Seems clear. Or does it? The expert is entitled to a reasonable fee for time spent. What does that mean? Can the expert charge a flat rate for the day even though only a part of the day is the "time spent"? Can an expert charge the ultra fee that top practitioners can command in the most complex cases or does "reasonable fee" mean moderation? Or perhaps something in the middle? Can time spent for trial testimony be charged at a higher rate than testifying at a deposition? Can he or she charge for travel time? For punctilious preparation? For reviewing literature in the field of expertise? For "practice" sessions with retaining counsel? Can the expert demand an advance or "up front" payment? Given the plethora of practical questions that could be asked, the rule's generality probably is its strength, not its weakness. Ultimately, a dispute the parties can't resolve themselves will be for the judge to decide. Here we report on a number of recent rulings which, both individually and cumulatively, may point the way for counsel to anticipate or resolve problems without wasteful motion practice and the antagonism such fee squabbles can breed. Travel Time In Lent v. Fashion Mall Partners LP,[1] a premises liability action, the plaintiff patron disclosed that R, a security expert from Georgia, would testify as to the applicable standards of safety at a shopping center in White Plains. Defendants noticed R's deposition and notified plaintiff that they would agree to pay R's hourly fee of $100 per hour but would not pay for R's travel expenses or travel time to and from the deposition. They also advised that they would not pay for R's preparation time for the deposition. U.S. District Judge Stephen C. Robinson of the Southern District of New York identified the questions posed to him: does the federal civil procedure rule's phrase "reasonable fee" include (1) travel expenses and travel time incurred in R's getting to New York; and (2) R's preparation time? Plaintiff cited a case called The Mark Andrew of the Palm Beaches v. GMAC[2] but Judge Robinson found the case not completely supportive of plaintiff's position. There the court held that defendant should not be burdened with more than 20 hours for deposition and preparation time and that travel time should not be separately billable for two reasons: (1) plaintiff chose a West Coast expert and should not be reimbursed for the travel time to New York; and (2) in any case there was no reason why the expert could not have used some of her time on the flight to prepare. In Mark Andrew the court also noted that it was aware of no precedent supporting the forced payment of nearly 20 hours travel time "without any showing that equally skilled local experts are unavailable." The court in Mark Andrew did direct defendant to pay for the expert's airfare but Judge Robinson disagreed with that aspect of the ruling. The court in Lent said that plaintiff should be free to select the expert of his choice regardless of where that expert is located. However, defendants "should not be forced to pay the increased costs associated with the plaintiff's decision to engage an expert from another part of the country — Georgia." This is particularly true when the plaintiff has not shown, or even claimed, that no acceptable security experts were available in the New York area. As for the demand that R be paid for preparation time, Judge Robinson said that Rule 26(b)(4)(C) "clearly contemplates remuneration for time spent responding to discovery requests, which would include reasonable preparation for a deposition."[3] Accordingly, the defendant was to pay the following costs: (a) R's reasonable travel expenses from any of the New York City metropolitan airports to the deposition site; (b) R's reasonable travel time from the New York airport to the deposition and then back to the airport; and (c) R's reasonable preparation time for the deposition. Plaintiff, however, was to pay his expert's travel expenses and time for the round trip from Georgia to New York. Advance Payment? In Harris v. Costco Wholesale Corp.,[4] a U.S. Magistrate Judge in the Southern District of California was confronted with the following expert fee problem. Plaintiff's expert S appeared for his deposition after being served with a subpoena. After some 15 minutes of preliminaries, plaintiff's counsel abruptly terminated the deposition and walked out with expert S. The reason for this abrupt departure is that plaintiff's counsel demanded immediate payment of S's time at the rate of $250 an hour and defense counsel did not have a check on him. Defense counsel had asserted on the record that "[i]f the Federal Rules . . . provide that [S] is entitled to receive an expert fee, we will pay it." Plaintiff found that response "equivocal" and terminated the deposition. Defendant then moved to bar expert S from testifying and sought attorney's fees and costs incurred with the deposition. The court denied without prejudice the motion to bar S from testifying but did order plaintiff to pay defendant's reasonable attorney's fees and costs incurred in connection with the deposition, including any work, appearances or costs related to defendant's motion. Rule 26(b)(4)(C)'s "reasonable fee" requirement is not extinguished because the expert was subpoenaed to appear at the deposition.