Snyder v. Acord Corp.

          MEMORANDUM OPINION AND ORDER AWARDING ATTORNEY FEES

          JOHN L. KANE SENIOR U.S. DISTRICT JUDGE.

         After dismissing Plaintiffs' claims in this case, I ruled that Joint Defendants^[1] are entitled to an award of attorney fees under Colorado Revised Statute § 13-17-201. Order Att'y Fees at 2, ECF No. 526. The Court of Appeals for the Tenth Circuit has since similarly concluded that Joint Defendants are entitled to an award of their appellate attorney fees under § 13-17-201. 05/26/17 COA Order at 2, ECF No. 557. The matters remaining for me to determine are the amount of the attorney fees that were reasonably and necessarily incurred by Joint Defendants in defending this action, both at the trial level and on appeal, and whether Joint Defendants are entitled to an award against Plaintiffs' counsel personally under 28 U.S.C. § 1927.

         I. Background

         Plaintiffs are insured homeowners whose homes were destroyed by fires or flood damage, prompting them to bring this class action against their insurance companies and a network of other insurers and entities. The initial complaint was filed on June 21, 2014. It was amended three times, eventually resulting in the 260-page, 1, 363-paragraph Third Amended Complaint (ECF No. 380), which asserted 23 claims-including RICO^[2], antitrust, and state law conspiracy claims-against 113 defendants.

         Organizing themselves into various groups, Defendants filed four main motions to dismiss. See Defs.' Summ. Mots. to Dismiss at 1-3, ECF No. 419. I granted the motion to dismiss filed by Defendant State Farm, and joined by all Defendants, on the basis that the Third Amended Complaint failed to comply with the requirement in Federal Rule of Civil Procedure 8(a) that a claim for relief in a pleading contain “a short and plain statement of the claim showing that the pleader is entitled to relief.”^[3] Plaintiffs reacted by filing a 105-page motion for relief from the final judgment. Finding that motion to be “absurdly prolix” and Plaintiffs to have “ignored my repeated suggestion that briefs . . . be kept to a reasonable length, ” I ordered that the motion and its accompanying documents be stricken. Order Mot. to Strike at 1, ECF No. 494. I permitted Plaintiffs to refile their motion but restricted its length to ten pages. Id. Plaintiffs submitted an amended motion, using an almost illegible kerning. See Am. Mot. for Relief from J., ECF No. 497. I denied their amended motion for relief from the judgment, and they appealed. The Tenth Circuit affirmed, deciding that I did not abuse my discretion in dismissing the Third Amended Complaint “for want of a simple, concise statement of the claims, one that would provide fair notice of the claims asserted against each defendant . . . .” 04/06/2017 COA Order at 8, ECF No. 553.

         In the meantime, Joint Defendants moved for attorney fees under Colorado Revised Statute § 13-17-201 and 28 U.S.C. § 1927. I granted the motion under the Colorado statute but deferred ruling on the specific amount of the award and whether Joint Defendants were entitled to fees against Plaintiffs' counsel personally until after the appellate mandate issued. Order Att'y Fees at 2.

         After affirming my order dismissing the case, the Tenth Circuit also awarded appellate attorney fees to Joint Defendants under Colorado Revised Statute § 13-17-201. 05/26/17 COA Order at 2. The court remanded the case and directed me to ascertain the amount of the appellate attorney fees that Joint Defendants reasonably and necessarily incurred. Id. It then sanctioned Plaintiffs' counsel in the amount of $500 for attempting to circumvent the type-volume limitations for appellate briefs. 07/03/17 COA Order at 2, ECF No. 563.

         On remand, Plaintiffs and Joint Defendants disputed how determination of the amount of the fee award should proceed. I considered their respective positions and issued a scheduling order (ECF No. 565) setting a standard briefing schedule and requiring Joint Defendants to produce their invoices supporting their fee request. Plaintiffs chose not to comply with the schedule and, instead, filed a Motion to Dismiss the Moving Defendants' Claims for Attorneys' Fees Pursuant to Fed.R.Civ.P. 12(b)(6) (ECF No. 573) and a Motion: (1) to Compel Basic Discovery or for Other Appropriate Sanctions Pursuant to Fed.R.Civ.P. 26; (2) In the Alternative, for Referral of the Parties' Discovery Disputes to a Magistrate Judge; (3) To Modify the Scheduling Order, and; (4) For a Hearing of Certain Factual Issues by an Advisory Jury if Plaintiffs' Fed.R.Civ.P. 12(b)(6) Motion is Not Granted (ECF No. 574).^[4] Perceiving those Motions to be completely without merit and “prolix, redundant, and meandering, ” I ordered that they be stricken. Order Striking Pls.' Att'y Fee Mots. at 1, 4, ECF No. 578.

