Laub v. Horbaczewski
Laub v. Horbaczewski
2020 WL 10817257 (C.D. Cal. 2020)
November 23, 2020

Stevenson, Karen L.,  United States Magistrate Judge

Spoliation
Cost Recovery
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Summary
The court granted the defendants' motion for spoliation sanctions against the plaintiff and awarded them $33,562.36 in reasonable fees and expenses incurred in filing and briefing the motion. The court applied the lodestar method to calculate the fee award, reducing the attorney hours and hourly rates to account for the complexity of the legal issues and the financial circumstances of the plaintiff. The award included fees for the motion, the related ex parte response, and the fee request.
Additional Decisions
JUSTICE LAUB AND DANIEL KANES, Plaintiffs,
v.
NICHOLAS HORBACZEWSKI, et al., Defendants
Case No. CV 17-6210-JAK (KS)
United States District Court, C.D. California
Signed November 23, 2020

Counsel

Patrick M. Ryan, Stephen C. Steinberg, Chad DeVeaux, Gabriella A. Wilkins, Joseph John Fraresso, Bartko Zankel Bunzel and Miller PC, San Francisco, CA, for Plaintiffs.
Kenneth A. Kuwayti, Morrison and Foerster LLP, Paolo Alto, CA, Andrew Ditchfield, Pro Hac Vice, Brian M. Burnovski, Pro Hac Vice, Peter M. Bozzo, Pro Hac Vice, Davis Polk and Wardwell LLP, New York, NY, Nicholas Rylan Fung, Morrison and Foerster LLP, Los Angeles, CA, for Defendants.
Stevenson, Karen L., United States Magistrate Judge

ORDER GRANTING, IN PART, DEFENDANTS' REQUEST FOR ATTORNEYS' FEES INCURRED IN FILING AND BRIEFING MOTION FOR SPOLIATION SANCTIONS [DKT. NO. 482]

*1 Before the Court for decision is Defendants Nicholas Horbaczewski and Drone Racing League, Inc.'s (“Defendants' ”) Request for Reasonable Fees and Expenses Incurred in Filing and Briefing the Motion for Spoliation Sanctions Against Justice Laub, which Defendants filed on August 5, 2020 along with the Declaration of Brian M. Burnovski (“Burnovski Decl.”) and related exhibits (together, the “Fee Request”). (Dkt. No. 482.) On September 22, 2020, pursuant to the parties' Stipulation (see Dkt. No. 485), Plaintiff Justice Laub (“Plaintiff” or “Laub”) filed an Opposition to the Fee Request along with the Declarations of Justice Laub (“Laub Decl.”) and Patrick Ryan (“Ryan Decl.”) and related exhibits (the “Opposition”). (Dkt. No. 491.) On September 30, 2020, Defendants filed a Reply in support of the Fee Request (the “Reply”). (Dkt. No. 506.) On October 2, 2020, Plaintiff filed an Objection to and Motion to Strike Defendants' Reply (Dkt. No. 507) and a Request for Leave to File Supplemental Declaration of Justice Laub in Opposition to Defendants' [Fee Request] re: Recent Change in Circumstance (“Supplemental Laub Decl.”) (Dkt. No. 508). On October 5, 2020, Defendants filed their Opposition to Plaintiff's Application to Strike Reply. (Dkt. No. 513.) On October 8, 2020, the Court granted Plaintiff's request to file the Supplemental Laub Declaration (Dkt. No. 515), and, on October 16, 2020, the Court denied Laub's Objection and Motion to Strike Defendants' Reply (Dkt. No. 519). On October 21, 2020, the Court held a telephonic hearing on the Fee Request and took the matter under submission. (Dkt. No. 520.)
Having considered the parties' moving papers and evidence, along with the relevant pleadings and files in this action, case authorities, and the arguments of counsel at the hearing, the Court, for the reasons outlined below, GRANTS the Fee Request in part in the amount of $33,562.36.
I. INTRODUCTION
On July 21, 2020, the Court granted Defendants' Motion for Spoliation Sanctions Against Justice Laub (the “Spoliation Motion”) in part and, pursuant to Rule 37(e), authorized Defendants to bring the instant Fee Request to recover reasonable expenses, including attorneys' fee, incurred in bringing the Spoliation Motion. (Dkt. No. 480 at 13.) According to the Fee Request, defense counsel expended 216.9 attorney hours in connection with preparing the Spoliation Motion, 14.7 hours on preparing the Fee Request, and 41.1 hours for preparing the Reply in support of the Fee Request, and also incurred $200 in expenses associated with the expert declaration of Michael Kunkel. (Fee Request at 9; Reply at 22-23.) After a “modest reduction” by 25% of the hours attorneys Ditchfield, Burnovski, and Bozzo each spent on the opening brief, reply brief, and oral argument, to account for portions of the Spoliation Motion that were denied, Defendants request an award of $161,551.10 for fees and expenses incurred in bringing the Spoliation Motion. (Reply at 14-15 (25% reduction in hours); 23 (total request after reduction).)
II. THE PARTIES' ARGUMENTS
A. Defendants' Position
*2 Defendants argues that the fee award sought here is “appropriate in light of the extensive resources that Defendant expended in securing spoliation sanctions against Mr. Laub.” (Fee Request at 2.) Defendants emphasize that they submitted a total of 40 pages of briefing in connection with the Sanctions Motion, including a 24-page opening brief with two supporting declarations and 14 exhibits; and a 16-page reply brief with two supplemental declarations and four exhibits. (Id. at 5.) In addition, Defendants note that they “reviewed and analyzed Mr. Laub's twenty-five-page opposition” with its supporting declarations and exhibits and responded to Laub's “separate objection to Defendants' expert declaration.” (Id. at 2.) Finally, Defendants emphasize that they had to expend “additional resources in responding to Mr. Laub's ex parte application to strike Defendants' reply and for leave to file a sur-reply, which the Court rejected.” (Id.)
Defendants seek to recover fees for more than two hundred (200) attorney hours comprised of the following: 88.8 hours to prepare Defendants' opening brief; one hour to prepare a Stipulation; 75.7 hours to prepare Defendant's Reply brief; 18.3 hours to respond to Plaintiff's Ex Parte Application to Strike Defendants' Reply brief; and 18.1 hours to prepare for and participate in Oral Argument. (See Fee Request at 3 and Declaration of Brian M. Burnovski (“Burnovski Decl.”) ¶ 3, Ex. B.) Defendants also seek 14.7 hours for time expended on the Fee Request. (Fee Request at 6.) Defendants maintain that the total hours represent a ‘reasonable number of hours” expended on the Spoliation Motion and Fee Request. (Id. at 4.)
