RAJENDER K. SALGAM, et al., Plaintiffs, v. ADVANCED SOFTWARE SYSTEMS, INC., Defendant Civil Action No. 1:18-cv-00029 (AJT/TCB) United States District Court, E.D. Virginia Signed June 24, 2022 Counsel Rajender K. Salgam, Cranbury, NJ, Pro Se. Jacob Madison Small, J. Madison PLC, McLean, VA, Robert Stone Porter, IV, The Spiggle Law Firm PLLC, Arlington, VA, for Plaintiff Munusamy Kandasamy. Kristen Lynn Loesch, Brendan Francis Cassidy, Timothy Michael McConville, Praemia Law, PLLC, Reston, VA, for Defendant. Trenga, Anthony J., United States District Judge ORDER *1 By order dated July 2, 2020, the Court concluded that Plaintiff Salgam's fabrication of emails produced in discovery in support of his and Plaintiff Kandasamy's claims against Assyst warranted monetary sanctions in favor of Defendant Advanced Software Systems, Inc. (“Assyst”).[1] [Doc. No. 143]. On July 31, 2020, Assyst filed its Amended Fee Application Pursuant to the Court's July 2, 2020 Order [Doc. No. 145] (the “Application” or “App.”). Upon consideration of the Application, the materials filed in support thereof and in opposition thereto,[2] and for the reasons stated herein, the Court awards against Salgam and in favor of Assyst fees in the amount of $120,252.94 and expenses in the amount of $16,674.48, for a total of $136,927.42. I. LEGAL STANDARD It is within the sound discretion of the Court to fix the amount of reasonable attorney's fees. Hensley v. Eckerhart, 461 U.S. 424, 437 (1983). The party requesting attorney's fees bears the burden of establishing that the amount requested is reasonable. Cook v. Andrew, 7 F. Supp. 2d 733, 736 (E.D. Va. 1998). The Fourth Circuit has endorsed a three-step procedure in determining the proper award of attorneys' fees: First, the court must “determine the lodestar figure by multiplying the number of reasonable hours expended times a reasonable rate.” Robinson v. Equifax Info. Servs., LLC, 560 F.3d 235, 243 (4th Cir. 2009). To ascertain what is reasonable in terms of hours expended and the rate charged, the court is bound to apply the factors set forth in Johnson v. Georgia Highway Express Inc., 488 F.2d 714, 717–19 (5th Cir. 1974). Id. at 243–44. Next, the court must “subtract fees for hours spent on unsuccessful claims unrelated to successful ones.” Id. at 244. Finally, the court should award “some percentage of the remaining amount, depending on the degree of success enjoyed by the plaintiff.” Id. McAfee v. Boczar, 738 F.3d 81, 88 (4th Cir. 2013). In turn, to establish what constitutes a reasonable hourly rate and the hours reasonably expended, the Court considers the following Johnson factors: (1) the time and labor expended; (2) the novelty and difficulty of the questions raised; (3) the skill required to properly perform the legal services rendered; (4) the attorney's opportunity costs in pressing the instant litigation; *2 (5) the customary fee for like work; (6) the attorney's expectations at the outset of the litigation; (7) the time limitations imposed by the client or circumstances; (8) the amount in controversy and the results obtained; (9) the experience, reputation and ability of the attorney; (10) the undesirability of the case within the legal community in which the suit arose; (11) the nature and length of the professional relationship between the attorney and client; and (12) attorney's fees awards in similar cases. Robinson, 560 F.3d at 243–44 (quoting Barber v. Kimbrell's Inc., 577 F.2d 216, 226 n.28 (4th Cir. 1978)). While these factors must guide the analysis, there is no strict formula the Court is required to follow. See Trimper v. City of Norfolk, 846 F. Supp. 1295, 1303 (E.D. Va. 1994), aff'd 58 F.3d 68 (4th Cir. 1995); In re Microstrategy, Inc., 172 F. Supp. 2d 778, 787 (E.D. Va. 2001) (recognizing that “arithmetic calculations aid the fee-setting process, but ultimately a trial court's judgment is centrally important and may trump the calculations”). In addition to the hours expended, the Court must assess the reasonableness of counsel's hourly rates. In determining whether an individual's rate is reasonable, the Court must consider “prevailing market rates in the relevant community,” which is understood to be the community within the jurisdiction where the action