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JMS DEVELOPMENT COMPANY v. BULK PETROLEUM CORPORATION

August 19, 2003

JMS DEVELOPMENT COMPANY, PLAINTIFF,
v.
BULK PETROLEUM CORPORATION, ET AL. DEFENDANTS



The opinion of the court was delivered by: Marvin Aspen, Chief Judge, District

MEMORANDUM OPINION & ORDER

On September 17, 2002, Magistrate Judge Keys ("Magistrate Keys") entered an order granting the Plaintiff's Second Supplemental Petition for Attorneys' Fees ("Fee Petition") totaling $10,649.50. On February 20, 2002, this Court entered an order authorizing the creation of an escrow account to finance remediation and allowing Plaintiff to remediate property adjoining its own at Defendants' expense (the "Zaltzman property"). Currently before the Court are Defendants' request to vacate portions of the September 17, 2002 order ("Magistrate Judge Keys' Order")and motion to stay remediation of the Zaltzman Property. For the reasons set forth below, we deny Defendants' request to vacate Magistrate Keys' Order and deny as moot their motion to stay.

BACKGROUND*fn1

Bulk Petroleum Corporation ("Bulk") and its president, Darshan Dhaliwal ("Dhaliwal"), owned and operated a gas station on property leased from Arthur and Evelyn Zaltzman (the "Zaltzmans"), which adjoins property owned by JMS Development Company("JMS"). JMS sued Bulk, Dhaliwal, and the Zaltzmans in this Court when it discovered the gas station's underground storage tanks had leaked and contaminated JMS's [ Page 2]

property. On September 18, 1997, this Court entered a Consent Decree ("Decree") signed by JMS and Defendants Bulk and Dhaliwal (collectively, "Defendants"), requiring Defendants to achieve administrative closure of JMS's property with the Illinois Environmental Protection Agency ("IPEA") within a reasonable time. The Decree required Bulk to: (1) pay a settlement amount to JMS; (2) prepare a report for submission to the EPA pursuant to the IEPA's corrective action objectives policy (at its cost and in consultation with JMS) in order to obtain administrative closure through a "no further remediation" letter within a reasonable time; and (3) apply for participation in the Site Remediation Program within 60 days of the Decree's execution. Throughout this process, Defendants were obligated to provide JMS with copies of all related correspondence with the IEPA.

Plaintiff subsequently filed several petitions seeking attorneys' fees and sanctions against Defendants for failing to comply with the terms of the Decree. On June 14, 2001, Magistrate Keys issued a Report and Recommendation advising that: (1) Plaintiff be granted attorneys' fees; and (2) Plaintiff be permitted to undertake remediation itself at the Defendants' expense to achieve administrative closure of the property. Plaintiff later objected to the Report and Recommendation on the grounds that it insufficiently protected Plaintiff's interests,*fn2 and requested the creation of an escrow account into which Defendants would deposit funds to finance the remediation.

On February 20, 2002, this Court authorized the creation of an escrow account to fund remediation of JMS's property. See JMS Dev't Co. v. Bulk Petroleum Corp., 2002 WL 252457, *2 (N.D. Ill. 2002). In addition, we gave JMS authorization to remediate the Zaltzman property at Bulk's expense, which was necessary to obtain administrative closure from the IEPA. See id. We referred the matter to Magistrate Keys to determine the specific terms of the escrow account and to rule on Plaintiff's Fee Petition requesting attorneys' fees incurred from April 1, 2001 to January 25, 2002. See id. On April 29, 2002, Defendants filed a timely [ Page 3]

appeal of our February 20, 2002 order to the Seventh Circuit On September 17, 2002, Magistrate Judge Keys granted Plaintiff's Second Supplemental Petition for Attorneys' Fees. Defendants filed their objections to Magistrate Keys' Order on October 4, 2002. On January 6, 2003, Defendants filed a motion before this Court to stay remediation of the Zaltman property pending resolution of their appeal. The Seventh Circuit dismissed Defendants' appeal for lack of jurisdiction in an opinion dated July 24, 2003.

DISCUSSION

I. REQUEST TO VACATE ATTORNEYS' FEES

A. Standard of Review

According to Federal Rule of Civil Procedure 72(a), a magistrate judge's ruling on a non-dispositive matter is reversible only upon finding that it is "clearly erroneous or contrary to law." If the motion is dispositive, however, review of a magistrate judge's recommendation is de novo. See 28 U.S.C. § 636(b)(1). The awarding of attorneys' fees and costs are analogous to awarding damages, as both have a dispositive effect on a party. See Retired Chicago Police Ass'n v. City of Chicago, 76 F.3d 856, 869 (7th Cir. 1996). Because Magistrate Keys' Order awarded attorneys' fees and costs, we review the Order de novo. In doing so, we may accept, reject, or modify Magistrate Keys' recommendation, receive further evidence, or recommit the matter to him with instructions. See id.

B. Analysis

The merit of a petition for attorneys' fees is determined by examining the "number of hours reasonably expended on the litigation multiplied by a reasonable hourly wage." Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). A reasonable hourly rate is the market rate the attorney commands. See People Who Care v.Rockford Bd. of Educ. Sch. Dist. No. 205, 90 F.3d 1307, 1310 (7th Cir. 1996). The time the attorney expends on the ...


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