T. S. Ellis, III, United States District Judge.
At issue on remand from the Fourth Circuit in this copyright infringement and conversion case is the proper quantum meruit analysis of the fee award to which plaintiffs' former counsel is entitled and the proper contract analysis of the costs to which plaintiffs' former counsel is entitled. The dispute is between (i) plaintiffs, who
Plaintiffs in the underlying case are (i) Jordan Fishman, a Florida citizen, and three companies he owns and controls, namely (ii) Tire Engineering and Distribution, LLC, a Florida Company, (iii) Bearcat Tire ARL LLC, also a Florida company, and (iv) Bcatco A.R.L., Inc., which is incorporated under the laws of the Jersey Channel Islands. During times relevant to this litigation, plaintiffs were in the business of designing, manufacturing, and selling highly specialized tires for use on underground mining vehicles.
There were two sets of defendants in the underlying litigation. The first set, collectively referred to as the "Al Dobowi defendants," comprises: (i) Al Dobowi Tyre Co. LLC, (ii) Dobowi Ltd, (iii) TyreX International, Ltd., and (iv) TyreX International Rubber Co., Ltd., all of which were headquartered in the United Arab Emirates and owned by Surender Kandharia, a Dubai citizen. The second set of defendants, collectively referred to as the "Linglong defendants," comprises (i) Shandon Linglong Rubber Co., and (ii) Shandong Linglong Tire Co., Ltd., both of which were incorporated in China. At all relevant times, the Dobowi and Linglong defendants
By 2009, Jordan Fishman had become convinced that his head of sales had conspired with plaintiffs' competitors, the A l Dobowi and Linglong defendants, to steal plaintiffs' copyrighted underground mining tire blueprints and designs and then to sell knock-off copies of plaintiffs' tires around the world, thereby damaging plaintiffs. Accordingly, Fishman sought counsel to vindicate plaintiffs' rights, and on August 4, 2009, Fishman signed an Engagement Letter with the Gilbert Firm. This Engagement Letter, drafted by the Gilbert Firm, provides for two alternative fee arrangements, specifically as follows:
Engagement Letter. From the date plaintiffs retained the Gilbert Firm until plaintiffs discharged the Gilbert Firm in or around October 2011, plaintiffs' case was handled chiefly by Matteis, as lead counsel, and by Copley. Other Gilbert Firm lawyers assisted Matteis and Copley, but played less substantial roles in the case.
On October 28, 2009, plaintiffs filed two complaints in this district, one against the Al Dobowi defendants and one against the Linglong defendants. After the two suits were promptly consolidated, the parties briefed and argued various threshold motions and then proceeded to conduct discovery. After completion of discovery, defendants sought summary judgment on all nine counts and succeeded on four counts. Plaintiffs then proceeded to trial on the remaining counts: (i) violation of the Copyright Act, 17 U.S.C. § 101, et seq., (ii) violation of the Lanham Act, 15 U.S.C. § 1051, et seq., as to registered marks, (iii) violation of the Lanham Act as to unregistered marks, (iv) common law conversion, and (v) common law civil conspiracy.
During the six-day trial, the parties presented live and videotaped testimony from a number of witnesses, substantial documentary evidence, and competing expert testimony on the issues of infringement and damages. In the end, the jury returned a verdict in favor of plaintiffs, awarding plaintiffs $26 million in damages jointly and severally against all defendants. Defendants' post-verdict Rule 50
Defendants appealed and on June 6, 2012, the Fourth Circuit reversed the remaining trademark and conspiracy verdicts, but nonetheless upheld the $26 million judgment against defendants based on the jury's verdicts on the conversion and copyright violation claims. See Tire Eng'g and Distrib., LLC v. Shandong Linglong Rubber Co., Ltd., 682 F.3d 292, 298 (4th Cir.2012). The Fourth Circuit also vacated the fee award because the trademark claims were the sole bases for that award. Id.