is tried. Rum Creek Coal Sales, Inc. v. Caperton, 31 F.3d 169, 175 (4th Cir. 1994). In that regard, the Fourth Circuit has required that “[i]n addition to the attorney's own affidavits, the fee applicant must produce satisfactory specific evidence of the prevailing market rates in the relevant community for the type of work for which he seeks an award.” Plyler v. Evatt, 902 F.2d 273, 277 (4th Cir. 1990) (internal citations and quotations omitted). II. ANALYSIS This action was filed on January 5, 2018. On September 8, 2018, all parties stipulated that “Mr. Salgam's claims against Defendant are hereby dismissed with prejudice and that Mr. Salgam is hereby dismissed as a party to this action, with Mr. Salgam to bear his own attorney's fees and costs and none other in this action.” [Doc. No. 25]. On July 2, 2020, the Court concluded that Salgam's fraud in the discovery process was clear and convincing, such that it warranted monetary sanctions in favor of Assyst. Assyst had originally sought all fees and expenses incurred in the litigation, which the Court has rejected and by Order dated July 2, 2020, [Doc. No. 143], directed that Assyst file a fee application limited to those fees and expenses related to the fraud, specifically, those fees and expenses incurred by Assyst during the period beginning on August 18, 2018 and ending on July 30, 2020. Based on the Court's ruling limiting the scope of recoverable attorney's fees, Assyst now seeks fees in the amount of $325,625.50 and $33,348.95 in expenses. [App. at 2.] It has also provided a detailed description of the work performed because of Salgam's fraud, and the hours expended and rates charged pertaining to that work, including: (1) review of the many documents produced during discovery before Salgam's fraud was discovered; (2) investigating the fraudulent conduct during the Court authorized sixty-day limited discovery period through written discovery to Kandasamy, third-party subpoenas, and depositions of Kandasamy and Salgam, through which counsel for Assyst discovered the fraud; (3) the work associated with Defendant's Motion to Compel Limited Discovery and to Stay Due to Fraud Upon the Court and Defendant's Motion for Sanctions Against Rajender Salgam and for Rule 54(b), 59(e), and 60(b) Relief, and the responses thereto; and (4) preparing an amended fee application.[3] 1. Lodestar Amount *3 “ ‘Reasonableness is the touchstone of any award of attorneys' fees,’ regardless of whether the award is made because of a fee-shifting statute or as a sanction.” De Simone v. VSL Pharm., Inc., 2018 WL 6680922, at *3 (D. Md. Dec. 19, 2018) (quoting SunTrust Mortg., Inc. v. AIG United Guar. Corp., 933 F. Supp. 2d 762, 769 (E.D. Va. 2013)). When evaluating the reasonableness of attorney's fees sought as a sanctions, courts may consider “the nature of the sanctionable conduct, the nature and extent of the inquiry necessary to ascertain and resolve issues respecting the sanctionable conduct, and the nature of the sanction obtained.” SunTrust, 933 F. Supp. 2d at 774. a. Reasonable Rate Assyst's requested fees are based on the hourly rates of three attorneys and one law clerk. The most senior attorney, Mr. McConville, a trial attorney with over twenty-three years of experience, including as the founder of Praemia Law, PLLC, and formerly the head of the labor and employment practice group at Odin, Feldman & Pittleman, P.C., billed his time at rates of $395.00 and $425.00 per hour. Id. at 12; id., Ex. C (Invoice Nos. 22, 934).[4] The second most senior attorney, Mr. Archer, an attorney with nearly eight years of experience specializing in management-side labor and employment litigation, billed his time at a rate of $295.00 per hour. [Id. at 12.] The most junior attorney, Mr. Cassidy, who has six years of experience and also specializes in management-side labor and employment litigation, billed his time at a rate of $275.00 per hour. [Id. at 12–13.] Finally, the law clerk, Ms. Bonafede, who billed only 1.6 hours to this matter, billed her time at a rate of $145.00 per hour. [Id. at 14.] As detailed in the Leonard Declaration attached to the Application, these rates fall within the range of reasonableness suggested by the Vienna and Laffey Matrices: Timekeeper