In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 15‐1518
ANGEL HOUSTON,
Plaintiff‐Appellee,
v.
C.G. SECURITY SERVICES, INC.,
Defendant‐Appellant.
____________________
Appeal from the United States District Court for the
Southern District of Indiana, Indianapolis Division.
No. 1:12‐cv‐00328 — William T. Lawrence, Judge.
____________________
ARGUED FEBRUARY 26, 2016 — DECIDED APRIL 25, 2016
____________________
Before POSNER, FLAUM, and EASTERBROOK, Circuit Judges.
FLAUM, Circuit Judge. This appeal arises out of a lawsuit
brought by plaintiff‐appellee Angel Houston, who sustained
injuries from a fall during a New Year’s Eve party at a Hyatt
hotel in Indianapolis. Defendant‐appellant C.G. Security Ser‐
vices, Inc. (“C.G.”) provided security personnel for the party.
During litigation, Houston filed several motions for sanctions
against C.G. The district court referred the matter to a magis‐
2 No. 15‐1518
trate judge, who issued a report and recommendation regard‐
ing sanctions against C.G. for discovery violations. The dis‐
trict court adopted the magistrate judge’s report and recom‐
mendation to impose sanctions.
C.G. appeals. Specifically, C.G. claims that the district
court abused its discretion by adopting the report and recom‐
mendation, as well as by awarding Houston’s counsel attor‐
ney’s fees. We conclude that there was no abuse of discretion
and affirm the judgment of the district court.
I. Background
In March 2012, Houston sued Hyatt Corporation and the
Hyatt Regency Indianapolis (collectively, “Hyatt”) for breach
of contract, intentional misconduct, and negligence in connec‐
tion with injuries she sustained after falling at the downtown
Indianapolis Hyatt hotel during a hotel‐sponsored New
Year’s Eve party on December 31, 2010. Houston claimed that
Hyatt failed to provide a safe and secure environment for the
party and that this failure was the proximate cause of her in‐
juries as well as consequential damages arising out of those
injuries. Houston sought damages in excess of one million
dollars.
Several months later, Houston joined C.G. as a defendant
in an amended complaint based upon C.G.’s provision of se‐
curity personnel for the New Year’s Eve party. Discovery re‐
vealed that Hyatt had used C.G.’s security services for years.
Houston alleged that C.G. failed to provide adequate security
services and that this failure proximately caused her injuries
and damages.
On May 1, 2013, both Hyatt and C.G. moved for summary
judgment. A discovery conference was held several weeks
No. 15‐1518 3
later, on May 22. The district court granted Hyatt’s summary
judgment motion on February 3, 2014. However, it delayed
ruling on C.G.’s motion due to Houston’s filing of three mo‐
tions for sanctions against C.G. for various discovery matters.
The district court referred the matter of sanctions to a magis‐
trate judge pursuant to 28 U.S.C. § 636(b)(1)(B).
The magistrate judge examined the three motions for sanc‐
tions and found that C.G. had engaged in a pattern of obstrep‐
erous discovery behavior by testifying falsely about its docu‐
ments and discovery efforts, failing timely to correct false rep‐
resentations regarding its discovery, falsifying documents,
and impeding the fair conduct of depositions. The magistrate
judge recommended that the district court impose monetary
sanctions against C.G. In particular, the magistrate judge ad‐
vised the district court to compel C.G. to pay Houston reason‐
able attorney’s fees for the work of her counsel in the conduct
of discovery after C.G. joined the litigation.
Following the magistrate judge’s issuance of the report
and sanctions recommendation, the district court granted
C.G.’s motion for summary judgment on March 14, 2014. The
district court declined to enter final judgment pending a de‐
termination as to the amount of sanctions to be levied against
C.G. C.G. subsequently objected to the magistrate judge’s re‐
port and recommendation.
