United States District Court, N.D. Illinois
May 6, 2004.
ANGELIA M. WHITEHEAD, Plaintiff
GATEWAY CHEVROLET, OLDSMOBILE, INC., CRAIG ANDREA, LEE DRYZBEK, and THOMAS OKIMOTO, Defendants
The opinion of the court was delivered by: ARLANDER KEYS, Magistrate Judge
REPORT AND RECOMMENDATION
This matter comes before the court for a recommendation on defendants'
motion for sanctions pursuant to Rule 37(b). For the reasons set forth
below, the court recommends that defendants' motion be granted and that
$15,202.00 enter against plaintiff's counsel, Christopher Langone.
Plaintiff, Angelia M. Whitehead, through her counsel, Mr. Langone,
filed this RICO action against defendants Gateway Chevrolet, Oldsmobile,
Inc., Craig Andrea, Lee Dryzbek, and Thomas Okimoto (collectively
"Gateway"). On February 2, 2004, Judge Conlon granted Gateway's motion to
dismiss Ms. Whitehead's amended complaint, and also found that Ms.
Whitehead's counsel, Mr. Langone, had incorporated confidential
information into the amended complaint in flagrant violation of a
protective order entered between Gateway and Mr. Langone in a prior and unrelated
litigation, Beene v. Gateway Chevrolet, Inc., 02 C 830 (the Protective
Order). Judge Conlon further decided that Mr. Langone's deliberate
violation subjected him to sanctions under Rule 37(b), and asked this
court to determine the appropriate amount.
Pursuant to Judge Conlon's referral, this court ordered Gateway to
provide an itemization of expenses incurred responding to Mr. Langone's
violation. Gateway's counsel, Burke, Warren, MacKay & Serritella, has
submitted a detailed statement, which requests $21,523.27 in attorney's
fees and costs.
Before calculating the appropriate sanction, the court must address a
preliminary matter. Mr. Langone has gone to considerable lengths to argue
that the district court does not have the authority to impose Rule 37(b)
sanctions for his particular misconduct. Mr. Langone's efforts are in
vain. That ship has already sailed. Judge Conlon has determined that the
court has such authority, and this court will not revisit her decision.
Further, Judge Conlon's referral order is limited to the issue of what
should be the appropriate sanction, not whether there should be
sanctions. And if there was any doubt regarding the scope of the
referral, such doubt was dispelled when Judge Conlon denied Mr. Langone's
motion for clarification of her referral order on April 14, 2004. Thus,
many of Mr. Langone's arguments in opposition to Gateway's motion are rejected as irrelevant.
1. Attorney's fees
Under Rule 37(b), the appropriate sanction is for Mr. Langone to pay
Gateway's reasonable expenses, including attorney's fees, caused by his
violation. Fed.R.Civ.P. 37(b)(2). A determination of attorney's fee
requires calculation of the lodestar. Mathur v. Board of Trustees of
Southern Illinois University, 317 F.3d 738, 742 (7th Cir. 2003). The
lodestar is the product of an attorney's reasonable hourly rate and the
number of hours reasonably expended. Hensley v. Eckerhart, 461 U.S. 424,
434 (1983). The party seeking the fee award bears the burden of proving
the reasonableness of the hours worked and the hourly rate claimed. Id.
Gateway submits the hours of two attorneys, Ira Levin and Kimberly
Smith. Mr. Levin billed 38.6 hours, and Ms. Smith billed 64.1 hours.
These hours represent three general categories of work. First, Gateway
requests reimbursement for hours spent reviewing Ms. Whitehead's RICO
case statement.*fn1 Next, Gateway describes hours spent preparing its
motion to strike and dismiss Ms. Whitehead's amended complaint. Lastly, Gateway includes time devoted to drafting the present motion for
sanctions. Mr. Langone argues that the first category of work should be
excluded entirely, and the second category should be significantly
Before considering these objections, the court must briefly address
Mr. Langone's argument that none of Ms. Smith's hours are appropriate.
Mr. Langone argues that Gateway should not recover for any of Ms. Smith's
work, because she also violated the Protective Order. Ms. Smith is
Gateway's counsel. Gateway is certainly free to share its confidential
information with its own counsel. Further, the Protective Order expressly
provided "[a]ny party may freely disclose . . . its own confidential
documents . . . without impairing the obligations imposed by this Order
upon others." See Protective Order, par. 11. Thus, Mr. Langone's request
is both illogical and directly contrary to the Protective Order, and is,
Turning to Mr. Langone's specific objections, he first argues that
Gateway cannot recoup fees for hours spent reviewing the RICO case
statement, because this work occurred prior to his misconduct. But, as
Gateway correctly recounts, the confidential information first appeared
in the RICO case statement, and was later incorporated into the amended
complaint. Thus, Mr. Langone's violation occurred when he filed the RICO
case statement, and this temporal event marks the beginning of Hr. Langone's
misconduct. Thus, Mr. Langone's first objection is overruled.
