Arthur S. Langenderfer, Inc. v. SE Johnson Co.

• Decision Date: 11 January 1988
• Docket Number: No. C 76-425.,C 76-425.
• Parties: ARTHUR S. LANGENDERFER, INC., et al., Plaintiffs, v. S.E. JOHNSON COMPANY, et al., Defendants.
• Court: U.S. District Court — Northern District of Ohio

684 F. Supp. 953

ARTHUR S. LANGENDERFER, INC., et al., Plaintiffs, v. S.E. JOHNSON COMPANY, et al., Defendants.

No. C 76-425.

United States District Court, N.D. Ohio, W.D.

January 11, 1988.

COPYRIGHT MATERIAL OMITTED

James Porter, Cleveland, Ohio, for plaintiffs.

Neal Rains, Cleveland, Ohio, for defendants.

MEMORANDUM AND ORDER

JOHN W. POTTER, District Judge.

This matter is before the Court on plaintiffs' application and supplemental application for award of attorney's fees and costs. Both parties have thoroughly briefed the issues presented by plaintiffs' application and supplemental application. On June 2, 1987, this Court heard oral argument on these issues.

Plaintiffs seek an award of attorney's fees and costs totalling $2,944,727.66. This amount includes a request attorney's fees of $2,539,125.62 for time spent by plaintiffs' attorneys for discovery, trial, appeal and retrial of the case from 1976 through April 30, 1987, and $405,602.04 for costs of suit for the same time period.

Because of the extensive nature of this litigation, it is necessary to briefly outline the procedural history of this case. The original action (Langenderfer I) was commenced on August 26, 1976 by plaintiffs A.S. Langenderfer, Inc. and Northern Ohio Asphalt Paving, Inc. to recover treble damages and injunctive relief against defendants for monopolization of asphalt paving in Northwestern Ohio in violation of the antitrust laws. Langenderfer I was tried to a jury in March, 1980. The jury unanimously found for plaintiffs and against defendants and returned a general verdict for $982,117.00. After denying defendants' motions for judgment notwithstanding the verdict or a new trial, the Court entered a treble judgment of $2,946,351.00 plus attorney's fees of $344,544.57 and costs of $18,559.90. Defendants filed a timely appeal.

On March 15, 1984, the Sixth Circuit vacated the judgment and remanded the case for retrial. Arthur S. Langenderfer, Inc. v. S.E. Johnson Co., 729 F.2d 1050 (6th Cir.) cert. denied, 469 U.S. 1036, 105 S.Ct. 510, 83 L.Ed.2d 401 (1984). In vacating the judgment, the Sixth Circuit recognized that "the evidence presented at trial clearly focused on the claim of predatory pricing." Id. at 1055 (footnote omitted). However, since the evidence did not establish that defendants had charged prices below their total cost for the product sold, "the trial court erred by failing to grant a directed verdict in favor of defendants on the issue of predatory pricing." Id. On November 26, 1984, the Supreme Court denied certiorari.¹

While the appellate decision was pending in Langenderfer I, the original plaintiffs joined by MacRitchie Materials, Inc., M & B Asphalt, Inc. and G.M. Sader Excavating and Paving, Inc. filed a second case (Langenderfer II) on December 23, 1983. Langenderfer II alleged that defendants had engaged in the same monopolistic and antitrust conduct as alleged in Langenderfer I. On November 6, 1985, this Court ordered the cases consolidated for jury trial. The Court set August, 1986 for trial.

Following a six week trial, a unanimous jury, after answering special interrogatories, returned a verdict in favor of all plaintiffs and against defendants. On October 2, 1986, this Court entered a total treble judgment of $7,425,000.00. On April 30, 1987, the Court denied defendants' motions for judgment notwithstanding the verdict or a new trial. Thereafter, on August 13, 1987, this Court entered an injunction against defendants.

In accordance with Section 4 of the Clayton Act, 15 U.S.C. § 15, plaintiffs seek an award of attorney's fees. The statute provides in part that "any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws ... shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney's fee." 15 U.S.C. § 15(a) (Supp.1987). Therefore, this statute in connection with the other fee-shifting statutes entitles a prevailing litigant to the recovery of its reasonable attorney's fees. However, the Supreme Court has cautioned that:

these statutes were not designed as a form of economic relief to improve the financial lot of attorneys, nor were they intended to replicate exactly the fee an attorney could earn through a private fee arrangement with his client. Instead, the aim of such statute was to enable private parties to obtain legal help in seeking redress for injuries resulting from the actual or threatened violation of specific federal laws.

Pennsylvania v. Delaware Valley Citizens Council For Clean Air, 478 U.S. 546, 106 S.Ct. 3088, 3098, 92 L.Ed.2d 439 (1986).

