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JPMorgan Chase Bank, N.A. v. Neovi

March 12, 2007


The opinion of the court was delivered by: Judge Graham


The background of this case and of the personal jurisdiction issue which remains pending before the Court are both described in the Court's order of November 14, 2006, and will not be repeated here. That Opinion and Order concluded both that defendant Neovi had engaged in sanctionable conduct with respect to its responses to discovery and that it was obligated to provide additional information to plaintiff Chase concerning its business contacts with the State of Ohio or with Ohio residents. The order established both a procedure for the submission of information relating to the appropriate award of attorneys' fees and expenses in connection with Chase's motion to compel discovery and also a date by which the additional information should be provided.

Briefing on the issue of the appropriate amount of attorneys' fees and expenses has now been completed. In addition, Neovi did provide Chase with additional information concerning its business relationship to the State of Ohio and Ohio residents. Because of perceived omissions in that information, Chase has filed another motion to compel. That motion is also fully briefed. For the following reasons, the Court will award Chase attorneys' fees and expenses in the amount of $22,370.75 and will direct the Clerk to set the second motion for sanctions for an evidentiary hearing.


The Court turns first to the question of the attorneys' fees and expenses to be awarded to Chase in connection with the motion for sanctions which was granted by the Court's order of November 14, 2006. That order noted that, because of Neovi's sanctionable conduct, Chase had incurred expenses not only in filing the motion but in conducting additional discovery, including a deposition in San Diego, California, which should have been unnecessary. Consequently, the Court gave Chase the opportunity to submit an affidavit outlining the fees and expenses incurred in the unnecessary discovery, and provided Neovi with an opportunity to reply.

Chase filed an affidavit of its lead counsel, Jeffrey S. Saltz, which included detailed billing records from Mr. Saltz and another attorney working on the case, Lisa B. Wershaw. According to Mr. Saltz's itemization, Chase was billed for $21,030.90 for services rendered in connection with the discovery which the Court determined to have been necessitated by Neovi's sanctionable conduct. Additionally, expenses of $1,775.95 were incurred. Mr. Saltz requests reimbursement for his time at the rate of $271 per hour and for Ms. Wershaw's time at the rate of $230 per hour. His affidavit states that these rates are "specially negotiated time rates for Chase and are lower than the time rates generally charged by me and Ms. Wershaw." Mr. Saltz has almost thirty years of commercial litigation experience, and Ms. Wershaw has over twenty years of similar experience.

Neovi makes the following arguments in support of a reduction in the fees and expenses being sought. First, it claims that the rates being charged by Mr. Saltz and Ms. Wershaw are higher than reasonable rates charged by similar attorneys in the Columbus, Ohio area (both of Chase's attorneys practice in Pennsylvania) and that the Court should reduce the hourly rate charged to $225 per hour. Second, Neovi contends that any time spent on reviewing documents generated by a Federal Trade Commission investigation of Neovi did not relate to the discovery at issue here. Neovi also argues that the bill reflects time not charged to or paid by Chase, that Mr. Saltz and Ms. Wershaw spent far too much time working on a motion for sanctions, and that Mr. Saltz's request for reimbursement for meals and hotel accommodations in San Diego should not be included because he could have conducted the deposition as part of a day trip. For the following reasons, the Court concludes that none of these arguments have merit. However, the Court will make a small reduction on the amount of fees requested based on its independent review of the time records.

In any context where an attorney requests fees to be awarded by the Court, the Court has an obligation to award only reasonable fees. Although the Court has substantial discretion in determining what is a reasonable fee, there are a number of factors which the Court should consider, including the prevailing market rates for comparable legal work in the community, whether the amount of time requested was reasonably necessary to perform the tasks described, and whether the representation was of at least average quality. See Kauffman v. Sedalia Medical Center, 2007 WL 490896 (S.D. Ohio February 9, 2007), citing Bemis v. Hogue, 1991 WL 102385 (6th Cir. June 13, 1991).

The hourly rates requested by Mr. Saltz and Ms. Wershaw are reasonable even under Columbus standards. Kauffman, a decision authored by Judge Sargus of this Court, awarded between $300 and $325 per hour to experienced counsel and between $210 and $235 per hour for counsel with ten years of practice. The rates sought here are below or within those ranges for attorneys with equivalent or greater experience. In Estep v. Blackwell, 2006 WL 3469569 (S.D. Ohio November 29, 2006), Judge Watson of this Court awarded fees at a rate of up to $400 per hour for litigation in this Court. In Doe v. Hogan, 421 F.Supp.2d 1051 (S.D. Ohio 2006), Judge Marbley of this Court awarded fees up to $260 per hour for public interest attorneys. There is simply no factual or legal basis to support Neovi's argument that the fees requested by Mr. Saltz and Ms. Wershaw are unreasonable when compared to rates charged by Columbus attorneys or rates approved by other Judges of this Court.

With respect to Neovi's second and third contentions, in its reply, Chase notes that the time spent reviewing the FTC documents did relate to the deposition taken and certain statements made by Neovi's representative at the deposition. Chase also noted that it did not bill for time not charged to Chase, and there is nothing on the time records submitted which would indicate to the contrary. The Court has also reviewed the contentions that too much time was spent on the motion for sanctions, and disagrees based on its experience and the complexity of the motion. Finally, the Court rejects the concept that it was unreasonable for Mr. Saltz to incur usual travel expenses such as meals and a hotel bill for a trip to San Diego, California to depose a witness. Neovi could have chosen to have the deposition at a more convenient location but did not, and the Court should not now penalize Mr. Saltz because he made reasonable travel arrangements to attend and conduct a deposition.

In conducting an independent review of the time records, however, the Court concludes that the time span described in the first eight entries on the itemization and the twelfth entry would have been time incurred regardless of whether Neovi had engaged in sanctionable conduct. It appears to the Court, from the content of the entries, that this time was spent reviewing the discovery responses which were received and discussing these responses with Chase. That would have been necessary whether the discovery responses turned out to be complete and accurate or whether they did not. The total amount charged for those nine entries is $436.10. Consequently, the Court will make an appropriate reduction, so that rather than awarding the $22,806.85 requested, the award will be $22,370.75. That amount should be paid within thirty days of the date of this order.


The other matter before the Court is Chase's second motion for sanctions. That motion relates to the discovery responses which were provided by Neovi in response to the Court's November 14, 2006 order.

The basic facts concerning those responses do not appear to be disputed. By either December 6 or December 7, 2006, Neovi provided Chase with several links to websites which contained some information relating to persons who used Neovi's Qchex services. The Court's order granting the motion to compel contemplated that the information provided would be sufficient to allow Chase to have access to all information currently held by Neovi concerning whether payors, payees, financial ...

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