PPG Industries v. Celanese Polymer Specialties Co.

• Decision Date: 02 April 1987
• Docket Number: Civ. A. No. 78-0380-L(A).
• Citation: 658 F. Supp. 555
• Parties: PPG INDUSTRIES, INC., Plaintiff, v. CELANESE POLYMER SPECIALTIES COMPANY, INC., Defendant.
• Court: U.S. District Court — Western District of Kentucky

658 F. Supp. 555

PPG INDUSTRIES, INC., Plaintiff, v. CELANESE POLYMER SPECIALTIES COMPANY, INC., Defendant.

Civ. A. No. 78-0380-L(A).

United States District Court, W.D. Kentucky, Louisville, Division.

April 2, 1987.

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Wm. C. Guethlein, Louisville, Ky., Edward M. O'Toole, Carl E. Moore, Jr., Chicago, Ill., Carl T. Severini, Pittsburgh, Pa., for plaintiff.

Herbert F. Schwartz, New York City, John T. Ballantine, Ogden & Robertson, Louisville, Ky., Herbert F. Schwartz, David J. Lee, James F. Haley, Jr., Ron E. Shulman, Fish & Neave, New York City, Andrew F. Sayko, Jr., Chatham, N.J., Herbert P. Price, Jeffersontown, Ky., Thomas J. Morgan, Robert A. Longman, Celanese Corp., New York City, for defendant.

MEMORANDUM OPINION

ALLEN, Senior District Judge.

This action is submitted to the Court upon the application of Celanese for an award of $1,281,807.24 in attorneys' fees and disbursements. Plaintiff objects to an award in that amount as being unjustified in fact and law.

The right of the defendant to an award of attorneys' fees is based on 35 U.S.C. § 285, which provides: "The Court in exceptional cases may award reasonable attorney fees to the prevailing party." This Court has previously determined that this is an exceptional case, and has also determined that award of fees is appropriate. In the case of Morgan Adhesives Co. v. Chemtrol Adhesives, Inc., 574 F.Supp. 832, 833 (N.D.Ohio 1983); aff'd 765 F.2d 158 (Fed.Cir.1985), the district court stated the controlling principles governing the award of the fee as follows:

In patent cases, 35 U.S.C. § 285 permits an award of attorney's fees to the prevailing party when the circumstances are "exceptional." footnote omitted. Such an award "is intended to compensate the prevailing party for costs that it would not have incurred but for the conduct of the losing party and is within the sound discretion of the district court." Campbell v. Spectrum Automation Co., 601 F.2d 246, 251 (6th Cir.1979). emphasis added.

To courts that regularly host claims brought under any of several employment or civil rights statutes, award of attorney fees is a familiar task, and a substantial body of authority exists to guide the court's exercise of discretion. To determine whether that authority is available to assist us here, we must analyze whether the standards developed for setting the amount of an award under 42 U.S.C. Sec. 1988 are dependent on either the purpose of that fee-shifting statute or the usual identity of the parties.

The fact that defendants in civil rights suits are usually public bodies is not the justification for the rigorous examination given fee applications under Sec. 1988. See, e.g., Beazer v. New York City Transit Authority, 558 F.2d 97, 101 (2d Cir.1977) (courts should avoid "either the reality or the appearance of awarding `windfall fees.'"). The same standards are used in connection with 42 U.S.C. Sec. 2000e-5(k), where the defendants are typically private employers. Louisville Black Police Officers Organization v. City of Louisville, 700 F.2d 268 (6th Cir.1983); see also, Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir.1974), and S.Rep. No. 94-1011. It seems clear that the identity of the party liable for the fee is irrelevant in fixing the amount of the award.

A rationale for abandoning the "American rule" and awarding fees to successful civil rights plaintiffs is to encourage enforcement of public policy and to encourage representation by attorneys who presumably would be hesitant to take such cases with no prospect of payment. No such justification supports the patent law fee-shifting statute, since it is apparent that entities like the parties to this case will have the services of competent attorneys regardless of the potential for fees in exceptional cases. Indeed, the poor or nonexistent contemporaneous fee records indicate little concern that this case would include a fee award phase. Does a different justification for fee-shifting compel use of different standards for setting amounts?

We think not. 42 U.S.C. 1988 also permits awards to prevailing defendants in exceptional cases, which is the standard in the patent law statute involved here. Smith v. Smythe-Cramer Co., 754 F.2d 180 (6th Cir.1985). Once a court justifies a defendant award by finding exceptional circumstances, the standards used in setting the amount of the fee award are the same as those used in setting the more routine plaintiff's award. See, e.g., Nash v. Reedel, 86 F.R.D. 16 (E.D.Pa.1980). Thus, since neither the identity of the parties nor the rationale supporting award of fees is relevant in fixing the amount, we believe the fee-setting standards developed in connection with 42 U.S.C. Sec. 1988 may properly guide the court's discretion in this case.

