KLLM Transp. Servs., LLC v. JBS Carriers, Inc.
| Decision Date | 28 February 2018 |
| Docket Number | CIVIL ACTION NO.: 3:12-CV-116-HTW-LRA |
| Parties | KLLM TRANSPORT SERVICES, LLC PLAINTIFF v. JBS CARRIERS, INC. DEFENDANT |
| Court | U.S. District Court — Southern District of Mississippi |
BEFORE THIS COURT is the plaintiff KLLM Transport Services, LLC's Motion for Attorney Fees and Litigation Costs [Docket no. 232]. This motion stems from a years-long, extremely contentious litigation between the parties. After a careful review of the submissions of the parties, the relevant legal precedent, and the oral arguments of the parties, this court is convinced that KLLM Transport Services, LLC's Motion for Attorney Fees and Litigation Costs [Docket no. 232], should be granted, but with reductions. Below, this court sets out the facts and law upon which this court bases its rulings.
This case revolves around the termination of a "dedicated" hauling contract1 and the breach of a settlement agreement. The salient background facts are as follows.
In 2008, KLLM Transport Services, LLC (hereinafter referred to as "KLLM"), an over-the-road trucking company based in Mississippi, entered into a dedicated hauling contract with Pilgrim's Pride Corporation (hereinafter referred to as "PPC"), a chicken processing company. In 2010, PPC allowed its sister company, JBS Carriers Inc. (hereinafter referred to as "JBS"), to perform the dedicated hauling services for the PPC/KLLM contract. JBS, though, also began poaching some of the KLLM employees who had worked on the PPC dedicated hauling contract.Afterwards, an aggrieved KLLM sued JBS. KLLM contended that JBS had tortuously interfered with KLLM's business relationships, converted its proprietary trade secrets, and converted its customers. KLLM filed this lawsuit in this court, the United States District Court for the Southern District of Mississippi in case number 3:10-CV-546-HTW-LRA.
With the court's help and encouragement, the two parties ultimately settled their differences out of court on December 1, 2010. [Docket no. 1-2]. In the settlement agreement, JBS agreed as follows:
The current contract between KLLM and Pilgrim's Pride shall be honored and continued for its stated duration and no early opt-out or termination of such contract will occur. KLLM will continue to provide services and pricing levels as stated in such contract.
[Docket no. 1-2, ¶ 5]. JBS further agreed that "JBS Carriers will not circumvent this Agreement or its obligations as set forth herein through any of its parent or affiliated companies." [Docket no. 1-2, ¶ 8].
Despite this settlement agreement, on December 13, 2011, PPC informed KLLM that it was terminating its dedicated hauling contract with KLLM. On February 17, 2012, KLLM filed this lawsuit in this federal court against JBS, contending that JBS had breached the settlement agreement in permitting PPC to terminate the dedicating hauling contract. [Docket no. 1]. In addition to compensatory damages, KLLM also requested punitive damages.
This matter was brought to trial on August 19, 2015, before a jury of eight persons. After nine (9) days of trial, on September 1, 2015, the jury began its deliberation and returned a verdict in favor of KLLM. The jury awarded KLLM $36,950.00 in contractual damages for JBS Carrier's breach of the settlement agreement. [Docket no. 216].
The next day, on September 2, 2015, that same jury heard the punitive damages phase of trial. During its closing argument in the punitive damages phase of the trial, KLLM argued thatJBS had violated the settlement agreement that it had entered into voluntarily just eleven months prior. KLLM also reiterated to the jury that JBS's counsel who penned the settlement agreement was the same attorney who terminated the KLLM-JBS contract less than a year later. JBS, said KLLM, terminated the contract to benefit itself because JBS's business was suffering and the PPC contract JBS took from KLLM doubled JBS's business. Just as KLLM had emphasized during the trial, KLLM characterized JBS' conduct as "reckless disregard for KLLM's rights." [Docket no. 223, P. 7].
JBS presented to the jury that PPC decided to terminate KLLM's contract before they knew about the prior settlement agreement and that no JBS employees were involved in the decision to terminate KLLM's contract with PPC. The jury was not persuaded by JBS's arguments.
JBS also presented what it purported to be its balance sheet. According to this balance sheet, JBS had only $38,019.00 in cash-on-hand and a negative net worth of $71,702,835.00. [Docket no. 229, P. 27]. KLLM did not object to this document being admitted into evidence. KLLM, though, did question the veracity of this balance sheet, noting that JBS was [Docket no. 223].
