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Loatman v. Summit Bank


October 15, 1999


The opinion of the court was delivered by: Simandle, District Judge:


This case involves plaintiff's request for attorney's fees pursuant to this Court's opinion and order of August 29, 1997 in which defendant was ordered to pay all of plaintiff's reasonable attorney's fees stemming from specific actions by the defendant Summit Bank for which it was sanctioned by this Court under its inherent power. Loatman v. Summit Bank, 174 F.R.D. 592 (D.N.J. 1997). This court held that defendant Summit Bank engaged in direct contact with the putative class representative, plaintiff Annette Loatman, under circumstances that were "oppressive, unfair and disruptive of the proper course of this class action proceeding." 174 F.R.D. 605. Defendant's actions were found to have "led to months of otherwise unnecessary motion practice and discovery, all of which delayed the proper course of this litigation." Id. Under the inherent power of the court to preserve orderly judicial processes and to assure that others will not be tempted to employ harassment tactics striking at the heart of the class action procedure, including the relationship between class counsel and their client, the court found that the burden of plaintiff's costs and fees in addressing defendant's misconduct shall be borne by defendant, in an amount of reasonable counsel fees and expenses to be determined by the court after submissions of appropriate affidavits of costs and fees. Id.

Plaintiff's counsel submitted the application for fees in compliance with L. Civ. R. 54.1 on September 19, 1997 requesting a total of $155,705.95, for fees and costs by four separate firms. The total requested is divided among them as follows:

Firm Hours Fees Costs

Poplar & Eastlack 84.10 $25,230.00 $0.00

Trujillo Rodriguez & Richards 54.25 $11,848.65 $206.75

Tomar Simonoff Adourian O'Brien Kaplan 98.40 $23,520.00 $823.25

Jacoby,& Graziano

Chimicles, Jacobsen, & Tikellis 295.50 $92,567.50 $1,509.80

TOTALS 532.25 $153,166.15 $2,539.80

These attorney's fee affidavits contain a total of 396 entries of allegedly billable events by an array of attorneys acting for Loatman.

Thereafter, on October 3, 1997, defendant submitted a brief in opposition to plaintiff's application for fees which contains numerous specific objections. *fn1 Plaintiff responded on October 17, 1997, generally reiterating their position that the fees applied for reflected services performed in response to defendant's sanctionable conduct and providing affidavits on customary attorneys' fees in support of the lodestar affidavits they submitted with the original application.

Finally, defendant responded on October 31, 1997, essentially summarizing the objections to plaintiff's application for fees.

In a piece of litigation marked by extreme polarization, this court is now confronted with the task of determining an appropriate monetary sanction lying at the collision of fee petitions which are sometimes excessive, vague, and duplicative, and defendant's opposition which contests essentially every single entry, often without plausible reason and occasionally with distortions of the record. A time-consuming and distasteful review process has been the result. I am not inclined to permit litigation over every minute of time claimed, and some simplifying and rounding off have been added occasionally, in my discretion, so that a just and fair sanction can be calculated. It should scarcely require noting that this determination of an appropriate sanction against disruption and delay of orderly proceedings has regrettably necessitated so much further expenditure of court time.


This dispute arises in the context of a class action litigation in which the plaintiff, Annette Loatman, was seeking to represent the class of plaintiffs who were borrowers who had purchased so-called "force- placed" insurance coverage through the bank. Id. at 595. Defendant desired a settlement, but negotiations between plaintiff's class counsel and defendant's counsel had been going badly, and on June 19, 1996, defendant's Senior Vice President, Charles Maraziti, contacted Mrs. Loatman and her husband and attempted to convince her to settle the case for $25,000, an amount which is about 15 times the worth of her personal claim. Id. at 598. He did this in direct violation of the court's instructions that no settlement offers should be made without clarification of ethical considerations related to the effect of a proposed settlement on the other members in the potential class. Id. at 595.

Mrs. Loatman informed her attorneys of the contact the same night. Id. at 598. They contacted the court the next day, June 20, 1996, requesting a hearing regarding the granting of a Temporary Restraining Order ("TRO") prohibiting the defendant from any further direct contact with Mrs. Loatman. Id. at 599. The court set a return date of June 24, 1996. Plaintiff filed her brief in support of the motion for a TRO the next day, June 21, 1996. Id.

