Free Order on Motion for Attorney Fees - District Court of Arizona - Arizona

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WO

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA

) ) Plaintiff, ) ) vs. ) ) The Burlington Northern Santa ) Fe Railway Company, a ) corporation, ) ) Defendant. ) ) The Burlington Northern Santa ) Santa Fe Railway Company, ) a corporation, ) ) Third Party Plaintiff ) ) vs. ) ) Chemical Lime Company of ) Arizona, a corporation; ABC ) Corporations I-IV, fictitious ) corporations, ) ) Third Party Defendants.) ______________________________)

Steven Schrum,

No. CIV 04-0619-PHX-RCB O R D E R

Currently pending before the court is an "Application for Attorneys' Fees and Costs" by defendant and third-party plaintiff, the Burlington Northern Santa Fe Railway Company ("BNSF") (doc.

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132).

BNSF is requesting attorneys' fees of $219,045.00 "with Id. at 3. Third-party defendant,

interest thereon until paid."

Chemical Lime Company of Arizona ("Chemical Lime"), responds that the court should deny this motion in its entirety due to BNSF's non-compliance with LRCiv. 54.2. Alternatively, for a host of

reasons which will be more fully discussed herein, Chemical Lime contends that the court should reduce the requested fees by $164,358.00. The resultant fee award would then total $54,687.00.

"[O]r, in any event," Chemical Lime believes that the fee award should be "no more than . . . $65,000[.]" Resp. (doc. 142) at 12 and 13. Background In Schrum v. Burlington Northern and Santa Fe Railway, 2006 WL 1371634 (D.Ariz. 2006) ("Schrum I"), familiarity with which is assumed, this court granted summary judgment in favor of BNSF on plaintiff's claims brought pursuant to the Federal Employer's Liability Act ("FELA"), 45 U.S.C. § 51 et seq. Subsequently, the

court granted BNSF's motion for reconsideration and also granted summary judgment in BNSF's favor as to the third-party complaint, finding that under the 1991 Industry Track Agreement ("ITA") Chemical Lime had a duty to defend BNSF in the underlying FELA action. Schrum v. Burlington Northern Santa Fe Railway Co., 2007

WL 1526717 (D.Ariz. 2007) ("Schrum II"). Additionally, in Schrum II, the court ordered BNSF to "file and serve a motion for attorneys' fees and costs, etc., consistent with th[at] Order and with the 1991 ITA ." Id. at *12.

Thereafter, BNSF filed the pending "Application for Attorneys' Fees and Costs" (doc. 132). -2Document 151 Filed 05/30/2008

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To support this fee request, initially BNSF filed a redacted "Task-Based Itemized Statement of Fees and Expenses" ("Fee Statement"). Chemical Lime sought, inter alia, to have the court

deny attorneys' fees for all the redacted time or "similarly insufficient entries," i.e. $65,043.00. Resp. (Doc. 142) at 6.

Thereafter, BNSF filed a separate motion "request[ing] that the Court conduct an in camera inspection of BNSF's" Fee Statement. Mot. (doc. 145) at 1. Finding that such an inspection would

"assist the court in resolving BNSF's Application for Attorneys' Fees and Costs[,]" the court granted that motion. Doc. 149 at 2.

Thus, in analyzing the parties' respective arguments, the court also has carefully examined BNSF's unredacted Fee Statement. Discussion Chemical Lime's objections readily can be grouped into two broad categories - procedural and substantive. Chemical Lime's

procedural objections form the basis for its argument that the court should deny this application in its entirety. court will address those objections first. Therefore, the

If those procedural

objections are unfounded, the court will turn to Chemical Lime's alternative argument that for various substantive reasons BNSF's fee request should be "significantly reduced[.]" See Resp. (doc. 142) at 2. I. Procedural Challenges Chemical Lime argues that the court should deny this fee request "in its entirety because BNSF has not filed a proper motion . . . with this Court[]" in that it has not fully complied with the requirements of LRCiv. 54.2. See Resp. (doc. 142) at 2. It notes

Chemical Lime's first procedural objection is picayune. -3Document 151 Filed 05/30/2008

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that BNSF styled its fee request as an "application" as opposed to a motion. The court's order did specifically direct BNSF to file a

"motion for attorneys' fees and costs[.]" Schrum II, 2007 WL 1526717, at *12 emphasis added). nomenclature. LRCiv. 54.2 uses the same

See, e.g., LRCiv. 54.2(b)(1) (emphasis added)

("Unless otherwise provided by statute or court order . . . , the party seeking an award of attorneys' fees . . . shall file and serve a motion for award of attorneys' fees[.]") Although BNSF's

request is more properly styled as a motion, rather than an application, the court will overlook this minor technical flaw. The court cannot so easily overlook Chemical Lime's other procedural objections though. LRCiv. 54.2 sets forth in exhaustive

detail the requirements for filing an attorneys' fee motion in this District. LRCiv. 54.2(c) dictates that a party seeking fees file a

memorandum of points and authorities discussing "the following matters with appropriate headings and in the order listed[;]" (1) "eligibility," (2) "entitlement," and (3) "reasonableness of requested award." LRCiv. 54.2(c)(1)-(3). In turn, LRCiv.

