SEAN STENSON, Plaintiff, v. KEITH EDMONDS, CARGILL MEAT LOGISTICS SOLUTIONS, INC., Defendants Civil Action No. 18-cv-01968-JLK-STV United States District Court, D. Colorado Filed March 08, 2021 Counsel Anne Thomas Sulton, Sulton Law Offices, Milwaukee, WI, for Plaintiff. Christopher J. Casolaro, Isaac T. Smith, Kyle Russell Hosmer, Laurence ("Trip W. DeMuth, III, Faegre Drinker Biddle & Reath LLP, Denver, CO, for Defendant. Varholak, Scott T., United States Magistrate Judge RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE *1 This matter comes before the Court on Defendants’ Application for Attorneys’ Fees and Expenses (“the Application”) [#72], which has been referred to this Court for a recommendation [#97]. The Court has carefully considered the Application and related briefing, the entire case file, and the applicable case law, and has determined that oral argument would not materially assist in the disposition of the Application. For the following reasons, the Court RECOMMENDS the Application be GRANTED in part. I. BACKGROUND The facts relevant to this Recommendation are as follows. This matter arises out of a traffic accident that occurred on August 1, 2016. [#35] Plaintiff asserts claims of negligence, negligence per se, and vicarious liability. [Id.] On June 11, 2019, Judge Kane granted Defendant's Motion to Compel Discovery Responses and Order Release of Medical Records [#26], stating that “Plaintiff has repeatedly failed to provide complete records, and he appears unwilling to request and produce all relevant pre-collision medical information himself.” [Id. at 3] Following that Order, “[Plaintiff] failed to comply with [the] order and continued to provide false assertions of complete production of financial records. Through their efforts to identify [Plaintiff's] financial accounts, Defendants discovered that he had produced falsified ‘paychecks.’ ” [#71 at 3] Defendants thereafter filed a Motion for Attorney Fees and Sanctions (“Motion for Sanctions”) on November 22, 2019. [#42] The same day, Plaintiff's counsel moved to withdraw. [#43] Judge Kane then stayed discovery pending resolution of the Motion for Sanctions. [$46] At a March 2, 2020 Motion Hearing on the Motion for Sanctions, Judge Kane “expressed concern that Stenson's conduct could implicate the crime-fraud exception to attorney-client privilege” and continued proceedings to allow Defendants to subpoena Stenson's former counsel for information regarding his misconduct. [#71 at 3] This resulted in Judge Kane ordering Defendants to issue subpoenas to two law firms that formerly represented Plaintiff. [Id.] Those firms then moved for protective orders. [Id.] After considering the presented evidence, Judge Kane found that “[D]efendants are entitled to attorney fees and costs resulting from [Plaintiff's] misconduct and that dismissal of [Plaintiff's] non-economic claims is an appropriate sanction.” [Id. at 4] Judge Kane awarded Defendants $16,803 in expenses incurred in making the Motion to Compel and further awarded Defendants “the reasonable expenses incurred in making and defending the Motion for Attorney Fees and Sanctions.” [Id. at 10] Judge Kane ordered Defendants to submit an accounting of the expenses for the Motion for Sanctions. [Id.] Defendants submitted the instant Application for Attorney Fees on July 8, 2020. [#72] Plaintiff has filed an objection [#95] and Defendants have replied [#99]. Each party additionally submitted supplemental briefing on the Application. [## 107, 109] II. Standard of Review *2 A district court may award expenses incurred in making and defending motions for attorney's fees. See Chung v. Lamb, No. 14-cv-03244-WYD-KLM, 2018 WL 7141325, at *2 (D. Colo. June 7, 2018) (“Attorneys’ fees can ... be awarded under Rule 37(a)(5)(A) for the time spent preparing fee statements and defending awards of attorneys’ fees.”). Determining the amount of a fees award is within the sound discretion of the district court. Wright v. U-let-Us Skycap Servs., Inc., 648 F. Supp. 1216, 1218 (D. Colo. 1986). Calculation of attorney's fees awards is based on the “lodestar” amount, which represents the number of hours reasonably expended multiplied by a reasonable hourly rate. Case v. Unified Sch. Dist. No. 233, 157 F.3d 1243, 1249 (10th Cir. 1998); United States Commodity Futures Trading Comm'n v. R2 Cap. Grp., LLC, No. 14-cv-02182-MSK-KLM, 2017 WL 4350366, at *3 (D. Colo. Aug. 3, 2017) (applying lodestar method to Rule 37 sanction).