Lawson v. Spirit Aerosystems, Inc.
Filing
465
MEMORANDUM AND ORDER granting in part and denying in part 385 Defendant Spirit AeroSystems, Inc.'s Application for TAR Expenses. See text of order for details and deadlines. Signed by Magistrate Judge Angel D. Mitchell on 10/29/20. (ks)
Case 6:18-cv-01100-EFM-ADM Document 465 Filed 10/29/20 Page 1 of 40
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
LARRY A. LAWSON,
Plaintiff,
v.
SPIRIT AEROSYSTEMS, INC.,
Defendant.
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Case No. 18-1100-EFM-ADM
MEMORANDUM AND ORDER
This matter comes before the court on Defendant Spirit AeroSystems, Inc.’s (“Spirit”)
Application for TAR Expenses. (ECF 385.) The court previously granted Spirit’s motion to shift
the expenses it incurred in connection with a technology-assisted review (“TAR”) of
approximately 322,000 documents to plaintiff Larry A. Lawson (“Lawson”). After the parties
could not reach agreement regarding the amount of those expenses, Spirit filed this application
seeking $791,700.21 in expenses incurred in connection with the TAR. Spirit also seeks $83,000
in costs and fees incurred conferring with Lawson and preparing the briefing associated with its
current application. Lawson objects to the amount Spirit seeks, arguing many of the expenses
included in Spirit’s calculation are unreasonable or outside the scope of the court’s order. (ECF
397-1.) Lawson contends that Spirit’s reasonable TAR expenses are no more than $330,000.
For the reasons discussed below, the court grants Spirit’s application in part and denies it
in part. Specifically, the court awards Spirit $754,029.46 in TAR expenses. The court also awards
Spirit its expenses incurred in connection with the current application, but the court cannot
determine the reasonable amount of those expenses based on the present record. The court will
therefore allow Spirit to file a renewed application with the required fee detail.
Case 6:18-cv-01100-EFM-ADM Document 465 Filed 10/29/20 Page 2 of 40
I.
BACKGROUND
Lawson is Spirit’s former chief executive officer. He filed this breach of contract action
after Spirit stopped paying him under his Retirement Agreement because of his business dealings
involving Arconic, Inc. (“Arconic”), which Spirit contends violated Lawson’s non-compete. At
Lawson’s request, the parties spent months engaged in an ESI discovery process regarding the
issue of business overlap between Spirit and Arconic using traditional ESI methods involving
custodians and search terms. When that process repeatedly yielded low responsiveness rates, the
court allowed the parties to proceed—again, at Lawson’s request—with the TAR, with the caveat
that the court would decide whether to allocate the TAR expenses to Lawson. Spirit filed a motion
to shift the TAR expenses to Lawson pursuant to Federal Rule of Civil Procedure 26(c), which
authorizes a court to allocate discovery expenses upon a showing of good cause in order to protect
a party from undue burden and expense. FED. R. CIV. P. 26(c)(1)(B). The court granted the motion,
finding good cause to allocate the TAR expenses to Lawson because he insisted on pursuing the
TAR after it became disproportional to the needs of the case. See Lawson v. Spirit AeroSystems,
Inc., No. 18-1100-EFM-ADM, 2020 WL 3288058, at *22 (D. Kan. June 18, 2020). The court
ordered briefing to determine the specific dollar amount of those expenses.
Since that order, the parties’ cross motions for summary judgment reinforced the court’s
determination that the TAR expenses were disproportionate to the needs of this case. Those
summary judgment motions are targeted, in part, to the issue of business overlap between Spirit
and Arconic, which is the issue that was the subject of the TAR. (ECF 432 & 435.) Spirit’s
summary judgment response brief points out that “[o]f the 95 exhibits Lawson submitted in
connection with his Motion for Summary Judgment, only one is from Spirit’s TAR production.”
(ECF 445, at 11 n.3 (emphasis in original).) Furthermore, Lawson submitted this lone TAR
2
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document to support an unremarkable factual contention about when Lawson began contemplating
retirement, not the issue of business overlap between Spirit and Arconic that was the subject of the
TAR. (Id.) This only served to confirm, once again, that Lawson’s insistence on pursuing the
TAR was disproportionate to the needs of the case.
Spirit has now filed the current application for the court to determine the amount of
expenses to allocate to Lawson under the June 18 order. (ECF 385.) Spirit seeks $455,272.71
paid to its eDiscovery vendor, Legility; $172,871.50 in attorneys’ fees paid to the Arcadi Jackson
law firm; and $163,556 in attorneys’ fees paid to the Foulston Siefkin law firm. Spirit also seeks
$83,000 in costs and fees incurred leading up to and preparing the current application. Lawson
opposes Spirit’s application, arguing many of Spirit’s expenses are unreasonable or outside the
scope of the June 18 order. Lawson contends that reasonable TAR expenses should be reduced to
no more than $330,000.
