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Curry v. United Parcel Service, Inc.

United States District Court, E.D. Pennsylvania

October 25, 2017

ROBERT CURRY, Plaintiff,
v.
UNITED PARCEL SERVICE, INC., et al., Defendants.

          MEMORANDUM

          GERALD J. PAPPERT, J.

         Defendants United Parcel Service, Inc. and Teamsters Local 623 seek attorneys' fees under 28 U.S.C. § 1927 and Local Civil Rule 83.6.1 for work that resulted from Robert Curry's counsel's bad faith filing of the Amended Complaint. After considering the reasonableness of the requests and balancing the equities between the parties, the Court orders Curry's attorney, Matthew Weisberg, to pay UPS $12, 576.00 and Local 623 $7, 080.00.

         I.

         Curry sued UPS and Local 623 after he was fired in May of 2015. The case was ultimately resolved on the merits when the Court denied Curry's Motion to Remand and granted the Defendants' Motions to Dismiss.[1] (ECF Nos. 34 & 35.) The case's sordid history is presented in all its glory in the Court's August 30 Memorandum, and will mercifully not be repeated here.[2] (ECF No. 36.)

         Prior to dismissal, Defendants filed Motions for Sanctions pursuant to 28 U.S.C. § 1927 and Local Civil Rule 83.6.1. (ECF Nos. 20 & 22.) The Court ordered Weisberg to show cause why it should not award the Defendants their costs, expenses, and attorneys' fees incurred as a result of Weisberg's filing of the Amended Complaint. (ECF No. 31.) After holding a hearing, the Court ruled that Weisberg acted in bad faith in filing the Amended Complaint and with the purpose of multiplying the proceedings through conduct that was unreasonable and vexatious because: (1) the Amended Complaint was never meant to stand on its merits and (2) the timing of the filing- when viewed in context of the entire record-strongly suggested it was filed to delay the proceedings and the ultimate dismissal of the case. (ECF No. 36.)

         The Court reserved ruling on the sanctions motions, requesting that the Defendants file fee petitions detailing their costs, expenses and attorneys' fees incurred because of Curry's filing of the Amended Complaint. (ECF No. 37.) On September 14, 2017, counsel for both UPS and Local 623 filed Fee Petitions. (ECF Nos. 38 & 39.) UPS requested attorneys' fees and costs in the amount of $19, 651.60 and Local 623 requested $13, 338.00 in fees, for a total of $32, 989.60. Curry filed an omnibus response on September 18, 2017. (ECF No. 40.) Defendants filed their replies on September 20, 2017 and September 26, 2017, (ECF Nos. 43 & 47), and Curry filed a sur-reply on October 03, 2017, (ECF No. 51).

         II.

         Once a court finds bad faith, “the appropriateness of assessing attorneys' fees against counsel under section 1927 is a matter for the district court's discretion.” Ford v. Temple Hosp., 790 F.2d 342, 347 (3d Cir. 1986) (citing Baker Indus., Inc. v. Cerberus Ltd., 764 F.2d 204, 210 (3d Cir. 1985)). “The language and purpose of the statute reflect that these sanctions are aimed at deterring lawyers' bad faith conduct that disrupts the administration of justice by multiplying proceedings, ” In re Prosser, 777 F.3d 154, 161 (3d Cir. 2015), or conduct that “intentionally and unnecessarily delay[s] judicial proceedings, ” LaSalle Nat'l Bank v. First Conn. Holding Grp., LLC, 287 F.3d 279, 288 (3d Cir. 2002). See also In re Schaefer Salt Recovery, Inc., 542 F.3d 90, 101 (3d Cir. 2008) (“[T]he principal purpose of sanctions under § 1927 is ‘the deterrence of intentional and unnecessary delay in the proceedings.'”) (quoting Zuk v. E. Pa. Psychiatric Inst. of the Med. Coll. of Pa., 103 F.3d 294, 297 (3d Cir. 1996)).

