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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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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FLOWRIDER SURF, LTD., et al.,

Case No.: 15cv1879-BEN (BLM)
Plaintiffs,

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v.

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ORDER IMPOSING SANCTIONS ON
DEFENDANT

PACIFIC SURF DESIGNS, INC.,
Defendant.

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AND RELATED COUNTERCLAIMS

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On March 9, 2017, the Court issued an order denying Defendant’s motion to compel

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discovery. ECF No. 175.

Specifically, the Court found that Defendant’s motion was untimely

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and sought irrelevant, duplicative, and confidential documents, which were not proportional to

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the needs of this case, and that the motion was not substantially justified. Id. at 15–16. The

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Court further found that the imposition of sanctions requested by Plaintiffs was warranted,

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ordered Plaintiffs to submit a declaration detailing costs, expenses and attorney’s fees incurred

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in opposing Defendant’s motion, and allowed Defendant to file a reply. Id. at 16–17. In

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accordance with the Court’s briefing schedule, on March 24, 2017, Plaintiffs filed additional

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briefing regarding their request for sanctions [ECF Nos. 188 & 190], and on April 7, 2017,

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Defendant filed its reply. ECF No. 193. Having considered the briefing submitted by the parties

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and having reviewed all of the supporting exhibits, the Court imposes sanctions on Defendant

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in the amount of $16,168.50.

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LEGAL STANDARD

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If a motion to compel discovery is denied, a court “must, after giving an opportunity to

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be heard, require the movant, the attorney filing the motion, or both to pay the party or

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deponent who opposed the motion its reasonable expenses incurred in opposing the motion,

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including attorney’s fees,” unless the motion was substantially justified or other circumstances

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mitigate against awarding expenses. Fed. R. Civ. P. 37(a)(5)(B); see also Brown v. Hain Celestial

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Grp., Inc., 2013 WL 5800566, at *5 (N.D. Cal. Oct. 28, 2013) (“[t]he party that loses the motion

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to compel bears the affirmative burden of demonstrating that its position was substantially

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justified.”).

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The Ninth Circuit utilizes the “lodestar” method for assessing reasonable attorney’s

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fees. Gonzalez v. City of Maywood, 729 F.3d 1196, 1202 (9th Cir. 2013). Under the “lodestar”

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method, the number of hours reasonably expended is multiplied by a reasonable hourly rate.

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Id. The fee applicant bears the initial burden of substantiating the amount of hours worked and

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the rate claimed. See id. at 1206; Dang v. Cross, 422 F.3d 800, 814 (9th Cir. 2005). To meet

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the burden, the fee applicant must produce evidence that the requested rates are “in line with

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those prevailing in the community for similar services by lawyers of reasonably comparable skill,

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experience, and reputation” and services by paralegals “based on the prevailing market rate in

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the relevant community.” See Gonzalez, 729 F.3d at 1206–07; Sorenson v. Mink, 239 F.3d 1140,

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1145 (9th Cir. 2001) (reasonable hourly rates are determined by the “prevailing market rates in

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the relevant community.”).

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community is the forum in which the district court sits.” Gonzalez, 729 F.3d at 1205 (quoting

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Prison Legal News v. Schwarzenegger, 608 F.3d 446, 454 (9th Cir. 2010)). A court may rely on

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rates outside the local forum only where “local counsel was unavailable, either because they are

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unwilling or unable to perform because they lack the degree of experience, expertise, or

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specialization required to handle properly the case.” Deocampo v. Potts, 2014 WL 788429, at

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*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

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DISCUSSION

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As noted above, the Court already has determined in its discovery order that Defendant’s

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motion to compel was not substantially justified and that the imposition of sanctions under

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Rule 37 is warranted. See ECF No. 175 at 16. Plaintiffs seek to recover $32,595.50 in fees and

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costs. ECF No. 190. Specifically, Plaintiffs seek $23,277.50 in fees incurred in connection with

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opposing Defendant’s motion to compel, $9,254.50 in fees associated with the additional briefing

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regarding their request for sanctions, and $63.50 in messenger fees. See id. at 2–3. Plaintiffs

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claim that such fees and costs are reasonable in light of the work they performed and the rates

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they charge. ECF No. 188 at 3–11.

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Defendant maintains that the fees Plaintiffs seek to recover are excessive and

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disproportionate. ECF No. 193 at 3–7. Defendant argues that Plaintiffs improperly seek to

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recover market rates charged for legal work in the Central District of California, as opposed to

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the Southern District of California, the venue for this case. Id. at 5–7. Defendant further claims

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that Plaintiffs improperly seek fees unrelated to drafting and filing their opposition brief, such as

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fees incurred meeting and conferring before Defendant’s motion was filed, and fees associated

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with the additional briefing regarding Plaintiffs’ request for sanctions. Id. at 7–10. Defendant

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also argues that the time spent by Plaintiffs’ counsel and paralegal on drafting and filing Plaintiffs’

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opposition is excessive. Id.