Northcross v. Board of Education of the Memphis City Schools, 611 F.2d 624 (6th Cir.1979), cert. denied, 447 U.S. 911, 100 S.Ct. 2999, 64 L.Ed.2d 862 (1980), is the controlling authority for awards of attorney's fees in the Sixth Circuit. Although the court in Northcross was construing 42 U.S.C. § 1988 of the Civil Rights Attorney's Fees Award Act of 1976, the Sixth Circuit recognized the legislative history as intending that "the amount of fees is to be governed `by the same standards which prevail in other types of equally complex Federal litigation, such as antitrust cases.'" Id. at 633 (quoting S.Rep. No. 1011, 94th Cong., 2d Sess. 6 reprinted in 1976 U.S. Code Cong. & Admin. News 5908, 5913). Therefore, Northcross does provide guidance for the award of attorney's fees in antitrust litigation.

In Northcross, the Sixth Circuit utilized the lodestar approach for calculating reasonable attorney's fees. Thereafter, the Supreme Court endorsed this method in Hensley v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983). The Court held that "the most useful starting point for determining the amount of a reasonable fee is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate.... The party seeking an award of fees should submit evidence supporting the hours worked and the rates claimed." Id. at 433, 103 S.Ct. at 1939 (emphasis added).

In determining the number of hours reasonably expended on this litigation, the Court must address plaintiffs' request to include the time spent on the first trial, appeal and petition for certiorari in Langenderfer I. Plaintiffs rely on Hasbrouck v. Texaco, Inc., 631 F.Supp. 258 (E.D.Wash. 1986), aff'd, 830 F.2d 1513 (9th Cir.1987), as authority for the award of attorney's fees in Langenderfer I's first trial, appeal and petition for certiorari. However, Hasbrouck is factually distinguishable from the present proceeding. In Hasbrouck, although plaintiffs' jury verdict was reversed when the trial court granted judgment n.o.v., plaintiffs were successful at the appellate level and at the subsequent retrial.

The Sixth Circuit expressly considered Langenderfer I as clearly focusing on the claim of predatory pricing. Langenderfer, 729 F.2d at 1055. The Supreme Court has held that "where the plaintiff has failed to prevail on a claim that is distinct in all respects from his successful claims, the hours spent on the unsuccessful claim should be excluded in considering the amount of reasonable fees." Hensley, 461 U.S. at 446, 103 S.Ct. at 1946. Therefore, the original award of attorney's fees in the amount of $344,544.57 will not be reinstated. Furthermore, plaintiffs claim a total of 1508.5 hours for services rendered between June 1, 1980 and June 30, 1985.² An examination of plaintiffs' Exhibits 3A, 3B and 3C reveal 1275.25 hours spent on matters related to plaintiffs' unsuccessful appeal or petition for certiorari. Therefore, for the period between June 1, 1980 and June 30, 1986 plaintiffs will be compensated only for 233.25 hours.³

During the period of July 1, 1985 through April 30, 1987, plaintiffs seek compensation for 8,502.25 hours.⁴ During this period approximately forty partners, associates, summer associates and paralegals worked on this case. This Court determines that this is "too many hours of too many attorneys." In Re Fine Paper Antitrust Litigation, 751 F.2d 562, 598 (3rd Cir.1984). Plaintiffs' counsel has an obligation to exercise "billing judgment," thereby excluding "from a fee request hours that are excessive, redundant, or otherwise unnecessary ..." Hensely, 461 U.S. at 434, 103 S.Ct. at 1939-40. However, plaintiffs' counsel has not fulfilled this obligation.

The Sixth Circuit has "approved the arbitrary but essentially fair approach of simply deducting a small percentage of the total hours to eliminate duplication of services." Northcross, 611 F.2d at 636-37 (citing Oliver v. Kalamazoo Board of Education, 576 F.2d 714 (6th Cir.1978)). In Northcross, the court reduced the total fees by 5% because of the limited number of attorneys involved in the case. However, the use of approximately forty attorneys and support staff requires a deduction of 10%. See Oliver v. Kalamazoo Board of Education, 576 F.2d 714 (6th Cir.1978); Akron Center for Reproductive Health v. City of Akron, 604 F.Supp. 1275, 1286-87 (N.D.Ohio 1985) (5% reduction for use of four lawyers at trial level). The Court realizes that plaintiffs' counsel allegedly spent approximately 1000 hours in preparation of post-trial materials. Although the Court recognizes that the Sixth Circuit has upheld reductions of 25% and 50%, this Court determines that a reduction of 10% for post-trial hours is adequate. Therefore, the total hours of 8735.50 will be reduced by 10%.

Once the total hours expended is calculated, the Court must establish a reasonable hourly rate. Plaintiffs have requested that their historical hourly rates be used in the calculation of attorney's fees. Plaintiffs have submitted affidavits from Leslie W. Jacobs, a partner with Thompson, Hine and Flory of Cleveland, and H. Stephen Madsen, a partner with Baker & Hostetler of Cleveland. These affidavits state that the historical rates of $120 and $220 per hour for partners, $51 to $130 per hour for associates, $37 to $70...