54.2(c)(3) lists 13 factors "bearing on the reasonableness of the requested attorneys' fee award," which a party seeking fees "should discuss, as appropriate[.]" LRCiv. 54.2(c)(3). LRCiv. 54.2(d) sets forth equally detailed requirements as to the supporting documentation which must be included in a fee motion. A party seeking attorneys' fees must provide: (1) a

"Statement of Consultation[;]" (2) a copy of the fee agreement if written and, if oral, a "full recitation" of that agreement; (3) a Fee Statement in the prescribed format, with the requisite "description of services rendered[;]" (4) an affidavit of moving -4Document 151 Filed 05/30/2008

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counsel; and (5) "[a]ny other affidavits or evidentiary matter deemed appropriate . . . or required by law." (5). LRCiv. 54.2(d)(1)-

Additionally, "at a minimum," the affidavit of moving counsel

must include the following: (1) "Background[;]" (2) "Reasonableness of Rate[;]" and (3) "Reasonableness of Time Spent and Expenses Incurred." LRCiv. 54.2(4)(A)-(C).

Chemical Line is correct in noting that BNSF's initial memorandum did not comply with LRCiv. 54.2(c) because it did not include the three "appropriate headings" which that Rule mandates. However, as BNSF is quick to point out, substantively its memorandum includes the required information, albeit not in extensive detail. Likewise, attorney Thorpe's affidavit, while

again not including the "appropriate headings[,]" also mentions the three factors specified in LRCiv. 54.2(c). Moreover, as part of

its Reply, BNSF provided a "Supplement to its Application for Attorneys' Fees[,]" which makes explicit what is implicit in its prior filings. That Supplement expressly identifies and discusses Thus,

each of the three factors which LRCiv. 54.2(c) designates.

at this juncture, the court finds that BNSF is in compliance with LRCiv. 54.2(c). Chemical Line also challenges the sufficiency of this fee motion because purportedly BNSF's supporting documentation is incomplete in that it did not provide: "1) [a] statement of consultation, 2) the fee agreement, 3) a Fee Statement, and 4) an affidavit [from] moving counsel[.]" Resp. (doc. 142) at 3-4. the first item, BNSF describes this objection as "completely disingenuous" given its "numerous" efforts, all of which have been rejected, to get Chemical Lime to pay BNSF's attorneys' fees. -5Document 151 Filed 05/30/2008 As to

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Reply (doc. 144) at 4.

Be that as it may, the fact remains that

LRCiv. 54.2(d) is explicit in requiring a "Statement of Consultation." Indeed, in accordance with that Rule, "[n]o motion

for [an] award of attorneys' fees will be considered unless" such a Statement is attached to the supporting memorandum. LRCiv.

54.2(d)(1); see also In re Elegant Custom Homes, Inc., 2007 WL 1991673, at *1 (D.Ariz. 2007) (denying attorneys' fee motion for

attorneys' fees for failure to file Statement of Consultation). Nonetheless, as it did in Rudebusch v. Arizona, 2007 WL 2774482, at *1 (D.Ariz. 2007), the court is willing to "overlook th[is] procedural irregularity this time[,]" especially because BNSF did file such a statement as part of its Reply. 2), exh. 2 thereto. See Supp. (doc. 144-

Similar to Rudebusch, "counsel are

forewarned[,]" however, "that future fee motions must include this Statement [in the first instance], or the court will not consider them." See Rudebusch, 2007 WL 2774482, at *1.

As with the Statement of Consultation, originally BNSF did not comply with LRCiv. 54.2(d)(2) with respect to any fee agreement it may or may not have had with its counsel herein. That Rule

unequivocally requires that "[a] complete copy of any written fee agreement, or a full recitation of any oral fee agreement, . . . be attached to the supporting memorandum." LRCiv. 54.2(d)(2). That

Rule further provides that "[i]f no fee agreement exists, then counsel must attach a statement to that effect." Id. BNSF did

not attach such a statement to its original motion, but one is included as part of BNSF's later filed Supplement. 144-2), exh. 3 thereto. See Supp. (doc.

The court will, once again, overlook this

procedural deficiency because BNSF has provided the required -6Document 151 Filed 05/30/2008

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information, although not in its initial submissions. On the other hand, Chemical Lime's assertion that BNSF did not comply with LRCiv. 54.2(d) because it did not include a Fee Statement, or an affidavit of moving counsel, borders on the frivolous. BNSF provided both. Originally BNSF filed a 151 page

breakdown of the legal services rendered; the date on which they were rendered; the person rendering them; the time spent and the amount billed. 4). Thorpe Aff. (doc. 132-3), exh. A thereto (doc. 132-

Likewise, BNSF filed an affidavit of moving counsel in the See id. Thus, the court declines to deny BNSF's

required format.

attorneys' fees motion "in its entirety[,]" as Chemical Lime urges, for these relatively minor procedural irregularities. (doc. 142) at 4. As mentioned at the outset, in its original form BNSF's Fee Statement was redacted. Chemical Lime maintains that the court See Resp.

should "deny" attorneys' fees for "all . . . that . . . redacted[]" time because LRCiv. 54.2(e)(2) requires, inter alia, that "[t]he party seeking an award of fees . . . adequately describe the services rendered so that the reasonableness of the charge can be evaluated." LRCiv. 54.2(e)(2). As previously mentioned, however,

since its original submissions, BNSF has filed an unredacted Fee Statement. Consequently, the court will not deny attorneys' fees In any event,

simply because of those initial redacted entries.

the court observes that even if it deemed the redacted time descriptions "incomplete, or if such descriptions fail[ed] to adequately describe the service rendered," the remedy would be reduction of any fee award, not, as Chemical Lime seeks, complete denial of a fee award. See LRCiv. 54.2(e)(2).

