Specter v. Recon Air Corp.
| Decision Date | 19 August 2021 |
| Docket Number | 3:17-cv-00194-TMB |
| Parties | JOLYN L. SPECTER, as Personal Representative of the ESTATE OF JAMES E. SPECTER, M.D., and on behalf of herself, and the Surviving Family Members including KEVIN SPECTER, and DAVID W. WOOD, JR. and MARIANNE WOOD, Individually an on behalf of the marital community, Plaintiffs, v. RECON AIR CORPORATION, a foreign corporation, Defendant. |
| Court | U.S. District Court — District of Alaska |
ORDER ON RECON AIR CORPORATION'S MOTION FOR ATTORNEY'S FEES AND COSTS (DKT. 393)
This matter comes before the Court on Defendant Recon Air Corporation's (“RAC”) Motion for Attorney's Fees and Costs (the “Motion”).[1] Plaintiffs Jolyn L. Specter[2] (the “Specter Estate” or “Specter Plaintiffs”) and David W. Wood, Jr. and Marianne Wood (the “Wood Plaintiffs, ” and together with the Specter Plaintiffs, “Plaintiffs”) oppose the Motion.[3] The Motion has been fully briefed and the Court concludes oral argument is not necessary for resolution of the matter.[4] For the following reasons, the Motion at Docket 393 is GRANTED in part and DENIED in part.
On February 5, 2021, the Court issued an Order granting RAC's Motion for Summary Judgment as to Plaintiffs' negligence claims against it.[5] The Court entered Final Judgment in favor of RAC on March 12, 2021.[6] The Motion was filed on March 26, 2021, pursuant to Federal Rule of Civil Procedure 54(d)(2) and Local Civil Rule 54.[7] The background facts of this case and RAC's Motion for Summary Judgment are set out in detail at this Court's Orders at Dockets 313 and 348 and incorporated by reference herein. RAC requests $247, 336.86 in attorney's fees pursuant to Alaska Rule of Civil Procedure (“Alaska Civil Rule” or “Rule”) 68(b)(2), or, in the alternative, $138, 134.20 under Rule 82(b)(2).[8]
It its Motion, RAC argues that “[a]s the prevailing party, [it] is entitled to an award of attorney's fees in its favor.”[9] It states that under Rule 82, RAC would be entitled to at least 20 percent of its “actual, reasonable attorney's fees which were necessarily incurred.”[10] On September 9, 2019, however, RAC served Plaintiffs with Offers of Judgment, which, RAC asserts “would have completely resolved all of [P]laintiffs' claims against RAC.”[11] RAC's Offers of Judgment (the “Offers”) would have provided $25, 000 to resolve the claims brought by the Wood Plaintiffs and $25, 000 to resolve the claims brought by “Estate of James Specter, M.D., and all beneficiaries and dependents” against RAC.[12] RAC argues that since its Offers were “made more than 60 days after the parties exchanged initial disclosures but more than 90 days before the start of trial[, ]” and since the Court found RAC was not liable for any of Plaintiffs' claims, RAC is entitled to 50 percent of its reasonable attorney's fees.[13]
RAC argues that its fees were “reasonable and necessarily incurred by RAC in order adequately and properly to defend the various claims asserted against RAC by [P]laintiffs.”[14] RAC cites the numerous claims brought against RAC, including various claims for strict liability, negligence, negligent failure to warn, ” and claims for emotional harm and punitive damages.[15]RAC also cites the “over 30 motions” filed in relation to Plaintiffs' claims, “substantial discovery[, ]” and how “plaintiffs completely altered their theory of the case-twice-leading to additional discovery and motion practice.”[16] In addition, Plaintiffs “retained seven different expert witnesses[.]”[17] RAC argues that its attorney's fees request is reasonable, especially in light of Plaintiffs' assertion that their damages would have amounted to “‘tens of millions of dollars[.]'”[18]To substantiate its request, RAC attached itemized statements detailing how attorneys' time was spent.[19]
Plaintiffs oppose the Motion.[20] First, Plaintiffs argue that the Motion is procedurally defective because RAC “made no effort to apportion the fees between the various Plaintiffs[.]”[21]Second, Plaintiffs argue that RAC is not entitled to fees under Rule 68 because the Offers were only made “for the purposes of shifting fees[.]”[22] They argue that the Offers were too small in comparison to the potential damages that a jury could award, and that “the [Offers were] not made in order to encourage settlement.”[23] Plaintiffs also point to the timing of the Offers as supporting their position.[24] Specifically, they argue that “there is no way that [RAC] could have accurately assessed the strength of the Plaintiff[s'] liability case.”[25] When RAC made the Offers, the “expert opinions had yet to be disclosed[, ]” so RAC “did not know what criticism the Plaintiffs' experts would have on its conduct.”[26]
