The opinion of the court was delivered by: Magistrate Judge Michael T. Mason
District Judge Gary Feinerman
MEMORANDUM OPINION AND ORDER
Michael T. Mason, United States Magistrate Judge.
Currently pending before this Court is plaintiff United Central Bank's ("plaintiff" or "UCB") Petition for Fees and Costs Related to Its Motion for Sanctions (the "fee petition") . UCB is seeking $332,929.34 in fees and costs incurred as a result of defendants' spoliation of evidence. For the reasons set forth below, we grant UCB's fee petition in part, and we award UCB fees and costs in the amount of $322,416.84.
UCB filed this action against defendants Kanan Fashions, Inc., Creative Warehousing (Chicago) LLC, Kanan Cruises, Inc., Kanan Holdings, LLC, Varsha Shah, and Mehul Shah ("defendants") on January 18, 2010. UCB alleges that defendants breached four loan agreements and seeks damages in excess of $26 million. In response, defendants have denied the material allegations in the complaint. Defendants have also asserted two affirmative defenses, and filed a counterclaim for breach of contract.
Discovery of defendants' electronically stored information ("ESI") has not been an easy process in this case. Defendants maintained ESI on a number of different computer servers, one of which was located at a warehouse in Aurora, Illinois ("the warehouse server"). On several occasions, defendants, through their former counsel Bailey Borlack Nadelhoffer LLC ("Bailey Borlack"), represented to the Court and to UCB that all of defendants' computer servers were within defendants' control and that appropriate procedures had been put in place to avoid any spoliation issues. Despite these representations, on August 20, 2010, UCB received notice from Bailey Borlack that defendants did not, in fact, have access to or control of the warehouse server because the warehouse had been foreclosed upon and was now owned by First Midwest Bank ("FMB"). Although defendants removed almost all of their belongings from the warehouse prior to the foreclosure, the warehouse server was left behind. Defendants claimed that they attempted to buy back the lease on the warehouse server from FMB, but before they could reach an agreement, FMB abruptly sold the server to an unknown entity located in Dubai. Counsel for UCB made several attempts to track down the warehouse server and locate the purchaser in Dubai but they were unsuccessful.
The warehouse server contained information that was directly relevant to UCB's claims, as well as its defenses to defendants' counterclaim. On September 24, 2010, UCB filed a motion for sanctions against defendants and Bailey Borlack for spoliation of evidence . In the motion, UCB claimed that both defendants and Bailey Borlack were responsible for the spoliation. Defendants and Bailey Borlack blamed each other for the loss of the server. The parties engaged in extensive written and oral discovery, and submitted a number of briefs on these issues [207, 272, 309, 320, 355, 369]. In addition, this Court held a five-day evidentiary hearing, which included testimony from ten witnesses and 240 exhibits. The parties also submitted post-hearing briefs [407, 410, 412].
Ultimately, this Court found that there was strong circumstantial evidence that defendants actually orchestrated the "sale" of the server, and then went to great effort to hide their actions from both UCB and Bailey Borlack.*fn1 As a result, we found that "the evidence amply demonstrate[d] defendants acted wilfully and in bad faith" . We recommended that the District Court grant UCB's Motion for Sanctions and award UCB "all fees and expenses incurred in bringing the Motion for Sanctions," including "fees and expenses incurred in all discovery related to the Motion, as well as briefing the Motion and preparing for and participating in the five-day evidentiary hearing" .*fn2
The District Court subsequently adopted our Report and Recommendation over defendants' objections .*fn3 UCB then filed this fee petition.
"District courts possess wide latitude in fashioning appropriate sanctions and evaluating the reasonableness of the attorneys' fees requested." Heriaud v. Ryder Transp. Services, 03 C 289, 2006 WL 681041, at *2 (N.D. Ill. Mar. 14, 2006) (quoting Johnson v. Kakvand, 192 F.2d 656, 661 (7th Cir. 1999)). In order to determine a reasonable fee, we use the lodestar method, "multiplying the number of hours reasonably expended on the litigation...by a reasonable hourly rate." Pickett v. Sheridan Health Care Ctr, 664 F.3d 632, 639 (7th Cir. 2011) (citing Hensley v. Eckerhart, 461 U.S. 424, 433 (1983)). The party requesting fees bears the burden of documenting the appropriate hours expended and establishing its entitlement to reasonable hourly rates. Hensley, 461 F.3d at 433. "There is a strong presumption that the lodestar calculation yields a reasonable attorneys' fee award." Pickett, 664 F.3d at 639.
A. Reasonable Hourly Rates
In order to determine a reasonable fee under the lodestar method, we first look at the proposed billing rates for UCB's attorneys. A reasonable hourly rate is determined by "the market rate for the services rendered." Spegon v. Catholic Bishop of Chicago, 175 F.3d 544, 554 (7th Cir. 1999). The market rate is the "rate that lawyers of similar ability and experience in their community normally charge their paying clients for the type of work in question." Id. at 555; Williams v. Z.D. Masonry Corp., No. 07 C 6207, 2009 WL 383614, at *2 (N.D. Ill. Feb. 17, 2009). The attorney's actual billing rate for comparable work is "presumptively appropriate" to use as the market rate. Denius v. Dunlap, 330 F.3d 919, 930 (7th Cir. 2003).
In its fee petition, UCB has listed six attorneys and four paralegals who worked on the issues raised in the motion for sanctions. The attorneys listed have experience ranging from five years to thirty-five years and their hourly billing rates range from $200 to $350. The experience of the paralegals ranges from five to six years, and each paralegal has an hourly billing rate of $125. UCB has also included an affidavit from its lead attorney, Vilia Dedinas, in which Ms. Dedinas describes the role and responsibilities for each attorney and paralegal in the briefing, discovery and evidentiary hearing on the motion for sanctions. She also avers to each attorney and paralegal's experience, credentials and billing rate. In addition, Ms. Dedinas attests that UCB has paid all invoices (tendered to UCB as of the date of the affidavit) on this matter at the proposed hourly rates.
Because UCB counsel has attested that their clients actually pay these billing rates, these rates are "presumptively appropriate." See, e.g., DeBartolo v. Health & Welfare Dept. of the Constr. & General Laborer's Dept., No 09 C 39, 2011 WL 1131110, at *7 (N.D. Ill. Mar. 28, 2011) ("The best evidence of the market value of legal services is what people will pay for it"). Defendants do not assert that the proposed rates are too high, and given the experience and expertise of plaintiff's counsel, we find these rates of $125 for the paralegals and $200-$350 for the attorneys to be entirely reasonable. Accordingly, ...