URS Holdings. v. John Ripley

Opinion

Case 2:17-cv-05398-RSWL-AGR Document 423 Filed 05/09/22 Page 1 of 14 Page ID #:10386 'O' 1 2 3 4 5 6 7 CV17-5398-RSWL-AGRx CONSTRUCTION, INC., ORDER re: Plaintiff, PLAINTIFF’S v. TO ESTABLISH ATTORNEYS’ FEES GARY TOPOLEWSKI, et al., Defendants. Plaintiff AECOM Energy & Construction, Inc. (“AECOM”) brought this Action for injunctive relief and damages against Defendants Morrison Knudsen Corporation; Morrison-Knudsen Company, Inc.; Morrison-Knudsen Services, Inc.; Morrison-Knudsen International, Inc. (collectively, “Corporate Defendants”); and Gary Topolewski (“Defendant Topolewski”) (collectively, “Defendants”). The Action arises out of Defendants’ infringing use of the identity and goodwill of Morrison Knudsen Corporation (“MK IP” or “MK brand”), which AECOM 1 Case 2:17-cv-05398-RSWL-AGR Document 423 Filed 05/09/22 Page 2 of 14 Page ID #:10387

1 owns the rights to. 2 Currently before the Court is a supplemental

3 briefing (“Supplement”) [419] filed by AECOM to 4 establish the amount of attorneys’ fees pursuant to this 5 Court’s Order granting AECOM’s Motion for Sanctions 6 [417]. AECOM seeks $387,902.40 in post-remand 7 attorneys’ fees in addition to $873,628.02 that was 8 previously awarded for the initial phase of this 9 litigation. Having reviewed all papers submitted pertaining to the Supplement, the Court NOW FINDS AND RULES AS FOLLOWS: the Court reduces AECOM’s post-remand attorneys’ fees to $372,473.60 and affirms its previous attorneys’ fees award of $873,628.02, thus awarding AECOM a total of $1,246,101.62 in attorneys’ fees. A. Factual Background The facts underlying this Action are stated at length in this Court’s previous Order granting AECOM’s Motion for Summary Judgment and Permanent Injunction. See generally Order re: Pl.’s Mot. for Summ. J., ECF Nos. 242, 243. Moreover, the facts giving rise to this Supplement are stated in this Court’s previous Order granting AECOM’s Motion for Sanctions, where the Court granted AECOM’s request for attorneys’ fees and costs and ordered AECOM to provide supplemental briefing to establish the amount of such fees and costs. See generally Order re: Pl.’s Mot. for Sanctions, ECF No. 417. Because the facts are well-known to the parties, 2 Case 2:17-cv-05398-RSWL-AGR Document 423 Filed 05/09/22 Page 3 of 14 Page ID #:10388

1 the Court need not restate them here. 2 B. Procedural Background

3 On November 8, 2018, this Court granted [242, 243] 4 AECOM’s Motion for Summary Judgment against Defendants,1 5 finding willful infringement of the MK brand and 6 awarding AECOM $1,802,834,672 (“$1.8 billion”) in 7 damages.2 On February 21, 2019, Defendants filed a 8 Motion for Alteration, Amendment, or Reconsideration 9 [268] of the Court’s Order granting AECOM’s Motion for Summary Judgment, which the Court denied [305] on April 24, 2019. Also on April 24, 2019, the Court granted AECOM’s Motion to Set Attorneys’ Fees [262] and awarded AECOM $873,628.02 in attorneys’ fees [305]. Defendants appealed the $1.8 billion damages award, which the Ninth Circuit reversed and remanded to this Court [339] on March 24, 2021.3 Following remand, this 1 AECOM also named four additional individual defendants in its Complaint: Bud Zulakoff, John Ripley, Todd Hale, and Henry Blum (collectively, “Defaulting Defendants”). See generally Compl., ECF No. 1. On December 4, 2017, the court clerk entered default as to these four individuals. See generally Default by Clerk. On November 9, 2018, AECOM filed a Motion for Default Judgment against Defaulting Defendants. See generally Mot. for Default J., ECF No. 244. On January 24, 2019, the Court granted AECOM’s motion, finding Defaulting Defendants jointly and severally liable for AECOM’s damages. See generally Order re: Mot. for Default J. 2 The Court also granted AECOM’s request for a permanent injunction, ordering Defendants to cease their use of the MK IP, and awarded AECOM its attorneys’ fees. See Order re: Pl.’s Mot. for Summ. J. 45:5-55:8. 3 Defendants also argued on appeal that AECOM lacked Article III standing, which the Ninth Circuit rejected. See Ninth Cir. Mem. at 2-3, ECF No. 339. 3 Case 2:17-cv-05398-RSWL-AGR Document 423 Filed 05/09/22 Page 4 of 14 Page ID #:10389

