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Orion Drilling Company, LLC v. EQT Production Co.

United States District Court, W.D. Pennsylvania

September 10, 2019

ORION DRILLING COMPANY, LLC, Plaintiff,
v.
EQT PRODUCTION COMPANY, Defendant.

          OPINION AND ORDER RE: ECF NO. 342

          Maureen P. KELLY, Magistrate Judge

         Pending before the Court is EQT's Motion for Attorneys' Fees and Related Costs filed on behalf of Defendant EQT Production Company (“EQT”). ECF No. 342. EQT brings its motion pursuant to Federal Rule of Civil Procedure 54(d), and seeks recovery of attorneys' fees and costs incurred and paid in defense of the instant action. For the reasons that follow, the Court grants EQT's motion, and awards attorney's fees and the amount of $1, 920, 823.06, and related costs in the amount of $854, 535.73.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         This action was commenced by Plaintiff Orion Drilling Company, LLC (“Orion”), against EQT alleging that EQT breached a series of contracts pursuant to which Orion agreed to build and operate two drilling rigs, referred to as Rig 17 and Rig 18, at various EQT well sites for a specified number of days. Orion claimed that as a result of EQT's alleged breaches, it was entitled to liquidated damages of $32, 102, 000, plus pre-judgment interest and attorneys' fees.

         The parties aggressively litigated Orion's claims over the course of two and one-half years, and conducted extensive discovery, including over three dozen depositions of fact witnesses. The parties exchanged twelve expert witness reports and deposed five experts. Discovery disputes led to numerous discovery motions, motions to compel, and related motions for sanctions. Prior to trial, the parties filed or responded to eleven motions in limine and filed briefs in support or in opposition to each. In addition, the parties filed trial memoranda regarding legal issues not previously resolved, as well as extensive pretrial statements summarizing evidence and legal theories, and identifying witnesses and trial exhibits. Thereafter, the Court conducted a two-week jury trial which resulted in a verdict in favor of EQT as to Orion's breach of contract claims. ECF No. 329. The Court entered judgment in EQT's favor on February 1, 2019. ECF No. 330.

         On February 15, 2019, EQT filed a Motion for Attorneys' Fees and Costs (the “Motion”). ECF No. 342. The Motion is based on the express provision in Section 7.15 of the underlying Drilling Contracts, that “[i]n the event of litigation to enforce this contract, the prevailing party shall be entitled to attorneys' fees.” ECF No. 1-3 at 13. As the prevailing party, EQT claims it is entitled to recover all attorneys' fees and related expenses incurred and paid in defense of this action. Accordingly, EQT seeks an award of $1, 920, 823.06 in attorney's fees and $854, 535.73 in related expenses incurred and paid during the period October 1, 2016 through January 31, 2019. EQT also filed a Brief in Support, ECF No. 343, that included declarations and the invoices of Meyer, Unkovic & Scott LLP (“Meyer Unkovic”) and Reed Smith LLP (“Reed Smith”), ECF Nos. 343-1 to 343-6.

         In support of the instant Motion, EQT has submitted the Declaration of lead trial counsel Patricia L. Dodge, a former partner at Meyer Unkovic.[1] ECF No. 343-5. Meyer Unkovic is a well- respected complex commercial litigation firm located in Pittsburgh, Pennsylvania. Attorney Dodge is a nationally recognized trial attorney, and a distinguished member of the International Academy of Trial Lawyers, the American College of Trial Lawyers, and the Academy of Trial Lawyers of Allegheny County. Attorney Dodge was assisted by partner Caleb M. Turner, four associates and two paralegals. Attorney Dodge's participation in the early stages of this action was strategic and advisory, providing analysis, advice and consultation to co-counsel Reed Smith. After the close of fact discovery, Attorney Dodge and Meyer Unkovic assumed the role of lead trial counsel, taking and defending expert depositions, participating in meetings with trial witnesses, drafting pre-trial filings including the pretrial statement, trial related motions and briefs and jury instructions, preparation for direct and cross examination of witnesses, and opening and closing statements.

         In connection with its engagement on behalf of EQT, Attorney Dodge represents that EQT paid Meyer Unkovic a negotiated discounted rate and, depending upon the assigned attorney's experience and role, the amount billed was approximately one-third lower than Meyer Unkovic's established hourly rates.[2] Through February 8, 2019, Meyer Unkovic submitted invoices based on time and billing rates totaling $412, 313.70, representing 1, 942.40 hours for attorney and support staff time. Associated litigation costs, including certain expert witness fees, trial technology expenses, transcripts, and photocopying, were submitted to EQT totaling $148, 180.56. These amounts do not include time or expenses that were written off and not submitted to EQT in the exercise of counsel's judgment. EQT has paid all Meyer Unkovic adjusted invoices, and reimbursed Meyer Unkovic for all expenses.

