Parallel Iron LLC v. NetApp Inc.

Filing 108

MEMORANDUM OPINION regarding request for attorneys fees (see D.I. 94 and 58 ). Signed by Judge Richard G. Andrews on 3/25/2015. (nms)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE

Parallel Iron LLC,

Plaintiff;
v.
Civil Action No. 12-769-RGA
NetApp, Inc.,

Defendant.

MEMORANDUM OPINION

Richard D. Kirk, Esq., Bayard, PA, Wilmington, DE; Stephen B. Brauerman, Esq., Bayard, PA,
Wilmington, DE; Vanessa R. Tiradentes, Esq., Bayard, PA, Wilmington, DE; Sara E. Bussiere,
Esq., Bayard, PA, Wilmington, DE, attorneys for the Plaintiff.
Jack B. Blumenfeld, Esq., Morris, Nichols, Arsht & Tunnell LLP, Wilmington, DE; Rodger D.
Smith, II, Esq., Morris, Nichols, Arsht & Tunnell LLP, Wilmington, DE; Michael J. Flynn, Esq.,
Morris, Nichols,Arsht & Tunnell LLP, Wilmington, DE; Natalie Hanlon-Leh, Esq., Faegre, Baker,
Daniels LLP, Denver, CO; Joel D. Sayres, Esq., Faegre, Baker, Daniels LLP, Denver, CO, attorneys
for the Defendant.

March

~~ 2015
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Currently before the Court is Defendant NetApp, Inc. 's request for attorney's fees. (D.I.
94). This matter has been fully briefed. (D.I. 94, 103, 104). For the reasons set forth herein,
Defendant's request is GRANTED IN PART. Defendant's requests for discovery and an
injunction are DENIED.

BACKGROUND
Plaintiff brought this suit against Defendant on June 18, 2012. (D.I. 1). Plaintiff alleged
that Defendant infringes U.S. Patent Nos. 7,197,662, 7,958,388, and 7,543,177. (Id.) The
complaint identifies the accused products as "by way of example and without limitation, those
implementing" parallel Network File System ("pNFS"). 1 (E.g., id. at~ 13). On February 15,
2013 Plaintiff served its Section 4(a) disclosures, which continued to identify the accused
products only in relation to their implementation of pNFS, citing one example, the E-Series
Platform products. (D.I. 43-1 at 2-3). Plaintiff served its "Amended Disclosures" on April 23,
2013, only identifying products by their use of pNFS, and adding a second example. (Id. at 5-6).
On May 7, 2013, Plaintiff served its second amended disclosures, which continued to identify
accused products based on their use of pNFS and added Hadoop-related products as examples of
products implementing pNFS. (Id. at 8-9). After receiving Plaintiffs second amended
disclosures, Defendant wrote to Plaintiff on May 16, 2013 regarding "( 1) the untimeliness of
[Plaintiff]'s purported amendments to its disclosures; (2) the failure of [Plaintiff] to sufficiently
identify an accused product other than its reference to pNFS; and (3) that the E-Series category
of products referenced in [Plaintiff]'s disclosures did not practice pNFS." (D.I. 59 at 13 (citing
D.I. 43-1 at 11-14)). Additionally, Defendant's letter requested the pre-suit basis for Plaintiffs

1 pNFS

is an industry standard. Therefore, stating that one uses pNFS describes an overall technology, not a specific
product, system, or method.

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-

"

