Defense attorneys seek more than $26K in fees from Prenda, Duffy

By Bethany Krajelis | Feb 10, 2014

Attorneys representing the defendants in Prenda Law’s defamation suit have asked U.S. Judge John Darrah to order the now-dissolved firm and its lawyer to pay them at least $26,452.50, an amount they assert is “more than proper.”

In documents filed Friday in Chicago’s federal court, Erin Russell and Jason Sweet said they have collectively clocked about 60 hours since April 2013 on various aspects of the remand and sanctions motions filed in the case against defendants Paul Godfread, a Minnesota attorney, and his client, Alan Cooper.

Darrah granted the sanctions request Jan. 23 and in an order issued last week, called out Prenda and its attorney, Paul Duffy, for lying and engaging in duplicitous behavior in the defamation suits they brought last year in the circuit courts of St. Clair and Cook counties.

His sanctions order marks one of the latest lodged against Prenda and attorneys with ties to the firm, although it comes in a defamation suit as opposed to the computer hacking and copyright infringement cases Prenda has become well known for in recent years.

Prenda, Duffy and attorneys Paul Hansmeier and John Steele have been accused in other sanctions orders of creating sham corporations, exploiting the courts’ subpoena powers and extorting defendants into settling suits.

Darrah’s order sanctions Prenda and Duffy for their actions in seeking to remand their defamation suits back to the St. Clair County Circuit Court after they had been removed to their respective federal courts and then consolidated in Chicago’s federal court.

It also mentioned alleged misrepresentations Prenda’s local counsel, Belleville attorney Kevin Hoerner, made to get an amended complaint filed in the St. Clair County Circuit Clerk’s office without permission from the court. Hoerner was not sanctioned.

When Darrah granted the September sanctions motion last month, he ordered Russell and Sweet to file a breakdown of their fees and costs to help him come up with a dollar figure to attach to his order.

They did so on Friday, when they submitted an itemization of their fees, as well as exhibits and affidavits detailing the hours they and their local counsel spent working on the matters related to the conduct at the crux of Darrah’s sanctions order.

The filing shows Russell, a Chicago attorney, spent nearly 55 hours researching and writing filings, conferring with Sweet and their clients, and attending hearings on the remand and sanctions issues. With an hourly rate of $400, her fees total about $21,500.

Russell asked Darrah to award her firm a total of $22,894.20, the difference of which accounts for a nearly $1,000 bill from Laura Beasley, a Belleville attorney who served as local counsel for the defense, and a less than $100 invoice for court transcripts.

Beasley billed Russell for more than five hours of work over the amended complaint aspect of the case, which included investigating the filing, obtaining records and drafting the affidavit of Judy Kent, an employee of the clerk’s office who asserts Hoerner told her leave wasn’t needed to file the amended complaint because the defendants hadn’t been served.

Booth’s affidavit shows he spent 8.7 hours since last year working on the removal and remand matters. With an hourly rate of $409, Booth asked Darrah to award his Massachusetts firm $3,558.30 in fees when he imposes sanctions on Prenda and Duffy.

Russell and Sweet assert the amount of hours and their combined fees totaling $26,452.50 are reasonable given they stem for more than a year of fighting Prenda’s remand request and their work in seeking sanctions.

They contend they “made every effort to avoid duplicating each other’s work and to minimize the cost” to their clients, who they assert were sued in retaliation for bringing a copyright infringement suit against Prenda and some of its principals in Minnesota.

In further support of their fees, Russell and Sweet state that their hourly rates –$400 and $409 respectively– “were also a relative bargain” considering they fall below the 2012 median rate of $425 that was cited in a nationwide survey from the American Intellectual Property Law Association.

The survey, they note, showed intellectual property partners in Chicago, where Russell practices, charged $497 per hour on average in 2012 and those in the Boston area, where Sweet’s firm is located, billed an average hourly rate of $627 that same year.

Asserting they met the burden of showing their rates are reasonable, the defense duo asserts in the recent filing that Prenda and Duffy “must now supply ‘a good reason’ to apply lower rates, if they have one.”

“No such reason exists,” Russell and Sweet contend, adding that “the hours and hourly rate are eminently reasonable for the year-long defense of an action in which Plaintiff and its counsel committed significant wrongdoing sufficient to warrant sanctions.”

They claim “the sweeping trail of deception for which Prenda and Duffy have been sanctioned in this case” began in southern Illinois’ federal court and continued before Darrah, who invited Russell in August to file a sanctions request.

“Defendants expended a great deal of time, effort and resources uncovering the truth about the St. Clair County ‘amended complaint,’” the defense attorneys assert.

They also explain that they had to spend a considerable amount of time dealing with the plaintiffs’ remand motions that Darrah dubbed as “duplicative” in his sanctions order.

Despite U.S. Judge David Herndon’s refusal to remand the matter back to St. Clair County Circuit Court when it was in southern Illinois’ federal court, the defense attorneys assert Prenda and Duffy brought a “renewed” remand motion that made the same arguments before Darrah.

Their arguments focused on their amended complaint that added a Minnesota law firm as a plaintiff, a move that would have destroyed the diversity factor that allowed the defendants to remove the suits to federal court.

“Plaintiff’s attorneys created Defendants’ costs by attempting to manufacture an amended complaint in a state court to interfere with diversity jurisdiction in two separate federal courts and by continuing to lie about it after overwhelming evidence of the deception was brought to light,” Russell and Sweet assert in their Friday filing.

To read more about Darrah’s sanctions order, click here.

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