The Real Estate Bar Ass'n for Mass. v. Nreis

• Decision Date: 17 August 2009
• Docket Number: Civil Action No. 07-10224-JLT.
• Citation: 642 F.Supp.2d 58
• Parties: THE REAL ESTATE BAR ASSOCIATION FOR MASSACHUSETTS, INC., Plaintiff, v. NATIONAL REAL ESTATE INFORMATION SERVICES and National Real Estate Information Services, Inc., Defendants.
• Court: U.S. District Court — District of Massachusetts

642 F.Supp.2d 58

THE REAL ESTATE BAR ASSOCIATION FOR MASSACHUSETTS, INC., Plaintiff, v. NATIONAL REAL ESTATE INFORMATION SERVICES and National Real Estate Information Services, Inc., Defendants.

Civil Action No. 07-10224-JLT.

United States District Court, D. Massachusetts.

August 17, 2009.

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R. Bruce Allensworth, K & L Gates LLP, Brian Marc Forbes, Irene C. Freidel,

Kirkpatrick & Lockhart Preston Gates Ellis LLP, Boston, MA, for Defendants.

MEMORANDUM

TAURO, District Judge.

I. Introduction

Presently at issue is Defendants National Real Estate Information Services and National Real Estate Information Services, Inc.'s (collectively "NREIS") Motion for Attorneys' Fees and Costs Pursuant to 42 U.S.C. § 1988. For the following reasons, NREIS's Motion is ALLOWED.

II. Background

Plaintiff The Real Estate Bar Association for Massachusetts, Inc. ("REBA") brought this action claiming that NREIS had engaged in the unauthorized practice of law in Massachusetts by performing real estate conveyances, conducting so-called "notary closings," and issuing title insurance. NREIS counterclaimed under 42 U.S.C. § 1983 that REBA's interpretation of the practice of law, and enforcement of that interpretation, violated the Dormant Commerce Clause of the U.S. Constitution. This court explained the relevant facts in greater detail in its April 13, 2009 Memorandum,¹ which allowed NREIS's Motion for Summary Judgment and Motion for Summary Judgment on Dormant Commerce Clause Counterclaim, and denied REBA's Motion for Summary Judgment.² NREIS filed the pending Motion on April 27, 2009, and this court held a hearing on the Motion on August 12, 2009.³ NREIS now seeks $904,076.17 in attorneys' fees and costs,⁴ plus a risk factor enhancement.⁵

III. Discussion

A. Qualification for Attorneys' Fees and Costs Under 42 U.S.C. § 1988

A district court may, in its discretion, award reasonable attorneys' fees to the prevailing party on a § 1983 claim.⁶ A prevailing party is one who has "succeed[ed] on any significant issue in litigation which achieves some of the benefit the parties sought in bringing suit."⁷ In other words, a party prevails "when the actual relief on the merits of his claim materially alters the legal relationship between the parties by modifying defendant's behavior."⁸

REBA denies that NREIS is the "prevailing party" on its Dormant Commerce Clause counterclaim, arguing that this court rejected REBA's interpretation of Massachusetts law and thus rendered any subsequent decision on the Dormant Commerce Clause counterclaim advisory and insufficient to alter the legal relationship between REBA and NREIS. But this court did not define the practice of law in Massachusetts, in favor of REBA's interpretation or otherwise.⁹ The "judicial branch of government has exclusive power to determine what constitutes the practice of law,"¹⁰ and the Massachusetts Supreme Judicial Court ("SJC") "has addressed [this question] on a case-by-case basis."¹¹ REBA is authorized as a Massachusetts bar association to enforce the commonwealth's unlawful practice of law statute¹² and, relying largely on the SJC case In re Opinion of the Justices, has acted to enforce that statute against NREIS. REBA's actions to enforce its interpretation of the practice of law placed NREIS's Dormant Commerce Clause rights and the First Circuit's opinion in National Revenue Corp. v. Violet¹³ squarely at issue.

Holding that REBA violated the Dormant Commerce Clause, and issuing a permanent injunction in NREIS's favor, resulted in a material alteration of Parties' legal relationship. REBA is now "enjoined from enforcing on NREIS its interpretation of the practice of law as encompassing (1) all the interconnected activities of a real estate conveyance and (2) the issuance of title insurance."¹⁴ An injunction that bars one party from taking action against another party amounts to a material alteration of the parties' relationship,¹⁵ and a court may award attorneys' fees if injunctive relief was issued to remedy a Commerce Clause violation.¹⁶ Having prevailed on the merits of its Dormant Commerce Clause counterclaim, and secured a permanent injunction in its favor, NREIS is undeniably the prevailing party.

