          In the United States Court of Federal Claims
                                           No. 08-610C
                                      (Filed: April 25, 2017)

                                           )
 TEXTAINER EQUIPMENT                       )
 MANAGEMENT LIMITED, et al.,               )
                                           )
                      Plaintiffs,          )      Attorneys’ Fees and Costs; Uniform
                                           )      Relocation Assistance and Real
 v.                                        )      Property Acquisition Policies Act of
                                           )      1970 (“URA”), 42 U.S.C. § 4654(c);
 THE UNITED STATES,                        )      RCFC 54(d)
                                           )
                      Defendant.           )
                                           )

       Lars H. Liebeler, Washington, DC, for plaintiffs.

       Robert C. Bigler, Commercial Litigation Branch, Civil Division, United States
Department of Justice, Washington, DC, with whom were Franklin E. White, Jr.,
Assistant Director, Robert E. Kirschman, Jr., Director, and Chad A. Readler, Acting
Assistant Attorney General, for defendant.

 MEMORANDUM OPINION GRANTING-IN-PART AND DENYING-IN-PART
     PLAINTIFF’S MOTION FOR ATTORNEYS’ FEES AND COSTS

        Pending before the court is plaintiff Capital Lease Limited’s (“Capital”) motion
for attorneys’ fees and costs pursuant to Rule 54(d) of the Rules of the United States
Court of Federal Claims (“RCFC”) and the Uniform Relocation Assistance and Real
Property Acquisition Policies Act of 1970 (“URA”), 42 U.S.C. § 4654(c). ECF No. 188
(filed Nov. 30, 2016); ECF No. 189 (filed Dec. 9, 2016). In total, Capital argues that it is
entitled to an award of approximately $1.25 million in fees and costs for around 2,000
hours of work on this case.

        Defendant the United States (“the government”) acknowledges that Capital is
entitled to reimbursement of reasonable attorneys’ fees and costs that it actually incurred
in successfully advancing its takings claims against the United States. However, the
government argues that Capital’s proposed fee award should be reduced on the grounds
that Capital has not shown that its proposed hourly rate is reasonable. In addition, the
government asserts that Capital has claimed attorneys’ fees for hours that Capital’s
counsel spent on work for other, unsuccessful plaintiffs in this litigation and on legal
work that was unnecessary or did not result in Capital receiving any relief. Finally, the
government objects to legal research costs that the government asserts are not sufficiently
documented.

        This litigation began in 2008 when plaintiffs CAI International, Inc. (“CAI”),
Cronos Containers Limited (“Cronos”), and Textainer Equipment Management (U.S.)
Limited (“Textainer”) (a company that managed shipping containers owned by Capital at
the time of the taking) filed suit against the United States claiming that the government
had taken title to their shipping containers without paying just compensation. The
plaintiffs alleged that they each leased containers to a third party, TOPtainer Inc.
(“TOPtainer”), which in turn leased the containers to the United States Army (“the
Army”). Under the terms of the lease between the United States and TOPtainer, the
government would take title to containers that were “lost” or “deemed lost” at the end of
the lease. At the end of the lease, the government paid TOPtainer for approximately
1,000 containers that were either lost or deemed lost. TOPtainer did not, however, pass
on those payments to the plaintiffs. After TOPtainer went out of business the plaintiffs
sued the United States for just compensation.

        In November 2012, after several rounds of briefing and rulings on motions for
partial summary judgment, the court determined that CAI and Cronos had failed to
establish takings claims but that Capital had a potential takings claim. Textainer Equip.
Mgmt. Ltd. v. United States, No. 08-610C, 2012 WL 5465983 (Fed. Cl. Nov. 6, 2012);
see also Textainer Equip. Mgmt. Ltd. v. United States, No. 08-610C, 2013 WL 1984382
(Fed. Cl. May 15, 2013) (granting plaintiffs’ motion to join Capital as the real party in
interest). The court found that the Army’s decision to take title and possession of
Capital’s containers after the Army had been told that TOPtainer was in default of its
contract and that TOPtainer did not have the authority to transfer title to the United States
could give rise to a takings claim under the Fifth Amendment. 1 The court denied CAI’s
and Cronos’s takings claims on the ground that CAI and Cronos had not notified the
Army that TOPtainer was in default of their contracts and thus when the government
exercised its contractual rights at the end of the lease with TOPtainer to take possession
of their containers, the government obtained good title to their containers as a bona fide
purchaser for value.

       In order to resolve Capital’s takings claim the court ordered additional discovery
regarding the ownership and number of Capital containers. At the conclusion of
discovery, there was another round of briefing and eventually the court concluded that the
government was liable for taking 258 containers owned by Capital. Textainer Equip.

1
 During discovery the parties learned that 122 of Capital’s containers were being used by the
United States Marine Corps in Okinawa, Japan. Textainer Equip. Mgmt. Ltd. v. United States, 99
Fed. Cl. 211, 216 (2011).


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Mgmt. Ltd. v. United States, 115 Fed. Cl. 708, 717-18 (2014). The court held that Capital
lacked standing to pursue a takings claim with respect to containers it did not own and
rejected plaintiffs’ request to allow another company, Capital Lease GmbH, the alleged
owner of the additional containers, to join the action as a plaintiff. Id. at 712-17.

