A Brooklyn judge has rejected a bank's request for $9,112 in costs for producing subpoenaed documents, calling the claim an example of the excess and greed among "fat cat bankers on Wall Street."
JPMorgan Chase, a non-party in an action to confirm an arbitration award, sought 25 cents per page and $25 per hour for producing 18,248 pages of subpoenaed documents demanded by the petitioner.
In a blistering 11-page decision, Brooklyn Supreme Court Justice Arthur Schack granted JPMorgan Chase only $1,250.27, or about one-seventh of the amount the bank requested.
The judge quoted a recent interview of President Barack Obama on "60 Minutes" in which the president suggested that the greed of "fat cat bankers" played a role in the present recession.
"Clearly, Chase's arbitrary $25.00 per hour ... fee for the unsubstantiated 182 hours of research by person or persons unknown only helps to unjustly enrich 'a bunch of fat cat bankers on Wall Street,'" Justice Schack wrote in Matter of Arbitration of Klein v. Persaud, 8007/09. "This Court is not a collection vehicle to further enrich already rich bankers."
Schack called the bank's CEO, James S. Dimon, the "fattest cat" at JPMorgan Chase, citing Dimon's compensation of nearly $20 million in 2008.
Petitioner Abraham Klein initiated the underlying action to confirm a multimillion-dollar arbitration award against Christine Persaud and Caring Home Care Agency.
In July, Schack asked non-party JPMorgan Chase to submit an affirmation regarding its production expenses.
The bank claimed it provided Klein 18,248 pages of documents and requested $9,112 -- $4,550 for locating and retrieving the documents and $4,562 for printing them.
In opposing JPMorgan Chase's request, Klein called the bank's demand "flawed and disingenuous." He argued that the bank sought to be "rewarded for ignoring court orders" and reimbursed for pages it never produced. Klein also claimed that JPMorgan Chase flooded his attorneys with "thousands" of documents they never requested.
JPMorgan Chase denied those allegations.
"Chase produced approximately 12,000 pages by [the] deadline set by the Court ... The 12,000 pages are responsive to petitioner's unequivocal and explicit demand for all documents for that account," the bank contended in court papers. "Chase has also produced more than 6,000 pages of documents for the other four accounts listed in the June 12th subpoena."
Schack sided with Klein.
First, the judge reduced the bank's hourly fee from $25 to $6.55 -- the minimum wage in Indiana, where the judge believed the work may have been done, at the time the documents were produced.
"[T]he Court ... is guided by the principal that '[o]rdinarily, the retrieval and evaluation of documents should be done by the lowest-level person consistent with accurate and reliable identification of the material called for,'" Schack wrote.
The 182 hours worked by JPMorgan Chase employees therefore came to $1,192, not $4,562, the judge concluded.
In order to determine the compensation rate per page the bank copied, the judge "examined" the Web sites of "three major stationary suppliers" and determined that a case of Hammermill Copy Plus Paper, containing 10 reams (i.e., 5,000 sheets) lists for $44.99, or a little less than a penny per page.
Schack therefore awarded JPMorgan Chase one cent per page for paper, plus an additional two cents for "toner, copier maintenance and electricity."
The judge also noted that of the 18,248 pages that JPMorgan Chase produced, the bank placed 16,317 pages online, as opposed to printing them. For those pages, the bank only deserved compensation for labor and not supplies, the judge wrote, calling the bank's claim "disingenuous."
At three cents per page for only 1,939 pages, instead of 25 cents per page for 18,248, the bank deserved $58.17, not $4,562, Schack concluded.
The judge ordered Klein to pay JPMorgan Chase a total of $1,250.27.
Michelle E. Tarson of Simmons, Jannace & Stagg represented Chase. The firm did not return calls for comment.
Paulino J. Salazar and Mendel Zilberberg of Mendel Zilberberg & Associates in Brooklyn represented Klein.
