no later than 14 days after the entry of judgment." Fed. R. Civ. P. 54(d)(2)(B)(i). Kal Tire did not file their motion until more than two months after judgment was entered. (ECF 77).
Rule 54(d) provides in relevant part that "[a] claim for attorney's fees and related nontaxable expenses must be made by motion." Fed. R. Civ. P. 54(d)(2)(A). "Unless a statute or a court order provides otherwise, the motion must be filed no later than 14 days after the entry of judgment." Fed. R. Civ. P. 54(d)(2)(B)(i).
However, whether Rule 54 applies to the instant motion is a matter of statutory interpretation. In construing the language of Rule 54, the Court begins with the "fundamental principle of statutory construction that the starting point must be the language . . . itself." U.S. v. Davila, 461 F.3d 298, 302 (2d Cir. 2006) (quoting Morenz v. Wilson-Coker, 415 F.3d 230, 234 (2d Cir. 2005)); see also In re Edelman, 295 F.3d 171, 177 (2d Cir. 2002) ("Where the statutory terms are clear, our inquiry is at an end."). Rule 54(d) deals with "claims" for attorney's fees and costs. See Fed. R. Civ. P. 54(d)(2)(A). Because the rule does not define the word "claim," the Court gives the word its "ordinary, contemporary, common meaning." Edelman, 295 F.3d at 177 (quoting Perrin v. United States, 444 U.S. 37, 42 (1979)). Black's Law Dictionary defines the word as "[t]he assertion of an existing right; any right to payment or to an equitable remedy, even if contingent or provisional." Black's Law Dictionary, 10th ed. 2014.
Considering this definition, this Court agrees with Kal Tire that Rule 54(d) does not apply. Rule 54(d) governs situations where a litigant seeks to establish an entitlement to attorney's fees and costs. It does not apply to the instant case, where Judge Forrest "already rendered judgment as to [Kal Tire's] entitlement to a fee award, and where the only issue awaiting judicial resolution is the appropriate amount of such an award." Report & Recommendation, Lijoi v. Cont'l Cas. Co., No. 01-CV-4536 (E.D.N.Y. Feb 6, 2007) (Pohorelsky, M.J.), ECF No. 84, at 8, adopted by Lijoi v. Cont'l Cas. Co., No. 01-CV-4536, 2007 WL 708238 (E.D.N.Y. Mar. 1, 2007) (Glasser, J.) (finding Rule 54's time limitation inapplicable where district judge had already awarded attorney's fees in his decision granting summary judgment and what remained for the magistrate judge to determine was amount of attorney's fees to be awarded); see Saudi Iron & Steel Co. v. Stemcor USA, Inc., 1997 WL 790746 at *2 (S.D.N.Y. Dec. 23, 1997) (Cote, J.) ("Rule 54(d)(2)(B) does not apply to situations . . . wherein the Court has already granted a party's motion for attorneys' fees.").
Further support for this reading of Rule 54(d) is found in the Advisory Committee Notes for Rule 54(d), which explicitly distinguish between a motion for attorney's fees and material used to set the amount of attorney's fees. Rule 54(d)(2) "does not require that the motion be supported at the time of filing with evidentiary material bearing on the fees." Fed. R. Civ. P. 54 advisory committee's note (1993). "This material must of course be submitted in due course, according to such schedule as the court may direct." Id. Therefore, this Court finds that Judge Forrest's ruling established Kal Tire's entitlement to a fees and costs award, obviating the need for Kal Tire to file a Rule 54 motion.
