Zhu v. Li

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 JIAJIE ZHU, Case No. 19-cv-02534-JSW

8 Plaintiff, ORDER DENYING MOTION FOR LEAVE TO FILE MOTION FOR 9 v. RECONSIDERATION AND AWARDING ATTORNEY’S FEES AND 10 JING LI, et al., COSTS Defendants. Re: Dkt. Nos. 241, 245 11

12 13 Now before the Court for consideration is the supplemental statement regarding attorney’s 14 fees and the motion for leave to file a motion for reconsideration filed by Plaintiff Jiajie Zhu 15 (“Plaintiff”). Plaintiff seeks reconsideration of the Court’s July 26, 2023 Order granting, in part, 16 and denying, in part, Plaintiff’s motion for attorney’s fees. For the following reasons, the Court 17 DENIES Plaintiff’s motion for leave to file a motion for reconsideration. The Court FURTHER 18 ORDERS that Plaintiff shall recover $177,571 in attorney’s fees and $16,267.15 in costs. 19 BACKGROUND 20 In this action, the jury found in favor of Plaintiff at trial on his claims for breach of 21 contract, breach of fiduciary duty, and intentional misrepresentation. Plaintiff subsequently 22 moved for attorney’s fees and costs, arguing that the indemnification provision of the Purchase 23 and Sale Agreement (“PSA”) entitled him to such recovery. The Court found that the 24 indemnification provision permitted Plaintiff to recover his attorney’s fees and costs related to the 25 breach of contract claim but not his tort claims. (See generally Dkt. No. 241.) The Court ordered 26 Plaintiff to file a supplemental statement presenting a revised accounting of the requested award 27 that was limited to work on the breach of contract claim. 1 same day, he filed a motion for reconsideration of the July 26, 2023 Order arguing that the Court 2 failed to consider his entitlement to fees and costs based on a different agreement, the operating 3 agreement for Teetex (“Operating Agreement”). 4 The Court will address additional facts as necessary in the analysis. 5 ANALYSIS 6 A. The Court Denies the Motion for Leave to File a Motion for Reconsideration. 7 Pursuant to Civil Local Rule 7-9, a party may seek leave to file a motion for 8 reconsideration of an interlocutory order at any time before judgment. Civ. L.R. 7-9(a). A motion 9 for reconsideration may be made on one of three grounds: (1) a material difference in fact or law 10 exists from that which was presented to the court, which, in the exercise of reasonable diligence, 11 the party applying for reconsideration did not know at the time of the order for which 12 reconsideration is sought; (2) the emergence of new material facts or a change of law; or (3) a 13 manifest failure by the court to consider material facts or dispositive legal arguments presented 14 before such order. Civ. L.R. 7-9(b)(1)-(3). Reconsideration of a prior ruling is an “extraordinary 15 remedy, to be used sparingly.” Kona Enters., Inc. v. Estate of Bishop, 229 F.3d 877, 890 (9th Cir. 16 2000). The moving party may not reargue any written or oral argument previously asserted to the 17 court. Civ. L.R. 7-9(c). “Once a reconsideration motion is filed, reconsideration is appropriate ‘if 18 the district court (1) is presented with newly discovered evidence, (2) committed clear error or the 19 initial decision was manifestly unjust, or (3) there is an intervening change in controlling law.’” 20 Cnty. of Santa Clara v. Trump, 267 F. Supp. 3d 1201, 1207-08 (N.D. Cal. 2017) (quoting Sch. 21 Dist. No. 1J, Multnomah Cnty., Or. v. ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993)). 22 Plaintiff argues that reconsideration is warranted based on the Court’s manifest failure to 23 consider a material fact which was presented to the Court before the order resolving Plaintiff’s 24 motion for attorney’s fees. Specifically, Plaintiff argues that he is entitled to attorney’s fees based 25 on the Operating Agreement, which “was presented to the Court in plaintiff’s request for judicial 26 notice and was admitted into evidence as Exhibit 2.” (Mot. at 3.) 27 The Court disagrees. The Operating Agreement was not presented to the Court in 1 Agreement at the time he filed the motion for attorney’s fee, he did not mention the agreement in 2 his motion let alone argue that it presented an alternative basis for a potential entitlement to 3 attorney’s fees. Rather, Plaintiff argued he was entitled to attorney’s fees based on the PSA, and 4 the Court addressed his entitlement to attorney’s fees based on that agreement. If Plaintiff 5 believed the Operating Agreement presented another basis for the relief he sought, he should and 6 could have argued that in his original motion. His failure to do so does not entitle him to 7 reconsideration of the Court’s order. See Mitchell v. Cnty. of Contra Costa, No. 21-cv-05014- 8 DMR, 2023 WL 420676, at *2 (N.D. Cal. Jan. 26, 2023 (“[d]efendants cannot use a motion for 9 reconsideration to get a ‘second bite’ at something they could and should have put before the court 10 in the first instance.”). 11 Plaintiff’s argument that he presented the Operating Agreement to the Court because it was 12 admitted as an exhibit at trial and was included in his request for judicial notice is not well-taken. 