Suk Joon RYU, aka James S. Ryu, Plaintiff–Appellee–Cross-Appellant, v. HOPE BANCORP, INC., as successor by merger to Wilshire Bancorp, Inc., Defendant–Appellant–Cross-Appellee.
Plaintiff-Appellee–Cross-Appellant Suk Joon Ryu cross-appeals from an order of the district court adopting a magistrate judge's report and recommendation regarding Ryu's claim for advancement of legal fees from Hope Bancorp Inc. (“Hope Bancorp”).1 The district court granted the relief sought by Ryu in part, and this appeal follows. We assume the parties’ familiarity with the underlying facts, the procedural history of the case, and the issues on appeal.
Ryu was the Senior Vice President and Chief Operating Officer of BankAsiana from 2007 until it merged with Wilshire Bancorp, Inc. in 2013. Hope Bancorp is the successor-by-merger to Wilshire Bancorp. One of Ryu's BankAsiana coworkers later implicated him in an embezzlement scheme, which led to a criminal investigation by the FBI and DOJ and a civil action against Ryu filed in the U.S. District Court for the District of New Jersey (“the Embezzlement Action”). Ryu subsequently filed this action in the U.S. District Court for the Southern District of New York (“the Advancement Action”), seeking contractual advancement from Hope Bancorp of Ryu's legal fees. Ryu retained two law firms to represent him in the civil actions: Steve Harvey Law LLC (“SHL”) and Greenberg Freeman LLP (“Greenberg Freeman”).
The magistrate judge recommended granting the relief sought by Ryu in part, but she concluded that 150% rate multipliers for both SHL and Greenberg Freeman were unreasonable and that SHL's billable hours should be reduced by 20%. The district court adopted the report and recommendation in full.
Ryu insists on appeal that the district court erred by not applying New Jersey law, specifically relying on Rendine v. Pantzer, 141 N.J. 292, 661 A.2d 1202 (1995), which, according to Ryu, would have rendered reasonable both the 150% rate multipliers and the billable hours.2 “The Second Circuit reviews a district court's decision to grant or deny an award of attorneys’ fees for abuse of discretion, reviewing de novo any rulings of law.” Fresno Cty. Emps.’ Ret. Ass'n v. Isaacson/Weaver Family Trust, 925 F.3d 63, 67 (2d Cir. 2019) (internal quotation marks omitted). A court abuses its discretion “when (1) its decision rests on an error of law (such as application of the wrong legal principle) or a clearly erroneous factual finding, or (2) its decision—though not necessarily the product of a legal error or a clearly erroneous factual finding—cannot be located within the range of permissible decisions.” Zervos v. Verizon N.Y., Inc., 252 F.3d 163, 169 (2d Cir. 2001) (footnote omitted).
With respect to SHL, Ryu's argument that Rendine provides the controlling principle fails out of the gate. Ryu criticizes the district court for relying on Pennsylvania v. Delaware Valley Citizens’ Council for Clean Air, a case involving a federal fee-shifting statute, for the proposition that “it would be unreasonable for SHL's attorneys to be compensated ‘as if [they] had sacrificed completely [their] right to payment in the event of an unsuccessful outcome.’ ”3 App. 529–30 (quoting Pennsylvania v. Del. Valley Citizens’ Council for Clean Air, 483 U.S. 711, 716–17, 107 S.Ct. 3078, 97 L.Ed.2d 585 (1987)); see also City of Burlington v. Dague, 505 U.S. 557, 567, 112 S.Ct. 2638, 120 L.Ed.2d 449 (1992) (“[W]e hold that enhancement for contingency is not permitted under the fee-shifting statutes at issue,” i.e., the Solid Waste Disposal Act and Clean Water Act.). As Ryu would have it told, the New Jersey Supreme Court held just the opposite in Rendine. See Rendine, 661 A.2d at 1228 (“We hold that the trial court, after having carefully established the amount of the lodestar fee, should consider whether to increase that fee to reflect the risk of nonpayment in all cases in which the attorney's compensation entirely or substantially is contingent on a successful outcome.”).
This is not technically accurate (denying the antecedent) and misses the point. The Delaware Valley plurality posited that an attorney not working under a contingency agreement had not assumed a risk of nonpayment sufficient to warrant an adjustment to the lodestar. Rendine held that an attorney who was working under a contingency agreement may indeed have assumed a risk warranting lodestar adjustment. Either way, those cases focus on the risk of contingency agreements. But Ryu did not retain SHL under a contingency agreement. The only caselaw upon which Ryu relies is therefore not relevant to whether the 150% fee multiplier was reasonable here.4
Ryu's argument concerning the 20% reduction applied to SHL's billable hours is likewise meritless. He again asserts that the district court erred by using federal-law principles, rather than New Jersey law, in its reasoning, but he fails to identify a single New Jersey case that would support a different outcome. See Fed. R. Civ. P. 61 (“At every stage of the proceeding, the court must disregard all errors and defects that do not affect any party's substantial rights.”).
We have considered Ryu's remaining arguments and find them to be without merit. The order of the district court is AFFIRMED.
1. Hope Bancorp's appeal of the same order was dismissed pursuant to Federal Rule of Appellant Procedure 42.
2. Hope Bancorp contends that Ryu's arguments on appeal are forfeited or waived because he failed to raise them until his objections to the magistrate judge's report and recommendation. Cf., e.g., Williams v. McNeil, 557 F.3d 1287, 1291–92 (11th Cir. 2009). We have not yet decided whether that failure results in forfeiture or waiver, and we decline to decide the issue now because we conclude that Ryu's arguments fail on the merits.
3. The language quoted by the magistrate judge was not a holding of the Supreme Court; it was the Supreme Court's quotation of an Eleventh Circuit case during the Court's survey of the state of the law. See Del. Valley, 483 U.S. at 716, 107 S.Ct. 3078 (quoting Jones v. Cent. Soya Co., 748 F.2d 586, 593 (11th Cir. 1984)).
4. True, Ryu's agreement with Greenberg Freeman was on a contingency basis. But even setting aside the fact that Ryu's brief mentions Greenberg Freeman's 150% fee multiplier only in passing and presents no factual argument concerning the risk assumed by Greenberg Freeman, Ryu does not address the district court's finding (as recommended by the magistrate judge) that Ryu proffered no evidence establishing that a reasonable paying client in his situation would be willing to pay the 150% multiplier.