Additionally, even if Rule 54(d)'s 14-day limitations period applies, Kal Tire has made a sufficient showing of "excusable neglect" to justify extending their deadline. "[T]he fourteenday deadline of Rule 54 is not a fatal jurisdictional deadline." Tancredi v. Metro. Life Ins. Co., 378 F.3d 220, 227 (2d Cir. 2004). Courts may extend Rule 54(d)'s deadline to file if the party failed to act because of "excusable neglect." Id. at 226. In finding "excusable neglect," courts consider "[1] [t]he danger of prejudice to the [opposing party], [2] the length of the delay and its potential impact on judicial proceedings, [3] the reason for the delay, including whether it was in the reasonable control of the movant, and [4] whether the movant acted in good faith." Id. at 228 (quoting Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P'ship, 507 U.S. 380, 395 (1993) (internal citations omitted)). "Excusable neglect" is an "elastic concept," that is "at bottom an equitable one, taking account of all relevant circumstances surrounding the party's omission." Id. (quoting Pioneer, 507 U.S. at 392, 395).
Taking each factor in turn, ComLab will suffer no prejudice from a finding of excusable neglect. ComLab has known since May 2, 2018 that Kal Tire sought attorney's fees and costs, and it is has known since September 11, 2018 that Judge Forrest awarded Kal Tire attorney's fees and costs. ComLab thus had ample notice of the need to include attorney's fees and costs in any appeal from the judgment. See Bienenfeld v. Bosco, Bisignano & Mascolo, 531 F. App'x 158, 159 (2d Cir. 2013) (no prejudice where non-movant had notice early in the litigation that movant sought attorney's fees). Further, ComLab's argument that Kal Tire delayed filing the motion because they were "hoping the time for Plaintiff to appeal would run . . ., thereby ensuring any decision would be final" simply does not make sense. (ECF 89, at 8). Judge Forrest awarded Kal Tire attorney's fees as a sanction for ComLab's spoliation of evidence. This is not a situation where ComLab was unable to decide whether to appeal without a full and accurate understanding of the amount at stake. Indeed, ComLab appealed Judge Forrest's decision, including her award of attorney's fees. (ECF 79).
Kal Tire also has not received any benefit from the delay. Indeed, the delay seems to have prejudiced Kal Tire, as it is still waiting for payment of the fee and costs award. See In re City of N.Y., No. 03-CV-6049, 2011 WL 7145228, at *9 (E.D.N.Y. Dec. 2, 2011) (finding no prejudice where "respondents [] pointed to no benefit gained by the movants from any delay [], and indeed it appears that any delay has resulted in detriment, not benefit, to the movants in that they are still awaiting compensation for their efforts.").
Addressing the remaining factors, Kal Tire's 23-day delay between the expiration of the 14-day deadline and Kal Tire's first letter to the court seeking the amount of the fee award was not unreasonably lengthy. Nor was the delay in filing the motion unjustified given the unique circumstances of this case. Judge Forrest retired the same day she filed the decision dismissing this case. For approximately five weeks, no district judge was assigned to this case. Kal Tire explains that after the decision it took significant time for them to review and redact the invoices to send to ComLab for payment due to the existence of privileged communications and attorney work product. (Goldberg Decl. ¶ 9-10, 22). Moreover, "it was not clear that it needed to file any further papers to calculate the award, as Judge Forrest's decision directed ComLab to pay all of Kal Tire's fees and costs." (Id. ¶ 22). Finally, nothing in the record before me supports a finding that Kal Tire acted in bad faith. Therefore, after considering all the factors, this Court recommends that, if Rule 54(d) applies to the instant case, a finding of "excusable neglect" is warranted.
The Court next moves to the amount of Kal Tire's attorney's fees and costs award. Kal Tire seeks an award of $313,138.67 ($250,232.50 in attorney's fees and $31,278.22 in costs incurred in the defense of this action, plus $30,918.50 in attorney's fees and $709.45 in costs incurred in making the instant motion). ComLab does not dispute these figures, having devoted the entirety of its papers to the Rule 54 timeliness argument.
In determining the reasonable amount of attorneys' fees, courts traditionally employed the "lodestar method." Courts calculated the "lodestar" by multiplying "the number of hours reasonably expended on the litigation [] by a reasonable hourly rate." Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). The court then adjusted the lodestar for case-specific considerations. See id. at 434.
