I could not resist writing about a new case that mentions electronic discovery (yes, I have a standing Lexis search), not because it creates any kind of great precedent or anything, but because it involves one of my all-time favorite comedians, Jerry Seinfeld. Charles v. Seinfeld, 2022 U.S. Dist. LEXIS 54387, Case No. 18-cv-1196 (AJN), (SDNY, April 29, 2022). The opinion is by Judge Alison Julie Nathan, who was sitting by designation after her elevation on March 30, 2022, to the Second Circuit Court of Appeals. The opinion itself, is, with all due respect, kind of like the Seinfeld’s series. It is not about anything terribly important. It’s not about much really. But still, I found it very funny in a cynical, jealous lawyer sort of way and it does have an important, between the lines, message. Read on if you are into that sort of thing.
Rules of the Game
To lay the proper groundwork for this blog about Seinfeld (personal opinions only), I have to start by sharing, for fair use educational purposes only, one of my favorite Jerry Seinfeld quotes. You’ve all heard it, the one about lawyers and judges. It explains my photo.
“What are lawyers, really? To me a lawyer is basically the person that knows the rules of the country. We’re all throwing the dice, playing the game, moving our pieces around the board, but if there’s a problem, the lawyer is the only person that has read the inside of the top of the box. I think one of the fun things for them is to say, ‘objection.’ ‘Objection! Objection, Your Honor.’ Objection, of course, is the adult version of, ‘’fraid not.’ To which the judge can say two things, he can say, ‘overruled’ which is the adult version of ‘’fraid so,’ or he could say, ‘sustained,’ which is the adult version of ‘Duh.’”Jerry Seinfeld, Seinfeld, Season 4: The Visa
Who Wouldn’t Love A Pony ?
I have seen every episode of Seinfeld many times. The famous Pony scene in Season 2, Episode 2, immediately came to mind when I read Charles v. Seinfeld. As you read on, see if you can figure out why that popped into my head. In case you don’t have instant recall of this great, family dinner table scene, check out this excerpt on YouTube. Better yet, treat yourself and watch the whole episode. It’s one of the best.
Before I do a fair use educational quote of the Pony script, let me share another Seinfeld quote, one that is supposedly serious. Being the naive idealist that I am, I believe it. Anyway, Jerry is credited with saying: “I like money, but it’s never been about the money.” I get that, as I truly feel the same way. Still, I do like money as much as the next person, maybe even the next lawyer (nah, probably not), and money is what Charles v. Seinfeld is all about. It considers a request for an award of fees and costs in favor of the prevailing party, Jerry Seinfeld, which includes costs of $32,692.21 for electronic discovery database hosting fees. Charles v. Seinfeld at *18 (by the way, check out Fn 5 on that page for a great Seinfeld-like note by the obviously very sharp, Judge Nathan: “There is a $0.30 discrepancy in the costs requested ($100,918.71) and the sum of the component costs.”)
Here are the lines and scene that came to mind when I read Charles v. Seinfeld. First, to set the stage, Manya is an elderly Jewish immigrant relative who is hosting a family dinner that Jerry and Elaine were roped into attending. Jerry and Elaine were bored and wanted to leave. At Elaine’s prodding, Jerry started to rant about children who had ponies.
Elaine: What about Ponies huh? What kind of abnormal animal is that? And those kids who had their own ponies.
Jerry: I know. I hated those kids. In fact, I hate anyone that ever had a pony when they were growing up.
Manya: I had a pony!
Jerry: Well, I didn’t mean a pony per se
Manya: When I was a little girl in Poland, we all had ponies. My sister had pony, my cousin had pony. So, what’s wrong with that?
Jerry: Nothing. Nothing at all. I was just expressing
Helen: Should we have coffee? Who’s having coffee?
Manya: He was a beautiful pony. And I loved him!
Jerry: Well, I’m sure you did. Who wouldn’t love a pony? Who wouldn’t love a person who had a pony?
Manya: You! You said so!Jerry Seinfeld, Seinfeld, Season 2, Episode 2.
At the end of this scene, Manya storms out, very upset at Jerry, saying “That’s it! I had enough!” Unfortunately, Jerry learns the next day that Manya died later that night.
Charles v. Seinfeld: A Run of the Mill Frivolous Copyright Case
If you are really interested (I’m not) in the dubious merits of the case, see the 2019 order granting the defendants’ motion to dismiss (Fraid-so!) by then District Court Judge Nathan. Charles v. Seinfeld, 410 F. Supp. 3d 656, 2019 U.S. Dist. LEXIS 169543, 2019 WL 4805684 (S.D.N.Y., Sept. 30, 2019). It is enough for my purposes to hear Judge Nathan’s later summary of the case in her April 29, 2022 order ruling on defendants’ motion for attorneys’ fees and costs under 17 U.S.C. § 505.
