3A Composites USA, Inc. v. United Industries, Inc. et al

Filing 140

OPINION AND ORDER granting 137 Motion for Attorney Fees. 3A is therefore ORDERED to pay these fees and costs, totaling $57,021.58, to Defendants within twenty days of the entry of this Order. Failure to comply with this Order may result in 3A's Complaint in the new case being stricken; see order for specifics. Signed by Honorable Timothy L. Brooks on February 24, 2016. (rg)

IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
FAYETTEVILLE DIVISION

3A COMPOSITES USA, INC.
V.

PLAINTIFF
CASE NO. 5:14-CV-5147

UNITED INDUSTRIES, INC. and
WESLEY PAULIN

DEFENDANTS

OPINION AND ORDER
Currently before the Court are Defendants United Industries, lnc.'s and Wesley
Paulin's Motion for Fees and Costs (Doc. 137) and Brief in Support (Doc. 138), and
Plaintiff 3A Composites USA, lnc.'s ("3A") Response in Opposition (Doc. 139). For the
reasons given below, Defendants' Motion is GRANTED.
This case was set to begin a jury trial on Monday, November 16, 2015 .
However, on the evening of Thursday, November 12, 2015 , 3A filed a motion to
voluntarily dismiss its claims without prejudice.

During a telephonic hearing held the

following day, Defendants stipulated to the proposed dismissal , on the condition, inter

alia , that if 3A were to refile its cla ims in a new lawsuit, Defendants be provided the
opportunity to recover a reasonable and appropriate amount of their costs and attorney
fees in the prior action that would be rendered duplicative by the new case . See Fed . R.
Civ. P. 41(a)(2). Cf Kem v. TXO Prod. Corp., 738 F.2d 968 (8th Cir. 1984). The Court
granted 3A's motion to dismiss, subject to Defendants' requested conditions (Doc. 136).
3A has now refiled its claims in a new lawsuit. See generally 3A Composites USA, Inc.

v. United Industries, Inc. & Wesley Paulin , W.D . Ark. Case No. 5:16-cv-5017 , Doc. 1.

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On December 1, 2015 , Defendants filed the instant Motion. Defendants seek to
recover three categories of duplicative fees and costs : (1) those associated with final
trial preparation activities , (2) those associated with discovery, and (3) those associated
with pleadings, motions, and briefing . 3A does not dispute th is Court's authority in
general to award the sort of relief requested in Defendants' Motion . However, 3A asks
this Court to defer ruling in whole or in part on the Motion , on the grounds that the
requested expenses "are contingent, premature and speculative." (Doc. 139, p. 1). The
Court disagrees, at least in part, and finds it proper that 3A be required to reimburse
certain of the Defendants' fees and expenses-which was an express condition of the
Court's prior dismissal order (Doc. 136).
As a threshold matter, the Court finds 3A's explanation of its need to non-suit to
be specious at best. The Court finds little credibil ity in 3A's explanation-to the effect
that "Attorneys' Eyes Only" discovery designations prevented 3A from knowing the
scope the Defendants' alleged misappropriation of trade secrets. To the extent 3A's
executives were not actually aware of the "new" information in question until the eve of
trial , its attorneys and expert witnesses certainly were-and had been for almost a year.
Yet no amendments to the pleadings were sought, nor any requests for relief from the
Stipulated Protective Order.
With regard to the first category, the Court finds that certain time and tasks
associated with preparations in the weeks immediately prior to trial have been
economically wasted . The Court has reviewed each itemized task and expense
identified by Defendants in their Motion , and finds that the same are properly included
within this category of time and expense. The effective and practical benefit of those

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efforts has been lost, as a direct consequence of 3A's beyond-the-eleventh-hour motion
to non-suit. And for no good cause or justifiable reason. But for 3A's untimeliness, the
case would have either properly proceeded to trial , or a dismissal could have been
sought well prior to this category of tasks and expenses being incurred. Regardless,
this category of expenses will necessarily be duplicated in the now-refiled action.
As to the reasonableness of the amount sought, 3A does not offer any objection
to the hourly rates charged by Defendants' attorneys, and the Court likewise finds
those hourly rates are reasonable .

Furthermore, after careful examination of

Defendants' claimed hours, the Court finds that Defendants' attorneys expended a
reasonable number of hours on these final trial preparation activities. 3A is therefore
ORDERED to pay these fees and costs, totaling $57 ,021.58 , to Defendants within

twenty days of the entry of this Order. Failure to comply with this Order may result in

3A's Complaint in the new case being stricken.
With regard to written discovery, depositions, pleadings and motion practice in
the newly re-filed case, the Court agrees with 3A, at least in part. It is premature to
award such fees and costs now, because the duplicative nature of those matters is not
presently clear or knowable . Furthermore , the Court intends to limit the scope of the
parties' discovery efforts in the new case to the allegations and damages relating to the
"new" claims.

Thus, there should be a corresponding limitation on the extent of

necessary duplication .
With regard to deposition discovery, however, some witness(es) may need to be
redeposed , and some amount of the fees and costs associated with those depositions
will necessarily be duplicative of the prior deposition(s) , regardless of the questions

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asked. It is therefore ORDERED that, to the extent Defendants seek to redepose any of
3A's witnesses, 3A shall pay Defendants' attorneys' travel time and expenses
reasonably incurred in re-taking any such deposition(s), as well as the costs and
expenses of the court reporter (and videographer if the original deposition was video
recorded) for such second deposition(s) . It is further ORDERED that to the extent 3A
seeks to redepose any of Defendants' witnesses, 3A shall pay Defendants' attorneys'
travel time and expenses reasonably incurred in such second deposition(s), as well as
the redeposed witnesses' travel expenses.

Defendants shall bill 3A for all such

duplicative deposition expenses within twenty days of each month's end . 3A may
challenge the reasonableness of any asserted travel time and expense by filing an
appropriate motion within 14 days of the bill's receipt. Otherwise, 3A shall pay each
such bill in full within twenty days of the receipt.
Finally, it is ORDERED that Defendants may recover their attorney fees and
costs reasonably incurred with regard to the category for duplicative pleadings, motions ,
and briefing , upon motion to this Court demonstrating the necessity of duplication and
the reasonableness of the requested time and expense .1 Motions seeking such
recovery shall be filed no more than once each quarter-year, with the final motion to
be filed not later than twenty days after this Court's final dispositive order. 3A may file
a Response within fourteen (14) days. Then , within twenty days of this Court's ruling
on any such motion , 3A shall pay the amount awarded in full.

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This provision does not apply to any of the specific line item tasks being awarded for immediate
trial preparations, i. e. for wh ich Defendants are being presently awarded the total collective sum of
$57,021 .58.

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IT IS SO ORDERED on this

J~ ~y

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of Februa