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Delivermed Holdings, LLC, William R. v. Michael L Schaltenbrand

November 29, 2012

DELIVERMED HOLDINGS, LLC, WILLIAM R. DEETER ASSOCIATES, INC., AND LINDA DEETER, PLAINTIFFS,
v.
MICHAEL L SCHALTENBRAND, JOEY D. SIDDLE AND MEDICATE PHARMACY, INC., DEFENDANTS. MARK A SWIFT, PLAINTIFF,
v.
MICHAEL L SCHALTENBRAND, JOEY D. SIDDLE AND MEDICATE PHARMACY, INC., DEFENDANTS.



The opinion of the court was delivered by: J. Phil Gilbert District Judge

MEMORANDUM AND ORDER

This matter comes before the Court on the motions for attorney's fees filed by plaintiff Mark Swift (Doc. 290) and defendants Michael L Schaltenbrand, Joey D. Siddle and Medicate Pharmacy, Inc. ("Medicate") (Doc. 292). Swift is entitled to fees from Medicate for his partial victory on Count IX, a claim under the Illinois Wage Payment and Collection Act ("IWPCA"), 820 ILCS 115/1 et seq. In Count IX, the Court found Medicate failed to timely pay Swift a bonus in the amount of $50,333 which it should have paid upon his termination as an employee of Medicate on September 1, 2009, and that Swift was entitled to an additional damage award of $21,139.86, for a total award of $71,472.86, plus reasonable attorney's fees.

On the other side, the defendants are entitled to fees from DeliverMed Holdings LLC

("DeliverMed") on a number of Counts: (1) pursuant to 17 U.S.C. § 505 for (a) their victory on Count I, DeliverMed's claim for copyright infringement based on the "house and pestle" logo*fn1 and (2) pursuant to 15 U.S.C. § 1117(a) for (a) their partial victory on Count II, DeliverMed's claim for trademark and service mark infringement based on the "Right at Home" tagline and the logo; (b) their partial victory on Count III, DeliverMed's claim for unfair competition based on use of the tagline and logo; and (c) for their victory on Counterclaim 2, a claim to cancel DeliverMed's trademark registration on the logo.

The parties have responded to the respective motions (Docs. 295 & 296).

I. Method of Calculating Attorney's Fees

Both parties agree that the proper method for calculating the awardable fees is the lodestar method, which involves "multiplying the number of hours the attorney reasonably expended on the litigation times a reasonable hourly rate." Mathur v. Bd. of Trs. of S. Ill. Univ., 317 F.3d 738, 742 (7th Cir. 2003) (citing Hensley v. Eckerhart, 461 U.S. 424, 433 (1983)). The party seeking a fee award bears the burden of establishing the reasonableness of the hours worked as well as the hourly rate, and where the documentary support is inadequate, the Court may reduce the award. See Hensley, 461 U.S. at 433, 437. A reasonable hourly rate is presumed to be an attorney's actual billing rate for comparable work. Mathur, 317 F.3d at 743. Indeed, "the best evidence of the market value of legal services is what people will pay for it." Stark v. PPM Am., Inc., 354 F.3d 666, 675 (7th Cir. 2004). As for hours reasonably expended, a fee award should not include hours that are excessive, redundant or otherwise unnecessary or that were incurred in unrelated, unsuccessful claims. Hensley, 461 U.S. at 434-35. Fees that would not be billed to a paying client will not be shifted to the opposing party in a fee award. Id.

Once the Court arrives at the lodestar amount, it can then adjust the total amount based on various factors specific to the litigation, including: the time and labor required; the novelty and difficulty of the questions; the skill requisite to perform the legal services properly; the preclusion of employment by the attorney due to acceptance of the case; the customary fee; whether the fee is fixed or contingent; time limitations imposed by the client or the circumstances; the amount involved and the results obtained; the experience, reputation, and ability of the attorneys; the "undesirability" of the case; the nature and length of the professional relationship with the client; and awards in similar cases.

Spellan v. Bd. of Educ. for Dist. 111, 59 F.3d 642, 645 (7th Cir. 1995). The results obtained is generally the most important factor, especially where a plaintiff only succeeds on some of his claims. Hensley, 461 U.S. at 434, 436. In such a case, the Court should not adapt a mathematical approach to comparing claims won and lost but should take a broader view of the significance of the result obtained. Id. at 435, n.11.

The Court reviews the fee petitions in light of this overarching framework.

II. Swift's Motion for Fees

Swift asks the Court to award him $827,814.00 in attorney's fees and $36,559.88 in expenses for a total award of $864,373.88 for his partial success in winning a $71,472.86 judgment on Count IX, an IWPCA claim, one of seven claims he brought in Swift v. Medicate Pharmacy, Inc., No. 10-cv-685-JPG-DGW ("Swift Action").*fn2 Swift's attorneys represent that they have omitted all charges that can be identified as specifically relating to Counts I through V (the counts alleged in the consolidated case of DeliverMed Holdings, LLC v. Medicate Pharmacy, Inc., No. 10-cv-684 ("DeliverMed Action")). Swift acknowledges that the Court may reduce his lodestar amount based on his limited success but argues that the Court should also adjust the final amount upward because he was able to extract key admissions from Schaltenbrand during the trial.

The defendants do not challenge the reasonableness of the hourly rates charged by Swift's counsel, but they do challenge the reasonableness of the number of hours (2,972.69) for which Swift seeks reimbursement, arguing that the hours are not adequately justified by Swift's documentation, reflect overlapping work unnecessarily done by multiple lawyers and work done on matters unrelated to Count IX (such as, for example, similar state court litigation and the DeliverMed Action). They further argue that the lodestar should be significantly reduced because the discrete issue on which Swift succeeded was essentially uncontested or should be eliminated because the fee award is grossly excessive. Finally, they object that some of the costs sought are not reimbursable under 28 U.S.C. § 1920.

The Court is tempted to deny Swift any substantial fee award altogether because his request is grossly excessive and an abuse of process. Budget Rent-A-Car System, Inc. v. Consolidated Equity LLC, 428 F.3d 717, 718 (7th Cir. 2005), allows the Court to deny a fee in such situations. Here, Swift prevailed on his claim that Medicate promised him a bonus when it hired him in January 2008 and never fully paid him that bonus. Medicate did not seriously dispute any of this at trial, and the Court ordered payment of the remainder of the bonus plus interest at the rate specified in the IWPCA -- a total award of $71,472.86. This was not a difficult claim. In the Court's opinion, the question of what wages Medicate promised Swift in his employment agreement could have been pled in a few pages and tried in a day with two or three witnesses. Indeed, on the morning of the first day of trial, Schaltenbrand, Medicate's president, agreed that Medicate had agreed to pay Swift a salary of $1,000 per week and promised him "sort of like a bonus" (Tr. 93:11) when he first became employed by Medicate in 2008. A few seconds later, Schaltenbrand testified, "I don't believe all of [the bonus] was paid" (Tr. 93:25). Schaltenbrand then testified, "All ...


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