Timothy McConville ($395.00 Rate) Timothy McConville ($425.00 Rate) Luke Archer Brendan Cassidy Giovanna Bonafede Experience 20+ 20+ 4-7 4-7 Law Clerk Vienna Matrix Reasonable Fee Per Hour $505-$820 $505-$820 $350 - $600 $350 - $600 $130-$350 Laffey Matrix Reasonable Fee Per Hour $894.00 $899.00 $455.00 $458.00 $203.00 Actual Billing Fee $395.00 $425.00 $295.00 $275.00 $145.00 Percentage of Time +/- Vienna Matrix4 -40.38% -35.85% -37.89% -42.11% -39.58% Percentage of Time +/- Laffey Matrix -55.82% -52.73% -35.16% -39.96% -28.57% [Leonard Decl. at 13–14.][5] In further support of the Application, the Leonard Declaration represents that these rates fall within and, in some cases, below, the rates charged by practitioners and support staff in the Northern Virginia legal market. [Id. at 12-15]; Taylor v. Republic Services, Inc., No. 1:12cv523, 2014 WL 325169, at *4 (E.D. Va. Jan. 29, 2014) (“To meet this burden, [plaintiff] must provide not only affidavits of her own attorneys, but also ‘specific evidence of the prevailing market rates in the relevant community for the type of work for which [she] seeks an award.’ ” (citation omitted)). *4 Based on the Court's familiarity with this litigation, the rates charged in this jurisdiction by lawyers and staff of similar experience, the rates judicially recognized as reasonable within this district, and for the purposes of calculating the Lodestar, Court finds reasonable the proposed rates of Mr. McConville, Mr. Archer, Mr. Cassidy, and Ms. Bonafede, of $395.00/$425.00, $295.00, $275.00, and $145.00, respectively. b. Reasonable Hours Per the Court's July 2, 2020 Order, Assyst has written off all hours performed prior to August 18, 2018. [Leonard Decl. at 4 n.2.] Upon taking into account those written-off hours, Assyst seeks recovery for approximately 981.70 hours performed by four different timekeepers: Timekeeper McConville Archer Cassidy Bonafede Kandasamy Write-Off[6] Total Rate $395 $425 $295 $275 $145 Hours 360.8 12.7 570.8 35.8 1.6 981.70 Requested Fees $142,516.00 $5,397.50 $168,386.00 $9,845.00 $232.00 ($751) $325,625.50 In reviewing the amended fee application, it appears from the detailed descriptions that some of the work performed during the time period from August 18, 2018 to July 30, 2020, relates to the litigation in general, not specifically to Salgam's fraud, including: (1) preparing and serving objections to party discovery requests; (2) work related to third party subpoenas begun before the fraud was discovered; (3) time related to Assyst's Motion to Compel related to discovery responses [Doc. No. 22][7]; (4) trial preparation; and (5) settlement negotiations.[8] The Court has therefore eliminated from Assyst's request hours spent on tasks that clearly pertain to general litigation, unrelated to the fraud. The Court has also eliminated request hours that relate to work, that although tangentially relate to the fraud, was not for a determinative issue. For example, the Court has eliminated hours pertaining to work relating to the amendment of Assyst's Answer post-discovery of the fraud and reviewing Plaintiff Kandasamy's motion for sanctions. Additionally, the Court has reduced some of the hours sought by Assyst in pursuing its requested fees. Furthermore, in calculating the lodestar amount, the Court has also considered the total hours expended relative to the tasks involved, as reflected in the detailed billing descriptions submitted by counsel for Assyst, taking into account the extent to which there appears to be some overlap or duplication of effort relative to the tasks involved; the responsible delegation of tasks, including the extent to which the tasks were performed at an appropriate professional level and the overall number of lawyers involved in those tasks. In light of the aforementioned, the Court calculates the following revised hours: *5 Timekeeper McConville Archer Cassidy Bonafede Total Rate $395 $425 $295 $275 $145 Hours 185.2 5 333.8 20 1.6 545.60 Based on its review of the materials filed in support the Application, and the opposition thereto, and based on the Court's familiarity with this litigation, the nature of the case and Salgam's bad faith and fraudulent actions, the diligence required to uncover the falsified