1 Court reopened discovery on damages.

2 On December 16, 2021, Defendants filed Motions for

3 Summary Judgment [395, 396], arguing that AECOM could 4 not prove that Defendants profited from their 5 infringement scheme. On December 17, 2021, AECOM filed 6 a Motion for Sanctions [398], requesting evidentiary 7 sanctions, terminating sanctions, and monetary 8 sanctions. On February 24, 2022, this Court granted in 9 part and denied in part [417] AECOM’s Motion for Sanctions and denied [417] Defendants’ Motions for Summary Judgment. Specifically, this Court: (1) granted AECOM’s request for evidentiary sanctions and deemed as true that Defendants performed and collected on a $36 million construction contract; (2) granted AECOM’s request for terminating sanctions and entered default judgment against Defendants in the amount of $36 million; (3) denied AECOM’s requests for compensatory and coercive sanctions; and (4) granted AECOM attorneys’ fees and costs in an amount to be established by supplemental briefing.4 On March 14, 2022, AECOM filed the instant Supplement [419] and lodged its Proposed Final Judgment [420]. On March 21, 2022, Defendant Topolewski objected [422] to the Proposed Final Judgment, taking issue with the requested attorneys’ fees amount. ///

4 The Court also bound Defaulting Defendants to this Order. See generally Order re: Mot. for Sanctions, ECF No. 417. 4 Case 2:17-cv-05398-RSWL-AGR Document 423 Filed 05/09/22 Page 5 of 14 Page ID #:10390

2 A. Legal Standard

3 “Attorneys’ fees can be recovered only to the 4 extent they are reasonable.” SAS v. Sawabeh Info. 5 Servs. Co., No. CV1104147MMMMANX, 2015 WL 12763541, at 6 *4 (C.D. Cal. June 22, 2015) (citing In re SNTL Corp., 7 F.3d 826, 842 (9th Cir. 2009)). Courts routinely use 8 the lodestar method to determine the reasonableness of 9 attorneys’ fees. See Christensen v. Stevedoring Servs. of Am., 557 F.3d 1049, 1053 (9th Cir. 2009); City of Burlington v. Dague, 505 U.S. 557, 562 (1992) (“[T]he ‘lodestar’ figure has . . . become the guiding light of [the court's] fee-shifting jurisprudence.”). The lodestar figure is calculated by multiplying the hours reasonably spent on the litigation by a reasonable hourly rate. See, e.g., Gonzalez v. City of Maywood, 729 F.3d 1196, 1202 (9th Cir. 2013). B. Discussion AECOM seeks $387,902.40 in attorneys’ fees incurred after remand from the Ninth Circuit, in addition to the previous award of $873,628.02, for a total of $1,261,530.42 in attorneys’ fees. Proposed Amen. Final J. 2:7-14, ECF No. 420-1. Defendant Topolewski takes issue with the requested fee award, objecting to both the reasonableness of the hours expended by AECOM’s counsel and the reasonableness of the rates charged. See generally Topolewski Objections to Proposed Amen. Final J. (“Topolewski Objs.”), ECF No. 422. The Court 5 Case 2:17-cv-05398-RSWL-AGR Document 423 Filed 05/09/22 Page 6 of 14 Page ID #:10391

1 examines the reasonableness of the hours expended by

2 AECOM’s counsel and the reasonableness of the rates

3 charged in turn below. 4 1. Reasonable Hours 5 Defendant Topolewski appears to argue that AECOM 6 cannot recover attorneys’ fees for time spent on the 7 unsuccessful stages of this litigation. See generally 8 Topolewski Objs. Namely, Defendant Topolewski argues 9 that AECOM cannot recover fees for certain work because: (1) Magistrate Judge Rosenberg granted Defendant Topolewski’s motion for protective order and therefore prevented AECOM from compelling third-party discovery regarding Defendant Topolewski; and (2) the Ninth Circuit reversed AECOM’s $1.8 billion damages award. Id. Defendant Topolewski is mistaken, however. AECOM can, indeed, recover attorneys’ fees for hours spent on the stages of this litigation that were not fruitful. Federal jurisprudence in this area is clear, stating that plaintiffs may, and should, recover attorneys’ fees for the unsuccessful stages of litigation if those stages contributed to the ultimate victory of the lawsuit. See Cabrales v. Cty. of Los Angeles, 935 F.2d 1050, 1053 (9th Cir. 1991) (citing Hensley v. Eckerhart, 461 U.S. 414 (1983)) (“Rare, indeed, is the litigant who doesn’t lose some skirmishes on the way to winning the war. Lawsuits usually involve many reasonably disputed issues and a lawyer who takes on only those battles he is certain of winning is 6 Case 2:17-cv-05398-RSWL-AGR Document 423 Filed 05/09/22 Page 7 of 14 Page ID #:10392

1 probably not serving his client vigorously enough;

2 losing is part of winning.”); see also Hensley, 461 U.S.