[5] The rule does not state that expert fees must be paid in advance of the deposition. Parties can agree on that point but the rule does not require it. And, because "there is no rule allowing a party to terminate a deposition for the failure to pay opposing expert fees in advance, plaintiff's counsel was wrong in doing so in the instant case." The federal rules provide alternative means to object to a deposition. Remedies include putting an objection on the record pursuant to Rule 30(c) and then applying to the court by motion if fees were not paid or paid untimely after the conclusion of the deposition and once the expert fees were either agreed upon or determined. Or, less favorably, plaintiff could contact the court at the time of the deposition to get the court's guidance or an immediate ruling. Because plaintiff's counsel did not pursue the appropriate remedies, defendants were not responsible for any of S' fees incurred in connection with the aborted deposition. Plaintiff is required to pay defense counsel reasonable attorney's fees and costs associated with the deposition. Plaintiff also must make S available for deposition by a specified date. If the parties cannot agree on an hourly fee for S's deposition, the deposition "shall still go forward." The parties will then file letter briefs on the reasonableness of S's hourly fee and the court will determine that question. Flat Rate Fee In Massasoit v. Carter,[6] an excessive force lawsuit against a North Carolina sheriff and deputy, plaintiffs objected to defendant's expert's charge of a $2,000 flat rate fee claiming it was unreasonable. They moved the court to determine the reasonable fee this expert could charge for having his deposition taken. In support of the motion plaintiffs said they had retained three experts who only charge from $75 to $125 per hour. They also urged that they only requested the defense expert to reserve two to three hours for the deposition at his office. The $2,000 flat rate fee, they argued, amounts to a charge of over $600 an hour and, thus, is exorbitant. The U.S. Magistrate Judge hearing this motion quoted from the U.S. Energy Corp. decision[7] about the "paucity of decisions" in the area of what constitutes a reasonable fee for an expert. The case law suggests seven factors to be considered in determining whether or not a fee is reasonable: (1) the witness's area of expertise; (2) the education and training that is required to provide the expert insight which is sought; (3) the prevailing rates of other comparably respected available experts; (4) the nature, quality and complexity of the discovery responses provided; (5) the fee actually being charged to the party who retained the expert; (6) fees traditionally charged by the expert on related matters; and (7) any other factor likely to be of assistance to the court in balancing the interests implicated by federal rule 26.[8] Defendants tried to provide some supportive information in line with the foregoing factors. They said that their expert is nationally renowned in the field of law enforcement and related areas. He will give his opinion that the defendant officer used reasonable force but likely also will render opinions regarding training and practices relating to law enforcement officers. Defendants argued that their expert has extensive experience in training, speaking, teaching and acting as an expert witness. They also showed he had education, training and experience in these areas. They contended that the expert's rates were comparable to other national experts and appended the fee schedules of another renowned national and international expert. The court observed, however, that advanced degrees are not required for practicing and the field is not one of technical complexity. Further, as the court noted, "[i]t is not clear that being an international or national expert should be a basis for a larger fee." Both sides will have to show the standard of conduct applicable to a North Carolina deputy in a specified county. And they likely will not be giving an opinion on the reasonableness of the deputy's actions, an ultimate question the jury can resolve.[9] The defendants, however, called this a complex case because two U.S. Army soldiers engaged in a covert or secret training exercise were shot by the sheriff's deputy after a stop of their vehicle. While the court agreed it was an unusual excessive force case, the issues on which the expert will render an opinion "are not complex in the sense that they require significant advanced study, research or training and experience, in the same way that would be required of a neurosurgeon, a rocket scientist, or accountant. The experts in this case will be testifying to police standards. This is not a field with stringent entrance requirements."