LOESEL v. CITY OF FRANKENMUTH

, in denying Defendant's motion in limine, the Court explained:

At this juncture, Defendant has not provided any legal authority to support the conclusion that Plaintiffs cannot recover money damages. Indeed, it would seem that as long as Plaintiff can establish the necessary causal connection, Plaintiffs can recover money damages. See Farrar v. Hobby, 506 U.S. 103, 112 (1992) (explaining that "the basic purpose of a § 1983 damages award should be to compensate persons for injuries caused by the deprivation of constitutional rights") (internal quotations omitted).

* * *

Significantly, Mr. Ewing's testimony appears to support the necessary causal connection between Defendant's conduct and the financial harm to Plaintiffs. While Mr. Ewing's credibility can certainly be questioned, particularly based on the other conditions precedent contained in the agreement, this does not mean that the jury could not ascertain damages with a reasonable degree of certainty. Presumably, the harm could simply be determined by determining the difference between the definite price term contained in the agreement between Plaintiffs and Wal-Mart and the value of Plaintiffs' property.

See [Dkt. # 73]. At trial, Plaintiffs presented uncontradicted deposition testimony of Mr. Ewing to establish that Wal-Mart intended to exercise its option to purchase Plaintiffs' property, and that it would have paid the full purchase price upon closing but for the enactment of the ordinance. Defendant has not provided any new arguments or additional legal authority to support its position, and is not entitled to a new trial on this ground.

Tenth, Defendant argues that a new trial is warranted because the Court "erred by allowing hearsay testimony of the `in agricultural use' appraised value of the property for estate tax purposes since the evidence was never disclosed prior to trial and was irrelevant to the true fair market value of the commercially and residentially zoned property." In response, Plaintiffs acknowledge that Defendant objected to the tax appraisal, but maintain that the Court properly allowed the evidence, and instructed the jury not to consider that amount to be the opinion of another party unless that party was a witness. Defendant did not object at trial that the tax appraisal was not produced prior to trial, and Plaintiffs contend that the argument is waived. Plaintiffs further contend that the evidence was properly considered by the jury, as Plaintiffs were permitted to introduce the evidence as a public record. Finally, Plaintiffs contend that the jury did not use the tax appraisal as a basis for its damage award. Plaintiffs' argument is persuasive and Defendant is not entitled to a new trial on this ground.

Eleventh, Defendant argues that a new trial is warranted because the Court did not properly instruct the jury that the measure of Plaintiffs' damages "should be the difference between the definite price term in the option agreement between Plaintiffs and Wal-Mart and the fair market value of Plaintiffs' property." In response, Plaintiffs contend that the jury properly determined Plaintiffs' damages in this case when there is evidence that Defendant bought identical vacant farmland for its future business park, which abuts Plaintiffs' land, for approximately $10,500 per acre. The jury, in computing the damages, appears to have accepted the $10,500 per acre figure as the fair market value of Plaintiffs' property, and reduced Plaintiffs' damages from the $4 million that Wal-Mart had agreed to pay to Plaintiffs to $3.6 million. Plaintiffs' argument is persuasive and Defendant is not entitled to a new trial on this ground.

C

Finally, Defendant contends that remittitur of the jury's damage award is warranted based on the difference between the price term per acre of the option agreement for Plaintiffs' property and the fair market value of the property. In response, Plaintiffs emphasize that the Sixth Circuit Court of Appeals has explained that "a jury verdict should not be remitted by a court `unless it is beyond the maximum damages that the jury reasonably could find to be compensatory for a party's loss.'" Gregory v. Shelby County, Tenn., 220 F.3d 433, 443 (quoting Jackson v. City of Cookeville, 31 F.3d 1354, 1358 (6th Cir. 1994). While Defendant argues that Plaintiffs' vacant farmland carried a fair market value of $150,000 per acre, that argument is undermined by the evidence that Defendant itself paid only $10,500 per acre for similar land for its future business park. Plaintiffs' argument that the jury was reasonable in finding $3.6 million to be compensatory for Plaintiffs' loss is persuasive and Defendant is not entitled to remittitur.

II

Next, Plaintiffs' motion for entry of judgment and assessment of interest, attorney fees, and costs raises several issues. First, Plaintiffs' proposed judgment raises the issue of whether the Court should declare the ordinance unconstitutional. Second, Plaintiffs' request for attorney fees raises the issue of what is a reasonable fee amount. Third, Plaintiff's request for costs raise the question of whether the request is premature. Fourth, Plaintiff's request for interest raises the questions of whether prefiling interest is warranted, in addition to prejudgment interest, and what rate of interest applies. Each will be discussed in turn.

A

Plaintiffs seek a judgment that provides as follows:

This case having come before this Court upon Plaintiffs' Motion for Entry of Judgment and Assessment of Costs, Prejudgment Interest, and Attorney Fees, this case having been previously tried before a jury which on March 4, 2010 rendered its verdict in favor of Plaintiffs, Ronald Loesel, Gayle Loesel, Arthur Loesel, Elaine Loesel, Valerian Nowak, and The Valerian Nowak and Alice B. Nowak Trust, against Defendant City of Frankenmuth, the Court having reviewed its file, the Court having heard oral arguments, the Court being fully advised and for good cause shown:

NOW, THEREFORE, IT IS HEREBY ORDERED AS FOLLOWS:

1. The City of Frankenmuth Ordinance, No. 2005-10, is hereby declared unconstitutional and is invalidated in its entirety.