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To conclude, insofar as Chemical Lime's procedural objections are concerned, obviously it would have been preferable for BNSF to have fully complied with LRCiv. 54.2 when it first filed this motion, rather than through later supplementation. Given BNSF's

initial substantial compliance, combined with the fact it fully complied with that Local Rule through later supplementation, the court will not deny this attorneys' fee motion on procedural grounds. By the same token, though, the requirements of LRCiv.

54.2 "are not advisory, but mandatory." Societe Civile Succession Richard Guino v. Beseder Inc., 2007 WL 3238703, at *7 (D.Ariz. 2007). Consequently, the court will not be so lenient in

overlooking non-compliance in future attorneys' fee motions filed by defense counsel. II. Substantive Challenges Having found insufficient merit to Chemical Lime's procedural arguments, the court will next examine Chemical Lime's substantive arguments for reducing any attorneys' fees awarded herein. Before

doing so, though, in accordance with LRCiv. 54.2(c)(1) and (2), the court will briefly touch upon BNSF's eligibility for and entitlement to recovery of its attorneys' fees. A. "Eligibility"/"Entitlement"

BNSF relies upon three separate sources for this motion. First, it points to the plain language of the 1991 ITA. When a

duty to defend arises under paragraph eight of that agreement, Chemical Lime is required to "pay all the costs incident to such defense including, but not limited to, attorneys' fees, . . . , [and] litigation expenses[.]" Resp. (doc. 142), exh. B thereto (doc. 142-4) (1991 ITA) at 5, ¶ 8. Second, it notes that in Schrum

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II, this court expressly ordered BNSF to file a motion for "attorneys' fees and costs . . . consistent with th[at] Order and with the 1991 ITA." Schrum II, 2007 WL 1526717, at *12. Third,

BNSF is relying upon A.R.S. § 12-341.01 which provides in relevant part that "[i]n any contested action arising out of a contract, . . . , the court may award the successful party reasonable attorney fees." A.R.S. § 12-341.01 (West 2003). In light of the

foregoing, wisely, Chemical Limes does not dispute BNSF's eligibility for or entitlement to attorneys' fees in the first place. Rather, the thrust of Chemical Lime's argument is that the

requested fees are not reasonable. B. "Reasonableness of Requested Award" First, the court must determine Schweiger v. China

Reasonableness has two parts.

the reasonableness of the hourly billing rate.

Doll Rest., Inc., 138 Ariz. 183, 187, 673 P.2d 927, 931 (Ariz.Ct.App. 1983)1 ("The beginning point in a development of a reasonable fee is the determination of the actual billing rate which the lawyer charged in the particular matter.") Second, it

must determine the reasonableness of the hours expended on the case. Id. at 188, 673 P.2d at 932. Informing this inquiry is the

general proposition that "[t]he prevailing party . . . is `entitled to recover a reasonable attorney's fee for every item of service which, at the time rendered, would have been undertaken by a reasonable and prudent lawyer to advance or protect his client's interest[.]'" Id. (quoting Twin City Sportservice v. Charles O. Finley & Co., 676 F.2d 1291, 1313 (9th Cir. 1982)).
1

It is against

As noted in Schrum II, in accordance with the 1991 ITA, Arizona law governs here. See Schrum II, 2007 WL 1526717, at *4.

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this legal backdrop which the court has analyzed the parties' respective arguments and scrutinized BNSF's 137 page unredacted Fee Statement. 1. Hourly Billing Rate

As to the hourly billing rate, "[u]nder Arizona law, `in corporate and commercial litigation between fee-paying clients, there is no need to determine the reasonable hourly rate prevailing in the community for similar work because the rate charged by the lawyer to the client is the best indication of what is reasonable under the circumstances of the particular case.'" Hummingbird Defense Systems, Inc. v. Ye, 2007 WL 4200751, at *4 (D.Ariz. 2007) (quoting Schweiger, 138 Ariz. at 187-188, 673 P.2d at 931-932). Here, as the "primary billing attorney in this case," attorney Thorpe avers that "[i]n most cases, the fees are calculated primarily based on the hourly-rate charges for the legal services." Mot. (doc. 132), exh. B thereto (Affidavit in Support of Application for Attorneys' Fees and Costs) (doc. 132-3), at 5, ¶ 10. Because of what it deemed to be "the substantial volume of work required . . . , Fennemore Craig employed a team of attorneys and staff to work on this case." Id. at 3, ¶ 4. The four

"shareholders and directors" who worked on this case billed at an hourly rate of $180.00 in 2004-2006 and at an hourly rate of $200.00 in 2007. Id. at 2, ¶¶ 3; 4(a); 4(b) and 4(c). The three

associates who worked on this case billed $140.00 per hour during the years 2004-2006. worked on this case. was $115. Id. at 3, ¶¶ 4(d)-4(f). Two paralegals also

One is a nurse-paralegal whose hourly rate The other paralegal, who is not a

See id. at 3, ¶ 4(g).