[1] “[T]he fee applicant bears the burden of establishing entitlement to an award and documenting the appropriate hours expended and hourly rates.” Case, 157 F.3d at 1249 (quotation omitted); see also Mares v. Credit Bureau of Raton, 801 F.2d 1197, 1210 (10th Cir. 1986) (same). From there, the reasonableness of hourly rates and hours expended is a question of fact for the trial court. Walker Group, Inc. v. First Layer Communications, Inc., No. 03-cv-01973-PSF-MJW, 2006 WL 8454026, at *1 (D. Colo. Sept. 29, 2006). The lodestar amount carries with it a presumption of reasonableness which, in rare circumstances, may be adjusted for special circumstances. Anchondo v. Anderson Crenshaw, & Assocs., LLC, 616 F.3d 1098, 1102 (10th Cir. 2010). The “most critical factor” in determining the reasonableness of a fee award is the degree of success obtained by the applicant. Stroup v. United Airlines, Inc., No. 15-cv-01389-WYD-STV, 2018 WL 10613861, at *2 (D. Colo. Dec. 5, 2018) (citing Farrar v. Hobby, Jr., 506 U.S. 103, 114 (1992)) (internal quotations omitted). Finally, “[t]here is no requirement ... that district courts identify and justify each disallowed hour,” Mares, 801 F.2d at 1202, and the Court may utilize percentage cuts as a means of adjusting an unreasonable application, Latin v. Bellio Trucking, Inc., No. 13-cv-01837-WYD-KMT, 2016 WL 9725289, at *4–5 (D. Colo., Nov. 23, 2016). III. Analysis In his Objection and supplemental pleading, Plaintiff objects both to Defendants’ right to recover attorney's fees and the amount requested. [## 95, 107] In particular, Plaintiff argues that “Defendants’ egregious billing conduct supports [Plaintiff's] request that Defendants’ fee application be denied in its entirety” [#95 at 14], or, in the alternative, that the amount awarded should be reduced due to the presence of entries unrelated to the motion, clerical entries, excessive hourly rates, inadequate documentation, and excessive time. [#95] In total, Defendants submitted 141 time entries related to the Motion for Sanctions. [#73] Plaintiff objects to 86 of those entries and to the hourly rate for the remaining entries. [See #95] The Court addresses each category of Plaintiff's objections in turn. A. Defendants’ Right to Attorney's Fees Plaintiff argues that this Court should decline to award any attorney's fees on the basis that Defendants’ counsel engaged in “egregious billing conduct.” [#95 at 14] As detailed below, this Court disagrees with Plaintiff's characterization of Defendants’ billing practices as “egregious.” Moreover, Judge Kane has already twice determined that Defendants are entitled to fees on account of Plaintiff's misconduct, which required unnecessary expenditure of Defendants’ and this Court's time. [See ## 71; 91 at 5 (“I will not reconsider my ruling that Defendants are entitled to fees associated with the Motion to Compel and the Motion for Attorney Fees and Sanctions.”)]. Judge Kane further warned: “I will not allow [Plaintiff] to waste time and resources relitigating the substantive findings made in my June 25, 2020 Order.” This Court, too, declines to relitigate whether Defendants are entitled to fees due to Plaintiff's misconduct. B. Entries Unrelated to Motion *3 Plaintiff objects to a large number of Defendants’ time entries on the basis that they are unrelated to the Motion for Sanctions. [See #95 at 5-7] A number of these objections appear to be without merit, as the entries clearly relate to the Motion for Sanctions, and the Court declines to disallow those entries.[2] Plaintiff objects broadly to all entries related to the subpoenas of Plaintiff's former counsel. Plaintiff argues that: [T]hese charges are for communications about and/or with Mr. Stenson's previous attorneys. Mr. Stenson and his new attorney were not involved with this in any way other than voluntarily providing a waiver of Mr. Stenson's attorney-client privilege relating to his previous attorneys. See ECF No. 62. None of these charges should be assessed against Mr. Stenson because he was not involved in this. The Court denied as moot the matters pertaining to his previous attorneys and therefore Defendants are not prevailing parties as it relates to matters pertaining to Mr. Stenson's previous attorneys. [Id. at 7] Plaintiff seemingly willfully ignores the fact that Judge Kane ordered Defendants to subpoena Plaintiff's former counsel, and that he continued disposition of the Motion for Sanctions until after that had been completed. [#61 at 41 (41:10-14)] Accordingly, and as a direct result of Plaintiff's fraud on Defendant and the Court, Judge Kane ordered Defendants to engage in further efforts to defend their Motion for Sanctions.[3] Judge Kane then broadly awarded Defendants fees “incurred in making and defending” the Motion for Sanctions. [#71 at 10] Therefore, this Court finds that Defendants’ entries related to the subpoenas of Plaintiff's former counsel are appropriately included in this award.