Tag Archives: Daniel Mauler

SCOTUS Vacates 4th Circuit Decision on Trump Immigration Order

Readers of the EDVA Update have followed our coverage of the challenges to President Trump’s multiple immigration Executive Orders, including challenges starting in both the Eastern District of Virginia and the District of Maryland.  While President  Trump received an initial loss and then a qualified win in the Eastern District, he did not fare so well in Maryland, leading to the Fourth Circuit case of International Refugee Assistance Project v. Trump.  In an en banc decision, the Fourth Circuit pulled no punches, handing a sharp loss to the President in a controversial decision.  The U.S. Supreme Court, however, has recently vacated the Fourth Circuit’s decision, effectively dismissing the case on mootness grounds.  As a legal matter, this wipes out the Fourth Circuit’s and lower court decisions in the case.

The Supreme Court acted after calling for letter briefs from both the Government and the ACLU on whether the case still presented a live controversy after President Trump issued a new Executive Order on September 24th superseding the previously-challenged order.  On October 10th, the Court sided with the Government and vacated the Fourth Circuit’s decision via an anti-climatic, short paragraph:

We granted certiorari in this case to resolve a challenge to the temporary suspension of entry of aliens abroad under Section 2(c) of Executive Order No. 13,780. Because that provision of the Order expired by its own terms on September 24, 2017, the appeal no longer presents a live case or controversy. Following our established practice in such cases, the judgment is therefore vacated, and the case is remanded to the United States Court of Appeals for the Fourth Circuit with instructions to dismiss as moot the challenge to Executive Order No. 13,780. We express no view on the merits. Justice Sotomayor dissents from the order vacating the judgment below and would dismiss the writ of certiorari as improvidently granted.

This ends the current litigation originating from the Fourth Circuit.  Yet, a new suit challenging the September 24th Executive Order was filed in the District of Maryland on behalf of the Council on American-Islamic Relations and six other plaintiffs.  It remains to be seen how far this case advances in the Fourth Circuit.

While the Supreme Court has halted the case coming out of the Fourth Circuit, it did not end a similar challenge originating out of Hawaii.  Trump v. Hawaii remains alive at the Court, likely because this case challenged an aspect of the original Executive Order that was not raised in the Fourth Circuit litigation, namely a 120-day suspension of admission of refugees into the United States that is still in effect.  That particular suspension, however, is scheduled to end on October 24th, which will likely render Trump v. Hawaii moot as well.  Apparently anticipating this, the Supreme Court has removed Trump v. Hawaii from its argument calendar.

The Hawaii Plaintiffs, though, are not going quietly.  In response, they sought leave from the district court to file an Amended Complaint challenging the September 24th Executive Order in the existing case.  While this tactic may permit the current litigation to survive, it is likely to cause the Supreme Court to either vacate the Ninth Circuit decision in the case, or to dismiss the writ of cert as improvidently granted (“DIG-ing” the case, in SCOTUS parlance).  Doing so will allow the case to survive for now, but the litigants will likely be forced to start afresh in the district court.

Government Official’s “Personal” Facebook Page is a Public Forum under First Amendment

In what will likely be one of his last opinions before retiring from the Eastern District of Virginia bench, Judge James C. Cacheris authored an important decision applying traditional free speech principles to a local government official’s Facebook page.  This opinion provides important guidance regarding an official’s ability to regulate speech in the emerging digital public square.

In Davison v. Loudoun County Board of Supervisors, 1:16-cv-932, 2017 WL 3158389 (E.D. Va. July 25, 2017), a pro se plaintiff filed suit against Chair Phyllis J. Randal of the Loudoun County Board of Supervisors.  The lawsuit resulted after Chair Randall blocked the plaintiff from commenting on her Facebook page.  After a bench trial, Judge Cacheris granted the plaintiff judgment, holding that 1) Chair Randall’s Facebook page was a public forum for speech purposes under the First Amendment, and 2) Chair Randall acted under color of state law when she banned the plaintiff, which violated the plaintiff’s free speech rights.