Third, if the Court decides to award attorney's fees under Rule 82, Plaintiffs argue RAC's fees should be “substantially reduced.”[27] Plaintiffs argue that RAC's requested fees are not reasonable because the fees include (1) alleged over-billing; (2) overlap with the In re Crash of Aircraft N93PC[28] litigation that should have reduced fees, non-legal tasks performed by attorneys; and (3) duplicative tasks and billing, vague entries, excessive time spent on phone calls and emails, excessive redactions that make it “impossible” to justify certain entries.[29] Plaintiffs also raise specific objections to the “overall time spent” on certain litigation tasks such as RAC's Answer and preparing discovery requests.[30] Plaintiffs further argue that “[n]othing in the record shows any efforts by [RAC's] counsel to minimize fees” and that awarding the fees requested by RAC would “deter future airplane accident victims.”[31] Plaintiffs argue that, at most, RAC should be awarded approximately $40, 000 in fees under Rule 82.[32]
In a Reply, RAC addresses Plaintiffs' objections.[33] First, RAC argues that its Offers were not procedurally defective because “[P]laintiffs' claims against RAC are all identical . . . and all relat[e] to RAC's performance work on the subject aircraft.”[34] As a result, RAC argues that there was no need to apportion fees.[35] Second, RAC argues that its Offers were valid under Rule 68.[36]RAC made two separate Offers, which RAC argues was appropriate because the interests of each group of Plaintiffs were (and are) aligned.[37] Namely, the Jolyn L. Specter, the wife of James E. Specter, and adult son Kevin Specter, have aligned interests, as do the married Wood Plaintiffs.[38]RAC says there is no apportionment issue that, “absent settlement, would have to be resolved by a jury.”[39] Third, RAC argues that their Offers were not nominal.[40] RAC argues that “there was scant evidence that RAC had any realistic liability in relation to this accident, and there was substantial evidence indicating that the cause of the crash was the negligence of Rainbow King Lodge's pilot[.]”[41] Accordingly, the Offers were to “provide an opportunity to the [P]laintiffs to take a realistic look at the case before . . . prolonged litigation.”[42] The Offers were not analogous to the two cases cited by Plaintiffs, RAC argues, where offers of $10 and $1 were made at different stages of the litigation than here.[43] Fourth, RAC argues that its fees are reasonable in light of the complexity of the case.[44] RAC rejects Plaintiffs' critiques of certain line items or billing practices.[45]
Federal Rule of Civil Procedure 54(d)(2) allows for a claim for attorney's fees by motion to be filed within fourteen days of the entry of judgment. Such a motion must specify the grounds entitling the movant to the award, the amount sought or a fair estimate thereof, and disclose the terms of any agreement under which the motion is made.[46] Under Local Civil Rule 54.2, a party seeking an award of attorney's fees must file a motion stating the amount requested, setting forth the authority for the award, and must be accompanied by a declaration or affidavit setting forth the total number of hours billed, the rate for each lawyer or professional, the amount charged to the client, and attaching itemized supporting documents.[47] In determining the amount which should be awarded in fees, the Court looks to Alaska Civil Rules 68 and 82. Rules 68 and 82 “are considered substantive law under Erie R.R. Co. v. Tompkins, and accordingly apply in cases in federal court based on diversity jurisdiction.”[48]
A. Alaska Civil Rule 68 Framework
Alaska Civil Rule 68(b)(2) provides for the award of “all costs as allowed under the Civil Rules[.]” Rule 68(b)(2) also states that if an offer of judgment was “served more than 60 days after . . . initial disclosures . . . but more than 90 days before [] trial[ ]” then the offeror is entitled to 50 percent of “reasonable actual attorney's fees, ” which covers all fees “incurred by the offeror from the date the offer was made.” A party is only eligible for an award of fees under Rule 68(b) “if the judgment finally rendered by the court is at least . . . 10 percent less favorable to the offeree than the offer[.]”[49] Under Alaska law, “[w]hen awarding Rule 68 attorney's fees a trial court must use its discretion to determine what amount represents the reasonable actual attorney's fees, ” based on a determination of “whether the fees claimed are objectively reasonable.”[50] The Alaska Supreme Court has held that this determination does not involve “an exhaustive list of factors, ” but instead “focuses on two factors: (1) the hourly rate charged and (2) the number of hours reported.”[51] Courts may also consider the factors listed in Alaska Civil Rule 82(b)(3), discussed infra Section III-B, in determining whether an award is reasonable.[52] Critically, “the purpose of Rule 68 is not merely to ‘partially compensate a...
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