## In the 

# United States Court of Appeals

For the Seventh Circuit

____________

No. 01-3495

W ILLIAM T. D IVANE J R

., et al.

, Plaintiffs-Appellees

,

v.

KRULL E LECTRIC C O

., Defendant

, and

J OHN J. C URRY J R

., Respondent-Appellant

.

____________ Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 95 C 6108— George W. Lindberg

, Judge.

____________ ARGUED S EPTEMBER 24, 2002—D ECIDED F EBRUARY 11, 2003

____________

Before B AUER

, P OSNER

, and K ANNE

, Circuit Judges

.
K

ANNE

, Circuit Judge . Three years ago, we upheld the district court’s imposition of Rule 11 sanctions against John J. Curry Jr. for filing an answer and counterclaim that (i) denied certain facts that Curry’s client, Krull Electric Company, previously had admitted in companion litigation and (ii) asserted a frivolous counterclaim for which Curry never provided any evidentiary support, despite the frequent opportunities to do so during the2 No. 01-3495

underlying litigation’s “tortuous three-year road to trial.” Divane v. Krull Electric Co., Inc. , 200 F.3d 1020, 1022 (7th Cir. 1999) [hereinafter Divane I ]. We remanded the case to the district court to determine the appropriate amount of sanctions, vacating the district court’s initial blanket award of attorney’s fees and costs because it necessarily included some amount that did not directly result from Curry’s sanctionable conduct. Id. Dissatisfied with the
district court’s decision onremand, Curry appeals the sanction award once again, arguing this time that the
district court abused its dis cretion by ignoring certain elements of our mandate and disregarding governing principles in fashioning an appropriate award. Because
the district court acted withinits discretion in reducing the amount of the original sanction award by a figure representing a reasonable estimate of what the plaintiffs’ attorney’s fees and costs would have been absent Curry’s sanctionable conduct, we affirm.

HISTORY

The sanctions were imposed in a case that began in October 1995, when plaintiffs-appellees William T. Divane Jr., et al., known collectively as the Electrical Insurance Trustees, filed a complaint against defendant Krull Electric Company claiming that the defendant owed them delinquent benefit-fund contributions under the terms of a collective bargaining agreement (“CBA”). For ease of later explanation, we will refer to this case as Krull Electric II. Specifically, in Krull Electric II, the Trustees alleged that Krull Electric was an electrical employer employing electricians pursuant to an October 1984 letter of
assent that Krull Electric had executed to a CBA originally entered into between Local 134 of the International
Brotherhood of Electrical Workers and the Electrical Contractors’ Association of the City of Chicago. Under the terms of the CBA, Krull Electric (as an employer) agreedNo. 01-3495 3

to pay certain wages and to file a monthly payroll report and make corresponding mont hly contributions to the Trustees (as the duly appointed representatives of Local 134 and the Association) to cover certain fringe benefits for Krull Electric’s employees. The Trustees alleged that Tan Lee—an electrician employ ed by Krull Electric and husband of its president, Pamela Lee—had testified in a September 1995 deposition (taken in a related case, which is explained below) that he had been working forty hours a week for the company. This was news to the Trustees;Krull Electric had stopped making contributions in October 1994, filing monthly payro ll reports that claimed that
no contributions were due because no “clock hours” had been logged by any of its electricians. Citing provisions of the CBA and its related agreements, which granted the Trustees the power to demand and collect delinquent contributions on the Fund’s behalf, the Trustees broughtsuit under ERISA and the Labor Management Relations Act to recover the delinquent funds.

Krull Electric denied liability, claiming it had no payment obligation because it was no longer a signatory tothe CBA, and filed a counterclaim alleging that the Trustees’ demand for payment constituted a violation of section 302 of the LMRA. 29 U.S.C. § 186 et seq. (1995) (prohibiting the collection of payments without the requisite provisions of services or benefits ). In its answer, Krull Electric denied knowledge of various CBA and related-agreement provisions, denied knowledge that Tan Lee had testified to working forty hours a week, and although it admitted that it had not made any fringe-benefit contributions since October 1994, denied that it had any obligation to make them. It asserted four affirmative defenses: (1) that it was not bound by any agreement to pay benefit-fund contributions; (2) that the Trustees suffered no loss; (3) that the amounts claimed by the Trustees were excessive; and (4) that the Trustees’ demands for payment were unlawful. In its corresponding single-count counterclaim,4 No. 01-3495

Krull Electric explained why it was no longer obligated to make benefit-fund contributions despite its October
1984 assent to the CBA: Krull Electric alleged that in October 1994, Local 134 determined that the company was no longer a signatory of the CBA. And since the Trustees knew (or should have known) of Local 134’sdetermination, their demand to compel payment violated the LMRA.

