DoubleLine Capital LP v. Odebrecht Finance, Ltd

Background

DoubleLine Capital LP, DoubleLine Income Solutions Fund, and DoubleLine Funds Trust sued Odebrecht Finance, Ltd. and other defendants, alleging violations of federal securities law and state law related to the sale of bonds without disclosure of involvement in a long-running bribery scheme.

On October 14, 2020, the Court ordered defendants Odebrecht, S.A. — Em Recuperacao Judicial, Construtora Norberto Odebrecht, S.A., and Odebrecht Engenharia e Construcao S.A. to produce nonprivileged documents responsive to three requests for production. The defendants did not comply and remained in violation for almost a year.

On July 19, 2022, the Court granted DoubleLine’s motion for sanctions under Federal Rule of Civil Procedure 37(b)(2)(A), established certain facts for purposes of the action, and ordered the defendants to pay reasonable expenses—including attorneys’ fees and out-of-pocket costs—caused by the discovery violations. The compensable expenses included work seeking substitute discovery and preparing and pursuing the sanctions motion.

DoubleLine later sought $90,065 in attorneys’ fees for work by Steven Berman, Karl Barth, and Joseph Salonga of Hagens Berman Sobol Shapiro LLP. DoubleLine did not seek reimbursement for out-of-pocket costs.

Analysis

The Court applied the approach used in the Second Circuit: calculating a presumptively reasonable fee by multiplying a reasonable hourly rate by a reasonable number of hours spent on compensable work. The Court considered the attorneys’ qualifications, the nature of the work, rates awarded for comparable work in the Southern District of New York and the Seattle area, and the relatively straightforward nature of the discovery dispute.

The Court found that DoubleLine had not provided sufficient evidence that its requested hourly rates were reasonable. The submission did not show that DoubleLine was actually charged or paid those rates, compare them with rates in similar cases, or provide counsel’s background and experience. Using the available information and its familiarity with prevailing rates, the Court awarded rates of $850 per hour for Berman, $600 per hour for Barth, and $200 per hour for Salonga.

The Court generally accepted the categories of work identified by DoubleLine as caused by the defendants’ failure to comply. It deducted one hour from Berman’s time for a meeting attended only by Berman. It also reduced by 25% Barth’s hours for legal research and drafting, finding that those tasks could have been performed more efficiently by more junior lawyers at lower rates.

Disposition

The reductions resulted in the following award:

- Steven Berman: 2.5 awarded hours at $850 per hour, totaling $2,125. - Karl Barth: 105.7 awarded hours at $600 per hour, totaling $63,390. - Joseph Salonga: 9.1 awarded hours at $200 per hour, totaling $1,820. - Total: $67,335.

The Court ordered the defendants to pay the plaintiffs $67,335 within 30 days of the April 10, 2023 Memorandum and Order.