The facts of this case are rather mundane, in reality.  The plaintiff, a resident of Loudoun County who regularly attends county board meetings, posted comments on Randall’s Facebook page implying that members of Loudoun County School Board were corrupt and financially benefiting family members.  Chair Randall deleted the plaintiff’s post and then banned him from commenting further on the page.  Chair Randall, however, had a change of heart the next morning and “unbanned” the plaintiff from the page.  In all, the plaintiff had been banned for about 12 hours.

After laying out the facts, Judge Cacheris first considered whether the Facebook page constituted a public forum for free speech purposes.  The interesting point here is that Chair Randall’s Facebook page started off as a non-public forum, and she defended this lawsuit by claiming the page was “personal.”  The page was first created by Randall the day before she was sworn in on the Board, and it was not created by County employees or through the County’s IT staff.  Instead, Randall “brought” the page with her to her new elected role.

The page became a public forum, however, based upon a “totality of circumstances” focusing on the current use of the page.  For example, Chair Randall’s Chief of Staff assisted in maintaining the page as part of her duties.  Official newsletters issued by the Chair’s office (and drafted by County employees) included links to the page.  And, as Judge Cacheris’s opinion notes in detail, Chair Randall went to great efforts to “swathe . . . the Facebook page in the trappings of her office.”  This included her official title of “Chair” prominently featured on the page, along with her official government contact information, official County website address, and her encouragement of “back and forth constituent conversations.”

Once Judge Cacheris determined the Facebook page had morphed into a public forum, he then turned to the content of the plaintiff’s speech.  Chair Randall testified she banned the plaintiff because she was offended by the criticism of her colleagues on the School Board.  She also noted that she had no way to tell if the criticism was valid or not, and she did not want to leave such criticism available on the page.

While Judge Cacheris noted that such a feeling was understandable, it was not a valid reason for deleting the comment or banning the plaintiff from the forum.  Quoting the recent Matal v. Tam Supreme Court decision, the judge noted that “[i]f the Supreme Court’s First Amendment jurisprudence makes anything clear, it is that speech may not be disfavored by the government simply because it offends.”  Judge Cacheris then held that Chair Randall had “engaged in viewpoint discrimination by banning Plaintiff from her Facebook page” and that “[v]iewpoint discrimination is ‘prohibited in all forums.’”

Turning to the form of relief, Judge Cacheris declined to order injunctive relief since the plaintiff had already been unbanned from the page.  But the judge did issue a declaratory judgment in the plaintiff’s favor.

Judge Cacheris’s opinion is noteworthy for multiple reasons, and not only because a pro se plaintiff won a case at trial against skilled counsel from Fairfax.  Rather, this opinion provides important guidance for government officials at all levels in their social media interactions with constituents.  It also demonstrates the “morphing” ability of a private web space into a public forum due to new circumstances.  Considering the frequent use of Twitter by high-ranking government officials (and the ease of blocking followers from such accounts), we will likely see more litigation over this new digital forum in the near future.

C-Span to Broadcast Live Audio of Today’s 4th Circuit’s Argument on Immigration Executive Order

The Fourth Circuit will hear en banc the oral argument today at 2:30 pm in International Refugee Assistance Project v. Trump.   For the first time (that we know) the Court will allow a live audio broadcast of proceedings.

Earlier this year the Ninth Circuit permitted the live audio broadcast of the argument on the prior Immigration Executive Order.  137,000 people logged in to listen.

Listeners can find the link to the audio feed on the Fourth Circuit’s web page here.  The Court has also advised that an MP3 audio file will be available for download approximately one hour after the argument concludes here.Graphic

The case Orders and Briefs are available online on the site.  In the Case Information section under Public Advisory #4 in the News & Announcements section on Page 1, the Orders, Briefs and more are accessible.

Only 14 of the Court’s 15 active judges will hear the case.  Judge Wilkinson has recused himself because his son-in-law is the Acting Solicitor General.  The even number of participating judges presents the awkward possibility of a tie vote.