2. A money judgment is hereby entered in favor of Plaintiffs, Ronald Loesel, Gayle Loesel, Arthur Loesel, Elaine Loesel, Valerian Nowak, and The Valerian Nowak and Alice B. Nowak Trust, against Defendant, City of Frankenmuth, in the amount of Three Million Six Hundred Thousand Dollars ($3,600,000.00) in compensatory damages for their claim that Defendant, City of Frankenmuth, wrongfully denied Plaintiffs the equal protection of the law as provided for in the Fourteenth Amendment of the United States Constitution.

3. Pursuant to Fed.R.Civ.P. 54(d)(1), Plaintiffs, Ronald Loesel, Gayle Loesel, Arthur Loesel, Elaine Loesel, Valerian Nowak, and The Valerian Nowak and Alice B. Nowak Trust, are awarded costs in the amount of _______________________________ ($______________), against, and which shall be paid by, Defendant, City of Frankenmuth.

4. Pursuant to 42 U.S.C. § 1988 this Court awards Plaintiffs, Ronald Loesel, Gayle Loesel, Arthur Loesel, Elaine Loesel, Valerian Nowak, and The Valerian Nowak and Alice B. Nowak Trust, attorneys fees in the amount of ____________________ ($______________), against, and which shall be paid by, Defendant, City of Frankenmuth.

5. Pursuant to M.C.L. § 600.6013, Plaintiffs, Ronald Loesel, Gayle Loesel, Arthur Loesel, Elaine Loesel, Valerian Nowak, and The Valerian Nowak and Alice B. Nowak Trust, are awarded prejudgment interest in the amount of __________________ ($______________), against, and which shall be paid by, Defendant, City of Frankenmuth.

6. Pursuant to 28 U.S.C. § 1961, interest shall continue to accrue on the total judgment amount ____________________ ($_____________) through the date it is paid in full. The Court retains jurisdiction to determine this amount if necessary.

7. This Judgment is a final Order in this matter, disposing of all claims, except those concerning an assessment of post-judgment interest pursuant to 28 U.S.C. § 1961.

See [Dkt. # 96-8].

In response to Plaintiffs' motion, Defendant raised the issue of whether the judgment to be entered in this case should provide that the ordinance at issue "is hereby declared unconstitutional and is invalidated in its entirety." Defendant asserts that "[t]he jury did not invalidate the ordinance and was not asked to do so." In reply, Plaintiffs assert that the Court must invalidate the ordinance, because the jury's verdict establishes that the ordinance is unconstitutional. Indeed, Plaintiffs highlight that Defendant has previously argued that Plaintiffs' only remedy is a declaration that the ordinance is unconstitutional.

The Court directed further briefing because whether the Court should declare the ordinance unconstitutional is an important question. Whether declaratory relief should be granted is discretionary. See 28 U.S.C. § 2201(a); Adrian Energy Assocs. v. Mich. PSC, 481 F.3d 414, 421 (6th Cir. 2001) (noting that the Declaratory Judgment Act, 28 U.S.C. § 2201(a) "gives district courts statutory discretion to decide whether to entertain actions for declaratory judgments"). Here, Plaintiffs are entitled to recover $3.6 million in damages pursuant to the jury's verdict, which is arguably premised on the assumption that the ordinance continues to operate to prevent Plaintiffs from selling their property at the price for which they bargained. The Court directed the parties to further address whether it is necessary to invalidate the ordinance to make Plaintiffs whole when invalidation of the ordinance would seem to open the door for Plaintiffs to, in effect, obtain a double recovery through sale of the property. The Court also directed the parties to address what the effects of declaratory relief would be on other property owners who own property subject to the ordinance, and whether there are any other property owners that own parcels large enough to be practically affected by the ordinance.

Despite the explicit directive from the Court, in its supplemental brief [Dkt. # 133], Defendant revives the argument that money damages are not available in relation to an equal protection cause of action, citing Lingle v. Chevron USA, Inc., 544 U.S. 528, 543 (2005), and contends that the Court should vacate the jury's award of damages. In addition, Defendant contends that it is "inappropriate" to consider whether other property owners are affected by the challenged ordinance, to determine whether to grant declaratory relief, because the trial evidence did not address the issue and parcels that may be too small to accommodate a large building on their own may later be joined together.

In their supplemental brief, Plaintiffs contend that "any chance of double recovery by Plaintiffs is not supported by the record, as no other offers have been made on the property in the five years since the ordinance encumbered it, and all efforts to sell it have failed. There is no indication that another offer will ever be made to Plaintiffs. Further, there is testimony from Wal-Mart that it has abandoned Frankenmuth as a viable project." Plaintiffs insist that even in the remote event that Plaintiffs sell their property at a later date, the most it could fetch would be its fair market value of approximately $10,500 per acre. The jury deducted this amount from the $4 million contract price.

More to the point, Plaintiffs contend that "the court has not merely the power but the duty to render a decree which will so far as possible eliminate the discriminatory effects of the past as well as bar like discrimination in the future,'" quoting Johnson v. Capitol City Lodge No. 74, Fraternal Order of Police, 477 F.2d 601, 603 (4th Cir. 1973); Bell v. Hood, 327 U.S. 678, 684-85 (1946) ("And it is also well settled that where legal rights have been invaded, and a federal statute provides for a general right to sue for such invasion, federal courts may use any available remedy to make good the wrong done.").

Plaintiffs emphasize that § 1983 provides in relevant part as follows:

Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress.

"While it is clear from a reading of [Section 1983] that the only remedy it offers is phrased in terms of liability `to the party injured in an action at law, suit in equity, or other proper proceeding for redress,' it would seem that money damages and/or injunction are the available relief." Moss v. Jones, 288 F.2d 342, 344 (6th Cir. 1961).

