McKesson Corporation v. Iran, the Islamic Re
935 F. Supp. 2d 34
D.D.C.2013Background
- McKesson sued Iran in 1982 for expropriation of equity in Pak Dairy and withheld dividends; judgment awarded damages and prejudgment interest in 2010.
- D.C. Cir. affirmed that the act-of-state doctrine does not bar adjudication; Treaty of Amity provides McKesson a private right of action; Iran liable for expropriation and withheld dividends.
- Appellate remand directed calculation of damages based on expropriated equity and dividends plus simple interest from 8/12/1981; interest calculated to 3/27/2013.
- McKesson seeks final judgment for damages, prejudgment interest, attorneys’ fees, and expenses; Iran opposes fees and enhancements.
- Court applies Iranian law to determine fee shifting and awards reasonable attorneys’ fees, costs, and non-taxable expenses; 2012 rates used for delay-enhancement.
- Court awards total of damages, fees, and costs, with adjustments for duplicative time and vague billing entries.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether damages and prejudgment interest are proper under the Treaty and Iranian law | McKesson entitled to expropriation damages and simple interest. | Argues limitations on damages or interest calculations. | Damages and prejudgment interest awarded $29,318,284.47. |
| Whether McKesson may recover attorneys' fees and expenses under Iranian law | Iranian law permits fee shifting to prevailing party on Treaty claim. | Disputes applicability of Iranian tariff rates and fee shifting. | McKesson entitled to reasonable attorneys' fees and expenses. |
| What is the reasonable rate and hours for lodestar calculation | Use 2012 billing rates; firm’s standard billing scales reflect market rates. | Use Laffey matrix rates as comparator. | 2012 rates used; reasonable hours confirmed; lodestar calculated. |
| Whether enhancement for delay in payment is appropriate | Enhancement justified for delay at current rates over time. | Delay not warranting enhancement due to appeals. | Current-rate enhancement awarded for delay in payment. |
| Taxable and non-taxable costs awarded | Costs and related non-taxable expenses recoverable under Treaty law. | Challenge to amounts and categories of costs. | Taxable costs awarded; related non-taxable costs awarded. |
Key Cases Cited
- McKesson Corp. v. Islamic Republic of Iran, 672 F.3d 1066 (D.C. Cir. 2012) (regarding act-of-state doctrine and treaty-based liability)
- Hensley v. Eckerhart, 461 U.S. 424 (U.S. 1983) (lodestar method for attorneys' fees)
- Copeland v. Marshall, 641 F.2d 880 (D.C. Cir. 1980) (lodestar and fee-shifting principles)
- Covington v. District of Columbia, 57 F.3d 1101 (D.C. Cir. 1995) (elements for reasonable hourly rate; market rates)
- Goos v. Nat'l Ass'n of Realtors, 997 F.2d 1565 (D.C. Cir. 1993) (common core of facts; not discrete claims for fee purposes)
- Yazdani v. Access ATM, 474 F. Supp. 2d 134 (D. Del. 2007) (survey data as market rates evidence)
- Missouri v. Jenkins, 491 U.S. 274 (U.S. 1989) (market-based approach to reasonableness in fees)