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Spectrum Produce Distributing, Inc v. Fresh Marketing

June 20, 2012

SPECTRUM PRODUCE DISTRIBUTING, INC.,
PLAINTIFF,
v.
FRESH MARKETING, INC., ET AL.,
DEFENDANTS.



The opinion of the court was delivered by: Honorable Jerome B. Simandle

OPINION

SIMANDLE, Chief Judge:

I.INTRODUCTION

This matter comes before the Court on Plaintiff's motion for attorney's fees [Docket Item 28] pursuant to 7 U.S.C. § 499e(c)(2). Plaintiff's application seeks $66,548.95 in attorney's fees and costs. Defendants, in default, file no opposition to this motion. For the reasons discussed herein, the Court will grant Plaintiff a reduced award of $31,773.95 in attorney's fees and costs.

II.BACKGROUND

Plaintiff filed the instant motion following the Court's award of default judgment on Plaintiff's claims for violation of the Perishable Agricultural Commodities Act ("PACA"), 7 U.S.C. §499. The procedural history and underlying facts of this case are described in the Court's March 12, 2012 memorandum opinion, see Spectrum Produce Distrib., Inc. v. Fresh Marketing, Inc., Civil No. 11-6368 (D.N.J. Mar. 12, 2012), and are reviewed herein only to the extent necessary to serve as a context for the fee application under consideration.

A.Procedural History

Between March 2011 and May 2011, Spectrum Produce ("Spectrum" or "Plaintiff") sold Fresh Marketing, Inc. nine truckloads of grapes for $325,426.50.*fn1 Id., at *1. Defendants failed to complete payment, leaving an outstanding balance of $304,298.50. Id. Plaintiff, a seller of perishable agricultural commodities who included the required statutory language in its invoices, is a beneficiary of the statutory trust created pursuant to PACA, 7 U.S.C. § 499(e)(c), until full payment is made for the produce. On September 28, 2011, Plaintiff retained the law firm of Mintzer, Sarowitz, Zeris, Ledva & Meyers, LLP to assist in recovering the unpaid balances pursuant to the PACA trust.

On November 1, 2011, this Court issued a temporary restraining order against Defendants. [Docket Item 4]. On November 15, 2011, this Court further entered a preliminary injunction against Defendants. [Docket Item 14.] Following the Clerk's entry of default, Plaintiff moved for, and this Court on March 12, 2012 granted in part, default judgment against all four defendants in the amount of $345,183.09. Spectrum Produce Distrib., Inc., Civil No. 11-6368. Plaintiff's motion for default judgment as to attorney's fees and costs was denied by this Court "without prejudice to Plaintiff filing the necessary materials to support judgment as to those amounts consistent with L. Civ. R. 54.1 and 54.2 within fourteen (14) days of the entry of this order." [Docket Item 27.] Specifically, the Court noted that Plaintiff "has not demonstrated that the amount incurred, $59,214.80, was necessary to collect the balance due," and "offers no support for the figure, and on its face it would appear to represent more fees than were necessary to prevail in this unopposed case" in noncompliance with L. Civ. R. 54.2. Spectrum Produce Distrib., Inc., Civil No. 11-6368 at *3 [Docket Item 26.] The Court further noted the motion did not provide for shifting of Plaintiff's costs, and advised that Plaintiff must separately move for an award of costs pursuant to "the applicable law and L. Civ. R. 54.1." Id. The instant application for attorney's fees and costs was subsequently filed.*fn2

B.Attorney's Fees and Costs

Plaintiff's application for attorney's fees and costs requests compensation for services rendered of $64,872.50*fn3 and for costs amounting to $1,676.45. (Certification of Counsel ¶¶ 17 & 18.) Breaking down the request for attorney's fees, attorney Minos H. Galanos, Esq. billed 183.5 hours; attorney Edward Jarosz, Esq. billed 1.2 hours; and law clerk Stephanie N. Luzzi billed 1.3 hours. (Id. ¶¶ 11-13.) The billing rates Plaintiff submits for this work are $350/hour for attorneys and $175/hour for law clerks. (Id. ¶ 15).