Thus, Plaintiffs contend that a money judgment works to remedy Defendant's past discrimination, as the jury found that its discriminatory ordinance cost Plaintiffs the sale of a lifetime. See, e.g., Cmties. for Equity v. Mich. High Sch. Athletic Ass'n, 459 F.3d 676, 681 (6th Cir. 2006) ("For plaintiffs, then, § 1983 serves as a vehicle to obtain damages for violations of both the Constitution and of federal statutes."). On the other hand, the Court's invalidation of the ordinance would work to remedy Defendant's discrimination into the future. Currently, Plaintiffs' property is encumbered by an unconstitutional ordinance that is affecting its fair market value. Likewise, the constitutional rights of Plaintiffs and possibly others who own property in the CL-PUD district will remain perpetually violated if the Court declines to issue an order declaring the ordinance unconstitutional and invalid. Like Defendant, Plaintiffs highlight that, if several parcels were merged into a parcel large enough to host a structure in excess of 65,000 square feet, that property owner's constitutional rights would be violated by Defendant's discriminatory ordinance. The Court is persuaded by Plaintiffs' arguments that declaratory relief is proper under the circumstances of this case.

III

Plaintiffs seek an attorney fee award pursuant to 42 U.S.C. § 1988, in the amount of $405,672.00, with a fifty-percent enhancement that brings the total to $608,508.00. On August 17, 2010, Plaintiffs filed a supplemental brief, seeking an additional $25,400.00 for attorney fees incurred post trial, with a fifty-percent enhancement bringing the total to $38,100. See [Dkt. # 129]. Eastern District of Michigan Local Rule 54.1.2(b) requires the following:

A motion for an award of attorneys' fees shall be supported by a memorandum brief as to the authority of the court to make such an award . . . The motion shall also be supported by an affidavit of counsel setting out in detail the number of hours spent on each aspect of the case, the rate customarily charged by counsel for such work, the prevailing rate charged in the community for similar services, and any other factors which the court should consider in making the award.

E.D. Mich. LR 54.1.2(b).

The local rule enables the Court to employ the "lodestar" approach to calculate a "reasonable" attorney fee award, which is "the product of reasonable hours times a reasonable rate." City of Burlington v. Dague, 505 U.S. 557, 559-60 (1992) (quotations omitted) (noting that the lodestar figure is the "guiding light of our fee-shifting jurisprudence"). The lodestar approach has become the "dominant" approach taken by federal courts because it is "readily administrable, . . . objective, and thus cabins the discretion of trial judges, permits meaningful judicial review, and produces reasonably predictable results." Perdue v. Kenny, ___ U.S. ___, 130 S. Ct. 1662, 1672 (2010).

In fee-shifting cases in particular, the emphasis on "the prevailing rate charged in the community for similar services" is directed at "produc[ing] an award that roughly approximates the fee that the prevailing attorney would have received if he or she had been representing a paying client who was billed by the hour in a comparable case." Id. (emphasis in original). Such an award presumptively yields a result that is "sufficient to induce a capably attorney to undertake the representation of a meritorious civil rights case." Id.

While there are "rare" and "exceptional" circumstances under which an award may be "enhanced," most relevant factors are "subsumed in the lodestar calculation." Id. at 1673; see, e.g., Blum v. Stenson, 465 U.S. 886, 898-99 (1984); Dague, 505 U.S. at 563 (noting that "an enhancement for contingency would likely duplicate in substantial part factors already subsumed by the lodestar" and "would in effect pay for the attorney's time . . . in cases where his client does not prevail"). Ultimately, the party seeking the attorney fee award has the burden of producing "specific evidence" to prove "that an enhancement is necessary." Perdue, 130 S. Ct. at 1673 (citing Dague, 505 U.S. at 561, and Blum, 465 U.S. at 899, 901-02).

In Jordan v. City of Cleveland, 464 F.3d 584, 602 (6th Cir. 2006), the Sixth Circuit described Wayne v. Village of Sebring, 36 F.3d 517, 531 (6th Cir. 1994), as "exemplary of our cases stating the methodology for the determination of a reasonable attorney's fee award." Jordan quoted the following passage from Wayne:

A starting point is to calculate the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate. . . . The court should then exclude excessive, redundant, or otherwise unnecessary hours. Next, the resulting sum should be adjusted to reflect the "result obtained." This involves two questions: First, did the plaintiff fail to prevail on claims that were unrelated to the claims on which he succeeded? Second, did the plaintiff achieve a level of success that makes the hours reasonably expended a satisfactory basis for making a fee award?

Jordan, 464 F.3d at 602 (quoting Wayne, 36 F.3d at 531). Additional factors to be considered, which may or may not be subsumed by the above in particular cases, include the following factors, which the Sixth Circuit has adopted, and the Supreme Court has cited with approval:

(1) the time and labor required; (2) the novelty and difficulty of the question; (3) the skill requisite to perform the legal service properly; (4) the preclusion of other employment by the attorney due to acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorney; (10) the "undesirability" of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases.

Geier v. Sundquist, 372 F.3d 784, 792 (6th Cir. 2006); Hensley v. Eckerhart, 461 U.S. 424, 430 n. 3, 434 n. 9 (1983).

In their motion, Plaintiffs address each of the twelve factors identified above individually. First, with respect to "the time and labor required," Plaintiffs emphasize that their attorneys undertook significant discovery efforts, including thirty-one discovery subpoenas, FOIA requests, depositions of party and third-party witnesses, and review of many thousands of pages of documents, including zoning codes, the city charter, extensive records of e-mail correspondence among over twenty people, extensive Wal-Mart records, and the records of the Frankenmuth Downtown Development Authority ("DDA") and the Frankenmuth Economic Development Corporation ("EDC"). Plaintiffs' counsel had to respond to Defendant's efforts to join other parties in this case, invocation of privileges and immunity defenses, two motions for summary judgment, and a motion in limine. Additionally, the jury trial lasted seven days over a three-week period.

