City of Detroit Says $2M Fee Request is Unreasonable
April 13, 2023
A recent Law 360 story by Danielle Ferguson, “Detroit Says $2M Atty Fee is Unreasonable in Property Case,” reports that the city of Detroit asked a federal judge to deny a $2 million attorney fee request from a commercial property owner that won an inverse condemnation case against the city, saying some requests are "outrageous" and so vague that it would be a "Herculean" task to calculate individual fees. HRT Enterprise's requests are unreasonable because the fees include time spent on issues not directly related to the case and because HRT didn't provide documentation detailing why the hourly rates they proposed would be appropriate, the city said in its response to the fee request.
"The Court should either require HRT to purge its billing records of all entries unrelated to this case and explain the ambiguous entries so that the Court and the City can properly review the entries, or the Court should award a fee of not more than $300,000," the city wrote. Mark Demorest of the Demorest Law Firm, representing HRT, said the plaintiffs filed almost 300 pages alongside the motion that properly detail the hours spent working on the case, and that the hourly rates requested for lead attorneys are appropriate, given their more than 40 years of experience.
In its motion for fees, HRT said it understands the fees in the case are "substantial," but that they are reasonable because of how long the case has been active. "We had to fight for 11 years to get the city to pay for our client's property that they took through their actions. The City has still not paid, and we're entitled to every bit of the attorney's fees that were incurred to protect our client's constitutional rights," Demorest told Law360.
The attorneys spent thousands of hours on the case, responsibly managed the litigation for it and properly documented everything they did, HRT said. The city cannot protest fees for a case it rigorously defended, Demorest said. "We documented all the time we had to spend on this. It's not a situation where the city can just say, 'Well, that's too much.' It is what it is," he said.
HRT sued Detroit in federal court in 2012 for inverse condemnation, alleging the city took its property when the city was considering expanding or improving the Detroit City Airport, now known as the Coleman Young International Airport. In state court, lawsuits from HRT's tenants resulted in the city paying $6.8 million and $4 million for claims the city's activities to expand the airport interfered with the tenants' use of the property. The 2012 lawsuit – at issue here – alleges inverse condemnation based on events since those state jury verdicts. In an initial trial, the jury sided with HRT and said the city owed HRT $4.25 million for the property it took. Detroit moved for a new trial, which the federal court granted. The second jury awarded just under $2 million.
In its response to the motion for attorney fees, Detroit said HRT put hours for the state lawsuits and city's bankruptcy issues into its fees for this case. The attorneys billed for hours during the period in which this case was stayed due to the bankruptcy case, the city said, arguing the city's bankruptcy, while it does have an impact on HRT's case, is a different matter.
HRT made "no effort" to detail hours spent by the attorneys on the case, which the city said, wrongfully puts the onus on the city. The line items were vague or in block entries, according to Detroit. "Because HRT did not separate its fees, it is a Herculean task to calculate the lodestar," the city wrote. The city said the "most egregious" entry was 1.5 hours billed to drive to and from a location to pick up a check, something the city alleges isn't related to attorney's fees. "Moreover, attempting to charge the city $427.50 to pick up the $3,800 payment when a stamp costs less than $0.50, is outrageous," the city said.
The city protested HRT's request to compensate it for travel arrangements for HRT's owner because it said HRT didn't pay for the travel in the first place. The travel compensation requests are also done in blocks, "making it impossible" for the city to determine how much time was spent on a task, the city said. The city also shouldn't have to pay for time HRT attorneys spent removing privileged documents from the court's docket when HRT shouldn't have uploaded them to the docket in the first place, the city said.
"The City should not have to pay attorney's fees for time spent on motions that should have been resolved between the attorneys in under ten minutes," according to the response. HRT requested more than double the billable hours that it should have, the city said. HRT said it billed about 3,000 billable hours. The city said 1,200 hours is reasonable if the state and bankruptcy hours are removed.
Detroit also said the hourly rate for attorneys HRT is requesting isn't reasonable based on prevailing community rates. Some attorneys didn't submit affidavits for their experience and skill to support their hourly rate request, so they shouldn't be awarded fees, the city said.