The jury, after due deliberation, awarded KLLM $900,000.00 in punitive damages. [Docket no. 218].
This court earlier confirmed that it possesses diversity of citizenship subject-matter jurisdiction over this dispute in its orders dated July 26, 2013 [Docket no. 137], and August 17,2015 [Docket no. 204]. Inasmuch as this court is exercising diversity of citizenship subject-matter jurisdiction, this court, sitting in Mississippi, will apply Mississippi law to the substantive issues in accordance with the Erie Doctrine. Erie v. Tompkins, 304 U.S. 64, 78-79, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). Under the Erie Doctrine, federal courts sitting in diversity must apply state substantive law and federal procedural law. Foradori v. Harris, 523 F.3d 477, 486 (5th Cir. 2008) (citing Gasperini v. Ctr. for Humanities, Inc., 518 U.S. 415, 426-427 (1996)).
KLLM asks this court to award it attorney fees and litigation costs in accordance with the settlement agreement which was the central issue in this case. The settlement agreement between the parties reads:
10. If a court of competent jurisdiction determines that JBS has breached or violated any aspect of this Agreement, JBS will reimburse and pay all [attorney fees] and litigation costs incurred by KLLM in connection with the investigation, preparation and filing of a complaint, together with any additional [attorney fees] and litigation costs which may be incurred in connection with legal proceedings brought by KLLM for breach of this Agreement entered into between KLLM and JBS. The claimed amount of such [attorney fees] and litigation costs will be submitted to the applicable court for assessment and approval.
[Docket no. 1-2, ¶ 10]. Thus, KLLM has submitted its Motion for Attorney Fees and Litigation Costs [Docket no. 232] along with exhibits that purport to itemize its attorney fees and litigation costs.2
KLLM seeks an award of $1,232,701.50 in attorney fees, $84,560.23 in expenses, and $350.00 in litigation costs. JBS, on the other hand, argues for an award of either $634,265.92 at the maximum or $62,766.00 at a minimum in attorney fees, $17,780.61 in expenses, and $350.00 in litigation costs. This court is persuaded for the reasons set forth below that various reductions of KLLM's requested attorney fees are warranted. This court, however, is also persuaded that KLLM has shown its expenses are reasonable - with the exception of two (2) expert witnesses' fees. This court is finally persuaded that KLLM is entitled to its costs of court.
The settlement agreement between the parties expressly states that JBS will "pay all attorney fees... incurred by KLLM in connection with the investigation, preparation and filing of a complaint, together with any additional attorney fees ... which may be incurred in connection with legal proceedings brought by KLLM for breach of this Agreement." This agreement is particularly impactful where the parties and the court engaged in a nine (9) day jury trial to resolve this litigation.
In determining attorney fees, this court must follow Fifth Circuit precedent by calculating a "lodestar" fee "by multiplying the reasonable number of hours expended on a case by the reasonable hourly rates for the participating lawyers." Louisiana Power & Light Co. v. Kellstrom, 50 F.3d 319, 324 (5th Cir. 1995). The court then considers whether the lodestar figure should be adjusted upward or downward depending on the circumstances of the case. Id. In making a lodestar adjustment the court should look to twelve factors, known as the Johnson factors, after Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974).
"When ... the applicant for a fee has carried his burden of showing that the claimed rate and number of hours are reasonable, the resulting product is presumed to be the reasonablefee[.]" Blum v. Stenson, 465 U.S. 886, 897, 104 S. Ct. 1541, 1548, 79 L. Ed. 2d 891 (1984). Indeed, the United States Supreme Court has held:
The "lodestar" figure has, as its name suggests, become the guiding light of our fee-shifting jurisprudence. We have established a "strong presumption" that the lodestar represents the "reasonable" fee, Delaware Valley I, supra, 478 U.S., at 565, 106 S.Ct., at 3098, and have placed upon the fee applicant who seeks more than that the burden of showing that "such an adjustment is necessary to the determination of a reasonable fee." Blum v. Stenson, 465 U.S. 886, 898, 104 S.Ct. 1541, 1548, 79 L.Ed.2d 891 (1984) (emphasis added).
City of Burlington v. Dague, 505 U.S. 557, 562, 112 S. Ct. 2638, 2641, 120 L. Ed. 2d 449 (1992)
KLLM asserts the hours it has claimed and the hourly rates it charged are reasonable and consistent with other cases in this region. JBS does not challenge the hourly rates as presented to this court by KLLM. JBS argues, instead, that the sheer number of attorneys and paralegals working on this litigation was...
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