Second, with respect to "the novelty and difficulty of the question," Plaintiffs emphasize that there are few cases providing guidance on "class of one" equal protection claims. Plaintiffs represent that only two other cases involving a "class of one" equal protection clause violation have been tried in the United States. Plaintiffs also emphasize that "size-cap" ordinances are tough to defeat on the basis of discrimination because of the extraordinarily high burden of proof placed on the plaintiffs.

Third, with respect to "the skill requisite to perform the legal service properly," Plaintiffs emphasize that their counsel is experienced in complex litigation, see [Dkt. # 96-4, 96-5] (affidavits of Plaintiffs' counsel), as is defense counsel.

Fourth, with respect to "the preclusion of other employment by the attorney due to acceptance of the case," Plaintiffs emphasize that their attorneys worked diligently on this case starting in early 2008 and continued until trial concluded on March 4, 2010, precluding them from providing their services to other clients.

Fifth, with respect to "the customary fee," Plaintiffs represent that their counsel's fees (for example, partner-level Kochanowski billing at $400 per hour and associate-level Young billing at $200 per hour) are consistent with fees customarily charged in the metropolitan Detroit area according to recent legal publications and awards in other cases. See [Dkt. # 96-9 to 96-19]. Plaintiffs suggest that these fees are lower than the prevailing rates for attorneys of similar skill, experience, and reputation in the community. Plaintiffs do not address the fact that Mr. Kochanowksi's affidavit indicates that he routinely bills commercial clients $350 per hour, rather than $400 per hour.

Sixth, with respect to "whether the fee is fixed or contingent," Plaintiffs contend that in novel or difficult cases, attorney fees may be enhanced to reflect the contingent nature upon which the case was taken. Plaintiffs highlight that in Northcross v. Board of Education of Memphis City Schools, the Sixth Circuit explained:

Perhaps the most significant factor in these cases which at times renders the routine hourly fee unreasonably low is the fact the award is contingent upon success. An attorney's regular hourly billing is based upon an expectation of payment, win, lose or draw. If he or she will only be paid in the event of victory, those rates will be adjusted upward to compensate for the risk the attorney is accepting of not being paid at all. Some cases under the civil rights statute, those in which the facts are strong and the law clear, pose little risk of losing, and the attorney's normal billing rate will be adequate compensation. Others, in developing areas of law or where the facts are strongly disputed, will require substantial upward adjustment to compensate for the risk . . . The contingency factor is not a `bonus' but is part of the reasonable compensation to which a prevailing party's attorney is entitled under § 1988.

611 F.2d 624, 638 (6th Cir. 1979). Plaintiffs suggest that their attorneys should be rewarded for "taking a large and uncertain financial risk in the pursuit of justice." To support the proposition that an enhancement is justified, Plaintiffs also cite Paschel v. Flagstar Bank, FSB, 279 F.2d 431 (6th Cir. 2002), and Geier, 372 F.3d 784. Notably, both of these cases predate the U.S. Supreme Court's recent decision in Perdue. In response, Defendants contend that a fifty percent enhancement is not warranted as the complexity of the case, and the fact that the case may have presented unique issues are factors that are already subsumed by the lodestar calculation.

Seventh, with respect to "time limitations imposed by the client or the circumstances," Plaintiffs acknowledge that they did not place any time limitations on their counsel.

Eighth, with respect to "the amount involved and the results obtained," Plaintiffs assert that they seek $608,508.00, that they prevailed on the only claim submitted to the jury, and that the jury awarded Plaintiffs $3,600,000, nearly all of the economic damages sought. Plaintiffs emphasize that Defendant did not make a monetary offer to settle prior to trial.

Ninth, with respect to "the experience, reputation, and ability of the attorney[s]," Plaintiffs again emphasize that their attorneys are very experienced and respected complex litigation specialists.

Tenth, with respect to "the `undesirability' of the case," Plaintiffs represent that when they first began seeking legal assistance, they could not find an attorney in the Saginaw area willing to represent them in their suit against Defendant on the basis of a contingent fee arrangement. Plaintiffs assert that the novelty of this area of law and the high burden of proof placed upon Plaintiffs made the case particularly difficult and undesirable to most attorneys.

Eleventh, with respect to "the nature and length of the professional relationship with the client," Plaintiffs acknowledge that their counsel represented them only in connection with this case and beginning in early 2008.

Twelfth, with respect to "awards in similar cases," Plaintiffs represent that they have been unable to locate a case with a jury verdict for a similar amount in a "class of one" equal protection case. They assert that this is a further indicator of the novelty of the case.

More generally, Plaintiffs contend that the number of hours spent by their attorneys on the case is "reasonable." Plaintiffs' attorneys spent a total of 1,190.11 hours prosecuting this litigation, equaling fees in the amount of $405,672.00. Plaintiffs again emphasize that their attorneys undertook significant discovery efforts, including thirty-one discovery subpoenas, FOIA requests, depositions of party and third-party witnesses, and review of many thousands of pages of documents, including zoning codes, the city charter, extensive records of e-mail correspondence among over twenty people, extensive Wal-Mart records, and the records of the DDA and EDC. Plaintiffs' counsel had to respond to Defendant's efforts to join other parties in this case, invocation of privileges and immunity defenses, two motions for summary judgment, and a motion in limine. Additionally, the jury trial lasted seven days over a three-week period.