Prior to the December 2011 oral argument before the Fourth Circuit panel, attorneys Matteis and Copley, in October 2011, elected to leave the Gilbert Firm and establish their own law firm, WMC. Both firms offered to continue representing plaintiffs. After consulting with both firms, plaintiffs elected to stay with Matteis and Copley, and accordingly, discharged the Gilbert Firm and retained WMC to represent plaintiffs in this case. Shortly thereafter, in January 2012, the Gilbert Firm filed a Notice of Former Counsel's Lien pursuant to Va. Code § 54.1-3932.
Once the $26 million judgment against defendants became final and defendants declined to pay, WMC, on plaintiffs' behalf, commenced a vigorous and wide-ranging collection effort. This effort included initiating lawsuits to compel banks to turn over defendants' assets in the banks' possession
Thereafter, plaintiffs filed a motion to determine the value of the Gilbert Firm's lien. The Gilbert Firm sought to recover its expenses, but it did not seek its contingency fee, conceding that the provision authorizing the contingent fee was not enforceable under Virginia law, and therefore the Gilbert Firm could recover only the value of its services in quantum meruit. Arguing that its significant contribution to plaintiffs' success in the litigation merited a substantial fee award, the Gilbert Firm sought $4.5 million in hourly fees, $1.8 million in costs, and a portion of the contingency fee.
By Order and Memorandum Opinion dated September 29, 2014, plaintiffs' motion to determine the value of the Gilbert Firm's lien was granted inasmuch as the
Thereafter, the Gilbert Firm appealed, and on January 11, 2016, the Fourth Circuit issued an unpublished Memorandum Opinion vacating and remanding the district court judgment on the grounds that Outsidewall I (i) did not expressly apply the factors for quantum meruit fee awards set forth by the Supreme Court of Virginia in County of Campbell, 112 S.E. at 885, and (ii) erroneously applied a quantum meruit analysis to the costs issue instead of enforcing the costs provision in the parties' Engagement Letter. In re Outsidewall Tire Litigation, No. 14-2192, 636 Fed.Appx. 166, 170-72, 2016 WL 106276, at *3-5 (4th Cir. Jan. 11, 2016) (unpublished). Thereafter, the mandate issued, and the parties were expressly instructed by Order "to submit supplemental briefs that apply the legal tests elucidated by the Fourth Circuit"; the parties were neither directed nor permitted to submit additional factual material. In re Outsidewall Tire Litigation, 1:09cv1217 (E.D.Va. Feb. 10, 2016) (Order) (Doc. 642). It remains, therefore, to apply the County of Campbell factors to determine the appropriate quantum meruit fee award and to apply the Engagement Letter's costs provision to determine the appropriate amount in costs to which the Gilbert Firm is entitled.
In the fee claim at issue in Outsidewall I, the Gilbert Firm claimed that its lawyers spent 10,955 hours on the case at hourly rates ranging from $375/hour to $900/hour, for a total of $4,542,228.50. Now, on remand, it is important to note that the Gilbert Firm does not seek all of the 10,955 hours originally claimed, but instead seeks 4,192 hours fewer than that figure. Thus, the Gilbert Firm seeks on remand to recover attorney's fees for 6,763 hours at the same hourly rates, for a total of $3,118,595. With respect to costs, the Gilbert Firm claimed in Outsidewall I that it was entitled to $1,812,149.20 in costs. Yet, on remand, the Gilbert Firm excludes $71,836.30 of the costs originally claimed, and therefore now seeks $1,740,312.90 in costs.