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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’

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Additional Briefing Regarding Request for Sanctions Pursuant to Court Order (“Taché Decl.”). In

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his declaration, Mr. Taché provides the background and credentials of the attorneys and the

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paralegal who worked on the opposition and the supplemental briefing at issue. Id. at 3–6. Mr.

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Taché also attests to the rates billed by the attorneys and the paralegal, and asserts that the

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rates are within the reasonable comparable rates of the Los Angeles community. Id. at 3–8.

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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

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ECF No. 190 at 2. Plaintiffs further allege that their fees associated with “preparing and filing

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Plaintiffs’ additional briefing and declaration” are as follows:

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Name/Position

Hours

Hourly rate

Total fees

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Rick Taché (shareholder)
Roger Scott (associate)
Leanna Costantini (associate)
TOTAL

.5
10.6
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$995
$645
$480

$497.50
$6,837.00
$1,920.00
$9,254.50

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Id. at 3.

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In determining reasonable attorney’s fees, the Ninth Circuit utilizes the “lodestar” method.

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Gonzalez, 729 F.3d at 1202. Pursuant to this method, the Court is required to calculate the

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number of hours reasonably spent on the matter multiplied by a reasonable hourly rate. Id.

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(1)

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Plaintiffs are represented by a large international law firm and counsel who specialize in

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intellectual property litigation. See ECF No. 188 at 9; Taché Decl. at 2. Although many of the

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issues raised in the underlying motion to compel were not technically complex, Plaintiffs are

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entitled to engage counsel with the technical knowledge and expertise in the procedures

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associated with intellectual property litigation, and thus the prevailing market rates should be

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measured against rates charged for representation in intellectual property litigation.

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Matlink, Inc. v. Home Depot U.S.A., Inc., 2008 WL 8504767, at *3 (S.D. Cal. Oct. 27, 2008)

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(finding that the prevailing market rates had to be measured against rates charged for

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representation in patent litigation, where a motion to compel giving rise to the request for

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sanctions at issue was filed in a patent case). Further, when determining a reasonable hourly

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rate, “the relevant community is the forum in which the district court sits.” See Gonzalez, 729

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Reasonable Hourly Rate

See

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F.3d at 1205–06 (quotation omitted). Because this case is litigated in the Southern District of

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California, the relevant legal community is the Southern District of California.

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Plaintiffs have not provided any evidence demonstrating that local counsel was

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unavailable or unable to handle a case of this nature. See ECF Nos. 188 & 190; see also

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Deocampo, 2014 WL 788429, at *8; Barjon, 132 F.3d at 500. Further, Plaintiffs have not

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provided any declarations or other documentation establishing the prevailing market rate for

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attorneys litigating in the field of intellectual property in the Southern District of California. See

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id. Instead, Plaintiffs’ counsel merely provide their experience, billing rates, and opinions that

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the rates are reasonable for the Central District of California.

See Taché Decl.

Although

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Defendant provided a declaration and an exhibit showing rates charged by partners, associates,

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and paralegals in the San Diego region,1 such rates are outdated and do not differentiate

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between the fields of legal practice. ECF No. 193 at 6; see also id., Exh. 1; ECF No. 193-1,

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Declaration of Anup M. Shah in Support of PSD’s Reply to Plaintiffs’ Motion for Sanctions Pursuant

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to Court Order (“Shah Decl.”).

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Because neither party provided information regarding the relevant billing rates—the

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hourly rates for intellectual property litigation in the Southern District of California in 2016–17—

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the Court was forced to consider other evidence. A review of recent case law concerning

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reasonable fee awards in intellectual property/patent cases in the Southern District of California,

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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.