Defendants request fees billed for work performed by three attorneys from the law firm of Davis Polk & Wardwell LLP (“Davis Polk”): Andrew Ditchfield, Partner; Brian M. Burnovski, Of Counsel; and Peter M. Bozzo, a fifth year Associate. (Fee Reqeust at 7-8.) Mr. Ditchfield billed Defendants at $1,026 per hour; Mr. Burnovski billed at $843/hour; and Mr. Bozzo at $696/hour. (Id. at 7.) According to Defendants, “[t]hese rates reflect a substantial discount from the standard rate charged for work by each of these attorneys. (Id. (citing Burnovski Decl., ¶¶ 6-8).) Defendants point out that they are not seeking to recover fees incurred by their co-counsel at Morrison & Foerster who “spent over six hours assisting in preparation for the Motion, including facilitating consultation with Defendants' technical expert and reviewing Defendants' submission.” (Id. at 5.)
Defendants maintain that “[e]ach attorney's hourly rate is appropriate in light of his skill level and experience.” (Fee Request at 7.) Mr. Ditchfield, who has worked a Davis Polk since 2009 and was promoted to partner in 2016, has extensive experience in complex civil litigation. (Id. at 8; Burnovski Decl. at ¶ 6.) He is a graduate of Georgetown University Law Center and completed judicial clerkships in the Southern District of New York and the Second Circuit Court of Appeals. (Id.) Mr. Burnovski has worked at Davis Polk since 2006 and was promoted to partner in July 2020. (Id.; Burnovski Decl., ¶ 7.) Mr. Burnovski has broad experience in complex civil litigation and is a graduate of New York University School of law. (Id.) Mr. Bozzo, a graduate of Yale Law School who clerked for the Sixth Circuit Court of Appeals, is a fifth-year associate who has worked at Davis Polk since 2016. (Fee Request at 8; Bernovski Decl. ¶ 8.)
Defendants maintain that their attorneys' hourly rates are “in line with those charged for attorneys of similar experience by comparable law firms.” (Fee Request at 8.) To support this contention, Defendants reference a National Law Journal's (“NLJ”) Billing Report for 2017[1], as evidence that that the rates billed by Messrs. Ditchfield, Burnovski, and Bozzo are well within the range of rates charged by attorneys of similar experience from “comparable firms.” (Id.; Burnovski Del., ¶ 4, Ex. C.) The document that comprises Exhibit C to the Burnovski Declaration is a one-page summary chart showing hourly billing rates for private firm lawyers at twenty-six (26) top national law firms around the country and it identifies the location of each firm's largest U.S. office. (Id.)
*3 Defendants maintain that their request for compensation for 201.9 hours of work is justified by the time entries and the nature of the briefing that was required on the Spoliation Motion. (Fee Request at 6.) Defendants note that “[c]ourts in this circuit have upheld fee awards in comparable cases for similar to or greater than the amounts requested by Defendants.” (Id.) Defendants argue that their attorneys reasonably expended 14.7 hours on the Fee Request itself, which included “the time spent on researching and drafting the request and compiling the relevant billing records” and note that they will seek additional fees for work expended in preparing the reply in support of the Fee Request. (Id. at 7.) Finally, Defendants seek to recover $200 in “expert expenses” incurred by their forensics expert, Michael Kunkel, for preparing two declarations to rebut “Laub's assertion that text messages were no longer accessible on his iPhone after those text messages were deleted.” (Id. at 9; Burnovski Decl., ¶ 5, Ex. D.)
B. Plaintiff's Position
In its Opposition, Laub argues that the Fee Request should be denied primarily because an award of fees in the amount Defendants seek, “or any significant portion of it,” will cause financial ruin to Plaintiff, an unemployed live-event marketing consultant and planner, and artist.” (Opposition at 7-8.) Plaintiff argues that the “American Rule” of each party bearing its own costs “has been a bedrock principle of our courts since ... l796” and requires that even when the law permits fee shifting, the court must consider the sanctioned party's ability to pay. (Id. at 7 (citing Matter of Yagman, 796 F.2d 1165, 1185 (9th Cir. 1986).) Further, Plaintiff maintains that an award of attorneys' fees “must be commensurate with the sanctioned party's culpability” and emphasizes that the Court expressly concluded that Plaintiff did not act with specific intent to deprive Defendants of any deleted text messages. (Opposition at 8.)
Plaintiff contends that the Fee Request should be denied on the further grounds that, because most of the hours that Defendants want to recover were billed for work seeking FRCP 37(e)(2) sanctions, which the Court denied, the Fee Request “is fatally deficient.” (Opposition at 8-9.) Plaintiff also argues that the Fee Request fails for other deficiencies. Specifically, Plaintiff notes that Defendants failed to meet their burden to establish that the billing rates charged by their attorneys are commensurate with prevailing market rate in the Los Angeles community. (Id. at 9.) Plaintiff notes that the National Law Journal billing rate data that Defendants submitted reflect national billing rate averages, not averages in Los Angeles. (Id. at 9 (emphasis in original).) Plaintiff argues that Defendants fail to meet their burden to establish that the amount of fees incurred were reasonably necessary to achieve the result obtained because Defendants' billing entries are generic and “fatally vague.” (Id.) Finally, Plaintiff maintains that the Fee Request should be denied in its entirety as overreaching because the amount of fees sought is exorbitantly inflated. (Id.)
C. Defendants' Reply
In the Reply, Defendants argue that Plaintiff's financial status and degree of culpability do not justify a substantial reduction in Defendants' fee request. (Reply at 3-7.) Specifically, Defendants contend “that his current income and assets are not legally relevant in the context of this motion.” (Reply at 1.) Defendants also reject Plaintiff's contention that the Fee Request should be denied based on the “limited results” that Defendants obtained. (Id. at 12-14.) Defendants maintain that all of the elements necessary to evidence spoliation are present: Laub failed to preserve ESI; the ESI was lost during a time when Laub has a duty to preserve it; Laub failed to carry his burden to establish the absence of prejudice; and the imposition of sanctions was appropriate under Rule 37(e)(1). (Id.) Defendants “acknowledge that a modest reduction of fees” is appropriate in light of the fact that the Court did not find that Plaintiff acted with the requisite level of intent, but maintain that “Defendants' overwhelming success [on the Sanctions Motion] warrant an award of a substantial proportion of the fees requested by Defendants.” (Id.)
