Asdale v. Int'l Game

• Decision Date: 24 May 2011
• Docket Number: 3:04-cv-00703-RAM
• Citation: Asdale v. Int'l Game, 3:04-cv-00703-RAM (D. Nev. May 24, 2011)
• Parties: SHAWN VAN ASDALE, an individual, and LENA VAN ASDALE, an individual Plaintiffs, v. INTERNATIONAL GAME, TECHNOLOGY, a Nevada corporation, Defendant.
• Court: U.S. District Court — District of Nevada

SHAWN VAN ASDALE, an individual, and LENA VAN ASDALE, an individual Plaintiffs,

v.INTERNATIONAL GAME, TECHNOLOGY, a Nevada corporation, Defendant.

3:04-cv-00703-RAM

UNITED STATES DISTRICT COURT DISTRICT OF NEVADA

DATED: May 24, 2011.

MEMORANDUM DECISION AND ORDER

Before the court is Plaintiffs' Motion for Attorneys' Fees, Costs, and Prejudgment Interest. (See Doc. # 323-327.)¹ Defendant opposed (Doc. #339), and Plaintiffs replied (Doc. #344). At the court's request (see Doc. #351), Plaintiffs supplemented their motion. (Doc. #352.) Defendant filed a response to the supplement (Doc. #353) and Plaintiffs move to strike the response (Doc. #354). After a thorough review, the court grants Plaintiffs' Motion for Attorneys' Fees, Costs, and Prejudgment Interest (Doc. #323), as outlined below. The court denies Plaintiffs' Motion to Strike (Doc. #354).

I. BACKGROUND

Plaintiffs Shawn Van Asdale and Lena Van Asdale (Plaintiffs), husband and wife, are former corporate counsel for Defendant International Game Technology, a Nevada corporation (IGT). (Pls.' Compl. (Doc. # 3).) IGT specializes in the design, development, manufacturing, distribution and sale of computerized gaming machines and systems products. (IGT's Mot. for Summ. J. (Doc. # 173) 6.) Plaintiffs filed their Complaint against IGT on December 1, 2004,asserting a claim for whistleblower protection relief under the Sarbanes-Oxley Act, 18 U.S.C. § 1514A (SOX), and state law claims for tortious discharge, intentional interference with contractual relations, retaliation, and intentional infliction of emotional distress. (Doc. #3.) Prior to filing the Complaint in district court, Plaintiffs filed and voluntarily dismissed a formal complaint before the Secretary of Labor. (Doc. # 3 at ¶ 60.)

IGT filed a motion for summary judgment on November 22, 2006. (Doc. # 173.) On June 13, 2007, the court granted summary judgment as to Plaintiffs' SOX claim, and declined to retain jurisdiction over the remaining state law claims. (Doc. # 197.) Plaintiffs appealed, and the United States Court of Appeals for the Ninth Circuit issued an opinion finding that Plaintiffs raised a genuine issue of material fact regarding the cause of their terminations. (Doc. # 212, 220.) The Ninth Circuit reversed the grant of summary judgment as to the SOX claim, vacated dismissal of the state law claims, and remanded the matter to the district court to address, in the first instance, IGT's motion for summary judgment as to the state law claims. (Doc. # 220.) On remand, the court issued an order granting summary judgment as to Plaintiffs' state law claims and denying summary judgment as to application of the after-acquired evidence doctrine. (Doc. # 235.)

A jury trial was held, and a verdict was returned in favor of Plaintiffs, awarding actual damages in the amount of $955,597 to Shawn Van Asdale and $1,270,303 to Lena Van Asdale. (Doc. # 316-317.)² Judgment was entered on February 9, 2011. (Doc. # 321.) Plaintiffs filed the instant Motion for Attorney Fees, Costs, and Prejudgment Interest on February 17, 2011, and IGT opposed.

II. LEGAL STANDARD

SOX includes protection for whistleblower employees of publicly-traded companies who have suffered adverse-employment action for reporting or cooperating in the investigation ofcorporate fraud or violations of Securities and Exchange Commission rules or regulations. 18 U.S.C. § 1514A(a). A whistleblower under 18 U.S.C. § 1514A has two options for seeking relief: (1) file a complaint with the Secretary of Labor; or (2) if the Secretary has not issued a final decision within 180 days, bring an action in the district court. 18 U.S.C. § 1514A(b)(1).

"An employee prevailing in any action under subsection (b)(1) shall be entitled to all relief necessary to make the employee whole." 18 U.S.C. § 1514A(c). This relief "shall include--(A) reinstatement with the same seniority status that the employee would have had, but for the discrimination; (B) the amount of back pay, with interest; and (C) compensation for any special damages sustained as a result of the discrimination, including litigation costs, expert witness fees, and reasonable attorney fees." Id.