For an overview of the issues in the appeal, you should see our earlier EDVa Update posts on the Immigration Order battles here, here, here, here, and here.  But if you only have time to review one post, go our March 30th post.   While the instant appeal addresses an order from the District Court for Maryland, and not Judge’s Trenga’s ruling in Sarsour et al. v. Trump, his opinion provides extremely well-reasoned coverage of the issues.

EDVA: Legal Malpractice Does Not Give Rise to Breach of Fiduciary Duty Claim

A claim of legal malpractice by client against a former attorney does not, at the same time, give rise to a breach of fiduciary claim under Virginia law, according to Judge Henry Hudson of the Eastern District of Virginia (Richmond Division).  Judge Hudson’s ruling is a development in the law of fiduciary duty, and it goes into territory that has not yet been covered by the Virginia Supreme Court.

In Kylin Network (Beijing) Movie & Culture Media Co. Ltd v. Fidlow, 3:16-cv-999-HEH, 2017 WL 889620 (E.D. Va. Mar. 6, 2017), the case began with a Chinese company that wanted to make a movie about the life of martial arts legend Bruce Lee.  The company hired the defendants (a Virginia attorney and his former law firm) to negotiate and obtain the movie rights with the supposed copyright owner.  According to the Complaint, after some negotiation, the attorney recommended that the plaintiff pay $1 million to the supposed seller of the rights.  After the payment was made, the plaintiff allegedly discovered the seller did not have good title to the movie rights.  The unhappy client then filed a three-count complaint in federal court against its former attorney for legal malpractice, breach of fiduciary duty, and fraud.

The defendants sought to dismiss all counts of the Complaint under Fed. R. Civ. P. 12(b)(6).  The defendants first argued that the legal malpractice claim failed due to the plaintiff’s contributory negligence.  While Judge Hudson recognized that contributory negligence could be a complete defense to legal malpractice, he ruled that the defense had to be resolved at trial by the fact-finder when “reasonable minds could disagree” on the disputed facts.  Thus, the judge denied the 12(b)(6) motion on this count.

The defendants, however, had better luck on the remaining two counts.  The plaintiffs’ breach of fiduciary duty claim, according to Judge Hudson, was based upon duties arising from the attorney-client relationship.  In turn, this relationship was based in contract, specifically the written engagement agreement between the law firm and the clients that gave rise to the legal malpractice claim.  Judge Hudson noted that the Virginia Supreme Court has not ruled on the issue, but based upon prior precedent, he held that the breach of fiduciary duty had to arise from a duty independent of the attorney-client contract.  According to Judge Hudson, “[i]n Virginia, because legal malpractice is a contract claim, an additional claim for breach of fiduciary duty must be based on something other than a violation of a duty arising under the attorney-client relationship.”

Judge Hudson then made short work of the remaining fraud count, dismissing it on similar grounds and holding that such a claim must arise from a source other than the contractual relationship between the parties.

The plaintiffs’ legal malpractice claim survived the 12(b)(6) stage, which appears to be the true core of the plaintiffs’ case.  But Judge Hudson’s opinion is notable as a development in the law of fiduciary duty in Virginia, a claim that seems to appear more frequently in business litigation in the Eastern District.

Suing a URL: A Roadmap to a Cybersquatting Action

As more economic activity occurs online, internet domain addresses are increasing in value, especially for small- and medium-sized businesses.  Businesses of all sizes need to pay attention to the security of their internet domain addresses, and a recent EDVA decision highlights the dangers of losing control of a business’s domain address.

In Jacobs Private Equity, LLC v. <JPE.com>, Case No. 1:16-cv-01331, 2017 WL 830397 (E.D. Va. Feb. 2, 2017), Magistrate Judge Ivan D. Davis faced a “cybersquatting” claim that is becoming more common.  Plaintiff Jacobs Private Equity, LLC, operated www.jpe.com as its website for over 12 years.  One day, however, its employees suddenly found that their login credentials to the website no longer worked.  According to the Complaint, an employee was the victim of an email “phishing” scheme where she was conned into divulging her login credentials.  The hackers then logged into the internet domain registry and changed the password to the business’s account.  As a result, the business lost control over its website and email addresses, and a new entity registered its purported ownership of the domain address.

