Barranco v. 3D Sys. Corp., CIVIL NO. 13-00412 LEK-RLP

• Decision Date: 16 August 2018
• Docket Number: CIVIL NO. 13-00412 LEK-RLP
• Parties: RONALD BARRANCO, Plaintiff, v. 3D SYSTEMS CORPORATION, a Delaware corporation, 3D SYSTEMS, INC., a California corporation, ABRAHAM REICHENTAL, DAMON GREGOIRE, Defendants.
• Court: U.S. District Court — District of Hawaii

RONALD BARRANCO, Plaintiff, v. 3D SYSTEMS CORPORATION, a Delaware corporation, 3D SYSTEMS, INC., a California corporation, ABRAHAM REICHENTAL, DAMON GREGOIRE, Defendants.

CIVIL NO. 13-00412 LEK-RLP

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF HAWAII

August 16, 2018

ORDER DENYING PLAINTIFF'S PARTIAL OBJECTIONS AND ADOPTING, AS MODIFIED, THE MAGISTRATE JUDGE'S FINDINGS AND RECOMMENDATION TO GRANT IN PART AND DENY IN PART DEFENDANTS 3D SYSTEMS CORPORATION AND 3D SYSTEM, INC.'S MOTION FOR AN AWARD OF ATTORNEYS' FEES

On June 15, 2018, the magistrate judge issued his Findings and Recommendation to Grant in Part and Deny in Part Defendants 3D Systems Corporation and 3D System, Inc.'s Motion for an Award of Attorneys' Fees ("F&R"). [Dkt. no. 423.] On June 29, 2018, Plaintiff Ronald Barranco ("Plaintiff" or "Barranco") filed his partial objections to the F&R ("Objections"). [Dkt. no. 429.] On July 9, 2018, Defendants 3D Systems Corporation and 3D Systems, Inc. ("Defendants" or "3D Systems") filed their response to the Objections ("Response"). [Dkt. no. 432.] The Court has considered the Objections without a hearing, pursuant to Rule LR7.2(e) of the Local Rules of Practice of the United States District Court for the District of Hawai`i ("Local Rules"). Plaintiff's Objections are denied and the F&R is adopted, as modified, for the reasons set forth below.

BACKGROUND

The background of this matter is well known to the parties, and the Court will only discuss the background relevant to the Objections. On May 27, 2016, following a trial, the jury returned verdict in favor of Defendants on all of Plaintiff's claims and in favor of Defendants on their counterclaim for breach of a noncompete agreement. [Dkt. no. 282.] On May 9, 2017, in its Order Denying Plaintiff's Oral Motion for Judgment as a Matter of Law, this Court concluded, based on the jury's verdict, that Defendants were entitled to an equitable accounting. [Dkt. no. 300.] On November 20, 2017, this Court conducted a one-day bench trial to perform the equitable accounting. [Minutes, (dkt. no. 383).] On March 30, 2018, this Court issued its Findings of Fact and Conclusions of Law and Order ("FOF/COL"). [Dkt. no. 391.¹] The FOF/COL ruled: "judgment shall enter in favor of 3D Systems on its breach of contract counterclaim in the amount of $522,860.24." 307 F. Supp. 3d at 1103.

On April 13, 2018, Defendants filed their Motion for an Award of Attorneys' Fees ("Motion"). [Dkt. no. 395.] On May 9, 2018, Plaintiff filed his memorandum in opposition, andDefendants filed their reply on May 23, 2018. [Dkt. nos. 409, 413.] The F&R recommended that, pursuant to Haw. Rev. Stat. § 607-14, Defendants be awarded: "$1,299,408.50 in attorneys' fees, $348,668.99 in prejudgment interest, and $71,642.97 in nontaxable costs." [F&R at 30.] The Objections followed thereafter.

STANDARD

This Court has stated the legal standard applicable to its review of magistrate judge's findings and recommendations as follows:

Local Rule 74.2 provides: "Any party may object to a magistrate judge's case dispositive order, findings, or recommendations . . . within fourteen (14) days after being served with a copy of the magistrate judge's order, findings, or recommendations." See also Fed. R. Civ. P. 72(b) ("Within 14 days after being served with a copy of the recommended disposition, a party may serve and file specific written objections to the proposed findings and recommendations.").

. . . .

When a party objects to a magistrate judge's findings or recommendations, the district court must review de novo those portions to which the objections are made and "may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge." 28 U.S.C. § 636(b)(1); see alsoUnited States v. Raddatz, 447 U.S. 667, 673 (1980); United States v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003) (en banc) ("[T]he district judge must review the magistrate judge's findings and recommendations de novo if objection is made, but not otherwise.").

Under a de novo standard, this Court reviews "the matter anew, the same as if it had not been heard before, and as if no decision previously had been rendered." Freeman v. DirecTV, Inc., 457 F.3d 1001, 1004 (9th Cir. 2006); United States v. Silverman, 861 F.2d 571, 576 (9th Cir. 1988). The district court need not hold a de novo hearing; however, it is the court's obligation to arrive at its own independent conclusion about those portions of the magistrate judge's findings or recommendation to which a party objects. United States v. Remsing, 874 F.2d 614, 616 (9th Cir. 1989).