[4] Second, Plaintiff contends that work done on Defendant's Motion to Stay and on responding to Plaintiff's Motion for Summary Judgement should not be considered in awarding fees for the Motion for Sanctions. [#95 at 5-6] Defendants, by contrast, argue that work done on the Motion to Stay was necessary because the Motion for Sanctions asked for dispositive relief. [#99 at 7] This Court does not believe, however, that the Motion to Stay was strictly necessary for making or defending the Motion for Sanctions. Additionally, the Court finds that work on the Motion for Summary Judgment was not necessary for the making or defending of the Motion for Sanctions. *4 The Court accordingly respectfully RECOMMENDS that the twelve entries related to the Motion to Stay and Motion for Summary Judgment—totaling 9.2 hours and $4,374—be disallowed. C. Clerical Time Plaintiff next objects to entries it asserts are clerical in nature. [#95 at 13-14] “[P]urely clerical or secretarial tasks should not be billed at a paralegal [or associate] rate, regardless of who performs them.” Missouri v. Jenkins by Agyei, 491 U.S. 274, 288 n.10 (1989); Shabazz v. Pinnacle Credit Services LLC, No. 15-cv-0687-WJM-NYW, 2016 WL 6892948, at *5 (D. Colo. Nov. 23, 2016) (same). Plaintiff contends that seven entries are for purely clerical work. [#95 at 13-14] Courts in this district have found that purely administrative or clerical tasks include tasks such as “scanning and organizing documents, calendaring deadlines, copying, and printing.” Stroup, 2018 WL 10613861, at *5; see also Shabazz, 2016 WL 6892948, at *5 (finding tasks such as emailing and phone calls about administrative or scheduling matters to be clerical in nature). The entries Plaintiff identifies as “clerical” include the preparation of exhibits for filing and for hearings, review of motions and replies, and the review and preparation of records. [#95 at 13-14] The Court is not persuaded that this work is “clerical” in nature, given that most of it involved necessary document finalization and preparation in advance of filing with the Court. Jenkins, 491 U.S. at 288 n. 10 (identifying work that could be conducted by a paralegal or attorney, such as compilation of data, checking citations, and document production). The Court additionally notes that the entries identified by Plaintiff were made by either a paralegal or the attorney with the lowest hourly rate. This kind of task management is in line with the United States Supreme Court's determination that “encouraging the use of lower cost paralegals rather than attorneys wherever possible ... encourages cost-effective delivery of legal services.” Jenkins, 491 U.S. at 288. (quotation omitted). The Court therefore respectfully RECOMMENDS that these entries be included in the final award. D. Inadequate Documentation and Excessive Time What remains after disposing of the vast number of contested entries in previous sections are eight entries that Plaintiff contends are excessive, vague, or otherwise do not show appropriate billing judgement. [#95 at 10-12] Those eight entries include 43 hours totaling $21,540. Among those entries are three separate entries of more than eight hours for drafting motions or supplements to motion. [Id. at 11] Three of the entries are for reviewing the file or attending preparation sessions, each between three and five hours long. [Id. at 11-12] The final entry is for two hours to “[a]ttend oral argument/hearing on sanctions motion in federal court”—Plaintiff contends that the actual hearing itself only lasted 1.1 hours. [Id. at 12] The party requesting fees has the burden of establishing the number of hours reasonably spent by submitting meticulous, contemporaneous time records that reveal, for each lawyer for whom fees are sought, all hours for which compensation is requested and how those hours were allotted to specific tasks. Case, 157 F.3d at 1250. The requesting party must also exercise billing judgment by making a “good faith effort to exclude from a fee request hours that are excessive, redundant, or otherwise unnecessary.” Hensley v. Eckerhart, 461 U.S. 424, 434 (1983). “Hours that are not properly billed to one's client also are not properly billed to one's adversary.” Mares, 801 F.2d at 1204. (quotations omitted) (emphasis in original). “A district court is justified in reducing the reasonable number of hours if the attorney's time records are sloppy and imprecise and fail to document adequately how he or she utilized large blocks of time.” Case, 157 F.3d at 1250 (quotations omitted). *5 The Court first notes that all entries presented to this Court were actually billed to the client. [#99-1] Additionally, although not required to do so, this Court conducted a thorough review of the billing statement submitted by Defendants. Latin v. Bellio Trucking, Inc., 2016 WL 9725289, at *4–5 (D. Colo., Nov. 23, 2016). The Court finds there is some merit in Plaintiff's objection to these entries and believes that there are a number of additional instances in which attorneys of the experience level of Defendants’ counsel should have completed a given task in less time.