City of Almaty, Kazahkstan v. Mukhtar Ablyazov

Background

The court had previously sanctioned Defendant Mukhtar Ablyazov for failing to participate in discovery. That earlier ruling awarded Plaintiffs City of Almaty, Kazakhstan, and BTA Bank JSC attorneys’ fees and costs connected to motions seeking discovery from Ablyazov, including his deposition, and to the sanctions motion. The court then directed Plaintiffs to submit their fees.

Plaintiffs requested $203,743 in attorneys’ fees for work performed by lawyers and a paralegal at Boies Schiller Flexner LLP. Ablyazov was given time to respond but filed no objection to the fee application. The opinion states that he had objected to the earlier sanctions ruling, but that objection remained pending.

Legal standard

The court explained that attorneys’ fees are generally calculated using a “lodestar”: a reasonable hourly rate multiplied by the number of hours reasonably spent. The party requesting fees must show that the rates and hours are reasonable. Courts may exclude work that is excessive, duplicative, unnecessary, or outside the purpose of the award.

Because these fees were sought as discovery sanctions, the court distinguished them from fees awarded for winning the underlying lawsuit. Discovery sanctions compensate an adversary for costs caused by the other party’s failure to meet discovery obligations; they do not reward success on the case’s ultimate merits.

Hourly rates

The court approved some previously accepted rates and reduced or limited proposed increases for other attorneys. It found that rates of $330 per hour for Valecia Battle and $365 per hour for Andrew Chesley were reasonable for their work as junior associates. It approved rates of $720 per hour for Craig Wenner’s 2018 work, $740 per hour for his 2019 work, $680 per hour for Daniel Boyle’s late-2018 and 2019 work, $375 per hour for Chesley’s work, and $155 per hour for Sophie Roytblat’s work in 2018 and 2019. It did not approve additional increases for the partners whose rates had already been approved at high levels.

Compensable work

The requested fees were divided into three categories:

The court awarded nothing for the first category. It said that Ablyazov did not speak English, was unfamiliar with the U.S. court system, and could not personally communicate with the court’s office for people without lawyers. The court had addressed the communication issue by barring him from communicating with the court through an attorney who had not formally appeared. The Plaintiffs’ speculation that Ablyazov was trying to manipulate the court did not justify expanding the earlier sanctions award.

For the second category, the court excluded work that was not caused by discovery misconduct. This included preparing an initial request under the Hague Convention to obtain discovery, drafting and reviewing ordinary written discovery requests, and communications about deposition logistics that would have occurred regardless of Ablyazov’s conduct. The court included work responding to deficient or missing discovery responses, preparing related letters and motions, and attending discovery conferences addressing his conduct.

The court found that all the time in the third category fell within the earlier sanctions award. After applying the approved rates and removing non-compensable time, it awarded $44,066 for Category 2 and $96,049.60 for Category 3.

Ruling

Magistrate Judge Katharine H. Parker granted Plaintiffs’ motion for fees and awarded them a total of $140,115.60 in attorneys’ fees. The award was consistent with the court’s explanation and its prior ruling. Ablyazov was ordered to pay within three months of the opinion, and the court stated that failure to pay could result in further sanctions. Plaintiffs did not seek costs in this motion but reserved the right to seek them later.