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nurse, had a billable rate of $115 in 2004, "$125.00 in 2005 and . . . $140 in 2006." Id. at 3, ¶ 4(h).

"BNSF has paid for all fees and costs Fennemore Craig rendered and incurred on behalf of BNSF[,]" id. at 4, ¶ 5, which is the best indication of "what is reasonable[]" here. See Hummingbird

Defense, 2007 WL 4200751, at *4 (internal quotation marks and citation omitted). Evidently, Chemical Lime agrees because, with

one exception which will be discussed momentarily, it is not contesting the hourly billing rates. Therefore, at least in terms

of the attorneys, any fees awarded herein will be based upon the rates recited above -- rates which the court finds imminently reasonable. The one narrow dispute as to hourly billing rates pertains to the $140.00 charged by the non-nurse paralegal in 2006. Through

the affidavit of attorney James K. Kloss, a self-described "expert witness" regarding this fee motion, Chemical Lime contends that that particular rate "is at least 25% in excess of what `[he] consider[s] to be a reasonable billing rate for experienced paralegal time in Arizona in this type of litigation." Resp. (doc.

142), exh. D thereto (doc. 142-6) (Aff. Of James K. Kloss), at 1, ¶ 2; and at 3, ¶ 10(C). Attorney Kloss bases that opinion, in part,

upon the fact that the other paralegal who worked on this case, and who is also a nurse, had an hourly billing rate of $115.00. Attorney Kloss further opines that "[i]t is custom and practice in the industry for nurse-paralegals to bill . . . at higher rates than `normal' paralegals because of the expertise associated with being a nurse." Id. Chemical Lime adds that the $140.00 hourly

rate for this paralegal in 2006 is the same hourly rate BNSF bills - 11 Filed 05/30/2008

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for its associates. There are a variety of factors, apart from the fact that one paralegal is a nurse and another is not, which may contribute to different billing rates, including experience. The same is true Thus,

when comparing paralegal billing rates to associates' rates.

the court declines to speculate as to the reasons for the varying billing rates which attorney Kloss has noted. Speculation is

particularly inappropriate given the rule set forth at the outset that the "rate charged . . . is the best indication of what is reasonable under the circumstances of the particular case. See

Hummingbird Defense Systems, 2007 WL 4200751, at *4 (internal quotation marks and citation omitted). Thus, the court finds that

the billing rates for the paralegals are reasonable as well. 2. Hours Reasonably Expended

There are five discrete categories of time for which Chemical Lime believes that BNSF should not be entitled to recover any attorneys' fees whatsoever. In particular, Chemical Lime believes (1)

that BNSF is not entitled to recover for time billed for:

"Tasks Spent Prior to Tendering its Defense[;]" (2) "Tendering the Defense[;]" (3) "Litigating . . . the Indemnity and Duty-to-Defend Issues[;]" (4) "Tasks Unrelated to this Litigation[;]" and (5) the pending Ninth Circuit appeal. 11. Resp. (doc. 142) at 4; 6; 7; 8; and It

The court will address these billing categories seriatim.

will then turn to Chemical Lime's more broad based arguments, attacking first the sufficiency of BNSF's billing entry descriptions and, second, the reasonableness of the hours expended. a. "Prior to Tendering its Defense"

Without citing to any legal authority, Chemical Lime maintains - 12 Filed 05/30/2008

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that BNSF should not be allowed to recover its attorneys' fees, totaling $39,121.50, for time expended prior to March 15, 2005, the date it tendered its defense. BNSF challenges the factual accuracy

of Chemical Lime's positions, and decries it as "another meaningless diversion." Reply (doc. 144) at 6.

As thoroughly discussed in Schrum II, Chemical Lime was recalcitrant in terms of accepting BNSF's tenders of defense. Schrum II, 2007 WL 1526717, at *3; and at *11. See

Thus, to imply, as

Chemical Lime does, that on March 15, 2005, BNSF simply tendered its defense for the first time and Chemical Lime accepted that tender, is not entirely accurate. Rather, Chemical Lime, as its

insurance carrier states, was "placed on notice by [BNSF] . . . back in September 2003[,]" of plaintiff's allegations. 144), exh. B thereto (doc. 144-2) at 42. Reply (doc.

Had Chemical Lime

accepted tender at that time, BNSF's fees in this regard would have been de minimis. Instead, as outlined in BNSF's Fee Statement,

between March 4, 2004, and March 15, 2005, it expended a relatively significant amount of time on the underlying action and the thirdparty action. What is more, as BNSF also points out, the 1991 ITA contains broad "hold harmless" language, wherein Chemical Lime must "pay all the costs incident to . . . defense including, but not limited to, attorneys' fees, investigators' fees, [and] litigation expenses[.]" Resp. (doc. 142), exh. B thereto (doc. 142-4) at 5, Art. I, ¶ 8 (emphasis added). That Agreement does not limit Chemical Lime's Given

obligations to paying only post tender defense costs.

