Flowrider Surf, Ltd. et al v. Pacific Surf Designs, Inc.

Filing 217

ORDER Imposing Sanctions on Defendant. Signed by Magistrate Judge Barbara Lynn Major on 5/18/2017.(fth)

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1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 SOUTHERN DISTRICT OF CALIFORNIA 9 10 FLOWRIDER SURF, LTD., et al., Case No.: 15cv1879-BEN (BLM) Plaintiffs, 11 12 v. 13 ORDER IMPOSING SANCTIONS ON DEFENDANT PACIFIC SURF DESIGNS, INC., Defendant. 14 15 AND RELATED COUNTERCLAIMS 16 17 18 On March 9, 2017, the Court issued an order denying Defendant’s motion to compel 19 discovery. ECF No. 175. Specifically, the Court found that Defendant’s motion was untimely 20 and sought irrelevant, duplicative, and confidential documents, which were not proportional to 21 the needs of this case, and that the motion was not substantially justified. Id. at 15–16. The 22 Court further found that the imposition of sanctions requested by Plaintiffs was warranted, 23 1 15cv1879-BEN (BLM) 1 ordered Plaintiffs to submit a declaration detailing costs, expenses and attorney’s fees incurred 2 in opposing Defendant’s motion, and allowed Defendant to file a reply. Id. at 16–17. In 3 accordance with the Court’s briefing schedule, on March 24, 2017, Plaintiffs filed additional 4 briefing regarding their request for sanctions [ECF Nos. 188 & 190], and on April 7, 2017, 5 Defendant filed its reply. ECF No. 193. Having considered the briefing submitted by the parties 6 and having reviewed all of the supporting exhibits, the Court imposes sanctions on Defendant 7 in the amount of $16,168.50. 8 LEGAL STANDARD 9 If a motion to compel discovery is denied, a court “must, after giving an opportunity to 10 be heard, require the movant, the attorney filing the motion, or both to pay the party or 11 deponent who opposed the motion its reasonable expenses incurred in opposing the motion, 12 including attorney’s fees,” unless the motion was substantially justified or other circumstances 13 mitigate against awarding expenses. Fed. R. Civ. P. 37(a)(5)(B); see also Brown v. Hain Celestial 14 Grp., Inc., 2013 WL 5800566, at *5 (N.D. Cal. Oct. 28, 2013) (“[t]he party that loses the motion 15 to compel bears the affirmative burden of demonstrating that its position was substantially 16 justified.”). 17 The Ninth Circuit utilizes the “lodestar” method for assessing reasonable attorney’s 18 fees. Gonzalez v. City of Maywood, 729 F.3d 1196, 1202 (9th Cir. 2013). Under the “lodestar” 19 method, the number of hours reasonably expended is multiplied by a reasonable hourly rate. 20 Id. The fee applicant bears the initial burden of substantiating the amount of hours worked and 21 the rate claimed. See id. at 1206; Dang v. Cross, 422 F.3d 800, 814 (9th Cir. 2005). To meet 22 the burden, the fee applicant must produce evidence that the requested rates are “in line with 23 2 15cv1879-BEN (BLM) 1 those prevailing in the community for similar services by lawyers of reasonably comparable skill, 2 experience, and reputation” and services by paralegals “based on the prevailing market rate in 3 the relevant community.” See Gonzalez, 729 F.3d at 1206–07; Sorenson v. Mink, 239 F.3d 1140, 4 1145 (9th Cir. 2001) (reasonable hourly rates are determined by the “prevailing market rates in 5 the relevant community.”). 6 community is the forum in which the district court sits.” Gonzalez, 729 F.3d at 1205 (quoting 7 Prison Legal News v. Schwarzenegger, 608 F.3d 446, 454 (9th Cir. 2010)). A court may rely on 8 rates outside the local forum only where “local counsel was unavailable, either because they are 9 unwilling or unable to perform because they lack the degree of experience, expertise, or 10 specialization required to handle properly the case.” Deocampo v. Potts, 2014 WL 788429, at 11 *8 (E.D. Cal. Feb. 25, 2014) (quoting Barjon v. Dalton, 132 F.3d 496, 500 (9th Cir. 1997)). When determining a reasonable hourly rate, “the relevant 12 DISCUSSION 13 As noted above, the Court already has determined in its discovery order that Defendant’s 14 motion to compel was not substantially justified and that the imposition of sanctions under 15 Rule 37 is warranted. See ECF No. 175 at 16. Plaintiffs seek to recover $32,595.50 in fees and 16 costs. ECF No. 190. Specifically, Plaintiffs seek $23,277.50 in fees incurred in connection with 17 opposing Defendant’s motion to compel, $9,254.50 in fees associated with the additional briefing 18 regarding their request for sanctions, and $63.50 in messenger fees. See id. at 2–3. Plaintiffs 19 claim that such fees and costs are reasonable in light of the work they performed and the rates 20 they charge. ECF No. 188 at 3–11. 