The Fashion Exchange LLC v. Hybrid Promotions, LLC

Background

On December 26, 2019, the court granted in part defendants’ motion for sanctions concerning the plaintiff’s loss of financial documents related to actual damages. The court did not impose the requested terminating sanctions because the record did not establish that the documents had ever existed. Instead, it imposed monetary sanctions on the plaintiff and its counsel for repeated misrepresentations to defendants and the court concerning discovery obligations.

The earlier sanctions order required the plaintiff and its counsel to pay defendants’ fees and costs for specified discovery-related work, including preparing a September 27, 2018 letter; attending two discovery conferences; preparing for and taking the January 29, 2019 deposition of Hanono; and briefing the sanctions motion. Defendants submitted attorney declarations and billing records seeking $108,716.60. The plaintiff objected to the requested amounts.

Attorney’s Fees

The court evaluated the requested fees using the lodestar method, which generally calculates a reasonable hourly rate multiplied by a reasonable number of hours. It approved the requested hourly rates for the attorneys and paralegal, including rates of $580 and $600 for Mark J. Rosenberg, $530 for Debra Bernstein, $450 for Joel H. Rosner, and $75 for paralegal Toni Serrant.

Defendants billed 236 hours for the compensable tasks. The plaintiff argued that the hours were excessive because defendants achieved limited success on the sanctions motion, spent too much time drafting that motion, used vague block billing, and billed excessive preparation time for the Hanono deposition.

The court rejected the challenge to the roughly 192 hours billed for the sanctions motion. It reasoned that the motion addressed repeated discovery violations, required review of a substantial record, and sought sanctions relating to evidence necessary for the plaintiff to establish damages. The court also found that approximately 22 hours of preparation by two attorneys for the Hanono deposition was not excessive, given the importance of the witness and the circumstances leading to the court-ordered deposition.

The court did find that some billing entries combined several tasks without stating how much time was spent on each task. Because counsel had to estimate after the fact how much time was attributable to compensable work, the court reduced defendants’ fees by 10%.

Costs

Defendants requested $2,400.75 for deposition transcripts, messenger services, and Westlaw. The court denied those costs because defendants had not filed the bill of costs required by Local Rule 54.1 of the Southern and Eastern Districts of New York.

Disposition

The court awarded defendants $95,684.085 in attorney’s fees, reduced from $106,315.65, and held the plaintiff and its counsel jointly and severally liable for that amount. It denied the requested costs. The order was stayed pending Judge Stein’s ruling on the plaintiff’s objections to the earlier sanctions order. If Judge Stein overruled those objections, the plaintiff was directed to pay the fee award within fourteen days of Judge Stein’s order.