allegations regarding pNFS. (D.I. 59 at 13; D.I. 43-1 at 16). On May 25, 2013, Plaintiff served
2,600 pages of infringement contentions. (D.I. 59 at 14). The contentions listed specific
products, but did not mention pNFS. (Id.) The parties had a meet-and-confer call on August 22,
2013, during which Plaintiff confirmed that it was no longer accusing pNFS. (Id. at 15).
Based upon Plaintiffs indication that it was no longer accusing pNFS, Defendant
requested a discovery dispute conference with the Court, and filed a discovery dispute letter as
per the scheduling order for this case. (D.I. 43). The Court held a discovery conference on
September 27, 2013. (D.I. 47). Based upon a joint stipulation (D.I. 49), the Court granted a stay
of this case on October 10, 2013, pending the final resolution of several related cases involving
the same patents. (D.I. 50). The Court granted this stay in part as a remedy to Defendant for
Plaintiffs altering its allegations from pNFS to Hadoop. (Id. at 1).
On January 22, 2014, Plaintiff granted a license to the asserted patents to Unified Patents,
Inc. 2 (D.I. 59 at 16; D.I. 82 at 7). The agreement granted a sublicense to Defendant, with no
requirement for Defendant to pay any money to Plaintiff. (Id.).
On March 31, 2014, NetApp moved for attorney's fees under 35 U.S.C. § 285 and the
Court's inherent powers. (D.I. 58). The Court granted the motion on September 12, 2014. (D.I.
92). The Court did not grant fees under§ 285 because Defendant was not a "prevailing party,"
since the suit was resolved by way of a license agreement and not a decision on the merits. (D.I.
91 at p. 8). However, the Court granted attorney's fees under its inherent powers because it
found that Plaintiff acted "in bad faith, vexatiously, and wantonly as it brought this suit without a

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good faith basis and then continued to litigate the case via a misleading and prejudicial litigation
strategy." (Id. at pp. 9-10).

2 The

Court did not receive a copy of this license agreement.

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After an in camera review of all the materials gathered and created as part of Plaintiffs
pre-suit investigation, the Court found that Plaintiff initiated the suit without a good-faith belief
that the accused instrumentalities implemented pNFS in an infringing manner. (Id. at p. 11 ).
The Court further found that Plaintiff "provided no evidence that there was even a minimal
investigation into NetApp's actual implementation of pNFS." (Id. at p. 12). The Court found
that Plaintiff then "strung the Defendant along for one year, one month, and eighteen days stating
that they were accusing products that implemented pNFS, only to state, when directly asked in
an interrogatory, that they had no intention of accusing products implementing the pNFS
standard." (Id. at p. 11 (footnotes omitted)). The Court found that such conduct warranted an
award of attorney's fees "not only to compensate NetApp, but also to deter Parallel Iron from
continuing to litigate in such a manner in the future." (Id. at p. 15).

LEGAL STANDARD
"It has long been understood that certain implied powers must necessarily result to our

Courts of justice from the nature of their institution, powers which cannot be dispensed with in a
Court, because they are necessary to the exercise of all others." Chambers v. NASCO, Inc., 501
U.S. 32, 43 (1991) (internal quotation marks and brackets omitted). The court's "power reaches
both conduct before the court and that beyond the court's confines" as the underlying purpose of
the court's power is to stem "disobedience to the orders of the Judiciary, regardless of whether
such disobedience interfered with the conduct of trial." Id. at 44 (internal quotation marks and
brackets omitted). Furthermore, a court "may assess attorney's fees when a party has acted in
bad faith, vexatiously, wantonly, or for oppressive reasons." Id. at 45-46 (internal quotation
marks omitted). The Third Circuit has held, "In exercising its discretion under its inherent
powers, the court should be guided by the same considerations that guide it in the imposition of

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sanctions under the Federal Rules." Republic of Philippines v. Westinghouse Elec. Corp., 43
F.3d 65, 74 (3d Cir. 1994).
"The court calculates attorney fees pursuant to the 'lodestar' approach. The lodestar
amount results from multiplying the amount oftime reasonably expended by reasonable hourly
rates .... The prevailing community market rates assist the court in determining a reasonable
hourly rate." Asahi Glass Co. v. Guardian Indus. Corp., 2013 WL 936451, at *1 (D. Del. Mar.
11, 2013) (internal citations omitted). The court should exclude all hours that were not
"reasonably expended." Hensley v. Eckerhart, 461 U.S. 424, 434 (1983). The party seeking fees
"bears the burden of establishing the reasonableness of both the time expended and the hourly
rates." Asahi, 2013 WL 936451, at* 1. Once the amount oftime has been multiplied by a
reasonable hourly rate, there are several factors a court may consider to adjust the award upwards
or downwards. Id. at *2. The Court can consider these factors to the extent they are raised by
the parties. Id. The only factor Plaintiff in this case identified was a reduction based on the
"results obtained." (DJ. 103 at p. 10; see Asahi, 2013 WL 936451, at *2 n.2).