Krull Electric’s denials and counterclaim allegationsfrustrated and confused the Trustees. First, the denials directly contradicted admissions the company had made just months earlier in response to another, related complaint the Trustees had filed against Krull Electric. In that case, which had been pending before Judge Kocorassince April 1995, the Trustees claimed that Krull Electric had been underreporting the amount of hours Tan Lee had worked each week for the years 1992 and 1993in order to minimize the amount of fringe-benefit contributions the company was responsible for making underthe CBA. Since it was filed first (even though it is discussed second here), we will call this case Krull Electric I

. The Trustees’ Krull Electric I complaint had set forth some of the same CBA and related-agreement provisions that were alleged in Krull Electric II . But in its Krull Electric I answer, the company had admitted knowledge ofthese provisions and to being a signatory to the agreement. (Tellingly, Krull Electric filed a motion on May 15, 1996—five days after filing its answer in Krull Electric

II

—seeking to amend its Krull Electric I answer in order to remove its admissions regarding its knowledge of the CBA provisions and to refute its status as a signatory. Judge Kocoras denied the motion.) Second, it was in the course of discovery for Krull Electric I that Tan Lee’s deposition had been taken, revealing the post-October 1994
hours worked that formed the core of the Trustees’ cause
of action in Krull Electric II . And as such, the Trustees were perplexed over how Kru ll Electric—who, as a partyNo. 01-3495 5

in Krull Electric I, attended the Tan Lee deposition and was entitled to the same copy of the deposition transcript that the Trustees had received—could credibly claim lack of knowledge over what Tan Lee had testified to. Finally,at Pamela Lee’s deposition on May 24, 1996, the Trustees inquired into the factual underpinnings of the counterclaim: namely, the alleged Local 134 determination. Over objections by Curry, Pamela claimed she didn’t know what Local 134 might have done in October 1994 and, strangely, that if she did, the information about it was privileged. After the deposition, the Trustees informedCurry that if he could not provide support for Krull Electric’s counterclaim allegations, they would seek sanctions.

Curry never did. He deposed several Local 134 members, but never was able to drum up any support for the notion that the union had repudiated its agreement with Krull Electric. So on September 13, 1996, the Trustees sent Curry a motion requesting that he withdraw the counterclaim and amend his answer by October 4, 1996, or face sanctions. Judge Lindberg denied the motion to strike, noting that by alleging the October 1994 repudiation by Local 134, Krull Electric had raised an issue of fact. But the court warned Curry that if he could not substantiate his claim, he would face sanctions. Discovery concluded,
and the case went to bench trial in December 1997. In his trial brief, Curry advanced a couple of new arguments as to why the company was not obligated to pay contributions as required by the CBA. Finding these last-minute arguments as equally unsupported by the evidence as the October 1994 repudiation allegation, the district court found in favor of the Trustees and awarded just over $54,000 in damages.

In post-trial proceedings, the Trustees renewed their Rule 11 motion, requesting the court to award $25,000 as a flat sanction. Simultaneously, they filed a fee petition against Krull Electric under ERI SA’s fee-shifting provision.6 No. 01-3495

In a March 27, 1998 order addressing both motions, the district court first found Curry’s conduct sanctionable, observing that the answer and counterclaim had beenfiled without any evidentiary support (or reasonable inquiry) and were intended for the improper purposes of incurring unnecessary delay and needlessly increasingthe costs of litigation. As such, Curry’s sanctionable conduct had infected the entire proceeding, pressing an otherwise straightforward, routine, and, for that matter, meritorious case (because, after all, Krull Electric never was able to produce any viable defense to the Trustees’claim) all the way to trial, imposing en route undue burdens on the Trustees and the court. As a sanction, the district court ordered Curry to pay a $5000 penalty to the court, and, should Krull Electric not be able to satisfy its judgments, to pay the roughly $37,645 in attorney’s fees and $2526.07 in costs prayed for by the Trustees in their ERISA fee petition—reasoning that the practical effect (and perhaps targeted goal) of Curry’s obstructionismwas the avoidance of any realistic possibility of the Trustees’ recovery from Krull Electric, which had by thenclaimed insolvency and seemed likely to enter bankruptcy proceedings. In setting the amount of the fee award, the district court considered and rejected Krull Electric’s numerous objections to the Trustees’ fee petition, including claims that the Trus tees’ attorney’s billing rates were unreasonable and the time requested was excessive.

Dissatisfied, Curry filed a Rule 59(e) motion seeking to alter or amend the court’s sanction award, essentially repeating the arguments he advanced in opposition to the Trustees’ Rule 11 motion and fee petition the first time. In an April 16, 1998 order, the district court refused to address the only new argument Curry advanced—that the court had in fact already stricken the counterclaim back in June 1996—because that argument was available to Curry at the time he filed his original response. But the court did proceed to modify the judgment. HavingNo. 01-3495 7

determined that circumstances now made clear that KrullElectric would not be able to satisfy the judgments entered against it, the court di spensed with contingencies altogether and ordered Curry to pay the Trustees all attorney’s fees and expenses incurred after May 10, 1996— the date of the offensive pleading—a total of $33,292 in fees and $2306.69 in costs. In the court’s opinion, this amount was an appropriate sanction for Curry’s conduct
and was warranted for effective deterrence.

On appeal, we upheld the district court’s imposition of Rule 11 sanctions against Curry, rejecting his procedural and substantive challenges. Divane I , 200 F.3d at 1022. But in evaluating the fee-based sanction in light of theRule’s mandate in subsection (c)(2) that sanctions be limited to the least amount su fficient to deter repetitious conduct and—that being so—that an award of reasonable attorney’s fees and other expenses be limited to those directly resulting from th e sanctionable conduct, we could not accept that all of the awarded legal expenses
were warranted. Id. at 1030; see also Fed. R. Civ. P. 11(c)(2). We remanded the case so that the district court could set a more appropriate amount, noting that it was in the best position to determine which of the Trustees’ legal costs were the direct result of the sanctionable
conduct. Id.

In remanding, we added a “cautionary note” to the district court, which explained that a proper award would include, for example, any research into the sole legal issue raised by Curry’s counterclaim, but that it could not include such activities as the cost of deposing witnesses who would have been deposed without regard to the
frivolous counterclaim. Id. at 1031. Moreover, we observed that we could see no reason why the sanctionable
denials in the answer would cause the Trustees to incur additional legal expenses since those denials were di-8 No. 01-3495

rectly at odds with admissions made in companion litigation. Id.