21 Defendant maintains that the fees Plaintiffs seek to recover are excessive and 22 disproportionate. ECF No. 193 at 3–7. Defendant argues that Plaintiffs improperly seek to 23 3 15cv1879-BEN (BLM) 1 recover market rates charged for legal work in the Central District of California, as opposed to 2 the Southern District of California, the venue for this case. Id. at 5–7. Defendant further claims 3 that Plaintiffs improperly seek fees unrelated to drafting and filing their opposition brief, such as 4 fees incurred meeting and conferring before Defendant’s motion was filed, and fees associated 5 with the additional briefing regarding Plaintiffs’ request for sanctions. Id. at 7–10. Defendant 6 also argues that the time spent by Plaintiffs’ counsel and paralegal on drafting and filing Plaintiffs’ 7 opposition is excessive. Id. 8 9 In support of their request for sanctions, Plaintiffs provided a declaration from their lead counsel, Mr. Taché. ECF No. 188-1, Declaration of J. Rick Taché in Support of Plaintiffs’ 10 Additional Briefing Regarding Request for Sanctions Pursuant to Court Order (“Taché Decl.”). In 11 his declaration, Mr. Taché provides the background and credentials of the attorneys and the 12 paralegal who worked on the opposition and the supplemental briefing at issue. Id. at 3–6. Mr. 13 Taché also attests to the rates billed by the attorneys and the paralegal, and asserts that the 14 rates are within the reasonable comparable rates of the Los Angeles community. Id. at 3–8. 15 16 17 18 19 20 Specifically, Plaintiffs assert that they incurred the following fees in connection with opposing Defendant’s motion to compel: Name/Position Hours Hourly rate Total fees Rick Taché (shareholder) Roger Scott (associate) Leanna Costantini (associate) Alexis Kovacs (paralegal) TOTAL 3.4 1.6 32.5 8.7 $995 $645 $480 $375 $3,383.00 $1,032.00 $15,600.00 $3,262.50 $23,277.50 21 22 23 4 15cv1879-BEN (BLM) 1 ECF No. 190 at 2. Plaintiffs further allege that their fees associated with “preparing and filing 2 Plaintiffs’ additional briefing and declaration” are as follows: 3 Name/Position Hours Hourly rate Total fees 4 Rick Taché (shareholder) Roger Scott (associate) Leanna Costantini (associate) TOTAL .5 10.6 4 $995 $645 $480 $497.50 $6,837.00 $1,920.00 $9,254.50 5 6 7 Id. at 3. 8 In determining reasonable attorney’s fees, the Ninth Circuit utilizes the “lodestar” method. 9 Gonzalez, 729 F.3d at 1202. Pursuant to this method, the Court is required to calculate the 10 number of hours reasonably spent on the matter multiplied by a reasonable hourly rate. Id. 11 (1) 12 Plaintiffs are represented by a large international law firm and counsel who specialize in 13 intellectual property litigation. See ECF No. 188 at 9; Taché Decl. at 2. Although many of the 14 issues raised in the underlying motion to compel were not technically complex, Plaintiffs are 15 entitled to engage counsel with the technical knowledge and expertise in the procedures 16 associated with intellectual property litigation, and thus the prevailing market rates should be 17 measured against rates charged for representation in intellectual property litigation. 18 Matlink, Inc. v. Home Depot U.S.A., Inc., 2008 WL 8504767, at *3 (S.D. Cal. Oct. 27, 2008) 19 (finding that the prevailing market rates had to be measured against rates charged for 20 representation in patent litigation, where a motion to compel giving rise to the request for 21 sanctions at issue was filed in a patent case). Further, when determining a reasonable hourly 22 rate, “the relevant community is the forum in which the district court sits.” See Gonzalez, 729 23 5 Reasonable Hourly Rate See 15cv1879-BEN (BLM) 1 F.3d at 1205–06 (quotation omitted). Because this case is litigated in the Southern District of 2 California, the relevant legal community is the Southern District of California. 