Gong v. Sarnoff

Background

The court had previously granted in part and denied in part Stuart M. Sarnoff and O’Melveny & Myers LLP’s motion for sanctions under Federal Rule of Civil Procedure 11. The court found that Junwu Gong’s claims were frivolous and that he had initiated the action for an improper purpose. It awarded Sarnoff and O’Melveny the reasonable attorneys’ fees and costs they incurred defending against the action, but not fees incurred bringing the sanctions motion. The sanctions were to be paid by Gong and his counsel, Richard Freeth and Yongbing Zhang.

Sarnoff and O’Melveny submitted a fee application requesting $235,812.50 in attorneys’ fees and $5,955.86 in costs. After the court found their first submission insufficiently detailed, they submitted additional billing records. The fee application was based on work performed by five lawyers whose requested hourly rates ranged from $790 to $1,555. The lawyers recorded 177.5 hours of work.

Hourly Rates

The court held that the requested rates were excessive given the case’s relative simplicity, the lack of complex or novel issues, and the absence of evidence that the lawyers had civil-rights litigation experience. The court found that the case required knowledge of federal litigation and civil-rights law, but not the specialized securities, bankruptcy, or other expertise emphasized by the fee applicants.

The court set the reasonable hourly rates at $500 for William J. Sushon, $350 for Laura Aronsson, and $300 for each of the three associates: Aisling Murray, Eli Grossman, and Makenzie Russo.

Hours and Costs

The court found that nearly 100 hours spent on the motions to dismiss the original and amended complaints was unreasonable because the case was simple and the amended complaint made minimal changes relevant to those motions. It reduced by 25 percent the hours each lawyer devoted to those motions. The fee award would be calculated using the reduced hours and the hourly rates set by the court.

The court found the requested litigation costs reasonable and awarded the Moving Defendants $5,955 in costs. The opinion did not state the final amount of attorneys’ fees because the defendants were required to submit a revised itemized billing statement.

Disposition

The court granted in part and denied in part the Moving Defendants’ fee application. It directed them to submit, within seven days, a revised declaration showing each lawyer’s hours after the 25 percent reduction, applying the court-approved hourly rates, and attaching a proposed order.