ANALYSIS
A.

Fee Award
Defendant seeks attorney's fees in the amount of $594,162, 3 which reflects the fees

incurred (1) during the time Plaintiff accused pNFS and (2) in bringing the fee motion. (DJ. 94
at pp. 1-2). Defendant calculated fees based on the lodestar approach, using average rates for
New York attorneys as reported by the American Intellectual Property Law Association's Report
of the Economic Survey. (Id. at pp. 6-7).

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Defendant originally requested $594,471. (D.I. 94 at p. 1). Due to a minor reduction in fees from local counsel,
Defendant reduced the request to $594, 162. (D.I. 104 at p. 10 n.7).

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Plaintiff raises four objections. First, Plaintiff argues that the lodestar approach is the
incorrect method for calculating the fee award. (D.I. 103 at p. 5). Second, Plaintiff argues that
Defendant's fees are unreasonable because they include unnecessary work. (Id. at pp. 3-5).
Third, Plaintiff argues that Defendant should be denied fees entirely as a sanction for violating
Federal Rule of Evidence 408. (Id. at p. 7). Fourth, Plaintiff argues that Defendant is not
entitled to fees incurred in bringing the fee motion. (Id. at pp. 9-10). The Court will address
these objections in turn.
1. Lodestar Method
Plaintiff argues that the lodestar approach is the incorrect method to calculate attorney's
fees granted under the Court's inherent powers. (D.I. 103 at p. 5). Plaintiff contends that the
lodestar method is limited to calculating attorney's fees granted under a statutory fee-shifting
provision. (Id.). Plaintiff argues that sanctions under the Court's inherent powers must be
limited to an amount designed to "remedy the damage done by a litigant's malfeasance." (Id.
(citations omitted)).
Defendant responds that Plaintiff cites no authority indicating that the lodestar approach
should not be used to calculate attorney's fees granted under the Court's inherent powers. (D.1.
104 at p. 5). Defendant argues that fees awarded under § 285 are granted for the same reason
Plaintiff identifies as the rationale for fees granted under the Court's inherent powers: "to
compensate a defendant for attorney's fees it should not have been forced to incur." (Id.
(citations omitted)). Since the provisions have the same rationale, Defendant argues that there is
no reason to use different methods of calculation. (Id.).
The Court finds that the lodestar approach applies to awards granted under the Court's
inherent powers, as well as to fee-shifting statutes. Under either provision, fees are awarded as a

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sanction for misconduct and to compensate a party for fees incurred as a result of bad faith
litigation. Plaintiff does not identify any other method of calculating an amount to "remedy the
damage done by a litigant's malfeasance." In addition, fees incurred during the period Plaintiff
accused pNFS is the proper amount to remedy Plaintiffs misconduct. The malfeasance that the
Court sanctioned was bringing a suit without a good faith basis and continuing to litigate it in a
misleading and prejudicial way. (D.I. 91 at pp. 9-10). The damage caused by such misconduct
can be measured by the fees Defendant incurred while Plaintiff was misleadingly litigating the
case.
The lodestar method is a well-established approach to calculating reasonable attorney's
fees, and the Court sees no reason to depart from it. Moreover, other courts have applied the
lodestar method to fees awarded under the Court's inherent powers: "When attorney's fees are
awarded under the Court's inherent powers, courts use the lodestar approach, which has been
held ... to be the method to be used to determine a reasonable attorney fee in all the federal
courts .... " In re Nicholas, 496 B.R. 69, 74 (Bankr. E.D.N.Y. 2011) (internal quotation marks
omitted).
2. Reasonableness of Fees
Plaintiff posits two reasons that Defendant's fee request is unreasonable. First, Plaintiff
argues that Defendant is only entitled to fees for work related to the conduct for which Plaintiff
was sanctioned. (D.I. 103 at p. 3). Plaintiff maintains that it was sanctioned for identifying
pNFS as the accused instrumentality. Therefore, Plaintiff argues that Defendant can only
recover fees directly related to investigating pNFS, and not, for example, reviewing the patents
and prosecution history, researching prior art, or preparing invalidity contentions. (Id at pp. 34).

