Delshah 60 Ninth, LLC v. Free People of PA LLC

Background

Delshah moved for attorney’s fees and costs after Judge Jesse M. Furman entered a $6,707,916.84 judgment in Delshah’s favor. The underlying dispute concerned Free People’s alleged failure to pay rent under a commercial lease during the COVID-19 pandemic. The lease included provisions allowing the successful party in an action relating to the lease to recover reasonable attorney’s fees and other costs.

Delshah sought fees for work performed by Woods Oviatt Gilman LLP, Rosenberg & Estis, PC, and Duke Holzman Photiadis & Gresens LLP. The firms requested $840,805.10 in attorney’s fees before the court’s reductions, along with $18,588.40 in litigation costs. Delshah also sought $102,268.50 for expert Sharon Locatell’s work. Free People acknowledged that Delshah was a prevailing party entitled to recover reasonable attorney’s fees and costs under the lease and did not dispute the firms’ hourly rates, except for an acknowledged billing-rate error that had already been corrected. Free People disputed the reasonableness of the hours, argued that Delshah’s limited success warranted a further reduction, and objected to Locatell’s fees.

Attorney’s Fees

The court applied the lodestar method, which calculates a presumptively reasonable fee by multiplying reasonable hours by a reasonable hourly rate. It found that more than 40 hours spent by three attorneys from two firms revising the complaint was unreasonable given the limited changes between the original and amended complaints. The court did not recommend a separate reduction for time spent on discovery requests and responses because the parties had not provided enough information to evaluate that objection.

The court found that the firms’ billing records contained extensive block billing, meaning that multiple tasks were combined into single time entries without stating how much time was spent on each task. The records also showed multiple timekeepers billing for the same conferences, senior attorneys billing their regular rates for administrative tasks, vague or duplicative entries, and unreasonable amounts of time for certain tasks. Based on these deficiencies, the court recommended an across-the-board 20% reduction to the firms’ requested fees.

The court rejected Free People’s request for an additional reduction based on the percentage of damages Delshah originally sought that it ultimately recovered. Although the judgment did not adopt every damages calculation Delshah proposed, Delshah prevailed on the central lease-breach claim, defeated Free People’s defenses and counterclaims as described in the recommendation, and obtained substantial relief. The court therefore recommended no additional reduction for the degree of success.

The recommended attorney-fee awards were $540,046.00 for Woods Oviatt, $97,668.40 for Rosenberg & Estis, and $34,929.68 for Duke Holzman, for a total of $672,644.08.

Costs

The court recommended awarding all $18,588.40 in requested litigation costs. These costs included e-discovery, court reporting, service of process, legal research, travel, and similar expenses. Delshah supplied supporting documentation, and Free People did not challenge these costs.

For Locatell’s expert fees, the court found that the requested $950 hourly rate was not adequately supported. It found $900 per hour more reasonable, noting that Free People’s expert charged $900 per hour and that Delshah had not shown why Locatell’s rate should be higher. The court did not reduce Locatell’s 107.65 hours because her records were sufficiently detailed and her work appeared to have been substantially incorporated into the judgment. The resulting recommended expert-cost award was $96,885.00.

Recommendation and Procedure

Magistrate Judge Sarah L. Cave recommended that Delshah’s fee motion be granted in part and denied in part, with awards of $672,644.08 in attorney’s fees, $18,588.40 in litigation costs, and $96,885.00 in expert costs. The report and recommendation states that the parties had 14 days after service to file written objections with the Clerk of Court. The text provided does not state whether Judge Furman later adopted, modified, or rejected this recommendation.