13 Plaintiff did not direct the Court to the Operating Agreement or argue it had any relevance to the 14 attorney’s fee motion. Thus, the fact that it was admitted as an exhibit at trial does not mean that 15 it was presented to the Court in connection with the fee motion. It is not the task of the Court to 16 manufacture arguments for counsel or scour the record for any possible basis on which it could 17 grant Plaintiff’s request. See Indep. Towers of Washington v. Washington, 350 F.3d 925, 929 (9th 18 Cir. 2003) (embracing the maxim, “[j]udges are not like pigs, hunting for truffles buried in 19 briefs.”). 20 Plaintiff’s assertion that he presented the Operating Agreement to the Court in his request 21 for judicial notice is also without merit. First, the request for judicial notice was submitted in 22 connection with Plaintiff’s motion for a new trial, not the motion for attorney’s fees. Even if the 23 request for judicial notice was connected to the relevant motion, Plaintiff failed to identify the 24 specific exhibits or contents of any exhibit that might be pertinent to his arguments. Instead, he 25 requested judicial notice of every exhibit admitted at trial. Such untailored requests for judicial 26 notice are not consistent with the law’s requirements. Threshold Enterprises Ltd. v. Pressed 27 Juicery, Inc., 445 F. Supp. 3d 139, 146-47 (N.D. Cal. 2020) (noting that while “dumping large 1 approach to requesting judicial notice…is not consistent with the law’s requirements.”). 2 Plaintiff has failed to show a “manifest failure by the court to consider material facts or 3 dispositive legal arguments presented before” the July 26, 2023 Order resolving the motion for 4 attorney’s fees. Plaintiff’s motion for leave to file a motion for reconsideration is DENIED. 5 B. The Reasonableness of the Fee Amount. 6 In his original motion for attorney’s fees, Plaintiff requested $376,373 in fees and 7 $91,654.20 in costs. The Court granted Plaintiff’s motion, in part, determining that Plaintiff was 8 the prevailing party and that the PSA authorized the recovery of attorney’s fees for the breach of 9 contract claim. However, in order to permit the Court to assess the reasonableness of the 10 requested attorney’s fees, the Court ordered Plaintiff to file a supplemental statement providing a 11 revised account of the request for attorneys’ fees and costs limited to those incurred in connection 12 with the breach of contract claim. Plaintiff filed a supplemental statement on July 26, 2023. 13 Courts apply the lodestar method to calculate reasonable attorney’s fees under California 14 law. Int’l Petroleum Prods. & Additives Co. v. Black Gold S.A.R.L., No. 19-cv-03004-YGR, 2020 15 WL 789567, at *1 (N.D. Cal. Feb. 18, 2020) (“The Court applies California’s lodestar method to 16 calculate the appropriate attorneys’ fees to be awarded.”) (citing Meister v. Regents of Univ. of 17 California, 67 Cal. App. 4th 437, 448–49 (1998)). “[T]he court must calculate the ‘lodestar 18 figure’ by taking the number of hours reasonably expended on the litigation and multiplying it by 19 a reasonable hourly rate.” Fischer v. SJB-P.D. Inc., 214 F.3d 1115, 1119 (9th Cir. 2000) (citing 20 Hensley v. Eckerhart, 461 U.S. 424, 433 (1983)); see also PLCM Grp. v. Drexler, 22 Cal. 4th 21 1084, 1095 (2000) (“[T]he fee setting inquiry in California ordinarily begins with the ‘lodestar,’ 22 i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate.”). 23 The party requesting attorney’s fees must prove the requested hours are reasonable by 24 providing “a sufficient and proper basis for making that determination.” Rey v. Madera Unified 25 Sch. Dist., 203 Cal. App. 4th 1223, 1244 (2012). “The Court must review time records to 26 determine whether the hours are adequately documented in a manner that can be properly billed 27 directly to clients.” Int’l Petroleum Prods., 2020 WL 789567 at *2 (citing Hensley, 461 U.S. at 1 billing entries” because “[c]onclusory and unsubstantiated objections” are not sufficient. 2 Parkridge Ltd. v. Indzyen, Inc., No. 16-cv-07387-JSW(LB), 2020 WL 9422351, at *4 (N.D. Cal. 3 May 8, 2020). “Even if the opposing party has not objected to the time billed, the [C]ourt cannot 4 uncritically accept a fee request and must assess whether the time billed is reasonable in light of 5 the work performed in the case.” Id. 6 The Court must also determine whether the requested rates are reasonable. “The party 7 seeking the fee has the burden of producing satisfactory evidence, in addition to the affidavits of 8 its counsel, that the requested rates are in line with those prevailing in the community for similar 9 services of lawyers of reasonably comparable skill and reputation.” Int’l Petroleum Prods., 2020 10 WL 789567 at *3 (citing Jordan v. Multnomah Cty., 815 F.2d 1258, 1263 (9th Cir. 1987)). “The 11 reasonable hourly rate is that prevailing in the community for similar work by lawyers of 12 comparable skill, experience, and reputation.” Parkridge Ltd., 2020 WL 9422351 at *3 (citation 13 omitted); see also Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 979 (9th Cir. 2008). 14 “Generally, the relevant community is the forum where the district court sits.” Parkridge Ltd., 15 2020 WL 9422351 at *3. 