[10] Looking to the expert's fee schedule, the court observed that the expert charges $250 per hour, with a $6,000 minimum to review a case. For trial testimony he charges $250 an hour for preparation, and $3,000 a day. For depositions, he bills a flat rate of $2,000 per day. The same amount is charged for a site inspection or investigation. Defendants argued that this schedule showed no unusual discrepancy in the deposition charge to plaintiffs compared to the fees charged to defendants themselves. The defendants did not show the fees the expert would forgo by having his deposition taken — a potentially important indicator as to whether the deposition fee is excessive. However, much of defendants' assertions went unchallenged because plaintiffs did not file a reply. Fee Fashioned Accordingly, the court focused on only the "most glaring problem" — whether the court should permit an expert to charge a flat rate fee for his deposition. "The answer is," said the court, "that a flat rate fee does raise a red flag with respect to whether expert fees are reasonable, and requires the court to closely scrutinize the situation."[11] This requires the court to see if there is a "rational basis for such a fee." Although physicians may charge fixed amounts for certain procedures, that is not the case with depositions. Some may last an hour, some may last days. "For this reason a flat rate fee is not normally reasonable."[12] The court held that defendants did not show a reasonable basis for the expert's $2,000 flat rate fee for a deposition at his own office. While defendants argued that the expert blocks out an entire day for a deposition, that does not explain why he does that for all depositions, even short ones. The expert also consults for his business so he can spend his time reviewing reports. The court observed that the expert charged $3,000 per day for depositions held at counsel's chosen location. Such a fee, said the court, has a better chance of being found reasonable because there the expert may have to reserve an entire day, considering travel time, etc.[13] The court's task is not merely to determine what the traffic will bear. Rather, the court must determine what is a reasonable fee. The place to start is by selecting an hourly fee. This expert charges $250 per hour as a general fee for consultation, investigation and preparation — twice what plaintiffs' experts charge. There is no showing that $250 for a "national" expert is unreasonable. A $250 per hour fee amounts to $2,000 for an eight-hour deposition. Also preparation time may be a reasonable inclusion. The $250 figure was selected by the court as "a base amount." Next the court had to determine how the hourly fee should be administered. Because depositions can be of uncertain length, an expert may be called upon to reserve an indefinite period of time, such as a half-day or a day. In that instance, "a party may have to pay for that reservation, whether that time is used or not." This situation arises when the expert, such as a physician, has to clear his schedule and, therefore, will have lost income. A consultant has a right to budget his or her time. It is reasonable that, if plaintiffs wish to take the expert's deposition on an hourly basis, the expert have a firm schedule. Plaintiffs here said they believe they would request only two to three hours of the expert's time. But the expert has a right to know approximately how long the deposition will take. Therefore, the following fee arrangement was ordered. Plaintiffs will reserve the number of hours they wish to depose the expert and will pay $250 per hour for any hour or part of an hour for which the expert is deposed. Any time spent less than that reserved because of an abrupt termination shall, nevertheless, be paid by plaintiffs. The foregoing trio of decisions does not exhaust the questions that may arise under the rule's standard of granting experts a "reasonable fee." But the relevant factors identified above and the courts' respective methodologies in grappling with competing considerations help teach us how to foster agreement among counsel or failing that, how to advocate the fee issue effectively. It is clear that counsel need not be a doormat when opposing experts' fee-gouge. At the same time, a "reasonable fee" standard, as vague as that test occasionally might be, is not an invitation to become unreasonable. Michael Hoenig is a member of Herzfeld & Rubin Endnotes:________________________________________________________________________________________________________ 1. 223 FRD 317 (SDNY 2004). 2. 2003 WL 21767633 *2, 2003 U.S. Dist. LEXIS 13217 *6 (SDNY 2003). 3. Lent, 223 F.R.D. at 318. 4. 226 F.R.D. 675 (S.D. Cal. 2005). 5. Id. at 676 (citing Fischer-Price, Inc. v. Safety 1st, Inc., 217 F.R.D. 329, 331 (D. Del. 2003)). 6. 227 F.R.D. 264 (M.D. N.C. 2005). 7. U.S. Energy Corp. v. NUK-EM, Inc., 163 F.R.D. 344, 345-346 (D. Colo. 1995). 8. Massasoit, 227 F.R.D. at 265. 9. Id. at 266 n. 2. 10. Id. 11. Id. at 267. 12. Id. (citing Brought v. Batson, 2003 WL23149946 (Conn. Super. Dec. 17, 2003) ($5,000 for neurologist's deposition patently unreasonable; but expert fee of $400 per hour allowed)). 13. Id. at 267 n. 3. |
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