Brands International Corporation v. Reach Companies, LLC

Background

Brands International Corporation, a hand sanitizer manufacturer, sued Reach Companies, LLC, a distributor, after Reach failed to pay for hand sanitizer that Brands delivered to Reach’s customer, Five Below, Inc. The parties had agreed that the product’s price was $89,072.64. Brands asserted claims including breach of contract, and Reach asserted contract and tortious-interference counterclaims.

In an earlier summary-judgment order, the court held that the United Nations Convention on Contracts for the International Sale of Goods applied to the contract claims. The court concluded that Reach was required to pay when it received the hand sanitizer, even if it had not received an invoice, and entered judgment for Brands for $89,072.64. The court also stated that Brands was entitled to reasonable attorney’s fees and costs under the Convention.

Fee and Cost Request

Brands asked for $265,265.78 in attorney’s fees and $3,601.28 in costs. It also asked the court to amend the judgment to specify pre-judgment and post-judgment interest. Reach argued that the requested fees were disproportionate to the damages, unreasonable given the simplicity of the case, and should be limited to fees incurred after Brands first requested fees during the summary-judgment stage.

The court applied federal law and the lodestar method, which calculates fees by multiplying reasonable hours by reasonable hourly rates. It rejected a reduction based solely on the relationship between the requested fees and the damages because there is no required dollar-for-dollar proportionality rule. It also declined to reduce the award based on the number of hours because Reach did not identify specific billing entries that were unreasonable.

The court agreed, however, that the case involved relatively simple factual and legal issues. It reduced the fee award by 30% for that reason. The court also found that Norton Rose partner Felicia Boyd’s $880 hourly rate after November 2022 was slightly above a reasonable market rate. It reduced that rate to $740, resulting in an additional $980 reduction. The court did not reduce fees for Brands’ use of Pennsylvania counsel because that counsel performed local services related to nonparty discovery in the Philadelphia area. The court also rejected Reach’s request to exclude fees incurred before Brands requested fee reimbursement, finding that litigation costs from the beginning of the case were foreseeable consequences of Reach’s failure to pay.

Interest and Disposition

The court found that pre-judgment interest was appropriate under the Convention and that Minnesota’s 6% rate was fair and reasonable. It calculated $16,426.08 in pre-judgment interest on the $89,072.64 liability, beginning when Brands’ claim arose on March 23, 2020. The court also awarded post-judgment interest at $13.09 per day until the judgment is satisfied, applied to the damages and pre-judgment interest.

Judge John R. Tunheim ordered that Brands’ motion for attorney’s fees and costs and to amend the judgment was GRANTED in part and DENIED in part. The order awarded Brands $185,000.05 in attorney’s fees and $3,561.28 in costs, and amended the judgment to include the specified pre-judgment and post-judgment interest.