         “‘[O]f all the duties of the judge, imposing sanctions on lawyers is perhaps the most unpleasant.' Yet, none is more important.” Loftus v. Se. Pa. Transp. Auth., 8 F.Supp.2d 458, 459 (E.D. Pa. 1998) (quoting William W. Schwarzer, Sanctions Under the New Federal Rule 11-A Closer Look, 104 F.R.D. 181, 205 (1985)). The imposition of sanctions for willful abuses or manipulations of the legal system is essential to maintaining the public's trust in the system and protecting innocent parties from unjustified legal expenses. See id. However, the statute should be “‘construed narrowly and with great caution so as not to stifle the enthusiasm or chill the creativity that is the very lifeblood of the law.'” LaSalle, 287 F.3d at 289 (quoting Mone v. Commn'r of Internal Revenue, 774 F.2d 570, 574 (2d Cir. 1985)). Courts should exercise sanctioning power “‘only in instances of a serious and studied disregard for the orderly process of justice.'” Id. at 288 (quoting Ford, 790 F.2d at 347).

         This is one such instance. Weisberg's conduct went far beyond zealous advocacy. Indeed, it went further than mere rank incompetence. His repeated filings and tactics were designed to manipulate the legal system, impose unnecessary and unjustified expenses on the Defendants, and flout the rules governing litigation, not to mention those governing his conduct as an attorney. The Amended Complaint was on its face insufficient to stand on its own. A very basic principle of federal civil procedure, learned by all first-year law students (well, perhaps all but one), is that the court must have subject matter jurisdiction over the action. In fact, the federal rules require a “short and plain statement of the grounds for the court's jurisdiction.” Fed.R.Civ.P. 8(a)(1). Here, Weisberg filed a complaint which read, “Respectfully, this Honorable Court does not have jurisdiction over this matter.” (ECF No. 16.) The Amended Complaint was thus not only deficient, but this deficiency was known to counsel and memorialized on the second page of the filing.

         Further, the record reveals that Weisberg filed the complaint in an attempt to delay the proceeding and avoid responding to meritorious motions to dismiss. The Court's August 30 Memorandum, (ECF No. 36), recounts Weisberg's repeated procedural shenanigans in painful detail. The filing of the Amended Complaint was consistent with his numerous prior attempts to avoid deadlines and litigate this case outside of the rules.

         III.

         Once the Court decides sanctions are warranted, § 1927 permits the Court to award reasonable attorneys' fees and “costs and expenses that result from the particular misconduct.” In re Prudential Ins. Co. Am. Sales Practice Litig. Agent Actions, 278 F.3d 175, 188 (3d Cir. 2002) (citing Martin v. Brown, 63 F.3d 1252, 1264 (3d Cir. 1995)); 28 U.S.C. § 1927. “The starting point for determining the amount of a reasonable fee is the lodestar, which courts determine by calculating the ‘number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate.'” McKenna v. City of Philadelphia, 582 F.3d 447, 455 (3d Cir. 2009) (quoting Hensley v. Eckerhart, 461 U.S. 424, 433 (1983)). The lodestar rate is “strongly presumed” to result in a reasonable fee. Washington v. Phila. Cty. Court of Common Pleas, 89 F.3d 1031, 1035 (3d Cir. 1996) (citing City of Burlington v. Dague, 505 U.S. 557 (1992)). See also Souryavong v. Lackawanna Cty., 872 F.3d 122, 128 (3d Cir. 2017) (explaining that the lodestar calculation carries a strong presumption of reasonableness and includes most, if not all, of the factors relevant to determining a reasonable fee). The requesting party must demonstrate that its requested rates and hours are reasonable by submitting “‘evidence supporting the hours worked and rates claimed.'” Interfaith Cmty. Org. v. Honeywell Int'l, Inc., 426 F.3d 694, 703 n.5 (3d Cir. 2005) (quoting Rode v. Dellarciprete, 892 F.2d 1177, 1183 (3d Cir. 1990)).