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reveals that the hourly rates charged by Plaintiffs’ attorneys and paralegal exceed the prevalent

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market rates in this district. See Deep Sky Software, Inc. v. Southwest Airlines Co., 2015 WL

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10844231, at *1–2 (S.D. Cal. Aug. 19, 2015) (finding reasonable the following hourly rates

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charged by attorneys in a patent infringement case: partner with twenty years of experience

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($505–$625.50), partner with fourteen years of experience ($405–$535.50), associates with

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eight years of experience ($270–$481.50)); Zest IP Holdings, LLC v. Implant Direct Mfg., LLC,

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2014 WL 6851612, at *6 (S.D. Cal. Dec. 3, 2014) (finding reasonable the following average

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hourly rates charged by attorneys in a patent and trademark infringement action: partner

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($775), associate ($543)); also citing Brighton Collectibles, Inc. v. Coldwater Creek Inc., 2009

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WL 160235, at *4 (S.D. Cal. Jan. 20, 2009) (concluding that $90 to $210 per hour was

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reasonable for paralegal work in an action that involved a copyright infringement claim; also

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noting that “$90 to $210 per hour is a wide range depending on the education, skill and

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experience of the particular paralegal.”); In re Maxwell Technologies, Inc., Derivative Litigation,

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2015 WL 12791166, at *5 (S.D. Cal. Jul. 13, 2015) (“paralegal rates approved in this district

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have generally ranged from $125 to $175, although they have been approved as high as $290”);

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see also “2016 Real Rate Report: Lawyers Rates, Trends, and Analysis,” a CEB and Wolters

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Kluwer publication (listing the following median billing rates for intellectual property attorneys

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for San Diego in 2015: partner ($585.04–$727.50), associate ($413.80)); Hicks v. Toys “R” Us-

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Delaware, Inc., 2014 WL 4670896, at *1 (C.D. Cal. Sept. 2, 2014) (finding the “2013 Real Rate

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Report Snapshot (Real Rate Report), a CEB and TyMetrix publication . . . a much better reflection

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of true market rates than self-reported rates.”) (citation omitted).

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Mr. Taché is a Co-Managing Shareholder of the Greenberg Traurig’s Orange County office

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and Co-Chair of Greenberg Traurig’s Litigation Group with over twenty-five years of experience

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and many professional accolades. See Taché Decl. at 3. Mr. Stout and Ms. Costantini are

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intellectual property litigation associates with over ten and four years of experience, respectively.

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Id. at 4-6. Ms. Kovacs is an intellectual property litigation paralegal with more than nineteen

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years of experience.

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reasonable in similar cases in the Sothern Distinct of California, the Court will apply the following

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hourly billing rates: $750 for Mr. Taché’s services, $550 for Mr. Scott’s services, $350 for Ms.

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Costantini’s services, and $150 for Ms. Kovasc’s services.

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(2)

Id. at 6.

In light of the hourly attorney and paralegal rates found

Reasonable Number of Hours
a. Meeting and Conferring

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Defendant argues that Plaintiffs should not recover fees for the time they spent meeting

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and conferring regarding the discovery dispute and that they have not clearly established the

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amount of time they spent on meeting and conferring. ECF No. 193 at 9. The local rules for

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the Southern District of California require counsel to meet and confer before filing any discovery

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motion in an effort to resolve disputes. See CivLR 26.1. The Court’s Chambers’ Rules contain

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the same requirement and further require the parties to “conduct a conference call with the

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Chambers” before filing a motion to compel. Accordingly, “fees associated with the initial meet

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and confer process logically should not always be included in a fee award.” Matlink, Inc., 2008

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WL 8504767, at *5.

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Here, Plaintiffs state that Ms. Costantini spent 5.4 hours on meeting and conferring with

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the opposing counsel, and preparing for and participating in a telephonic conference with

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chambers regarding Defendant’s demand for documents subject to Defendant’s motion to

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compel. See Taché Decl. at 5. The Court finds that the hours expended by Ms. Costantini on

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meeting and conferring should be excluded from the fee award sought by Plaintiffs. The Court

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further finds that the declaration provided by Mr. Taché is sufficiently detailed and rejects

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Defendant’s argument that the request should be further reduced because time attributed to

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preparing the motion may include additional meet and confer efforts.

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b. Preparation and Filing Opposition Brief

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Defendant argues that the time spent by Plaintiffs’ counsel is “disproportionate to the

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task of opposing a motion to compel.” ECF No. 193 at 7. Defendant also argues that the 8.7

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hours billed by the paralegal to prepare and file exhibits is excessive. Id.

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Mr. Taché billed 3.4 hours in connection with Plaintiffs’ opposition brief, Ms. Costantini

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billed 27.1 hours preparing the brief, and Mr. Scott billed 1.6 hours drafting his declaration and

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revising the opposition brief. See Taché Decl. at 4–6. Ms. Kovacs, the paralegal, billed 8.7

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hours for “gathering, organizing and preparing exhibits” in support of Plaintiffs’ opposition brief,

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electronically filing the document, and coordinating the delivery of chambers copies. Id. at 6–

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7.

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The Court finds that the 3.4 hours billed by Mr. Taché and 1.6 hours billed by Mr. Scott

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are reasonable.

