New York Federal Court reduces fees by 40% for unnecessary and excessive work and vague block billed entries
Posted on October 27th, 2016 by Legal Fee Advisors
By Kristen Sisko
The Southern District of New York made an aggregate reduction of 40% to a motion for attorneys’ fees, finding that the hours billed by the firm in representing the U.S. Bank National Association, reflected unnecessary and excessive work, contained insufficient details and were block billed.
Pursuant to an escrow agreement between the plaintiff, Synergy Aerospace Corp. (“Synergy”), and the defendant, LLFC Corporation, the Defendant and Counterclaim/Cross-Claim Plaintiff, U.S. Bank National Association (“U.S. Bank”) moved for attorneys’ fees from Synergy (as a result of an indemnification provision in the terms of the escrow agreement). The firm, Thompson Hine LLP, initially sought $114,613.30 in attorneys’ fees from Synergy. In a supplemental declaration, the firm sought an additional $32,647.11 for fees incurred in preparation of a reply brief in support of its motion for attorneys’ fees. Synergy argued that the hourly rates should be reduced, citing case law indicating lower rates, and that the professional hours detailed in the time records reflected unnecessary work, overstaffing, duplicative hours, as well as vague and block billed entries.
The Court applied the “presumptively reasonable fee” standard: what a reasonable client would be willing to pay given that such client wishes to spend the minimum necessary to effectively litigate the case. The Court first assessed the reasonableness of the hourly rates charged by the firm. The hourly rates ranged from $625 to $765 for partner time, $480 for associate time, and $265 for paralegal time. U.S. Bank received a 10% discount on the firm’s rate and paid, or approved for payment, a majority of the invoices. The Court found that New York district courts have recently approved similar rates for law firms. The Court further found the negotiation and regular payment of hourly rates by a sophisticated party is “solid evidence of their reasonableness”. Consequently, the Court concluded that the firm’s rates fall within a reasonable range.
The Court next assessed the reasonableness of the hours billed by the firm. The Court found that they had billed for work that could have been avoided, citing the example of how they billed 55.6 hours to prepare a motion for summary judgment and interpleader relief, whereas the court rules only require parties to submit a letter, no more than three-pages, requesting a pre-motion conference prior to filing such motion. It was held that if the firm had complied with the court rules, there may not have been a need for the motion. As it turned out, the pre-motion conference determined that such motion was unnecessary, thus the time spent preparing such motion was determined to be excessive. The Court further found the firm’s time entries lacked sufficient detail, such that the Court could not determine the reasonableness of the time spent on certain activities. Vague description such as “attention to case docket,” “review consent,” and “communications regarding pre-trial conference” and block billing prompted the Court to further reduce fees.
Additionally, the Court examined the staffing structure at the firm. The Court found that staffing three partners, one associate and one paralegal to a case that had “no novel issues of law or fact” and that involved an escrow dispute that was in the “mine-run of cases” further warranted a reduction in fees. As a result, the Court reduced the fees at issue due to a lack of efficiency.
This case is an important reminder to firms to staff matters efficiently, avoid excessive time for simple tasks and to describe time entries with sufficient detail to allow the courts to easily determine the reasonable fees to be awarded. Failing to do so may result in a large reduction of the fees sought.
Synergy Aerospace Corp. v. LLFC Corp., No. 16CV2268, 2016 WL 5717582, (S.D.N.Y. Oct. 3, 2016)
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