         On March 5, 2018, after both sides had submitted two briefs on the matter-an opening brief, response, reply, and surreply, I held an evidentiary hearing with oral argument. At that time, Plaintiffs' counsel requested that I permit Plaintiffs to submit updated summaries of their critique of Joint Defendants' fee calculation. 03/05/18 Trans. at 55:13-20, ECF No. 620. I acquiesced and authorized a supplementary response by Joint Defendants as well. Id. at 70:19-21. In the end, then, the filings associated with this Order are: Joint Defendants' Opening Brief for Determination of Amount of Attorneys' Fees to be Awarded (ECF No. 581), Plaintiffs' Brief Responding to the Joint Defendants' Opening Brief for Determination of Amount of Attorneys' Fees to be Awarded (ECF No. 592), the Reply in Support of Joint Defendants' Opening Brief for Determination of Amount of Attorneys' Fees to be Awarded (ECF No. 598), Plaintiffs' Subsequent Brief Regarding the Determination of Attorneys' Fees to be Awarded (ECF No. 601), the Stipulation between Plaintiffs and Certain Defendants (ECF No. 606), the Amended Affidavit of Kevin Shea in Support of Certain Defendants' Motion for Attorney Fees (ECF No. 608), Plaintiffs' Summary of Attorneys' Fees Billings (ECF No. 614), the Notice of Filing Concerning Plaintiffs' Amended Summary of Attorneys' Fees Billings Pursuant to Fed.R.Civ.P. 15(a)(A)(A) and D.C.COLO.LCivR 15.1(a) (ECF No. 618), and Joint Defendants' Reply to Plaintiffs' Summary of Attorneys' Fees Billings (ECF No. 619).

         I have struggled to decipher Plaintiffs' legal arguments throughout this case. Those that pertain to the attorney fee award are no exception.^[5] As such, the following analysis considers Plaintiffs' positions to the extent I have been able to extract them from the morass.

         II. Amount of the Attorney Fee Award under Colorado Revised Statute § 13-17-201

         I have already found that Plaintiffs' claims in this case sounded primarily in tort, requiring me to award attorney fees to Joint Defendants under Colorado Revised Statute § 13-17-201.^[6] Order Att'y Fees at 1-2. Left for me to determine is the amount of fees Joint Defendants reasonably and necessarily incurred in “defending the action.” Colo. Rev. Stat. § 13-17-201. To do so, I must calculate the lodestar amount, which “is the product of the number of attorney hours ‘reasonably expended' and a ‘reasonable hourly rate.'” Robinson v. City of Edmond, 160 F.3d 1275, 1281 (10th Cir. 1998). The moving party is expected to submit adequate documentation supporting the hours worked and rates claimed. Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). If Joint Defendants carry their “burden of showing that the claimed rate and number of hours are reasonable, the resulting product is presumed to be a reasonable fee . . . .'” Robinson, 160 F.3d at 1281 (quoting Cooper v. Utah, 894 F.2d 1169, 1171 (10th Cir. 1990)).

         Joint Defendants' Opening Brief on the amount of the attorney fee award (ECF No. 581) calculated the total lodestar at $1, 775, 855.69. That amount has since been reduced by: (1) the voluntary cut in fees by Defendant Sentry Insurance and the Fireman's Fund Defendants, see Notices Reduction of Fees, ECF Nos. 588 & 589, (2) the Amended Affidavit of Joint Defendants' expert (ECF No. 608), and (3) the abandonment of the motion for fees by Defendants Insurance Services Office, Inc. and Verisk Analytics, Inc., see Ord. Withdraw Mot. for Fees at 1, ECF No. 613. Thus, the final award sought by Joint Defendants is $1, 597, 602.66. Reply Pls.' Summ. Att'y Billings at 4, ECF No. 619.

         A. Opinions Submitted

         Along with their counsel's affidavits and fee invoices, Joint Defendants have submitted Affidavits from the highly experienced civil litigator Kevin Shea (ECF Nos. 581-2 to 581-15, 608, 608-1). His analysis of the fees billed is meticulous and persuasive. To the extent Plaintiffs challenge Mr. Shea's qualification as an expert, I find his Affidavits are based on sufficient facts and data, his opinions are the product of reliable principles and methods, and he reliably applied those principles and methods to the facts. See Fed. R. Evid. 702. Without a doubt, Mr. Shea has employed before this Court “the same level of intellectual rigor that characterizes the practice of an expert in the relevant field, ” here, the practice of law. Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 152 (1999).

