TERENCE P. KEMP, Magistrate Judge.
This matter is before the Court on plaintiff Sheryl Szeinbach's application for an interim award of attorney's fees, expenses and pre-judgment interest and a supplemental application seeking the same. Defendant The Ohio State University has filed a response and the motions have been fully briefed. The parties have requested an evidentiary hearing on the applications. For the following reasons, the request for an evidentiary hearing will be granted.
As the Court of Appeals explained in its August 10, 2012 decision (Doc. 186), this case involves retaliation claims brought by Ms. Szeinbach against her employer, Ohio State. The case was referred to now-retired Magistrate Judge Mark R. Abel for all proceedings; after he granted summary judgment to Ohio State, the Court of Appeals reversed and remanded the case for trial on Ms. Szeinbach's claims of differential salary increases and research misconduct investigation.
After remand, the case was tried to a jury. The jury returned a verdict in Ms. Szeinbach's favor on a claim of coworker retaliation and awarded her damages in the amount of $513,368.00. Shortly thereafter, Ms. Szeinbach filed her initial application (Doc. 358). Subsequently, the Court reduced the damage award by $213,368.00 to reflect the fact that Ms. Szeinbach was not entitled to back pay. Ms. Szeinbach then filed her supplemental application (Doc. 384).
Thereafter, Ms. Szeinbach appealed the Court's order reducing the jury award. Ohio State filed a cross-appeal as to the judgment and the Court's Order on a motion for a new trial. The Court of Appeals granted Ohio State's motion to voluntarily dismiss the cross-appeal. The Court stayed its consideration of Ms. Szeinbach's applications pending resolution of the appeal. (Doc. 399). The Court of Appeals affirmed the judgment and Ms. Szeinbach sought a writ of certiorari from the United States Supreme Court. The Supreme Court denied the writ of certiorari by order dated October 6, 2016. Consequently, Ms. Szeinbach's applications are now ready for decision.
Following the Supreme Court's ruling, this Court held a status conference. At that conference the parties indicated that their briefing identifies a threshold issue to be decided by the Court arising from an offer of judgment Ohio State made to Ms. Szeinbach on January 17, 2014, and its impact on post-offer costs. This issue was raised for the first time in Ohio State's response to Ms. Szeinbach's fee applications. It is to this issue that the Court will turn first.
The starting point for the Court's consideration of the effect of Ohio State's offer of judgment is the language of the offer itself. The offer, attached to Ohio State's response as Exhibit A (Doc. 394-1), states in its entirety:
Also necessary to the Court's consideration of the threshold issue identified by the parties is the language of Rule 68. That Rule states, in relevant part:
Applying Rule 68 in the context of an offer of $426,000 and Ms. Szeinbach's damage award of $300,000, Ohio State asserts that she is not entitled to recover an award for any costs incurred after January 17, 2014. Ohio State explains its position as follows. Its offer allowed judgment to be taken against it for both damages and costs. Although Rule 68 does not mandate it, in an effort to illustrate its basis for the offer, it itemized the respective amounts that it believed represented damages and costs. It states that it did not intend, by its proposed breakdown, to restrict the payout amounts to the specific categories and if Ms. Szeinbach had accepted, she was free to distribute the total as she chose. Ohio State asserts that its having drafted the offer in this manner does not invalidate the offer. In short, Ohio State argues that because the $426,000 offer was more than the $300,000 in damages awarded to Ms. Szeinbach, Rule 68 shifts responsibility for all post-offer costs, which in this Title VII action also includes her attorney fees, to Ms. Szeinbach. Ohio State relies primarily on
In her reply, Ms. Szeinbach contends that the cases cited by Ohio State, and
As the Court understands the parties' arguments, Ohio State focuses on Ms. Szeinbach's potential discretion to re-allocate the amounts set forth in its offer of judgment. Ohio State's position seems to suggest that this is the controlling issue here. This is so despite Ohio State's citation to
Here, there is no question that Ohio State contends that the proposed judgment amount was $426,000. There is also no question that this offer was intended to apply to both a damages award and all costs, expenses and attorney fees. Ohio State's position assumes, without any discussion, that Ms. Szeinbach's damages award of $300,000 constitutes the judgment finally obtained for Rule 68 purposes. To the contrary, Ms. Szeinbach contends that, under
In a case involving, in part, claims arising under the federal Truth in Lending Act and the Equal Credit Opportunity Act, the Court of Appeals recognized that "the only way in which Rule 68 directly implicates awards of attorney's fees is in situations where such fees are made an element of `costs' — whether such by statute (42 U.S.C. §1988 is the most familiar) example) or as a matter of contract."