       The plaintiffs filed a motion for reconsideration regarding the court’s decision not
to allow Capital Lease GmbH to join the litigation. The plaintiffs also filed a motion for
reconsideration with respect to CAI’s takings claim, arguing that the containers were not
lost and, as a result, the Army could not legally purchase the containers from TOPtainer.
Following briefing, the court denied both of the motions for reconsideration. Textainer
Equip. Mgmt. Ltd. v. United States, No. 08-610C, 2014 WL 2938452 (Fed. Cl. June 30,
2014).

       On June 30, 2014, the court entered judgment for Capital on its takings claim in
the amount of $485,899.64, which was approximately half of its original claim of
$893,955.90. ECF No. 177. 2 The court entered judgment for the government with
respect to the claims brought by CAI and Cronos. Id.

        On November 30, 2016, Capital filed its application for attorneys’ fees and costs
under the URA. ECF No. 188. The URA provides that a plaintiff that is awarded
compensation for a taking of property by the federal government may be awarded “such
sum as will in the opinion of the court . . . reimburse such plaintiff for his reasonable
costs, disbursements, and expenses, including reasonable attorney, appraisal, and
engineering fees, actually incurred because of such proceeding.” 42 U.S.C. § 4654(c).
Capital filed its application with this court’s permission after all appeals were resolved in
Biery v. United States, 818 F.3d 704 (Fed. Cir. 2016), a case also involving URA fees and
costs.

       In its initial application for attorneys’ fees and costs, Capital sought attorneys’ fees
of $1,247,373.38 for 1,995.00 hours of attorney and paralegal work. Capital arrived at
this amount using the lodestar method and applying the fees listed in the LSI Laffey
Matrix or Kavanaugh Matrix for the 9 attorneys who worked on the case. In its initial
application, Capital also sought expenses of $18,884.89. On December 9, 2016, Capital
filed an amended application reducing the expenses claimed to $11,930.93 on the
grounds that under the cost sharing arrangement in plaintiffs’ “Legal Representation
Agreement,” Capital was responsible for 60% of the expenses with the remaining 40%
the responsibility of unsuccessful plaintiffs CAI and Cronos. ECF No. 189.

       The government argues that because plaintiffs’ counsel does not have a standard
hourly billing rate and because the case was not complex, the court should not apply the

2
 Capital was also awarded $238,461.62 in interest through May 15, 2014 for a total award of
$724,361.26. ECF No. 177.


                                              3
LSI Laffey Matrix but should instead apply a reduced version of the lower rates set forth
in the adjusted Laffey Matrix. The government argues that 75% of the adjusted Laffey
Matrix is appropriate based on the fee rates of plaintiffs’ lead counsel in other cases. The
government further argues that the court must reduce Capital’s claimed hours to account
for plaintiffs’ counsel’s work for non-successful plaintiffs and work on unsuccessful
motions. In particular, the government urges the court to reduce Capital’s claimed hours
before November 2012 by 40%, or 468 hours, to match the allocation used to account for
litigation expenses among the three parties in the case. Finally, the government argues
for a reduction of $3,000 in on-line research expenses on the grounds that the cost is not
adequately documented. In total, the government would reduce Capital’s award to
$370,420.25 in fees and $9,051.66 in costs. Def.’s Sur-Reply 10 (ECF No. 194-1).

        In response to the government’s arguments, Capital asserts with regard to rates
that the government cannot justify a rejection of the LSI Laffey matrix rates because use
of that matrix was approved by the Federal Circuit in Biery, 818 F.3d at 713-14, as an
appropriate “starting point” in URA cases. Capital also argues that all of the hours
expended, but for 13.55 hours which are attributable solely to CAI and did not contribute
to Capital’s award, should be accepted. Capital further argues that a 40% reduction in
hours based on the cost-sharing provisions of counsel’s retainer agreement is unsupported
on the grounds that the cost-sharing agreement did not address attorneys’ fees and a 40%
reduction is not supported. Capital contends that the court cannot simply reduce fees
based on a ratio without a rational basis. Capital contends that except for the hours
identified above, all of the time claimed was for time spent on litigating issues applicable
to Capital. Capital notes that the government logged significantly more hours than the
hours logged by plaintiffs’ attorneys (3,000 hours versus 2,000 hours) to show that the
hours spent by plaintiffs’ counsel were reasonable. Pls.’ Sur-Reply 11. In addition,
Capital argues that amount of claimed costs for research time has been justified in the
sworn affidavit filed in support of costs. Capital also argues that it is entitled to an
additional $16,890.00 incurred for 26.25 hours spent preparing the reply brief.