3 Plaintiffs have not provided any evidence demonstrating that local counsel was 4 unavailable or unable to handle a case of this nature. See ECF Nos. 188 & 190; see also 5 Deocampo, 2014 WL 788429, at *8; Barjon, 132 F.3d at 500. Further, Plaintiffs have not 6 provided any declarations or other documentation establishing the prevailing market rate for 7 attorneys litigating in the field of intellectual property in the Southern District of California. See 8 id. Instead, Plaintiffs’ counsel merely provide their experience, billing rates, and opinions that 9 the rates are reasonable for the Central District of California. See Taché Decl. Although 10 Defendant provided a declaration and an exhibit showing rates charged by partners, associates, 11 and paralegals in the San Diego region,1 such rates are outdated and do not differentiate 12 between the fields of legal practice. ECF No. 193 at 6; see also id., Exh. 1; ECF No. 193-1, 13 Declaration of Anup M. Shah in Support of PSD’s Reply to Plaintiffs’ Motion for Sanctions Pursuant 14 to Court Order (“Shah Decl.”). 15 Because neither party provided information regarding the relevant billing rates—the 16 hourly rates for intellectual property litigation in the Southern District of California in 2016–17— 17 the Court was forced to consider other evidence. A review of recent case law concerning 18 reasonable fee awards in intellectual property/patent cases in the Southern District of California, 19 20 22 Defendant’s declaration establishes that in 2010, rates charged by partners in San Diego ranged between $350–$679 per hour, and rates charged by associates ranged between $245 and $445 per hour. ECF No. 193 at 6; Shah Decl., Exh. A at 6. Defendant has not provided any comparable paralegal billing rates for the San Diego region. See id. 23 6 21 1 15cv1879-BEN (BLM) 1 reveals that the hourly rates charged by Plaintiffs’ attorneys and paralegal exceed the prevalent 2 market rates in this district. See Deep Sky Software, Inc. v. Southwest Airlines Co., 2015 WL 3 10844231, at *1–2 (S.D. Cal. Aug. 19, 2015) (finding reasonable the following hourly rates 4 charged by attorneys in a patent infringement case: partner with twenty years of experience 5 ($505–$625.50), partner with fourteen years of experience ($405–$535.50), associates with 6 eight years of experience ($270–$481.50)); Zest IP Holdings, LLC v. Implant Direct Mfg., LLC, 7 2014 WL 6851612, at *6 (S.D. Cal. Dec. 3, 2014) (finding reasonable the following average 8 hourly rates charged by attorneys in a patent and trademark infringement action: partner 9 ($775), associate ($543)); also citing Brighton Collectibles, Inc. v. Coldwater Creek Inc., 2009 10 WL 160235, at *4 (S.D. Cal. Jan. 20, 2009) (concluding that $90 to $210 per hour was 11 reasonable for paralegal work in an action that involved a copyright infringement claim; also 12 noting that “$90 to $210 per hour is a wide range depending on the education, skill and 13 experience of the particular paralegal.”); In re Maxwell Technologies, Inc., Derivative Litigation, 14 2015 WL 12791166, at *5 (S.D. Cal. Jul. 13, 2015) (“paralegal rates approved in this district 15 have generally ranged from $125 to $175, although they have been approved as high as $290”); 16 see also “2016 Real Rate Report: Lawyers Rates, Trends, and Analysis,” a CEB and Wolters 17 Kluwer publication (listing the following median billing rates for intellectual property attorneys 18 for San Diego in 2015: partner ($585.04–$727.50), associate ($413.80)); Hicks v. Toys “R” Us- 19 Delaware, Inc., 2014 WL 4670896, at *1 (C.D. Cal. Sept. 2, 2014) (finding the “2013 Real Rate 20 Report Snapshot (Real Rate Report), a CEB and TyMetrix publication . . . a much better reflection 21 of true market rates than self-reported rates.”) (citation omitted). 