However, "'[f]rivolous, conclusive, or general objections [to a magistrate judge's report and recommendation] need not be considered by the district court.'" Rodriguez v. Hill, No. 13CV1191-LAB (DHB), 2015 WL 366440, at *1 (S.D. Cal. Jan. 23, 2015) (some alterations in Rodriguez) (quoting Marsden v. Moore, 847 F.2d 1536, 1548 (11th Cir. 1988)). Thus, an objection to findings "without any analysis as to why [they are] inaccurate" is "insufficient to trigger review of those findings." United States v. Rudisill, Nos. CR 97-327-PHX-ROX, CV 04-466-PHX-ROX, 2006 WL 3147663, at *1 (D. Ariz. Nov. 1, 2006) (citation omitted). If courts required review in such circumstances, "'judicial resources would be wasted and the district court's effectiveness based on help from magistrate judges would be undermined.'" Bridgeman v. Stainer, No. 12-CV-212 BEN (PCL), 2014 WL 1806919, at *1 (S.D. Cal. May 7, 2014) (some citations omitted) (quoting United State v. Midgette, 478 F.3d 616, 622 (4th Cir. 2007)); see alsoReyna-Tapia, 328 F.3d at 1122 ("the underlying purpose of the Federal Magistrates Act is to improve the effective administration of justice" (citing Peretz v. United States, 501 U.S. 923, 928, 111 S. Ct. 2661, 115 L. Ed. 2d 808 (1991)). Further, "[o]bjections that would not alter the outcome are moot, and can be overruled on that basis alone." Rodriguez, 2015 WL 366440, at *1.

Muegge v. Aqua Hotels & Resorts, Inc., Civil 09-00614 LEK-BMK, 2015 WL 4041313, at *2 (D. Hawai`i June 30, 2015) (some alterations in Muegge) (some citations omitted).

DISCUSSION

I. Nikole Mergo's Hourly Rate

Plaintiff argues the magistrate judge erred by describing Nikole Mergo, Esq., as an attorney with twenty-eight years of experience, and notes she graduated law school in 1999. [Objections at 5.] Plaintiff argues the magistrate judge erred in approving as reasonable Ms. Mergo's requested rate of $320, and argues her rate should be reduced to either $290 or $300 to be comparable to the rate of $290 approved for Dawn Sugihara, Esq., who graduated law school in 2001. [Id. at 6.]

In light of Plaintiff's identification of the specific factual error related to Ms. Mergo's years of experience, this Court reviews her hourly rate de novo. See Motion, Aff. of Nikole Setzler Mergo ("Mergo Aff.") at ¶ 6 ("I have been a billing attorney in the private sector legal practice for nineteen (19) years."). The issue before this Court is whether "the requested hourly rate reflects prevailing community rates for similar services." Au v. Republic State Mortg. Co., Civ. No. 11-00251 JMS-KSC, 2014 WL 770291, at *6 (D. Hawai`i Feb. 25, 2014) (citing Jordan v. Multnomah County, 815 F.2d 1258, 1263 (9th Cir. 1987)). In evaluating Ms. Mergo's hourly rate, thisCourt considers the prevailing market rates in Honolulu, not the prevailing markets rates in other jurisdictions where Defendant's mainland counsel also practices. See Muegge, 2015 WL 4041313, at *16 (some citations omitted) (citing Gates v. Deukmejian, 987 F.2d 1392, 1405 (9th Cir. 1992)). The Court also considers the experience, skill, and reputation of the attorney requesting the fees. Webb v. Ada Cty., 285 F.3d 829, 840 & n.6 (9th Cir. 2002).

Ms. Mergo describes her experience as follows. She graduated from the University of Virginia Law School in 1999. [Mergo Aff. at ¶ 11.] Since then, she has "continuously engaged in the practice of law in the private sector in the Columbia, South Carolina office of Nexsen Pruet," focusing on complex commercial litigation; served as the lead trial attorney and client relationship partner for many of her firm's largest clients; regularly developed case strategy and supervised partners, associates, and paralegals; and been recognized by and listed in Chambers USA, Best Lawyers in America, Super Lawyers, and Legal Elite of the Midlands. [Id.] In this case, Ms. Mergo served as lead counsel, and as co-lead trial counsel alongside Thomas Benedict, Esq. [Id. at ¶ 12.] Specific responsibilities "included the management of all document productions, defending and taking depositions, arguing motions, drafting briefs, and trying both the jury trial and the accounting trial with . . . local counsel." [Id. at ¶ 13.] The Court is familiar with theprevailing rates for legal services in Honolulu, and finds that $320 per hour is consistent with the prevailing rates for an attorney of Ms. Mergo's experience and for the type of work performed.

Plaintiff also argues a rate of $320 for Ms. Mergo is unreasonable because, in Muegge, this Court found $275 to be a reasonable hourly rate for an attorney with twenty-five years experience. See 2015 WL 4041313, at *16. This comparison fails for two reasons. First, and most significantly, that attorney adduced no evidence, apart from his own say-so, showing his proposed hourly rate was reasonable. Id. at *5 (citing BlueEarth Biofuels, LLC v. Hawaiian Elec. Co., Civil No. 09-00181 LEK-KSC, 2015 WL 881577, at *3 (D. Hawai`i Feb. 27, 2015) ("In addition to their own statements, attorneys are required to submit additional evidence that the rate charged is reasonable." (emphasis in BlueEarth)). Second, that case involved legal work performed between 2009 and 2014. Id. at *1. In this case, Defendants provided the affidavit of a partner at the firm Cades Schutte, who has twenty-seven years experience practicing law, attesting to the...