Federal Trade Commission v. Circa Direct LLC

912 F. Supp. 2d 165, 2012 WL 6568417, 2012 U.S. Dist. LEXIS 178021
CourtDistrict Court, D. New Jersey
DecidedDecember 17, 2012
DocketCivil No. 11-2172 RMB/AMD
StatusPublished
Cited by1 cases

This text of 912 F. Supp. 2d 165 (Federal Trade Commission v. Circa Direct LLC) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Federal Trade Commission v. Circa Direct LLC, 912 F. Supp. 2d 165, 2012 WL 6568417, 2012 U.S. Dist. LEXIS 178021 (D.N.J. 2012).

Opinion

OPINION AND ORDER

BUMB, District Judge.

On March 8, 2012, Defendants Circa Direct LLC and Andrew Davidson (the “Defendants”) moved that they be awarded attorney’s fees and expenses. [Docket No. 40]. For the reasons that follow, that motion is GRANTED, in part, and DENIED, in part.

I. Background

A.The Preliminary Injunction

On April 18, 2011, Plaintiff Federal Trade Commission (the “FTC”) filed a Complaint against the Defendants, alleging that the Defendants had engaged in certain deceptive practices. [Dkt. No. 1]. Defendants retained attorneys from the New York office of Venable LLP (“Venable”) to represent them in connection with the litigation and furnished Venable with a $150,000 retainer. On April 19, 2011, Plaintiff and Defendants negotiated a Stipulated Temporary Restraining Order. [Docket No. 5]. The parties then agreed to a Stipulated Preliminary Injunction Order on May 20, 2011. [Docket No. 17]. That Order includes an asset preservation provision restraining the ability of Defendants to utilize their assets other than for actual, ordinary, and necessary living and business expenses they reasonably incur, with those expenses limited to $5,500 plus an additional $5,000 to undertake new business activities for the first thirty days after the Order, and $4,500 a month thereafter, subject to the consent of the FTC, or approval of the Court. Stipulated Preliminary Injunction Order § IV(A)-(B).

B. The Stipulated Order.

On February 10, 2012, the FTC agreed to a Stipulated Final Judgment and Order (the “Stipulated Order”) with the Defendants, settling the FTC’s claims without admitting to liability. [Docket No. 37], After briefing on the propriety of the Stipulated Order [Docket Nos. 36, 42, 43, 44, 49, 50, 51, 52, 54] this Court approved the Stipulated Order on October 17, 2012. [Docket No. 55]. The Stipulated Order calls for the turnover of substantially all of Defendants’ assets to the FTC. Stipulated Order § 7(B) ¶ 4. However, the Stipulated Order also authorizes the release of frozen funds “to pay attorneys’ fees and costs reasonably incurred by” counsel, contingent on either the consent of the FTC or the approval of the Court pursuant to a motion. Stipulated Order § 7(B) ¶ 4

C. Defendants’ Fee and Expense Request

In litigating this matter, Venable exhausted its initial $150,000 retainer and incurred significant additional fees and expenses. [Docket No. 40, Declaration of Edwin M. Larkin (“Larkin Dec.”) ¶¶ 2, 7]. Because the FTC would not agrees to release funds to meet these fees and expenses, Defendants have now moved, pursuant to the Stipulated Order, for the release of frozen funds to pay their fees and expenses. [Docket No. 40]. Defendants claim to have incurred a total of $400,076.50 in legal fees and $6,139.47 in expenses. [Larkin Dec. ¶ 2], Because Defendants already furnished Venable with a $150,000 retainer, Defendants seek the release of an additional $250,076.50 in fees, based on Venable’s hourly billing rates and hours worked on the matter, and $6,139.47 in expenses. [Larkin Dec. ¶¶ 2, 7].