Chemical Lime's delay in accepting BNSF's tenders of defense, along with the broad language of the 1991 ITA, the court will allow BNSF - 13 Filed 05/30/2008

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to recover for time expended prior to tender.2 b. Tendering the Defense

The 1991 ITA provides for the recovery of attorneys' fees "for the defense of any lawsuit[.]" Id. (emphasis added). Arguing that

fees incurred in actually tendering the defense do not come within the ambit of that language, Chemical Lime asserts that BNSF should not be allowed to recover the $446.00 which BNSF is seeking for time expended in tendering its defense. Without explanation, BNSF responds that "the fees are clearly contemplated by the Court's Order and the [1991 ITA]." 144) at 7. Reply (doc.

Alternatively, BNSF asserts that fees incurred in

tendering its defense are recoverable pursuant to A.R.S. § 12341.01. From a policy standpoint, BNSF further asserts that not

requiring Chemical Lime to pay these fees "would encourage parties to avoid their duties to defend and indemnify because they could do so without consequence." Id.

The expansive language of the 1991 ITA encompasses fees incurred in tendering a defense. As previously stated, that

Agreement requires Chemical Lime to "pay all the costs incident to . . . defense including, but not limited to, attorneys' fees[.]" Resp. (doc. 142), exh. B thereto (doc. 142-4), at 5, Art. I, ¶ 8 (emphasis added). Surely fees incurred in actually tendering a

defense are "incident to such defense[,]" and hence within the purview of that Agreement. See id. In allowing recovery for fees

incurred in tendering BNSF's defense, the court also gives some

Such recovery will be allowed so long as it is otherwise reasonable ­ a determination which the court will separately make after deciding for which of the challenged billing categories recovery can be had.

2

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credence to BNSF's policy argument.

Therefore, despite Chemical

Lime's argument to the contrary, the court finds that BNSF is entitled to recover attorneys' fees for time expended (again, assuming this time is otherwise reasonable) in actually tendering its defense. c. Litigating Indemnity & Duty-to-Defend Issues

Noting that the 1991 ITA does not contain a "separate fee provision" governing disputes between the parties as to the indemnity and duty-to-defend issues, Chemical Lime contends that BNSF is not entitled to recover fees of $19,156.00 incurred in litigating those issues. Resp. (doc. 142) at 7.

BNSF makes the same argument which it did in arguing for recovery of its fees for time billed tendering the defense ­ such fees are contemplated by the ITA and there are strong policy reasons for allowing the recovery of such fees. The court agrees.

As with the fees incurred in tendering its defense, the fees BNSF incurred in litigating the indemnity and duty-to-defend issues, come within the broad scope of the ITA. Further, the policy behind

allowing recovery of these particular litigation fees is, perhaps, even more compelling than for allowing recovery for fees incurred in tendering the defense. Allowing a party to "challenge its duty

to defend and postpone payment for years, without" regard to "having to pay the costs associated" with that strategy would, as BNSF maintains, "be an unintended" result, id. at 7, and one which the court will not countenance. d. Tasks "Unrelated" to Litigation

Next, Chemical Lime objects to fees in the amount of $530.00 for "tasks unrelated to this litigation." Resp. (doc. 142) at 8.

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As a general proposition, the court agrees.

The only supposedly

unrelated tasks which Chemical Lime mentions in its response are for time expended litigating the issue of plaintiff's return to work. An independent review of BNSF's Fee Statement reveals that

of the entries which Chemical Lime identified as being "unrelated," at least on the face of it, four do not pertain to plaintiffs' return to work. See Resp. (doc. 142), exh. A thereto at 68

(7/27/050); at 95 (12/17/05); and at 96 (12/22/05 and 12/23/05). Given, as BNSF is quick to point out, that plaintiff's failure to mitigate his damages and seek alternate employment was an issue in the underlying litigation, the court disagrees that time spent on that issue was "unrelated to this litigation[,]" and hence not compensable. See id. As to the four entries which do not pertain

to the mitigation issue, the court is satisfied that those tasks are related to this litigation. For example, on July 27, 2005,

attorney Rivera "draft[ed] a letter to opposing counsel regarding plaintiff's claim that he was represented by Fennemore Craig [BNSF's counsel herein] in [a] previous matter[.]" Resp. (doc. 142), exh. A thereto at 68 (7/27/05). Plainly, this potential Thus, because the

conflict is relevant to the current litigation.

court disagrees with Chemical Lime and finds that all of the supposedly "unrelated" tasks were, in fact, related to this litigation, BNSF can recover its fees for time spent on all such tasks. e. Appellate Fees

Some clarification is necessary before addressing Chemical Lime's argument that BNSF is not entitled to recover attorneys' fees "for the appeal currently before the 9th Circuit Court of - 16 Filed 05/30/2008

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Appeals[.]" Resp. (doc. 142) at 11. appeals.