As the Fourth Circuit made clear in its unpublished January 11, 2016 opinion, "[t]he parties agree that Virginia law governs the Gilbert Firm's recovery from its former client, and that Virginia law prohibits the Gilbert Firm from enforcing its contingency fee agreement with [plaintiffs]." In re Outsidewall Tire Litigation, 636 Fed.Appx. at 169, 2016 WL 106276, at *2. The Fourth Circuit further elucidated the governing law by noting that "[u]nder Virginia law, `when, as here, an attorney employed under a contingent fee contract is discharged without just cause and the client employs another attorney who effects a recovery, the discharged attorney is entitled to a fee based upon quantum meruit' for the work performed before the attorney was terminated." Id. at 169-70, 2016 WL 106276 at *2 (quoting Heinzman v. Fine, Fine, Legum & Fine, 217 Va. 958, 234 S.E.2d 282, 285 (1977)). The Supreme Court of Virginia has defined quantum meruit as "the reasonable value of the services rendered." Heinzman, 234 S.E.2d at 286, n. 4. As the Fourth Circuit further
112 S.E. at 885. Importantly, when applying these factors to determine the quantum meruit value of a fee award for the services rendered, "the measure of compensation is the value of the work done [by the lawyer], not the benefit derived by the [client] from it." Id. at 884-85.
The Fourth Circuit held that the attorney's fee determination recorded in Outsidewall I was erroneous because even though it referred to the County of Campbell factors in connection with a quantum meruit lodestar analysis, Outsidewall I did not expressly analyze the County of Campbell factors when determining the fee award. Instead, as the Fourth Circuit noted, Outsidewall I "calculated a lodestar figure and ended its analysis there." In re Outsidewall Tire Litigation, 636 Fed. Appx. at 170, 2016 WL 106276, at *3. In other words, the Fourth Circuit held that although it is appropriate to apply the lodestar methodology in the context of a quantum meruit fee award,
Accordingly, it is appropriate to consider expressly the County of Campbell factors in connection with the lodestar methodology. In this respect, County of Campbell factors (ii), (vi), (vii), and (viii) relate directly to the appropriate rates that should be paid to discharged counsel, and factors (i), (iii), (iv), (v), and (ix) relate to the number of hours worked on the matter. In
A useful starting point in the lodestar analysis is the reasonableness of the hourly rates claimed in the fee claim in light of the County of Campbell factors. Here, the claimed hourly rates for various Gilbert Firm attorneys range from $375/ hour to $900/hour. These are essentially the same rates that were previously submitted — and rejected as excessive — in the trademark fee petition. See Outsidewall Tire, 748 F.Supp.2d at 568-69. In addition, the rates that the Gilbert Firm seeks here on remand are the same rates that the Gilbert Firm sought in the fee claim at issue in Outsidewall I. The conclusion reached there was that courts in this district have recognized, in the fee-shifting context, rates up to $420/hour for partners and $250/hour to $300/hour for associates as "reasonable and appropriate for cases similar in nature, difficulty, and complexity" in Northern Virginia. Outsidewall I, 52 F.Supp.3d at 788.
Factors (ii) and (vi) measure the level of experience, skill, and commitment required to carry out the representation at issue. This matter involved a copyright claim that was litigated through trial, appeals, and collections. In this regard, the reasonable rates awarded to attorneys in Northern Virginia in the fee-shifting context are instructive — although not dispositive — as those rates are grounded in considerations of the attorneys' experience, skill, and commitment. Thus, in light of County of Campbell factors (ii) and (vi), the rates applied in Outsidewall I — $400/hour for partners, $350/hour for counsel, and $275/ hour for associates — are an appropriate starting place. It remains to be determined whether the remaining County of Campbell factors relevant to determining an appropriate quantum meruit fee award point toward higher or lower hourly rates.
Factor (vii) addresses the character and standing of the Gilbert Firm attorneys in their profession. The October 28, 2010
Outsidewall Tire, 748 F.Supp.2d at 568.