Represented by Mark H. M. Sosnowsky of Drinker Biddle’s DC office, the business filed suit in the Eastern District of Virginia under the federal Anti-Cybersquatting Consumer Protection Act (the “ACPA”), 15 U.S.C. § 1125(d), et seq.  The Eastern District frequently sees these actions because many of the most popular internet domain registrars have offices in northern Virginia.  In this case, VeriSign, Inc., served as the registry, and it has an office in Reston, Virginia.

Suing an Internet Address

In a marriage of ancient legal principles and new information technology, a lawsuit under the ACPA is an in rem action against the internet domain address itself (and similar to an in rem action against a parcel of real estate or tangible personal property).  While the actual internet domain address is named as a defendant, the real defendant is, of course, the party who registered the address.

An ACPA action also involves elements of traditional trademark law.  In fact, the ACPA is part of Title 15 of the U.S. Code which focuses on federal law governing trademarks, also commonly referred to as the Lanham Act.  Under the ACPA, a court may order the forfeiture or cancellation of a domain name, or transfer of a domain address to the rightful owner of the mark. The ACPA applies, for the most part, to marks that are distinctive or famous.

A Common Problem

Fraudulent phishing schemes, such as the one that snared Jacobs Private Equity, are unfortunately increasingly common.  The usual pattern for this scheme is that bad actors outside of the United States will either take over the registration for a valuable website, or will watch for a non-renewal of registration for an active website.  The new party will swoop in, register the domain, and then offer to sell the domain back to the previous user for exorbitant amounts.  This frequently ensnares small businesses who fail to renew a website registration, such as by relying upon an expired credit card for an expected “auto-renewal” that never occurs.  The ACPA was enacted in 1999 in hopes of curbing such problems.

Elements of an ACPA Claim

Judge Davis’s opinion provides a useful roadmap for cybersquatting claims.  Treating an internet domain address as a trademark, a plaintiff must prove two elements to succeed on a cybersquatting claim:

  1. The domain name is identical or confusingly similar to the plaintiff’s mark.
  2. The registrant had bad-faith intent to profit from the domain name.

Traditional Trademark Law

The ACPA protects both registered trademarks and unregistered, common law marks.  While a common course of action for a business is to register its trademarks with the U.S. Patent & Trademark Office, a business may also acquire common law trademark rights by actual use of the mark in the market place.  For example, a small jewelry shop that has operated for 15 years as “Kitty’s Fine Jewelry” likely has a common law trademark rights in the name.  And if that small jewelry shop also operated a website (such as www.kittysfinejewelry.com), it will likely have a strong ACPA claim against a subsequent registration of the domain by a party acting in bad faith.  A business need not make a formal registration with the USPTO to have such protection.

Proving Bad Faith

Proving “bad faith intent” is often the challenge in these types of cases.  Because we cannot see into a person’s mind to determine intent, the ACPA sets forth nine “factors” that a court “may consider” in determining a person’s intent.  These factors operate as non-exclusive guides to the court (which is a concept similar to the common law “badges of fraud” used in traditional fraudulent conveyance law).  The nine factors under § 1125(d)(1)(B)(i) are as follows:

  1. Any preexisting trademark or other rights in the name used in the domain address.
  2. Whether the domain name contains the legal name of the person or a name that is commonly used to identify the person.
  3. Prior use of the domain name in connection with bona fide goods or services.
  4. Legitimate noncommercial or fair use of the mark in a site that uses the mark in the domain address.
  5. Intent to divert consumers from the mark owner’s online location to another site that could harm the goodwill represented by the mark.
  6. Whether the person offered to sell the domain name back to the mark owner for financial gain without having used the domain in any legitimate business activities. (This factor also includes whether the person has engaged in such activity in the past, indicating a pattern of such conduct.)
  7. Providing false or misleading contact information during the registration of the domain address.
  8. Acquiring multiple domain names which are identical or confusingly similar to multiple preexisting marks.
  9. Whether the mark is distinctive or famous at the time of registration of the domain name.

