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Client Network Services, Inc. v. Smith

United States District Court, D. Maryland, Southern Division

August 23, 2018

CLIENT NETWORK SERVICES, INC., Plaintiff,
v.
STEHPEN A. SMITH, Defendant.

          MEMORANDUM OPINION AND ORDER ADOPTING REPORT AND RECOMMENDATION

          Paul W. Grimm United States District Judge.

         Following a three-day bench trial, I entered a preliminary order of judgment in favor of Plaintiff Client Network Services, Inc. (“CNSI”) and against Stephen Alan Smith for nominal damages for the termination of CNSI's contract with a non-party and order of disgorgement of Mr. Smith's salary and “success bonus.” Prelim. Or. J., ECF No. 74. I entered judgment in favor of Mr. Smith on CNSI's claim for punitive damages. Id. After CNSI moved for attorneys' fees, I referred this motion to Magistrate Judge Charles Day for a report and recommendation. Judge Day issued a thorough and well-reasoned recommendation, ECF No. 88. Plaintiff has objected to Judge Day's recommendations regarding a reduction in the hourly rate for Mr. Platt's services and Judge Day's reduction of overall fees by twenty percent. Pl.'s Obj., ECF No. 89. Mr. Smith objects to (1) Judge Day's recommended rates for Mr. Antonelli and Mr. McLin because they were calculated at rates in excess of their years of experience and (2) Judge Day's recommendation to reduce Plaintiff's attorneys' fees by only 20 percent. Def.'s Obj., ECF No. 90. I find, on de novo review, that the Magistrate Judge's report and recommendations were correct with the exception of the hourly rate used for Mr. McLin, and therefore, overrule both parties remaining objections. Because I find that Mr. McLin's hours were compensated at too high a rate, I adopt the report and recommendation with modifications, and award CNSI attorneys' fees in the amount of $252, 142.00.

         Legal Standard

         The Court reviews de novo any portions of a magistrate judge's R&R to which a specific objection is made, 28 U.S.C. § 636(b)(1), but may adopt, without explanation, any of the magistrate judge's recommendations to which no objections are filed, Solis v. Malkani, 638 F.3d 269, 274 (4th Cir. 2011) (citing Camby v. Davis, 718 F.2d 198, 200 (4th Cir. 1983). Any objection to a magistrate judge's findings and recommendations must be served and filed within fourteen days of their issuance. Fed.R.Civ.P. 72(b)(2); see also Loc. R. 301.5(a). Absent a timely objection, the Court need “only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation.” Diamond v. Colonial Life & Acc. Ins. Co., 416 F.3d 310, 315 (4th Cir. 2005) (quoting Fed.R.Civ.P. 72 advisory committee's note).

         Discussion

         The Fourth Circuit recently articulated the procedure by which attorneys' fees are awarded in Randolph v. Powercomm Constr. Inc., 715 Fed.Appx. 227, 230 (4th Cir. 2017):

First, “the court must determine the lodestar figure by multiplying the number of reasonable hours expended times a reasonable rate.” Id. (internal quotation marks omitted). “To ascertain what is reasonable in terms of hours expended and the rate charged, the court is bound to apply the factors set forth in Johnson v. Georgia Highway Express Inc., 488 F.2d 714, 717-19 (5th Cir. 1974).” McAfee, 738 F.3d at 88. Second, “the court must subtract fees for hours spent on unsuccessful claims unrelated to successful ones.” Id. (internal quotation marks omitted). When “all claims involve a common core of facts much of counsel's time will be devoted generally to the litigation as a whole, making it difficult to divide the hours expended on a claim-by-claim basis.” Brodziak v. Runyon, 145 F.3d 194, 197 (4th Cir. 1998) (alterations, ellipsis, and internal quotation marks omitted). Third, “the court should award some percentage of the remaining amount, depending on the degree of success enjoyed by the plaintiff.” McAfee, 738 F.3d at 88 (internal quotation marks omitted).

         “[T]here is a ‘strong presumption' that the lodestar figure is reasonable, but that presumption may be overcome in those rare circumstances in which the lodestar does not adequately take into account a factor that may properly be considered in determining a reasonable fee.” Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 554 (2010). In determining whether the lodestar results in a reasonable fee, this Court evaluates “the twelve well-known factors articulated in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974) and adopted by the Fourth Circuit in Barber v. Kimbrell's, Inc., 577 F.2d 216, 226 (4th Cir. 1978).” Thompson, 2002 WL 31777631, at *6 (footnotes omitted). Those factors are:

(1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the skill requisite to properly perform the legal service; (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 circumstances; (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.

Id. at *6 n.19 (citing Johnson, 488 F.2d at 717-19). However, the Supreme Court has noted (and experience awarding attorneys' fees has confirmed) that the subjective Johnson factors provide very little guidance and, in any event, that “‘the lodestar figure includes most, if not all, of the relevant factors constituting a ‘reasonable attorney's fee.'” Perdue, 559 U.S. at 551, 553 (quoting Pennsylvania v. Del. Valley Citizens' Council for Clean Air, 478 U.S. 549, 566 (1986)).

         Overall, Mr. Smith does not object to Judge Day's recommendations on any of the line item billing entries or for the rate he awarded fees to Mr. Platt, a Partner at Saul Ewing and the senior attorney representing Plaintiff. Therefore, I adopt Judge Day's recommendations as to Mr. Platt's hourly rate and the line item billing entries. See Solis, 638 F.3d at 274; Diamond, 416 F.3d at 315.

         Mr. Antonelli and Mr. McLin's Hourly Rates

         Mr. Smith specifically objects to the hourly rates Judge Day recommended for two of CNSI's attorneys, Mr. Antonelli and Mr. McLin. Def.'s Obj. 2-3. The Local Rules of this Court provide guidelines as to what a presumptively reasonable billing rate is, based upon the number of years of practice of an attorney, paralegal, or law clerk, and Judge Day applied each attorney's experience to those guidelines to determine the appropriate rate.

         Appendix B to this Court's Local Rules, Rules and Guidelines for Determining Attorneys' Fees in Certain Cases, provides the following ...


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