In
Further, the Court of Appeals noted that, because Rule 68 refers only to costs but not attorney fees,
Roughly a decade later in
The Court of Appeals in
In
The
The Court finds the two-step analysis identified in
Generally, parties are required to pay their own attorney's fees.
"Although §1988 uses permissive language regarding fee awards, `the Supreme Court has read [§1988] as mandatory where the plaintiff prevails and special circumstances are absent.'"
"The award-seeking party should submit evidence of the hours worked and the rates sought." The Northeast Ohio Coalition for the
As noted above, the issue presented by the offer of judgment was not raised until Ohio State's response. Consequently, Ms. Szeinbach's applications are not neatly divided in terms of pre- and post-offer attorney fees and costs. Ms. Szeinbach's initial application seeks $949,968.13 in interim attorney fees and expenses. This amount is divided as follows. The bulk of the amount is attributable to $827,920.00 for billable time spent by her lead counsel in this litigation, Eric Rosenberg; his associate David Ball; and Paul Bittner, an attorney at Schottenstein, Zox and Dunn, Mr. Ball's former firm. She proposes that Mr. Rosenberg and Mr. Ball be compensated at the following rates: (a) $325.00 per hour from 2011 to present; (b) $275.00 per hour from 2009-2010; and (c) $225.00 per hour from 2007-2008. Additionally, Ms. Szeinbach seeks compensation for time spend by Diane Jaquish, an attorney who assisted Mr. Rosenberg throughout the 14-day jury trial, at the rate of $200.00 per hour for 223.9 hours for a total of $44,780.00. Further, Ms. Szeinbach seeks compensation at the rate of $40.00 per hour for 205.45 hours of time spent by two legal assistants for a total of $8,218.00. She also requests an interest award on her attorney fees of $9,853.72, reflecting an interest rate of 2.35 percent over the time period from 2007 through 2014. Finally, Ms. Szeinbach requests $53,752.71 in non-attorney fee costs incurred from September 2007 through May — June 2014.
Ms. Szeinbach contends that the award she seeks is reasonable and not subject to reduction because her successful and unsuccessful claims arise from a common core of facts. Further, she maintains that the requested award is proportionate to her damages award. She also seeks $5,443.75 in attorney fees for preparation of the fee application and prejudgment interest.
In her supplemental application, Ms. Szeinbach requests an additional $66,869.50 in attorney fees and costs broken down as follows. She seeks $2,372.00 for copies of trial transcripts. Additionally, she seeks $59,800 in attorney fees for 184 hours spent by counsel in preparing a memorandum contra Ohio State's motion for a new trial and $4,875.00 in attorney fees for 15 hours spent by counsel on various other activities. She also requests an award of $300.00 for time spent by one of Mr. Rosenberg's legal assistants in reviewing the time sheets attached to both the original and supplemental applications. Finally, she notes that $477.50 should be deducted from the original petition due to an overstatement of hours and reiterates her request for prejudgment interest.
Both of Ms. Szeinbach's applications are supported by affidavits from Mr. Rosenberg and copies of billing records. She requests a hearing on her applications.
In response, Ohio State identifies $419,308.50 in attorney fees and $23,300.72 in costs that Ms. Szeinbach seeks relating to the pre-offer time period. Within this time period, Ohio State contends that, at most, Ms. Szeinbach's records indicate that she paid a total amount of only $179,106.09 in attorney fees and costs. Ohio State asserts that the amount of costs Ms. Szeinbach identifies must be reduced or denied because counsel's hourly rate is unreasonable, billing records are deficient, the application seeks compensation for excessive, redundant and unnecessary hours, and time spent on claims unrelated to the co-worker retaliation claim is non-compensable.
More specifically, Ohio State points out that Ms. Szeinbach has not cited any independent evidence of market rates for counsel litigating a Title VII claim in central Ohio but that an attorney's billing rate can be a reliable indicator of market rate. Consequently, Ohio State contends that Ms. Szeinbach's counsel should be compensated at the rates he actually charged. According to Ohio State, statements counsel made to the Court and invoices indicate that counsel's rate ranged from $100.00 to $175.00 per hour, and counsel led both Ohio State and the Court to believe this was an accurate rate. In further support of its position that counsel's billing rate is unreasonable, Ohio State asserts that the rate should reflect the quality of representation. Ohio State cites examples of conduct that it believes demonstrate that, despite success on the co-worker retaliation claim, Ms. Szeinbach's counsel should not command the requested hourly rate.