As a result of the June 24, 1996 hearing, an order was issued on June 26, 1996, granting the TRO or preliminary injunction. Id. On the same day, a hearing was granted on plaintiff's application for expedited discovery so that information could be gathered regarding the circumstances surrounding Mr. Maraziti's behavior and whether defendant's counsel had any involvement in the incident. Additionally, defendant was ordered to show cause why the TRO should not be extended for the duration of the litigation. On July 10, 1996, the temporary restraining order and the order to show cause were amended, and on July 22, 1996, plaintiff's counsel filed a motion to compel discovery and for sanctions, which was met by a cross-motion filed August 2, 1996. In the meantime, the parties engaged in expedited discovery aimed at the issue of the defendant's contacts with plaintiff.

At the hearing on August 15, 1996, the court determined, for reasons stated in the Oral Opinion of that date, that a permanent order should be entered under Rule 23(d), Fed. R. Civ. P., to bar defendant Summit Bank, its officers, employees, and attorneys, from having any communication with plaintiff Loatman outside the presence of her attorney, and also to bar defendant from initiating any communication about the litigation with any member of the uncertified class of plaintiffs without prior court approval under Rule 23(d). (See Order filed August 16, 1996.) Accordingly, a discovery motion by plaintiff to compel testimony and production of documents (and a cross-motion by defendant for a protective order) pertaining to the issue of the impermissible defendant conduct became moot and these discovery motions were dismissed, no further discovery being necessary. The dismissal of the discovery motions was expressly without prejudice to an application for appropriate sanctions. *fn2 (Id.) On October 1, 1996, plaintiff submitted a motion for sanctions against defendant based mainly on Maraziti's improper contact with Ms. Loatman, but later withdrew it to pursue negotiations with defendant. This court, therefore, dismissed plaintiff's motion for sanctions without prejudice so negotiations could proceed.After negotiations again proved fruitless, plaintiff reinstated her motion for sanctions, and at the July 18, 1997 hearing in this court, the parties argued the motion along with several others. Then on July 25, 1997, before the decision was rendered on plaintiff's sanction motion, defendant instituted a meritless cross-motion for sanctions against plaintiff. This court resolved both motions in its opinion of August 28, 1997, denying defendant's motion for sanctions and granting in part and denying in part plaintiff's motion for sanctions against defendant and ordering defendant to pay plaintiff's reasonable costs and fees incurred as a result of defendant's sanctioned behavior.


Because they are in a position of familiarity with the facts of a case, district courts have discretion in determining the appropriate amount of fee awards. Hensley v Eckerhart, 461 U.S. 424, 437 (1983). In Hensley, which arose under the Civil Rights Act's fee award statute 42 U.S.C. § 1988, the Supreme Court determined that reasonable attorney's fees are determined using the lodestar approach, calculated by multiplying the number of hours worked by an appropriate hourly rate. Id. at 433. The party applying for fees bears the burden of submitting evidence in support of the request, and the court has the discretion to reduce the fee award where such supportive documentation is lacking. Id. Although the present award is made under the inherent authority of the court rather than under s 1988, the Hensley type of lodestar analysis provides a useful framework, subject to simplifying assumptions that facilitate the determination of a just award to redress the defendant's misconduct in a monetary sense without unduly prolonging this fee dispute.

A threshold consideration in the upward or downward adjustment of the fee award is the degree of success achieved by the work for which fees are requested. Id. at 434. In addressing this issue, the court must ascertain whether the work is related to a claim in regard to which the fee applicant achieved a substantial measure of success, in which case the work is compensable. Id. However, work performed in pursuit of an unsuccessful claim cannot be considered to have contributed to the result achieved, and is therefore not compensable. Id. at 435.