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Second, Plaintiff argues that Defendant's billing structure encouraged unnecessary work
and caused Defendant's counsel to frontload work during periods when the case was dormant.
(D.I. 103 at pp. 4-5). Defendant entered into a fixed-fee arrangement under which it paid
counsel a set amount each month, irrespective of the amount of work performed during that
period. (Id. at p. 4). Plaintiff argues that the arrangement incentivized defense counsel to
perform work earlier than necessary so that counsel "did not substantially exceed the cap on the
payments it was to receive when the case started moving." (Id. at p. 5). Plaintiff maintains that
it should not have to pay for work that was ultimately rendered unnecessary because it entered
into a license which disposed of the case. (Id.). Plaintiff also asserts that the fees incurred by
Defendant's local counsel were minimal, which demonstrates that the fees Defendant requests
are unreasonable.
Defendant argues that it is entitled to fees beyond those that directly relate to
investigating pNFS because, had Plaintiff performed a good faith pre-suit investigation, Plaintiff
would not have filed the case at all. (D.1. 104 at p. 1). Defendant notes that the Court awarded
fees not only for bringing the suit without a good faith basis, but also because Plaintiff
"continued to litigate the case via a misleading and prejudicial strategy." (Id. at p. 2 (citing D.I.
91 at pp. 9-10)). Therefore, Defendant argues it is entitled to fees incurred throughout the entire
period Plaintiff accused pNFS instrumentalities.
Defendant also argues that its counsel did not perform work earlier than necessary. (Id.
at p. 3). Defendant notes that Plaintiff failed to identify any specific task that should have been
deferred to later in the case. In addition, Defendant argues that the Court already rejected
Plaintiffs argument that defense counsel should have delayed work. (Id. at p. 4 (citing D.I. 47 at
14)). Defendant further argues that local counsel fees do not have a bearing on the

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reasonableness of its overall fee request. It notes that local counsel represented more than twenty
defendants in related litigation, all of whom divided the fees between them. (Id. at p. 4 n.2).
The Court finds Plaintiffs arguments unavailing. First, Plaintiff misstates the conduct on
which the Court based its fee award. The Court did not award fees solely because the complaint
identified pNFS. The Court granted attorney's fees because Plaintiff filed the suit without
investigating whether the accused instrumentalities used pNFS, and then proceeded to identify
the accused instrumentalities solely by reference to pNFS. (DJ. 91 at pp. 9-10). Plaintiff was
therefore sanctioned both for filing the suit and for its litigation tactics throughout. The entire
period that Plaintiff accused pNFS instrumentalities is therefore the appropriate period for which
to award fees.
Furthermore, the Court does not find that defense counsel performed unnecessary,
frontloaded work. As I previously held, responsible attorneys would not stand around and wait
for months once their client has been accused of infringement and then rush to perform all their
work once they get more specific information. (See D.I. 47 at 14). It is reasonable to begin
investigating and preparing a defense once an infringement suit has been brought. 4 Finally, the
Court agrees with Defendant that local counsel fees do not have a bearing on the reasonableness
of Defendant's overall fee request. Those fees were shared among more than twenty defendants
and would therefore naturally be much lower than fees that were not so split.
3. Federal Rule of Evidence 408

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I also do not find the "incentivizing" argument at all persuasive. If a firm gets a flat fee for as Jong as the litigation
lasts, I would think the financial incentive would be to postpone work that may never need to be done, since doing it
is not going to increase the fees, and postponing it may result in it never being done. The advantage of the latter
alternative is that, if it never needs to be done, the attorney can do other work and be paid for it.