The district court considered C.G.’s objection and con‐
ducted a de novo review of the magistrate judge’s report and
recommendation. On September 16, 2014, the district court
overruled C.G.’s objection, adopted the report and recom‐
mendation, and ordered Houston’s counsel to file a petition
for fees. Houston’s counsel moved for $146,050.00 in attor‐
ney’s fees and $18,512.10 in costs.
4 No. 15‐1518
In February 2015, the district court granted in part Hou‐
ston’s motion for attorney’s fees. In so doing, the district court
considered various objections lodged by C.G. and excluded
more than 100 billed hours that appeared unrelated to discov‐
ery efforts. The district court ultimately ordered C.G. to pay
Houston $118,925.00 in attorney’s fees and $16,498.91 in costs,
for a total of $135,423.91.
C.G. appeals the district court’s adoption of the magistrate
judge’s report and recommendation regarding sanctions, as
well as its order awarding Houston attorney’s fees.
II. Discussion
A. Report and Recommendation Regarding Sanctions
On appeal, C.G. argues that the district court abused its
discretion by awarding sanctions. We may reverse the district
court’s determination of factual issues underlying the award
of sanctions only if its findings are clearly erroneous. Ordower
v. Feldman, 826 F.2d 1569, 1574 (7th Cir. 1987). By contrast, we
review the decision to award sanctions for abuse of discretion.
Id. In reviewing for abuse of discretion, we “keep in mind that
because the trial court alone has an intimate familiarity with
the relevant proceedings it is in a far superior position to pass
on an attorney’s conduct than a reviewing court.” Id. (citation
and internal quotation marks omitted).
C.G.’s initial contention is that the district court abused its
discretion by awarding sanctions because Houston failed to
comply with procedural prerequisites. C.G. relies in part on
Local Rule 7‐1(g)(1) of the U.S. District Court for the Southern
District of Indiana, which requires movant’s counsel to file a
motion showing that she made reasonable efforts to confer
with opposing counsel and resolve the issues raised in the
No. 15‐1518 5
motion. S.D. Ind. L.R. 7‐1(g)(1). Relatedly, Local Rule 37‐1(a)
requires movant’s counsel to confer in good faith before in‐
volving the court in discovery disputes. S.D. Ind. L.R. 37‐1(a);
see also Fed. R. Civ. P. 37(a)(1) (requiring certification of such
efforts). C.G. argues that because Houston did not engage in
a discovery conference before her second motion for sanc‐
tions, the award of fees for issues raised in the second motion
was improper. According to C.G., the sole discovery confer‐
ence held on May 22, 2013—before the first motion for sanc‐
tions was filed—did not satisfy the court’s meet‐and‐confer
requirements with regard to Houston’s second and third mo‐
tions for sanctions. C.G. asserts that Houston should have
called for an additional discovery conference and provided
proper certification of efforts to confer with opposing counsel.
The evidence in the record indicates that Houston’s coun‐
sel met the meet‐and‐confer requirements through participa‐
tion in the May 2013 discovery conference, as well as through
email exchanges and calls to opposing counsel. In the context
of what the magistrate judge referred to as C.G.’s “obstreper‐
ous” conduct and “improper gamesmanship,” we cannot ac‐
cept C.G.’s contention that one discovery conference was in‐
sufficient. The record shows that Houston’s counsel made
various attempts to confer with C.G.’s counsel but that C.G.
rebuffed these efforts. Because C.G. was largely responsible
for the lack of meeting, the district court did not abuse its dis‐
cretion in finding that Houston had complied with the proce‐
dural prerequisites.