3 at 435 (“Where a plaintiff has obtained excellent 4 results, his attorney should recover a fully 5 compensatory fee . . . encompass[ing] all hours 6 reasonably expended on the litigation . . . . [T]he fee 7 award should not be reduced simply because the plaintiff 8 failed to prevail on every contention raised in the 9 lawsuit.”). Though unsuccessful, AECOM’s efforts in litigating the third-party subpoenas and the $1.8 billion damages award were essential to its ultimate success in securing terminating sanctions. The Court reminds Defendant Topolewski that it is due to his collective failure with Corporate Defendants to provide financial discovery that AECOM had to litigate the $1.8 billion damages award, serve third-party discovery requests, and move for terminating sanctions in the first place. Yet, unabashedly, Defendant Topolewski asks this Court to carve out AECOM’s litigation failures in calculating the attorney’s fees. The Court will do no such thing. Cabrales, 935 F.2d at 1053 (“[Defendant] would have us scalpel out attorney’s fees for every setback, no matter how temporary, regardless of its relationship to the ultimate disposition of the case. This makes little sense.”). Accordingly, AECOM is entitled to attorneys’ fees expended on the third-party discovery requests, 7 Case 2:17-cv-05398-RSWL-AGR Document 423 Filed 05/09/22 Page 8 of 14 Page ID #:10393

1 including time spent unsuccessfully opposing Defendant

2 Topolewksi’s Motion for Protective Order, and time spent

3 litigating the $1.8 billion damages award that was 4 ultimately overturned by the Ninth Circuit. See Pierce 5 v. Cty. of Orange, 905 F. Supp. 2d 1017, 1032 (C.D. Cal. 6 2012) (citing Cabrales, 935 F.2d at 1053; O’Neal v. City 7 of Seattle, 66 F.3d 1064, 1069 (9th Cir. 1995)) (“[T]ime 8 spent unsuccessfully opposing motions or requests on the 9 way to prevailing in a case may be compensable.”); see also Cabrales, 935 F.2d at 1053 (awarding attorneys’ fees to plaintiff even though judgment was vacated by the Supreme Court because plaintiff ultimately won her case on remand). To be clear, the Court notes that AECOM may only recover attorneys’ fees for hours reasonably expended. See Van Gerwen v. Guarantee Mut. Life Co., 214 F.3d 1041, 1045 (9th Cir. 2000) (quoting Hensley, 461 U.S. at 434) (“A district court should exclude from the lodestar amount hours that are not reasonably expended because they are ‘excessive, redundant, or otherwise unnecessary.’”). Looking at the billing statement submitted by AECOM, the Court finds that the 5.7 hours billed by legal assistants for trial preparation are somewhat unreasonable. See Declaration of Yungmoon Chang (“Chang Decl.”) 2:8, ECF No. 419-1. While some trial preparation was necessary, including researching the Court’s trial procedures and preparing the stipulation to continue trial, the Court finds that such 8 Case 2:17-cv-05398-RSWL-AGR Document 423 Filed 05/09/22 Page 9 of 14 Page ID #:10394

1 work could have been completed in 3.7 hours.

2 Accordingly, the Court reduces the hours billed by legal

3 assistants for trial preparation by two hours. See 4 Gonzalez, 729 F.3d at 1202 (noting that courts may 5 perform an “hour-by-hour analysis” of attorneys’ fees 6 requests and “exclude those hours for which it would be 7 unreasonable to compensate the prevailing party”). The 8 Court reduces these hours based on Senior Paralegal 9 Keith Catuara’s hourly rate because Mr. Catuara performed most of the trial preparation work. The Court otherwise finds that the hours expended on this litigation post-remand by AECOM’s counsel are reasonable. 2. Reasonable Rates Reasonable hourly rates are calculated according to the “prevailing market rates in the relevant legal community for similar services by lawyers of reasonably comparable skill, experience, and reputation.” Valentin v. Grant Mercantile Agency, Inc., 2017 WL 6604410, at *9 (E.D. Cal. Dec. 27, 2017) (citing Blum v. Stenson, 465 U.S. 886, 895 (1984)). The relevant legal community is the forum in which the district court sits. Carson v. Billings Police Dep't, 470 F.3d 889, 891 (9th Cir. 2006). In determining whether rates are reasonable, “[t]he Court [may] also draw[] on precedent from other courts, its knowledge of the prevailing community rates, and its evaluation of the quality of the work performed by counsel. Toyo Tire & Rubber Co. Ltd v. Hong Kong 9 Case 2:17-cv-05398-RSWL-AGR Document 423 Filed 05/09/22 Page 10 of 14 Page ID #:10395

