United States District Court, D. Delaware
DEBORAH DUNGEE, on behalf of herself and all others similarly situated, Plaintiff,
DAVISON DESIGN & DEVELOPMENT, INC., formerly known as DAVISON & ASSOCIATES, INC., Defendant.
Deborah Dungee ("Dungee") filed a putative class
action complaint against Defendant Davison Design &
Development, Inc. ("Davison"), claiming that: (1)
Davison breached its agreements with Dungee; (2) Davison
violated the American Inventor's Protection Act of 1999,
35 U.S.C. § 297 (the "AIPA") by making
material misrepresentations; and (3) Davison violated the
AIPA by failing to make the proper disclosures under the
statute. (D.I. 1.) After settling the "claims-made,
" the court issued an order granting $1, 118, 936.40 in
attorney's fees to Dungee's counsel ("Class
Counsel"), which was calculated using the lodestar
amount of $257, 226.76 enhanced by a multiplier of 4.35.
(D.I. 36 at 8; D.I. 51 at 4 n.2; D.I. 61 at 4.) Davison
appealed the award to the Third Circuit, and the case was
remanded for the court to specify evidence on the record that
supports the application of an enhancement multiplier.
Dungee v. Davison Design & Development Inc., 674
Fed.App'x 153 (3d Cir. 2017).
pending before the court is Dungee's Motion on Remand for
Attorneys' Fees and Expenses. (D.I. 61.) Dungee requests
that the court award Class Counsel $525, 125.89 in fees,
which would be calculated by using an increased lodestar
amount that encompasses fees for the time spent on appeal and
an enhancement multiplier of 1.73. (D.I. 61; D.I. 63.)
suggests that the court award Class Counsel the lodestar
amount of $257, 226.76, which does not include fees for time
spent on appeal or an enhancement multiplier. (D.I. 62.) For
the following reasons, the court will grant Class Counsel an
award of $325, 878.44 in attorney's fees and costs.
April 21, 2010, Dungee filed suit on behalf of Davison's
customers who entered into agreements with Davison for
invention related services between January 28, 2000 and March
19, 2006. (D.I. 1.) Dungee alleged that Davison breached its
agreements with her, thereby violating the AIPA, by making
material misrepresentations and by failing to make
disclosures of how successful Davison was in promoting the
inventions of their clients, as required by the statute.
(D.I. 1.) Davison filed a motion to dismiss on June 3, 2010,
which was denied by the court on March 29, 2011. (D.I. 6;
D.I. 15.) After Davison's motion to dismiss was denied,
there were no depositions, no discovery motions, no summary
judgment proceedings, no pre-settlement class-certification
proceedings, and no pre-settlement class-certification court
appearances. Instead, Class Counsel spent time exchanging and
reviewing documents in preparation for the settlement
negotiations with JAMS mediators, engaging in those
settlement negotiations, and communicating with class
members. (D.I. 61 at 1; D.I. 61 at Ex. B.) After three years
of settlement negotiations, the parties agreed to a
"claims-made" settlement on December 8, 2014. (D.I.
34-1.) Additionally, the parties agreed that Davison would
pay Class Counsel's fees, but did not agree on an amount
at that time. (D.I. 36 at 3.)
April 10, 2015, Dungee sought $2 million in fees in her
Motion for Award of Attorney's Fees and Expenses and
Class Representative Incentive Award. (D.I. 36.) In her
motion, Dungee claimed that the common fund doctrine of the
percent-of-recovery method should apply. (D.I. 36 at 5-7.)
Dungee argued that the common fund should be valued at the
total amount made available to the class, which was $25, 492,
157.50. (D.I. 36 at 7.) At the time of the filing of the
initial fee request, the parties had not yet determined the
value of the timely submitted claims. (D.I. 49.) According to
Dungee, her $2 million request, thus, represented 7.8% of the
value of the entire settlement available to class members.