On remand, Curry seized upon our cautionary language as an explicit endorsement that the district court evaluate each specific line-item entry in the fee petition in setting the appropriate award. Moreover, he read our language questioning whether any additional fees could resultfrom contesting denials in an answer that had been admitted elsewhere to mean that we had conclusively held unrecoverable any fees claimed to have resulted from the sanctionable answer. As this left only the sanctionable counterclaim, he scoured the fee petition objecting to any line-item entry that did not sp ecifically reference it and it alone. As a result, he struck all but two entries, which totaled $334 in fees. Apart from his objections, Curry advocated for a period of discovery during which he could depose the Trustees’ counsel and gain access to their individual timesheets, which in his opinion were the only evidence of contemporaneous timekeeping capable ofclarifying the pre-billing reports and conclusively establishing the time spent addressing his sanctionable conduct.
He demanded that at the conclusion of this additional discovery the court hold an evidentiary hearing before ruling on an appropriate award.

Viewing his latest procedural requests against the protracted procedural history of this case and its relatedproceedings, the Trustees argued in response that granting the request for additional discovery and an evidentiary hearing would do nothing mo re than create another battlefield for Curry’s war of attrition, one that the court need not endorse or participate in. In any event, they asserted that their pre-billing time descriptions were adequate and that discovery of individual timesheets wouldn’t aid the district court in its analysis. The difficulty in separating recoverable from nonrecoverable fees was not—as Curry asserted—due to insufficient time-record-No. 01-3495 9

ing procedures or a failure to satisfy the Trustees’ burden to substantiate their fee request, but was instead a byproduct of Curry’s sanctionable conduct. The denial that Krull Electric was no longer bound by the terms of the CBA (an argument up until trial based solely on the counterclaim allegations) so pervaded discovery and the pretrial proceedings that the Trustees were unable toseparate by individual time entry that time spent litigating against the counterclaim from that time spent prosecuting their own case. To illustrate, they responded tomany of Curry’s objections to their individual time entries on the pre-billing report, setting forth how each challenged entry directly related to Curry’s sanctionable conduct. Moreover, they arguedthat Krull Electric’s only practical defense to the action was to delay the course of the litigation, which Curry accomplished by asserting
the baseless counterclaim and obstructionist answer. Absent this sanctionable conduc t, the Trustees argued that the company would, at the least, have been forced into
favorable settlement terms since Krull Electric had no viable defenses to the Trustees’ claims (as born out by the meritless arguments asserted in its last-minute trial brief). But because of the time the Trustees spent battling against Curry’s stonewalling tactics, Krull Electric was essentially allowed to liquidate its assets, preventing any meaningful recovery by the Trustees. Thus, the Trustees stood by their claim to the entire amount originally
awarded.

Only after additional prompting by the court to comeup with some portion attributable only to the counterclaim did the Trustees capitulate. They pointed to the fees they had been awarded in prosecuting a similar straightforward ERISA case and argued that those fees, $8500, be deducted as a fair benchmark of what it would have cost them to prosecute this litigation against an opponent who was unwilling to violate Rule 11. The court10 No. 01-3495

agreed, but deducted not the $8500 eventually awarded (which reflected reasonableness-of-fee-and-time deductions), but the $11,584 that the Trustees had requested in that fee petition. So it reduced the original amount of thesanctions, $29,869, by $11,584, to arrive at $18,285. Moreover, the district court agreed with Curry’s position thatin our cautionary note we had determined that no additional fees could have been generated in response to the
answer’s sanctionable denials. The court estimated that
one-third of the fees that were not attributable to the estimated figure of the Trustees’ base prosecution costs were attributable to other nonrecoverable aspects of the case (i.e., litigating against the denials), and thus further reduced the award by $6095, arriving at $12,190. As for costs, the district court reduced the original $2306.69 requested by forty-one percent, since the $12,190 fee award represented forty-one percent of the original $29,869 requested for fees. So it added $945.74 in costs to the running total, bringing the sanction award to $13,135.74. Finally, the district court added an additional $6425 in attorney’s fees generated in litigating the Rule 11 motion through remand, representing two-thirds of the totalamount requested, $9637.50; the one-third reduction representing the amount of time on remand the Trustees had spent arguing that the sanctionable denials resulted in additional fees (an estimate based on the observation that approximately one-third of the Trustees’ briefs addressed that argument).

Regrettably—but not surprisi ngly—the case is back before us. Curry argues that the district court’s chosen methodology was an abuse of discretion and, for that matter, that had the district court conducted anything
short of a mini-trial over eachof the recorded entries, it
would have likewise abused its discretion. In the alternative, since the Trustees refused to meet him on the lineitem-entry battlefield, Curry argues they are in derelic-No. 01-3495 11

tion of their duty to substantiate their fee request and thus entitled to no fees-as-sanctions award at all (or at least, only to the $344 he admits directly resulted fromhis sanctionable conduct). In addition, he asserts a number of objections to the reasonableness of the entire fee request itself: namely, that the hours submitted were excessive and that the rates were unreasonably high.Finally, he argues that the award should have been further reduced based upon numerous equitable principles: most notably, that the Trustees failed to mitigate their damages and that the district court did not properly take into account his ability to pa y the fine assessed. Curry’s remaining challenges have been considered by the court, are meritless, and warrant no discussion here.

ANALYSIS

I.