III. LEGAL STANDARD
A. Rule 37(e)
*4 When a party fails to preserve electronically stored information, Rule 37(e) provides as follows:
If electronically stored information that should have been preserved in the anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it and it cannot be restored or replaced through additional discovery, the court:
(1) Upon finding prejudice to another party from the loss of the information, may order measures no greater than necessary to cure the prejudice; or
(2) Only upon finding that the party acted with the intent to deprive another party of the information's use in the litigation may;
A. Presume that the lost information was unfavorable to the party;
B. Instruct the jury that it may or must presume the information was unfavorable to the party; or
C. Dismiss the action or enter a default judgment.
FED. R. CIV. P. 37(e). Further, pursuant to Rule 37(a)(5)(A), when a discovery motion is granted in the entirety, the court must, after giving an opportunity to be heard, require the party or deponent whose conduct necessitated the motion, . . to pay the movant's reasonable expenses incurred in making the motion, including attorney's fees. FED. R. CIV. P. 37(a)(5)(A). The court “must not order the payment if the movant filed the motion before attempting to obtain the disclosure without court action; the opposing party's nondisclosure or objection was substantially justified or “other circumstances make an award of expenses unjust.” FED. R. CIV. P. (37(a)(5)(A)(i-iii)
B. Lodestar Approach to Calculate Fee Awards
In Hensley v. Eckerhart, 461 U.S. 424 (1983), the Supreme Court adopted the lodestar method for calculating attorneys' fee award. A court determines the lodestar by multiplying the number of hours reasonably expended on a particular motion by a reasonable hourly rate. Id. at 433. “Although the district court's calculation of an award need not be done with precision, some indication of how it arrived at its figures and the amount of the award is necessary.” Chalmers v. City of Los Angeles, 796 F.2d 1205, 1211 (9th Cir. 1986).
To determine the reasonable hourly rate of an attorney, courts must look to the “rate prevailing in the community for similar work performed by attorneys of comparable skill, experience, and reputation.” Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 979 (9th Cir. 2008); see also Jordan v. Multnomah Cnty., 815 F.2d 1258, 1262 (9th Cir. 1987) (“The prevailing market rate in the community is indicative of a reasonable hourly rate.”). A party seeking attorneys' fees must provide “satisfactory evidence ... that the requested rates are in line with those prevailing in the community.” Blum v. Stenson, 465 U.S. 886, 895-96 n. 11 (1984). A declaration regarding the prevailing rate in the relevant community is sufficient to establish a reasonable hourly rate. Widrig v. Apfel, 140 F.3d 1207, 1209 (9th Cir. 1998).
“When a fee applicant fails to meet its burden of establishing the reasonableness of the requested rates, however, the court may exercise its discretion to determine reasonable hourly rates based on its experience and knowledge of prevailing rates in the community.” Bademyan v. Receivable Mgmt. Servs. Corp., Case No. CV 08-519-MMM (RZx), 2009 WL 605789 at *5 (C.D. Cal. Mar. 9, 2009); See Moreno v. Empire City Subway Co., 2008 WL 793605, at *7 (S.D.N.Y. Mar. 26, 2008) (stating that if fee applicant “has submitted no evidence of the prevailing market rate for attorneys of like skill ... it is within [the court's] discretion to determine the reasonable hourly rate ... based on [the court's] familiarity with ... prevailing rates in the [relevant community]”).
*5 In addition, a party seeking attorneys' fees following a successful discovery motion “bears the burden of proving that the fees and costs taxed are ... reasonably necessary to achieve the result obtained.” Rucker v. Air Ventures, Haw., LLC, 2017 WL 4158201, at *3 (D. Haw. Sept. 19, 2017) (citing Tirona v. State Farm Mut. Auto Ins. Co., 821 F. Supp. 632, 636 (D. Haw. 1993)). The court reviews time records submitted by the party seeking the fee award to determine whether the hours were reasonably incurred or if “any of the hours were unnecessary, duplicative or excessive,” or inadequately documented. True Health Chiropractic, Inc. v. McKesson Corp., 2015 WL 3453459, at *1 (N.D. Cal. May 29, 2015) (internal citation omitted).
IV. DISCUSSION
As noted above, the Court first determines the appropriate hourly rate and then examines the applicant's contemporaneously recorded billing records. Hensley, 461 U.S. at 434. The Court must exclude from the lodestar amount hours that are “excessive, redundant, or otherwise unnecessary.” Id. Courts have a “strong preference” for contemporaneous time records, but reconstructed time records are not per se impermissible and do not preclude an award of attorneys' fees. United States v. $12,248 in U.S. Currency, 957 F.2d, 1513, 1521 (9th Cir. 1991).
A. Defendants' Attorney Billing Rates
1. Defendants Present No Evidence of Prevailing Rates in the Relevant Community
To determine the reasonableness of attorneys' hourly fees, courts look to the prevailing market rate in the community, i.e., Los Angeles. See Blum, 465 U.S. at 895. Evidence of prevailing rates in the community are sufficient to establish the appropriate rate of lodestar purposes. See Bouman v. Block, 940 F.2d 1211, 1235 (9th Cir. 1991); Montano v. Bonnie Brae Convalescent Hosp., Case No. CV 12-3452-FMO (AGRx), 2015 WL 12698407, at *3 (C.D. Cal. Sept. 14, 2015). When applying the lodestar method to determine a reasonable hourly rate, “the relevant community is the forum in which the district court sits.” Camacho v. Bridgeport Financial, Inc., 523 F.3d 973, 979 (9th Cir. 2008) (citing Garjon v. Dalton, 132 F.3d 496, 500 (9th Cir. 1997).)
For purposes of the lodestar analysis in this case, the Court must consider prevailing hourly rates in the Los Angeles community. See e.g., Cotton v. City of Eureka, Cal, 889 F.Supp.2d 1154, 1161 (affirming Magistrate Judge's conclusion that declarations pertaining to lawyer's billing rate in civil rights cases in Southern California of little value on a motion for fees incurred litigating such cases in the San Francisco Bay area). Here, as evidence of the reasonableness of the Davis Polk attorneys' hourly rates, Defendants submitted a one-page excerpt from what is purportedly a National Law Journal Billing Report for 2017,[2] which purports to show hourly billing rates for private firm lawyers at top national law firms. (Burnovski Decl.¶ 4 , Ex. C.) The Court finds that this evidence of comparable rates does not support the reasonableness of the attorney billing rates sought in the Fee Request.
