Linde v. Arab Bank, PLC

293 F.R.D. 138, 2013 WL 3096100, 2013 U.S. Dist. LEXIS 87040
District Court, E.D. New York·Decided June 17, 2013·No. No. 04-CV-2799 (NG)(VVP)·Published·Cited by 6 cases

Opinion

ORDER

NINA GERSHON, District Judge:

In an order filed July 12, 2010, pursuant to Rule 37 of the Federal Rules of Civil Procedure, the plaintiffs were awarded a variety of sanctions against the defendant Arab Bank for its failure to comply with its obligations to produce discovery. The sanctions included “attorneys’ fees and costs incurred as a result of the defendant’s production failures and the resulting sanctions litigation.” Linde v. Arab Bank, PLC, 269 F.R.D. 186, 205 (E.D.N.Y.2010), collateral order appeal dismissed and mandamus denied, 706 F.3d 92 (2d Cir.2013). Among other things, the order noted that the plaintiffs had spent massive amounts of time and money flying to Jordan to depose witnesses who were directed not to answer questions on the previously rejected ground of foreign bank secrecy and that the defendant’s conduct had caused extensive delays and waste of resources. Linde, 269 F.R.D. at 205. The issue present[140]*140ed now is the amount of reasonable fees and expenses to be awarded.

“Determining a ‘reasonable attorney’s fee’ is a matter that is committed to the sound discretion of a trial judge____” Perdue v. Kenny A., 559 U.S. 542, 130 S.Ct. 1662, 1676, 176 L.Ed.2d 494 (2010). The “presumptively reasonable fee” for an attorney’s work is what a reasonable client would be willing to pay for that work. Arbor Hill Concerned Citizens Neighborhood Ass’n v. Cnty. of Albany and Albany Cnty. Bd. of Elections, 522 F.3d 182, 190 (2d Cir.2008).

The plaintiffs have requested four categories of fees and expenses: fees for the nine depositions of Arab Bank employees conducted in Jordan; fees for non-deposition activities related to the Bank’s withholding of documents and information on foreign bank secrecy grounds, including briefing and attendance at hearings; fees associated with the instant application; and expenses associated with these activities. The defendant raises various objections to the requests which are addressed below.

I. General Objections

Relevance of the ATS Claims

In recent correspondence, the Bank argues that the claims under the Alien Tort Statute (“ATS”), 28 U.S.C. § 1350, which constitute the greater number of the approximately 6000 claims in these related cases, will likely be dismissed under Kiobel v. Royal Dutch Petroleum Co., — U.S.-, 133 S.Ct. 1659, 185 L.Ed.2d 671 (2013), and therefore any attorneys’ fees related to ATS claims would be inappropriate.

The Bank’s argument is rejected. All of the claims in these cases were consolidated for pretrial purposes and discovery, including the issue of the Bank’s assertion of foreign bank secrecy laws, and the parties and the court have treated them together. More importantly, whether or not claims are ultimately successful, a violator of discovery orders is not relieved of the monetary sanctions imposed for those violations. See Gregory P. Joseph, Sanctions: The Federal Law of Litigation Abuse § 47(B) (4th ed. 2008). The role of a monetary sanction under Rule 37 is to compensate a party for unnecessarily expended attorneys’ fees and expenses; it is not to reward the prevailing party in the suit. Therefore, the potential dismissal of the ATS claims is immaterial to the plaintiffs’ fee application.2

Date From Which Fees and Expenses Should be Calculated

The plaintiffs’ lawyers request fees and expenses beginning in April 2007. The defendant argues that the plaintiffs should not recover for any work performed before October 31, 2007, when, it argues, the conduct which the court found “noncompliant” first occurred. Based upon the history of the litigation over the Bank’s foreign bank secrecy objections, I conclude that the plaintiffs’ starting date is amply supported.

On November 25, 2006, Magistrate Judge Pohorelsky overruled the Bank’s foreign bank secrecy objections to producing documents and responding to other discovery requests. Linde v. Arab Bank, PLC, 463 F.Supp.2d 310, 317 (E.D.N.Y.2006). I affirmed that order on March 14, 2007. Linde v. Arab Bank, PLC, No. 04-cv-2799 (ECF No. 320).

The Bank’s argument that, because Judge Pohorelsky had allowed the Bank some time to obtain permission to disclose the information sought from pertinent governments and authorities, there was not yet any “noneompliance” on its part, is simply wrong. It was clear from Judge Pohorelsky’s order that, whether or not the Bank received permission to comply, foreign bank secrecy laws were not a valid basis for not complying with discovery demands. Moreover, as I noted in the sanctions order filed July 12, 2010, the Bank was required to make a good faith effort to secure permission from the foreign authorities, and it did not establish that it had done so. Linde, 269 F.R.D. at 193-94, 199. On the contrary, I found, for example, that its letters to the Lebanese authority “were calculated to fail.” Id. at 199. Final[141]*141ly, the Bank argues that three of the depositions of bank officials in Jordan, at which bank secrecy was used to bar answers to questions, should not be compensated because they were taken too early, in May 2007. The Bank relies upon an order of Judge Pohorelsky, from June 22, 2006 (EOF No. 198 at 3), stating that the depositions of Arab Bank employees residing outside of the United States “should not proceed until the bank secrecy issue is decided.” Id. What the Bank ignores is that the issue was decided by March 14, 2007, well before those depositions.

Hourly Rates

The plaintiffs’ attorneys seek fees at rates varying up to $655 per hour for partners. The defendant, noting the body of case law to the effect that partners in the Eastern District of New York typically are awarded no more than $300 to $400 per hour in routine eases, argues that these rates are too high.

In determining the appropriate hourly rate, the district court should, among other things, “attempt to approximate the ‘market rates prevailing in the community for similar services by lawyers of reasonably comparable skill, experience and reputation.’” Green v. City of New York, 403 Fed.Appx. 626, 629 (2d Cir.2010) (citing Arbor Hill, 522 F.3d at 190 and quoting Gierlinger v. Gleason, 160 F.3d 858, 882 (2d Cir.1998)). “[I]n order to provide adequate compensation where the services were performed many years before the award is made, the rates used by the court ... should be ‘current rather than historic hourly rates.’ ” Gierlinger, 160 F.3d at 882 (quoting Missouri v. Jenkins, 491 U.S. 274, 284, 109 S.Ct. 2463, 105 L.Ed.2d 229 (1989)). Current rates, rather than historic rates, are used in an effort to “compensate [the attorney] for the delay in payment” of fees. LeBlanc-Sternberg v. Fletcher,

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Linde v. Arab Bank, PLC, 293 F.R.D. 138, 2013 WL 3096100, 2013 U.S. Dist. LEXIS 87040 (E.D.N.Y. 2013).

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