Of course, not all of these factors will apply in a given case, and there is no set standard for how many factors need to be present to establish bad faith.  Rather, a court has wide-latitude in these fact-intensive cases.

Service of Process Issues

In Jacobs Private Equity, the new registrant of the disputed internet domain address never responded to the complaint, so Judge Davis recommended that a default judgment be entered.  In Judge Davis’s Report and Recommendation (“R&R”), he first focused on the efforts that the plaintiff went to effect service of process.  The plaintiff tried the telephone number, mailing address, and email address listed by the new registrant, but all turned out to be bogus.  The plaintiff then sought court approval to publish notice of the lawsuit in The Washington Times.  Once this was accomplished, the court was satisfied that the default judgment could be granted.

The Plaintiff Prevails

Even though the defendant defaulted, Judge Davis still performed the ACPA statutory analysis in his R&R.  He determined that the plaintiff had a valid common law trademark rights in “JPE” and that the new registrant acted in bad faith by providing bogus contact information to VeriSign, among other factors.  No objections to Judge Davis’s R&R were ever filed, and on March 2nd, District Judge Liam O’Grady adopted the R&R in full, ordering the internet register to return the domain address to the plaintiff.

Alternatives to Litigation

 While the ACPA provides a legal remedy in federal court, aggrieved mark owners can also pursue an administrative challenge to bad-faith registration.  Known as a “Uniform Domain Name Dispute Resolution Policy” (“UDRP”) proceeding, the action is essentially a private arbitration filed with the internet registry overseeing the disputed domain.  While it can be faster and cheaper than litigation, the range of remedies allowed in such an arbitration are fewer than those available from a federal court.  And a successful arbitration can have little or no deterrence or precedential value against other cybersquatters targeting a specific website.

 Conclusion

The ACPA provides a legal remedy to businesses and individuals who have been victimized by the theft  or loss of control of their internet domains.  The statutory framework is straight-forward, but proving bad-faith intent can be challenging, especially when defendants evade service of process or mask their identities.  Yet, with the rise of online commerce (especially for small- and medium-sized businesses), we will likely see more incidents of stolen internet websites, and by virtue of the Eastern District’s geographic location, more cybersquatting claims brought in this court.

Practitioners’ Alert: New Procedure to Request Emergency Relief After Business Hours

The EDVA Clerk’s Office recently announced a new procedure for civil emergency matters (such as requests for emergency injunctions or TRO’s), that seek the immediate attention of a district judge outside of regular business hours or during weekends / holidays.  This is a brand-new procedure – for both attorneys and staff in the Clerk’s Office.

The new procedure is briefly described here on the EDVA website.  First, a party must electronically file a written motion requesting the emergency relief.  If no case is currently pending, the attorney will need to electronically open a new case (see here for the process to open new cases), followed by electronically filing the motion that requests the relief.

Once the motion is filed, the party must then call the Clerk’s Office via a special telephone number, which varies among the divisions within EDVA.  The telephone numbers are:

  • Alexandria Division:      (703) 403-2789
  • Norfolk / Newport News Division:      (757) 619-0307
  • Richmond Division:      (804) 313-1762

According to the Clerk’s Office, these numbers will go to cell phones that will be monitored by Clerk’s Office staff members.  Attorneys who call the numbers should expect to leave a voice mail explaining the emergency, in addition to providing the case number and contact information for the attorney.  The staff member will then triage the voice mail messages in consultation with a judge who is “on duty,” and then return the call “within a reasonable period of time” to advise how the request will be handled.  Practitioners should not expect to speak directly to a staff member during the initial phone call.