As an initial matter, the Court cannot independently verify the source the billing rate summary that Defendants rely upon because Defendants did not include either a cover page for the National Law Journal source document or any other pages that would confirm the source of the rate summary. (See Burnovski Decl. Ex. C.) Even if that information had been provided, as Plaintiff emphasizes, there is nothing in the document to indicate that the rates are representative of the prevailing rates in the relevant community, i.e., Los Angeles. (See Opposition at 23-25.)
*6 The one-page summary chart Defendants submitted lists billing information for twenty-six (26) national law firms and includes a column that identifies the “Largest U.S. Office City” for each firm. (Burnovski Decl., Ex. C.) Los Angeles is only mentioned in connection with the Sheppard, Mullin, Richter & Hampton LLP firm. (Burnovski Decl., Ex. C.) There is no information on the document about what rates lawyers at any of those 26 law firms charge in Los Angeles. (Id.) Instead, the billing rates are categorized by level of experience, i.e., partners, and there is nothing to indicate whether the rates reflected in Exhibit C include transactional attorneys as well as litigators. The summary document does not provide any break down of attorney billing rates by geographic region. See Camacho v. Bridgeport Financial, Inc., 523 F.3d at 979 ( standard for “determining a reasonable hourly rate is the rate prevailing in the community for similar work performed by attorneys of comparable skill, experience, and reputation”). As a result, Defendants' billing rate documentation has little probative value in enabling the Court to determine that Defendant's attorneys' billing rates are indeed commensurate with those of attorneys of similar experience in comparable business litigation in the Los Angeles community.
2. The Court's Own Familiarity with Prevailing Rates in Los Angeles
Based on the Court's familiarity with the relevant legal market, the Court finds the hourly requested for Defendants' attorneys, all based in New York, are substantially above the rates for Los Angeles attorneys with comparable experience in similar civil cases. Ingram v. Oroudjian, 647 F.3d 925, 928 (9th Cir. 2011) (agreeing with other circuit courts that “it is proper for a district court to rely on its own familiarly with the legal market” in determining a reasonable rate). Even the authorities that Defendants rely upon demonstrate that courts in this district have found significantly lower hourly rates than those sought here to be reasonable in complex litigation in Los Angeles. See, e.g., Perfect 10, Inc. v Giganews, Inc., No. CV 11-07098-AB (SHx), 2015 WL 1746484 at *15-16 (C.D. Cal. Mar. 24, 2015) (billing rates of $750-$930 for a senior partner; $610 -$750 for junior partner; and $350-690 for associates reasonable in L.A. market); Baez v. Pension Consulting All., Inc., Case No. CV 17-1938-RGK (AGRx), 2018 WL 2572643, at *2 (C.D. Cal. Apr. 30, 2018) (finding hourly rates of $590 and $575 per hour reasonable in Los Angeles legal market for contract action); Grumpy Cat Ltd. v. Grenade Beverage LLC, Case No. SACV 15-2063-DOC (DFMx), 2018 WL 5880804, at *3 (C.D. Cal. Oct. 9, 2018) (finding hourly rate of $425 per hour reasonable in Los Angeles legal market for contract action).
Defendants point to this Court's award in a prior fee motion in this case as supporting that the billing rates sought in the Fee Request are reasonable. (Reply at 17.) Defendants note that in that prior instance “the Court held that fees of $820 per hour for a partner and $570 per hour for an associate” were reasonable and argue that those rates are “materially in line” with the billing rates sought here—$1026 per hour for partner Ditchfield; $843 per hour for Burnovski who was Counsel until July 2020 when he was elevated to partner; and $696 per hour for fifth year associate Bozzo. (Id. at 17-18 (citing Dkt. No. 419).) However, Defendants' senior partner and associate billing rates (even at a supposedly substantially discounted rates) are nearly 20% higher than the partner rate the Court found reasonable in this prior motion. Indeed, Defendants concede, as they must, that “the hourly rates sought here are different than those sought in the prior motion, as different Defendants counsel handled the two motions.” (Id. at 18 n.13.)
Regardless of the Court's findings on other fee motions brought by different law firms, Defendants have not met their burden in this case to establish that the rates sought are comparable to those of attorneys of similar skill, experience, and reputation in the relevant Los Angeles market. Thus, the Court, based on its own familiarity with the billing rates of experienced complex business litigators the Los Angeles legal market, exercises its discretion to reduce the hourly rates of Defendants' attorneys by 15% to bring those rates more in line with attorneys of comparable skill and experience at national firms in the Los Angeles community. Accordingly, the Court finds the following billing rates to be reasonable for each of Defendants' attorneys:
*7 Mr. Ditchfield $1,026/hr - 15% = $872/hr
Mr. Burnovski $ 843/hr - 15% = $715.55/hr
Mr. Bozzo $ 696/hr - 15% = $591.60/hr
B. Defendants' 200+ Total Attorney Hours Were Not Reasonably Necessary
The Court next turns to consider the reasonableness of the total attorney hours expended. Defendants' initially sought to recover fees for 216.6 hours of attorney time. (Fee Request at 9.) In the Reply, they concede that a 25% reduction in certain hours billed in connection with the opening brief is warranted because they did not prevail on all the issues presented in the Spoliation Motion. (Reply at 14-15.) Nevertheless, they seek fees for an additional 41.1 hours for preparing the Reply, which Defendants argue was necessitated by Plaintiffs' 25-page opposition. (Id. at 22.)
As noted above, a court cannot “uncritically accept counsel's representations concerning the time expended.” Jordan, 815 F.2d at 1263 n.8. In their opening brief, Defendants requested a total award of $166,173.70 for 216.6 hours of work by three attorneys (a partner (Mr. Ditchfield), a Counsel (Mr. Burnovski), and a fifth year associate (Mr. Bozzo)). (Motion at 9.) In their Reply, Defendants acknowledge that they were not entirely successful in obtaining all of the relief they sought on the Spoliation Motion and indicate that a reduction in the total fee request is appropriate “to account for the portions of the spoliation motion that the Court denied.” (Reply at 22.) Defendants urge that “[t]he Court should reduce the number of hours incurred by Defendants on the opening and reply brief (and in preparing for oral argument) by no more than 25%” and “such a reduction is more than sufficient to account for the time spent pursuing relief that ultimately was not granted.” (Id. at 14-15.) This minor reduction, plus an additional 41.1 hours for time spent preparing the Reply brief, and $200 in expenses related to their expert Michael Kunkel, results in a total request of $161,551.10. (Reply at 22-23.)
For the reasons discussed below, after a close review of Defendants' billing records, the Court concludes that Defendants' 25% “modest reduction” is not sufficient to bring the total attorney hours sought in the Fee Request within a reasonable range.