II.
EXPENSES ALLOCATED TO LAWSON
To determine the amount of expenses to allocate to Lawson, the court must independently
analyze the reasonableness of Spirit’s expenses. Cf. Pennsylvania v. Delaware Valley Citizens’
Council for Clean Air, 478 U.S. 546, 562 (1986) (“[T]he benchmark for the awards under nearly
all of these statutes is that the attorney’s fee must be ‘reasonable.’”), supplemented, 483 U.S. 711
(1987); see also Consumer Fin. Prot. Bureau v. Ocwen Fin. Corp., No. 9:17-CV-80495, 2018 WL
6843629, at *2 (S.D. Fla. Dec. 21, 2018) (stating the court would determine the reasonable and
necessary costs pursuant to Rule 26(c)(1)(B)); Flowserve US Inc. v. Optimux Controls, LLC, No.
2:13-CV-1073, 2017 WL 1240205, at *2 (D. Utah Mar. 31, 2017) (analyzing whether the
defendants’ expenses allocated to plaintiff under Rule 26(c)(1)(B) were reasonable); Marens v.
3
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Carrabba’s Italian Grill, Inc., 196 F.R.D. 35, 37-38 (D. Md. 2000) (“The court is given great
flexibility to . . . apportion costs and burdens in a way that is fair and reasonable.”).
A.
Legility Expenses
Spirit retained Legility as its eDiscovery vendor in this case. To begin the TAR, Legility
received the 322,524-document TAR dataset, copied it to its network, and staged (i.e.,
intermediately stored) the data for processing and filtering. (ECF 388-1 ¶ 16.) Legility then
processed the TAR dataset into an application called Venio to remove documents that were
duplicative or outside the relevant time range and to extract text and metadata for keyword
searching. Legility performed an early case assessment within Venio to identify potentially
responsive documents to promote into the TAR. Data and documents processed for analysis and
review remained in Venio in a “nearline” state (i.e., more easily accessible than offline storage) in
case the scope of discovery changed and additional data and documents needed to be promoted
into the TAR.
To initiate the TAR, Legility loaded potentially responsive documents into a document
review system called Catalyst that includes a tool called “Predict,” which uses continuous active
learning to code documents for responsiveness. After the system created an index of the TAR
documents, Legility’s managed review team of contract attorneys and Arcadi Jackson attorneys
began reviewing and coding documents in order to “train” Predict to code additional documents.
After Predict was trained and could rank documents from the most likely responsive to the least,
Legility’s managed review team preliminary coded documents for responsiveness, confidentiality,
and privilege according to the review protocol that Arcadi Jackson created. Responsive TAR
documents were then subject to a second-level review by Arcadi Jackson or Foulston Siefkin
attorneys before they were produced.
4
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During the review process, Legility collected and analyzed metrics to evaluate the efficacy
of the TAR workflow and the quality of the datasets to be reviewed. Legility also imposed quality
control measures to ensure that only responsive and non-privileged documents would be produced
and conducted a final quality control check prior to production. To produce the TAR documents,
Legility converted the documents to TIFF format, bates labeled and stamped them with an
appropriate designation, and produced them to Lawson according to the parties’ agreed
specifications.
Spirit seeks the following categories of TAR-related expenses that it paid to Legility:
EXPENSE DESCRIPTION
AMOUNT
TAR-related fees for document review team
TAR project management fees
$216,252.00
67,021.56
TAR-related fees for data
processing/hosting/user fees/near line
data/productions (including hosting fees
through December 2020)
TOTAL:
171,999.15
$455,272.71
(ECF 386, at 8.) Lawson proposes that he pay only $141,636.78 of Legility’s fees, which equals
50% of the document review team and project management fees. (ECF 395, at 4.)
1.
Lawson’s Objection to TAR 2.0 vs. TAR 1.0
The court turns first to Lawson’s contention that Spirit should have used a TAR 1.0 tool
rather than Predict, which is a TAR 2.0 tool. In tools commonly marketed as “TAR 1.0,” software
training begins by taking a random sample of documents from the entire TAR set. A human then
reviews and codes those documents and, based on the coding in that seed set, the software
generates a predictive model that is then applied across all relevant documents. See BOLCH
JUDICIAL INST. & DUKE LAW, TECHNOLOGY ASSISTED REVIEW (TAR) GUIDELINES 4-5 (Jan. 2019)
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[hereinafter TAR GUIDELINES].1 In contrast, with a TAR 2.0 tool, the human review and software
training are melded together in a way that they occur simultaneously. See id. at 4-5. From the
outset, human coding decisions are submitted to the software, which continuously analyzes the
entire document collection and ranks (and re-ranks) the documents for relevancy and then presents
additional documents that it predicts to be most likely relevant back to the human for review and
coding. Id. Predict is a TAR 2.0 tool that uses this type of continuous active learning. (ECF 4151 ¶ 5; ECF 416 ¶ 6); see also Lawson, 2020 WL 3288058, at *6.