Finally, consideration of factor (viii) — whether or not the fee is absolute or contingent — does not result in an increase to the hourly rates to be applied in this case. As the Fourth Circuit made clear in this case, the Supreme Court of Virginia explained that it is a "`recognized rule that an attorney may properly charge a much larger fee where it is to be contingent than where it is not so.'" In re Outsidewall Tire Litigation, 636 Fed.Appx. at 170, 2016 WL 106276, at *3 (quoting County of Campbell, 112 S.E. at 885). Indeed, to conclude otherwise would discourage attorneys from taking on contingency cases in the first place, as these cases require firms to invest time and money with no guarantee of ultimate recovery. See In re Abrams & Abrams, P.A., 605 F.3d 238, 245-46 (4th Cir.2010) (noting that "contingency fees provide access to counsel for individuals who would otherwise have difficulty obtaining representation"). The Gilbert Firm contends that in light of this County of Campbell factor, it is appropriate to multiply the lodestar figure by two or three in order to account for the contingent nature of the Gilbert Firm's original representation of plaintiffs. Yet, as plaintiffs correctly note, such an enhancement is inappropriate here for several reasons.
To begin with, most of the cases cited by the Gilbert Firm in support of its argument
Here, by contrast, plaintiffs would not benefit from a windfall in the absence of an enhancement to the Gilbert Firm's fee award because unlike in Kidd, plaintiffs' agreement with the Gilbert Firm — the Engagement Letter — not only included a provision for a contingency fee, but also made clear that in the event plaintiffs terminated the Gilbert Firm's representation, the Gilbert Firm would be paid according to an hourly rate. Specifically, the parties entered an agreement according to which the Gilbert Firm would be paid as follows:
Engagement Letter. Although the parties' Engagement Letter is not enforceable here, it points persuasively to the conclusion that plaintiffs and the Gilbert Firm knew from the outset that if plaintiffs terminated the Gilbert Firm's representation prior to completion of litigation — which in fact occurred — the Gilbert Firm would be entitled, under the terms of the Engagement Letter, only to an absolute fee based on the hours expended.
Moreover, the fact that plaintiffs chose the Gilbert Firm, as distinct from parties in fee-shifting cases who do not choose the opposing counsel whose fees they ultimately must pay, does not support a conclusion that the Gilbert Firm is entitled to the excessive hourly rates it now seeks. This is so because the Engagement Letter failed to disclose to plaintiffs the rates the Gilbert Firm now seeks, or even any hourly rates for any Gilbert Firm attorneys who might work on the case. Thus, plaintiffs had no notice — nor any other reason to believe — that they had selected a law firm that charges rates higher than the rates charged by similarly situated attorneys in Northern Virginia of a similar level of experience, skill, and commitment required
In sum, for purposes of determining the lodestar amount in light of the relevant County of Campbell factors, the rates applied in Outsidewall I are properly applied here: $400/hour for partners, $350/hour for counsel, and $275/hour for associates. These rates are fully consistent with the County of Campbell factors.
The next step in the lodestar analysis is to examine the fee claim to determine the appropriate number of attorney hours to multiply by the hourly rates. Outsidewall I concluded that a careful review of the 10,955 hours billed by the Gilbert Firm revealed that the number of hours sought was excessive and that the time entries were "rife with flawed entries that make its record inadequate and unreliable." Outsidewall I, 52 F.Supp.3d at 788. As a result, the number of hours was reduced to 3,834.25 for lodestar purposes. As already noted, on remand, the Gilbert Firm does not seek compensation for the full 10,955 hours included in the original fee claim, but seeks instead compensation for 6,763 of these hours, which still far exceeds the 3,834.25 hours previously awarded in Outsidewall I.
Importantly, however, it is impossible to tell precisely which of the 10,955 hours the Gilbert Firm has removed from the fee claim in arriving at the 6,763 hours it now seeks. Indeed, the Gilbert Firm merely asserts that it has excluded some general categories of time entries from the original fee claim.
The relevant County of Campbell factors to be applied to the number hours are as follows: (i) "the amount and character of the services rendered"; (iii) "the labor, time, and trouble involved"; (iv) "the character and importance of the matter in which the services are rendered"; (v) "the amount of money or the value of the property to be affected"; and (ix) "[t]he result secured." County of Campbell, 112 S.E. at 885.