materials, the hours expended, and the results obtained, and for the purposes of calculating the Lodestar, the Court-revised hours are reasonable. c. Lodestar Fee Calculation Having determined the reasonable rates and hours, the Court calculates a lodestar amount of $179,482.00: Timekeeper McConville Archer Cassidy Bonafede Total Rate $395 $425 $295 $275 $145 Hours 185.20 5 333.8 20 1.60 545.60 Requested Fees $73,154.00 $2,125.00 $98,471.00 $5,500.00 $232.00 $179,482.00 d. Adjustment of Lodestar Amount After calculating a “presumptively reasonable lodestar amount,” the Court “must also consider whether any factors warrant an adjustment.” De Simone, 2018 WL 6680922, at *6. In his opposition to Assyst's Amended Fee Petition, Plaintiff Salgam argues that the Court should “sharply reduce or deny” Assyst's fee request for several reasons, including that Assyst, “instead of stopping the litigation” after Plaintiff Kandasamy dismissed his claims, “initiated an anti-fraud crusade against Mr. Salgam vastly more costly than, on knowledge and belief, the preceding litigation in this case.” [Doc. No. 160 at 3.][9] In essence, Salgam is arguing that the requested fees should be reduced because “the quantum of the fee is excessive in perspective of the end result.” SunTrust, 933 F. Supp. 2d at 779 (explaining that this is Johnson Factor 8, which is defined as the “amount in controversy and the results obtained”); see also De Simone, 2018 WL 6680922, at *3 (“[I]f ‘much of the work was unnecessary.... considering what was at stake and what was achieved,’ reasonableness will require lowering the fee award.” (citation omitted)). As the Court has previously stated, “[s]ubmitting a false discovery document—or fabricating evidence—has been referred to as the most egregious misconduct which justifies a finding of fraud upon the Court.” [Doc. No. 143 at 7 (citation omitted).] Here, the Court determined that Salgam was “responsible for the creation and submission of the fabricated emails” and that the “falsification of documentary evidence was extremely prejudicial to the judicial process, particularly given that all of the documentary evidence pertaining to Salgam's requests for information regarding the exercise of his stock options appears to be falsified.” [Id. at 8.] The Court granted Assyst's motion for sanctions after determining that Assyst established Plaintiff Salgam's wrongdoing—submitting false documents in discovery—by clear and convincing evidence. [Id.] Unearthing Salgam's fraud sufficient to meet this high standard required substantial time and effort on the part of Assyst's attorneys, which the Court has recognized in its Lodestar calculation. *6 At the time Assyst discovered the fraud, Salgam was not an active litigant in this matter having his claims dismissed with prejudice per stipulation. However, Plaintiff Kandasamy remained an active litigant and intended to continue pursuing his claims. Kandasamy did not agree to dismiss his claims against Assyst until late-January 2019, after Assyst had conducted months of discovery into the fraud. Assyst's investigation into the fraud caused Kandasamy to voluntarily dismiss his claims. [Doc. No. 94 at 1.] During the time between Assyst's discovery of the fraud and Kandasamy's dismissal, approximately November 2018 to January 2019, Assyst incurred $147,754.00 in fees.[10] Following Kandasamy's dismissal, Assyst incurred an additional $70,000 (approximately) in fees pursuing its sanctions motion and amended fee petition, a significant portion of which can be attributed to Salgam's active motion practice opposing Assyst's requested relief. Therefore, the “crusade” Salgam alleges Assyst engaged in amounts to less than a quarter of Assyst's requested fees. An assessment of the reasonableness of the requested hours “should depend not on hindsight, but on whether at the time the work was performed, a reasonable attorney would have engaged in similar time expenditures.” Underdog Trucking, LLC v. Verizon Services Corp., 276 F.R.D. 105, 112 (S.D.N.Y. 2011). Upon discovering the fraud on October 31, 2018, it “reasonably appeared to [Assyst] that it faced a significant fraud that could significantly affect the validity” of Kandasamy's claims and, therefore, “it was