The court may exclude from the fee award compensation for time not reasonably expended for other reasons as well. Id. For example, where cases are overstaffed, the court may deduct charges for unnecessarily duplicative work. Id at 433. The Third Circuit has said, "members of the bar are quasi-officers of the court and they are expected to be careful ... in their representations to the court." Hall v. Roselle, 747 F.2d 838, 841-42 (3rd Cir. 1984). Accordingly, the fee applicant should exercise "billing judgment" and "should make a good faith effort to exclude from a fee request hours that are excessive, redundant, or otherwise unnecessary, just as a lawyer in private practice ethically is obligated to exclude such hours from his fee submission." Hensley, 461 U.S. at 434.

The court may also choose to reduce a fee award when services that could be performed by associates or paralegals at lower rates were performed and billed at partner rates because, as defendant points out, "A Michelangelo should not charge Sistine Chapel rates for painting a farmer's barn." Ursic v. Bethlehem Mines, 719 F.2d 670, 677 (3d Cir. 1983); Daggett v. Kimmelman, 617 F.Supp. 1269, 1281 (D.N.J. 1985), aff'd, 811 F.2d 793 (3d Cir. 1987). Moreover, while a partner may nevertheless justify the billing of a high rate based on his or her ability to complete tasks more efficiently than lesser paid workers, a fee applicant may not charge a high hourly rate based on his or her experience and expertise and then also bill for an inordinate number of hours. Id.

The burden of showing that the rates applied for are comparable to rates charged for similar legal work by attorneys in the community of comparable skill, experience, and reputation is on the fee applicant. Blum v. Stenson, 4655 U.S. 886, 895 n.11 (1984). It is within the court's discretion to reduce the rate at which services are billed to one that is customary in the prevailing market. Public Interest Research Group of New Jersey Inc. v. Windfall, 51 F.3d 1179, 1185 (3d Cir. 1995).

Finally, in applying for fees awarded by the court for sanctionable conduct, the parties should adequately explain how the fees sought are related to the sanctioned conduct. In re: Tutu Wells Contamination Litigation, 120 F.3d 368, 390-391 (3d Cir. 1997)(upholding a district court's denial of a portion of the fees sought partly because the party's submission to the court did not clearly show the relationship of the expenses to sanctionable conduct and finding that the court's refusal to devote its resources to the scrutiny of the submissions for the benefit of the plaintiff was within its discretion in preventing a "second major litigation" under Hensley, 461 U.S. 424 at 437).


A. Hourly Rates

The first question to be decided is whether the rates charged by plaintiff's counsel are within the limits of customary fees charged by attorneys of similar experience and expertise in the prevailing market. Defendant argues that the rates submitted by plaintiff are excessive. In support of this proposition, defendant has submitted fee affidavits from various attorneys. Plaintiff has also submitted such affidavits in support of the fees it requests.

The following is a chart of the name abbreviations used by plaintiff's counsel organized by firm, along with each attorney's fee and year of graduation from law school or admission to the bar:

Firm: Poplar & Eastlack

CDP Carl D. Poplar 1967 $300.00

Firm: Tomar, Simonoff, Adourian, O'Brien, Kaplan, Jacoby & Graziano

CNR Charles N. Riley 1973 $250.00

DSM Donna Siegel Moffa 1982 $200.00

Firm: Trujillo, Rodriguez, & Richards (on and after April, 1997)

LJR Lisa J. Rodriguez 1983 $335.00

INR Ira Neil Richards 1986 $290.00

JP James Penzi 1996 $120.00

KIT Kenneth I. Trujillo 1986 $290.00

Firm: Chimicles, Jacobsen,& Tikellis (until March 31, 1997)

LJR Lisa J. Rodriguez 1983 $335.00

MBR Miles B. Rittmaster 1980 $305.00

RJK Robert J. Kriner 1988 $230.00

AIA Alex I. Arezina Law Clerk $100.00

LCD Lisa C. Dykstra 1992 $200.00

JRM James R. Malone 1984 $335.00

NEC Nicholas E. Chimicles 1973 $435.00

MDD Michael D. Donovan 1984 $335.00

INR Ira Neil Richards 1986 $290.00

The court finds the hourly rates of Mr. Poplar, Mr. Riley, and Ms. Moffa are reasonable and reflect the prevailing rates for talented and experienced federal litigation counsel in this court's community. These rates will be used as the benchmark of reasonableness for the hourly rates of the Chimicles and Trujillo firms' attorneys. *fn3 The hourly rates for the Chimicles and Trujillo firm attorneys for purposes of this motion will be reduced by 20 percent to bring them into line with prevailing hourly rates for excellent counsel with similar years of experience in complex litigation in this area. Throughout this Opinion, this 20 percent reduction will be called an "adjustment" of the fee requested by these listed attorneys to reflect reasonable hourly rates. This reduction yields the following rates per hour as of 1996- 97:

Lisa J. Rodriguez `83 $268.00

Ira Neil Richards `86 $232.00

James Penzi `96 $96.00

Kenneth I. Trujillo `86 $232.00

Miles B. Rittmaster `80 $284.00

Robert J. Kriner `88 $184.00

Alex I. Arezina (Paralegal) $80.00

Lisa C. Dykstra `92 $160.00

James R. Malone `84 $268.00

Nicholas E. Chimicles `73 $348.00

Michael Donovan `84 $268.00

Defendant also contests the practice of billing in no smaller than quarter hour increments employed by the Chimicles firm, Poplar & Eastlack, and the Trujillo firm. Defendant argues that this practice is not customary and results in grossly excessive fees. Although the court is aware most firms now bill in one-tenth of an hour increments, it is not necessarily unreasonable to bill in quarter hour increments as some firms continue to do in their normal course of business.

Additionally, though it is probably the case in some instances, the court has no way of knowing if any given task, billed as one taking .25 hours to complete, actually took far less time and would, consequently, have no guidance in making adjustments. Finally, so many of the .25 hour charges on this fee application, to which defendant specifically objects, have been rejected as related to matters outside the scope of the fee award, a reduction of those .25 hour charges that remain to .10 or .20 hour charges would be of little benefit *fn4 to defendant.

B. Services Not Compensable Under August 28, 1997 Order

The remaining issues can be described as questions about the reasonableness of the time expended in generating these fees. First, defendant claims that many of the fees requested by plaintiff are unreasonable because they represent time and work expended in relation to matters for which defendant is not required to pay fees and costs. In this case, my opinion of August 28, 1997, enumerates the items for which plaintiff's counsel are entitled to be compensated. There I found that:

[T]he burden of costs and fees in addressing defendant's misconduct shall be borne by the defendant. Such costs include reasonable attorney's fees relating to the TRO, the permanent injunction, and the discovery taken in conjunction with those applications, together with transcript costs and other necessary expenses. Plaintiff is also entitled to reasonable attorney's fees relating to preparing plaintiff's motion for sanctions and responding to defendant's cross-motion for sanctions. Loatman, 174 F.R.D. at 605.

Although specific items are listed, the preceding passage is not necessarily exhaustive, and it is possible that some work performed by plaintiff's counsel may be compensable even though it is not explicitly stated, as long as it was work necessitated directly by defendant's sanctionable conduct and was performed in a reasonable manner. The question before the court, then, is whether the fees sought represent work performed in relation to the sanctionable conduct of the defendant and whether they are compensable in light of both the parameters quoted in this court's August 28, 1997 opinion quoted above and the relevant caselaw.

1. Services Performed Before June 19, 1996

Defendant's first objection is to the fees applied for by Carl D. Poplar ("CDP") for services performed before June 19, 1996, the date that defendant began its engagement in improper settlement negotiations with Ms. Loatman. This is the specific conduct for which defendant was sanctioned, and defendant argues that because these legal services were performed prior to the sanctionable conduct of Mr. Maraziti, it cannot have been necessitated by defendant's actions.