“A request for attorney’s fees should not result in a second major litigation.” Hensley v. Eckerhart , 461 U.S. 424,437 (1983). Despite this oft-quoted admonition, fee litigation has become a significant burden on the federal courts. As we have previously observed, fee litigation “can turn a simple civil case into two or even more cases—the case on the merits, the case for fees, the case for fees on appeal, the case for fees for proving fees, and so on ad infinitum, or
at least ad nauseam.” Ustrak v. Fairman , 851 F.2d 983, 987 (7th Cir. 1988). Given the burdens this litany of fee litigation imposes upon the co urts, we have granted wide
latitude to district courts insetting awards of attorney’s fees, for “neither the stakes nor the interest in uniformdetermination are so great as to justify microscopic appellate scrutiny.” Id. Generally, a district court will only
abuse this discretion when no reasonable person could have taken the same view it adopted. Bright v. Land O’Lakes, Inc. , 844 F.2d 436, 442 (7th Cir. 1988).12 No. 01-3495

The same holds true for awards of attorney’s fees as Rule 11 sanctions. In general, the district court enjoys broad discretion in setting a sanction award that it believes will serve the deterrent purpose of Rule 11. In an effort to deter future conduct, it may impose a flat sanction, it may strike offensive pleadings, or—more commonly—it may direct the offending party to pay the other party’s reasonable attorney’s fees. In the latter case, “Rule 11 is not a feeshifting statute in the sense that the loser pays.” Mars Steel Corp

. v. Cont. Bank , 880 F.2d 928, 932 (7th Cir. 1989). Instead, “Rule 11 ensures that each side really does bear the expenses of its own case—that the proponent of a position incurs the costs of investigating the facts and
the law.” Id. ; see also Johnson v. A.W. Chesterton , 18 F.3d 1362, 1366 (7th Cir. 1994). But if the court determines that an award of attorney’s fees will serve the deterrent purpose of Rule 11, it has an obligation to award only those fees which directly resulted from the sanctionable conduct. Fed. R. Civ. P. 11(c)(1)(A). This ensures that the proponent of a sanctionable position ultimately pays thecosts resulting from it, serving a dual purpose of deterrence and restitution, while avoiding blanket fee-shifting, which would have the tendency to overcompensate the opponent and penalize the proponent.

In practice, this proves to be an inexact science. Essentially, the analysis is a matter of causation. This is apt since we have already analogized Rule 11 litigation to tort law, having opined that “it establishes a new form of negligence,” where one owes a “duty to one’s adversary to avoid needless legal costs and delay.” Mars , 880 F.2d at 932 (citing In re Central Ice Cream Co. , 836 F.2d 1068,1072 (7th Cir. 1987) (“[T]he Rule speaks of ‘reasonable’ prefiling inquiry, the language of tort law.”) and Hays v. Sony Corp. , 847 F.2d 412, 418 (7th Cir. 1988) (“Rule 11 defines a new form of legal malpractice.”)). Carrying the analogy further: once a violation of this duty has been established,No. 01-3495 13

a claimant must still show how its damages resulted from that violation. As with tort law, there are easy cases and hard ones. If a plaintiff files a baseless single-count complaint, it is fairly simple for a district court deciding upon an award of attorney’s fees as a Rule 11 sanction to determine which fees resulted from the plaintiff’s conduct: they are those that the defendant spent answering the complaint and defending against it. This scenario is the slip-and-fall of Rule 11 cases. The task becomes more complicated with multicount complaints or multiple defenses intertwined around si milar operative facts, some of which are sanctionable, some not. Think of these cases as complex toxic-tort litigatio n. But just as tort law hasdeveloped various mechanisms to allow innocent plaintiffs to recover from negligent defendants even if it isdifficult, if not impossible, to prove that all of the plaintiff’s injuries resulted from the defendant’s conduct, so too has the law of fee litigation developed to address these more complex scenarios.

In deciding upon a fee award in a case where a plaintiff has only partially prevailed, a court must apportion the award according to the results actually achieved. Hensley , 461 U.S. at 434-37. Perhaps a victorious plaintiff will have succeeded on only some of his claims for relief, in which case the district court has an obligation to adjust the award downward to account for time spent on
unsuccessful claims. In Hensley , the Supreme Court outlined the framework for the district court’s analysis:“Factually unrelated claims are treated as separate lawsuits, and therefore if the plaintiff loses on such a claim he is not to be reimbursed for the attorney’s fees allocable
to it.” Ustrak , 851 F.2d at 988 (discussing Hensley ). In this scenario, a fee applicant should have maintained and provided records identifying “the general subject matter of his time expenditures,” which will “enable a reviewing court to identify distinct claims.” See Hensley , 461 U.S. at14 No. 01-3495

437 & n. 12. “But where ‘the plaintiff’s claims of relief . . . involve a common core of facts or [are] based on related legal theories,’ so that ‘much of counsel’s time will be devoted generally to the litigation as a whole, making it difficult to divide the hours expended on a claim-by-claim basis, . . . the district court should focus on the significance of the overall relief obtained by the plaintiff in relation to the hours reasonably expended on the litigation.’ ”
Ustrak , 851 F.2d at 988 (quoting Hensley , 461 U.S. at 435). If the latter is applicable, “[n]o exact calculation” of the time reasonably required to prepare and litigate a case
if that case had been confined to its meritorious issues is possible. Id. at 989. The amount is an “elusive counterfactual,” and thus relegated to the domain of best estimates. Id. (finding that the “best estimate” of the cost of prosecuting plaintiff’s sole meritorious claim amid five other unsuccessful ones would have been “half as great as it turned out to be”).