(D.I. 36 at 7.) Thus, Dungee concluded that Class
Counsel's fee request was fair and reasonable because it
was below the Third Circuit's precedent that a reasonable
award of attorney's fees should be within the range of
19% to 45% of the common fund. (D.I. 36 at 7.)
contrast, Davison argued that the lodestar calculation method
was more appropriate under the circumstances because the
total value of the fund made available to the class was not
representative of the value the class would receive. (D.I.
41.) Davison developed the $257, 226.76 lodestar value using
Class Counsel's hourly billing rates from 2010 multiplied
by 611-the hours Class Counsel spent on the case until Dungee
filed her initial motion for attorney's fees on April 10,
2015. (D.I. 36 at 8; D.I. 36 at 8; D.I. 61 at 4.) Davison
concluded that Class Counsel's lodestar amount was a fair
and reasonable award of attorney's fees. (D.I. 41.)
30, 2015, the court held a class action settlement fairness
hearing at which the parties presented their attorney's
fees arguments. (D.I. 47-1). After the hearing, the parties
jointly stipulated that the total value of the timely
submitted class claims was $564, 735.50. (D.I. 49.) On
February 16, 2016, the court issued an order granting Class
Counsel a fee award. (D.I. 51.) To determine the amount of
the award, the court used the lodestar method starting with
the parties' agreed upon lodestar amount of $257, 226.76,
and applied a 4.35 enhancement multiplier, which resulted in
an award of $1, 118, 936.40. (D.I. 51 at n.2.)
timely appealed the court's fee award on March 11, 2016.
(D.I. 55.) The Third Circuit vacated the award and remanded
the case on January 6, 2017 for the court to "reassess
whether an enhancement to the lodestar calculation is
appropriate in this case and, if so, . . . [to] provide
factual findings supporting any multiplier used."
Dungee, 674 Fed.Appx. at 155.
STANDARD OF REVIEW
general rule in the United States is that each party must pay
its own attorney's fees and expenses except where a
federal statute explicitly authorizes otherwise.
Pennsylvania v. Delaware Valley Citizens' Council for
Clean Air, 478 U.S. 546, 561 (1987); see also
Alyeska Pipeline Service Co. v. Wilderness Society, 421
U.S. 240 (1975). Under the ATP A, district courts
are authorized to award the prevailing party reasonable costs
and attorney's fees. 35 U.S.C. § 297(b)(1). The
grant of attorney's fees is not automatic, rather the
party seeking such fees bears the burden of proving the
reasonableness of its request. Del. Valley Citizens'
Council for Clean Air, 478 U.S. at 564 (citing Blum
v. Stenson, 465 U.S. 886, 897 (1984)). Therefore, the
grant of attorney's fees turns on the facts of each case,
and the district court must use its discretion to determine
how to calculate the fees and what fees are reasonable.
In re Gen. Motors Corp. Pick-Up Truck Fuel Tank Prod.
Liab. Litig., 55 F.3d 768, 821 (3d Cir. 1995).
are two primary methods for calculating attorney's fees
awards in the class action context: (1) the
percentage-of-recovery method; and (2) the lodestar
method." In re Cendant Corp. PRIDES Litig., 243
F.3d 722, 732 (3d Cir. 2001) (footnote omitted). The lodestar
method is appropriate in cases involving a fee-shifting
statute and carries with it a strong presumption of
reasonableness. Del. Valley Citizens' Council for
Clean Air, 478 U.S. at 565. The lodestar analysis starts
with an assessment of reasonable fees using "the number
of hours reasonably expended on the litigation multiplied by
a reasonable hourly rate." Id. at 564. Where
the lodestar method is implemented, enhancement multipliers
may be added if "rare" or "exceptional"
circumstances of the case suggests "superior attorney
performance." Perdue v. Kenny A. ex rel. Winn,
559 U.S. 542, 554 (2010). The party requesting an enhancement
to the lodestar carries the burden of showing that a
multiplier is necessary to reach a fair and reasonable fee
award using "specific evidence on the record."
Dungee, 674 Fed.Appx. at 157.