However, in Arbor Hill Concerned Citizens Neighborhood Ass'n v. County of Albany, the Second Circuit concluded that the lodestar metaphor should be abandoned. 522 F.3d 182, 190 (2d Cir. 2008). Instead, "the district court, in exercising its considerable discretion, [should] bear in mind all of the case-specific variables that we and other courts have identified as relevant to the reasonableness of attorney's fees in setting a reasonable hourly rate." Id. The court should then multiply the reasonable hourly rate by the number of hours reasonably expended to find the "presumptively reasonable fee." See id.; Porzig v. Dresdner, Kleinwort, Benson, North America LLC, 497 F.3d 133, 141 (2d Cir. 2007) ("The presumptively reasonable fee analysis involves determining the reasonable hourly rate for each attorney and the reasonable number of hours expended and multiplying the two figures together to obtain the presumptively reasonable fee award.").
Once the "presumptive reasonable fee" has been calculated, the Court may then determine whether an upward or downward adjustment of the fee is warranted based on factors such as success in the litigation. Barfield, 537 F.3d at 151-52 (affirming 50% deduction for lack of success); McDow v. Rosado, 657 F.Supp.2d 463, 467 (S.D.N.Y.2009) ("unstated, but again presumed, is that the presumptively reasonable fee is just that—a presumptive figure that can be further adjusted as circumstances warrant"). Other factors include "excessive, redundant or otherwise unnecessary hours." Quaratino v. Tiffany & Co., 166 F.3d 422, 425 (2d Cir. 1999); see also Saunders v. City of New York, No. 07-CV-830 (SAS), 2009 WL 4729948, at *8 (S.D.N.Y. Dec. 9, 2009) (excessive and redundant fees and vague entries).
Accordingly, as explained by Judge Chin, "the process is really a four-step one, as the court must: (1) determine the reasonable hourly rate; (2) determine the number of hours reasonably expended; 3) multiply the two to calculate the presumptively reasonable fee; and (4) make any appropriate adjustments to arrive at the final fee award." Adorno v. Port Authority of New York and New Jersey, 685 F.Supp.2d 507, 511 (S.D.N.Y. 2010).
The determination of "reasonable hourly rates" is a factual issue committed to the court's discretion, and is defined as the rate a "reasonable, paying client would be willing to pay." Arbor Hill, 522 F.3d at 184. To determine this number, courts should consider "all of the case-specific variables that [the Second Circuit] and other circuits have identified as relevant to the reasonableness of attorney's fees." Id. at 190. These factors include the following:
(1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the level of skill required to perform the legal service properly; (4) the preclusion of employment by the attorney due to acceptance of the case; (5) the attorney's customary hourly rate; (6) whether the fee is fixed or contingent; (7) the time limitations imposed by the client or the circumstances; (8) the amount involved in the case 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.
Id., 522 F.3d at 184, 186 n.3 (citing Johnson v. Ga. Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974), abrogated on other grounds by Blanchard v. Bergeron, 489 U.S. 87, 92-93 (1989). A court may rely both on "its own knowledge of comparable rates charged by lawyers in the district," Morris v. Eversley, 343 F.Supp.2d 234, 245 (S.D.N.Y.2004), as well as on "evidence proffered by the parties," Farbotko v. Clinton County of N.Y., 433 F.3d 204, 209 (2d Cir.2005), in determining the reasonable hourly rate.
Turning to the instant motion, Kal Tire seeks the following hourly rates: (1) $425 for each partner; (2) $300 for each associate; and (3) $140 for each paralegal and law clerk. (Goldberg Decl., ¶ 25). Four partners, two associates, two paralegals and one law clerk worked on the instant case. (Id., ¶ 25). In support of the requested rates, Kal Tire has submitted short biographies of each partner involved in the action—Eric J. Goldberg, Robert W. Littleton, Robert L. Joyce, and James C. Ughetta—detailing their qualifications. (Id., Exs. A, D). Mr. Goldberg has also submitted a declaration in which he describes each partner, associate, paralegal and law clerk's individual legal experience. Finally, Mr. Goldberg notes that Kal Tire paid in full each invoice Littleton Park sent to it over the course of the litigation. (Id., ¶ 22).
