ARBORWELL LLC v. ALERUS FINANCIAL (2025)

ORDER GRANTING IN PART AND DENYING IN PART RENEWED MOTION FOR ATTORNEYS' FEES

Defendants Matt Dickinson, Kris Yamaguchi, Doug Hagge, and Arbor MD Tree Care, Inc. (collectively, “Defendants”) renew their motion for attorneys' fees against Plaintiffs.¹ Defendants seek fees in connection with Baker Botts' and Brown Gee & Wenger's work on the Defend Trade Secrets Act (“DTSA”) claim and the two fees motions related to that claim. The motion is granted in part and denied in part. This ruling assumes the reader is familiar with the facts, applicable law, and the arguments made by the parties, and incorporates the prior oral ruling from the October 8, 2024 hearing on Defendants' original fees motion.

“District courts have broad discretion when awarding attorneys' fees.” A.D. v. Cal. Highway Patrol, 712 F.3d 446, 450 (9th Cir. 2013). The party seeking attorneys' fees “bears the burden of establishing entitlement to an award and documenting the appropriate hours expended and hourly rates,” and “should maintain billing time records in a manner that will enable a reviewing court to identify distinct claims.” Hensley v. Eckerhart, 461 U.S. 424, 437 (1983). “To meet that burden, the moving party must submit detailed records justifying the hours that have been expended.” Forto v. Cap. One Bank, Nat'l Ass'n, No. 14-CV-05611-JD-MEJ, 2017 WL 6026242, at *3 (N.D. Cal. Dec. 5, 2017). It is within the district court's discretion to reduce hours “where documentation of the hours is inadequate; if the case was overstaffed and hours are duplicated; if hours expended are deemed excessive or otherwise unnecessary.” Id. (quoting Chalmers v. City of Los Angeles, 796 F.2d 1205, 1210 (9th Cir. 1986)); see also Thompson v. Gomez, 45 F.3d 1365, 1367–68 (9th Cir. 1995) (district courts may reduce a “fees-on-fees” award to reflect the percentage of “merits fees” recovered). As “[t]here is no precise rule or formula for making these determinations,” the district court “has discretion in making this equitable judgment.” Teetex LLC v. Zeetex, LLC, No. 20-CV-07092-JSW, 2022 WL 2439176, at *6 (N.D. Cal. July 5, 2022) (quoting Hensley, 461 U.S. at 436–37).

At the hearing on Defendants' original motion for attorneys' fees, having denied the fees requested on the ERISA claims, the Court instructed Defendants to “submit [their] fees and costs that are specific to DTSA,” which are those that Defendants “would not have incurred but for the existence of the DTSA claim and the lawsuit.” (Dkt. No. 126 (“Hearing Tr.”) at 41:4–10.) As explained, such fees must necessarily exclude those “related to the state law claims,” including the state law trade secret claims that were dismissed for lack of subject matter jurisdiction, and those “related to the ERISA claims.” (Id. at 8:11–19.) Thus, “any submission would have to parse out what [Defendants] wouldn't have had to do if there were no DTSA claim in this case.” (Id. at 34:12–14.)

In view of Defendants' supplemental declarations and time keeping records, reductions are warranted.² One overarching issue is that in records submitted by Baker Botts and Brown Gee & Wenger, many of the entries are not specific to the DTSA claim or appear to seek fees for work that would have been completed even if there was no DTSA claim. Such entries, for example, include work related to the order to show cause, stipulations setting the briefing and hearing schedule, the joint case management statement, as well as vague and overinclusive descriptions of work “[r]ead[ing]” or “[r]eview[ing]” Plaintiffs' amended complaint. (E.g., Dkt. No. 127-2 at 1–2, 4.) For another, Defendants also seek DTSA fees for administrative and clerical tasks, which “are not compensable.” Forto, 2017 WL 6026242, at *4 (collecting cases).