         A.

         Generally, the applicable hourly rate is determined by reference to the prevailing market rates in the community. Washington, 89 F.3d at 1035 (citing Blum v. Stenson, 465 U.S. 886, 895-96 n.11 (1984)). “The fee schedule established by Community Legal Services, Inc. (“CLS”) ‘has been approvingly cited by the Third Circuit as being well developed and has been found by [the Eastern District of Pennsylvania] to be a fair reflection of the prevailing market rates in Philadelphia.'” Maldonado v. Houstoun, 256 F.3d 181, 187 (3d Cir. 2001) (alteration in original). “Once the [requesting party] has made the prima facie showing with respect to the appropriate hourly rate, that rate may be contested, ‘but only with appropriate record evidence.'” Evans v. Port Auth. of N.Y. & N.J., 273 F.3d 346, 361 (3d Cir. 2001) (quoting Smith v. Phila. Hous. Auth., 107 F.3d 223, 225 (3d Cir. 1997)).

         1.

         UPS requests attorneys' fees in the amount of $19, 648.00, [3] calculated by multiplying the number of hours counsel worked by an hourly rate of $320.

         The $320 rate requested by UPS is reasonable. Gary M. Tocci, a partner at Reed Smith and a member of the firm's Labor & Employment Group, submitted an affidavit in support of UPS's fee petition. (ECF No. 38, Ex. A.) The affidavit states that three lawyers worked on this case for UPS: Tocci; Molly Q. Campbell, a senior associate; and Kristen M. Ashe, a junior associate. Tocci graduated from Temple University School of Law in 1987. (ECF No. 38, Ex. A.) CLS of Philadelphia lists a rate of $620-$650 per hour for attorneys with over twenty-five years of experience. Campbell is a senior associate in Reed Smith's Complex Litigation Group. She graduated from the University of Pittsburgh School of Law in 2011. (ECF No. 38, Ex. A.) CLS of Philadelphia lists a rate of $270-$340 per hour for attorneys with between six to ten years of experience. Ashe is a junior associate, also in the firm's Complex Litigation Group. She graduated from Villanova University School of Law in 2016. (ECF No. 38, Ex. A.) CLS of Philadelphia lists a rate of $180-$200 per hour for attorneys with fewer than two years of experience post-law school. The average hourly rate for the lawyers who worked on the case is thus approximately $360-$400.[4] Reed Smith and UPS agreed to a blended hourly rate of $320 for all work performed in this case, regardless of the lawyer's seniority. The negotiated rate of $320 falls below the attorneys' combined average hourly rate.

         Further, use of the $320 rate is reasonable in light of the hours actually billed by each lawyer. The table included as Exhibit B to UPS's petition provides the total number of hours billed by Reed Smith. Breaking the table down by lawyer and applying the low end of the CLS rate ranges to each to determine the lawyers' lodestars demonstrates that UPS would have paid more if each lawyer had an individual rate that directly reflected his or her experience:

Total Hours Billed Tocci Campbell Ashe
0.5 0.6 0.7
0.7 1.2 2.2
0.6 0.5 1.6
1.2 1.2 0.3
0.4 0.4 0.9
0.8 0.7 1.3
0.7 1.2 4.5
0.2 0.1 0.6
0.5 1.3 0.8
0.3 0.8 1.5
0.5 0.4 1.6
1.0 0.9 4.9
0.3 2.5 2.1
0.8 0.9 1.6
2.5 0.3
0.5 0.2
0.8 1.8
0.8 1.5
1.0 0.3
1.2 0.6
0.8 0.2
0.8

0.8

1.5

19.2 17.6 24.6

Tocci

Campbell

Ashe

Hours Billed

19.2

17.6

24.6

Low-end CLS Rate

$620.00

$ 270.00

$ 180.00

Lodestar per Lawyer

$ 11, 904.00

$4, 752.00

$ 4, 428.00

Total Lodestar

$ 21, 084.00


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