Practitioners should also be aware that this is a new procedure for the Clerk’s Office, and staff members have yet to be fully trained on the new process.  While that training unfolds across EDVA’s divisions, practitioners should keep a handy reference back to the Clerk’s Office web page outlining the procedure.

Handling Overlapping and Duplicative Damages

In a recent case, Judge Liam O’Grady astutely handled in his Jury Instructions and a Special Verdict Form the prospect of a jury’s duplicative and overlapping damage determinations.  He then resolved the parties’ dispute on overlapping damages when he decided post-verdict remittitur motion.  This case provides a roadmap for practitioners on how to handle similar problems in future cases.

Multi-count Complaint and Overlapping Damages

The case of Hair Club for Men, LLC v. Ehson et al, Civil Action No. 1:16cv236–LO/JFA involved a two-year covenant not-to-compete.  Plaintiff (a former employer) sued to enforce the covenant against a departing employee and her new employer.  Plaintiff sought not only an injunction but also considerable damages.

The Complaint alleged the usual suite of claims found in covenant-not-to-compete cases. The leading claim was for Breach of Contract, followed by claims for Trade Secrets Misappropriation, Tortious Interference, Unjust Enrichment, and Breach of Fiduciary Duty.

The case narrowed at summary judgment when the Court held that the defendants were liable on certain counts.  Judge O’Grady ruled that the non-compete covenant was enforceable, and that, as a matter of law, the ex-employee breached her fiduciary duty.  But still the Trade Secrets and Tortious Interference claims had to be tried, and the measure of damages for all claims was left open for trial.  Perhaps surprisingly, the case did not settle after these rulings.

Seven months after filing of the Complaint, the case went to a jury trial for four days.  The jury’s Special Verdict Form awarded Breach of Contract damages of $156,096, and then awarded damages of $258,330 on each of the three remaining counts.  Additionally, the jury responded to the question of whether the damages awarded were duplicative by circling “Yes.”

Jury Instructions and Special Verdict Form

Judge O’Grady’s jury instructions navigated through the duplicative damages issue, and the Special Verdict Form focused the jury on the key question of duplication.  Jury Instruction No. 39 addressed the possibility of overlapping damage awards:

In this case, Hair Club seeks to recover the same type of damages for lost profits on its breach of contract, breach of fiduciary duty of loyalty, misappropriation of trade secrets and tortious interference with contract and business advantage claims. A party is not entitled to multiple recovery for its losses. However, if you find that Hair Club has proved every element of each of its damages, and is entitled to recover for its claimed losses, you will be asked whether the recovery is duplicative, so that Hair Club does not recover more than it is entitled.

On the Special Verdict Form, Question No. 7 asked “Are any of the answers to questions 1, 3, 5, or 6 duplicative?”, followed by a simple “Yes/No” option.  (The four identified questions corresponded to Plaintiff’s four separate remaining counts.)

Dealing with Duplicative Damages

Despite the simple “Yes/No” question, the jury’s verdict left uncertainty as to the overall damages.  If the Court simply added all of the multiple damage awards, then the result would be a judgment for $934,086.  Plaintiff agreed that the jury intended that the three awards of $258,330 were for the same conduct and damage.  But Plaintiff also argued that the Breach of Contract damages should be added to the common damages, for a total damage award of $414,426.  Judge O’Grady, however, concluded that the appropriate total damage award was $258,330.

Virginia law prohibits the award of duplicative damages “when the claims, duties, and injuries are the same.” Wilkins v. Peninsula Motorcars, Inc., 266 Va. 558, 587 S.E.2d 581 (2003).  Judge O’Grady added that the “two claims are not duplicative if the conduct underlying the claims is different.”  For this, he cited Advance Marine Enterprises, Inc. v. PRC Inc., 256 Va. 106, 501 S.E.2d 148 (1998), and his analysis tracks the Wilkins opinion.  The trial court must “evaluate whether multiple damage awards constitute impermissible double recovery” and that under Virginia law it is the responsibility of the trial court in reviewing a verdict to supervise “the damage awards to avoid double recovery.”