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preparing the opposition to Defendant’s motion to compel is excessive. Defendant’s motion was

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not complex as it concerned the production of documents and pleadings exchanged in the

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preceding arbitration. See ECF No. 139-1 at 4–8. The Court therefore reduces the amount of

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compensable hours billed by Ms. Costantini to 20 hours.

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The Court further finds that that 27.1 hours billed by Ms. Costantini for

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The Court also finds that the 8.7 hours billed by Plaintiffs’ paralegal, Ms. Kovacs, is

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excessive. Plaintiffs filed nine exhibits in support of their opposition, which consisted of copies

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of Defendant’s responses to Plaintiffs’ interrogatories, a protective order, a Contribution

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Agreement, and email correspondence. See ECF Nos. 150 & 163. Plaintiffs do not explain why

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Ms. Kovasc required almost an hour/exhibit to compile and file such exhibits, and the Court finds

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the requested amount of hours unreasonable. Accordingly, the Court reduces the amount of

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compensable time expended by Ms. Kovasc to 4 hours.

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c. Additional Briefing

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Defendant argues that Plaintiffs should not be compensated for their supplemental

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briefing regarding sanctions. ECF No. 193 at 8. An attorney’s fee award generally includes the

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time spent preparing and litigating a motion to obtain a fee award. Camacho v. Bridgeport Fin.,

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Inc., 523 F.3d 973, 981 (9th Cir. 2008); Shaw v. Credit Collection Serv., 2009 WL 4981620, at

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*1 (S.D. Cal. Dec. 14, 2009) (“[a]s a general rule, the time attorneys spend seeking fees is

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compensable, and can be incorporated into a final attorneys’ fees award.”).

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Here, Plaintiffs claim that Mr. Taché spent 0.5 hours, Mr. Scott 10.6 hours, and Ms.

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Costantini 4 hours on “preparing and filing Plaintiffs additional briefing and declaration.” ECF

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No. 190 at 3.

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supplemental sanction briefing as they spent drafting the opposition to the underlying motion

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to compel and the motion for sanctions. The Court finds that the 0.5 hours billed by Mr. Taché

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and 4 hours billed by Ms. Costantini are reasonable. However, the Court reduces the amount

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of compensable hours billed by Mr. Scott to 6 hours. See Orr v. California Highway Patrol, 2015

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WL 9305021, at *14 (E.D. Cal. Dec. 22, 2015) (reducing the amount of hours expended on

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As such, Plaintiffs’ counsel spent almost half as many hours preparing the

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preparing a fee motion; reasoning that “[a] request for attorney’s fees should not result in a

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second major litigation.”) (quoting Hensley v. Eckerhart, 461 U.S. 424, 437 (1983)).

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d.

Messenger Fees

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Plaintiffs seek to recover $63.50 in messenger fees for delivering courtesy copies of their

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opposition to the Court. Taché Decl. at 8; see also ECF No. 188 at 10; ECF No. 190 at 3.

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Section 2(e) of the Electronic Case Filing Administrative Policies and Procedures Manual for the

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Southern District of California requires parties to deliver or mail a courtesy copy of any filing

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exceeding twenty pages in length to chambers within twenty-four hours after filing. The Court’s

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Chambers’ Rules contain the same requirement. Plaintiffs’ opposition to Defendant’s motion to

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compel and attachments far exceeded twenty pages [see ECF No. 150], and thus Plaintiffs were

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required to deliver a courtesy copy to chambers.

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Messenger service fees are compensable in a fee award. See Harris v. Marhoefer, 24

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F.3d 16, 19–20 (9th Cir. 1994) (finding that messenger fees may be recovered); Matlink, Inc.,

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2008 WL 8504767, at *7 (same). Accordingly, the Court GRANTS Plaintiffs’ request for the

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messenger fees in the amount of $63.50.

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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

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Thus, the Court awards Plaintiffs a total of $16,105 in attorney’s fees.

Further, as

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discussed above, the Court awards Plaintiffs $63.50 in messenger fees. Accordingly, the Court

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sanctions Defendant in the amount of $16,168.50.

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SUMMARY AND CONCLUSION

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For the foregoing reasons, the Court GRANTS Plaintiffs’ motion for monetary sanctions.

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Defendant is ordered to pay Plaintiffs the amount of $16,168.50 on or before June 2, 2017.

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Defense counsel is ordered to file a declaration verifying said payments no later June 9, 2017.

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Failure to comply with this order may result in the imposition of additional sanctions.

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IT IS SO ORDERED.
Dated: 5/18/2017

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