Accordingly, mindful that “[t]here is no precise rule or formula for making these determinations,” the Court in its discretion will prorate Defendants' request as follows so as to award fees that are “reasonable in relation to the success achieved.” Hensley, 461 U.S. at 436–37. First, as to the briefing for the motion to dismiss by Arbor MD Tree Care, Dickinson, Yamaguchi, and Hagge, fees will be awarded by the percentage of pages in the briefing dedicated exclusively to the DTSA claim, for those entries not specifically related solely to that claim. Of the 37 pages of briefing on the motion and the reply, approximately four pages are specific to the DTSA claim. Those entries will therefore be prorated by 10.81%. The entries relating specifically to the DTSA claim will not be reduced, and the entries regarding tasks that would have been undertaken regardless whether a DTSA claim was asserted (such as case management statements, or reviewing the amended complaint generally) will not be included. Second, as to the original motion for attorneys' fees, the requested fees will be reduced to reflect the percentage of fees successfully recovered as compared to the amount of the original request. Third, as to the renewed motion for attorneys' fees for the DTSA claim, Defendants' requested fees will be reduced by the percentage of fees awarded of their request (that is, the sum of the fees recovered on the DTSA claim and the fees from their original motion for attorneys' fees, as compared to the total requested fees for those items in the renewed motion).

Applying those prorations, as to Baker Botts, for the entries related to the briefing on the motion to dismiss, the total fee awarded is $4,042.01. Entries that were administrative or clerical in nature or accounted for work that would have been completed even if there was no DTSA claim were excluded. For the entries related to the original motion for attorneys' fees, the total fee awarded is $1,087.04. For the entries related to the renewed motion for attorneys' fees, the total fee awarded is $1,681.31. In sum, Defendants are awarded $6,810.36 for Baker Botts' fees.

As to Brown Gee & Wenger, for the entries related to the briefing on the motion to dismiss, the total fee awarded is $6,223.32. Entries that were administrative or clerical in nature or accounted for work that would have been completed even if there was no DTSA claim were excluded. For the entries related to the original motion for attorneys' fees, the total fee awarded is $1,574.79. For the entries related to the renewed motion for attorneys' fees, the total fee awarded is $1,690.62. In sum, Defendants are therefore awarded $9,488.73 for Brown Gee & Wenger's fees.

* * *

Based on the foregoing, the motion for attorneys' fees and costs is GRANTED IN PART and DENIED IN PART. In total, Defendants shall be awarded $16,299.09 in attorneys' fees.

IT IS SO ORDERED.

FOOTNOTES

1.   Defendants Andrew LaVelle and Neil Woolner are excluded from the fee award because, as their counsel concedes, the briefing on their motion to dismiss “did not address the DTSA cause of action.” (Dkt. No. 129 at 9; see also Dkt. No. 63 at 24 n.18 (LaVelle and Woolner's motion to dismiss stating that the “DTSA claim is fully briefed in the Arbor MD Memorandum”); Dkt. No. 77 at 20 (LaVelle and Woolner's reply in support of their motion to dismiss stating that their motion “incorporat[ed] by reference arguments in the brief of their employer, Arbor MD, and other co-owners of Arbor MD” as to the DTSA claim). Citations to page numbers in this order are to the ECF pagination.

2.   Defendants' supplemental declarations are admissible and are not based on hearsay evidence, as the attorney declarants “declare[d] that [they] personally reviewed the firms' billing records,” business records maintained contemporaneously and entered in the normal course of business. See Logtale, Ltd. v. IKOR, Inc., No. 11-CV-05452-EDL, 2016 WL 7743408, at *11 (N.D. Cal. Aug. 16, 2016), aff'd in part, rev'd in part on other grounds, dismissed in part on other grounds, 728 F. App'x 665 (9th Cir. 2018) (on similar facts, rejecting the argument that “declarations from each of the over 35 timekeepers for which [the party] seeks fees, attesting under oath to the hours reasonably spent” were necessary to support fee request); Fed. R. Evid. 803(6)(B).

RITA F. LIN United States District Judge