All four partners charged $425 an hour. Mr. Goldberg has practiced commercial litigation since 2005 and has been the head of Littleton Park's commercial litigation department since 2014. (Id., ¶¶ 7-9). Mr. Goldberg affirms that his hourly rate for commercial litigation matters is between $400 to $475 an hour. (Id., ¶ 14). He has also submitted two engagement letters from similar cases in this district showing that he received a $430 hourly rate in 2013 and a $475 hourly rate in 2018. (Id., Ex. B). The other three partners are all experienced litigators, each with over thirty years of experience. (Id., Ex. D). As to the two associates, both billed at the rate of $300 an hour. (Id., ¶ 17). Dejan Kezunovic graduated from Fordham University School of Law in 2011 and Collin M. Crecco graduated from the University of New Hampshire School of Law in 2017. (Id.). Littleton Park charged $300 for junior associates in at least one other case. (Id., Ex. B). Finally, Littleton Park charged $140 an hour for Rachael Baughman, a law clerk who graduated from Pace University School of Law in May 2018, and two paralegals, Willem Lee and Laura Pulcini, who have eight and fifteen years of experience as litigation paralegals, respectively. (Id., ¶ 18-19).
Here, the rates charged by Littleton Park are consistent with rates that have been approved in similar matters in this district. See e.g., Tabatznik v. Turner, No. 14-CV-8135, 2016 WL 1267792, at *34 (S.D.N.Y. Mar. 30, 2016) (hourly rate of $650 for partners with 10 and 14 years of experience and $425 for associate with seven years of experience approved in commercial litigation matter); Rubenstein v. Advanced Equities, Inc., No. 13-CV-1502, 2015 WL 585561, at *16 (S.D.N.Y. Feb. 10, 2015) (hourly rate of $525 for partners, $350 for associates with five years of experience and recent graduate, and $140 for paralegals approved in breach of contract case); Nautilus Neurosciences, Inc. v. Fares, No. 13-CV-1078, 2014 WL 1492481, at *2-3 (S.D.N.Y. April 16, 2014) (hourly rate of $337.50 for recent law graduate approved in breach of contract case). Further, Kal Tire, a sophisticated company with over 6,800 employees, negotiated its rates and paid sixteen invoices in full. (Golberg Decl., ¶ 21-22); see Prospect Capital Corp. v. Enmon, No. 08-CV-3721, 2010 WL 2594633, at *4 (S.D.N.Y. June 23, 2010) ("negotiation and payment of fees by sophisticated clients are solid evidence of their reasonableness in the market"; the invoices "are not hypothetical amounts prepared only for purposes of a fee application, but rather actual invoices that Prospect would have, if it has not already, paid its counsel").
Additionally, it appears that litigating this matter was complex, time-consuming and required a high level of skill, compounded by ComLab's fabrication and spoliation of evidence. Judge Forrest found that Kal Tire had shown by clear and convincing evidence that "ComLab fabricated the Subject Emails and subsequently spoliated evidence in order to hide that fact." (ECF 76, at 6). According to Judge Forrest, ComLab's actions caused defense counsel to "expend[] significant resources in defending this litigation" and caused the Court to "spend significant time presiding over this absurd series of events." (Id. at 20). Defense counsel explained that, among other efforts, defense counsel spent hours analyzing "native" productions, taking two depositions, consulting with a computer forensic expert, drafting the motion for sanctions, preparing for and participating in the evidentiary hearing, and drafting post-hearing submissions. (Goldberg Decl., ¶ 35). This work necessarily involved a high level of skill in highly technical matters. Finally, ComLab has not contested the validity of these rates. Therefore, after considering all the factors discussed above as well as the parties' submissions, this Court finds that the proposed hourly rates are reasonable.