Lawson contends that the Predict TAR 2.0 tool was not cost effective. In support, Lawson
relies on a declaration submitted by Jeffrey Grobart with Lawson’s eDiscovery vendor in this case,
H5 Technologies (“H5”). (ECF 394-1.) Grobart states that H5 would have recommended using a
TAR 1.0 model instead because a TAR 2.0 model like Predict “is often inefficient and requires
significant review of false-positive documents in sets with low responsiveness.” (Id. ¶ 8.) He
contends that, with TAR 1.0, reviewers could code a limited set of 12,000 documents to train the
tool that, when applied to the dataset, would ultimately result in a smaller pool of documents for
first-level review. (Id.)
In response, Spirit relies on a declaration from Legility Senior eDiscovery Consultant Jeff
Stoneking. (ECF 415-1.) Stoneking explains that TAR 1.0 would not have resulted in cost savings
because the subject matter experts (i.e., Spirit’s outside counsel) would have had to review
thousands of documents to create the seed set. (Id. ¶ 10.) Grobart explains that Spirit would incur
significant costs if its outside counsel were to review 12,000 documents, even at an aggressive
pace. (Id.) For example, assuming 50 documents reviewed per hour and a $400 per hour billing
1
Available at https://judicialstudies.duke.edu/wp-content/uploads/2019/02/TAR-GuidelinesFinal-1.pdf (last visited Oct. 26, 2020).
6
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rate, it would cost $96,000 just to create the seed set. The court also notes that one of the downsides
to using a TAR 1.0 tool is undertraining, which results in “an unnecessarily large number of
nonrelevant documents . . . reviewed to reach the desired recall.” TAR GUIDELINES, at 4. Given
the low responsiveness rate in the TAR dataset in this case, this could have further driven up the
costs of creating an effective seed set. Stoneking also explains that Legility’s review platform
Catalyst does not include a TAR 1.0 tool, so Legility would have had to host the TAR dataset in a
different database from the rest of the documents in the case, which also would have created
inefficiencies. (ECF 415-1 ¶ 11.)
The court is unpersuaded by Lawson’s argument that Spirit’s document review costs are
unreasonable because Legility used a TAR 2.0 tool rather than a TAR 1.0 tool. In support of this
argument, Lawson relies on a declaration from its eDiscovery vendor who, not surprisingly, claims
that H5 could have done it better and cheaper. Meanwhile, Stoneking has adequately explained
why Predict was appropriate under the circumstances and was just as cost-effective, if not more
so. Grobart’s opinion is further undermined by the fact that Lawson agreed to Spirit using Predict,
see Lawson, 2020 WL 3288058, at *6, and H5 was involved in conferences between the parties
before TAR began and did not propose using TAR 1.0 at that time (ECF 415-1 ¶¶ 5-6; ECF 416
¶¶ 6-7). If Grobart or H5 genuinely believed Spirit should have used a TAR 1.0 tool, they should
have raised that issue before the TAR began rather than months after the review was complete.
The court therefore finds Grobart’s declaration on this point to be unpersuasive.
2.
Document Review Team Fees
a.
Review Time
Turning next to document review team fees, Spirit seeks $172,343.50 in fees paid to
Legility for 2,970.5 hours of preliminary document review. Legility worked on the TAR from
7
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September 2019 to January 2020. The managed review team completed its preliminary review in
October and November. Seventeen contract attorneys worked on the managed review team and
largely billed at $55 per hour. One individual billed at $75 per hour for certain activities.2 The
Team Lead also conducted preliminary document review and billed at $85 per hour. Many review
team members had knowledge about Spirit from prior work for the company.
Lawson argues Spirit’s requested expenses should be reduced by 50% because Legility
“conducted the first-level review at an unreasonably slow pace.” (ECF 397-1, at 4.) The average
rate of document review “can vary considerably based on the complexity of the documents and the
experience of the reviewers.” See Brown v. Barnes & Noble, Inc., No. 116CV07333RAKHP, 2019
WL 7168146, at *3 (S.D.N.Y. Dec. 23, 2019). A common range is 30 to 100 documents per hour.