This court said in its August 28, 1997 opinion that "[a]n appropriate sanction must restore respect for the orderly judicial processes and assure that others will not be tempted to employ harassment tactics striking at the heart of the class action process." Id. This court now finds that as the defendant was not sanctioned for any conduct committed prior to June 19, 1996 (although defendant's pre- June 19 conduct was relevant), the fees requested for work done before this date cannot have been related to work performed in response to defendant's sanctionable conduct and are not compensable under the court's order. *fn5

2. Services Not Related To Sanctionable Conduct

Defendant next objects to the inclusion of fees by a number of plaintiff's counsel for work done on matters pertaining to aspects of the underlying litigation which were not related to the work for which plaintiff was awarded fees. After close examination of plaintiff's application, this court finds that fees have been applied for which represent work done in relation to other matters including plaintiff's response to Summit's motion for summary judgment and motion for a stay of discovery, the Gundle claims and related discovery issues, plaintiff's motion to consolidate the Loatman and Gundle actions, plaintiff's motion for class certification, and settlement efforts. As fees for work performed in relation to these matters are clearly not included in this court's August 1997 order, they will be disallowed. *fn6

C. Fees for Compensable Services

Defendant does not raise objections to the inclusion of fees related to the TRO, the limited discovery authorized by this Court's order of 6/24/96, or the parties' cross-motions for sanctions. Defendant does, however, contend that the fees requested in relation to these matters are excessive. Defendant further objects to all services rendered in preparing the final injunction brief on the ground that no brief was necessary and none was served. Each of these areas of activity have been carefully examined, and the court makes the following determinations.

1. The TRO

First, defendant argues that the use of three law firms, seven partners, one of counsel, two associates, and one law clerk for work performed in regard to the TRO is excessive, resulting in duplicative and unnecessary work on the brief and at the hearing.

Plaintiff's fee application indicates that counsel has applied for a total of $25,131.25 in fees related to the TRO. This is comprised of several categories. First, plaintiff requests $16,266.25 *fn7 in fees for work performed by at least eight attorneys in strategizing and conferring ($5,573.75 *fn8 ), and in drafting the TRO brief ($10,692.50 *fn9 ) which was served and filed before the close of business on June 21, 1996, about 48 hours after plaintiff's counsel learned of Maraziti's contact with Ms. Loatman.

This brief cited to eight cases and contained 10 pages of argument. Much of the research and all of the drafting was done by partners at partner rates. The court recognizes that plaintiff's counsel found itself in a crisis situation; it therefore views the portion of the fee application related to this specific time period somewhat more leniently, and does not agree with defendant's contention that billing research and drafting at partner rates is per se unreasonable.

However, as mentioned above, while high rates may be justified by the greater efficiency with which a more experienced attorney may complete a task, such expertise should be reflected by fewer hours of work. In this case, such expertise is not reflected in the excessive hours needed to complete the work in question, and much of the work done seems duplicative and unnecessary, as does the excessive number of individuals involved in the work. The court will therefore adjust the number of hours to an amount reasonable in light of the rates billed, the complexity of the work performed, and the difficult situation in which plaintiff's counsel found themselves. The adjusted totals of $4,729 for strategy and discussions and $8,554 for drafting the TRO brief leads to a total of $13,283 for these services, which will be further reduced by one-third to reflect inefficiencies and duplication. The approved amount for the TRO brief becomes $8,855.

Additionally, fees totaling $1,556.25 have been sought for work on a revised brief which will be disallowed as unreasonable because after careful comparison, the court can find no meaningful difference between the original brief and the revision. Therefore, the revision can not have contributed to plaintiff's success in winning her motion for the TRO and cannot be compensated. *fn10

Finally, eight attorneys have billed for services regarding preparation for and attendance at the June 24, 1996 TRO hearing and also for participation in post hearing conferences for a total of $7,308.75 in fees. *fn11 The involvement of so many attorneys was excessive and unnecessary. The attendance of three attorneys, namely Mr. Poplar, who represented class counsel, Ms. Rodriguez (who argued for the TRO), and Mr. Riley (who had substantial direct contacts with Annette Loatman regarding the facts of the emergent matter) is appropriate, and this amount adds up to an adjusted total of $4,719. *fn12 Therefore, fees submitted by the other attorneys for attendance at the June 24th hearing will be deducted as duplicative, *fn13 and the awarded fees for preparation and attendance at the June 24th TRO hearing will be $4,719.

2. Discovery

Defendant claims that the fees applied for in relation to the limited discovery ordered by this court on June 24, 1996 are excessive. In that order, this court permitted the parties to serve on each other interrogatories and document requests limited to five total items each. Additionally, this court permitted plaintiff to depose Mr. Maraziti and an attorney or attorneys within the Office of General Counsel of United Jersey (Summit) Bank, while defendant was permitted to depose Ms. Loatman. All depositions were limited to one hour in duration excluding lawyers' objections. They were conducted in the court on 7/9/96.

