Penberg v. Healthbridge Mgmt.
| Decision Date | 22 March 2011 |
| Docket Number | 08 CV 1534 (CLP) |
| Parties | MARC PENBERG, Plaintiff, v. HEALTHBRIDGE MANAGEMENT, Defendant. |
| Court | U.S. District Court — Eastern District of New York |
On March 29, 2010, this Court issued a Report and Recommendation ("the Report") recommending that defendant HealthBridge Management ("HealthBridge") be awarded attorneys' fees and costs in connection with the spoliation of evidence by plaintiff Marc Penberg. (Report at 10-11, 16, 25). Pursuant to the district court's Order of July 9, 2010, adopting the Report, HealthBridge submitted an application for counsel fees in the amount of $33,696.00 charged by defendant's counsel, Buchanan Ingersoll & Rooney P.C. (the "Firm"), and costs totaling $21,896.34, including computer forensic expert fees, electronic research, postage, and overnight courier expenses. (Moran Decl.1 ¶¶ 1-2, 5). By Order dated July 28, 2010, defendant's application was referred to the undersigned.2
The facts and circumstances leading to the award of spoliation sanctions are set forth in the Court's earlier Report and incorporated by reference herein. For purposes of this motion for fees and costs, the Court repeats certain relevant facts.
In February of 2009, defendant HealthBridge received information from a third party that documents relating to HealthBridge and its patients were being "leaked" onto the internet from plaintiff's computer through a peer to-peer-file sharing device. (See Report at 5-6). Defendant also asserted that plaintiff had failed to produce certain of the "leaked" documents during the course of discovery. (Id. at 6). Defendant therefore sought a temporary restraining order to prevent further leaks and spoliation of evidence, and retained a forensic computer expert, Intelysis Corp., to conduct a review of plaintiff's computer in an effort to determine the extent of the spoliation, what data had been deleted from the computer, and what information, if any, could be recovered. (Id. at 6-7). In addition to expert time and fees, HealthBridge's counsel seeks fees for time expended consulting with the client, communicating with the expert, investigating the spoliation, communicating with the Court and opposing counsel, conducting legal research, preparing and submitting motion papers for defendant's Motion to Dismiss and Motion to Amend ("MTA"), as well as preparation for and attendance at the oral argument regarding those two motions. (Moran Decl. ¶ 3). In addition, defendant's counsel indicates that additional attorney time was expended in redacting certain information in plaintiff's papers and in defendant's billing records. (Id.; Def.'s Rep.3 at 2 )).
In Arbor Hill Concerned Citizens Neighborhood Association v. County of Albany and Albany County Board of Elections, the Second Circuit held that when assessing whether claimed legal costs are reasonable, the Court determines the "presumptively reasonable fee" for an attorney's services by looking to what a reasonable client would be willing to pay, "bear[ing] in mind all of the case-specific variables" that the courts have identified as relevant in setting a reasonable hourly rate. 522 F.3d 182, 190 (2d Cir. 2008) (emphasis in original); see also Simmons v. New York City Transit Auth.. 575 F.3d 170, 172 (2d Cir. 2009). The Court abandoned the traditional "lodestar" method of calculating fees by multiplying the number of hours reasonably spent by counsel on the matter by a reasonable hourly rate, see Hensley v. Eckerhart. 461 U.S. 424, 433 (1983); Cruz v. Local Union No. 3 of Int'l Bhd. of Elec. Workers. 34 F.3d 1148, 1159 (2d Cir. 1994), and set forth a number of factors to guide the court's inquiry as to what constitutes a reasonable hourly rate for legal services performed. As laid out in Arbor Hill, these include:
(1) 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 time limitations 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" ofthe case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases.
Arbor Hill Concerned Citizens Neighborhood Ass'n v. County of Albany and Albany County Rd. of Elections, 522 F.3d at 187 n.3 .
