Angelo, Gordon & Co. v. MTE Holdings, LLC
| Decision Date | 12 April 2021 |
| Docket Number | 20 Misc. 23 |
| Parties | Angelo, Gordon & Co., L.P., Movant, v. MTE Holdings, LLC, et al. Respondent. |
| Court | U.S. District Court — Southern District of New York |
Before the Court is a motion by Movant, Angelo, Gordon & Co., L.P. ("Angelo Gordon"), for reimbursement of attorney's fees and expenses. For the reasons stated below, the motion is GRANTED in part and DENIED in part.
On January 9, 2020, in connection with cases pending in the United States Bankruptcy Court for the District of Delaware which were brought by MTE Holdings LLC and affiliate debtors ("Debtors") against a creditor of Angelo Gordon's affiliate, Debtors served Angelo Gordon with notices of intent to serve it with a subpoena requiring a representative to testify at a deposition, and a subpoena for documents. See ECF Nos. 5 ¶ 3; 5-1; 5-6. On January 10, 2020, Debtors served the subpoenas on Angelo Gordon. ECF No. 5-8. That same day, Angelo Gordon's counsel sent a letter to Debtors' attorney claiming that the subpoenas were defective, and demanding their withdrawal. ECF No. 5-9. Debtors did not withdraw the subpoenas.
On January 13, 2020, Angelo Gordon filed a motion to quash the subpoenas in this Court. ECF No. 1. Debtors failed to file a response brief by the February 4, 2020 deadline, ECF No. 6, or the February 14, 2020 extension as ordered by this Court, ECF No. 8. On August 13, 2020, this Court granted Angelo Gordon's motion to quash and for reasonable attorney's fees. Angelo, Gordon & Co., L.P. v. MTE Holdings, LLC, No. 20 Misc. 23, 2020 WL 4700910, at *4 (S.D.N.Y. Aug. 13, 2020). The Court ordered Angelo Gordon to file contemporaneous billing records and other expenses in support of an award for fees and costs by August 27, 2020, and Debtors to file any opposition to Angelo Gordon by September 10, 2020. Id. Angelo Gordon filed their motion and records on August 27, 2020. ECF Nos. 10-11. Respondent has not filed opposition papers.
Federal Rule of Civil Procedure 45(d)(1) requires courts to impose a sanction of "reasonable attorney's fees" where the party or attorney issuing a subpoena failed to take "reasonable steps to avoid imposing undue burden or expense on a person subject to the subpoena." Fed. R. Civ. P. 4f(d)(1). "The fee applicant bears the burden of establishing entitlement to an award and documenting the appropriate hours expended and hourly rates." Dancy v. McGinley, 141 F. Supp. 3d 231, 235 (S.D.N.Y. 2015) (quoting Hensley v. Eckerhart, 461 U.S. 424, 437 (1983)) (alteration omitted). A court's calculation of "the lodestar—the product of a reasonable hourly rate and the reasonable number of hours required by the case—creates a presumptively reasonable fee." Millea v. Metro-N. R. Co., 658 F.3d 154, 166 (2d Cir. 2011) (internal quotation marks and citation omitted). "The reasonable hourly rate is the rate a paying client would be willing to pay." Arbor Hill Concerned Citizens Neighborhood Ass'n v. Cty. of Albany & Albany Cty. Bd. of Elections, 522 F.3d 182, 190 (2d Cir. 2008). In calculating that rate, the court must "bear in mind all of the case-specific variables . . . relevant to the reasonableness of attorney's fees." Id. These include:
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 timelimitations 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. at 186 n.3; see id. at 191. There is a presumption that "a reasonable, paying client would in most cases hire counsel from within his district, or at least counsel whose rates are consistent with those charged locally," and so in ordinary circumstances courts may rely on typical fees within the district as a measure of reasonableness. Id. at 191.
In determining the number of hours reasonably expended, courts must consider both "contemporaneous time records specifying, for each attorney, the date, hours expended, and nature of the work done," Marion S. Mishkin Law Office v. Lopalo, 767 F.3d 144, 148 (2d Cir. 2011) (internal quotation marks, citation, and alterations omitted), as well as "its own familiarity with the case and . . . its experience generally as well as . . . the evidentiary submissions and arguments of the parties," Clarke v. Frank, 960 F.2d 1146, 1153 (2d Cir. 1992) (internal quotation marks and citation omitted). Courts may reduce the fee award requested in some circumstances, such as when plaintiffs submit deficient or incomplete billing records, see Hensley, 461 U.S. at 437 n.12, or in order to exclude "excessive, redundant, or otherwise unnecessary hours," Quaratino v. Tiffany & Co., 166 F.3d 422, 425 (2d Cir. 1999).