1. Defendants' Billing Records Reflect Duplicative Time Entries and Excessive Hours
Even though Defendants were largely successful in bringing the Spoliation Motion, the Court declined to grant any of the evidentiary sanctions available under Rule 37(e)(2). (Dkt. No. 480 at 12.) Instead, based on a finding that Plaintiff had an obligation to preserve text messages on his iPhone and had failed to do so, the Court awarded monetary sanctions in the amount of $1200 and, as permitted by Rule 37(a)(5)(C), authorized Defendants to seek to recover their reasonable expenses, including attorneys' fee, incurred in bringing the Sanctions Motion. (Id.) But even with a 25% reduction for the portions of the Spoliation Motion that were not successful, Defendants' result does not demonstrate the number attorney hours purportedly expended by a senior partner, a Counsel (later junior partner), and a fifth year associate at one of the largest law firms in the nation were reasonable to bring the Spoliation Motion.
*8 Indeed, the billing records submitted with the Fee Request reflect generic and repetitive task descriptions that make it difficult for the Court to identify the particular nature of the work performed and, as a result, seem to indicate considerable duplication of effort by the attorneys that prepared the Spoliation Motion. (Burnovski Decl. at ¶ 3, Ex. A.) As Plaintiff points out, Defendants billing records consistently reflect generic descriptions of tasks such as “work on spoliation motion,” “draft motion for spoliation sanctions,” “review spoliation motion,” and “review draft motion.” (Opposition at 20; and see Burnovski Decl. Ex. B.)
a. Opening Brief
The Court's review of the billing records confirms the vagueness of the work descriptions. For example, between March 26 and March 27, 2020, Mr. Bozzo has time entries for 4.8 hrs. and 6.5 hours, a total of 11.3 hours, with the identical description: “Draft motion for spoliation sanctions.” (Burnovski Decl., Ex. A at p. 2.) These time entries are then immediately followed by entries for Mr. Burnovski's work on March 27 and 28, 2020 of 2.1 hours and 2.9 hours, respectively, both with the description: “Work on spoliation motion.” (Burnovski Decl., Ex. A at p.2.) Thus, the records reflect 16.3 hours of attorney time logged over a two-day period with no indication of the specific tasks performed or how Mr. Burnovski's work differed from that of Mr. Bozzo. On March 29, 2020 Mr. Burnovski listed 1.7 hours of work as “revise spoliation motion, discuss with P. Bozzo” and two days later, on March 31, 2020, the records show an entry for Mr. Bozzo of 5.1 hours to “Revise motion for spoliation sanctions against J. Laub.” (Id.) In sum, after expending 16.3 hours “drafting” and “working” on the spoliation motion, attorneys Bozzo and Burnovski spent 6.8 more hours to “revise” the Spoliation Motion.
Further, between April 1 and 20, 2020, the Defendants' billing records show 38.5 additional hours reflected in numerous time entries that are all described as either “review”, “work on” or “revise” the draft spoliation motion. The generic and repetitive nature of Defendants' billing entries is reflected in the entries excerpted below:
4/1 4/3 4/4 4/5 4/6 4/7 4/14 4/14 4/15 4/16 4/16 4/16 4/17 4/18 4/19 4/19 4/19 4/20 TOTAL Burnovski Burnovski Burnovski Burnovski Burnovski Bozzo Burnovski Bozzo Ditchfield Bozzo Ditchfield Burnovski Bozzo Burnovski Bozzo Burnovski Ditchfield Bozzo .9 1.1 1.5 3.8 3.2 2.5 1.7 4.2 1.0 2.8 .4 1.7 6.6 1.7 2.0 .7 .7 2.0 38.5Review motion for spoliation sanctions, related emails . . Work on spoliation motion Review, revise spoliation motion Work on spoliation motion Revise spoliation motion Revision motion for spoliation sanctions . . .Review, revise spoliation motion Revise motion for spoliation sanctions . . . Review, revise draft spoliation motion Revise spoliation motion and ancillary filings Review revised motion for spoliation sanctions Review/revise spoliation motion Review, revise spoliation motion and ancillary filings Revise spoliation motion Revise spoliation motion and ancillary papers Revise spoliation motion Review revised spoliation motion Review/finalize spoliation motion and ancillary papers Attorney Hours
(Burnovski Decl. Ex. A at p. 2-3.) Defendants' records put all of these hours in the “Opening Brief” category. (Id. at p. 2.)
Plaintiff argues that the general time entries are impermissible “because they make it impossible for a reviewing court to ascertain how much time was billed on non-meritorious arguments.” (Opposition at 20.) The Court agrees. Such generic entries do not permit the Court to adequately assess whether the time billed was reasonably necessary or simply duplicative. Indeed, much of the work done by Messrs. Bozzo and Burnovski to “review” and “revise” the draft motion seems duplicative, and, therefore, not reasonably necessary.
*9 In some instances, Defendants' time entries include reference to work to prepare “ancillary filings” or “ancillary papers,” but there is nothing in the time records to identify what those “ancillary” documents were, or what portion of the billed time was devoted to those tasks versus other tasks necessary to prepare the spoliation motion.[3] These time entries that lump together disparate tasks amount to block billing and, as the Ninth Circuit has emphasized, block billing “makes it more difficult to determine how much time was spent on particular activities.” Welch v. Metropolitan Life Ins., Co., 480 F.3d 942, 948 (9th Cir. 2007) (internal citation omitted). The billing records indicate that all of the attorney hours billed between March 19, 2020 and April 20, 2020 was devoted to the “Opening Brief,” but given the generic nature of numerous time entries, the Court finds the hours reflected in the records presented here to be facially duplicative and excessive. Therefore, the Court cannot find that the 88 hours expended on preparing the Opening Brief were reasonable.
b. Reply Brief and Response to Plaintiffs' Ex Parte Application
Similar duplication and excess are evident in 75.7 hours of time entries for work attributed to the Reply Brief. (See Burnovski Decl., Ex. A at p. 3.) The records show 38.5. hours billed by Mr. Burnovski to “Work on,” “Review,” or “Revise spoliation motion reply brief,” while Mr. Bozzo billed 35.9 hours to “draft reply brief,” “research case law,” and “revise reply.” (Id.) Mr. Ditchfield, as senior partner, billed only 1.3 hours to work related to the Reply Brief.” (Id.)