In response, Defendant contends that it must be provided an opportunity to review Plaintiffs' counsel's billing statements in order to address whether Plaintiffs' claim for attorney fees is "sufficiently documented," within the meaning of United Slate, Tile Composition Roofers v. G M Roofing, 732 F.2d 495, 502 n. 2 (6th Cir. 1984) ("The documentation offered in support of the hours charged must be of sufficient detail and probative value to enable the court to determine with a high degree of certainty that such hours were actually and reasonably expended in the prosecution of the litigation."). See also Hensley, 461 U.S. at 437 (noting that a fee applicant "should maintain billing time records in a manner that will enable a reviewing court to identify distinct claims"). At this juncture, it appears that Plaintiffs have provided the details regarding their fees to the Court, but not Defendant. See [Dkt. # 130]. While Plaintiffs assert that in camera review of fee petitions is the standard practice in this district based on the attorney-client privilege, and Defendant contends that Plaintiffs' fee request must be denied if Defendant is not able to review the details, neither party cites any authority to support or undermine either position.

Plaintiffs also specifically contend that the hourly billing rates are "reasonable," according to "the prevailing market rates in the relevant community." Kramer v. Paul Revere Life Ins. Co., No. 04-74362, 2009 WL 2849067, at *7 (E.D. Mich. Sept. 1, 2009) (citing Blum v. Stenson, 465 U.S. 886, 897 (1984)). Plaintiffs acknowledge that the "relevant community" for purposes of § 1988 attorney fees is generally based on where the district court sits. Plaintiffs insist, however, that rates outside the district court's forum may be used "if local counsel was unavailable, either because they are unwilling or unable to perform because they lack the degree of experience, expertise, or specialization required to handle properly the case." See e.g., Barjon v. Dalton, 132 F.3d 496, 500 (9th Cir. 1997).

Here, Plaintiffs assert that they were unable to find a lawyer or law firm in the greater Saginaw area to represent them in their suit against Defendant. Their search eventually led them to Sommers Schwartz, P.C., in Southfield, Michigan, an area of the state where attorney fees are customarily higher than in the greater Saginaw area. In particular, Plaintiffs' attorneys from Sommers Schwartz, P.C., located in Southfield, Michigan, charge hourly rates ranging from $150.00 for its associates and up to $400.00 for its senior partners.

Plaintiffs assert that all of these hourly rates are well within the range, or substantially less, than the ordinary fees charged by attorneys in the greater Detroit area with similar skill, experience, and reputation as that of Plaintiffs' attorneys. See [Dkt. # 96-9] (sample listing of hourly billing rates for attorneys in the Detroit area in "Largest Law Firms Directory," Michigan Lawyers Weekly (2009)); May v. City of Detroit, Nos. 233318, 234966, 2003 WL 21362985, at *12-13 (Mich. Ct. App. June 12, 2003) (affirming award based on $600 per hour fee); Page v. Globerson, No. 04-058923-NH, slip op., at *4 (Oakland County Cir. Ct. Sept. 1, 2006) (awarding $475 per hour fee); Juzba v. State Farm Mut. Auto. Ins. Co., No. 04-829-NF, slip op., at *2 (Washtenaw County Cir. Ct. Feb. 8, 2007 (awarding $450 per hour fee); Worthing v. Reliance Standard Life Ins. Co., No. 08-11895, 2009 WL 1798387, at *2 (E.D. Mich. June 22, 2009) (awarding $400 per hour fee); Karwoski v. Barnebei, No. 05-1012-NH, slip op., at *2 (Washtenaw County Cir. Ct. Mar. 30, 2007) (awarding $300 per hour fee); Ruffin v. Metro Cars, Inc., No. 05-504665-NI, slip op., at *2 (Wayne County Cir. Ct. Jan. 25, 2007) (awarding $500 per hour fee); Yousif v. Mercedes-Benz USA, LLC, No. 2004-061201, 2006 WL 2808565, at *1 (Oakland County Cir. Ct. Sept. 22, 2006) (awarding $300 per hour fee); Cavanaugh v. Dwamena, No. 05-972-NH, slip. op., at *2 (Oakland County Cir. Ct. Sept. 23, 2008) (awarding $300 per hour fee); RDI of Mich., LLC v. Mich. Coin-Op Vending, Inc., No. 08-11177, 2010 WL 625397, at *3 (E.D. Mich 2010) (awarding $375 per hour); Wells v. Corporate Accounts Receivable, No. 1:07-cv-1214, 2010 WL 455294, at *4 (W.D. Mich. Feb. 8, 2010) (awarding $300 per hour fee).

In response, Defendant contends that Plaintiffs' counsel's hourly rates are well in excess of prevailing market rates for the Saginaw and Bay City areas, and that the rates "should be adjusted to reflect their experience or lack thereof in litigating zoning cases." Defendant insists that when an attorney voluntarily accepts a case outside of his or her home area, they are voluntarily subjecting themselves to the relevant rate in the out of town area, citing Alcock-Ladd v. Sec. of Treasury, 227 F.3d 343, 350 (6th Cir. 2000). Defendant does not address why there could not be an exception, as Plaintiffs suggest, to this general rule.

Defendant also highlights that the Sixth Circuit and courts in the Eastern District of Michigan have approved the use of the State Bar of Michigan Economics of Law Practice Survey in calculating prevailing rates, citing Sykes v. Anderson, Nos. 05-71199, 05-73725, 2008 WL 4776837, at *5 (E.D. Mich. Oct. 31, 2008) (citing, inter alia, Auto Alliance Intel, Inc. v. U.S. Customs Serv., No. 04-1764, 2005 WL 2149673, at *1 (6th Cir. Nov. 23, 2005)). Defendant asserts that the median rate for litigation is $150 per hour in the Saginaw and Bay City area, and that the ninetieth percentile rate is $192.50. Defendant notes that even the rates for South Oakland County and Downtown Detroit are $200-$210 (median) and $283-$277.50 (ninetieth percentile).

