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Doherty v. Allstate Indemnity Co.

United States District Court, E.D. Pennsylvania

December 17, 2019

MARY LOU DOHERTY, et al., Plaintiffs,
v.
ALLSTATE INDEMNITY COMPANY, Defendant.

          MEMORANDUM

          GERALD J. PAPPERT, J.

         After finding that Mary Lou Doherty and Joseph Mirarchi unreasonably and vexatiously multiplied the proceedings, the Court granted Allstate's motion for sanctions under 28 U.S.C. § 1927. The Court ordered that Doherty and Mirarchi pay Allstate's reasonable excess costs, expenses and attorneys' fees associated with fifty-two specific docket entries. After reviewing Allstate's fee petition, the underlying factual support and the circumstances of this case, the Court imposes sanctions of $35, 000 on Doherty and $4, 114 on Mirarchi.

         I

         The Court need not repeat this case's unfortunate and protracted history. See (Mem. Granting Sanctions in Part 2-4, ECF No. 203); (Mem. Granting Summ. J. 2-27, ECF No. 175). Doherty filed a meritless lawsuit against Allstate. See (Mem. Granting § 1927 Sanctions 2-3). Acting as a litigant and an attorney, Doherty prosecuted her suit in bad faith. See (id. at 3, 8-9). Nine months into the case, she enlisted Mirarchi as her co-counsel. See (id. at 3).

         After four years and over 200 filings, the Court partially granted Allstate's motion for sanctions. Though the Court held that the supervisory rule barred Allstate's request for sanctions under Federal Rule of Civil Procedure 11, see (id.), it found that Doherty's and Mirarchi's “serious and studied disregard for the orderly process of justice” called for sanctions under 28 U.S.C. § 1927, (id. at 10 (quoting In re Prosser, 777 F.3d 154, 161 (3d Cir. 2015)). The Court identified fifty-two filings evincing Doherty's and Mirarchi's unreasonable and vexatious multiplication of the proceedings, see (id. at 6-7), and ordered Doherty and Mirarchi to pay Allstate's reasonable excess costs, expenses and attorneys' fees associated with those filings, see (Order ¶ 2, ECF No. 204).

         The Court directed Allstate to submit a petition itemizing its excess expenditures linked to the identified filings. See (id. at ¶ 3). Allstate's petition stated that it incurred $39, 618 in attorneys' fees, $6, 707.30 in costs and $23, 631.95 in expert fees associated with the specified docket entries. See (Pet. ¶¶ 5, 6, 8, ECF No. 207). As support, Allstate attached a document listing the hours worked and attorneys' fees charged for each of the fifty-two filings. See (id. Ex. C, ECF No. 207-5). It attached similar documents for the expert fees and other costs. See (id. Ex. D, ECF No. 207-6); (id. Ex. E, ECF No. 207-7).

         Although Mirarchi declined to object to Allstate's petition, [1] Doherty asserted lengthy objections, most of which were either irrelevant or divorced from the facts or law, [2] see (Objs. to Pet., ECF No. 208). But Doherty correctly objected that Allstate's petition failed to: (1) identify the name, qualifications and hourly rate for each attorney who billed Allstate; (2) specify the prevailing market rate for similar legal services; (3) list the tasks performed for the fifty-two filings; and (4) justify the requested expert fees and costs. See (id. ¶¶ 5, 6, 8). The Court ordered Allstate to address those deficiencies and allowed Doherty and Mirarchi to file supplemental objections. See (Order for Suppl. Docs., ECF No. 210).

         Allstate recently submitted its supplemental materials. In one letter, it identified each attorney who worked on the case and listed their qualifications and hourly rate. See (Suppl. Letter, ECF No. 211). Allstate attached a separate letter attesting that the reasonable hourly rate for similar legal work in the community ranged from $210 to $335 per hour. See (id. Ex. B, ECF No. 211-2). In another letter, Allstate provided an affidavit and invoice sheet tracking the attorneys' fees and other costs Allstate incurred over the litigation. See (Second Suppl. Letter, ECF No. 215). Another document detailed the tasks performed, hours worked and attorneys' fees charged for each of the fifty-two filings. See (Attorneys' Fees Doc., ECF No. 212).

         Once again, Doherty objected, but Mirarchi did not. Contrary to the record, Doherty claimed that Allstate had not “set forth the name, qualifications and hourly rate for each attorney.” (Suppl. Objs. ¶ 1, ECF No. 213). Nor did she think Allstate had established “the prevailing market rate for similar legal services.” (Id. at ¶ 2.) Doherty also criticized Allstate's submissions for neither including the specific dates that each attorney worked on each task, see (id. at ¶ 3), nor providing Third Circuit precedent to support awarding expert fees under § 1927, see (id. at ¶ 4). Finally, Doherty argued that Allstate's documentation regarding its expert fees and costs was not specific enough to justify an award. See (id. at ¶ 5).

         II

         Once a district court decides sanctions under 28 U.S.C. § 1927 are warranted, it has wide discretion in fixing the amount of sanctions to impose. See Ford v. Temple Hosp., 790 F.2d 342, 347 (3d Cir. 1986). In exercising that discretion, a court may award only those attorneys' fees and “costs and expenses that result from the particular misconduct.” In re Prudential Ins. Co. Am. Sales Practice Litigation Agent Actions, 278 F.3d 175, 188 (3d Cir. 2002). Likewise, the attorneys' fees must be reasonable, and the costs and expenses limited to those “that could be taxed under 28 U.S.C. § 1920.” Id. Before imposing a sanction, a court must “balance the equities between the parties” and ensure that the sanction serves “the interests of justice.” Id.

         III

         A

         To test whether the attorneys' fees are reasonable, courts compare the requested fees with a “lodestar”-that is, the product of the reasonable hours spent on the litigation and a reasonable hourly rate. See Ford, 790 F.2d at 349 n.10. Courts “strongly presume” that the lodestar rate results in a reasonable fee. Washington v. Phila. Cty. Court of Common Pleas, 89 F.3d 1031, 1035 (3d Cir. 1996). Even so, it is the petitioner's burden to show that its rates and hours are reasonable by submitting “evidence supporting the hours worked and rates claimed.” Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). Once the petitioner makes this prima ...


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