A number of recent cases have applied some of these Arbor Hill factors when awarding attorneys' fees. See Vilkhu v. City of New York. No. 06 CV 2095, 2009 WL 1851019 (E.D.N. Y. June 26, 2009); see also Cruz v. Henry Modell & Co.. Inc.. No. 05 CV 1450, 2008 WL 905351, at *3 (E.D.N. Y. Mar. 31, 2008). Courts are also instructed to balance:
the complexity and difficulty of the case, the available expertise and capacity of the client's other counsel (if any), the resources required to prosecute the case effectively..., the timing demands of the case, whether an attorney might have an interest (independent of that of his client) in achieving the ends of the litigation or might initiate the representation himself, whether the attorney might have initially acted pro bono..., and other returns (such as reputation, etc.) that an attorney might expect from the representation.
Arbor Hill Concerned Citizens Neighborhood Ass'n v. County of Albany. 522 F.3d at 184 (emphasis in original). It remains the attorney's burden to maintain contemporaneous records, see F. H. Krear & Co. v. Nineteen Named Trustees. 810 F.2d 1260, 1265 (2d Cir. 1987), and fee applications are subject to denial where the fees have not been adequately documented. See, e.g.. Riordan v. Nationwide Mut. Fire Ins. Co.. 977 F.2d 47, 53 (2d Cir. 1992).
In this case, defendant's counsel seeks a total award of fees in the amount of $33,696.00 (Moran Decl. ¶ 2), representing 109.1 hours of attorney time, plus 2.50 hours of paralegal time, and 4.30 hours for "project assistant" time. . These fees were calculated by defendant using the following billing rates: 1) $350 per hour for Caroline J. Berdzik, Esq., a former shareholder of the Firm; 2) $310 per hour for David Frison, Esq., an associate of the Firm; 3) $270 per hour for Sandra S. Moran, Esq., currently a shareholder of the Firm;4 4) $175 per hour for Melody Dye, a paralegal; and 5) $95 per hour for Shelia Kliwinski, the Firm's "project assistant." (Id. ¶ 4). According to counsel, the billing rates for Berdzik and Moran are "reasonable in light of [their] litigation experience and the prevailing rates that attorneys charge in Northern/Central New Jersey, " and Mr. Frison's rate is described as "normal and customary based on his experience and the prevailing rates that attorneys charge in New York City." (Id.)
With respect to the number of hours for which counsel fees are sought, defendant's counsel has submitted contemporaneous time records setting forth the dates upon which services were rendered, the time spent, and a description of the work performed. See New York State Ass'n for Retarded Children v. Carey, 711 F.2d 1136, 1147-48 (2d Cir. 1983). According to defendant's counsel, these records have been redacted to reflect only those hours that counsel has determined relate to services performed in connection with the spoliation issue. . Furthermore, it appears that where certain tasks were redacted, thehours billed have been manually redacted and reduced as well.
In addition to counsel fees, defendant seeks reimbursement for $21,896.34 in costs and disbursements, including expert fees. (Moran Decl. ¶ 5). In that regard, defendant has submitted the Affidavit of Jeffrey Brenner, Esq., President of Intelysis, describing the work performed in connection with the forensic investigation of plaintiff's computer, along with contemporaneous time records detailing the work performed, the date, time, and the individual at Intelysis who performed the services. . As defendant's counsel did with regard to their fees, Intelysis has also redacted its fees to reflect only the costs related to "our investigation into the Plaintiff's alleged spoliation activities." (Id. ¶ 5). Defendant therefore seeks reimbursement for $17,691.75 in fees charged by Intelysis, plus 7% in New Jersey State sales tax in the amount of $ 1,238.42, for a total of $ 18,930.17. . According to Mr. Brenner, the "work conducted on this matter was billed at our standard computer forensic rate of $275 per hour, and a standard computer forensic-time charge of $125 per hour... was used for any data processing that did not require human supervision to conduct." (Id. ¶7). Mr. Brenner's Affidavit also includes the curriculum vitae of the employees who worked on this matter. (Id. ¶6, Ex. B).
In opposing defendant's fee request, plaintiff argues that "an award of this sort... in the context of an employment discrimination suit, would be unjust." (PL's Mem.6 at 1). He further contends that the sanctions sought are "grossly unrelated" to plaintiff's error and suggests that they are disproportionate to the injuries actually suffered by the defendant. (Id. at 3-5). Finally, plaintiff raises a challenge to the actual amount of time for which fees are requested,...
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