[5] The Court is mindful that Plaintiff's own deceit—as well as his vigorous objection in the face of confrontation regarding that deceit—resulted in Defendants being forced to conduct additional discovery into Plaintiff's records and mount a robust defense to their Motion for Sanctions. Nevertheless, the Court believes the hours submitted are slightly inflated and therefore respectfully RECOMMENDS a 20% reduction in the fee award. E. Excessive Hourly Rate Finally, the Court turns to Plaintiff's contention that Defendants’ attorneys’ hourly rates are excessive. [#95 at 7-10] A “reasonable rate” is defined as the prevailing market rate in the relevant community for an attorney of similar experience. Guides, Ltd. v. Yarmouth Grp. Prop. Mgmt., Inc., 295 F.3d 1065, 1078 (10th Cir.2002). The party requesting fees bears “the burden of showing that the requested rates are in line with those prevailing in the community.” Ellis v. Univ. of Kan. Med. Ctr., 163 F.3d 1186, 1203 (10th Cir.1998) (quotation omitted). The court is also entitled to consider the quality of counsel's performance in determining reasonableness of the fee. Id. To satisfy its burden, the claimant must produce “satisfactory evidence—in addition to the attorney's own affidavits—that the requested rates are in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience and reputation.” Blum v. Stenson, 465 U.S. 886, 895 n.11 (1984). A lawyer's “customary rate is a relevant but not conclusive factor.” LaSelle v. Public Serv. Co. of Colo. Severance Pay Plan, 988 F. Supp. 1348, 1351 (D. Colo. 1997). Defendants’ attorneys’ customary rates range from $435 to $645 per hour, based on years of experience of the attorney. [#73 at 3] Judge Kane previously found that these rates were reasonable when awarding fees related to Defendants’ Motion to Compel. [#71 at 5] However, he specifically stated in his Order on Plaintiff's Motion to Reconsider that “arguments related to the accuracy and reasonableness of the amounts requested in the Fee Application warrant consideration” and permitted Plaintiff to file an objection to that effect. [#91 at 5] This Court will therefore consider the evidence of reasonableness presented by the parties. The Court first finds that Defendants have only provided a single affidavit and evidence indicating that the firm representing Defendants, Faegre Drinker, is a large, international law firm. [#73] The Court will therefore consider other factors in determining the reasonableness of the rate. See Guides, Ltd., 295 F.3d at 1079 (“Where a district court does not have before it adequate evidence of prevailing market rates, the court may use other relevant factors, including its own knowledge, to establish the rate.”). Additionally, although Plaintiff has submitted—and this Court has reviewed—a 2017 Colorado Bar Association survey demonstrating attorney rates in Colorado [#95-2], this Court, like others in this District, is “dubious” as to the “validity and overall value” of the survey to the case at hand. Stroup, 2018 WL 10613861, at *7 (“I am not persuaded that this amalgamation of the hourly rates of attorneys across all levels of experience and all areas of practice is an appropriate benchmark for this case.” (quotation omitted)). *6 The Court finds the fees asserted in the Application were actually paid by the client, [##99-1; 99 at 4], and that they are less than or commiserate to the rate that Plaintiff's attorney is charging for this same matter [#77 at 7 (detailing Plaintiff's attorney's fees as $600 per hour)]. This Court is additionally mindful that Defendants’ attorneys’ rates have already been reduced by 12% both in charging the client and in their request for this award. [#73 at 4] This reduction is consistent with reductions of fee awards in this district on the basis of excessive fees or time. See Shabazz, 2016 WL 6892948, at *6 (applying a 20% reduction); Viall v. Stellar Recovery, Inc., No. 14-cv-01536-WYD-NYW, 2017 WL 4676592, at *4 (reducing by 15%). The Court also considers the success achieved by Defendants. Stroup, 2018 WL 10613861, at *2 (finding that success is a crucial factor in reasonableness of fee award). Here, Defendants’ counsel successfully argued the Motion for Sanctions based on fraud and misconduct by Plaintiff and, indeed, was able to successfully uncover Plaintiff's fraud despite Plaintiff actively working against them. Finally, this Court considers its own experience in the Denver legal market, the years of experience and skill level of Defendants’ attorneys, and the reputation of Faegre Drinker in the community. Id. at *8. Based on this assessment this Court believes that a rate at the higher end of the Denver market is appropriate. Id. (permitting recovery for rates between $540 and $590 per hour). This Court therefore respectfully RECOMMENDS no alteration be made to the rates awarded. IV. Conclusion For the reasons stated above, the Court respectfully RECOMMENDS that Defendant's Application for Attorneys’ Fees be GRANTED in part. Specifically: (1) The Court RECOMMENDS all entries related to the Motion to Stay and Motion for Summary Judgment be DISALLOWED. (2) This Court further RECOMMENDS that an additional twenty percent be deducted from the remaining fee entries. (3) Accordingly, the Court RECOMMENDS that Defendants be AWARDED fees for 239.4 hours, totaling $82,580.26 accrued making and defending Defendants’ Motion for Sanctions.