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S & H Industries, Inc. v. Selander

United States District Court, Fifth Circuit

November 15, 2013

S & H INDUSTRIES, INC., Plaintiff,
v.
KARL SELANDER, doing business as Atcoa Inc. aka Air Tool Corp of America, and ATCOA, INC., also known as Air Tool Corp. of America, Defendants.

FINDINGS, CONCLUSIONS, AND RECOMMENDATION

IRMA CARRILLO RAMIREZ, Magistrate Judge.

Pursuant to the order of reference dated January 3, 2012, this case has been automatically referred for pretrial management, including the determination of non-dispositive motions and issuance of findings of fact and recommendations on dispositive motions. Before the Court is Plaintiff S & H Industries, Inc.'s Motion for Award of Attorneys' Fees, filed April 2, 2013 (doc. 61). Based on the relevant filings and applicable law, the motion for attorneys' fees should be GRANTED in part.

I. BACKGROUND

S & H Industries, Inc. (Plaintiff), sued Karl Selander, d/b/a ATCOA Inc. a/k/a Air Tool Corp of America (Defendant), [1] for alleged violations of §§ 32 and 43(a) of the Lanham Act, [2] and for unfair competition and trademark dilution under Texas law. ( See doc. 1.) On June 27, 2012, Plaintiff moved for summary judgment, and Defendant filed what was construed as a cross-motion for summary judgment on July 31, 2012. (Docs. 34, 39.) On February 13, 2013, it was recommended that Plaintiff's summary judgment motion and request for a permanent injunction be granted, and that Defendant's cross-motion be denied. (Doc. 51.) It was also recommended that Plaintiff be permitted to recover attorney's fees in an amount to be determined. ( Id. at 17-19.) On March 19, 2013, the Court issued a final judgment and a permanent injunction against Defendant. (Docs. 57, 59.) Plaintiff now moves for an award of fees in the amount of $52, 845.50. (Doc. 61.) The motion has been fully briefed and is ripe for decision.

II. MOTION FOR AWARD OF ATTORNEYS' FEES

Having carried its burden to show that this case is exceptional and merits an award of attorneys' fees under the Lanham Act, ( see doc. 51 at 17-19), Plaintiff now seeks fees in the amount of $52, 845.50, ( see doc. 61).

A. Attorneys' Fee Analysis Legal Standard

The Lanham Act permits an award of reasonable attorney fees to a prevailing party in exceptional cases. 15 U.S.C. § 1117(a); National Business Forms & Printing, Inc. v. Ford, 671 F.3d 526, 537 (5th Cir. 2012). In order to determine reasonable attorney fees, the Fifth Circuit first conducts the "lodestar" analysis. See Matter of Fender, 12 F.3d 480, 487 (5th Cir. 1994). The "lodestar" method requires a two-step analysis: (1) "determine the reasonable number of hours expended on the litigation and the reasonable hourly rate for the participating lawyer[]"; and (2) compute the appropriate lodestar amount "by multiplying the number of hours reasonably expended by the reasonable hourly rate." Neles-Jamesbury, Inc. v. Bill's Valves, 974 F.Supp. 979 at 985 (S.D. Tex. 1997) (quoting Forbush v. J.C. Penney Co., 98 F.3d 817, 821 (5th Cir. 1996)); see also La. Power & Light Co. v. Kellstrom, 50 F.3d 319, 324 (5th Cir. 1995). The lodestar amount is presumed to be reasonable. Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 552 (2010). Enhancements to the lodestar amount can be awarded in "rare" and "exceptional" cases, however. Id. In fee-shifting cases, the Supreme Court noted three circumstances where enhancements could be reasonable: "(1) where the method used in determining the hourly rate employed in the lodestar calculation does not adequately measure the attorney's true market value; (2) if the attorney's performance includes an extraordinary outlay of expenses and the litigation is exceptionally protracted; and (3) in which an attorney's performance involves exceptional delay in the payment of fees." Jackson v. Host Intern., Inc., 426 F.App'x 215, 227 (5th Cir. Feb. 1, 2011) (quoting Perdue, 559 U.S. at 1674-75) (internal quotation marks omitted); see In re Pilgrim's Pride Corp., 690 F.3d 650, 664-65 (5th Cir. 2012).

B. Lodestar Method

1. Reasonable Hours and Reasonable Rates

"Determinations of hours and rates are questions of fact." La. Power & Light Co., 50 F.3d at 325 (citation omitted). "[C]ourts must determine whether the hours claimed were reasonably expended on the litigation." Id. (citation and internal quotation marks omitted). In order to determine the reasonable number of hours expended in this case, "[t]he party seeking attorney's fees must present adequately documented time records to the court." Watkins v. Fordice, 7 F.3d 453, 457 (5th Cir. 1993). "[T]he documentation must be sufficient for the court to verify that the applicant has met its burden." Louisiana Power & Light Co., 50 F.3d at 325 (citation omitted).

Plaintiff submitted copies of attorney invoices with detailed time entries, covering the period from October 20, 2011 through February 28, 2013.[3] (Doc. 62-1 at 8-82.) Contemporaneous billing records are acceptable documentation for determination of reasonable hours. See Bode v. United States, 919 F.2d 1044, 1047 (5th Cir. 1990). Counsel for Plaintiff stated in his declaration that a total of 107.6 hours were spent in pursuing Plaintiff's case against Defendant. (Doc. 62-1 at 2.) This excludes 5.6 hours spent on resolving Plaintiff's claims against other defendants whom it dismissed, and legal assistant fees. ( Id. )

"[P]laintiff[ is] charged with the burden of showing the reasonableness of the hours [it] bill[s] and, accordingly, [is] charged with proving that [it] exercised billing judgment." Walker v. U.S. Dept of Housing and Urban Development, 99 F.3d 761, 769 (5th Cir. 1996). Billing judgment "refers to the usual practice of law firms in writing off unproductive, excessive, or redundant hours[, and p]laintiffs submitting fee requests are required to exercise billing judgment." Id. (emphasis added). "The proper remedy for omitting evidence of billing judgment does not include a denial of fees but, rather, a reduction of the award by a percentage intended to substitute for the exercise of billing judgment." Saizan v. Delta Concrete Products Co., Inc., 448 F.3d 795, 799 (5th Cir. 2006).

Here, Plaintiff wrote off only 5.6 hours, including time spent on dismissed defendants and the 0.8 hours billed by a legal secretary. ( See doc. 62-1 at 2, 53.) A reduction of ten percent in place of the billing judgment is therefore appropriate in this case. Id. at 800; see also Walker, 99 F.3d at 770 (reducing the ...


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