Brands International Corporation v. Reach Companies, LLC

District Court, D. Minnesota·Decided October 2, 2023·No. 0:21-cv-01026·Unknown

Opinion

UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA BRANDS INTERNATIONAL CORPORATION, Civil No. 21-1026 (JRT/DLM) Plaintiff,

v. MEMORANDUM OPINION AND ORDER REACH COMPANIES, LLC, ON PLAINTIFF’S MOTION FOR ATTORNEY’S FEES AND COSTS AND TO Defendant. AMEND THE JUDGMENT

Felicia J. Boyd and Jaime Wing, NORTON ROSE FULBRIGHT US LLP, 60 South Sixth Street, Suite 3100, Minneapolis, MN 55402, for Plaintiff.

Steven C. Moore and David A. Brandis, SMITH JADIN JOHNSON, PLLC, 7900 Xerxes Avenue South, Suite 2020, Bloomington, MN 55431, for Defendant.

Brands International Corporation (“Brands”) is a hand sanitizer manufacturer that brought this action against distributor Reach Companies, LLC (“Reach”) after Reach failed to pay Brands for hand sanitizer that Brands delivered to Reach’s customer during the beginning of the COVID-19 pandemic. The Court granted summary judgment for Brands on the parties’ competing breach of contract claims and entered Judgment in favor of Brands for $89,072.64. The Court also found Brands is entitled to an award of attorney’s fees and costs. Brands accordingly filed this Motion for Attorney’s Fees and Costs, asking the Court for $265,265.78 in attorney’s fees and $3,601.28 in costs. Brands additionally asks the Court to amend the Judgment to include Minnesota’s statutory 6% pre- and post- judgment interest. Because the Court concludes that the requested fees were marginally

excessive in light of this case’s simplicity and because the Court finds that one hourly rate was above market rate, the Court will award Brands $185,000.05 in fees. The Court will also award $3,601.28 in costs and modify its Judgment to specify the amount of pre- and post-judgment interest.

BACKGROUND I. FACTS The Court recently detailed the facts of this case in its summary judgment order, so it need not do so again here. See Brands Int’l Corp. v. Reach Co., LLC, No. 21-1026,

2023 WL 2898592 (D. Minn. Apr. 11, 2023). Broadly, Brands is a Canadian company that manufactures beauty and hygiene products. (Decl. Felicia Boyd (“1st Boyd Decl.”), Ex. 1 (“Rubinoff Dep.”), at 15:10–11, 20:2–17, Sep. 22, 2022, Docket No. 68.) Reach is a Minnesota company that distributes various consumer goods. (1st Boyd Decl., Ex. 3

(“Tollefson Dep.”), at 9:17–22, Sep. 22, 2022, Docket No. 68-2.) One of the product lines that Brands manufactures is hand sanitizer, which Reach ordered to satisfy the needs of one of its customers, Five Below, Inc. (“Five Below”). (Rubinoff Dep. at 20:12–13.; 1st Boyd Decl., Ex. 5 (“Aff. Cara Binder”) ¶ 3, Sep. 22, 2022, Docket No. 65-5; 1st Boyd Decl., Ex. 8

(“Purchase Order”), Sep. 22, 2022, Docket No. 65-8.) Brands made three deliveries to Five Below before halting its operations because Reach failed to pay for the deliveries. (See 1st Boyd Decl., Exs. 12–14 (“Individual Orders”), Sept. 22, 2022, Docket Nos. 65-12, 65-13, 65-14.) Despite follow up requests for payment on April 2, 3, 22, and 30, 2020, Reach never paid Brands for the deliveries made to Five

Below. (1st Boyd Decl., Exs. 30–33, Sep. 22, 2022, Docket Nos. 65–22, 65–23, 65–24, 65– 25; Tollefson Dep. at 77:3–23, 78:12–20, 91:20–92:25.) The parties agreed that the price of the product Brands shipped to Five Below was $89,072.64. Brands, 2023 WL 2898592, at *3.