County of Campbell factors (i) and (iii) require consideration of the amount and quality of the services rendered. Close examination of the Gilbert Firm's time entries reveals that flaws in the Gilbert Firm's time entries prevent a fair and confident assessment of the amount and quality of services rendered by the Gilbert Firm. These flawed entries include, for example: (i) entries that lump numerous tasks together for one time entry, (ii) entries that contain excessively vague and inadequate task descriptions, (iii) entries that claim legal fees for travel time, (iv) entries that claim time for multiple attorneys doing the same tasks when a single or fewer attorneys would have sufficed, (v) entries for time devoted to claims that ultimately did not succeed, (vi) entries that report time for law students temporarily employed for the summer, and (vii) entries that report time spent on other matters.
The same barrier to determining the character and nature of the work included in the time entries exists with respect to entries that lump multiple tasks together under a single time entry, a practice known as "lumping." As one court put it, "lumping" is the grouping of "several tasks together under a single entry, without specifying the amount of time spent on each particular task" such that a court is not provided "with a sufficient breakdown to meet [the] burden to support [a] fee request." Project Vote/Voting for America, Inc. v. Long, 887 F.Supp.2d 704, 716 (E.D.Va.2012) (internal quotation marks and citations omitted).
Where, as here, time entries suffer from inadequate documentation, such as lumping and vague task descriptions, a court must exercise sound judgment based on knowledge of the case and litigation experience to reduce the number of hours by an appropriate percentage. In other contexts, when "faced with excessively vague or inadequate task descriptions in fee claims," courts "have reduced fee claims by percentages ranging from 20% to 90%." Route Triple Seven Ltd. Partnership v. Total Hockey, Inc., 127 F.Supp.3d 607, 621 (E.D.Va.2015).
In addition to the pervasive lumping and vagueness flaws, the Gilbert Firm's time entries also include a number of entries claiming travel time, but the time entries fail to demonstrate or record whether the traveling attorneys actually performed work for plaintiffs while traveling. Most of the entries simply reflect travel from one destination to another with no substantive descriptions of any work completed during the course of travel. In terms of County of Campbell factors (i) and (iii), these entries provide no basis for concluding that the time claimed involved services rendered that were legal in nature — or that any services were rendered at all. Indeed, on the basis of these time entries, there is no reason to infer that the traveling attorneys were working on this case while traveling rather than spending time in other ways, such as
Next, in light of County of Campbell factors (i) and (iii) — the amount and character of the services rendered and the labor, time, and trouble involved — it is appropriate to reduce the hours claimed by the Gilbert Firm to account for time entries that are excessive, redundant, or otherwise unnecessary, as these entries charge for unnecessary services, and therefore the character of these services does not warrant compensation under the principles of quantum meruit. The Gilbert Firm's records include time entries for multiple attorneys who merely attended hearings and depositions, presumably just to watch and observe. This practice is generally discouraged, especially in the Fourth Circuit, and billing time for three attorneys at every single hearing, including relatively minor motions and sanctions hearings, is unnecessary and inappropriate. See Rum Creek Coal Sales, Inc. v. Caperton, 31 F.3d 169, 180 (4th Cir.1994) ("[W]e have also been sensitive to avoid use of multiple counsel for tasks where such use is not justified by the contributions of each attorney."). The burden is squarely on the Gilbert Firm to demonstrate the necessity of sending numerous attorneys to every single hearing, and this burden is not carried in the time entries submitted here that read simply "attend hearing." See Fee Analysis (various entries). Accordingly, a further reduction of 3% to the original 10,955 hours claimed is appropriate because mere attendance at hearings and depositions by attorneys is unnecessary, and therefore the character of these services does not warrant compensation under the principles of quantum meruit.