Plaintiff Christian Charles, an award-winning writer, director, and producer, alleged copyright claims against Jerry Seinfeld and several related Defendants related to the show Comedians in Cars Getting Coffee. The Court ultimately dismissed the second amended complaint on statute-of-limitations grounds, explaining [*2] that Charles was on notice of his claims since at least 2012 but did not file suit until 2018, far outside the three-year statute of limitations for such claims. Id. at 8.Charles v. Seinfeld, 2022 U.S. Dist. LEXIS 54387, Case No. 18-cv-1196, *1-2, at pg. 5 of 13, (SDNY, April 29, 2022),
The Second Circuit affirmed (Fraid not. Duh!) the Sept. 30, 2019 dismissal on June 18, 2020. The obvious Statute of Limitations winner, Jerry Seinfeld, et al, then moved for fees. That’s when the real fun began. To get an award of fees under the copyright statute Seinfeld’s attorneys had to show that Charles’s claims were objectively unreasonable. They failed to convince the Magistrate (Fraid not!) who was assigned to hear their motion for fees and costs, Judge Katharine H. Parker.
Seinfeld then objected to Judge Parker’s Report and Recommendation and Judge Nathan agreed (Fraid so. Duh!) with Seinfeld. Judge Nathan concluded that Charles’s claims were objectively unreasonable and that other relevant factors favored awarding Defendants’ attorneys’ fees. Id. She ordered Charles to file a brief on “the amount of the fee award,” with particular attention to the relative financial strength of the parties. Id.
Charles didn’t do that, instead he re-argued the merits of the Magistrate Judge’s report and recommendation denying any award at all. That usually upsets a judge, but here, Judge Nathan, now an appellate judge sitting by designation to wrap up old business, showed great restraint. She heard the procedurally improper, caveman lawyer type motion for rehearing and ruled on it here. She denied the rehearing argument (Duh!) and went on to address the issue of the amount of the award with no help from Charles. Id. at *3-5 at pgs. 5-6 of 13. Who knows, that might have been a smart move on his part.
Seinfeld Attorney’s Fee and Costs Motion – Those Are Some Expensive Ponies!
Before we get to the ponies, remember that this case was decided on a motion to dismiss. There was no discovery. None. Yet, somehow Seinfeld’s attorneys incurred costs of $32,692.21 for electronic discovery database hosting. Hmm. They moved for an award of these costs and, of course, the motion was denied. They got nada, because, as all ediscovery lawyers know, the ancient federal costs award statute does not allow for ediscovery costs. Moreover, as Judge Nathan patiently explained, instead of just saying duh:
Similarly, the electronic database hosting fees are [*19] very high and not properly imposed on Charles in a case that did not proceed to discovery. Defendants of course had an obligation to preserve relevant documents for discovery, as did Charles, but both sides bear and typically retain that cost.Id. at *17 at pg. 11 of 13.
Seinfeld’s attorneys were, however, awarded costs of $92 for paper copies. I personally find that funny.
In another Fraid Not! type eliciting move, Seinfeld’s attorneys also asked for an award of costs of $66,386.26 for electronic research fees. Again, same result, zero award for that. (Duh!) As Judge Nathan ruled, it is well settled such charges are already accounted in the attorneys’ hourly rates and research time. Id. at *16 at pg. 10 of 13. Wish it were not so, but it is; besides, $66,386.26 is one large Westlaw or Lexis fee for a simple Statute of Limitations case. Plus, as everyone knows, including the judge I presume, law firms are not charged by the project.
Still, Seinfeld’s attorneys justified the reasonableness of the fees and costs award requested on the representation that these were the fees and costs at rates actually billed to and paid by their clients. Here again is Judge Nathan explaining that argument, one which I have carefully used myself, and I emphasize carefully, because the representations better be true. Note I have omitted the lawyers names here as I have no intent to offend and I understand their frustration perfectly well with the obviously very annoying opposing counsel.
Generally, an “attorney’s customary billing rate for fee-paying clients is ordinarily the best evidence of” a reasonable hourly rate.
According to the ______’s declaration, the rates listed above are those actually charged and paid by ___________ clients for comparable work. That weighs in favor of finding the rates reasonable, but is not dispositive.Id. at *6, *9 at pgs 6, 7 of 13.