Plaintiff relied on Advanced Marine to argue that the damages were in part separate and therefore should be added to yield the aggregate damage award, but Judge O’Grady distinguished Advance Marine.   In that case, the plaintiff proved a common set of compensatory damages under separate claims for Trade Secrets Misappropriation and Business Conspiracy.  While the plaintiff was limited to only one set of compensatory damages, the plaintiff was allowed to recover both punitive damages under the Trade Secrets claim and to treble the compensatory damages under the Business Conspiracy claim.

Judge O’Grady summed his conclusion by stating that “compensatory damages for the same injury, based on the same evidence, should be awarded only once.  This was consistent with Advance Marine.  This rule holds even if the injury is articulated in multiple causes of action with separate burdens of proof.”  But equally important, the judge ruled that it was his responsibility to make the determination using the jury’s answers on the Special Verdict Form.

Summary

The dilemma of overlapping and repetitive damages arises frequently.  In the case before Judge O’Grady, the jury considered damages on four separate counts.  The trial evidence, however, addressed the damages as a single compensatory loss.  When the jury answered that the damages were duplicative, it was then the trial judge’s responsibility to resolve the parties’ disagreement on the extent of the duplication.

Too often, a jury’s verdict states only its liability findings and separate awards on multiple counts.  In this situation, a judge ventures into potentially dangerous territory if he or she imputes that the damages are duplicative.

A question for both trial lawyers and judges is how best to manage this issue to steer away from the quagmire.  Judge O’Grady’s jury instruction in Hair Club cleanly instructs on duplicative damages.  He coupled his Instructions with the simple Special Verdict Form question about duplication.  In Hair Club, this seems to have worked well, and perhaps is the model for multi-count cases where the claimed damages overlap.

New Trend in Attorney’s Fees Declarations?

As the judges of the Eastern District continue to differ regarding reasonable hourly rates for attorneys, practitioners need to be aware of a potential new trend regarding declarations supporting or opposing petitions for attorney’s fees.  Unfortunately, that new trend appears likely to make such petitions more detailed and time-consuming – and therefore, more expensive.

Traditionally, declarations supporting a petition for attorney’s fees in the Eastern District have followed a familiar pattern: An outside attorney reviews the hourly rates charged, the number of hours charged, the docket sheet, and selected motions/briefs.  The resulting opinions were usually based upon a “general” review of or familiarity with the litigation.  These reviews were not usually “deep dives” into the documents, pleadings, or billing records for a good, simple reason:  keeping costs down.

This custom may need to change, based upon the recent case of Salim v. Dahlberg, 1:15-cv-468 LMB / IDD, 2016 WL 2930943 (E.D. Va. May 18, 2016), which was covered by the EDVA Update here.  In that case, Judge Leonie M. Brinkema of the Alexandria Division was faced with a petition for attorney’s fees after the plaintiff prevailed on part of his civil rights claim.  The petition was supported by declarations from six leading attorneys, all whom have extensive experience in the Eastern District.  As Judge Brinkema said in her opinion, all six were “well-known to and well-respected by the Court,” and all “summarily conclude[d] that the hourly rates charged and hours worked were reasonable.”

In opposition, the defendant submitted one declaration by attorney Wayne G. Travell, a partner with Hirschler Fleischer’s Tysons office.  Despite the lop-sided number of supporting declarations, Judge Brinkema rejected much of the plaintiff’s fee petition (along with the conclusions in the six supporting declarations) and essentially adopted much of the opinion and analysis expressed by Mr. Travell.

Mr. Travell’s declaration is extensive, at 18 pages long with 47 paragraphs.  He discusses in detail the steps he took to form his opinion (including documenting the telephone calls he had with the respective counsel).  He recounts the applicable law, and then provides a detailed recitation of the facts (citing and quoting from the pleadings in the case).  The heart of his declaration, however, appears to be nearly eight pages of detailed examination of the plaintiff attorney’s time records, including identifying alleged instances of double-billing, block-billing, and vague entries.