See id. (noting an average rate of review is about 40-60 documents per hour); NICHOLAS M. PACE
& LAURA ZAKARAS, WHERE THE MONEY GOES: UNDERSTANDING LITIGANT EXPENDITURES FOR
PRODUCING ELECTRONIC DISCOVERY 44, 50 (2012) (discussing reported review rates varying from
31 to 100 documents per hour, with 50 documents being a common rate)3; Ralph C. Losey,
Predictive Coding and the Proportionality Doctrine: A Marriage Made in Big Data, 26 REGENT
U. L. REV. 7, 63 (2014) (stating that a “first-pass relevancy review typically goes at a rate of 50 to
100 files per hour”); Peter J. Corcoran, III, Strategies to Save Resources and Reduce E-Discovery
2
Legility billed Spirit directly for its services. The court treats the contract attorneys’ fees as
an expense and does not include them in the lodestar calculation discussed below. See Ark.
Teacher Ret. Sys. v. State St. Bank & Tr. Co., No. CV 11-10230-MLW, 2020 WL 949885, at *50
(D. Mass. Feb. 27, 2020) (characterizing fees of contract attorneys hired to do first-level document
review as an expense); Dial Corp. v. News Corp., 317 F.R.D. 426, 438 (S.D.N.Y. 2016) (awarding
contract attorney fees as expenses).
3
Available at https://www.rand.org/pubs/monographs/MG1208.html (last visited Oct. 26,
2020).
8
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Costs in Patent Litigation, 21 TEX. INTELL. PROP. L.J. 103, 108 (2013) (discussing estimated
document review rates of 40-50 documents per hour).
Here, Lawson contends that Legility reviewed documents at an unreasonable rate of 15 per
hour. The court has reviewed Legility’s invoices. In the court’s calculation, the review team’s
preliminary review of 76,802 documents took 2,970.5 hours, counting time spent on quality
assurance. (ECF 388-1, at 110-32 (the sum of hours recorded for “Primary Review”); ECF 415-1
¶ 12.) Thus, Legility’s first-level review pace was approximately 26 documents per hour. As
Spirit points out, the Lawson-designed TAR dataset consisted of ESI “taken from the files of
Spirit’s most senior executives (including its CEO)” and included “numerous lengthy
presentations, multi-sheet Excel spreadsheets with sensitive financial data, technical data,
specifications, and information, confidential information belonging to Spirit’s customers and/or
subject to non-disclosure agreements, and highly sensitive business and strategy information.”
(ECF 386, at 10; ECF 388-2 ¶ 20.) In addition, reviewers coded for more than just responsiveness.
They also coded for confidentiality, which would have complicated review because they were
required to decipher between two levels of confidentiality under the two-tiered protective order in
this case. (ECF 41 ¶ 1(j); see, e.g., ECF 388-1, at 39 (review team time entries).) In addition, they
reviewed for privilege, with over 2,000 TAR documents reportedly identified as privileged. (ECF
388-1 ¶ 7; ECF 386, at 10.) Under these circumstances, a 26-document-per-hour rate is not
unreasonable. Indeed, it is not far from 30-document-per-hour rate that Grobart says is “typical”
for commercial litigation involving lengthy, complex documents. (ECF 394-1 ¶ 6.)
Lawson further argues the pace of first-level review should have been faster because Spirit
claims most of the TAR documents were not responsive, and many of those that were technically
responsive were not relevant to the parties’ dispute. (ECF 397-1, at 4-5.) But, as explained above,
9
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Predict ranked documents from most likely responsive to least. In other words, Predict “promoted”
the documents that it predicted were most likely to be responsive to the top for human review, so
the first-level reviewers were primarily focused on reviewing documents that were presumably
responsive. They were not conducting a linear review of all documents in the TAR dataset that
was bloated with non-responsive documents.
Regardless of whether a reviewer ultimately
determined that a particular document was non-responsive, the reviewer still had to take time to
examine the document to determine whether responsive information appeared anywhere in it.
Lawson also contends that his proposed reduction is appropriate because Legility charged
above-market rates. (Id. at 5.) Legility’s review team, which is located in Nashville, billed at rates
between $55-85 per hour. Most of the first-level review—2,633 hours—was completed at $55 per
hour. Grobart argues $40-50 per hour would be more typical for a responsive review in the
Nashville market and $80 per hour would be a median rate for a privilege log review. (ECF 3941 ¶ 7.) In contrast, Stoneking states that Legility “actively monitors competitive rates nationwide”
in an effort to ensure its price structure is viable in the marketplace and that its rates are “consistent
with the market and are reasonable.” (ECF 388-1 ¶ 20.)