In relation to these matters, plaintiff requests a total of $26,470. Of this, $13,512.50 represents fees for preparation and attendance at the depositions themselves by four attorneys. *fn14 Since the court finds that two attorneys would have been adequate, all fees requested for preparation and attendance at the depositions will be reduced by half, and $6,756 will be awarded. In regard to the remainder of the fees relating to discovery, which total 12,957.50 *fn15 , the court will also reduce by half to reflect the inefficiencies of multiple-attorney coverage and, to a lesser extent, unreasonable lengths of time expanded for tasks, and $6,479 will be awarded.

Defendant claims the fees for the parties' cross-motions for discovery were disallowed by this court's August 15, 1996 Order. However, this is not the case. Plaintiff's counsel request $26,703.75 *fn16 in relation to the discovery cross-motions, including preparation and attendance at the hearing. After Chimicles' portion of this total, $21,053.75, is adjusted for the 20% hourly rate reduction, plaintiff's total fee requested amounts to $22,493. The court finds this is excessive in light of the work performed and the issues involved and the court will reduce this amount by one-third, yielding $14,995. Thus, the sum of $14,995 is awarded in connection with the plaintiff's counsel's efforts in the discovery cross-motions including attendance at the August 15th hearing.

3. The Permanent Injunction

Plaintiff is entitled, under this court's order, to fees for work performed in relation to the permanent injunction. Fees in connection with attending the August 15th hearing at which the discovery cross- motions were heard, have already been included above and will not be discussed again in connection with the permanent injunction.

By the court's calculation, plaintiff also requests $19,376.25 *fn17 , adjusted to $15,688 *fn18 , for work performed in researching and drafting a brief in support of the granting of the permanent injunction. Defendant objects to these because this brief was not required by the court. Rather, plaintiff was given the opportunity to file supplemental papers in this court's June 24, 1996 order granting the TRO and defendant was issued an order to show cause why the TRO should not be made permanent.

Though plaintiff's counsel undeniably performed work in preparation of supplemental material, no such document was ever served or filed. As such, defendant argues, it could not have contributed to plaintiff's success in obtaining the permanent injunction and should not be compensated. Defendant's argument is not without merit. However, the court recognizes that some of the time spent in preparation of this unfiled brief was reasonably necessary as preparation for the August 15, 1996 hearing. Therefore, the court will approve one third of the fees applied for in regard to the permanent injunction brief as preparation for oral argument on the issue and other issues related to defendant's misconduct. Reducing $15,688 by two-thirds equals $5,229, which is approved for efforts in preparing supplemental material/preparation in connection with the August 15th hearing.

4. The Cross-Motions For Sanctions

Defendant makes similar claims of excessiveness in regard to the fees for work done in relation to plaintiff's sanctions brief. From 9/9/96 to 9/27/96 a total of $12,418.50 *fn19 (adjusted to $9,934.80) was billed by Lisa J. Rodriguez ("LJR") and Miles B. Rittmaster ("MBR") of the Chimicles firm for 40.75 hours work on a brief that contained nine pages of legal argument and cited to twelve cases, five of which were previously cited in plaintiff's TRO brief. Again, as the work was performed at partner rates, the court will reduce the hours needed to complete the task to a number which more appropriately reflects the expertise of the writers. Given the relative shortness of this brief and the circumstance that the factual issues had previously been developed through other compensable efforts of counsel, the adjusted fee of $9,934.80 will be reduced by one-third, yielding $6,623.