reasonable for [Assyst] to have pursued the truth fully.” SunTrust, 933 F. Supp. 2d at 779. That Salgam was alone responsible for the fraud was not known to Assyst when it discovered the fabricated emails. Kandasamy's ultimate blamelessness does not absolve Salgam from having to bear the burden of Assyst's costly investigation. Nonetheless, in considering that Salgam's claims had already been dismissed with prejudice, that some of the discovery conducted may have been unnecessary in light of the amount in controversy, Kandasamy's lack of direct involvement in the fraud, Assyst's failure to obtain a reward of the entirety of fees and expenses incurred in the litigation ($330,670.50), [Doc. No. 143 at 10], and that Assyst's requested fraud-related fees ($325,625.50) almost equal the entirety of fees and expenses it incurred in the litigation prior to filing its sanctions motions, the Court will reduce the lodestar amount by an additional thirty-three percent (33%). Accordingly, the Court will award Assyst $120,252.94 in fees. 2. Expenses Assyst requests $33,348.95 in expenses. Having reviewed the itemized records, the Court reduces the requested expenses by fifty percent (50%) and awards Assyst $16,674.48 for expenses. 3. Salgam's Inability to Pay To the extent Salgam argues the fees requested in the Application should be reduced because he is unable to pay the requested amount, the Court finds that argument unpersuasive. The Court recognizes that a party's ability to pay may be considered in fashioning a fee award and in certain cases may warrant a reduced award on that basis. Williams v. Metro. Life Ins. Co., 609 F.3d 622, 636 (4th Cir. 2010) (concluding that a plaintiff's ability to pay attorney's fees may be considered by the district court). But here, Salgam has presented little evidence concerning his income or assets or his own prospects for the accumulation of future wealth and resources to satisfy any fee award. His claims of inability to pay must also be considered in light of his own conduct that led to this fee award. In that regard, the Court found, by clear and convincing evidence, that Salgam knowingly presented fabricated evidence, conduct extremely prejudicial to the judicial process. See ComLab, Corp. v. Tire, 815 F. App'x 597, 600 (2d Cir. 2020) (“The district court may also sanction a party for attempting to mislead the court by fabricating evidence.”). Within the context of this case, the Court finds little basis upon which to insulate Salgam from the financial consequences of his fraud based on his own financial situation. See, e.g., Salvin v. Am. Nat. Ins. Co., 281 F. App'x 222, 226 (4th Cir. 2008) (affirming district court's decision to impose monetary sanction, despite allegation of inability to pay, where party being sanctioned had not proffered evidence of financial status). 4. Salgam's Request for a Trial Date *7 Salgam requests that the Court set aside the dismissal of his claims and set a new date for trial. [Doc. No. 160 at 6-8.] The Court finds the request completely meritless and will deny it. IV. CONCLUSION Accordingly, it is hereby ORDERED that Defendant Assyst be, and the same hereby is, awarded against Rajender K. Salgam fees in the amount of $120,252.94 and expenses in the amount of $16,674.48, for a total of $136,927.42, judgment for which be, and the same hereby is, ENTERED. This is a Final Order for the purposes of appeal. To appeal, Plaintiff must file a written notice of appeal with the Clerk's Office within thirty (30) days of the date of this Order. A written notice of appeal is a short statement stating a desire to appeal this Order and noting the date of the Order Plaintiff wants to appeal. Plaintiff need not explain the grounds for appeal until so directed by the court. The Clerk is directed to forward copies of this Order to all counsel of record as well as Plaintiff Salgam's last known address,[11] enter judgment in accordance with this Order, and close this case. Alexandria, Virginia Footnotes [1] The facts pertaining to Salgam's conduct that resulted in the award of fees against him in favor of Assyst are recounted in the Court's Order date July 2, 2020, which is incorporated herein by reference. [2] On July 31, 2020, Assyst also filed in support of its Application the Second Declaration of Declan C. Leonard [Doc. No. 145-1 (“Leonard Decl.”)] and the Third Declaration of Judith Bounacos [Doc. No. 145-2 (“Bounacos Decl.”)]