         EQT has also submitted a Declaration from Nicolle R. Snyder Bagnell, a partner at Reed Smith, who served as co-lead counsel for Reed Smith and, with Lucas Liben, performed and directed Reed Smith's extensive work on the case from its inception, with primary responsibility through the close of fact discovery. ECF No. 343-1. Reed Smith is a multi-state, multinational law firm, with significant experience representing energy and natural resource clients. Attorney Bagnell has nearly twenty years of experience counseling and litigating on behalf of energy industry clients. Attorney Liben is an attorney with approximately nine years of experience, specializing in oil and gas industry litigation. Liben was elevated to partner at Reed Smith shortly before the commencement of trial. Attorneys Bagnell and Liben directed a team of approximately three dozen counsel, associates, e-discovery attorneys, paralegals and other staff who were engaged on behalf of EQT. Attorney Bagnell represents that fees for all participating Reed Smith attorneys were discounted 15% through 2018. Reed Smith invoiced EQT 6, 241.50 hours for a total of $1, 508, 509.36 in fees.[3] In addition, Reed Smith incurred costs and expenses of $706, 355.17 in the defense of this matter, including expert witness fees and expenses, deposition transcripts, trial technology costs, and fees related to a jury consultant. As of the date its motion was filed, EQT has paid all amounts invoiced through December 2018.

         Orion filed a nine (9) page Brief in Opposition to the instant Motion. ECF No. 382. Orion opposes the instant Motion of two grounds. First, Orion argues that EQT failed to carry its burden to show that the attorneys' fees were reasonable because: (a) Meyer Unkovic and Reed Smith redacted certain invoices, and (b) EQT took cumulative and duplicative discovery on undisputed or irrelevant issues. ECF No. 382 at 2-5. Second, Orion argues that EQT failed to carry its burden to prove that its costs were reasonable because: (a) EQT failed to provide a breakdown of costs, (b) the expert fees of Charles Stone were unreasonable, and (c) the expert fees of Robert Overbaugh were unreasonable. Id. at 5-8. Orion does not provide any counter-declarations to support its opposition.

         EQT has filed a Reply Brief in Support of Motion for Attorneys' Fees and Related Costs, ECF No. 384. The Motion is ripe for resolution.

         II. STANDARD OF REVIEW

         “Under Pennsylvania law, ‘[c]ounsel fees are recoverable only if permitted by statute, clear agreement of the parties, or some other established exception.'” Norfolk S. Ry. Co. v. Pittsburgh & W. Virginia R.R., 101 F.Supp.3d 497, 540 (W.D. Pa. 2015), aff'd, 870 F.3d 244 (3d Cir. 2017) (quoting Knecht, Inc. v. United Pac. Ins. Co., 860 F.2d 74, 80 (3d Cir. 1988)). When a contract provides for an award of attorney's fees to the prevailing party, “the trial court may consider whether the fees claimed to have been incurred are reasonable, and [] reduce the fees claimed if appropriate.” McMullen v. Katz, 985 A.2d 769, 777 (Pa. 2009).

         “The party seeking attorney's fees has the burden to prove that its request for attorney's fees is reasonable. To meet its burden, the fee petitioner must ‘submit evidence supporting the hours worked and rates claimed.'” Rode v. Dellarciprete, 898 F.2d 1177, 1183 (3d Cir. 1990) (quoting Hensley v. Eckerhart, 461 U.S. 424, 422 (1983)). The district court must also consider the amount and character of the services performed, the difficulty of the problems involved, and the amount of money or value of the property in question. Toshiba America Medical Systems, Inc. v. Valley Open MRI and Diagnostic Center Inc., 674 Fed.Appx. 130, 133 (3d Cir. 2016) (citing McMullen, 985 A.2d at 774). Other factors to be considered include the results obtained, the professional skill and standing of the attorney, the nature and length of the litigation, the responsibilities of the parties in affecting the nature and length of the litigation, and the competitiveness of the rate and time expended. City of Scranton v. Davis, No. 16-1727, 2018 WL 3126443 (M.D. Pa. June 26, 2018) (citing McMullen, supra; In re LaRocca's Tr. Estate, 246 A.3d 337, 339 (Pa. 1968); and citing Arches Condo Ass'n v. Robinson, 131 A.2d 122, 131-32 (Pa. Commw. Ct. 2015)).

         While “[t]he district court cannot ‘decrease a fee award based on factors not raised at all by the adverse party, '” the court has a great deal of discretion to adjust the fee award in light of objections. Rode, 892 F.2d at 1183 (internal citation omitted).

         III. DISCUSSION

         A. Reasonableness of Attorneys' Fees

         1. ...


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