[6] (4) Additionally, in its Application, Defendants informed the Court that the $16,803 award of fees in connection to the Motion to Compel made in Judge Kane's Order [#71] did not account for the 12% discount that Faegre Drinker applies to Defendants’ bill. [#73 at 4] Defendants requested that the Court modify that award to accurately reflect the amount paid by the client. [Id.] Accordingly, this Court RECOMMENDS the award of attorney's fees in connection with Defendants’ Motion to Compel be REDUCED to $14,786.64.[7] Footnotes [1] The parties have likewise applied a lodestar method in their analysis of the Motion. [##72, 95, 107, 109] [2] For example, Plaintiff objects to entries in which Defendants’ counsel reviewed bank statements and other documents because “discovery was stayed.” [#95 at 6-7] However, the Motion for Sanctions related directly to fraudulent discovery documents and this Court sees no reason to penalize Defendants for continuing to investigate and uncover Plaintiff's fraud. [3] “I'm continuing this hearing, and I'm ordering defense counsel to subpoena and you may depose in advance the former plaintiff's counsel in this case.” [#61 at 41 (41:10-12)] [4] Plaintiff also argues that Defendants were not the prevailing parties on this matter because the subpoenas were denied as moot. This too neglects to account for the Court's Order to Defendants regarding this matter and the Court's determination that the filings related to the subpoenas “have provided information I did not have before, and I am satisfied that I can rule on the motion.” [#71 at 1-2] Judge Kane thereafter mooted the subpoenas to prevent former counsel from the obligation of providing additional responses. [Id. at 2] [5] As discussed in the next Section, the Court recommends approving Defendant's attorneys’ billing rates, which are at the higher end of the Denver market. With those higher billing rates, however, comes an increased expectation for efficiency. [6] Defendants originally requested fees for 248.6 hours of work, totaling $121,676.00. [#73 at 4-5, 14] That amount was then decreased by 12%, per the billing agreement between Defendants and counsel, for a final total of $107,074.88 in requested fees. [Id. at 5] This Court has recommended that 9.2 hours be disallowed because they were unrelated to the Motion for Sanctions. [See supra III.B] The reduced total of hours is therefore 239.4 hours, or $117,301.50 before the 12% reduction and $103,225.32 after the 12% reduction. This Court finally recommends an additional 20% reduction off $103,225.32, which amounts to $82,580.26. [7] Within fourteen days after service of a copy of this Recommendation, any party may serve and file written objections to the magistrate judge's proposed findings of fact, legal conclusions, and recommendations with the Clerk of the United States District Court for the District of Colorado. 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b); Griego v. Padilla (In re Griego), 64 F.3d 580, 583 (10th Cir. 1995). A general objection that does not put the district court on notice of the basis for the objection will not preserve the objection for de novo review. “[A] party's objections to the magistrate judge's report and recommendation must be both timely and specific to preserve an issue for de novo review by the district court or for appellate review.” United States v. 2121 East 30th Street, 73 F.3d 1057, 1060 (10th Cir. 1996). Failure to make timely objections may bar de novo review by the district judge of the magistrate judge's proposed findings of fact, legal conclusions, and recommendations and will result in a waiver of the right to appeal from a judgment of the district court based on the proposed findings of fact, legal conclusions, and recommendations of the magistrate judge. See Vega v. Suthers, 195 F.3d 573, 579-80 (10th Cir. 1999) (holding that the district court's decision to review magistrate judge's recommendation de novo despite lack of an objection does not preclude application of “firm waiver rule”); Int'l Surplus Lines Ins. Co. v. Wyo. Coal Refining Sys., Inc., 52 F.3d 901, 904 (10th Cir. 1995) (finding that cross-claimant waived right to appeal certain portions of magistrate judge's order by failing to object to those portions); Ayala v. United States, 980 F.2d 1342, 1352 (10th Cir. 1992) (finding that plaintiffs waived their right to appeal the magistrate judge's ruling by failing to file objections). But see, Morales-Fernandez v. INS, 418 F.3d 1116, 1122 (10th Cir. 2005) (holding that firm waiver rule does not apply when the interests of justice require review).