We see no reason why Hensleyshouldn’t control under Rule 11’s directly resulting standard. For that matter neither do the parties. The more pressing question iswhere the relationship between the Trustees’ bare prosecution costs and Curry’s sanctionable conduct lies amid Hensley ’s distinction between factually unrelated, independent claims and those claims interwoven around a common core of facts or based on related legal theories. A district court is less likely to abuse its discretion in deciding to “simply reduce the award to account for . . . limited success,” rather than identifying and eliminating specific unrelated hours, ina case where the prevalence of common facts and related themes makes it difficult, if not impossible, efficiently and expediently to pursue the
other alternative. See Hensley , 461 U.S. at 436-37 (“Thereis no precise rule or formula for making these determinations. The district court may attempt to identify specific
hours that should be elimin ated, or it may simply re-No. 01-3495 15

1 The Trustees’ claim had the following elements: (1) the Trusteesadminister ERISA funds for Local 134 members; (2) Krull Electric was a signatory to Local 134’s CBA, which required contributions to be made to the Tr ustees; (3) Krull Electric employed an individual who performed bargaining unit work; and (4) Krull Electric failed to remit fringe-ben efit fund contributions to the

Trustees. See29 U.S.C. §§ 1132(a)(3), 1145 (2002); Connors
v. Hallmark & Son Coal , 935 F.2d 336, 337-38 (D.C. Cir. 1991);

1 R OTHSTEIN ET AL

., E MPLOYMENT LAW§ 3.27 (2d ed. 2002). duce the award to account for the limited success. The [district] court necessarily has discretion in making this equitable judgment.”).

Here, it cannot be said that the Trustees’ claim and Krull Electric’s counterclaim are “factually unrelated.” They share a central issue of proof: During the relevant time period, was Krull Electric obligated under the CBA agreement to make contributions? To succeed on their claim, one of the elements that the Trustees had to prove was that Krull Electric was a signatory to the CBA 1 ; conversely, in order for Krull Electric to succeed in its own right, it had to prove it was not. In its answer, Krull Electric first denied that it had any contributory obligations and then
asserted this denial as an affirmative defense. It added
as another affirmative defense that the Trustees’ demandfor payment without obligation was unlawful. These defenses comprised Krull Electric’s counterclaim; only in pleading the counterclaim, Krull Electric was requiredto submit a short plain statement of the facts. Krull Electric alleged that Local 134 had repudiated Krull Electric’s signatory status in October 1994 (no obligation) and that the Trustees’ demand for payment violated the LMRA (unlawful). In addition to the October 1994 repudiation allegation, Krull Electric’s trial brief presented a couple new factual twists about why Krull Electric was no longer bound by its earlier assent to the CBA. These alternate16 No. 01-3495

theories could have provided support for Krull Electric’s counterclaim, had Krull Electric been able to offer up any proof in support. It could not. It was this complete failure of proof, regardless of the theory advanced, that ultimately made the counterclaim sanctionable. Restated, if the counterclaim was supportable on any theory, itwould not have been sanctionable. But regardless of whether it took the form of the initial October 1994 repudiation allegation or those later advanced, the Trustees had torefute the central allegation of the sanctionable counterclaim that Krull Electric was no longer obligated to contribute in order to succeed in prosecuting their case.

This is not to say that a blanket award of all attorney’s fees incurred in the litigation was justified under Rule 11. Indeed, we remanded because it was not. But certainly
this case was like those where recoverable claims are closely interwoven factually and legally with nonrecoverable ones. And we cannot say that given this interrelatedness, the district court abused its discretion in determining that an analysis of each line-item entry in the petition was overburdensome and unlikely to produce a reliable result. See Tomazzoli v. Sheedy , 804 F.2d 93, 98 (7th Cir. 1986) (“[I]t is generally unrealistic to expect a trialcourt to evaluate and rule on every entry in an application.”).

Curry would reject this conclu sion, arguing that a district court has an obligation to respond to specific objections raised in opposition to a fee petition. See Oxford Asset Mgmt. v. Jaharis , 297 F.3d 1182, 1196 (11th Cir. 2002). The Eleventh Circuit has observed that the “more specific the objections to a fee application are, the more specific the findings and reasons for reject ing those objections can be.”
Id. at 1196-97. Here, Curry asserted boilerplate objections to all but two entries in the fee petition. Essentially, they were comprised of one of two categories: either he objected to any entry that did not me ntion the counterclaim specifi-No. 01-3495 17

cally, or he objected to line item entries that clearly referred to the counterclaim or motions written in opposition to it, but objected to them because they also included time he opined was dedicated to a ddressing other tasks. Curry would have a point if his sanctionable conduct and the Trustees’ prosecution efforts were not—as demonstrated above—so factually and legally intertwined. Keeping this interrelatedness in mind, howe ver, we find—as the district court must have—that Curry’s boilerplate objections were unduly overbroad. The Trustees effectively demonstrated this point to the district court in their reply, where they
showed how entries that did not reference the counterclaim on their face nonetheless reflected time spent in opposition to it (or at the least, time spent litigating the central issue
in the case: whether or not Krull Electric was obligated under the CBA). Nonetheless, even if Curry’s individual objections were nonspecific in the sense that they were fatally overbroad, the gist of them had some merit; on remand the district court was charged with the obligation to segregate the recoverable from the nonrecoverable. But Curry’s concerns are addressed by the district court’s decision to reduce the award; they are not offended by thecourt’s refusal of Curry’s invitation to do so on an entry-byentry basis.