Additionally, four different attorneys billed a total of $1,937.50 for reviewing defendant's reply brief between 10/21/96 and 10/31/96 *fn20 . The services were reasonable in light of the comprehensive nature of the defendant's brief under review, and the sum of $1,938 is allowed for this purpose. The additional billings by an uninvolved attorney, INR, will not be allowed. *fn21 Similarly, three attorneys (CDP, CNR, and LJR) submit fees for preparation and attendance at the July 18, 1997 hearing at which the sanction motion was one of four motions argued. CDP's efforts were directed solely toward the sanctions motion, and CDP is the only attorney who actually argued the sanctions motion, and his time for preparation and attendance was reasonable and necessary and is approved in the amount of $2,700.00. *fn22 The efforts of LJR were twofold, namely, to prepare for her oral argument concerning the summary judgment and class certification motions, and to augment CDP in the sanctions motion; LJR has already reduced her time for preparation to reflect only the sanctions aspect of her work [Rodriguez Aff. ¶ 9], and that time will be approved as reasonable and necessary, and her time for attendance at the hearing itself will be reduced by one-half to recognize that only the sanctions component is compensable, resulting in an award of $1,447.20. *fn23 For CNR, his preparation and attendance at the hearing was necessary, and he addressed the sanctions issue briefly (Tr. 7/18/97 at 83-85), and the requested amount of $1,175 is approved. Therefore, for preparation and attendance at the July 18, 1997 hearing, the total amount approved is $5,322.

5. Services Performed After July 18, 1997

Unfortunately, defendant's harassment tactics did not even end with the oral arguments on July 18th. As I previously have found, the defendant filed a non-meritorious so-called cross-motion for sanctions a week after the argument, on July 25, 1997. See Loatman, 174 F.R.D. at 606 & n. 9. This cross-motion was found to be "a further extension of defendant's oppressive conduct toward plaintiff and her attorneys" and "another failed harassment tactic," id. at 608. The efforts of plaintiff's counsel in responding to this cross-motion were found to be necessary to understand and redress the underlying misconduct by defendant, since the facts and law of the cross-motion were intertwined with plaintiff's sanctions motion. Id. at 608-609.

In this period, 12 items *fn24 are ruled as unrelated to the subject matter of the cross-motions or as too vague to establish relatedness. The remaining 45 items are compensable because they were necessary and reasonable, with the exception that the 7/28/97 entry for LJR is reduced from $670 to $83.75 because it appears her conference with INR was only 0.25 hours, not 2.00 hours according to INR's entry. Defendant's objections to the time expended in researching and writing plaintiff's opposition to defendant's cross-motion are overruled; the resulting brief was excellent and helpful to the court, showing sophistication in its content and approach. The amount awarded for these 45 items is $13,856. *fn25

Finally, the court overrules defendant's objection to compensating plaintiff's counsel for the time expended in this fee petition due to errors or discrepancies in the billings. First, the amounts sought are reasonable (9/17/97, CDP for $300; and 9/18/97, CNR for $750), and second, Ms. Rodriguez did not even seek fees, although she could have, for her substantial efforts in preparing and reviewing the billings and for writing an excellent reply letter dated October 17, 1997. The amount approved for preparation of the fee petition is $1,050.


The court's order also provided for recovery of reasonable and necessary costs incurred by plaintiff's counsel for these purposes. The Chimicles firm incurred $1,509.80 in such costs for court reporter fees (Affidavit of James R. Malone, Jr. at ¶ 15), and the Trujillo firm incurred $296.75 in such costs for couriers, transcripts, and one-half of photocopying costs (Affidavit of Lisa J. Rodriguez at ¶ 12), and the Tomar firm incurred $823.25 in such costs for copying, delivery, and the like (Affidavit of Charles N. Riley at ¶ 10 & Ex. A). These amounts are reasonable and necessary and such costs are awarded in the amount of $2,539.80.


The court recognizes that payment of these fees and costs has been delayed for more than two years since this court determined, on August 28, 1997, that plaintiff should receive payment of this sanction. Delay in payment may be compensated in the court's discretion, Missouri v. Jenkins, 491 U.S. 274, 284 (1989), either by calculating the lodestar in current dollars or by factoring in interest after the lodestar has been computed. Id. Such an adjustment should accrue from the date the trial court determines fee entitlement, not the later date when it has finally sifted through the petitions and arguments and quantified the award. Jenkins v. Missouri, 931 F.2d 1273, 1276 9th Cir.), cert. denied, 112 S. Ct. 338 (1991); Mathis v. Spears, 857 F.2d 749, 760 (Fed. Cir. 1988).

