C.H. Robinson Worldwide, Inc. v. Traffic Tech, Inc.

Background

C.H. Robinson Worldwide, Inc. (CHR) sued Traffic Tech, Inc., James Antobenedetto, Spencer Buckley, Wade Dossey, Brian Peacock, and Dario Aguiniga to enforce restrictive covenants in confidentiality and business-protection agreements signed by the individual defendants as a condition of employment.

After earlier rulings narrowed the case, CHR’s Second Amended Complaint asserted breach of contract, tortious interference with contractual relationships, and tortious interference with prospective economic advantage. On September 22, 2021, the court granted defendants’ summary-judgment motion in full. The court held that California law governed the restrictive covenants and that the covenants were void and unenforceable. It also held that CHR had not shown exclusive customer contracts or identified customer or carrier contracts with which defendants interfered.

Defendants then moved for attorney’s fees and costs under the agreements. They also moved for permission to file a reply brief.

Choice of Law

The agreements stated that CHR could recover reasonable attorney’s fees incurred in establishing a violation of the agreements. Defendants argued that California law applied. California Civil Code § 1717 provides that when a contract authorizes attorney’s fees for enforcement, the party prevailing on the contract may recover reasonable fees, even if the contract provision is written in favor of only one side.

CHR argued that Minnesota law governed because attorney’s-fee entitlement was procedural. The court rejected that argument. It had already determined that California law governed the agreements, and it treated the attorney’s-fee provision as a substantive contract provision controlled by California law.

CHR also argued that no party could enforce an attorney’s-fee provision in a contract provision found illegal. The court distinguished that situation from its earlier ruling: it had found the restrictive covenants void and unenforceable, not illegal. Under the authority the court applied, that distinction did not prevent recovery under California Civil Code § 1717.

Apportionment of Fees

Defendants argued that the claims were closely connected to the contract claims and that fees did not need to be divided by claim. The court agreed. It found that the claims were based on, or closely related to, the employment agreements and their restrictive covenants. The court therefore did not apportion fees among the individual causes of action.

The court also declined to require allocation between Traffic Tech and the individual defendants because the tortious-interference claims involved common issues, especially whether the restrictive covenants were enforceable. Defendants were not seeking fees for work related to two dismissed defendants or work solely concerning Traffic Tech’s justification defense.

Reasonableness of the Request

Defendants submitted billing evidence describing the lawyers’ experience, hourly rates, and time spent. The rates ranged from $425 to $130 per hour. CHR did not challenge the rates. Based on its experience and knowledge of prevailing market rates, the court found the rates reasonable.

The court also found the hours reasonable in light of the discovery, multiple depositions, document production and review, and multiple dispositive motions. It rejected CHR’s requests for additional reductions, reasoning that the claims were closely connected and that defendants had already excluded certain categories of work from their request.

Order

The court granted Defendants’ Motion for Attorney’s Fees and Costs. It awarded defendants $225,762 in attorney’s fees, including $6,000 for preparing the fee motion, and $21,654 in costs, for a total award of $247,416. The court also granted Defendants’ Motion to File Reply Brief.

This summary concerns the court’s ruling on attorney’s fees and costs, not the earlier summary-judgment ruling on the underlying claims.