1 Tri-Ace Tire Co., No. SACV1400054CJCJPRX, 2018 WL

2 702851, at *3 (C.D. Cal. Jan. 24, 2018) (citation

3 omitted). 4 AECOM’s billing statement reflects that the 5 following hourly rates were charged in 2021: 6 7 Diana Torres (lead partner) $1,116/hour 8 9 Yungmoon Chang (senior associate) $876/hour Maria Beltran (midlevel associate) $656/hour Adrineh Shakelian (first year associate) $550/hour Keith Catuara (senior paralegal) $396/hour Thomas Ambrus (junior paralegal) $251/hour Hector Alejandro (junior paralegal) $226/hour While these rates have increased since the Court last granted AECOM attorneys’ fees in 2018, they remain within or minimally above market range. See Univ. Elecs., Inc. v. Univ. Remote Control, Inc., 130 F. Supp. 3d 1331, 1337 (C.D. Cal. 2015) (noting intellectual property partners at major law firms bill in the range of $600 to $1,100 per hour); see also Perfect 10, Inc. v. Giganews, Inc., No. CV 11-07098-AC SHX, 2015 WL 10 Case 2:17-cv-05398-RSWL-AGR Document 423 Filed 05/09/22 Page 11 of 14 Page ID #:10396

1 1746484, at *20 (C.D. Cal. Mar. 24, 2015) (noting that

2 attorney rates ranging from $390 to $1,002.96 per hour

3 and paralegal rates between $240 and $345 per hour were 4 reasonable for the Los Angeles area). As such, the 5 rates here are reasonable and the Court rejects 6 Defendant Topolewski’s unsupported and unpersuasive 7 arguments to the contrary. 8 3. Lodestar Calculation 9 As stated above, the Court reduces the hours billed by legal assistants by two hours according to Mr. Catuara’s hourly rate of $396/hour. The Court also notes that there were several errors in the table provided in the Chang Declaration where the amounts charged did not correspond to the hours billed. See, e.g., Chang Decl. 2:1-10 (stating that Diana Torres charged $1505 for one hour of trial work, when Ms. Torres’ fee is $1,116 per hour). After an extensive analysis of the billing sheet submitted by AECOM’s counsel, the accurate lodestar calculation is as follows:5 /// /// /// 5 AECOM did not provide hourly rates for work done by Mark Malone, Daniel Shin, La Tonya D., Stephanie Rosa, or Library Factual. See generally Ex. A (“Billing Statement”), ECF No. 419- 2. As such, the Court calculates their hourly rates based on the billing statement submitted by AECOM’s counsel. See id. 11 Case 2:17-cv-05398-RSWL-AGR Document 423 Filed 05/09/22 Page 12 of 14 Page ID #:10397 1 Diana Torres 51.8 hours @ $1,116/hour 2 = $57,808.80 3 4 Yungmoon Chang 202.9 hours @ $876/hour 5 = $177,740.40 6 7 Maria Beltran 36.2 hours @ $656/hour 8 = $23,747.20 9 Adrineh Shakelian 106.1 hours @ $550/hour = $58,335.00 Keith Catuara 117.5 hours – 2 hours = 115.5 hours @ $396/hour = $45,738.00 Thomas Ambrus 11.1 hours @ $251/hour = $2,786.10 Hector Alejandro 13 hours @ $226/hour = $2,938.00 Mark Malone 1.8 hours @ $374/hour = $673.20 Daniel Shin 0.5 hours @ $361/hour = $180.50 12 Case 2:17-cv-05398-RSWL-AGR Document 423 Filed 05/09/22 Page 13 of 14 Page ID #:10398 1 La Tonya D. 4.6 hours @ $308/hour 2 = $1,416.80 3 4 Stephanie Rosa 1.7 hours @ $229/hour 5 = $389.30 6 7 Library Factual 2.1 hours @ $343/hour 8 = $720.30 9 TOTAL $372,473.60 Given the lodestar amount, the Court reduces the post-remand attorneys’ fees sought by AECOM from $387,902.40 to $372,473.60 and affirms its previous attorneys’ fees award of $873,628.02, reflecting a total of $1,246,101.62. /// /// /// /// /// /// /// /// /// /// /// 13 Case 2:17-cv-05398-RSWL-AGR Document 423 Filed 05/09/22 Page 14 of 14 Page ID #:10399 2 Based on the foregoing, the Court awards AECOM

3 $372,473.60 in attorneys’ fees incurred after remand 4 from the Ninth Circuit. The Court also affirms its 5 previous attorneys’ fees award of $873,628.02. As such, 6 the cumulative total of attorneys’ fees awarded to AECOM 7 is $1,246,101.62. The Court will amend AECOM’s Proposed 8 Final Judgment to reflect as much. 9 /s/ Ronald S.W. Lew DATED: May 9, 2022 _____________________________ HONORABLE RONALD S.W. LEW Senior U.S. District Judge 14