16 In his original motion, Plaintiff sought $376,373 in fees and $91,654.20 in costs. He now 17 requests a reduced award of attorney’s fees in the amount of $355,163 and a reduced award of 18 costs in the amount of $32,534.30. Plaintiff argues that the majority of the hours spent on this 19 case are not easily divisible because they applied to both the tort and contract claims. Plaintiff 20 submits that the only fees and costs that did not “directly or indirectly relate” to Plaintiff’s breach 21 of contract claim were the expert fees and costs of Plaintiff’s expert, Carl Saba, the fees related to 22 preparing for Saba’s testimony, and the fees related to Plaintiff’s second motion in limine, which 23 sought to exclude the expert report of Defendants’ rebuttal expert. 24 Plaintiff submits he worked 933.95 hours at the rate of $400/hour and paralegal fees at 25 between $100-$175/hour on work related to the breach of contract claim. (See Dkt. No. 244-1, 26 Declaration of Brian Irion, Ex. 1.) Defendants have not identified specific objections to the hours 27 submitted by Plaintiff apart from their overall objection that work related to the tort claims should 1 declaration and time records with specific billing entries, which include the total amount of time 2 spent on certain case categories and the associated smaller activities. The Court finds Plaintiff’s 3 supporting documentation contains sufficient detail to determine the reasonableness of the hours 4 worked, and it finds the hours expended on the case reasonable. 5 With regard to the reasonableness of the requested rates, Plaintiff’s counsel attests that he 6 has thirty years of experience and charged rates of $400/hour. (See Dkt. No. 224-1, Declaration of 7 Brian Irion ¶¶ 3-8.) Plaintiff has submitted some authority establishing that this rate is below the 8 rates of attorneys in the locale with similar knowledge, skill, training, and experience. Defendants 9 do not dispute the hourly rates requested by Plaintiff. The Court finds an hourly rate of $400/hour 10 is reasonable and falls below the routinely accepted attorneys’ rates in this district. See In re 11 MagSafe Apple Power Adapter Litig., No. 09-cv-01911-EJD, 2015 WL 428105, at *12 (N.D. Cal. 12 Jan. 30, 2015) (“In the Bay Area, reasonable hourly rates for partners range from $560 to $800, for 13 associates from $285 to $510[.]”); Banas v. Volcano Corp., 12-cv-01535-WHO, 2014 WL 14 7051682, at *5 (N.D. Cal. 2014) (finding rates ranging from $355 to $1,095 per hour for partners 15 and associates were within the range of prevailing rates). Accordingly, the Court finds the 16 requested rates are reasonable. 17 Defendants have not disputed the hourly rates requested by Plaintiff or submitted specific 18 objections to the amount of hours spent on the case. Rather, Defendants contend that several 19 categories of fees should be entirely excluded because they encompassed work unrelated to the 20 breach of contract claim. This includes fees for opposing the motion to dismiss, the motion to 21 consolidate, the motion for judgment on the pleadings, and the motion in limine related to the 22 ownership interest in Teetex. Defendants further contend that other categories of fees, such as 23 those related to discovery, case management conferences, and trial, should be reduced because 24 only portions of the work related to the breach of contract claim. 25 After considering Plaintiff’s original motion and supplemental statement and Defendants’ 26 arguments, the Court agrees with Plaintiff that much of the work on the case cannot be cleanly 27 divided between tort claims and contract claims, with the exception of the fees and costs related to ] has attempted to eliminate all fees related to expert fees. Moreover, fees and costs incurred in 2 || bringing and opposing certain motions, such as the motion to dismiss and motion for judgment on 3 || the pleadings, can properly be considered as indirectly relating to the breach of contract claim at 4 || least in part. They should not be wholly excluded because the motions addressed Plaintiff's 5 ability to pursue his claims, one of which was the claim for breach of contract. 6 However, the Court concludes that granting Plaintiff the entirety of his requested adjusted 7 || amount of fees and costs would be unreasonable given that he his entitled only to recover fees and 8 costs for his breach of contract claim. Thus, in addition to the adjustment to account of the 9 || exclusion of the expert fees and costs, the Court will impose a reduction on the fees and costs 10 || requested to account for the work performed on the tort claims. The Court finds it appropriate to 1] award Plaintiff $177,581 in fees and $16,267.15 in costs, which is half of Plaintiffs adjusted 12 || requested award. The Court finds that awarding Plaintiff half of the requested fees and costs 13 serves as a reasonable approximation of time spent on breach of contract claim while avoiding 14 || awarding fees and costs for work incurred on the tort claims. 3 15 CONCLUSION a 16 For the foregoing reasons, the Court DENIES Plaintiff's motion for reconsideration. The 2 17 || Court AWARDS Plaintiff attorney’s fees and costs in the amount of $193,848.15. 18 IT IS SO ORDERED. . oe 19 || Dated: August 16, 2023 C / LL, 20 3 Ww Ae JEFFREY/S, WHATE 2] United Stites Ditrict Judge 22 23 24 25 26 27 28