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In addition to requesting fees, Defendant requested discovery and an injunction related to
an allegation that Plaintiff has been dissipating assets received from settlement agreements. 5
(D.I. 94 at p. 10). Plaintiff argues that by disclosing confidential settlement communications,
Defendant violated Federal Rule of Evidence 408. (D.1. 103 at p. 7). Plaintiff requested that the
Court decline to grant attorney's fees as a sanction for that violation. (Id.). Rule 408 prohibits
the use of evidence related to settlement offers and negotiations "to prove or disprove the
validity or amount of a disputed claim or to impeach by a prior inconsistent statement or a
contradiction." FED. R. Evm. 408. However, such evidence is admissible if used "for another
purpose." Id. Plaintiff argues that Defendant offered the settlement agreements as evidence in
the same brief in which Defendant sought to prove the amount of attorney's fees, i.e., a disputed
claim. (D.1. 103 at p. 8).
Defendant responds that the disputed claim is the amount of fees it should be awarded,
and it did not offer settlement evidence to support its fee request. (D.I. 104 at p. 6). Defendant
notes that the Third Circuit has held that statements made in the context of settlement
negotiations can be considered when calculating a fee award as long as they are not used to
prove the merits of the claim. (Id. at p. 6 (citing Lohman v. Duryea Borough, 574 F.3d 163, 167
(3d Cir. 2009) (holding that settlements offers may be considered for the purpose of determining
whether a claim was successful))). Defendant further argues that Plaintiffs inability to pay is
not a "disputed claim," but rather an undisputed factual statement. (D.1. 104 at p. 6).
The Court agrees with Defendant that Rule 408 does not apply in this context. Plaintiffs
argument is premised on the fact that settlement evidence was submitted in a brief addressing
multiple issues. Defendant offered it for an unrelated issue; Defendant did not offer it to prove

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See infra Section B.

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the amount of a disputed claim. As other courts in this Circuit have noted, "Rule 408 does not
provide a blanket protection against any and all use of statements made during settlement
negotiations." Benson v. Giant Food Stores, LLC, 2011WL6747421, at *6 (E.D. Pa. Dec. 22,
2011 ). The fact that Defendant sought to prove the amount of fees owed in one section of a brief
does not contaminate the remainder. Indeed, even if the evidence were offered in the fee section,
it could be admissible for some other purpose. Defendant did not offer settlement evidence to
support its request for attorney's fees. The Court therefore finds that Defendant did not violate
Rule 408 and denies Plaintiffs request that the Court sanction Defendant.
4. Fees Incurred in Bringing the Fee Motion
Plaintiff argues that Defendant is not entitled to fees incurred in connection with bringing
its fee motion because Defendant's argument only addressed whether such fees can be awarded
in cases involving § 285. (D.I. 103 at p. 9). Plaintiff argues that sanctions issued under the
Court's inherent authority should be tailored to address misconduct. Because it did not oppose
the fee motion in bad faith, the opposition was not misconduct. (Id. at p. 10). Plaintiff further
argues that the fee motion was largely unsuccessful, because the majority of the motion
addressed fees under § 285, which the Court did not grant. (Id.). Plaintiff notes that only 1.17
pages of the thirty pages of briefing addressed the Court's inherent authority. (Id. at p. 10 n.7).
Therefore, Plaintiff argues that if the Court does grant fees in connection with the motion, it
should only grant 3.9% of the fees incurred. (Id.).
Defendant argues that the purpose of fee awards under both§ 285 and the Court's
inherent authority is to compensate an injured party for fees it should not have had to incur. (D.I.
104 at p. 8). Defendant notes that if Plaintiff had not engaged in the litigation, it would not have
had to expend fees in bringing the fee motion. (Id.). Therefore, fees incurred in bringing the