Once a party has established that it is entitled to an award of attorney's fees, "[i]t remains for the district courtto determine what fee is 'reasonable.'" Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). Under federal law, reasonable attorney's fees are generally based on the traditional "lodestar" calculation set forth in Hensley. See Fischer v. SJB-P.D. Inc., 214 F.3d 1115, 1119 (9th Cir. 2000). First, the court must determine a reasonable fee by multiplying "the number of hours reasonably expended on the litigation" by "a reasonable hourly rate." Hensley, 461 U.S. at 433. Second, the court must decide whether to adjust the lodestar amount based on an evaluation of the factors articulated in Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 70 (9th Cir. 1975), which have not been subsumed in the lodestar calculation. See Fischer, 214 F.3d at 1119 (citation omitted).

The Kerr factors are:

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

Kerr, 526 F.26. at 70. Factors one through five have been subsumed in the lodestar calculation. See Morales v. City of San Rafael, 96 F.3d 359, 364 n. 9(9th Cir. 1996) (citations omitted). Further, the Ninth Circuit, extending City of Burlington v. Dague, 505 U.S. 557, 567 (1992), held that the sixth factor, whether the fee is fixed or contingent, may not be considered in the lodestar calculation. See Davis v. City & County of San Francisco, 976 F.2d 1536, 1549 (9th Cir. 1992), vacated in part on other grounds, 984 F.2d 345 (9th Cir. 1993). There is a strong presumption that the lodestar figure represents a reasonable fee. Jordan v. Multnomah County, 815 F.2d 1258, 1262 (9th Cir. 1987) (internal citations omitted). However, upon considering the relevant Kerr factors that may bear on reasonableness, the court may adjust the award from the lodestar figure. Ballen v. City of Redmond, 466 F.3d 736, 746 (9th Cir. 2006). Only in rare instances should the lodestar figure be adjusted on the basis of these considerations. Id. (citations omitted). "District courts [also] possess the necessary discretion to adjust the amounts awarded to address excessive and unnecessary effort expended in a manner not justified by the case." Id.

III. DISCUSSION

A. ATTORNEYS' FEES

1. Amount Requested

Plaintiffs request a total of $1,237,956 in attorneys' fees. (See Doc. # 352 2.) IGT challenges the amount of Plaintiffs' request on various grounds, each of which is discussed below.

2. Reasonable Rate & Kerr Factors

Plaintiffs assert that a reasonable hourly rate in this case is $450 for attorneys and $120 for paralegals. (Doc. # 323 3.) IGT argues that Plaintiffs' counsel customarily charge $185 per hour for attorney services and $90 for paralegal services. (Doc. # 339 7-8, Ex. 8-9.)

In calculating the lodestar figure, reasonable hourly rates are determined by the "prevailing market rates in the relevant community." Blum v. Stenson, 465 U.S. 886, 895(1984); see also Sorenson v. Mink, 239 F.30 1140, 1145 (9th Cir. 2001). "The burden is on the plaintiff to produce evidence that the requested rates are in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation." Sorenson, 239 F.3d at 1145 (internal quotations and citation omitted). "Affidavits of the plaintiffs' attorney and other attorneys regarding prevailing fees in the community, and rate determinations in other cases, particularly those setting a rate for the plaintiffs' attorney, are satisfactory evidence of the prevailing market rate." United Steelworkers of Am. v. Phelps Dodge Corp., 896 F.2d 403, 407 (9th Cir. 1990) (citations omitted). "The defendant may introduce rebuttal evidence in support of a lower hourly rate." Sorenson, 239 F.3d at 1145. If the fee applicant has not met its burden of establishing the reasonableness of the requested rates, the court may determine the rate based on its experience and knowledge of prevailing rates in the community. See, e.g., Bademyan v. Receivable Mgmt. Servs. Corp., 2009 WL 605789 at *5 (CD. Cal. 2009).

Plaintiffs submit declarations from Graham Galloway, Esq., John Echeverria, Esq., and William Jeanney, Esq. (Doc. #323 Ex. 2-4.) Each of these attorneys has more than twenty-five years of experience representing plaintiffs, and each confirms $450 is a reasonable hourly rate for an attorney in this community with Ms. Piscevich's experience. (Id.) Plaintiffs also submit the declarations of counsel, Ms. Piscevich and Mr. Lenz. (Doc. # 323 Ex. 5-6.) Ms. Piscevich has forty years of litigation experience. (Doc. # 323 Ex. 5 at ¶1.) Mr. Lenz has nineteen years of litigation experience. (Doc. # 323 Ex. 6 at ¶ 4.)

To rebut the requested rate, first, IGT provides Plaintiffs' motion to retax costs and fees incurred in connection with IGT's motion for terminating sanctions, wherein Plaintiffs argue that $250 to $350 is a reasonable hourly rate for a business litigation attorney in this community. (Doc. # 339 Ex. 7at 3:14-22.) Second, IGT provides declarations of Ms. Piscevich and Mr. Lenz, filed in unrelated actions, asserting hourly rates of $185 to $175 for attorneys, and $85 to $95 for paralegals. (Doc. # 339 Ex. 8 at ¶7, Ex. 9 at ¶9.) Third, IGT also submitsaffidavits of...