Defendants also seek to recover for 18.3 attorney hours expended in responding to Plaintiffs' unsuccessful ex parte application to strike portions of Defendants' reply brief that Plaintiffs argued exceeded the applicable page limits. (Burnovski Decl., Ex. A at pp. 3-4; and see Dkt. No. 472.) Mr. Bozzo billed 5.4 hours to “Research, draft response to ex parte application” while Mr. Burnovski spent another 6.2 hours to “Review plaintiffs' draft surreply/draft opposition,” and then Mr. Bozzo, on June 18, 2020, spent an additional 3.2 hours to “Revise, prepare opposition to ex parte motion,” while, on the same day, Mr. Burnovski spent 2.4 hours to “review/revise opposition to motion for leave to file surreply, related emails.” Mr. Bozzo and Mr. Burnovski each billed an identical 8.6 total hours for responding to Plaintiffs' Ex Parte Application, while Mr. Ditchfield billed an additional 1.1 hours on this response as well. (Burnovski Decl., Ex. A at pp. 3-4.)
Although Plaintiff's ex parte application to strike Defendants' Reply required additional briefing that would not have otherwise been needed—and the Court ultimately denied Plaintiff's motion to strike—the additional work to respond to the ex parte application does not support the 18.3 attorney hours in the billing records associated with the “Ex Parte Application.” (Burnovski Decl., Ex. A at pp 3-4.) Neither the work descriptions nor the total hours expended in responding to the ex parte application warrant a fee award of the magnitude sought here. Defendants' Response to the Ex Parte Application was only three (3) pages and the single issue, whether Defendants' reply brief exceeded applicable page limits, was not complex. (See Dkt. No.522.)
c. Oral Argument
Defendants request fees for 18.1 attorney hours to prepare for and attend the hearing on the spoliation motion. (Fee Request at 4.) Mr. Bozzo billed 3.5 hours to “research case law” and “review” talking points for oral argument, while Mr. Burnovski expended 14.6 hours, which included 9.6 hours to “prepare for oral argument” and 5.0 hours to “attend court hearing on spoliation motion, related emails, etc.” ((Burnovski Decl., Ex. B, at p. 4.) The reasonableness of Mr. Burnovski's hours is called into question by the fact he lists 5.0 hours to attend the hearing on the Spoliation Motion, but that hearing was held telephonically, due to the ongoing coronavirus pandemic, and lasted only fifty-six minutes. (See Dkt. No. 520.) Either the time to attend is greatly inflated or there was an extraordinary number of “related emails” associated with his attendance at the hearing that lasted just short of an hour. In either case, the total hours expended for oral argument on the Sanctions Motion are not reasonable.
2. The Legal Issues Raised in the Spoliation Motion Were Not Complex
*10 In addition to the fact that the task entries in the billing records for Burnovski and Bozzo lawyers are highly duplicative, the Court is not persuaded that the issues in the Spoliation Motion were so complex or nuanced that this number of attorney hours is reasonable by any standard. Indeed, the legal issues concerning Laub's failure to back up his iPhone in order to preserve potentially relevant text messages were not complex. The briefing did not involve highly nuanced legal research, but rather a straightforward application of the spoliation principles outlined in Rule 37(e). (See Dkt. No. 97.) Defendants themselves note that the opening and reply briefs together comprised just forty pages, with supporting attachments. (Fee Request at 1 (twenty-four-page opening brief and sixteen page reply).)
Defendants argue that “[c]ourts in this circuit have upheld fee awards in comparable cases for similar to or greater than the amounts requested by Defendants.” (Fee Request at 6.)[4] The cases that Defendants cite are distinguishable and do not require a finding that an award of $161,551.10 in attorneys' fees is reasonable here. In Keithley v. Homestore, com, Inc., (N.D. Cal. Mar. 27, 2009), 2009 WL 816429 for example, the court awarded $148,269.50 in sanctions spoliation issued related to the production of source code, far more complex issues than the single cell phone at issue in this case. Keithley, 2009 WL 816429, at * 1. In Clear-View Techs., Inc v. Rasnick, No. 5:13–cv–02744–BLF, 2015 WL 2251005 (N.D. Cal. May 13, 2015), massive amounts of data were lost, and a witness testified that he deleted emails and text messages “all day long, every day”, discarded hardcopy documents, and had “thrown away several iPhones, a laptop computer and an iPad he used to access relevant documents and email accounts”—despite his awareness of the rules regarding document preservation. Clear-View Techs., 2015 WL 2251005, at * 4. Laub's conduct is not at all similar to the scale of spoliation that occurred in Clear-View and this Court found Laub's conduct to be negligent at worst, but not willful. The Court finds equally unpersuasive the other cases Defendants cite: Dong Ah Tire & Rubber Co. v. Glasforms, Inc., No. C 06–03359 JF (RS), 2009 WL 3617786 (N.D. Cal. Oct. 29, 2009), where the court awarded $257,000 attorneys' fees and costs as spoliation sanctions; and Mireskandari v. Daily Mail & Gen. Tr. PLC, No. CV 12-02943 MMM (FFMx), 2014 WL 12586434 (C.D. Cal. Nov. 7, 2014), where the court reduced the total compensable hours by 15% and still allowed recovery of over 282 hours of work on the spoliation motion, dictate a similar result in this case. In this case, an unsophisticated individual litigant, largely unfamiliar with the procedures of complex business litigation, negligently failed to preserve a single personal iPhone. Regardless of how courts resolved these other fee awards, this Court must conduct its lodestar analysis and resolve the fee award based on the particular facts and circumstances of this case.
3. A Further Reduction in Total Attorney Hours is Warranted
As noted, in the Reply, Defendants offer a “modest reduction” of 25% to the total hours sought by attorneys Ditchfield, Burnovski, and Bozzo for their work on the opening brief, reply, and oral argument based on the fact that the Court denied some of the relief Defendants sought in the Sanctions Motion. (Reply at 14-15.) This reduced the hours for time spent on these three tasks for Mr. Ditchfield to 3.3 hours; Mr. Burnovski to 63.5 hours; and for Mr. Bozzo to 70.1 hours. (Reply at 15 n.10.) But even this concession does little to persuade the Court that the total number of hours spent on these tasks was reasonable. In particular, between Mr. Burnovski and Mr. Bozzo, they still seek a whopping 133.6 attorney hours for the Opening, Reply, and oral argument. Assuming 10-hour workdays, that would be 13.36 full days of attorney work doing nothing but work on the Spoliation Motion, or alternatively, working 24 hours every day for more than five (5) days. Furthermore, Defendants made no reduction in any time spent on the Fee Request—another 14.7 hours; responding to Plaintiffs' Ex Parte Application—18.3 hours; or working on a stipulation with Plaintiffs to extend the time for filing the opposition (1.0 hours).