Defendant also contends that the awarded rate should be lowered because Plaintiffs' counsel lacks experience in litigating "zoning cases." Defendant suggests that while Mr. Kochanowski's routine fee for "commercial clients" may be $350 per hour (and $300 per hour for Mr. Szymanski), Defendant suggests that this case was not "commercial litigation," but a zoning case. In reply, Plaintiffs emphasize that this was not as much a "zoning case," addressing typical issues such as spot zoning, setback requirements, variances, special use permits, or the like, but an equal protection case arising under the Fourteenth Amendment to the U.S. Constitution.

Defendant acknowledges that according to Mr. Szymanski's biography, he had experience in municipal cases, however, Mr. Szymanski has not provided an affidavit (he has left the Sommers Schwartz firm). Defendant suggests that no higher than $200 per hour is appropriate for Mr. Szymanski. Defendant suggests that attorney fees should not be available for Mr. Szymanski's work if he was not directly paid for his work on this case.

Defendant also highlights that Mr. Kochanowski asserts that other attorneys worked on the case and requested rates of $200 per hour. Defendant emphasize that there is no information, other than Mr. Young's personal affidavit, regarding how long these other attorneys have been practicing and what experience they have in litigating "zoning cases." In particular, Ms. Owens, who is no longer at the firm, had five years of experience with the Michigan Court of Appeals as a law and research clerk. Mr. Young's affidavit indicates that he has been licensed since 2009. Defendant asserts that information from the State Bar's member directory indicates the following licensing dates: Owens (May 10, 2002), Stoops (Nov. 12, 2004), Harmon (Dec. 4, 2006). Defendant insists that "associate attorneys with such extremely limited experience do not warrant a rate of $200 per hour," but only $100 per hour.

In reply, Plaintiffs emphasize that district courts are generally free to look to any market they believe is appropriate to fairly compensate attorneys in individual cases, citing Louisville Black Police Officers Org. v. City of Louisville, 700 F.2d 268, 278 (6th Cir. 1983) ("District courts are free to look to a national market, an area of specialization market or any other market they believe appropriate to fairly compensate particular attorneys in individual cases."). Plaintiffs also highlight that a district court is not required to look only to the State Bar Survey to determine a reasonable rate, but should rely "on a combination of its own expertise and judgment, the State Bar of Michigan's `Economics of Law Practice Survey,' other market surveys if necessary, and the attorney's normal billing rate which will often show the market value of the services provided." Cmties. for Equity v. Mich. High Sch. Athletic Ass'n, No. 1:98-CV-479, 2008 WL 906031, at *10 (W.D. Mich. Mar. 31, 2008) (citations and quotations omitted); B G Mining, Inc. v. Dir., Office of Workers' Comp. Programs, 522 F.3d 657, 664 (6th Cir. 2008) ("Rates from prior cases can . . . provide some inferential evidence of what a market rate is, just as state-bar surveys of rates provide evidence of a market rate, but themselves do not set the rate."); Zanon v. Comm'r of Soc. Sec., No. 08-15337, 2010 WL 1524143, at *4 (E.D. Mich. Apr. 15, 2010) ("While the State Bar of Michigan Economics of Law Practice Survey provides a starting point in determining a reasonable fee . . . [it alone] is not sufficient."). Plaintiffs assert that Defendant places undue emphasis on the State Bar of Michigan's Economics of Law Practice Survey, particularly when sixty-percent of responding attorneys reported working in firms employing six or less attorneys, whereas Sommers Schwartz, P.C. employs over forty attorneys.

Importantly, the calculation of fees and costs is a question of fact that often requires an evidentiary hearing. See Henson v. Columbus Bank and Trust Co., 651 F.2d 320, 329 (5th Cir. 1981). Unless otherwise required by statute or rule, the question of whether to hold an evidentiary hearing to resolve a request for attorney fees is within the discretion of a district court. Jaynes v. Austin, 20 F. App'x 421, 427-28 (6th Cir. 2001); see also Bailey v. Heckler, 777 F.2d 1167, 1171 (6th Cir. 1985). An evidentiary hearing resolving a request for fees and costs is unnecessary "when a record has been fully developed through briefs, affidavits, and depositions." Robinson v. City of Edmond, 160 F.3d 1275, 1286 (10th Cir. 1998). Here, an evidentiary hearing is particularly necessary to establish the number of hours worked by Plaintiffs' counsel and the prevailing rate in the appropriate community, along with whether Plaintiffs' counsel is entitled to invoke the attorney-client privilege. An evidentiary hearing will be scheduled on the attorney fees portion of Plaintiffs' motion.

B

Plaintiffs seek costs in the amount of $43,236.63 pursuant to Federal Rule of Civil Procedure 54(d)(1). In response, Defendant contends that Plaintiffs' request for costs should be denied because it is not sufficiently documented to allow the Court to determine whether the amounts are reasonable and necessary, citing Pion v. Liberty Dairy, Co., 922 F.Supp. 48, 53 (W.D. Mich. 1996) (denying certain witnesses fees and copying costs because their "necessity" was not "adequately documented"). In reply, Plaintiffs assert that it is sufficient that Plaintiffs submitted a bill of costs signed by Mr. Young, along with an affidavit of Mr. Kochanowski stating that he personally reviewed the costs incurred and that each entry is correct and was necessarily incurred.

Defendant also presents seven additional objections. First, Defendant objects to Plaintiffs' expert witness fees. In reply, Plaintiff concedes that these are not recoverable.