No fixed rule directs the appropriate measure of such interest rates. Some courts have used the prime rate, see Skelton v. General Motors, 860 F.2d 250, 255 (7th Cir. 1988), cert. denied, 493 U.S. 810 (1989), or the IRS adjusted prime rate, see Lattimore v. Oman Constr., 868 F.2d 437, 438 n.2 (11th Cir. 1989), or have disapproved using the conservative municipal bond interest rates instead of prime rates, see Alberti v. Klevenhagen, 896 F.2d 927, 938 (5th Cir.), vac. in part on other grounds, 903 F.2d 352 (5th Cir. 1990).

The court finds that an upward adjustment of the lodestar is necessary to fairly compensate plaintiff's counsel for services rendered in 1996 and 1997, where judgment is being entered in 1999. The prime bank rate, as established by the Federal Reserve Board, represents the most favorable rate for use of funds by a bank in borrowings from the Federal Reserve System of up to seven days, and it is therefore a reliable index for other uses of funds in a commercial setting. The prime rate in August, 1997 was 8.50 percent, and the current prime rate is 8.25 percent. The average rate for this 26-month period was 8.21 percent, which is the rate this court will use.

This 8.21 percent rate at simple interest from August 28, 1997 to October 14, 1999 will be applied to the total costs and fees to fairly and adequately adjust for the delay in payment while defendant continued to have use of these funds.


For the foregoing reasons, the Court will grant plaintiff's motion for fees and costs in part and deny it in part. The court's determinations of amounts to be awarded are summarized as follows:

1. The TRO

Strategy and briefing $8,855.00

Preparation and attendance 4,719.00

2. Discovery

Prepare and attend depositions 6,756.00

Other discovery tasks 6,479.00

Cross-motions for discovery and August 15th hearing 14,995.00

3. Permanent Injunction

Preparation for Aug. 15 hearing 5,229.00

4. Motion for Sanctions

Briefing 6,623.00

Review defendant's brief 1,938.00

Preparation and attend July 18, 1997 hearing 5,322.00

5. Services After July 18, 1997

Response to defendant's cross-motion 13,856.00

Preparation of fee applications 1,050.00

6. Costs

Necessary and reasonable expenses 2,540.00

Total of Items 1-6: $78,362.00

7. Interest for Delay of Payment

8/28/97 to 10/14/99 at 8.21%

per annum $13,671.00


This court finds that the sum of $92,033 shall be paid as a sanction under the inherent power of this court to redress the willful misconduct of defendant Summit Bank in this litigation. The sanction award is made as a single sum to the four involved law firms for plaintiff because the court has not wished to prolong this matter by making tedious item-by-item calculations for each firm. Counsel are perfectly capable of doing so, or to otherwise agree among themselves how this lump sum shall be divided. *fn26 The accompanying Order is entered as the final judgment herein.

JEROME B. SIMANDLE U.S. District Judge


This matter having come before the Court upon the plaintiff's application for fees and costs pursuant to this `court's Opinion and Order filed August 28, 1997; and the Court having considered the parties' submissions; and for the reasons expressed in the Opinion of today's date;

It is this 15th day of October, 1999 hereby

ORDERED, ADJUDGED, and DECREED that defendant Summit Bank shall forthwith pay to plaintiff's counsel, namely, Poplar & Eastlack, and Tomar, Simonoff, Adourian, O'Brien, Kaplan, Jacoby & Graziano, P.C., and Trujillo, Rodriguez & Richards, L.L.C., and Chimicles, Jacobsen & Tikellis, severally, the sum of Ninety-Two Thousand Thirty-Three Dollars and No Cents ($92,033.00); and

IT IS FURTHER ORDERED that defendant Summit Bank shall forward its payment in this amount, plus any applicable post-judgment interest, to Charles N. Riley, Esquire, to be held in the Trust Account of the Tomar firm and to be disbursed, through Mr. Riley, to the four above-named firms in amounts equal to their respective shares of this sanction fund consistent with the court's Opinion of today's date, or as they otherwise shall agree.

JEROME B. SIMANDLE U.S. District Judge

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