The court finds Legility’s rates to be reasonable. Contract attorney rates vary widely. See
In re Citigroup Inc. Sec. Litig., 965 F. Supp. 2d 369, 396-99 (S.D.N.Y. 2013). Legility’s contract
attorney rates fall in the vicinity of rates that courts have discussed and/or approved. See, e.g.,
Ark. Teacher Ret. Sys., 2020 WL 949885, at *49 (discussing the special master’s recommendation
that “contract attorneys be treated as an expense at the rate of $50 an hour”); United Supreme
Council v. United Supreme Council of Ancient Accepted Scottish Rite for 33 Degree of
Freemasonry, No. 1:16-CV-1103, 2019 WL 3848784, at *2 (E.D. Va. Aug. 15, 2019) (approving
$46 per hour for contract attorneys conducting document review); Barranco v. 3D Sys. Corp., No.
10
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CV 13-00412 LEK-RLP, 2018 WL 4512186, at *5 (D. Haw. June 15, 2018) (same, $75 per hour),
report and recommendation adopted as modified, 2018 WL 3957046 (D. Haw. Aug. 16, 2018);
Banas v. Volcano Corp., 47 F. Supp. 3d 957, 970 (N.D. Cal. 2014) (stating defendant appropriately
elected to use contract attorneys for document review at rates of $47-59 per hour); see also David
Degnan, Accounting for the Costs of Electronic Discovery, 12 MINN. J.L. SCI. & TECH. 151, 164
(2011) (recognizing the cost for staffing document review attorneys 9 years ago ranged from $4065 per hour, with a mid-range of $52.50). Further, the Legility review team coded for both
responsiveness and privilege at rates that were for, the most part, far less than the $80-per-hour
rate that Grobart contends is a median rate for privilege review.4
In sum, Spirit’s expenses for first-level review by Legility’s contract attorneys were
reasonable. The court therefore allocates the $172,343.50 for that review to Lawson.
b.
Support Activities
In addition to the hours spent on initial review, Spirit seeks expenses related to a number
of activities that supported the TAR.
i.
Training, Downtime, Meetings, and Communications
Spirit seeks the following expenses relating to training, downtime, meetings, and
communications billed by review team members:
$3,245 for 59 hours of training, billed at $55 per hour.
$963 for 17 hours of downtime due to technical issues, billed at $55-85 per hour.
$1,351 for 17.8 hours relating to meetings and communications, billed at $55-85
per hour.
4
Contract attorney rates of $55-85 per hour are generally lower than reasonable rates for
paralegals in this district. See, e.g., Animal Legal Def. Fund v. Kelly, No. CV 18-2657-KHV, 2020
WL 4000905, at *9 (D. Kan. July 15, 2020) (finding $125 per hour for a paralegal reasonable);
Torkelson v. Jimick Prod., Inc., No. 12-1052-EFM, 2012 WL 6623911, at *2 (D. Kan. Dec. 19,
2012) (finding $100 per hour for a paralegal reasonable).
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Lawson objects to the training hours as excessively billed, the downtime hours as outside
of the scope of the June 18 order, and the time entries relating to meetings and communications as
vague. Lawson also contends the review team members’ rates were unreasonably high.
These objections are unpersuasive. As discussed above, the review team members’ rates
were reasonable. And the hours spent on these activities were necessary to the TAR and not
excessively billed, particularly in view of the number of team members and the project’s length.
Document reviewers must be trained to make sure they understand the review standards and apply
them consistently. Furthermore, some downtime to account for technical issues is inevitable in a
review of this scope, and 17 hours for such technical issues over the course of a few months is not
unreasonable. Periodic touchpoints throughout the review (e.g., meetings and communications)
are likewise typical. The court therefore allocates these costs to Lawson.
ii.
Management and Metrics
Spirit also seeks the following expenses relating to work performed by supervisory and
specialized Legility employees:
$11,309.50 for 129.3 hours relating to team lead support and management
activities, billed by the Team Lead at $85 per hour and another employee at $75
per hour.
$1,768 for 20.8 hours relating to metrics and reporting, billed by the Team Lead at
$85 per hour.
$13,648.50 for 101.1 hours relating to project management, billed by the Project
Manager at $135 per hour.5
$7,640 for 38.2 hours relating to technical project management, billed by a
Litigation and Technology Specialist at $200 per hour.
5
According to Legility’s invoices, 6.1 hours of the Project Manager’s time in November 2019
was not charged to Spirit. The court therefore does not include that time here.
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Lawson objects to the Team Lead’s time on metrics and reporting as outside the scope of
the June 18 order. Lawson also objects to the time entries for team lead support and management
activities as vague, and the Project Manager and Litigation and Technology Specialist’s time
entries as vague and excessively billed. Lawson further objects to time billed after January 15,
2020 (the date Spirit completed its TAR production) as outside the scope of the June 18 order.