Actually there are two pending

First, there are cross-appeals by plaintiff Schrum and

BNSF filed on June 15, 2006 and June 16, 2006 respectively, in the underlying FELA action. A second appeal was filed by Chemical

Lime, on June 22, 2007, from this court's order in Schrum II and the judgment entered thereon. However, because the $38,966.00

which BNSF is seeking in fees for appellate legal services were incurred between June 15, 2006 and January 31, 2007, these fees pertain to the cross-appeals in the FELA action. Reasoning that Schrum II addressed the duty to defend and not attorneys' fees related to the "pending appeal[,]" Chemical Lime claims that this court lacks jurisdiction to award such fees, and that such an award is not "ripe." Resp. (doc. 142) at 11.

Therefore, Chemical Lime urges the court to deny BNSF's motion to the extent it is seeking fees for appellate legal services. BNSF baldly asserts that "Chemical Lime is absolutely wrong that this Court does not have the authority to award" it fees incurred in defending itself on appeal. Reply (doc. 144) at 10.

In making this assertion, BNSF is relying upon this court's holding in Schrum II that Chemical Lime had a duty to defend BNSF. Thus,

BNSF reasons that it "was required to incur the fees associated with plaintiff's appeal because Chemical Lime refused to accept its responsibility to defend BNSF in the Ninth Circuit." Id. at 11.

Preliminarily, the court notes that there is no merit to Chemical Lime's assertion that this court lacks jurisdiction. The

Ninth Circuit has unequivocally held that "a district court still has jurisdiction, even after [an] appeal is filed but before the appeals court has ruled, to grant attorneys' fees." - 17 Filed 05/30/2008 Cazares v.

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Barber, 959 F.2d 753, 755-56 (9th Cir. 1992) (citation omitted) (emphasis in original). Thus, despite Chemical Lime's contrary

suggestion, the filing of the notices of appeal did not divest this court of jurisdiction over this attorneys' fee motion. On the other hand, the court agrees with Chemical Lime that an award of attorneys' fees for these appellate services would be premature especially in light of Chemical Lime's pending appeal of Schrum II. Therefore BNSF's motion for attorneys' fees is denied

without prejudice to renew to the extent it is seeking to recover for time expended for appellate legal services. f. Sufficiency of Billing Descriptions

LRCiv. 54.2(e)(2) mandates that a Fee Statement "adequately describe the services rendered so that the reasonableness of the charge can be evaluated." LRCiv. 54.2(e)(2); see also Hummingbird

Defense Systems, 2007 WL 4200751, at *4 (internal quotation marks and citation omitted) ("In order to make a determination that the hours claimed are justified, the fee application must be in sufficient detail to enable the court to assess the reasonableness of the time incurred.") Based upon BNSF's original redacted Fee Statement, Chemical Lime argued that the billing descriptions were "incomplete and inadequate[,] . . . mak[ing] it impossible to determine the reasonableness of the [requested] fee[s]." (doc. 142) at 5. Resp.

Accordingly, Chemical Lime believes that the

court should deny all fees for redacted entries, totaling $65,043. As earlier noted, with its Reply BNSF filed a separate motion, which the court granted, for in camera review of BNSF's unredacted Fee Statement. By granting this motion the court effectively

rendered moot any argument that BNSF's fees should be reduced or - 18 Filed 05/30/2008

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denied because initially they were redacted.

Nonetheless, even in

its unredacted form, the court finds that some of BNSF's billing descriptions do not contain the specificity which LRCiv. 54.2(e)(2) demands. The most glaring omission arises from BNSF's failure to

explain "the activities associated with [the] preparation" of a given pleading as LRCiv. 54.2(e)(2)(C) requires. BNSF's counsel

merely indicated, for example, "Work on BNSF's Answer[,]" or "Work on motion to strike[,]" or "Draft discovery requests." Unredacted

Fee Statement Fee Statement at 2 (4/25/04); and at 74 (10/19/05) and (10/20/05). A careful examination of BNSF's unredacted Fee

Statement shows that it is replete with entries which do not comport with the stringent requirements of LRCiv. 54.2(e)(2). Accordingly, the court will reduce any fees awarded herein by ten percent (10%) for failure to fully comply with that Local Rule. This reduction is wholly justified because the lack of "adequate[] descri[ptions] [of] the services rendered" hindered the court's ability to make the critical reasonableness determination. LRCiv. 54.2(e)(2). g. "Excessive" Fees See

Upon receipt of this motion seeking over $219,000.00 in attorneys' fees, Chemical Line retained attorney James K. Kloss to "opine on the reasonableness of BNSF's requested . . . fees." Resp. (doc. 142) at 9. Mr. Kloss claims that those fees are "not Id., exh. D (Aff. Of James Purportedly the

only excessive, but wildly excessive."

K. Kloss) thereto (doc. 142-6) at 4, ¶ 10(D).

requested fees are excessive in terms of the number of people working on the case, the time spent on various tasks, and the number of conferences among personnel. Further contributing to Mr.