Curry next argues that the district court violated our mandate by simply reducing the fee award instead of deciding upon specific entries in the fee petition. Curry reads too much into our opinion. We remanded because we noted that the district court was in the best position to make the decision on fees, having had first-hand experience with the parties and the issues advanced throughout the litigation. Had we felt otherwise, we had theauthority to review the petitions and make our own determination of an appropriate award. See Ustrak , 851 F.2d at 989-90 (listing cases where appellate courts made necessary adjustments to fee awards “without bothering18 No. 01-3495

to remand”). In remanding, our cautionary notes merely reinforced the district court’s obligation to segregate out those fees generated as a result of sanctionable conduct. They did not mandate that a particular methodology be employed to achieve that end.

II.

We next address the application of the district court’s chosen methodology. Under Hensley, the starting pointin a district court’s evaluation of a fee petition is a lodestar analysis; that is, a computation of the reasonable hours expended multiplied by a reasonable hourly rate. 461 U.S. at 434. Here, that figure was the $29,869 that the Trustees had requested in their initial post-trial fee petition submitted under ERISA’s fee-shifting provision.
The district court used this number as a base award from which to deduct nonrecoverable fees. Curry argues that the district court abused its discretion in using this figure as a starting point without first making reductions for unreasonable hours (vague time entries, multiple tasks in single entries, etc.) and unreasonably high hourly
rates. But the district cour t had already rejected these same arguments in its March 27, 1998 order, in which it ruled that the hours spent and the rates charged were reasonable. Curry did not appeal this aspect of that ruling, and, as such, these arguments have been waived. See Moriarty v. Svec , 233 F.3d 955, 963-64 (7th Cir. 2000). In any event, since no circumstances have changed that would affect the district court’s initial impression of the reasonableness of the total hours spent litigating the caseor the hourly rates charged, we can see no abuse of discretion in the district court’s refusal to readdress the
issue on remand.

Curry also challenges the baseline figure by arguing that it still improperly incl uded some amount of feesNo. 01-3495 19

2 We reiterate that we have the power to modify the judgment without remanding. See Burda v. M. Excker Co. , 2 F.3d 769, 778 (7th Cir. 1993); Ustrak , 851 F.2d at 989-90. We do so here in the interests of bringing this protracted litigation to a close. generated before the filing of the sanctionable answer and counterclaim. Looking at the original fee request, Curry asserts that just over $4800 in fees included in the original petition was generated be tween October 1995 and May 10, 1996. We agree and will subtract $4800 from the court’s baseline figure of $29,869. In so doing, we note that Curry
receives a bit of a windfall from this deduction since the court’s later subtraction for estimated prosecution costs, which was based on a bare ERISA claim taken from filing to judgment, would have by definition accounted for expenses incurred at the outset of the Trustees’ claim; that is, between filing the complaint and receiving the
sanctionable answer. But in the face of clear evidence—
because the burdensome and inexact task of interrelatedclaim segregation discussed above is not at issue for the time period before the sanctionable papers were even
filed—we will make the deduction. 2

Curry’s main problem with the court’s chosen methodology is its decision to use the fees incurred by the Trustees in another, unrelated ERISA case as a benchmark for
what their fees would have been in this case had nosanctionable conduct occurred. Despite Curry’s protestations, the approach itself is not novel. We have noted
that district courts often look to fees awarded in similar litigation for guidance in fashioning appropriate awards.
See

, e.g. , Tolentino v. Friedman , 46 F.3d 645, 652 (7th Cir. 1995) (fees charged in other cases used as evidence of attorney’s market rate); People Who Care v. Rockford Bd. of
Educ. , 90 F.3d 1307, 1315 (7th Cir. 1996) (same). Here, the district court looked to a recent ERISA case prosecuted by the Trustees against another signatory to the same20 No. 01-3495

CBA, Divane v. Barnet Electric Co. , No. 93 C 1721, 1995 WL 55245 (N.D. Ill. Feb. 7, 1995). An audit of Barnet Electric’s payroll by the Trustees’ accountant revealed inaccurately kept records for fiscal year 1988 and, as a result, showed the Trustees being owed some $29,000 indelinquent benefit-fund contributions. There was no dispute that Barnet Electric was a signatory to the CBA orthat it was liable to make regular reports and corresponding benefit-fund contributions. Instead, the only issuepresented for trial was whether the audit revealed unreported overtime hours or merely noncompensable reimbursements. Barnet Electric was a single issue ERISA case; at most, the kind of case that Krull Electric II should have been absent sanctionable denials and allegations
that Krull Electric was no lo nger bound by the agreement.

Curry makes much of the fact that the same parties were simultaneously litigating Krull Electric I and that if the court was going to look to other cases, it should
have looked to the Trustees’ Krull Electric I fee petition (some $48,000). It is not clear whether this argument was ever presented to the district court, but even if it was, we don’t find it persuasive. In making it, Curry fails to recognize that Krull Electric II should have been a very simple case because of the admissions obtained as
a result of the Krull Electric I litigation. Almost by definition then, Krull Electric I was not analogous and must have been excluded from the court’s comparison.