C.G. further argues that it did not conduct discovery in
bad faith and that any mistake or inadvertence on its part was
nothing more than “bad record‐keeping” unworthy of sanc‐
tion. To be sure, we have declined to impose sanctions where
6 No. 15‐1518
there is no showing of bad faith or improper purpose. See, e.g.,
Corley v. Rosewood Care Ctr., Inc. of Peoria, 388 F.3d 990, 1014
(7th Cir. 2004). Nonetheless, upon review, there is sufficient
evidence to support the district court’s finding that C.G. acted
in bad faith. For instance, before C.G. was joined as a defend‐
ant, Houston served on C.G. a non‐party documents sub‐
poena. C.G. never responded to this subpoena. Although
Houston did not seek relief for C.G.’s failure to comply with
the subpoena, service of the subpoena alerted C.G. to the need
to search for and secure documents related to its work for Hy‐
att at the New Year’s Eve party. Nevertheless, C.G.’s initial
search as part of its discovery obligations did not take place
until at least April 2013, roughly four months after C.G. was
added as a party. Furthermore, C.G. did not provide infor‐
mation sought by Houston regarding the security personnel
working for C.G. at the party in a timely manner, failed to
alert Houston that it could not provide reasonably definitive
information about the personnel, and then proceeded to con‐
tinually change its answers about the personnel. There is also
evidence of false or, at best, reckless and evasive testimony
offered by at least one of C.G’s witnesses, namely Charles
Guynn, C.G.’s owner and president. Such conduct does not
comport with C.G.’s claim that it did the best it could to pro‐
vide Houston with accurate, timely information in discovery.
C.G.’s argument that the sanction award was dispropor‐
tionate to the harm and the outcome of the underlying lawsuit
is also unavailing. The magistrate judge did not clearly err in
her factual findings related to C.G.’s misconduct in discovery,
nor did she err in concluding that C.G.’s meritorious defense
to Houston’s claim that C.G. failed to provide adequate secu‐
rity services did not excuse C.G.’s misconduct. Given the am‐
No. 15‐1518 7
ple evidence of C.G.’s attempts to impede, delay, and frus‐
trate Houston’s discovery efforts, the district court did not
abuse its discretion by imposing sanctions.
B. Attorney’s Fee Award
C.G. also challenges the nature of the sanction imposed by
the district court, namely the award of attorney’s fees. Under
the federal rules, Rule 37 sanctions may include an order to
pay the amount of the reasonable expenses incurred in mak‐
ing the motion for sanctions, including attorney’s fees. Fed. R.
Civ. P. 37(b)(2)(C). We review the district court’s award of at‐
torney’s fees for abuse of discretion. See Marrocco v. Gen. Mo‐
tors Corp., 966 F.2d 220, 225 (7th Cir. 1992).
C.G. contends that the district court abused its discretion
by awarding Houston’s counsel an unreasonable attorney’s
fee: $135,423.91 in fees and costs. According to C.G., the item‐
ized fee statement submitted by Houston’s counsel was “out‐
landish and replete with overbilling on unrelated tasks.” C.G.
also objects to alleged large blocks of time billed on tasks that
fall outside the scope of the court order.
Our case law provides that the “starting point in a district
court’s evaluation of a fee petition is a lodestar analysis; that
is, a computation of the reasonable hours expended multi‐
plied by a reasonable hourly rate.” Divane v. Krull Elec. Co.,
319 F.3d 307, 317–18 (7th Cir. 2003). In the case at hand, the
district court properly applied the lodestar analysis and of‐
fered a thorough explanation for why the costs, expenses, and
time claimed by Houston’s counsel were reasonable. At the
outset, the district court evaluated the itemized fee statement
and excluded entries requesting compensation for tasks it
8 No. 15‐1518
deemed unrelated to discovery. The district court also explic‐
itly addressed and rejected C.G.’s objections to thirteen spe‐
cific billing entries. Moreover, the district court properly con‐
sidered Houston’s counsel’s hourly rate of $250 per hour and
determined that it was reasonable based on counsel’s twenty‐
one years of litigation experience, as well as the fact that $250
per hour is counsel’s standard hourly rate. Thus, we cannot
conclude that the district court abused its discretion in calcu‐
lating and awarding attorney’s fees.
III. Conclusion
For the foregoing reasons, we AFFIRM the judgment of the
district court.