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Kloss' opinion of excessive fees are "inappropriate charges" which should have been "absorbed" as "overhead[,]" and paralegals billing for secretarial tasks. Id. at 4, ¶ 10(E).

In his affidavit, Mr. Kloss highlights a few tasks for which he believes the charges were excessive. He notes, for example that

one associate "billed over five hours to draft and file an answer," a task which Mr. Kloss asserts "should be accomplished in less than an hour[]" in a case of this type. Id. at 5, ¶ 10(G). Mr. Kloss

also challenges the expenditure of "approximately 40 hours . . . by four different timekeepers on the initial disclosure statement[.]" Id. Preparation of that document, according to Mr. Kloss, "should

have been carried out by at most two people, with a time expenditure certainly of less than 10 hours." Id. Finally, Mr.

Kloss sweepingly asserts that there was "excessive time spent on every motion that was filed, in part because multiple timekeepers overlapped on tasks that could have and should have been carried out by one person or at most two." Id.

Attorney Kloss posits that an "initial budget. . .should have been submitted to the client of between $50,000 and $75,000." at 4, ¶ 10(D). He further posits that in this case, which was Id.

resolved on summary judgment, he "would have expected the actual bills to come in under budget." Id. Evidently based upon this

budget model, Mr. Kloss "estimate[s] that reasonable fees,[]" excluding the appeal, "would have been approximately $65,000." at 7-8, ¶ 11. Id.

Express[ing] "surprise[] if the bills had been as

high as $100,000[,]" attorney Kloss concludes that "any billing over [that amount] is not reasonable and is significantly excessive." Id. at 8, ¶ 11. - 20 Filed 05/30/2008

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Because this litigation has: (1) been pending for over three years; (2) involved multiple claims and parties; and (3) it prevailed on both summary judgment motions, BNSF maintains that its requested fees are reasonable. Furthermore, BNSF urges the court,

in essence, to discount Mr. Kloss' opinion because he is "tr[ying] to apply some undescribed generic formula for setting the fee, when in reality, the case had unique and complicated factual and legal issues." Reply (doc. 144) at 10.

The court does not adopt Mr. Kloss's view that a reasonable fee here would be "approximately $65,000.00." See Resp. (doc. 142), exh. D thereto (doc. 142-6) at 8, ¶ 11. However, based upon its

own detailed review of BNSF's unredacted Fee Statement, its intimate familiarity with this four year litigation, and taking into account the relevant reasonableness factors listed in LRCiv. 54.2(c)(3), the court finds merit to some of Chemical Lime's challenges to the requested fees. "Once a party submits an itemized list of fees with sufficient detail and establishes entitlement to fees," as BNSF has done here, "the burden shifts to the party challenging the fees to show that the fees are unreasonable." Best Western International, Inc. v.

Patel, 2008 WL 544820, at *4 (D.Ariz. 2008) (citing Nolan v. Starlight Pines Homeowners Ass'n, 216 Ariz. 482, 167 P.3d 1277, 1286 (Ariz.Ct.App. 2007)). Significantly, "[a]n opposing party

does not meet [that] burden merely by asserting broad challenges to the application." Nolan, 216 Ariz. at 491, 167 P.3d at 1286 Therefore, "[i]t

(internal quotation marks and citations omitted).

is not enough . . . simply to state, for example, that the hours claimed are excessive and the rates submitted too high." - 21 Filed 05/30/2008 Id.

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(internal quotation marks and citations omitted).

Rather, as the

party opposing this fee request, it is incumbent upon Chemical Lime to "present specific objections to the reasonableness of the fees requested." See id. (emphasis added).

Despite the rather general averments in Mr. Kloss' affidavit, for the most part Chemical Lime has met its burden of at least "present[ing] specific objections to the reasonableness of [certain] of the fees requested." See id. Chemical Lime

scrutinized BNSF's redacted Fee Statement with a fine tooth comb. It then assigned a code to each disputed billing entry. At this

juncture the relevant codes pertain to entries which Chemical Lime viewed as "duplicate . . . and/or multiple timekeepers on [the] same task; . . . "[e]xcessive time on task;" and "secretarial tasks billed as paralegal time." Resp. (doc. 142), exh. A thereto Of course, whether those

(redacted Fee Statement) at 1, *note.

specific objections are valid is a separate inquiry to which the court will turn momentarily. Before doing so, however, it should be noted that Chemical Lime did not specifically identify where in BNSF's 151 page redacted Fee Statement there exist "inappropriate charges" for firm overhead. See Resp. (doc. 142), exh. D (doc. 142-6) thereto (Kloss This broad challenge does not suffice to meet

Aff.) at 4, ¶ 10(E).

Chemical Lime's burden as the party disputing the reasonableness of these particular fees. objection. Therefore, the court will not consider this

Moreover, from its own review of BNSF's Fee Statement,

it is not readily apparent that BNSF billed for matters which might be considered overhead. Likewise, Chemical Lime was not specific in challenging as - 22 Filed 05/30/2008

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excessive the number of conferences among billing personnel. Instead it is relying upon Mr. Kloss' sweeping averment on that point. Therefore, the court also declines to consider this See

objection to the reasonableness of BNSF's claimed fees.