One implication of this determination is that we will not find a requested fee appropriate simply because the applicant law firm has billed fees that its client is willing to pay. In awarding a fee, a court cannot avoid giving the public the impression of endorsement. Lack of challenge by a particular client is not support for the appearance of endorsement of an unusual billing practice. Additionally, it will be necessary for us to insist on adequate documentation. We are required to clearly spell out the basis of our findings. Northcross v. Memphis Board of Ed., 611 F.2d 624 (6th Cir.1979). This we are unable to do unless the applicant clearly spells out the basis for the request. Webb v. Dyer County Bd. of Ed., 471 U.S. 234, 105 S.Ct. 1923, 85 L.Ed.2d 233 (1985).

As noted earlier, we will permit recovery only of those costs incurred because of the conduct of PPG Industries. Campbell v. Spectrum Automation, 601 F.2d 246, 251 (6th Cir.1979). Furthermore, the language of the statute requires that the fees be reasonable. In accord with the case of Hensley v. Eckerhart, 461 U.S. 424, 434, 103 S.Ct. 1933, 1939, 76 L.Ed.2d 40 (1983), we will favor the basic approach of "reasonable hours times a reasonable rate." We will seek documentation showing what work was performed by each attorney, when it was performed, and what rate was charged for that work, and from this we can make the necessary determinations of reasonableness. With these basics in mind, we turn to the request itself.

Defendant seeks $742,955.00 for services billed to it by the firm of Fish & Neave. Defendant requests the Court to award $37,992.75 for services performed by Fish & Neave on antitrust issues that were raised by Celanese in its counterclaim. The cases of Machinery Corp. of America v. Gullfiber AB, 774 F.2d 467, 475 (Fed.Cir. 1985); Stickle v. Hueblein, Inc., 716 F.2d 1550, 1564 (Fed.Cir.1983); and U.S. Industries, Inc. v. Norton Co., 578 F.Supp. 1561, 1566 (N.D.N.Y.1984), indicate that fees should not be awarded under 35 U.S.C. § 285 for litigation of non-patent issues such as antitrust. This is a sound rule since 15 U.S.C. § 15 would allow Celanese to recover antitrust attorneys' fees if it prevailed on antitrust issues. We, therefore, disallow the entire amount of the fees sought for antitrust services.

Celanese also seeks to recover $42,870.00 for the use of Fish & Neave secretarial services, word processing equipment, library and general office staff. These services are generally considered part of an attorney's overhead, and as such, have usually been deleted from awards made to attorneys under 35 U.S.C. § 285. See Clairol Inc. v. Save-Way Industries, Inc., 211 USPQ 223, 225 (S.D.Fla.1980); Codex Corp. v. Milgo Electronic Corp., 541 F.Supp. 1198, 1201, n. 1 (D.Mass. 1982), aff'd 717 F.2d 622 (1st Cir.1983); CTS Corp. v. Electro Materials Corp. of America, 476 F.Supp. 144, 145 (S.D.N.Y.1979). This is a sound practice.

As noted by the plaintiff, the fees charged by Fish & Neave are greatly in excess of those charged by the Louisville firm of Ogden & Robertson, who have requested a reasonable fee of $85.00 per hour for their services. To add secretary and office fees to these fees charged by Fish & Neave would be clearly unreasonable. Because of failure to show that the cost is reasonable, and because this is not an item of expense customarily billed to fee-paying clients, this amount will be disallowed in its entirety. Northcross, supra.

Next, Celanese seeks to recover $54,371.25 in fees for services rendered in preparing the fee petition after the Court's November 20, 1986 decision. That request is clearly unreasonable on its face. Defendant claims that an attorney spent over one hundred hours supervising preparation of the petition at a billing rate of $230.00 per hour, and that another newly hired attorney spent over one hundred hours at $80.00 per hour, and that a total of 328 attorney hours and 78 paralegal hours were spent on the petition. No hourly logs were submitted in support of the application, so it is impossible to determine who performed what services.

As the court observed in U.S. Industries, supra, higher rates charged by patent litigation attorneys are not warranted for preparing fee petitions which essentially involve billing, reviewing arithmetic computations and legal study and briefing on attorneys fees case law. In U.S. Industries, the court reduced to $85.00 the hourly rate for each attorney involved in the preparation and submission of fee applications. We believe that in the case at bar, where the respected and able litigators at Ogden & Robertson have requested fees of $85.00 per hour, this rate is applicable to the time spent by Fish & Neave partners on the preparation of the fee applications. We also believe that rates of $60.00 per hour should be awarded to Fish & Neave associates instead of the requested $80.00 per hour. We likewise believe that paralegal rates of $30.00 per hour, which is the going rate in Louisville, should be used rather than $55.00 per hour, and that Fish & Neave's secretarial and office fees should be eliminated. These...