*11 Notwithstanding Defendants' reduction, the Court finds that the total number of hours expended is not reasonable and a further reduction is warranted to account for the duplicative nature of the work descriptions for Mr. Bozzo and Mr. Burnovski and excessive hours attributed to preparation for oral argument. Accordingly, the Court exercises its discretion to reduce the total number of attorney hours billed for the opening brief, reply brief, and oral argument by an additional 10% for hours billed by attorneys Burnovski and Bozzo on the opening brief, reply, and oral argument for a total reduction of 35%. The Court also applies a 35% reduction to the hours these attorneys billed for responding to Plaintiffs' ex parte application.
C. Defendants Are Entitled to Recover Fees Incurring in Preparing the Fee Request and Expenses for the Kunkel Declarations
The Court must also consider Defendants' request for fees incurred in preparing the Fee Request itself. When a party seeks reasonable expenses under Rule 37(a)(5), the fees incurred in preparing the fee application are recoverable. TVI, Inc. v. Harmony Enters., Inc., No. C18-1461-JCC, 2019 WL 5213247, at *1 (W.D. Wash. Oct. 16, 2019) (“A party may be awarded its reasonable attorney's fees incurred in preparing a subsequent fee application.” (internal citation omitted)). Even so, the Court must conduct its own analysis of the reasonableness of the hours sought and the adequacy of the billing evidence offered in support of the time sought for the fee application. Defendants seek a total of $40,511.70 in “fees on fees” associated with preparing the Fee Request itself. (Id. at 23.) The opening brief was only eleven (11) pages with four relatively short exhibits while the Reply was twenty-eight (28) pages in order to address the myriad arguments raised in Plaintiffs' thirty-two (32) page Opposition. (See Dkt. Nos. 506, 491.) Even so, as with the inordinate number of hours billed for the papers related to the Spoliation Motion itself, the 14.7 hours billed to prepare the very straightforward Fee Request are not reasonable. Accordingly, the Court exercises its discretion to apply a 35% reduction to the number of attorney hours billed by Mr. Bozzo and Mr. Burnovski for preparing the Fee Request. The Court makes no reduction in the 1.2 hours that Mr. Ditchfield billed for his work on the Fee Request.
Defendants may also recover the $200 expenses incurred in obtaining the declarations of their expert Michael Kunkel. (Reply at 15.) Plaintiff objects to Defendants' request to recover these expenses, but such expenses are expressly permitted under Rule 37. Defendants point out that Mr. Kunkel's declarations established that, after Mr. Laub discarded his cell phone in January 2017, “text messages from the time period relevant to this dispute likely remained on his device, contrary to Mr. Laub's contentions.” (Reply at 15.) The Kunkel testimony was directly relevant to establishing that when Mr. Laub discarded his iPhone, it resulted in the loss of potentially relevant text messages, an essential element of establishing spoliation. (Id. at 16.) Consequently, the expenses incurred in obtaining the Kunkel declarations that supported the Sanctions Motion are recoverable.
D. Calculating the Lodestar
Applying the lodestar method and reducing the attorney hours as outlined above, the Court calculates the reasonable fee for the Sanctions Motion, the related Ex Parte Response and the Fee Request as follows:
Attorney Ditchfield Burnovski Bozzo Subtotals TOTAL Total Original Hours Requested 6.7 95.3 114.6 216.9 Opening Reply, OralArg. Less 25% re: 3.3 63.5 70.1 136.9 Ex Parte Response 1.1 8.6 8.6 18.3 Stip re: Extension 0 .5 .5 1.0 Fee Motion 1.2 1.5 12.0 14.7 Total Hrs.5.6 74.1 91.2 170.9 Less Court Reduction (35%) 5.6[5] 48.1 59.3 113.0
*12 Attorney A. Ditchfield B. Burnovski P. Bozzo Atty Hours Kunkel Expenses TOTAL Total Hours After Court Reduction 5.6 48.1 59.3 113.0 Hourly Rate (less15%) $872.00 $715.55 $591.60 Fees Awarded $4,883.20 $34,417.95 $35,081.88 $74,383.03 200.00 $74,583.03
Thus, multiplying the reasonable attorney rates outlined above by the hours determined to be reasonably necessary to bring the the Spoliation Motion, the Court determines the lodestar amount for an award of attorneys' fees and $200 in expenses to be $74,583.03. But, because Rule 37 prohibits an award of sanctions if “other circumstances make an award of expenses unjust,” the Court now turns to what, if any, impact Plaintiff's culpability and financial circumstances may have on the fee award. FED. R. CIV. P. 37(a).
E. Plaintiff's Ability to Pay and Degree of Culpability
The evidence of Plaintiff's very difficult financial circumstances is undisputed. Nevertheless, the Court is unpersuaded by Plaintiff's arguments that the Fee Request should be denied outright because of his financial condition. (See, e.g., Opposition at 7.) Defendants maintain that they are “not unsympathetic” to Laub's financial straits but insist that “his current income and assets are not legally relevant in the context of this motion.” (Reply at 1.) Defendants argue that the fees they seek are appropriate to cure the prejudice resulting from Laub's conduct. (Id.) Defendants urge that to “deny[ ] reimbursement of those fees wholly or substantially would defeat the purpose of the sanction.” (Id. at 1-2.) Nevertheless, Defendants concede that Laub's financial resources are a factor that the court “should consider in assessing the appropriate amount of a fees award.” (Id. at 2.)