With respect to the issue of billing record deficiencies, Ohio State notes that Mr. Rosenberg admittedly lost billing records and this required him to obtain copies of cancelled checks from the bank to demonstrate Ms. Szeinbach's payments. When asked in deposition about the payments reflected by the checks and deductions for legal fees taken by her consulting company, Ms. Szeinbach could not specifically tie either to this litigation.
As for its contention that counsel billed excessive, redundant or unnecessary hours, Ohio State notes several examples of what it characterizes as "do overs" necessitated by counsel's conduct. Further, it notes that many hours were spent by counsel as a result of "his refusal to follow the District Court's orders and even the law of the case as set forth by the Sixth Circuit." As an example, Ohio State cites to counsel's conduct involving discovery motions relating to Terry Elton and the decision to seek to amend the complaint twice following the Court of Appeals' first order directed to summary judgment.
With respect to the issue of unrelated claims, Ohio State makes two arguments. First, it argues that the co-worker retaliation claim on which Ms. Szeinbach ultimately prevailed relied on a more discrete set of facts than her much broader direct retaliation claims. As a result, Ohio State identifies sixteen individuals for which it believes Ms. Szeinbach's counsel cannot seek an award of fees relating to their depositions. Further, Ohio State contends that any fee award must reflect Ms. Szeinbach's level of success. To this point, Ohio State asserts that counsel's efforts relating to Robert Lee as a comparator were wasted as were his efforts relating to Drs. Roig and Donick who were both disqualified as experts. Ohio State further requests that all time related to Dr. Dembe, "a supposed expert named Fink," and "another individual named Higgon" be deducted.
While most of Ohio State's billing challenges contain citation to the record, it is minimal and not specifically directed to any line item billing. Further, Ohio State explains that it has addressed only a sampling of the many billing errors present. Consequently, Ohio State does not set forth a specific amount of attorney fees or costs it believes are appropriate for the pre-offer period. Noting the voluminous time entries, Ohio State joins in Ms. Szeinbach's request for a hearing on the fee award. Ohio State challenges Ms. Szeinbach's request to include expenses for food, parking and office supplies as taxable costs. Finally, Ohio State contends that, because Ms. Szeinbach was not awarded back pay and because her complaint did not request prejudgment interest, the request made in her applications should be denied.
Ms. Szeinbach filed a lengthy reply addressing point by point Ohio State's response. In this reply, Ms. Szeinbach takes issue with Ohio State's position that counsel's billing rate ranged from $100.00 to $175.00 an hour. She attaches correspondence that she explains reflects lodestar updates demonstrating that in February, 2011, counsel began charging a rate of $225.00 per hour and that this rate increased to $275.00 per hour on January 30, 2014, and $325.00 per hour on July 2, 2014. She submitted an affidavit of counsel averring that all cancelled checks produced in discovery totaling $231,896.09 were applied to the outstanding balance in this litigation. She contends that the lodestar updates belie Ohio State's suggestion that it was misled to believe that the amount of fees to be sought was limited to the amount of the cancelled checks.
Beyond this, Ms. Szeinbach contends that any award short of her full request would allow a windfall to Ohio State at her expense. She maintains that consistent with
With respect to the issue of her failure to provide independent evidence of market value, Ms. Szeinbach explains that she could not find any reported cases on point. Further, her counsel could not afford to retain an expert witness. Moreover, she asserts, expert testimony is not necessary because counsel is seeking an award below that approved in other reported decisions.
Ms. Szeinbach offers to reduce her request for costs to $989,083.26 and to forego her ability to enhance her costs by a 1.75 multiplier which she believes she would be entitled to under various Sixth Circuit precedent applying
In response to Ohio State's assertion that her counsel ran up hours at Ohio State's expense, Ms. Szeinbach both challenges at length Ohio State's specific examples and identifies examples she believes demonstrate precisely the opposite. Further, she asserts that no reduction of costs is warranted here because all of her Title VII retaliation claims arose from a common core of facts and related legal theories. She explains in some detail exactly how this is so. Finally, Ms. Szeinbach disputes that her counsel's billing records are deficient and devotes significant discussion to challenging Ohio State's position relating to time spent on numerous depositions.