In the end, we could speculate a number of ways that
the district court could have decided upon an estimate of base prosecution fees. For example, it could have looked to more than one case, and even to similar cases between other litigants, and averaged the results. But we cannot say that the approach it did take, given itsknowledge of both the issues and the protracted procedural history of the instant case, was one that no other reasonable person in the same situation would have taken.No. 01-3495 21

Continuing to follow the district court’s analysis, if we deduct the $4800 from the baseline figure of $29,869 and then deduct the district court’s $11,584 estimate ofbase prosecution fees, we arrive at $13,485. Having decided that we had ruled conc lusively that no additional fees were generated as a result of Curry’s sanctionable denials, the district court next estimated that one-third of this remaining amount (which is now $13,485) shouldbe attributed to time spent litigating against the nonrecoverable, though nonetheless sanctionable denials. Had the Trustees taken issue with this aspect of the district court’s award and cross-appealed, they may have found sympathetic ears: although we note that in further reducing the amount the district court was only attempting to follow the cautionary statements in our first opinion, we see potential problems with its conclusion.

First, we observe that it is a very different thing to say “we see no reason” why the sanctionable denials would generate additional fees, Divane I , 200 F.3d at 1031, thanto hold “there is no reason.” The former connotes skepticism about a possibility; the latter forecloses it. Accord Moriarty , 233 F.3d at 964 (“Moriarty’s first claim is that any reduction in the Phase I fees is prohibited by language in the first opinion of this court, which states that ‘we see no error in any of the cost and fee calculations the [district] court has already ordered.’ However, immediately preceding this phrase the opinion states that ‘werealize that this award may have to be adjusted on remand to reflect any addition al proceedings.’ This language plainly demonstrates that we did not freeze the amount of the Phase I award but rather explicitly invited the district court to adjust it in accord with subsequent proceedings.” (citations omi tted)). Second, the Trustees did present evidence in their submissions on remandshowing how the sanctionable denials resulted in additional attorney’s fees. Krull Electric had argued at trial22 No. 01-3495

that its Krull Electric I admissions were evidentiary, not judicial in nature. In other words, although they were admissible evidence, they were nonbinding, and Krull
Electric was free to introduce evidence to refute them. The Trustees produced trial tran scripts to show that thecompany proceeded to spend trial time introducing testimony to that effect, and that the Trustees were obligatedto respond. Finally, the very fact that the court attributed some amount of fees to the task of litigating against the denials belies our prognostication that no amount of fees was generated in response to them. We doubt thatthis amount was substantial (another reason for rejecting the estimated one-third reduction); nevertheless, when the district court found that fees were generated in response to the sanctionable denials, the fees should have been awarded, not discounted. But since on appealthe Trustees assert no error with this portion of the district court’s analysis, we will not decide whether there was one. Hence, we will reduce our adjusted figure ($13,485) by one-third ($4495), arriving at $8990.

Moving on to costs, the district court next computed
a ratio of the amount of fees it was prepared to awardagainst the amount originally requested and then apportioned costs accordingly. It was reasonable to expect that portion of the fees attributable to the sanctionable conduct would bear a relationship to the portion of the costs attributable to the same, and thus we see no error in this next step of the court’s analysis. If we do the same, allowing for our adjustments, we calculate that thirty percent of the total costs should be awarded, or $692. Adding this amount to the $8990, we arrive at $9682.

The court then considered an award of fees and costs for the effort spent in remand proceedings. Rule 11 allowsthe court, in its discretion, to award to the prevailing party the reasonable attorney’s fees and expenses incurred in presenting or opposing the Rule 11 motion. Fed. R. Civ.No. 01-3495 23

P. 11(c)(1)(A). Curry never convincingly argues why the fees incurred on remand are noncompensable under the rule. At the end of the day, despite the fact that it took an appeal and additional proceedings on remand, the Trustees prevailed on their motion, proving that Curry violated the rule and securing an award of attorney’s fees
as a sanction. Cf. Sullivan v. Hudson , 490 U.S. 877, 889 (1989) (holding that a claimant could recover attorney’s fees for work done in administrative proceedings afterremand, where those proceedings were critical to vindication of the claimant’s rights); Weyant v. Okst , 198 F.3d 311, 316-17 (2d Cir. 1999). Given the amount of paper Curry filed in opposition to the Tr ustees’ efforts to secure the amount of the award on remand—including, for example, motions to reconsider, motions to amend motions, anamended motion to reconsider, numerous discovery requests and subpoenas, a motion to present a surreply and the surreply itself, and rescheduling motions—it ishardly surprising that the district court felt that the Trustees’ efforts in successfully prosecuting their motion should not go unrewarded. Furthermor e, we have reviewed the Trustees’ fee petition for this period and find the hours expended (64.25) and the rates charged ($150 per hour) to be reasonable. And although for reasons similar to
those discussed above we ar e skeptical of the district court’s one-third reduction of this amount, we will notdisturb this aspect of the award absent challenge. Adding two-thirds of the Trustees’ expenses generated on remand ($6425) to our adjusted figure ($9682), we total $16,107.

III.

Finally, we address Curry’s remaining arguments attacking the district court’s refusal to reduce the sanctions award further. Of these, the only challenges meriting24 No. 01-3495

discussion are whether the Trustees’ failed to mitigate their damages and whether the district court failed to consider Curry’s financial situation.

“A party defending against a frivolous paper has a duty under Rule 11 to mitigate its legal fees and expenses by resolving frivolous issues quickly and efficiently.” Dubisky v. Owens , 849 F.2d 1034, 1037 (7th Cir. 1988). Which is to say, “[c]ounsel must mitigate [his] damages by correlating his response, in terms of hours and funds expended, to the merit of the claims.” Id. (quotationsomitted). “Further, the court must consider to what extent a defending party’s injury could have been avoided
or was self-inflicted.” Id. (citing Thomas v. Capital Security Servs., Inc. , 836 F.2d 866, 879 (5 th Cir. 1988) (en banc)). “This entails an examination of the promptnessand method of bringing the frivolous conduct to the attention of both the court and the opposing party.” Id.