Next, Mr. Langone objects to any hours spent reviewing the amended
complaint. He claims that, regardless of any violation, Gateway still
would have had to review the amended complaint. While this reasoning is
incorrect, the objection is not wholly without merit. As discussed
above, Gateway first reviewed the confidential information when it
appeared in the RICO case statement. It then appears that Gateway reviewed
the same information a second time when it surfaced in the amended
complaint. The court cannot reimburse Gateway for this duplicative
effort, and will, therefore, subtract three hours from Gateway's totals.
FMC, Corp. v. Varonos, 892 F.2d 1308, 1316 (7th Cir. 1990) (the court
should scrutinize the fee petition carefully for indications of
Mr. Langone's remaining objections do not concern the substantive tasks
themselves, but rather the number of hours that Gateway spent on them.
Mr. Langone claims that Gateway devoted an excessive amount of time
performing relatively uncomplicated tasks, and should not be compensated
for their unnecessary efforts. Mr. Langone is correct that the fee award
can only include hours "reasonably expended" on the litigation. The court
will therefore consider Mr. Langone's final objections with an eye
towards eliminating hours that are "excessive, redundant, or otherwise unnecessary." Hensley, 461 U.S, at 434.
Gateway claims that it spent almost nineteen hours preparing, drafting,
and filing its motion to strike and dismiss Ms. Whitehead's amended
complaint. Mr. Langone calls the motion "uncomplicated" and characterizes
Gateway's time as "grossly excessive." In response, Gateway claims that
all the time was necessary because the motion encompassed four distinct
grounds for relief, each of which required significant research. The
court has carefully reviewed Gateway's motion to strike and dismiss, and
agrees that Gateway's reported time is excessive. The motion's argument
section is a mere five-pages long, the majority of which is comprised of
factual summaries and string citations. While the court does not wish to
degrade Gateway's product, nor intimate that Gateway fabricated its
expenditures, the court cannot justify awarding all of Gateway's claimed
hours, and will, therefore, deduct seven hours from the totals.
Mr. Langone further objects to the twenty-one hours Gateway apparently
spent on its reply brief, and claims that this outlay is "widely out of
proportion to the quality of the work done." Mr. Langone maintains that
he could have performed the same work in "2-3 hours, tops." The court has
carefully reviewed Gateway's reply brief and agrees that Gateway's
requested time is excessive. But Mr. Langone's suggested discount is
unreasonable. The reply brief is a nine-page, well-reasoned response that
persuasively counters a number of difficult arguments. Moreover, the brief attaches the affidavit of Alison M. Harrington, who was counsel
of record in the Beene case, and Gateway is permitted to recoup time
spent investigating and preparing Ms. Harrington's statement.*fn3 On the
other hand, the reply brief does not appear worthy of the full twenty-one
hours apparently spent on its preparation. The brief does not contain
citations to any new or significant legal precedent. Rather, it appears
that Gateway spent the majority of the twenty-one hours planning,
drafting, and revising the document. While it might have indeed taken
Gateway over twenty hours to craft the nine-page memorandum, the court
can only award a reasonable fee for these efforts. Accordingly, the court
will deduct an additional ten hours from Gateway's totals.
Mr. Langone's last two objections again regard Ms. Smith's reported
hours. Mr. Langone claims that Gateway cannot seek reimbursement for Ms.
Smith's time spent performing clerical activities, like preparing notices
and faxing correspondence. It is true that tasks easily delegable to
non-professional assistance cannot be part of the award. Spegon v.
Catholic Bishop of Chicago, 175 F.3d 544, 553 (7th Cir. 1999). The
court has reviewed the petition and notes that Gateway has included 1.4
hours that Ms. Smith devoted to such clerical tasks, and this time will be deducted from Gateway's totals.
Mr. Langone's final objection is that Mr. Levin duplicated a
significant amount of Ms. Smith's work, and that Gateway should not be
compensated for his redundant efforts. The court has scrutinized the fee
petition, and notes that many of Mr. Levin's descriptions mirror those of
Ms. Smith. As the court is not convinced that Mr. Levin performed
distinct work, eight hours will be deducted to reflect this perceived
The final category of work reflected in Gateway's submissions, is time
devoted to drafting the present motion for sanctions, and reply brief.