Lawson also contends that the billing rates for all of the activities performed by these Legility
employees were unreasonably high.
Again, these objections are unpersuasive. It is common on a document review project of
this type and magnitude to have active involvement by team leaders, project managers, and
technology support specialists to supervise and coordinate the workflow and to liaise with
litigation counsel. Furthermore, time spent on metrics and reporting is both reasonable and
compensable under the June 18 order. As discussed above, Legility gathered and analyzed metrics
to evaluate the effectiveness of the TAR as it progressed as well as the quality of the dataset subject
to review. This analysis was integral to ensuring the TAR’s validity and that review goals were
achieved. See TAR GUIDELINES, at 24 (“Whatever software is utilized, it must generate, or allow
for the generation of metrics or effectiveness measures, which allow the team to evaluate the
workflow and determine if the review goals have been met.”). It is appropriate to allocate these
expenses to Lawson, including the Litigation and Technology Specialist’s final analyses of the
TAR in late January 2020. These are appropriate wrap-up expenses.
The rates for the Legility attorneys who performed these activities are reasonable, both in
the court’s experience and according to Stoneking’s declaration. (ECF 388-1 ¶ 20.) The Team
Lead has worked for Legility for 6 years and has 24 years of legal experience. He was responsible
for implementing TAR workflows, processes, and protocols with the review team, managing the
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team’s day-to-day operations, and serving as the primary liaison between the team and Spirit’s
counsel. The Project Manager has worked for Legility for 8 years and has 11 years of legal
experience.
He managed the review team and was responsible for developing workflows,
processes, and protocols to maximize the TAR’s efficiency. The Litigation and Technology
Specialist has worked for Legility for 4 years and has 7 years of legal experience. He is
experienced in developing eDiscovery software for law firms. He was responsible for tracking
metrics and assisting with ensuring the TAR’s efficacy. The Team Lead, Project Manager, and
Litigation and Technology Specialist are all attorneys. Rates of $75-200 per hour are reasonable
for these support activities, which are supervisory in nature and/or require more specialized
knowledge. See, e.g., FDIC v. Johnson, No. 2:12-CV-00209-KJD, 2013 WL 1195698, at *1 (D.
Nev. Mar. 22, 2013) (adopting ESI protocol that required defendants to pay a per-page fee that
reflected “labor costs ranging from $35/hr. to $300/hr. for technical time, quality control group
viewers, and project managers”); see also Rob Robinson, What is the Price of Admission? Summer
2019 eDiscovery Pricing Survey Results, COMPLEX DISCOVERY (June 7, 2019) (showing that
59.2% of 81 survey participants charged between $100-200 per hour for project management
support, and 27.2% charged over $200 per hour).6
The court has reviewed the time entries for these team lead and project management
activities, including what these activities entailed.
The time spent was reasonable and
compensable, especially considering that the hours—approximately 230 total—were billed over
approximately 3.5 months. The court will allocate these expenses to Lawson.
6
Available at https://complexdiscovery.com/what-is-the-price-of-admission-summer-2019ediscovery-pricing-survey-results/ (last visited Oct. 26, 2020).
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iii.
Privilege Log
Spirit also seeks $3,160 for Legility expenses relating to the TAR privilege log. A Legility
Senior Solutions Architect spent 15.8 hours implementing and managing development of Spirit’s
TAR privilege log, billed at a rate of $200 per hour. Lawson objects to the Senior Solutions
Architect’s time entries as outside the scope of the June 18 order, excessively billed, and vague,
and contends that his billing rate is unreasonably high.
Again, these objections are unpersuasive. As discussed below, expenses for the TAR
privilege log are appropriately shifted to Lawson under the June 18 order. The Senior Solutions
Architect’s rate is reasonable for the specialized work he performed. He has worked for Legility
for 11 years, has 14 years of legal experience, and has 25 years of technical development and
support experience. The 15.8 hours he spent on the TAR privilege log was reasonable. The court
will allocate these expenses to Lawson.
3.
Project Management Fees
Spirit seeks $67,021.56 in additional project management fees billed by Project Manager
Laura Hale at $250 per hour and another Legility employee at $225 per hour. (See 388-1, at 143.)
Hale worked 294.5 hours on the TAR, and the other employee worked 17.75 hours. Hale is a
Certified E-Discovery Specialist7 with 18 years of industry experience. She was responsible for
providing database support to the review team and Spirit’s counsel, performing complex searching,
generating samples, analyzing the richness of sample datasets, providing feedback and
recommendations on TAR workflows, performing quality and discrepancy checks on productions,
7
To become a Certified E-Discovery Specialist, a candidate must pass an exam; establish a
minimum level of relevant experience, education, and training; and provide professional
references. See CEDS Eligibility, ASSOCIATION OF CERTIFIED E-DISCOVERY SPECIALISTS,
https://www.aceds.org/page/eligibility (last visited Oct. 8, 2020).
