China Fortune Land Development v. 1955 Capital Fund I GP LLC

Background

The respondents moved for attorneys’ fees for work on an appeal, a motion for an indicative ruling, and the motion for attorneys’ fees. They also moved for prejudgment interest and related post-judgment interest. The court’s order followed earlier arbitration and court proceedings concerning the petitioners’ request to vacate an arbitration award.

Attorneys’ Fees

The court held that the respondents’ requests for fees were authorized by the parties’ contracts. As described in the arbitration award, the contracts allowed the prevailing party in legal proceedings relating to a limited partner’s failure to make escrow payments to recover costs and expenses, including attorneys’ fees. The court concluded that the later court and appellate proceedings concerning the request to vacate the arbitration award also related to the alleged failures to make those payments.

The court rejected the petitioners’ timeliness objections. It found that the respondents’ motion to transfer consideration of appellate fees to the district court was timely under the applicable Ninth Circuit rules. Even if the fee motion itself was late, the rules were ambiguous and the respondents had good cause for their understanding of the deadline. The court likewise found good cause for any delay in seeking fees for responding to the indicative-ruling motion. The respondents had not waived their request for fees incurred litigating the fee motion because they had initially estimated those fees and later supplied supporting records.

The court held, however, that the contracts required the requested fees to be reasonable. It found the request for more than $1 million facially unreasonable. Examples included more than $750,000 for over 1,000 hours of appellate work, approximately $300,000 for preparing for 15 minutes of oral argument, about $58,000 related to sealing requests, $144,398 for opposing the indicative-ruling motion, and more than $170,000 for the fee motion. The court determined that reasonable fees were $360,000 for the appeal, $40,000 for the indicative-ruling motion, and $50,000 for the fee motion.

Prejudgment and Post-Judgment Interest

The court denied the motion for prejudgment interest as untimely. It treated the request as one to revise the judgment under Federal Rule of Civil Procedure 59(e), which required filing within 28 days after judgment. The court rejected the respondents’ argument that the request should instead be treated as a motion under Rule 60, explaining that Rule 60’s provisions for clerical mistakes, oversights, and omissions did not cover a substantive request to add prejudgment interest. The related request for post-judgment interest was also denied.

Disposition

The court granted in part and denied in part the respondents’ motion for attorneys’ fees and awarded the respondents $450,000. The court denied the respondents’ request for prejudgment interest and the related request for post-judgment interest.

In a separate sealing ruling, the court denied requests to seal hourly billing rates but granted requests to seal discount rates. It ordered the respondents to file new versions of the specified documents with only the discount rates redacted within seven days. The court denied the petitioners’ motion to seal portions of their opposition and the Hesse declaration.