Now we finally get to the unusually large ponies, the facts that took my breath away, namely the hourly rates of the attorneys, the fees requested, and the things they billed their client for. They also seemed to shock Judge Nathan, a very experienced judge in New York City, where all of the judges have pretty much seen it all, and so that’s really saying something.
Defendants request a staggering $872,939.66 in attorneys’ fees and $100,918.71 in costs. … That fee amount is constituted by 1,465.9 hours of work completed by eight attorneys as well as paralegals and support staff…Id. at *8 at pg. 7 of 13.
Wow. I’m staggered. All for a simple copyright case that the defense argued was frivolous and they won on a motion to dismiss based on an obvious statute of limitation defense. But wait, there are still more ponies. The senior partner in charge of the case represented that his hourly rate in 2020 was $1,550.00. Yup, that’s One Thousand, Five Hundred and Fifty Dollars per hour. Ok. I’m really impressed, maybe just a wee bit jealous. <Secret thought: I really need to raise my rates. I’ve read the rules on the back of many game boxes.> And that was two years ago. I bet his rate is even higher now.
But wait, my sisters and cousins have ponies too. The sixth year associate working on the case had a standard rate of $965 per hour. Gees! But wait, there’s more. Five first-year associates, yup, kids barely out of law school, had their own ponies. Their hourly rates ranged from $545 in 2018 to $650 in 2020. <Secret thought: All right, that does it! I’m raising my rates.> There’s still more. Everyone had ponies. Three paralegals working on the case had standard rates of $431.25 per hour. If you are not astonished yet, consider this additional detail by Judge Nathan, who, along with her clerks, obviously put a lot of work into this. But I guess “a lot of work” is relative as these comments show.
A few examples demonstrate the excessive nature of the hours billed. First, take the series of motions to dismiss that Defendants filed. The lead associate, _______, alone billed 120 hours to research and draft the initial motion to dismiss; an additional [*14] 130 hours to update the motion following the first amended complaint; and a further 37 hours to update it following the second amended complaint. And partners and junior associates also billed hours to contribute to and review this work. The Court finds substantial overlap in the authorities across the three briefs filed in support of the motions to dismiss, suggesting that the hours billed to modify later briefs were in large part unnecessary. And the approximately 180 hours spent by associates to analyze Charles’s response and to draft a reply exacerbates the issue. At bottom, given the straightforward statute-of-limitations defense at the center of this case, Defendants’ request of $300,000 for drafting just the moving briefs alone is plainly unreasonable.4
FN 4- As Defense counsel observed at the oral argument before Judge Parker: “There was no novelty here. There was no mystery here. This case was as dead on arrival as a copyright case can be. I’ve been practicing copyright for a lot of years, 30 years.” Tr. at 13, Dkt. No. 135.Id. at *13-14 at pg. 9 of 13.
I could go on, but the icing on the pony cake for me was that the defense attorneys put on and billed for a mock argument. Not only that, they even billed for first years to watch it. I kid you not. Here is Judge Nathan again and her dry wit. I’m pretty sure she is a Seinfeld fan too.
Third, the records reflect hours billed for multiple attorneys, including junior associates, to attend a mock argument and oral argument. Typically, courts do not pass the cost of associates observing mock arguments or oral arguments on to the opposing party in a fee award.Id. *15 at pg. 9 of 13.
Conclusion – DUH!
Second Circuit Court of Appeals Judge Alison Julie Nathan, sitting by designation as the former trial judge of Charles v. Seinfeld, considered Seinfeld’s motion for award of fees of $872,939.66 and costs of $100,918.71. She also considered the objections of the plaintiff, Charles. She ruled and awarded only $28,750 in attorneys’ fees and $92 in costs for a total of $28,842. Judge Nathan did make the award joint and several against the plaintiff and plaintiff’s counsel. Some small solace to Seinfeld’s attorneys. They were pushing hard for personal sanctions against opposing counsel. On the other hand, as a final gesture, that seems funny to me at least, Judge Nathan said Charles and his attorney could make these payments in equal monthly installments over a ten-year period.
Dear fellow lawyers, even if opposing counsel is beyond annoying, a real caveman, don’t kid around with a judge in seeking sanctions. This is, in effect, what was going on here, seeking sanctions in the form of fees against opposing counsel. The judges have not only read the rules of the game, but they know them well and know how to apply them fairly. Do not try to game the system with inflated demands.
The court-authorized payback schedule comes to about $120/month each (lawyer and client) for ten years plus statutory interest –currently less than one percent. Making them wait ten years may be the strongest evidence of the court’s contempt for all concerned.
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