As part of the quantum meruit analysis, it is next appropriate to consider County of Campbell factors (iv), (v), and (ix) — the character and importance of the matter in which the services are rendered, the amount of money or the value of the property to be affected, and the result secured. With respect to the "result secured" factor, the Supreme Court of Virginia has explained that this factor must be analyzed "merely as bearing upon the consideration of the efficiency with which they were rendered, and, in that way, not from the standpoint of their value to the client." County of Campbell, 112 S.E. at 885. Moreover, this factor is more relevant to a fee determination when the counsel seeking a fee award actually secures money for the client — as in County of Campbell — rather than where, as here, the clients' subsequent counsel, rather than the counsel seeking a fee award, actually undertook the arduous, time-consuming effort required to recover on the judgment. See County of Campbell, 112 S.E. at 881.
With respect to the result secured factor, the Gilbert Firm's litigation services related to an important matter involving a large sum of money; indeed, the dispute resulted in a $26 million judgment in favor of plaintiffs, although only a portion of that
Moreover, County of Campbell factors (iv), (v), and (ix) point persuasively to the conclusion that a further reduction in the Gilbert Firm's fee award is necessary as a result of the excessive amount of post-trial hours claimed by the Gilbert Firm. Of the 10,955 hours claimed, only 4,897.6 relate to work completed up to the end of trial.
In sum, as a result of the application of the County of Campbell factors, the 10,955 hours claimed by the Gilbert Firm must be reduced by 65%, which yields a total of 3,834.25 hours.
With respect to costs, the Fourth Circuit concluded that Outsidewall I erroneously used a reasonableness standard to reduce the amount of costs sought by the Gilbert Firm from $1,812,149.20 to $720,621.67. Specifically, the Fourth Circuit determined that Outsidewall I "assumed, after correctly determining that the contingency fee provision was unenforceable ..., that the entire [Engagement [L]etter," including the costs provision, "was unenforceable," when in fact the costs provision is enforceable, and as a result, Outsidewall I erroneously "employed a `reasonableness' inquiry to award costs" instead of looking to the Engagement Letter to determine the costs to which the Gilbert Firm is contractually entitled. In re Outsidewall Tire Litigation, 636 Fed.Appx. at 171-72, 2016 WL 106276, at *4. Accordingly, the Fourth Circuit vacated the award of costs and remanded "with instructions to recalculate the cost award after considering the `costs and expenses' and `termination' provisions of the [Engagement Letter]." Id. at 172, 2016 WL 106276 at *5.
The Engagement Letter provides that "[i]n the event that Alpha elects to terminate our representation, ... Alpha will reimburse the Firm for all out-of-pocket expenses and disbursements incurred by the Firm...." Engagement Letter. Specifically, "[s]uch costs and expenses may include photocopying charges, courier and overnight delivery charges, travel expenses (including mileage, parking, airfare, lodging, meals, translation services, security, and ground transportation), costs incurred in computerized research, litigation support services, filing fees, witness fees,
As reflected in Outsidewall I, the costs the Gilbert Firm seeks here generally fall into three categories: (i) "overhead expenses, such as internal copying, printing, and scanning of documents, telephone charges, online legal research charges, overtime meals, and HVAC"; (ii) expert fees and costs relating to technical expert Raymond Evans"; and (iii) "expert fees and costs relating to damages expert Phil Nelson." Outsidewall I, 52 F.Supp.3d at 793. Although plaintiffs do not contest the fees and costs relating to technical expert Raymond Evans, plaintiffs do contest the costs reflected in categories (i) and (iii) above.
In particular, plaintiffs contend that the reasonableness analysis employed in Outsidewall I is consistent with the costs provision of the Engagement Letter, and therefore the Gilbert Firm should be awarded only $720,621.67 in costs. In this regard, plaintiffs contend that despite the costs provision, a district court has inherent authority to ensure that lawyers do not take advantage of their clients. In other words, the costs provision is not an unfettered license for the Gilbert Firm to charge plaintiffs for anything and everything without providing support, documentation, and justification for such charges. Rather, plaintiffs contend that despite the Engagement Letter, the Gilbert Firm owes plaintiffs a fiduciary duty to justify its costs and not to charge plaintiffs for excessive and arbitrary expenses and disbursements.