Under Rule 37(A)(5), the Court “must not” an award of reasonable expenses, including attorneys' fees, incurred in bringing a successful discovery motion if “other circumstances make an award of expenses unjust.” FED. R. CIV. P. 37(A)(5)(iii). The language of Rule 37(a) is mandatory not discretionary. Here, Plaintiff argues that “the Court ‘must ‘consider the sanctioned party's ability to pay to determine the award's reasonableness.’ ” (Opposition at 10 (citing Mora v. Target Corp., 2010 WL 4818540, at *1 (S.D. Cal. Nov. 22, 2010)).) Laub presents evidence that he has very limited financial resources and is represented by counsel on a contingency fee basis. (Laub Decl. at ¶¶ 3-7 [Dkt No. 491-1]). Like many Americans struggling in the ongoing coronavirus pandemic, Laub is experiencing severe financial distress. (Id. at ¶¶ 3-11.) He is unemployed, has depended upon unemployment benefits since losing his job in February 2020, is unable to afford “rent and associated costs” of an apartment, and currently lives with his father in Santa Rosa, California. (Id. at ¶¶ 13-21.)[6]
*13 Defendants correctly point out that Rule 37 does not expressly include financial ability among the criteria for considering an award of attorneys' fees. (Reply at 3.) However, Rule 37 expressly provides that the Court must not make such an award when doing so would be unjust. FED. R. CIV. P. 37(a)(C)(5) (emphasis added). Moreover, courts in this Circuit and beyond have held that a court must take into consideration the financial circumstances of a party in the context of awarding Rule 37 sanctions. See e.g., Glass Egg Digital Media v. Gameloft, Inc., Case No. 17-cv-04165-MMC (RMI), 2019 WL 5963228 (N.D. Cal. Nov. 13, 2019) (when determining reasonableness of fees and expenses as discovery sanctions, “the court will also consider the would-be sanctioned party's ability to pay”); ClearValue, Inc. v. Pearl River Polymers, Inc., 560 F.3d 1291, 1306 (Fed. Cir. 2009) (finding an abuse of discretion by district court “in failing to consider that [party sanctioned under Rule 37] lacked the ability to pay”). As the Second Circuit emphasized, even severe misconduct by a party cannot justify subjecting that party to “financial ruin.” Faraci v. Hickey-Freement Co.., Inc., 607 F.2d 1025, 1029 (2d Cir. 1979) (magistrate judge should have considered plaintiff's “straitened circumstances” in determining size of a fee award.)
Here, the Court awarded $1,200 in monetary sanctions finding this amount “and an award of the reasonable expenses, including attorneys' fees” was “sufficient and no greater than necessary to cure the prejudice caused by Plaintiff Laub's spoliation.” (Dkt. 480 at 12.) In reaching that conclusion, the Court did not intend to impose sanctions so exorbitant that Plaintiff would be pushed into abject destitution.[7] Notably, the Court found that at most, Defendants “may have established that [Laub] negligently destroyed relevant evidence.” (Dkt No. 480 at 9.) Negligence is a far cry from willful conduct and, to the extent the Court considers the degree of culpability in its analysis, Plaintiff's negligence militates against a sanction that is disproportionate to the degree of culpability the Court found. See PersonalWeb Technologies LC v. Google Inc., No. C13–01317 EJD (HRL), 2014 WL 4090558, at * 3 (N.D. Cal. Aug.19, 2014) (in evaluating fee award, court considers whether monetary sanctions are commensurate with the nonmoving party's culpability and moving party's “results obtained relative to sanctions pursued”).
The total attorneys' fees Defendants seek, even as reduced by a de minimis amount in the Reply and further reduced by the Court's lodestar analysis, are not commensurate with the limited prejudice that the Court concluded was caused by Laub's failure to persevere text messages on his iPhone. Indeed, as discussed above, the Court declined to impose the most severe sanctions available under Rule 37(e). Accordingly, the Court will not impose additional, excessively punitive measures in the form of the exorbitant attorneys' fees that Defendants seek here. To do so, in these circumstances, would be manifestly unjust.
Accordingly, factoring in the partial results obtained in the Spoliation Motion, the limited prejudice, and Plaintiff's near indigence, the Court exercises its discretion to adjust the lodestar downward by an additional 55% for a total award of $ 33,562.36
CONCLUSION
The Court finds that a total award to Plaintiff of $33,562.36 comprises reasonable expenses, including attorneys' fees, incurred in bringing the Spoliation Motion and the related Fee Request. FED. R. CIV. P. 37(a)(5)(A), (C). Accordingly, for the reasons outlined above, Defendants' Fee Request is GRANTED in the amount of $33,562.36. Plaintiff shall pay this fee award to Defendants' counsel within one hundred twenty (120) days of the date of this Order.


Footnotes

The Court cannot independently verify the source the billing rate summary at Exhibit C because Defendants did not include either a cover page from the NLJ Billing Report for 2017 or any other pages that would confirm the source of the billing rate summary chart. (See Burnovski Decl. Ex. C.)
The Court cannot independently verify the source the billing rate summary because Defendants did not include either a cover page or any other pages that would confirm the source of the summary. (See Burnovski Decl. Ex. C.)
These references to work on “ancillary filings” entries are distinct from entries on 6/4/2020 for 1.7 hours spent by Mr. Bozzo to “Draft supplemental declaration for M. Kunkel” and 6/8/2020 for 1.1 hours spent by Mr. Burnovski to “Revise Kunkel declaration, emails related to same, other ancillary papers.” (Burnovski Decl., Ex. B at p. 3. )
Defendants also argue that Plaintiffs are seeking “fees at comparable rates and for a comparable number of hours in connection with an ant-SLAPP motion[.]” (Reply at 1.) But the anti-SLAPP motion is wholly irrelevant to this Court's analysis of the reasonableness of the Fee Request at issue here. Accordingly, the Court is unpersuaded by Defendants' arguments that the Court should consider the fees that Plaintiffs seek in the unrelated anti-SLAPP motion are somehow relevant to the lodestar analysis here.
The Court makes no additional reduction to Mr. Ditchfield's hours beyond the 25% Defendants' themselves applied for the opening brief, reply and oral argument. The Court concludes that the total of 5.6 hour expended by the senior partner on this matter was reasonably necessary.
Laub submitted a supplemental declaration stating this his wife has been recently laid off and is currently unemployed. (Supplemental Declaration of Justice Laub in Opposition to Defendants' Motion for Fees and Expenses Regarding a Recent Change in Circumstances (“Supplemental Laub Declaration” at ¶ 3 [Dkt. No. 517].) But Plaintiff acknowledges that his wife's financial circumstances are not “directly relevant to the Court's determination of the fee issue.” (See Request for Leave to File [Supplemental Laub Declaration] at 2 [Dkt. No. 508].) And while Defendants argue that by submitting the Supplemental Declaration, Plaintiff has put the couple's jointly held property at issue in the case (see Reply at 6) that does not alter the Court's analysis here. First, the Court declines to wade into the applicability (or lack thereof) of community property principles to the instant fee dispute. Second, his wife's recent unemployment only further emphasizes Laub's personal financial difficulties and inability to pay the amount of attorneys' fees that Defendants seek in the Fee Motion. (Laub Suppl. Decl. at ¶ 4 (“Any substantial fee award would likely force us to file for bankruptcy.”).)
Plaintiff offers evidence of Defendant Horbaczewski's “substantial wealth” and privileged background and asserts that Horbaczewski has threatened Plaintiff with financial ruin. (Opposition at 13-14; and see Declaration of Patrick Ryan, ¶¶ 3-10 [Dkt. No. 491-5].) In determining as appropriate fee award under Rule 37, the Court finds these assertions neither relevant nor material to its fee analysis.