As noted, the preliminary issue before the Court is whether Ms. Szeinbach is entitled to recover post-offer of judgment costs, which in this case includes attorney fees, or whether such recovery is precluded by the operation of Rule 68. This issue does not warrant extensive discussion. Initially, however, the Court notes that neither party addresses the issue of the $5,699.32 salary adjustment ("Plaintiff's salary will be adjusted from her current salary of Ohio Hundred Twenty Six Thousand Six Hundred Fifty Five Dollars and Sixty Eight Cents [$126,655.68] to an annual salary of One Hundred and Thirty Two Thousand Three Hundred Fifty Five Dollars [$132,355]"), included in the offer of judgment. Ohio State refers to the offer of judgment as totaling only $426,000.00 ($126,000.00 for damages and $300,000.00 for attorney fees and costs). In her reply, Ms. Szeinbach, in what appears to be a typographical error, refers to the offer of judgment as totaling $426,655.68. For purposes of its discussion, the Court will construe the offer of judgment as totaling $431,699.32.
As the above cases instruct, the Court need only conclude that Ms. Szeinbach's pre-offer costs exceed $131,699.32 because if that amount were added to her $300,000.00 damages award, it would result in a judgment finally obtained by Ms. Szeinbach that exceeds Ohio State's offer of $431,699.32. As indicated, Ms. Szeinbach does not divide her fee applications neatly between pre- and post-offer of judgment costs. Ohio State, however, breaks down Ms. Szeinbach's identified pre-offer costs and attorney fees as $419,308.50 and $23,3330.72, respectively, for a total amount of $442,639.22. In the context of arguing that this amount is clearly subject to reduction, Ohio State asserts that Ms. Szeinbach's canceled checks demonstrate that she paid only $179,106.09 in attorney fees and costs over the time period prior to the offer of judgment. Without conducting a full reasonableness analysis (and, based on the current state of the record, it would be difficult for the Court to undertake one), it is easy for the Court to conclude that, in order for Ms. Szeinbach to be precluded from recovering her post-offer costs, including attorney fees, the Court would have to find that she is entitled to recover pre-offer costs and fees in an amount at least $47,406.77 less than the amount of fees and costs Ohio State contends that she paid during this time period. Further, the Court notes that, in its offer of judgment, Ohio State allocated $300,000 to attorney fees and costs. Arguably, this suggests that an award of pre-offer fees and costs below $131,699.32 would likely be unreasonable.
Ohio State attempts to minimize this reality in two ways. First, it contends that the offer of judgment was divided between costs and damages merely as a suggestion such that Ms. Szeinbach could allocate the entire offered amount in a different manner than Ohio State had structured. That is, presumably, Ms. Szeinbach could allocate less to fees and more to damages than Ohio State proposed. This argument is not persuasive for the reasons discussed above. Moreover, contract principles apply to Rule 68 offers and Ohio State's language unambiguously suggests that it believed $300,000.00 was an adequate amount of attorney fees to offer in settlement of this action.
Second, Ohio State argues that it is not clear whether all of the payments reflected by Ms. Szeinbach's canceled checks were applied to this litigation. In reply, however, Ms. Szeinbach has submitted an affidavit of counsel in which he states that all such payments were applied to her outstanding balance for costs and attorney fees associated with this litigation.
With this in mind, the Court will grant the parties' request for an evidentiary hearing on Ms. Szeinbach's fee applications. The parties are advised that, consistent with the above analysis, the hearing will be addressed to both pre- and post-offer of judgment fees and costs. Ms. Szeinbach is reminded that she must justify the reasonableness of her requested fee award.
Further, based on the Court's review of the billing records as currently submitted, Ms. Szeinbach is also reminded that "`clerical or secretarial tasks ought not be billed at lawyers' rates, even if a lawyer performs them.'"
Ohio State is reminded that "`[a] district court has broad discretion to determine what constitutes a reasonable hourly rate for an attorney.'"
Finally, the Court notes that Ms. Szeinbach has included in her fee applications a request for pre-judgment interest. Ohio State has opposed this request. In her reply, Ms. Szeinbach suggests her request hinges on the Court of Appeals' decision regarding the back pay award. As discussed, the Court of Appeals has now issued its decision confirming Judge Abel's denial of a back pay award. Ms. Szeinbach also suggests that she "leaves the resolution of this issue to this Court's discretion." In doing so, she attempts to distinguish this case from
For the reasons set forth above, the parties' request for an evidentiary hearing on the plaintiff's attorney fee applications is granted. The Clerk shall set this matter for hearing on March 29, 2017 at 10:00 a.m.