Mr. Langone does not address these filings, as Gateway filed its fee
statement relating to its motion for sanctions, after Mr. Langone filed
his objections. Thus, the court must conduct its own review of Gateway's
submissions, and eliminate those hours that are excessive, duplicative or
unnecessary. Hensely, 461 U.S. at 434.
Gateway spent approximately fourteen hours on its memorandum supporting
its motion for sanctions, and approximately twenty-six hours on its reply
brief. Gateway's motion is a mere six-pages long and not particularly
complex. Rather, it is replete with string citations and factual
summaries. It does not contain the type of sophisticated legal reasoning
that would justify awarding fourteen hours in fees. Thus, the court will
deduct six hours from Gateway's totals.
The reply brief is a different story. This document is eighteen-pages long, and contains a substantial and thorough legal
analysis. Gateway's extensive efforts were justified because Mr. Langone
raised many new and complicated arguments in his response brief to which
Gateway had to respond. Thus, much of Gateway's added expense was of Mr.
Langone's own making. The court therefore approves of the entire
Adding the above reductions and subtracting them from Gateway's totals,
the court finds that Gateway is entitled to recover attorney's fees for
b. Hourly Rate
After determining the number of hours reasonably expended, the court
must examine whether the requested hourly rate is reasonable. Hensley,
461 U.S. at 433. A reasonable hourly rate is calculated according to the
prevailing "market rate" for the services rendered. People Who Care v.
Rochford Bd. of Educ., Sch. Dist. No. 205, 90 F.3d 1307, 1310 (7th Cir.
1996). An attorney's market rate is the rate lawyers of similar ability
and experience in the community normally charge their paying clients for
the type of work in question. Bankston v. State of Illinois, 60 F.3d 1249,
1256 (7th Cir. 1995). The burden of proving the market rate is on the fee
applicant, McNabola v. Chicago Transit Authority, 10 F.3d 501, 518-19 (7th
Cir. 1993); however, once the applicant provides evidence establishing
his market rate, the burden shifts to the opposing party to demonstrate
why a lower rate should be awarded. People who Care, 90 F.3d at 1313. In support of its hourly rates, Gateway offers the affidavit of Mr.
Levin, which sets forth both his and Ms. Smith's standard hourly
rates.*fn4 Gateway also submits copies of checks from its client,
Universal Underwriters Insurance Company (Universal), indicating that all
bills have been paid in full. In response, Mr. Langone claims that the
requested rates are too high and above the rates that Universal
ordinarily pays its defense counsel. Despite these objections, the court
accepts Gateway's rates as reasonable, and within the Chicago market
rates for attorneys with similar training and experience.
The best evidence that a firm is charging a reasonable rate is the
client's payment of the bills. Balcor Real Estate Holding, Inc. v.
Walentas-Phoenix Corp., 73 F.3d 150, 153 (7th Cir. 1996)("the best
evidence of the market value of legal services is what people pay for
it."). Here, Gateway submits reliable evidence that its client,
Universal, paid its bills in full. This evidence is satisfactory to prove
Mr. Langone has not offered anything to demonstrate why a lower rate
should be awarded. Further, Mr. Langone's claim that Gateway's rates are
too high is rather disingenuous, as he charges considerably more himself.*fn5 Because Mr. Langone has not
rebutted Gateway's evidence of reasonableness, his objections to
Gateway's rates are overruled.
Multiplying the number of hours worked by each attorney by their hourly
rates, Gateway is entitled to $15,202.00 in attorney's fees.*fn6
Gateway also requests $267.27 in costs. These costs include charges for
duplication of documents, messenger services, and computer-based legal
research. But Gateway does not provide any details regarding its costs,
such as what was duplicated and at what cost per page, or what was sent
via messenger. Without these specifications, the court has no basis to
determine whether the costs were necessary and reasonable. Moreover,
Gateway cannot recover its expenses for computerized legal research, as
these charges are not considered "costs" but rather part of the
attorney's fee award. Haroco, Inc. v. American National Bank and Trust
Company of Chicago, 38 F.3d 1429, 1440-41 (7th Cir. 1994). Thus,
Gateway's request for costs is denied in its entirety. CONCLUSION
This court recommends that Gateway's motion for sanctions be granted
consistent with this Report and Recommendation. This court also
recommends that an award of $15,202.00 be entered against Plaintiff's
counsel, Christopher V. Langone, in favor of Defendants, Gateway
Chevrolet, Oldsmobile, Inc., Craig Andrea, Lee Dryzbek, and Thomas