22 23 7 15cv1879-BEN (BLM) 1 Mr. Taché is a Co-Managing Shareholder of the Greenberg Traurig’s Orange County office 2 and Co-Chair of Greenberg Traurig’s Litigation Group with over twenty-five years of experience 3 and many professional accolades. See Taché Decl. at 3. Mr. Stout and Ms. Costantini are 4 intellectual property litigation associates with over ten and four years of experience, respectively. 5 Id. at 4-6. Ms. Kovacs is an intellectual property litigation paralegal with more than nineteen 6 years of experience. 7 reasonable in similar cases in the Sothern Distinct of California, the Court will apply the following 8 hourly billing rates: $750 for Mr. Taché’s services, $550 for Mr. Scott’s services, $350 for Ms. 9 Costantini’s services, and $150 for Ms. Kovasc’s services. 10 11 (2) Id. at 6. In light of the hourly attorney and paralegal rates found Reasonable Number of Hours a. Meeting and Conferring 12 Defendant argues that Plaintiffs should not recover fees for the time they spent meeting 13 and conferring regarding the discovery dispute and that they have not clearly established the 14 amount of time they spent on meeting and conferring. ECF No. 193 at 9. The local rules for 15 the Southern District of California require counsel to meet and confer before filing any discovery 16 motion in an effort to resolve disputes. See CivLR 26.1. The Court’s Chambers’ Rules contain 17 the same requirement and further require the parties to “conduct a conference call with the 18 Chambers” before filing a motion to compel. Accordingly, “fees associated with the initial meet 19 and confer process logically should not always be included in a fee award.” Matlink, Inc., 2008 20 WL 8504767, at *5. 21 Here, Plaintiffs state that Ms. Costantini spent 5.4 hours on meeting and conferring with 22 the opposing counsel, and preparing for and participating in a telephonic conference with 23 8 15cv1879-BEN (BLM) 1 chambers regarding Defendant’s demand for documents subject to Defendant’s motion to 2 compel. See Taché Decl. at 5. The Court finds that the hours expended by Ms. Costantini on 3 meeting and conferring should be excluded from the fee award sought by Plaintiffs. The Court 4 further finds that the declaration provided by Mr. Taché is sufficiently detailed and rejects 5 Defendant’s argument that the request should be further reduced because time attributed to 6 preparing the motion may include additional meet and confer efforts. 7 b. Preparation and Filing Opposition Brief 8 Defendant argues that the time spent by Plaintiffs’ counsel is “disproportionate to the 9 task of opposing a motion to compel.” ECF No. 193 at 7. Defendant also argues that the 8.7 10 hours billed by the paralegal to prepare and file exhibits is excessive. Id. 11 Mr. Taché billed 3.4 hours in connection with Plaintiffs’ opposition brief, Ms. Costantini 12 billed 27.1 hours preparing the brief, and Mr. Scott billed 1.6 hours drafting his declaration and 13 revising the opposition brief. See Taché Decl. at 4–6. Ms. Kovacs, the paralegal, billed 8.7 14 hours for “gathering, organizing and preparing exhibits” in support of Plaintiffs’ opposition brief, 15 electronically filing the document, and coordinating the delivery of chambers copies. Id. at 6– 16 7. 17 The Court finds that the 3.4 hours billed by Mr. Taché and 1.6 hours billed by Mr. Scott 18 are reasonable. 19 preparing the opposition to Defendant’s motion to compel is excessive. Defendant’s motion was 20 not complex as it concerned the production of documents and pleadings exchanged in the 21 preceding arbitration. See ECF No. 139-1 at 4–8. The Court therefore reduces the amount of 22 compensable hours billed by Ms. Costantini to 20 hours. 