In Dubisky , we remanded a Rule 11 sanction award tothe district court for redetermination in light of the defendant’s failure to mitigate its damages incurred in responding to the plaintiff’s complaint. The plaintiff’s complaint inaccurately alleged diversity jurisdiction. Instead of informally bringingthis error to the attention of plaintiff’s counsel, the defendants filed an extensive motion to dismiss and moved for sanctions, all of whichgenerated substantial fees. Finding the plaintiff’s conduct sanctionable, the district court awarded as a sanction all the fees generated in preparing the motion to
dismiss. We held this to be error. Litigants have a duty to use the least expensive alternative to alert the court and the offending party to a possible Rule 11 violation. An informal phone call or status conference would have alerted the plaintiff to his error and thus could have avoided litigation over the issu e. If, however, after receiving informal notice of his error, the plaintiff chose to press his jurisdictional allegations then the defendantNo. 01-3495 25

would have been justified in filing its extensive motion. Id.

at 1038.

Here, we all but considered and rejected Curry’s mitigation argument three years ago. There, Curry argued that we should estop the Trustees’ motion since it was not filed in a timely fashion. Divane I , 200 F.3d at 1027. We rejected Curry’s argument noti ng that “[i]mmediately after Pamela Lee’s testimony, when it became apparent to
Trustees’ counsel that the counterclaim lacked a factual basis, Trustees informed Krull Electric and Curry that they would file for sanctions if factual information to substantiate this claim did not emerge.” Id. at 1028. Therefore, Dubisky ’s informal-notice requirement was satisfied. Despite the warning, Curry never withdrew hiscounterclaim. Like the hypothetical situation we propounded in Dubisky , Curry’s refusal justified the Trustees’
further efforts to strike th e counterclaim and move for
sanctions. Dubisky , 849 F.2d at 1038. Although theyserved Krull Electric with a motion for sanctions in September 1996 and moved for sanctions on October 17, 1996, the court rejected the motion at that time noting that
the counterclaim raised issues of fact that still had adequate time to be discovered. Divane I , 200 F.3d at 1028

. For this reason, the Trustees waited until after trial to move again for sanctions. In the meantime, the Trustees still had to prove their case, and, as discussed at lengthabove, necessarily had to refute the counterclaim allegations in doing so. Having had the advantage of thisnearly year-and-a-half period of additional discovery during which he neither proved nor withdrew the sanctionable counterclaim, it is di singenuous for Curry now to fault the Trustees for the benefit accorded him by the
district court.

It is also disingenuous for Curry to claim financial hardship. It appears to this Court that Curry’s financial circumstances change to suit his litigation posture. When26 No. 01-3495

arguing against a substantial sanction award, Curry claims he lacks significant assets and that a large award may force him into bankruptcy. But when defending against the Trustees’ fraudulent-conveyance claim, initiated in the same district court and alleging that Curry unlawfully conveyed his residence from joint tenancy with his wife to tenancy in the entirety with his wife in an effort to avoid payment of the sanction award, Curry claims “[t]here is no evidence or indication that John Curry will be unable to pay any award, even one as high as $35,589.69.” (R. 164, Curry’s Mot. for Stay of Fraudulent Conveyance Claim at ¶ 3.) Reading these fraudulent-conveyance submissions, the district court took Curry at his word, “Mr. Curry’s submissions have shown that he will have the ability to pay the amount of sanctions that will be ultimately awarded,” (R. 206) and so will we.

IV.

Both parties have indicated that they wish this litigation to end. To ensure that it does, we direct the Trustees to submit to this court within fifteen days a statement of fees reasonably incurred on appeal. Accord Ustrak , 851 F.2d at 990. The Trustees as prevailing appellees achieving substantial success on appeal are entitled to these costs. Fed. R. App. P. 39(a)(2), (4); Ustrak , 851 F.2d at 990 (“But
the fact that we have cut down the district court’s fee award [by one third] does not in itself justify trimmingthe award for fees in this court, given [the plaintiff’s] status as an appellee defending with substantial although not complete success a districtcourt’s judgment in his favor.”). “[W]e can determine those fees ourselves; weneed not require the district court to make the determination.” Ustrak851 F.2d at 990. Curry may of course submit specific objections to pa rticular items of expense.No. 01-3495 27

CONCLUSION

In conclusion, the judgment of the district court is
A FFIRMED as M ODIFIED . Curry is ordered to pay $16,107 to
the Trustees as a sanction for conduct in violation ofRule 11. Interest on the judgment shall accrue from September 5, 2001, the date that the sanction award on remand

was set. Kaiser Alum. & Chem. Corp. v. Bonjorno , 494 U.S. 827, 835-36 (1990) (“Where the judgment on damages was not supported by the evidence, the damages have not been ‘ascertained’ in any meaningful way.”); Harris v. Chicago Great W. Ry. , 197 F.2d 829 (7th Cir. 1952) (vacating and reducing a district court’s award of reasonable attorney’s fees from $500,000 to $350,000, directing the district court to enter judgme nt in conformity with mandate, and allowing interest to accrue only from the date of the revised judgment; “[N]either the amount due forfees nor the due date of the obligation was authoritatively defined until our decision. There will be a final valid judgment only when a new one shall have been entered in conformity with our mandate.”).

A true Copy:

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________________________________ Clerk of the United States Court of

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USCA-02-C-0072—2-11-03