Signatures Network, Inc. v. Estefan, 2005 WL 151928, at *5 (N.D.Cal. 2005) (plaintiff did not meet burden for reducing fee award where it did "not explain[] which of the hours claimed by defendants for intraoffice or interoffice conferences [we]re duplicative[]"). However, the court will address below the other

challenged billing entries which Chemical Lime did specifically identify. I. "Secretarial Tasks"

Some of the tasks for which primarily paralegal Murphy billed are secretarial or clerical in nature, and thus not recoverable as part of a reasonable attorneys' fee award. See Semmaterials, L.P.

v. Alliance Asphalt, Inc., 2007 WL 676675, at *3 (D.Idaho 2007) (citing, inter alia, Missouri v. Jenkins, 491 U.S. 274, 288, n. 10 (1989) ("purely clerical or secretarial tasks should not be billed at a paralegal rate, regardless of who performs them"). The

rationale underlying this exclusion is that "[w]ork that is clerical in nature should be subsumed in a law firm's overhead." Synagro Technologies, Inc. v. GMP Hawaii, 2007 WL 851271, at * 11 (D.Hawai'i 2007). After scrutinizing the billing entries which

Chemical Lime identifies as secretarial tasks, the court agrees that billing for nearly all of those tasks should be excluded. Among those tasks which the court deems clerical or secretarial, and hence not compensable as part of an attorneys' fee award, are calendaring activities, scheduling depositions and bates labeling - 23 Filed 05/30/2008

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documents.

The court therefore will deduct $3,778.00 for paralegal

time billed for these and other similar tasks of a clerical nature. ii. "Duplicate Time and/or Multiple Timekeepers on Same Task" Chemical Lime asserts that the court should deny $3,908.00 of the requested fees because they were the result of "duplicate time and/or multiple timekeepers on [the] same task." at 11. Resp. (doc. 142)

After meticulously reviewing each of the billing entries

which Chemical Lime believes fall into this category, the court declines to make this reduction. First, it does not necessarily

follow that because a task is listed twice, the time spent is duplicate. It may simply be the continuation of one task. Or, it

could mean that the time spent is excessive; but that is a separate, albeit somewhat overlapping, objection which Chemical Lime also is making. Second, although the billing entries reflect "multiple timekeepers on [the] same task," that also does not necessarily mean that such billings were unreasonable. This is especially so

where it appears that a partner and an associate billed for the same task. It is easy to see how partners and associates,

primarily due to variations in experience, could perform the "same task" but with a different purpose. In fact, in some instances it Therefore, after

appears that that is what occurred here.

examining each of the entries which Chemical Lime deemed to involve either duplicate time or multiple timekeepers, the court is satisfied that the time spent was reasonable. Accordingly, there

will not be a reduction in fees on either of those bases. . . . - 24 Filed 05/30/2008

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iii.

Time

Chemical Lime further claims that $11,933.00 of the requested fees are attributable to "excessive time spent on tasks[,]" and thus the court should deny recovery of those fees. 142) at 11. Resp. (doc.

The court has studied each of the entries which

Chemical Lime claims involved excessive time, focusing on the specific examples mentioned in Chemical Lime's response and in Mr. Kloss' affidavit,3 and finds that the time spent on those particular tasks was not excessive. Likewise, again after careful review of BNSF's unredacted Fee Statement, the court does not find persuasive Chemical Lime's argument that the time spent was excessive because there were "multiple timekeepers." As the court recently explained in Best

Western, Inc. v. Patel, 2008 WL 544820 (D.Ariz. 2008), "it is standard practice for multiple attorneys to work on a single case at the same time, particularly a case that goes on for three [or more] years[.]" Id. at *4. Moreover, as previously alluded to, it

is apparent that many times there were multiple timekeepers because attorneys were reviewing documents prepared by colleagues. This

practice is "not unreasonable[]" given that "[g]enerally, editing and revising documents are a common part of legal drafting." The court thus declines to reduce the requested fees due to supposedly excessive time. In short, Chemical Lime has not met its Id.

burden of showing that the attorneys' fees which BNSF is seeking are in any way unreasonable.
3

In particular, the court examined each entry associated with the following tasks - time spent preparing (1) a substitution of counsel application; (2) an answer; (3) an initial disclosure statement; (4) a reply on the indemnity summary judgment motion.

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4

Conclusion For the reasons set forth herein, IT IS ORDERED that the motion by defendant and third-party plaintiff, the Burlington Northern Santa Fe Railway Company, for attorneys' fees (doc. 132) is GRANTED in part and DENIED in part. The motion is GRANTED to the extent BNSF is awarded $162,071.10 in attorneys' fees for time expended.4 The motion is DENIED without

prejudice to renew insofar as BNSF is seeking attorneys' fees for time incurred in connection with the appeals pending in the Ninth Circuit Court of Appeals. DATED this 29th day of May, 2008.

Copies to counsel of record

The court arrived at this amount by deducting $38,966.00, which represents time incurred for appellate work, from the total amount of fees sought $219,045.00. It then reduced that amount by 10% due to BNSF's failure to fully comply with LRCiv. 54.2

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