III.DISCUSSION

A.Award of Fees

Attorney's fees and expenses may be awarded to a prevailing party in a federal litigation where authorized by statute, court rule, or contract. See Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240, 257 (1975); Hall v. Cole, 412 U.S. 1, 4 (1973); Apple Corps. Ltd. v. International Collectors Soc., 25 F.Supp. 2d 480, 484 (D.N.J. 1998). Under PACA, a party can recover costs other than amounts due for produce "that are due contractually or otherwise 'in connection with' the transaction that is the subject of the PACA trust claim." Pacific Intern. Marketing, Inc. v. A & B Produce, Inc., 462 F.3d 279, 286 (3d Cir. 2006) (citing Middle Mountain Land & Produce, Inc. v. Sound Commodities, Inc., 307 F.3d 1220, 12203 (9th Cir. 2002)). "Such related expenses include attorney fees and interest that buyers and sellers have bargained for in their contracts." Country Best v. Christopher Ranch, LLC, 361 F.3d 629, 632 (11th Cir. 2004).

In this case, Plaintiff's invoices contained the following language: "In the event of our trust claim, we will seek to recover reasonable attorney's fees and the cost of recovery . . . . Interest and Attorney fees necessary to collect any balance due hereunder shall be considered sums owing in connection with the transaction under the 'PACA TRUST'." (Pls.' Mot. Prelim. Injunction Ex. A.)

Defendant's acceptance of these invoices, received with each shipment of grapes, gives good cause for finding that these terms formed part of the breached contract. Spectrum Produce Distrib., Inc., Civil No. 11-6368 at *3. As such the Plaintiff is entitled to all "attorney fees necessary to collect any balance due" under PACA.

B.Prevailing Party

A party may only be awarded attorney's fees if it is the prevailing party in the action. For Plaintiff to be the prevailing party, it must "receive at least some relief on the merits of [its] claim before [it] can be said to prevail." Texas State Teachers' Ass'n v. Garland Indep. Sch. Dist., 489 U.S. 782, 792 (1989). Within the Third Circuit, for a party to prevail a court must determine (1) the plaintiff obtained relief on a significant claim in the litigation; and (2) there is a causal connection between the litigation and the relief obtained from the defendant. See T.B. v. Mount Laurel Bd. of Educ., No.09-4780, 2012 WL 1079088 (Mar. 30, 2012)(citing Metro. Pittsburgh Crusade for Voters v. City of Pittsburgh, 964 F.2d 244, 250 (3d Cir. 1992)).

In the present case, Plaintiff clearly was the prevailing party. This Court timely granted Plaintiff's motions for a temporary restraining order [Docket Item 3], a preliminary injunction [Docket Item 14], and default judgment [Docket Item 27]. The Court awarded Plaintiff the requested final judgment along with prejudgment interest on that amount. Furthermore, given Defendants' previous nonpayment it is clear that there is a causal connection between the present litigation and the relief Plaintiff has obtained. As such, the Court finds Plaintiff to be the prevailing party and proceeds to consider what would be a reasonable award of fees.

C.Calculation of the Lodestar

The starting point for this Court's determination of a reasonable attorney's fee "necessary to collect any balance due" is calculation of the lodestar amount. Penn. Env't Def. Found. v. Canon-McMillan Sch. Dist. 152 F.3d 228, 231 (3d Cir. 1998). The lodestar is the "number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate." Hensley v. Eckerhart, 461 U.S. 424, 433 (1983); see also Lindy Bros. Builders, Inc. of Phila. v. American Radiator & Standard Sanitary Corp., 487 F.2d 161 (3d Cir. 1973). The party seeking an award of fees has the burden to provide evidence supporting the hours worked and rates claimed. Hensley, 461 U.S. at 434.

"To the extent the affidavit leaves any doubt as to the amount of fees to be awarded, these doubts shall be resolved against an award of fees. This is because the party seeking to recover attorney's fees bears the burden of establishing its right to them." Veneziano v. Long Island Pipe Fabrication & Supply Corp., 238 F.Supp. 2d 683, 695 (D.N.J. 2002). "Once the attorney's fee applicant has produced satisfactory evidence, the burden shifts to 'the party opposing the fee to contest the reasonableness of the hourly rate requested or the reasonableness of the hours expended.'" Marshak v. Treadwell, 2008 U.S. Dist. LEXIS 10567 (D.N.J. Feb. 13, 2008) (quoting Apple Corps. Ltd., 25 F.Supp. 2d at 485).

The court has discretion in deciding what attorney's fees are reasonable in a case, but cannot "decrease a fee award based on factors not raised at all by the adverse party" once the requesting party sufficiently demonstrates the reasonableness of the requested fees. Rode, 892 F.2d at 1183 (quoting Bell v. United Princeton Props., Inc., 884 F.2d 713, 720 (3d Cir. 1989)). Even in a default judgment ...


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