15
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and generating and transmitting productions to Lawson. Lawson objects to some of these project
management time entries as vague and block billed. Lawson also contends that all project
management expenses incurred after January 15, 2020, are outside the scope of the June 18 order
because the TAR productions were complete by then. And, once again, Lawson contends that the
rates billed are unreasonably high.
These objections are largely without merit.
According to Stoneking’s declaration,
Legility’s project management fees are “consistent with the market and are reasonable and
customary in the industry.” (ECF 388-1 ¶ 20.) Lawson has not pointed to any evidence suggesting
otherwise. A rate of $225-250 per hour is not unreasonable in the court’s experience and in view
of publicly available rate information. See, e.g., Johnson, 2013 WL 1195698, at *1 (adopting the
FDIC’s proposed ESI protocol where the defendant’s cost per page reflected “labor costs ranging
from $35/hr. to $300/hr. for technical time, quality control group viewers, and project managers”);
see also Robinson, supra (showing 27.2% of survey participants charged over $200 per hour for
project management support). Furthermore, Hale’s experience and credentials support a higher
hourly rate.
The court has reviewed the time entries for these project management expenses in
Legility’s invoices. They adequately describe TAR-related work and are not unreasonably vague.
With respect to the entries to which Lawson objects as block billed, all of the tasks appear to be
TAR-related even if they describe more than one task. Furthermore, Spirit has already reviewed
and excluded any non-TAR-related time from its calculations and does not seek those expenses.
A reduction for impermissible block billing is therefore not warranted.
The court will, however, exclude the time Hale billed in February 2020. When viewed in
conjunction with Spirit’s attorneys’ fees in February, those expenses appear to be related to Spirit’s
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response to Lawson’s Motion to Compel the Production of Non-Privileged Documents (ECF 261).
As discussed in further detail below, expenses related to that motion are outside the scope of the
June 18 order.
Thus, the court will allocate $62,571.56 of the project management expenses to Lawson.
4.
Processing, Hosting, and Production Fees
Spirit seeks $36,540 in processing expenses, $42,869.52 in Catalyst and near-line data
hosting expenses through January 2020, and $7,177.60 in production expenses. (ECF 388-1, at
143.) Spirit also seeks $7,764.73 per month in near-line data hosting expenses from February
through December 2020. (Id. ¶ 14.) Lawson argues these expenses are outside of the scope of the
June 18 order because “Spirit would have searched and hosted this ESI without performing TAR”
if the ESI protocol had been successful. (ECF 397-1, at 9.)
The court’s ESI protocol in April 2019 allowed Lawson to select 10 custodians and propose
search terms. In May 2019, Spirit collected ESI from the 10 custodians whose data was eventually
subjected to the TAR. (ECF 135 ¶ 7.) As explained in the June 18 order, Spirit conducted sampling
exercises with Lawson’s proposed search terms in an effort to refine the search terms to achieve
an 85% responsiveness rate. See Lawson, 2020 WL 3288058, at *4-*5. By September 2019, the
parties abandoned efforts to meet the 85% responsiveness-rate goal and, at Lawson’s insistence,
agreed to proceed with the TAR instead. At that point, “Spirit had already spent hundreds of
thousands of dollars on document collection, processing, and hosting, as well as the sampling
exercises.” Id. at *6.
The processing, hosting, and production expenses that Spirit now seeks are properly
allocated to Lawson under the June 18 order. Spirit does not request any expenses that it incurred
before the TAR began. Rather, Spirit seeks expenses beginning September 30, 2019, when Spirit
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first processed the TAR dataset into Venio and Catalyst. Spirit could not have conducted the TAR
without incurring these expenses, including the expenses for Catalyst user licenses for document
reviewers. And the production-related fees were also necessarily incurred to complete Spirit’s
rolling production of TAR documents.
The court will also allocate to Lawson the hosting costs Spirit seeks from February through
December 2020. As Grobart explains, Spirit would have to delete this data to avoid ongoing
hosting costs, and parties generally “do not delete data while litigation is ongoing.” (ECF 394-1 ¶
11.) Furthermore, contrary to Lawson’s arguments, there is no evidence that Spirit would have
collected all of the TAR custodians’ data in the absence of the TAR. To the contrary, as discussed
in the court’s June 18 order, of the 10 custodians Lawson selected whose data was subject to the
TAR, Spirit did not identify 7 of them as likely to have relevant ESI. Lawson, 2020 WL 3288058,
at *5. Lawson should therefore bear these hosting costs.
5.