Next, the Court turns to the number of hours reasonably expended on the litigation. See Arbor Hill, 522 F.3d at 190. In calculating the number of reasonable hours, the court relies on its own experience with the case, as well as its general experiences with similar submissions and arguments. Clarke v. Frank, 960 F.2d 1146, 1153 (2d Cir.1992). The Court will exclude any hours that were not "reasonably necessary to the outcome." Tucker v. City of New York, No. 08-CV-4753, 2010 WL 1191636, at *6 (S.D.N.Y. Mar. 25, 2010).
Here, Kal Tire's attorneys have submitted invoices for work performed from June 16, 2017, through December 21, 2018. (Goldberg Decl., Ex. E; Goldberg Supp. Decl., Ex. 3). These invoices reveal a total of 734.3 hours billed and paid by Kal Tire in connection with this matter (646.6 hours defending the action and 87.7 hours in making this motion and replying to ComLab's opposition papers). (Id.). Defense counsel have also submitted time keeping records for 40.30 hours spent on this matter but not charged to Kal Tire as a courtesy. (Goldberg Decl., Ex. F). Kal Tire's invoices and time keeping records contain detailed descriptions of the services performed. (Goldberg Decl. Exs. E, F; Goldberg Supp. Decl., Ex. 3). They identify which individual performed each service and the time spent on each task. (Id.). Each entry was made contemporaneously when the work was performed. (Id.).
This Court has carefully reviewed defense counsel's invoices and time records and finds that the hours expended are reasonable. The records demonstrate that defense counsel maintained an appropriate amount of staff and did not submit any redundant or unnecessary hours. While the records do indicate a high percentage of partner time, such time was necessary given the nature of the case and how it unfolded, requiring extensive discovery and significant motion practice, including a sanctions motion and an evidentiary hearing with experts. Indeed, given the complex issues engendered due to ComLab's fabrication of emails and spoliation of evidence, it was reasonable for the partners at Littleton Park, especially Mr. Goldberg, to take an active role in both discovery and the motion for sanctions.
Kal Tire also seeks $31,987.67 in costs incurred defending the action. Disbursements include expert services fees, court reporter fees, eDiscovery and litigation vendor fees, process server fees, court reporter fees, investigator fees, witness fees, PACER fees, and attorney travel expenses. (Goldberg Decl., Ex. E, G). These amounts appear reasonable and are adequately documented. Further, defense counsel is entitled to fees and costs incurred in making the instant motion. See Weyant v. Okst, 198 F.3d 311, 316 (2d Cir. 1999). After multiplying the number of hours reasonably expended by the reasonable hourly rates, and adding the costs, this Court finds that the presumptively reasonable fee is $313,138.67.
Lastly, this Court does not see a reason to adjust the "presumptively reasonable fee." Kal Tire was completely successful in defending this lawsuit, obtaining a dismissal and fees and cost award. Cf. Barfield, 537 F.3d at 151-52 (reducing award by 50% for lack of success). Nor were there any excessive or redundant hours in defense counsel's invoices or time records. Accordingly, Kal Tire should receive all the requested attorney's fees and costs.
For the reasons stated above, I recommend that Kal Tire be awarded $313,138.67 ($250,232.50 in attorney's fees and $31,278.22 in costs incurred defending the action from its inception through October 30, 2018, plus $30,918.50 in fees and $709.45 in costs incurred in making the instant motion).
In accordance with 28 U.S.C. § 636(b)(1) and FED. R. CIV. P. 72(b), the parties shall have fourteen (14) days (including weekends and holidays) from receipt of this Report to file written objections. See also FED. R. CIV. P. 6 (allowing three (3) additional days for service by mail). A party may respond to any objections within fourteen (14) days after being served. Such objections, and any responses to objections, shall be filed with the Clerk of Court, United States Courthouse, 500 Pearl Street, Room 120, New York, New York 10007. Any requests for an extension of time for filing objections must be directed to Judge Castel.