In this respect, the Supreme Court of Virginia has made clear that "[c]ontracts for legal services are not the same as other contracts" because "[s]uch an agreement is permeated with the paramount relationship of attorney client which necessarily affects the rights and duties of each." Heinzman, 234 S.E.2d at 282, 285 (Va. 1977). Indeed, "[a]n attorney occupies toward his client a high position of trust and confidence, and in his relations with his client it is his duty to exercise and maintain the utmost good faith, integrity, fairness and fidelity." J.C. Byars v. C.J. Stone & ST. Gilmer Adm'rs., 186 Va. 518, 42 S.E.2d 847, 852 (1947). On this basis, plaintiffs contend that the reduction in costs reflected in Outsidewall I was justified because it was premised not simply on finding that the excluded expenses were unreasonable, but also on a finding that the Gilbert Firm's "kitchen sink" approach led to charges that were "egregious," "inexplicable," "excessive," "inadequately supported," "non-compensable," "unjustifiably high," and "excessively high." Outsidewall I, 52 F.Supp.3d at 793-95.
With respect to the first category of costs — overhead expenses — plaintiffs are correct that the reduction reflected in Outsidewall I is consistent with Engagement Letter's costs provision. Specifically, Outsidewall I reduced the $372,138.20 claimed in overhead expenses by $79,580.53 because the Gilbert Firm (i) provided no basis for charges such as "overtime meals, telephone charges, or online legal research ... where, as here, the Gilbert law firm pays a flat rate for all online legal research charges," and (ii) sought to recover costs beyond the scope of those covered by the Engagement Letter's costs provision, namely an "inexplicable claim to recoup $82 for a gift the firm sent to Fishman while Fishman was in the hospital recovering from surgery[,] ... an $845 bill for a dinner to which Fishman was invited by the firm chair," and "alcohol purchased for a [Gilbert] firm party." Outsidewall I, 52 F.Supp.3d at 793, 794. Although the costs provision in the Engagement Letter contemplates certain actual
With respect to the third category of costs sought by the Gilbert Firm — expert fees and costs relating to damages expert Phil Nelson — Outsidewall I reduced the Gilbert Firm's claim of $1,394,351 in expert fees to $382,404 because the Gilbert Firm failed "to demonstrate the reasonableness of its proffered expert rate and fee." Id. at 794. As the Fourth Circuit made clear, however, reasonableness analysis is inappropriate to determine whether the Gilbert Firm is entitled to the costs relating to damages expert Phil Nelson because the costs provision of the Engagement Letter expressly provides that plaintiffs must reimburse the Gilbert Firm for all costs relating to expert and witness fees. Accordingly, the Gilbert Firm is entitled to the full $1,394,351 in costs associated with damages expert Phil Nelson, even though Nelson's rates "are higher by a factor of two than the [reasonable] rates charged by comparable damages experts and support staff." Id. Had the Engagement Letter limited costs for expert services to reasonable costs, a reduction would be appropriate here.
Thus, based on the foregoing analysis, the Gilbert Firm is entitled to the following expenses: (i) $292,557.67 for reimbursable costs other than experts, (ii) $45,660 in expert fees for the services of technical expert Raymond Evans, and (iii) $1,394,351 in expert fees for the services of damages expert Phil Nelson. Thus, the Gilbert Firm is entitled to a total costs award of $1,732,568.67.
Based on careful consideration of the Gilbert Finn's fee claim and supporting materials, the parties' briefs, oral argument, the Fourth Circuit's Memorandum Opinion, the parties' supplemental briefs on remand, and the court's years of experience with these types of cases, a fee award measured by quantum meruit of $1,237,720 is appropriate, and costs in the amount of $1,732,568.67 is appropriate, for a total of $2,970,288.67 as the value of the Gilbert Finn's lien.
An appropriate Order will issue.