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motion relate to the misconduct. (Id). Defendant further argues that cases regarding § 285 are
particularly relevant because the Court would have granted attorney's fees under that section had
Defendant been the prevailing party. (Id). Defendant argues that refusing to grant fees incurred
in connection with bringing a fee motion would undermine the purpose of the fee award by
requiring a party to pay more in order to avail itself ofreliefthe Court ordered. (Id at pp. 9-10).
Finally, Defendant argues that there is no authority for apportioning fees based on the number of
pages spent on different theories, and, in any event, the arguments overlapped. (Id. at p. 10 n.5).
The Court finds that Defendant can recover fees incurred in connection with bringing its
fee motion. While the Court does not find that Plaintiff opposed the motion in bad faith, the
motion would not have been necessary if Plaintiff had not engaged in bad faith litigation. Fees
for bringing the motion are therefore tailored to Plaintiffs misconduct. The Court does not agree
with Plaintiffs novel argument that Defendant should recover only partial fees based on the
number of pages which addressed inherent authority. As Defendant correctly notes, the bases for
the request under either theory are the same and the arguments therefore overlap. Contrary to
Plaintiffs suggestion that the motion was "largely unsuccessful," the Court granted the motion
entirely based on one of two alternate theories. (See D.I. 103 at p. 10). Moreover, the universal
rule in fee-shifting statutes is that a party may recover fees incurred in connection with bringing
a fee motion. The Court sees no reason to depart from this practice because it granted fees under
its inherent powers rather than a statute.
5. Amount of Fees
Defendant submitted detailed time records documenting the work counsel performed.
(D.I. 97, Exs. B, D). Defendant is not requesting fees for the total number of hours worked, only
the amount paid under the fixed-fee arrangement. (D.I. 94 at p. 4). The Court finds that the

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hours claimed were reasonably expended. The Court will award fees for the number of hours
billed, reduced to take into account the fixed-fee arrangement.
However, the Court does not agree with Defendant's hourly rate. Defendant argues that

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New York City." (Id. at p. 6 (internal citation omitted)). "[I]n most cases, the relevant rate is the

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prevailing rate in the forum of the litigation." Interfaith Cmty. Org. v. Hone)'Well Int'!, Inc., 426

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the Court should look at the rates charged by "attorneys in other highly regarded law firms in

F.3d 694, 705 (3d Cir. 2005); accord, B)'Waters v. United States, 670 F.3d 1221, 1232-33 (Fed.
Cir. 2012). The forum rule has two limited exceptions: "first, when the need for the special
expertise of counsel from a distant district is shown; and, second, when local counsel are
unwilling to handle the case." Interfaith, 426 F.3d at 705 (internal quotation marks omitted).
Applying the forum rule, the hourly rate should be that of Delaware intellectual property
attorneys. The exceptions to the forum rule do not apply. A number of Delaware attorneys can,
and do, capably litigate patent cases-including attorneys at the firm hired as local counsel.
There is no indication that Delaware counsel were unwilling to litigate the case.
The documents submitted to the Court show the number of hours worked and the amount
of fees charged. Because of the fixed-fee structure, the amount charged does not perfectly
correspond to the hours expended. I think the appropriate fee award should be calculated as
$594, 162 multiplied by a fraction to reflect the differences between New York and Delaware
rates. The fraction's numerator is the Delaware blended hourly rate 6 and the fraction's
denominator is the actual blended hourly rate of the attorneys involved. The Court therefore
orders Defendant to calculate the proposed fee award using this formula and meet and confer

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By "blended hourly rate," I mean a weighted average hourly rate based on the rates of the attorneys who worked
on the case, taking into account the proportion of the work the attorneys did. The numerator should be based on the
American Intellectual Property Law Association's Report of the Economic Survey.

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with Plaintiff. Within twenty-one days, Defendants are to submit a joint proposed order
reflecting an agreed-upon fee award consistent with this Opinion. If the parties cannot agree,
they are ordered to file letters of no more than three pages explaining their positions.

B.

Discovery and Injunction
Defendant further requests discovery regarding Plaintiffs financial condition and an

order enjoining Plaintiff from dissipating assets. (DJ. 94 at p. 10). According to Defendant,
Plaintiffs counsel represented that Plaintiff had only thirty or forty thousand dollars in assets
from which to pay a fee award. (Id. p. 14). Defendant argues that Plaintiff received
approximately ten million dollars in settlements on its patents, most of which it received after
Defendant first raised its fee request. (Id. at p. 10). The settlements Defendant identifies were
entered into between November 2013 and February 2014. (Id. at pp.11-12). Though this was
before the Court ordered fees, Defendant notes that the Court had previously indicated that
Defendant had a "decent argument" that it was entitled to fees. (Id. at p. 13). Defendant also
argues that discovery is warranted to determine whether Plaintiffs members are liable for the fee
award based on alter ego liability. (Id. at pp. 15-18).
Finally, Defendant argues that there is good reason to believe that Plaintiff and its
members will dissipate assets and requests an injunction to prevent them from doing so. (Id. at
p. 18; DJ. 104 at p. 10). Defendant notes that other courts have enjoined Erich Spangenberg,
who Defendant alleges was involved with the settlements, from dissipating assets because his
"use of his corporate entities is certainly cause for concern." (D.I. 104 at p. 10 (quoting Taurus