Second, Defendant objects that Plaintiffs included numerous expenses that appear to be for a private process server, and contends that these are not taxable under § 1920, citing Pion, 922 F.Supp. at 53 (citing Crues v. KFC Corp., 768 F. 2d 230, 234 (8th Cir. 1985)). In reply, Plaintiffs also contend that courts are split on the issue of whether the costs of a private process server are taxable, citing Hairston Motor Co., v. Northland Ins. Co., No., 1994 WL 874390 (W.D. Va. Sept. 23, 1994) (citing Tang How v. Edward J. Gerrits, Inc., 756 F.Supp. 1540 (S.D. Fla. 1991), aff'd, 961 F.2d 174 (11th Cir. 1992); Card v. State Farm Fire Cas. Co., 126 F.R.D. 658, 662 (N.D. Miss. 1989), aff'd, 902 F.2d 957 (5th Cir. 1990); Roberts v. Homelite Div. of Textron, Inc., 117 F.R.D. 637, 641 (N.D. Ind. 1987)). Plaintiffs explain that "[g]iven the apparent congressional intent to make service of process a taxable item . . . and due to the substitution of private process servers for the U.S. Marshal Service in recent years, . . . the taxation of costs for special process servers is justifiable," quoting Griffith v. Mt. Carmel Med. Ctr., 157 F.R.D. 499, 508 (D. Kan. 1994) (finding private process server fees "taxable only to the extent that they do not exceed the costs that would have been incurred had the Marshal's office effected service, since only the Marshal's fee amount is actually statutorily authorized").

Third, Defendant objects that "witness fees under § 1821 are limited to $40 plus travel expenses at a rate specified by the General Services Office to trial or to a deposition." Defendant also contends that "several of the early subpoenas were for document production however since there is a lack of supporting documentation which witness fees pertain to document production compared to testimony is unknown at this time."

Fourth, Defendant objects that there are entries for mileage for Patrick Driscoll and Harold Cote who are unidentified and the reason for the mileage and travel is not provided. In reply, Plaintiffs identify the two individuals as messenger clerks for Sommers Schwartz, P.C., whose job duties include traveling as necessary to serve and file documents for its attorneys.

Fifth, Defendant objects to a $200 fee for "All Points Appraisal," because "the appraisal was done for estate tax purposes and not for trial," and is therefore not a reasonable and necessary expense.

Sixth, Defendant contends that there is an "unexplained cost of $937.50 to Steven D. Sherbel of West Bloomfield. In reply, Plaintiffs explain that Plaintiffs' counsel met with Dr. Sherbel as a possible jury consultant.

Seventh, Defendant objects to the cost for overnight lodging during trial for Mr. Young and Mr. Kochanowski. Defendant contends that they had ample time to return to their office to prepare for the next day of trial. Defendant contends that Mr. Young "did not participate at trial other than to sit at counsel table and handle exhibits." Plaintiffs assert that lodging was necessary, as the commute was too far to reasonably expect Plaintiffs' attorneys to prepare for and present their case-in-chief, which lasted approximately four to five trial days. Further, contrary to Defendant's assumption, Mr. Young's lodging was necessary and reasonable, as he was responsible for research, general logistics, courtroom media and exhibits, scheduling witness appearances, organization of files and documents, and client contact.

Notably, costs in this Court are taxed in accordance with Federal Rule of Civil Procedure 54(d)(1) and Eastern District of Michigan Local Rule 54.1. In addition, the Clerk's Office has provided guidance to attorneys through the Bill of Costs Handbook, available online at http://www.mied.uscourts.gov/Rules/BillofCosts200711.pdf. Until the Clerk's Office has taxed costs, review by this Court is premature and Plaintiffs' motion will be denied in part as premature.

C

Plaintiffs seek prejudgment interest on the judgment amount, their attorney fees, and their costs. With respect to the judgment, 28 U.S.C. § 1961 provides that "[i]nterest shall be allowed on any money judgment in a civil case recovered in a district court." In exercising its discretion, Plaintiffs suggest that this Court should consider four factors:

1) the need to fully compensate the wronged party for actual damages suffered; 2) considerations of fairness and the relative equities of the award; 3) the remedial purpose of the statute involved; and/or 4) such other general principles as are deemed relevant by the court.

Beck v. Manistee County, No. 1:97-CV-533, 2005 WL 2620194, at *7 (W.D. Mich. 2005) (noting that "prejudgment interest is often a component of complete compensation and that in light of § 1983's remedial purpose, interest is often included in the damages award") (citing Wickham Contracting Co. v. Local Union No. 3, 955 F.2d 831, 833-34 (2nd Cir. 1992)). Plaintiffs contend that prejudgment interest on the money judgment is appropriate and equitable, given the remedial nature of § 1983 and the fact that Plaintiffs lost the ability to use the $4,000,000 during the four years since Defendant enacted the challenged ordinance. Plaintiffs assert that they are also entitled to prejudgment interest on their attorney fees and costs, citing, for example, Preston v. Thompson, 565 F.Supp. 294, 297 (N.D. Ill. 1983) ("Every reported case to address the issue has held that interest is available on an award of attorney's fees under § 1988.").

Plaintiffs assert that here, prejudgment interest began accruing from the date Plaintiffs filed their original complaint on March 17, 2008, and will continue to accrue through entry of this judgment. Plaintiffs assert that the amount of prejudgment interest as of April 14, 2010, based on the damages, the attorney fee award, and cost award portion of the judgment, is $342,754.25. See [Dkt. # 96-6] (Plaintiffs' calculation of prejudgment interest). Plaintiffs' assert that this calculation is properly made in accordance with Mich. Comp. Laws § 600.6013(8), as opposed to § 1961, because several federal Courts of Appeals have concluded that "state law governs the calculation of prejudgment interest in section 1983 claims," quoting, for example, Pressey v. Patterson, 898 F.2d 1018, 1026 (5th Cir. 1990); Winter v. Cerro Gordo County Conservation Bd., 925 F.2d 1069, 1073 (8th Cir. 1991).