. On December 3, 2020, Salgam filed his Amended Memorandum of Opposition to Amended Fee Petition out of time. [Doc. No. 161-1.] On December 8, 2020, Assyst filed its Reply to Plaintiff Rajender Salgam's Amended Memorandum of Opposition to Amended Fee Petition. [Doc. No. 165.] [3] [Leonard Decl. (providing attorney's fee expert witness from Berenzweig Leonard LLP, which details and includes copies of the invoices of Assyst's counsel); Bounacos Decl. (providing copies of invoices from Berenzweig Leonard LLP and Vesitgant, LLC, a computer forensics firm that provided an expert witness in this matter).] [4] Mr. McConville also billed his time at a rate of $275.00 per hour for one entry on August 3, 2018. [Leonard Decl., Ex. C (Invoice No. 22).] However, as noted below, Assyst wrote that time off per the Court's July 2, 2020 Order. [Leonard Decl. at 4 n.2.] [5] Although not bound by the Laffey Matrix, this Court and the Fourth Circuit have “recognized ... that ‘the Laffey matrix is a useful starting point to determine fees’ and that a court ‘may consider’ the matrix despite not being bound by it.” Ebersole v. Kline-Perry, No. 1:12CV26 JCC/TRJ, 2012 WL 4473247, at *1 (E.D. Va. Sept. 26, 2012), vacated on other grounds, 292 F.R.D. 316 (E.D. Va. 2013) (citing Newport News Shipbuilding & Dry Dock Co. v. Holiday, 591 F.3d 219, 229 (4th Cir. 2009)). For example, in Grissom v. Mills, the Fourth Circuit modified the Laffey Matrix, i.e. the Grissom Table, and applied an hourly rate of between $335 and $380 for a law firm partner with between eight to nineteen years of experience. 549 F.3d 313, 323 (4th Cir. 2008) (“Moreover, in recent decisions, this Court has assessed the reasonableness of Northern Virginia attorneys' rates ‘bearing in mind each of these resources, but giving the greatest heed to the Fourth Circuit's guidance in Grissom.’ ”). However, Grissom was decided in 2008; and its rate assessments do not account for inflation or other market forces. [6] During the litigation, Kandasamy was ordered to pay $750.00 in attorneys' fees to Assyst as the result of a motion to compel, and Kandasamy did pay that amount. [Leonard Decl. at 15 n.6.] As a result, Assyst subtracted those fees from the total amount sought. [Id.] When the Court calculated the fees after subtracting the pre-August 18, 2018 fees and the Kandasamy write-off it reached an amount $1 higher than Assyst's requested amount. The Court includes that additional $1 as part of the Kandasamy write-off. [7] Since some of this time is presumably captured by the $750 paid by Kandasamy, the Court could not determine which entries Assyst still sought recovery of attorney's fees. [8] The central issue is the extent to which Salgam's fraudulent conduct caused the Defendant to incur fees it would not otherwise have. That inquiry necessarily depends on whether this action would have been brought in any event absent the fabricated emails. Salgam was one of two Plaintiffs, and there is no evidence that Plaintiff Kandasamy knew of or knowingly participated in Salgam's fraud; and Plaintiffs' contractual right to the relief sought was based on an actual agreement between the parties and not, in the first instance, the fraudulent emails. [9] Plaintiff Salgam also objects to the requested fees because they reflect, in part, Assyst's attorneys' purported double billing and work that was not related to the discovery of the fraud or prosecution of sanctions regarding the same. [Doc. No. 160 at 1-3.] Those arguments have been considered as part of the Lodestar reasonable hours calculation. [10] As part of its lodestar calculation, the Court has reduced these requested fees to $115,408.50. [11] The Court granted Gerald L. Gilliard's (counsel for Salgam) Motion for Leave to Withdraw as Counsel on February 23, 2021. [Doc. No. 167.] The Order instructed the Leiser Law Firm to remain as Plaintiff's counsel of record. However, an attorney from that firm has not yet entered a notice of appearance. Therefore, in an abundance of caution, the Court will proceed as if Salgam is now proceeding pro se.