IP, LLCv. DaimlerChrysler Corp., 559 F. Supp. 2d 947, 961 (W.D. Wis. 2008), aff'd in part,
rev 'din part on other grounds, 726 F.3d 1306 (Fed. Cir. 2013)).

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Plaintiff argues that there is no reasonable basis to believe that it dissipated assets. (D.I.
103 at p. 10). Moreover, even if there were reason to so believe, Plaintiff argues that
Defendant's request for discovery is premature. (Id. at p. 11). Plaintiff notes that Federal Rule
of Civil Procedure 69(a)(2) governs discovery from judgment creditors. Plaintiff argues that
ordering discovery before judgment has been entered would render that rule superfluous. (Id.).
Plaintiff further argues that Defendant's request that the Court enjoin Plaintiff from dissipating
assets lacks support and is procedurally improper. (Id. at p. 13). Plaintiff maintains that the
Court does not have jurisdiction to bind non-parties and Defendant failed to provide evidentiary
support for its request. (Id.).
The Court finds that Defendant's request for discovery is premature. The Court agrees
with Plaintiff that ordering discovery before judgment has been entered would render Rule
69(a)(2) superfluous.
[D]iscovery may not be requested before the judgment is entered. Prejudgment discovery
is prohibited because the purpose of the provision is to allow the judgment creditor to
identify assets from which the judgment may be satisfied; however, after judgment, the
judgment creditor is permitted to conduct a broad inquiry to uncover any hidden or
concealed assets of the judgment debtor.
MOORE'S FEDERAL PRACTICE AND PROCEDURE§ 26.102. Accordingly, Defendant may obtain
discovery pursuant to Rule 69(a)(2) once judgment has been entered.
The Court further finds that an injunction is not appropriate. The Court "enjoys the
power to protect a potential future damages remedy," but the "traditional requirements for
obtaining equitable relief must be met." Hoxworth v. Blinder, Robinson & Co., 903 F.2d 186,
197 (3d Cir. 1990), holding modified on other grounds by Am. Tel. & Tel. Co. v. Winback &

Conserve Program, Inc., 42 F.3d 1421 (3d Cir. 1994). The moving party must demonstrate (1) a
likelihood of success on the merits, (2) the probability of irreparable harm if relief is not granted,

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(3) the possibility of harm to other interested persons from the grant or denial of the injunction,
and (4) the public interest favors granting an injunction. Id at 197-98.
The first factor has been shown, as the Court already granted Defendant's motion for
attorney's fees. (DJ. 92). However, Defendant has not addressed the other three factors.
Though Defendant argues that Plaintiffs counsel previously advised that it did not have
sufficient assets to satisfy a fee award (D.1. 94 at p. 10), Plaintiff claims that Defendant's
arguments "are based entirely on speculation." (D.I. 103 at p. 11). The Third Circuit has
"insisted that the risk of irreparable harm must not be speculative." Adams v. Freedom Forge

Corp., 204 F.3d 475, 488 (3d Cir. 2000). Defendant's request for an injunction was not made by
motion or supported by a brief addressing the relevant factors. The Court therefore finds that
Defendant has not met its burden of demonstrating that an injunction is warranted.

CONCLUSION
For the reasons set forth herein, Defendant's request for attorney's fees is GRANTED IN
PART. Defendant is to calculate a fee award as instructed above and meet and confer with
Plaintiff. Defendant is instructed to submit a joint proposed order reflecting an agreed-upon fee
award consistent with this Opinion within twenty-one days. If the parties cannot agree to a joint
proposed order, they are to file letters of no more than three pages within twenty-one days
explaining their positions. Defendant's requests for discovery and an injunction are DENIED.
An appropriate order will be entered.

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