23 The Court further finds that that 27.1 hours billed by Ms. Costantini for 9 15cv1879-BEN (BLM) 1 The Court also finds that the 8.7 hours billed by Plaintiffs’ paralegal, Ms. Kovacs, is 2 excessive. Plaintiffs filed nine exhibits in support of their opposition, which consisted of copies 3 of Defendant’s responses to Plaintiffs’ interrogatories, a protective order, a Contribution 4 Agreement, and email correspondence. See ECF Nos. 150 & 163. Plaintiffs do not explain why 5 Ms. Kovasc required almost an hour/exhibit to compile and file such exhibits, and the Court finds 6 the requested amount of hours unreasonable. Accordingly, the Court reduces the amount of 7 compensable time expended by Ms. Kovasc to 4 hours. 8 c. Additional Briefing 9 Defendant argues that Plaintiffs should not be compensated for their supplemental 10 briefing regarding sanctions. ECF No. 193 at 8. An attorney’s fee award generally includes the 11 time spent preparing and litigating a motion to obtain a fee award. Camacho v. Bridgeport Fin., 12 Inc., 523 F.3d 973, 981 (9th Cir. 2008); Shaw v. Credit Collection Serv., 2009 WL 4981620, at 13 *1 (S.D. Cal. Dec. 14, 2009) (“[a]s a general rule, the time attorneys spend seeking fees is 14 compensable, and can be incorporated into a final attorneys’ fees award.”). 15 Here, Plaintiffs claim that Mr. Taché spent 0.5 hours, Mr. Scott 10.6 hours, and Ms. 16 Costantini 4 hours on “preparing and filing Plaintiffs additional briefing and declaration.” ECF 17 No. 190 at 3. 18 supplemental sanction briefing as they spent drafting the opposition to the underlying motion 19 to compel and the motion for sanctions. The Court finds that the 0.5 hours billed by Mr. Taché 20 and 4 hours billed by Ms. Costantini are reasonable. However, the Court reduces the amount 21 of compensable hours billed by Mr. Scott to 6 hours. See Orr v. California Highway Patrol, 2015 22 WL 9305021, at *14 (E.D. Cal. Dec. 22, 2015) (reducing the amount of hours expended on 23 10 As such, Plaintiffs’ counsel spent almost half as many hours preparing the 15cv1879-BEN (BLM) 1 preparing a fee motion; reasoning that “[a] request for attorney’s fees should not result in a 2 second major litigation.”) (quoting Hensley v. Eckerhart, 461 U.S. 424, 437 (1983)). 3 d. Messenger Fees 4 Plaintiffs seek to recover $63.50 in messenger fees for delivering courtesy copies of their 5 opposition to the Court. Taché Decl. at 8; see also ECF No. 188 at 10; ECF No. 190 at 3. 6 Section 2(e) of the Electronic Case Filing Administrative Policies and Procedures Manual for the 7 Southern District of California requires parties to deliver or mail a courtesy copy of any filing 8 exceeding twenty pages in length to chambers within twenty-four hours after filing. The Court’s 9 Chambers’ Rules contain the same requirement. Plaintiffs’ opposition to Defendant’s motion to 10 compel and attachments far exceeded twenty pages [see ECF No. 150], and thus Plaintiffs were 11 required to deliver a courtesy copy to chambers. 12 Messenger service fees are compensable in a fee award. See Harris v. Marhoefer, 24 13 F.3d 16, 19–20 (9th Cir. 1994) (finding that messenger fees may be recovered); Matlink, Inc., 14 2008 WL 8504767, at *7 (same). Accordingly, the Court GRANTS Plaintiffs’ request for the 15 messenger fees in the amount of $63.50. 16 17 18 19 20 21 e. Conclusion The Court calculates the final lodestar amount as follows: Name/Position Hours Hourly rate Rick Taché (shareholder) Roger Scott (associate) Leanna Costantini (associate) Alexis Kovacs (paralegal) TOTAL 3.9 7.6 24 4 $750 $550 $350 $150 Total fees $2,925 $4,180 $8,400 $600 $16,105 22 23 11 15cv1879-BEN (BLM) 1 Thus, the Court awards Plaintiffs a total of $16,105 in attorney’s fees. Further, as 2 discussed above, the Court awards Plaintiffs $63.50 in messenger fees. Accordingly, the Court 3 sanctions Defendant in the amount of $16,168.50. 4 SUMMARY AND CONCLUSION 5 For the foregoing reasons, the Court GRANTS Plaintiffs’ motion for monetary sanctions. 6 Defendant is ordered to pay Plaintiffs the amount of $16,168.50 on or before June 2, 2017. 7 Defense counsel is ordered to file a declaration verifying said payments no later June 9, 2017. 8 Failure to comply with this order may result in the imposition of additional sanctions. 9 10 IT IS SO ORDERED. Dated: 5/18/2017 11 12 13 14 15 16 17 18 19 20 21 22 23 12 15cv1879-BEN (BLM)

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