Section 600.6013(8) provides:

Except as otherwise provided in subsections (5) and (7) and subject to subsection (13), for complaints filed on or after January 1, 1987, interest on a money judgment recovered in a civil action is calculated at 6-month intervals from the date of filing the complaint at a rate of interest equal to 1% plus the average interest rate paid at auctions of 5-year United States treasury notes during the 6 months immediately preceding July 1 and January 1, as certified by the state treasurer, and compounded annually, according to this section. Interest under this subsection is calculated on the entire amount of the money judgment, including attorney fees and other costs. The amount of interest attributable to that part of the money judgment from which attorney fees are paid is retained by the plaintiff, and not paid to the plaintiff's attorney.

Mich. Comp. Laws § 600.6013(8).

Under § 1961(a), "interest shall be calculated . . . at a rate equal to the weekly average 1-year constant maturity Treasury yield," and compounded annually, § 1961(b).

In contrast, Defendant contends that prejudgment interest should be calculated pursuant to the federal framework of § 1961, rather than under the Michigan statute, particularly because jurisdiction in this case is based on a federal question, rather than diversity. Defendant emphasizes that the Sixth Circuit has found that "the statutory post judgment framework set forth in 28 U.S.C. § 1961 is a reasonable method for calculating prejudgment interest awards," quoting Ford v. Uniroyal Pension Plan, 154 F.3d 613, 619 (6th Cir. 1998) (citation omitted). Defendant emphasizes that Plaintiffs rely on case law from the Fifth and Eighth Circuits to support the proposition that the state framework should be used, but that other circuits have found that federal law governs prejudgment interest awards in § 1983 actions. See, e.g., Basista v. Weir, 340 F.2d 74, 86 (3d Cir. 1965). Because Plaintiff sought relief under federal law, the Court will apply the rate as defined in § 1961. See Rybarczyk v. TRW, Inc., 235 F.3d 975, 986 (6th Cir. 2000).

Plaintiffs also contend that they should be awarded prefiling interest from the date that Defendant violated Plaintiffs' constitutional rights, citing Manatuck Assocs. v. Wendt, No. 3:95CV1006 (AHN), 1998 WL 563958, at *1 (D. Conn. Aug. 11, 1998), and SSC Assocs. Ltd. P'ship v. Gen. Ret. Sys. of City of Detroit, 534 N.W.2d 160, 162 (Mich. Ct. App. 1995). Plaintiffs maintain that Defendant violated their constitutional rights on December 7, 2005, when it enacted the challenged ordinance, and therefore, prejudgment interest should run from that date forward. Plaintiffs assert that as of April 14, 2010, the amount of prefiling and prejudgment interest that had accrued was $943,080.34.

In response, Defendant contends that prefiling interest should not be awarded because it would encourage plaintiffs to wait until just before a statute of limitations runs to file their claims. Defendant also particularly note that SSC Associates, 534 N.W.2d 160, is distinguishable from this case because the court found that the defendant held money on an overpayment of interest by the plaintiff that rightfully belonged to the plaintiff. The parties do not particularly address whether prefiling interest is available under the federal framework, as opposed to Michigan law. Nonetheless, the Court concludes that prefiling interest is not appropriate in this case.

Based on the above, Plaintiffs' motion as it relates to interest will be granted in part and denied in part.

III

Also before the Court is Plaintiff's motion to strike [Dkt. # 128] Defendant's reply in support of its motion for judgment or in the alternative for a new trial or remittitur. After the Court denied Defendant's request to file a twenty-three page reply brief, and struck the lengthy brief from the docket, the Court granted Defendant a short extension of time to file a five-page reply brief. The order was docketed on Wednesday, August 11, 2010, and provided that Defendant's reply brief must be filed by Thursday, August 12, 2010. Defendant did not file the reply brief until Monday, August 16, 2010. Thus, Plaintiff requests that the Court strike the brief as untimely.

Importantly, the Court never intended to provide Defendant with only one day to refile its reply brief. The order setting the August 12, 2010 deadline was prepared on August 9, 2010. Unbeknownst to chambers, there was a two-day delay in docketing the order. Thus, the three-day time period for refiling the reply brief was inadvertently shortened to just one day. Indeed, had it been known that the order would not be docketed until August 11, 2010, a deadline of August 16, 2010, would have been set for refiling the reply brief. Plaintiffs have suffered no prejudice from the "late" filing of Defendant's reply brief, and the motion to strike will be denied.

IV

Accordingly, it is ORDERED that Defendant's motion for judgment, or in the alternative for new trial and remittitur [Dkt. # 110] is DENIED.

It is further ORDERED that Plaintiffs' motion for entry of judgment and assessment of interest, attorney fees and costs [Dkt. # 96] is GRANTED IN PART, DENIED IN PART, and SCHEDULED FOR AN EVIDENTIARY HEARING IN PART. This order does not terminate the motion.

It is further ORDERED that an EVIDENTIARY HEARING is scheduled on Plaintiffs' motion [Dkt. # 96] as it relates to the rates and amounts of attorney fees to be awarded Plaintiffs on December 13, 2010 at 2:00 p.m., and that a TELEPHONIC STATUS CONFERENCE is scheduled on November 10, 2010 at 3:30 p.m. Plaintiffs' counsel is directed to initiate the telephonic status conference.

It is further ORDERED that Plaintiffs' motion to strike [Dkt. # 128] is DENIED.

PROOF OF SERVICE

The undersigned certifies that a copy of the foregoing order was served upon each attorney or party of record herein by electronic means or first class U.S. mail on September 27, 2010.