1. Defendants’ Requested Hours and Rates

In connection with the fee request, Defendants submitted an exhibit listing all of [169]*169the professionals who worked on this matter with their role, a proposed billing rate, and hours billed for each invoice. [Docket No. 40, Ex. I]. The Defendants also submitted individual invoices with records of each timekeeper’s billing entries. • [Docket No. 40, Exs. J-S]. The Defendants propose the following rates and billable hours for the professionals who worked on the case.

[[Image here]]

[Docket No. 4,-Ex. I].

In support of these claimed rates and hours, Defendants offered four other pieces of evidence. First,.they offered a declaration from Venable attorney Edwin M. Larkin (the “Larkin Declaration” or “Larkin Dec.”). [Docket No. 40]. The Larkin Declaration indicates that three attorneys — partner Edwin M. Larkin (“Larkin”), of counsel Thomas. A. Cohn (“Cohn”), and associate Heather Maly— were the principal attorneys who worked on the case.1 [Larkin Dec. ¶ 14]. The Larkin Declaration further indicates that these attorneys typically bill out at $800, $650, and $415 an hour respectively. [M]. However, the Larkin Declaration acknowledges that the prevailing market rates in this vicinage are lower than these rates and instead requests $600 an hour for partners and of counsel working on the case and $300 an hour for associates working on the case. [Id. ¶¶ 16-17]. The Larkin Declaration also described the nature of Venable’s work on the case.

Specifically, Venable: (1) reviewed approximately 21,500 documents to respond to FTC discovery requests; (2) engaged in numerous conference calls with the FTC relating to document production efforts; (3) contacted numerous third parties to obtain relevant information; (4) compiled, reviewed, and produced various financial statements; (5) negotiated and finalized the temporary restraining order; (6) participated in court conferences; (7) opposed a motion to strike Defendants’ affirmative defenses; (8) prepared for, and defended,, a Rule 30(b)(6) deposition and the deposition of Defendant Andrew Davidson; - (9) negotiated a protective order; and (10) negotiated and settled the matter. [Id. ¶ 20].

Second, Defendants submitted National Law Journal billing surveys from 2010 and 2011, which report data about the ranges various firms charge at the partner and associate level. [Docket No. 40, Exs. G and H]. The surveys, which appear to be based on self-reporting by law firms2, do [170]*170not indicate, however, whether the type of work performed by the firms was similar to the work-performed here in nature or complexity, and they do not indicate whether the professionals performing them are similar to the professionals here. [Id]. And the 2010 survey includes only one firm, Archer & Greiner, that is in the Southern New Jersey region where this Court sits, while the 2011 survey includes no firms in this region. [I'd].

Third, Defendants submitted a declaration from Cohn (the “Cohn Declaration” or “Cohn Dec.”). [Docket No. 46]. The Cohn Declaration explains that, in Cohn’s view, the hours billed in this matter were driven by the FTC’s “aggressive approach” to litigating this case and that Defendants took steps to minimize costs by not serving any affirmative discovery and by filing no motions in response to the FTC’s discovery requests. [Cohn Dec. ¶¶ 7-2Q],

Fourth, Defendants submitted a declaration from Defendant: Andrew Davidson (the “Davidson Declaration” or “Davidson Dec-.”). [Docket -No. 47]. The Davidson Declaration explains that the $4,500 Davidson was allotted each month was used for basic living expenses and that the amount unspent at the end of each month was, at most, $100. [Davidson Dec. ¶¶ 9-10].

2. The FTC’s Response

The FTC opposes Defendants’ motion. It does not dispute Venable’s costs. It does, however, árgue that neither the claimed rates, nor billable hours, are justified. The FTC has submitted a detailed listing of objections to each time entry submitted by Defendants. [Docket No. 45, Ex. 2].

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Ismail v. IHI Power Services Corp.
E.D. Pennsylvania, 2023

Cite This Page — Counsel Stack

Bluebook (online)
912 F. Supp. 2d 165, 2012 WL 6568417, 2012 U.S. Dist. LEXIS 178021, Counsel Stack Legal Research, https://law.counselstack.com/opinion/federal-trade-commission-v-circa-direct-llc-njd-2012.