        For the reasons set forth below, the court finds that Capital is eligible to recover
attorneys’ fees and costs under the URA using the lodestar approach. The court believes
that the case was sufficiently complex to warrant application of the LSI Laffey matrix as
a starting point but not without reductions. The court finds that a 15% reduction in the
LSI Laffey rate, to reflect rates that Capital’s lead counsel has received for work on other
cases, is proper. The court has considered the $510 per hour counsel charged to a
nonprofit client and $700 per hour counsel received for other recent work. Aff. of Lars
H. Liebeler ¶¶ 38, 43. Based on the variability in the amounts charged by lead counsel in
comparably complex cases, the court finds that a 15% reduction is appropriate for lead
counsel for each of the years at issue.

      The court also finds that certain hours spent on work for parties that did not
succeed must eliminated. The court looks first at the hours spent on work from initiation


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of the case in 2008 until March 30, 2012. During this period, Capital’s attorneys logged
1,156.96 hours for work related primarily to briefing on the right to recover under the
Fifth Amendment. Pls.’ Sur-Reply 9. The government objects to 23 hours that the
government argues were spent in depositions defending Textainer even though Textainer
was not the correct entity. Def.’s Resp. 19. The court finds that these hours were
reasonable and need not be reduced because the arguments were not focused on
individual companies but instead were focused on whether plaintiffs could make a Fifth
Amendment takings claim with regard to any of the containers TOPtainer leased to the
Army. See Textainer Equip. Mgmt. Ltd. v. United States, 99 Fed. Cl. 211, 216 (2011);
see also Textainer Equip. Mgmt. Ltd. v. United States, 105 Fed. Cl. 69, 71 (2012) (noting
that the government’s March 30, 2012 cross-motion for summary judgment presented a
challenge to plaintiffs’ property interests in their containers). However, the court agrees
with the government that Capital’s requested hours must be reduced for time spent on
unsuccessful motions which did not contribute to Capital’s ultimate success, including
112.35 hours on the unsuccessful motion for leave to amend the complaint to add an
implied contract claim, 50.9 hours on the unsuccessful motion for sanctions, and 17.25
hours on the unsuccessful motion to strike. Def.’s Resp. 20-21.

        Next, Capital’s attorneys logged 243.05 hours from March 30, 2012 to November
6, 2012 in briefing associated with the factual issue of whether each plaintiff had given
notice to the Army in order to support its taking claim. Pls.’ Sur-Reply 10. The
government objects to the reasonableness of 126 hours that were spent joining Green
Eagle Investments N.V. (“Green Eagle”) to the litigation and proposes a 40% reduction
of the remaining requested hours during the period up to November 2012 on the grounds
that this time was spent asserting CAI’s and Cronos’s unsuccessful claims. Def.’s Resp.
19. The court agrees with the government that the time spent defending Green Eagle’s
ownership interest in Capital’s containers was not justified. It was up to plaintiffs to
solve the ownership question and not the government. Therefore, the 126 hours spent
filing briefs joining Green Eagle, which was not the owner of Capital’s containers, must
be eliminated. Similarly, the time spent asserting CAI’s and Cronos’s claims must be
eliminated. “There is no dispute that work done on behalf of the unsuccessful plaintiffs is
not recoverable.” Biery, 818 F.3d at 712. While it may be difficult to separate out hour
reductions “[w]hen multiple claims are brought in a single litigation and involve common
questions of law,” id., here the court finds it can make that adjustment. Capital suggests
in its supplemental brief that a reduction of 48.61 hours (20% of the 243.05 hours
requested) might be appropriate based on the percentage of briefing dedicated to CAI and
Cronos issues. Pls.’ Sur-Reply 10. The court finds that reduction is appropriate.

        Next, the court turns to whether there should be a reduction in hours based on the
fact that Capital received compensation for only 258 of the 477 containers it initially
claimed were taken. The court is mindful that in reducing fees the court should not
engage in a mechanical exercise and thus rejects a straight percentage reduction. See
Hensley v. Eckerhart, 461 U.S. 424, 438 (1983). However, in this case Capital seeks to


                                             5
recover fees for time spent unsuccessfully attempting to bring P & R Equipment and
Finance Corporation (“P & R”) and Capital Lease GmbH into the litigation after
plaintiffs were given more than adequate time to find the rightful owner of the containers.
The court agrees with the government that the approximately 16.45 hours spent on the
unsuccessful motion for reconsideration of the court’s decision rejecting Capital Lease
GmbH’s efforts to join the litigation; 7.5 hours spent researching how to join P & R; and
7 hours spent on other research related to Capital Lease GmbH must be eliminated.
Def.’s Resp. 20, 22. In addition, the court agrees with the government that the 40 hours
spent on the unsuccessful motion for a protective order is not recoverable. Id. at 21-22.

       Finally, the court finds that Capital is entitled to reimbursement of costs, including
research costs, consistent with its amended petition. The court finds that the research
costs were justified and thus Capital is entitled to recover $11,930.93 in costs under the
URA.

       For the reasons above, Capital’s motion for attorneys’ fees and costs under the
URA is GRANTED-IN-PART and DENIED-IN-PART. The parties shall have until
May 12, 2017 to file a proposed final judgment based upon a revised calculation of
attorneys’ fees and costs consistent with the reductions discussed above.

       IT IS SO ORDERED.


                                                           s/Nancy B. Firestone
                                                           NANCY B. FIRESTONE
                                                           Senior Judge




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