Though the language of § 1988 provides the court with discretion to decide whether to allow attorneys' fees and costs, "awards in favor of prevailing civil rights plaintiffs are virtually obligatory."¹⁷ The prevailing party "should ordinarily recover an attorney's fee unless special circumstances would render such an award unjust."¹⁸ The nonprevailing party has the burden of showing such "narrowly circumscribed" special circumstances, which include "outrageous or inexecusable conduct on the part of the plaintiff or its counsel," "bad faith or obdurate conduct," or "an unjust hardship that a grant or denial of fee shifting might impose."¹⁹ REBA's contentions that allowing attorneys' fees and costs in this case would chill constitutionally protected activities or contradict the purposes of § 1988 fail to satisfy "these stringent criteria."²⁰

Given that NREIS is the prevailing party and that REBA has not shown any legally recognized special circumstances, NREIS qualifies for an award of reasonable attorneys' fees and costs.

B. Calculation of Attorneys' Fees and Costs

The court employs a two-step process to determine the reasonable fees. First, "the number of hours reasonably expended on the litigation [is] multiplied by a reasonable hourly rate" to reach the "lodestar" figure.²¹ Second, the court may adjust "the reasonable fee upward or downward if any special factors dictate such a result."²²

1. Lodestar Figure

a. Number of Hours

The court should begin its inquiry by determining "the number of hours reasonably expended on the litigation," excluding "hours that are excessive, redundant, or otherwise unnecessary."²³ The party seeking fees must "submit detailed and contemporaneous time records" in support of the hours its counsel spent on litigation.²⁴ Failure to do this is grounds for the court to disallow time that is "insufficiently documented" or "too generic."²⁵

NREIS's counsel, the law firm K & L Gates, submitted substantial time records in support of NREIS's fee request.²⁶ K & L Gates divided its efforts in this matter into four general phases: (1) "Development and Evaluation of Case; Answers and Counterclaim; Motion to Dismiss Attorney Solomon"; (2) "Discovery"; (3) "Summary Judgment on Defenses, Counterclaim"; and (4) "Fee Application."²⁷ These phases consisted of the following efforts: preparing and filing the Notice of Removal; preparing and filing the Answer, Counterclaim, and Motion to Dismiss; reviewing and producing documents; serving document requests on REBA; reviewing documents produced by REBA; engaging in discovery conferences; engaging in a protective order dispute, and briefing that dispute for this court; deposing nine different witnesses and defending a deposition of NREIS; preparing and filing the Motion for Summary Judgment and Motion for Summary Judgment on Dormant Commerce Clause Counterclaim; responding to REBA's Motion for Summary Judgment; responding to REBA's Motion to Amend and Alter Judgment; and preparing and filing this fee application.²⁸

In its invoices, K & L Gates meticulously recorded all the relevant billing information, including the date on which the work had been completed, the name of the attorney who had rendered the work, the number of hours the attorney had expended, a description of the attorney's efforts, the total amount that the attorney charged for the work, a list of disbursements and other charges, and a monthly summary.²⁹ Moreover, the monthly invoices were "roughly contemporaneous with the services actually performed."³⁰ From the total number of hours expended on this case, K & L Gates deducted $18,324.25 in unnecessary fees and a 10% fee discount.³¹

As of NREIS's most recent fee request, attorneys and staff members at K & L Gates had billed a total of 2,201.60 hours to NREIS.³² After deductions, NREIS requests fees for a total of 2,112.00 hours of work.³³ As part of its documentation of these hours, K & L Gates listed the eight partners, ten associates, and six staff members who billed time for this case. Of these individuals, partners Irene Freidel and Michael Ricciuti, and associates Robert Sparkes and Leanne Hartmann, billed approximately 88% of the total hours requested.

Ms. Freidel graduated from the University of Michigan Law School in 1991; has experience in commercial litigation and other areas of complex civil litigation, including contracts, environmental, employment discrimination, products liability, and civil rights; and billed 594.20 hours for this case (approximately 28% of the total hours requested) at hourly rates of $410, $490, $540, and $575.³⁴

Mr. Ricciuti graduated from Harvard Law School in 1987; has experience in criminal matters, internal investigations, complex domestic and international commercial arbitrations and cases, matters related to homeland security, and matters involving foreign assets and export controls; and billed 375.10 hours for this case (approximately 18% of the total hours requested) at hourly rates of $535, $590, and $625.³⁵

Mr. Sparkes graduated from Boston University School of Law in 2005; has experience in general commercial litigation; and billed 773.60 hours for this case (approximately 37% of the total hours requested) at hourly rates of $290, $350, and $400.³⁶

Ms. Hartmann graduated from the University of Michigan Law School in 2006; has experience in commercial litigation; and billed 107.30 hours for this case (approximately 5% of the total hours requested) at hourly rates of $325 and $365.³⁷

The other partners who expended time on this case were Michael DeMarco, R. Bruce Allensworth, David Overstreet, Phillip Schulman, James Weiss, and an individual identified as "Greco....