In her opinion, Judge Brinkema sided with Mr. Travell’s declaration because he “actually reviewed counsels’ billing records, provide[d] a detailed analysis of those records, discusse[d] the specific issues involved in the case, and evaluate[d] the work performed with respect to those issues.”  In contrast (according to the court’s opinion), the six supporting declarations were unpersuasive because none went into a “detailed analysis of plaintiff’s counsels’ time sheets; instead, the declarants base their conclusions almost exclusively on a review of the pleadings and of [plaintiff counsel’s] declaration.”

Mr. Travell’s declaration is another example of judicial pushback in the Eastern District against excessive attorney hourly rates (or, at least hourly rates perceived as excessive by the bench).  But it also likely signals that some judges will more closely scrutinize petitions for attorney’s fees, including attorney declarations that support and oppose those petitions.  For this reason, Mr. Travell’s declaration is likely a roadmap for future petitions in the Alexandria Division, if not throughout the Eastern District.  And the irony is straight-forward:  While the intent may be to hold down hourly rates, the added expense of more detail in such declarations will ultimately increase the cost of litigation overall.  But regardless of this impact, practitioners need to be aware of this possibility.

Is there a New Cap on Recoverable Attorney Rates in EDVA?

There is yet further disagreement among the judges of the Eastern District regarding reasonable attorney hourly rates.  As we noted in a previous EDVA Update here, this disagreement is manifesting itself most frequently in the Alexandria Division, as judges there confront (and push back against) the higher hourly rates frequently charged by larger law firms in the Northern Virginia/ DC metro area.

Today’s example of the disagreement comes in the recent case of Integrated Direct Marketing, LLC v. Drew May, et al., 1:14-cv-1183, 2016 WL 3582065 (E.D. Va. June 28, 2016).  In this case, Judge Leonie M. Brinkema of the Alexandria Division of the Eastern District invited a plaintiff to file a motions for sanctions and attorney’s fees after successfully demonstrating that the defendant made materially false statements in both an affidavit and during courtroom testimony.  But after the plaintiff petitioned for over $63,000 in attorney’s fees, Judge Brinkema strongly criticized the hourly rates and record keeping of plaintiff’s counsel, and she cut the fee award down to only $17,000.

To justify their hourly rates, plaintiff (represented by attorneys from both the DC and Connecticut offices of Ogletree, Deakins, Nash, Smoak & Stewart, PC) relied upon the matrix of hourly rates approved by Judge Gerald Bruce Lee in Vienna Metro (discussed in a prior EDVA Update here).  But Judge Brinkema rejected the Vienna Metro matrix.  By doing so, she sided with Judge T.S. Ellis’s opinion in Route Triple Seven (also discussed in a prior EDVA Update here) in the ongoing dispute regarding hourly attorney rates.  Below is a summary of the experience levels of each attorney, the hourly rates sought by the plaintiff, and the rates awarded by Judge Brinkema:

Attorney’s Legal Experience

Requested Hourly Rate

Awarded Hourly Rate

30 years $ 545 $ 450
9 years $ 395 $ 350
6 years $ 335 $ 275
5 years $ 320 $ 250

To set these hourly rates, the court followed the rates determined by Judge Ellis in Route Triple Seven.  Significantly, Judge Brinkema did not rely upon any other expert witness testimony or evidence to set these hourly rates.  (And, as we saw in the Route Triple Seven case, there the court relied upon its own “experience” to determine an appropriate reasonable rate.)  These hourly rates are in sharp contrast to the $550 – $600 hourly rates approved by Judge Lee in Vienna Metro.

It is clear that a revolt against high hourly rates (or, at least, rates perceived as high) is brewing among many judges of the Alexandria Division of the Eastern District.  It also appears that a hard cap of approximately $450 – $500 for an experienced attorney’s hourly rate is forming, at least in the eyes of several judges who have rejected the Vienna Metro matrix.