Once the lodestar is calculated, it may be adjusted only "when it does not adequately take into account a factor that may properly be considered in determining a reasonable fee." Millea, 658 F.3d at 167 (internal quotation marks and citation omitted). The Second Circuit has instructed, however, that "such adjustments are appropriate only in rare circumstances," and "a court may not adjust the lodestar based on factors already included in the lodestar calculation itself," but rather "only by factors relevant to the determination of reasonable attorneys' fees thatwere not already considered in the initial lodestar calculation." Id. (internal quotation marks and citation omitted).
Angelo Gordon was represented by the law firm of Jones Day and the legal team assigned to this case consisted of eight individuals. Angelo Gordon does not provide information about this team outside of their billing records, where the timekeepers are listed with their first or first and middle initials and their last name. See Ghaul Decl., ECF No. 11; Billing Records, ECF No. 11-1. After examining filings in this case and Jones Day's website, the Court has identified six of these individuals as partners Lee Armstrong, Charles Bensinger, Joshua Mester, and Laura Sawyer, and associates Genna Ghaul and Furqaan Siddiqui. See ECF Nos. 1, 5, 11; Joshua M. Mester, Jones Day, https://www.jonesday.com/en/lawyers/m/joshua-mester (last visited April 12, 2021); Charles N. Bensinger III, Jones Day, https://www.jonesday.com/en/lawyers/b/charles-bensinger (last visited April 12, 2021); Lee A. Armstrong, Jones Day, https://www.jonesday.com/en/lawyers/a/lee-armstrong (last visited Apr. 12, 2021). The Court has not identified the billers "M. Telegan" and "M. Melvin," though it deduces that they may be the paralegals or other support staff referenced in Angelo Gordon's declaration. See Ghaul Decl. ¶ 12.
Angelo Gordon requests hourly rates of between $1,175 to $1,350 for the Jones Day partners. ECF No. 11-1. These rates, though on the higher end, are comparable to rates awarded in this jurisdiction for firms in the "the New York City 'big firm' market." See, e.g., Vista Outdoor Inc. v. Reeves Family Tr., No. 16 Civ. 5766, 2018 WL 3104631, at *6 (); In re Relativity Fashion, LLC, No. 15 Br. 11989, 565 B.R. 50, 70 (Bankr. S.D.N.Y. 2017), and Inre Relativity Fashion, LLC, No. 15 Br. 11989 (Bankr. S.D.N.Y. June 10, 2016), ECF No 1965 (). Moreover, "the best evidence of the reasonableness of the 'market' value of a particular law firm's services (and therefore the reasonableness of its fees) are the fees that the law firm normally charges its clients in other matters." In re Relativity Fashion, 565 B.R. at 70. These rates are "the same or similar to those paid by Jones Day's other clients." Ghaul Decl. ¶ 11. Accordingly, the Court finds the rates for the partners reasonable.
For the associates, Angelo Gordon requests hourly rates of $875 for Genna Ghaul, who graduated from Columbia Law School in 2013, and $625 for Furqaan Siddiqui, who graduated from the University of California, Los Angeles School of Law in 2017. See Billing Records; Genna Ghaul, Jones Day, https://www.jonesday.com/en/lawyers/g/genna-ghaul (last visited Apr. 12, 2021); Furqaan Siddiqui, Weil, Gotshal & Manges LLP, https://www.weil.com/people/furqaan-siddiqui (last visited Apr. 12, 2021). Courts in this district have found hourly rates of $753 on the "upper limit" of rates award for associates in this district, even those at firms comparable to Jones Day. Visa Outdoor Inc., 2018 WL 3104631, at *7 (). In general, courts decline to award hourly rates of over $650 for associates. See In re Relativity Fashion, 565 B.R. at 70, and In re Relativity Fashion, No. 15 Br. 11989, ECF No. 1965 (); Kortright Cap. Partners LP v. Investcorp Inv. Advisers Ltd., 392 F. Supp. 3d 382, 407-08 (S.D.N.Y. 2019), appeal withdrawn, No. 19-2836, 2019 WL 6652238 (2d Cir. Sept. 23, 2019) (). Accordingly, the Court will apply an hourly rate of $650 for Ghaul and $625 for Siddiqui.
Finally, Angelo Gordon requests hourly rates of $400 and $550 for Melvin and Telegan, respectively, who the Court deduces are paralegals and legal support staff. Billing Records; G...
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