II. PROCEDURAL HISTORY Brands initiated this action against Reach for account stated, unpaid goods and services, breach of contract, and unjust enrichment. (Compl. ¶¶ 7–19, Apr. 21, 2021, Docket No. 2.) Reach asserted counterclaims for breach of contract, breach of installment

contract, and tortious interference with a contract. (Def.’s Am. Answer and Countercls. at 9–11, Oct. 7, 2021, Docket No. 23.) The parties then filed cross-motions for summary judgment. (Reach's Mot. Summ.

J., Sept. 22, 2022, Docket No. 54; Brands’ Mot. Summ. J., Sept. 22, 2022, Docket No. 60.) The Court held that the United Nations Convention on Contracts for the International Sale of Goods (“CISG”) applied to the breach of contract claims because Brands is a Canadian corporation. Brands, 2023 WL 4898592, at *4. It concluded that the parties had agreed

to pay cash on delivery, and that receipt of an invoice was not a condition precedent for remittance of payment, so Reach was under an obligation to pay for the hand sanitizer when Brands delivered it to Five Below. Id. at *6. Because Reach failed to make payments after receiving the product, it committed a fundamental breach of the contract, so the Court entered summary judgment in favor of Brands. Id. at *7. The Court awarded Brands $89,072.64, plus pre- and post-judgment interest. Id. at *10. However, the Court did not

specify the exact interest rates. Id. Important to this present motion, the Court also indicated that it would award Brands attorney’s fees. Id. at *8–9. The CISG authorizes damages for breach of contract “equal to the loss . . . suffered by the other party as a consequence of the breach.” CISG

art. 74. Though other circuits have concluded that the CISG does not authorize an award of attorney’s fees, the Court found those cases unpersuasive because the majority of Contracting States to the CISG adhere to the “English rule” that the loser pays, and

attorney’s fees are a reasonably foreseeable loss suffered “as a consequence of the breach.” Brands, 2023 WL 2898592, at *9. The Court directed Brands to file a motion pursuant to Federal Rule of Civil Procedure 54(d) to recover fees and costs, plus interest. Id.

Accordingly, Brands filed this Motion for Attorney’s Fees and Costs, asking the Court to award it $265,265.781 in attorney’s fees and $3,601.28 in costs. (See generally Mot. Fees and Costs, Apr. 25, 2023, Docket No. 97; Mem. Supp. Mot. Fees at 7, Apr. 25, 2023, Docket No. 99.) Brands also asks the Court to amend the Judgment to indicate the

applicable pre-judgment interest pursuant to Minnesota’s statutory 6% simple interest

1 This amount consists of $240,000.50 incurred throughout the substantive litigation leading to summary judgment and $21,664.00 incurred preparing this motion. (Mem. Supp. Mot. Fees at 7, Apr. 25, 2023, Docket No. 99.) rate and federal post-judgment interest to the entire award and any interest award. (Mem. Supp. Mot. Fees and Costs at 8.) Reach opposes Brands’ Motion, asserting (1) that

the requested fees are unreasonable in light of the Court’s summary judgment award and other factors, and (2) Brands is not entitled to fees incurred prior to Brands’ demand for fees during summary judgment. (Mem. Opp. Mot. Fees at 1, May 9, 2023, Docket No. 102.) Reach does not appear to contest Brands’ request for pre- and post-judgment

interest. (See generally id.) DISCUSSION I. STANDARD OF REVIEW The party seeking an award must provide evidence to support the reasonableness

of the fees, both as to the hourly rate and the hours worked, and should “exclude from a fee request hours that are excessive, redundant, or otherwise unnecessary.” Hensley v. Eckerhart, 461 U.S. 424, 433–34 (1983); see also Wheeler v. Mo. Highway & Transp. Comm'n, 348 F.3d 744, 754 (8th Cir. 2003).2 A district court has substantial discretion

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