         Plaintiffs' primary challenge to Mr. Shea's opinion is that he allegedly does not address the principal requirement of the lodestar method-that the hours expended by counsel were necessary. This argument is hollow. First, Mr. Shea outlines in detail the work that was necessary in defending the action. Shea Aff. at 15-18, ECF No. 581-2. Second, he specifically takes into account that many of Joint Defendants' attorneys did not bill their clients for all the fees they incurred and/or are not requesting all of the fees that were actually billed to and paid by their clients. Id. at 13. And, third, Mr. Shea reduced many of the invoices based on his evaluation of the reasonableness of the work performed. See, e.g., id. Ex. 6 at 2, ECF No. 581-4; id. Ex. 14D at 1, ECF No. 581-9. His analysis unquestionably speaks to whether the hours expended were necessary.

         To counter Mr. Shea's conclusions, Plaintiffs do not provide an expert opinion. Instead, Plaintiffs' counsel holds himself out as their expert, assessing the requested fees using a 24-factor test^[7] he concocted. Resp. Amount Att'y Fee Award at 7 n.6, ECF No. 592. I find this approach to be unreliable and bewildering. Nevertheless, without donning the green eyeshade of the accountant, see Fox v. Vice, 563 U.S. 826, 838 (2011), I have gleaned from it what I can.

         With these submissions framing my view, I first consider whether the number of hours for which Joint Defendants' seek reimbursement were reasonably expended.

         B. Reasonableness of the Hours Expended

         In Ramos v. Lamm, 713 F.2d 546, 553 (10th Cir. 1983), the Tenth Circuit suggested a number of factors to be considered in determining the reasonableness of the hours expended. The court has summarized them as: “(1) whether the tasks being billed ‘would normally be billed to a paying client,' (2) the number of hours spent on each task, (3) ‘the complexity of the case,' (4) ‘the number of reasonable strategies pursued,' (5) ‘the responses necessitated by the maneuvering of the other side,' and (6) ‘potential duplication of services' by multiple lawyers.” Robinson, 160 F.3d at 1281 (quoting Ramos, 713 F.2d at 553). I approach the reasonableness inquiry and evaluation of these factors “much as a senior partner in a private firm would review the reports of subordinate attorneys when billing clients whose fee arrangement requires a detailed report of hours expended and work done.” Ramos, 713 F.2d at 555. However, I “need not identify and justify every hour allowed or disallowed, as doing so would run counter to the Supreme Court's warning that a ‘request for attorney's fees should not result in a second major litigation.'” Malloy v. Monahan, 73 F.3d 1012, 1018 (10th Cir. 1996) (quoting Mares v. Credit Bureau of Raton, 801 F.2d 1197, 1203 (10th Cir.1986); Zuchel v. City and Cnty. of Denver, 997 F.2d 730, 745 (10th Cir. 1993)).

         I find the most significant factor for determining the proper amount of the present fee award is that Joint Defendants' request includes only hours for which they were actually billed by and paid their counsel. Mr. Shea gives great weight to this fact and notes that such consideration is especially warranted since Joint Defendants are sophisticated entities often with long-standing relationships with their counsel. Shea Aff. at 14, 22, ECF No. 581-2. These Defendants could select the counsel of their choice and many negotiated discounted rates. It is highly unlikely that counsel would jeopardize these relationships by overbilling their clients. Still, Joint Defendants do not seek total compensation for all of the hours expended by their counsel or at the full rate paid.

         Moving parties are instructed to “make a good faith effort to exclude from a fee request hours that are excessive, redundant, or otherwise unnecessary.” Hensley, 461 U.S. at 434. As discussed above, Joint Defendants' counsel along with Mr. Shea have done just that by eliminating both the hours expended and those billed that were deemed to be unreasonable. See, e.g., Shea Aff. Ex. 2A at 4, ECF No. 581-2 (counsel excluding amounts for billed work that was possibly duplicative or for which their client was not seeking reimbursement, totaling $72, 813); id. Ex. 4E at 6, ECF No. 581-4 (counsel redacting the invoices for irrelevant matters); id. Ex. 6 at 2, ECF No. 581-4 (Mr. Shea deducting $871 from the invoices for duplication, $105 for preparing an audit response letter, and $211 for a pro hac vice fee); id. Ex. 7 at 3, ECF No. 581-4 (Mr. Shea eliminating $276 charged for an audit letter); id. Ex. 8A at 4-5, ECF No. 581-5 (counsel removing $4, 302.50 in fees which Defendant paid but was not seeking to recover); id. Ex. 14D at 1, ECF No. 581-9 (Mr. Shea reducing the fee requested by $2, 065 for entries reflecting the duplication of ...