Total Legility Costs Allocated to Lawson
In sum, the court allocates the following Legility expenses reasonably incurred by Spirit to
Lawson pursuant to the court’s June 18 order:
EXPENSE DESCRIPTION
TAR-related fees for document review team
Project management fees for TAR
$215,428.50
62,571.56
TAR-related fees for data
processing/hosting/user fees/near line
data/productions (including hosting fees
through December 2020)
TOTAL:
B.
AMOUNT
171,999.15
$449,999.21
Attorneys’ Fees
“The proper procedure for determining a reasonable attorneys’ fee is to arrive at a lodestar
figure by multiplying the hours . . . counsel reasonably spent . . . by a reasonable hourly rate.”
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Praseuth v. Rubbermaid, Inc., 406 F.3d 1245, 1257 (10th Cir. 2005) (analyzing the attorneys’ fees
awarded to a prevailing employment plaintiff); accord Case v. Unified Sch. Dist. No. 233, 157
F.3d 1243, 1249 (10th Cir. 1998) (same, in a 42 U.S.C. § 1983 case); see also, e.g., Flowserve US,
2017 WL 1240205, at *2 (using the lodestar method to calculate an attorneys’ fees award pursuant
to Rule 26(c)(1)(B)).
Spirit seeks the following attorneys’ fees for work performed by its litigation counsel at
the Arcadi Jackson law firm:
EXPENSE DESCRIPTION
TAR-related fees
AMOUNT
$116,440.50
Fees for Spirit’s Motion to Shift Costs (ECF
133)
32,821.00
Fees for responding to Lawson’s Motion to
Compel the Production of Responsive
Documents (ECF 226)
16,205.50
50% of Arcadi Jackson’s fees for responding
to Lawson’s Motion to Compel the
Production of Non-Privileged Documents
(ECF 261)
TOTAL:
7,404.50
$172,871.50
(ECF 386, at 6.) Spirit also seeks the following attorneys’ fees for work performed by its litigation
counsel at the Foulston Siefkin law firm:
EXPENSE DESCRIPTION
TAR-related fees
AMOUNT
$109,217.26
Fees for Spirit’s Motion to Shift Costs (ECF
133)
Fees in connection with the TAR privilege
log
Fees in Dec. 2019-Jan. 2020 relating to
Lawson’s Motions to Compel
TOTAL:
19
5,654.69
42,481.25
6,202.80
$163,556.00
Case 6:18-cv-01100-EFM-ADM Document 465 Filed 10/29/20 Page 20 of 40
(Id. at 7.) In addition, Spirit seeks $83,000 in fees incurred leading up to and preparing this fee
application.
1.
Other Motions and Privilege Logs
Lawson contends that Spirit’s attorneys’ fees incurred in opposing Lawson’s motions and
creating privilege logs are not properly within the scope of the court’s June 18 order. That order
allocated Spirit’s “actual expenses incurred in connection with the TAR process.” Lawson, 2020
WL 3288058, at *22. This would include expenses Spirit incurred in responding to Lawson’s
Motion to Compel the Production of Responsive Documents (ECF 226). In that motion, Lawson
sought an order to compel Spirit to perpetuate the TAR review. Spirit had completed its TAR
production in January 2020 after reaching an 85% recall rate, i.e., the TAR algorithm correctly
identified 85% of the responsive documents in the TAR set. At that point, Lawson filed this motion
seeking to compel Spirit to produce the “residual TAR documents.” Lawson’s motion and Spirit’s
opposition were directly related to the parameters of the TAR process. Spirit’s expenses for that
motion were therefore incurred in connection with the TAR process. As a result, they are within
the scope of the court’s June 18 order and should be allocated to Lawson.
The court will also allocate Spirit’s expenses relating to the TAR privilege log to Lawson.
Once Spirit was obliged to produce responsive documents from the TAR, it was equally obliged
to create and produce a privilege log for any documents it withheld as privileged from its TAR
production. Expenses associated with the TAR privilege log were therefore incurred in connection
with the TAR process and are within the June 18 order’s scope.
However, the court agrees that the expenses Spirit incurred in preparing its non-TAR
privilege log are outside the scope of the June 18 order. The court also will not allocate to Lawson
the $385 in expenses that Spirit incurred in reviewing Lawson’s privilege log for deficiencies.
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Lawson argues that fees related to Lawson’s motions to compel are outside the scope of
the June 18 order. The court agrees that fees relating to Lawson’s Motion to Compel the
Production of Non-Privileged Documents (ECF 261) and Motion to Compel the Production of
Clawed Back Documents (ECF 231) are not within the scope of the court’s June 18 order.
Although these motions may have arisen as a result of documents being produced through the TAR
process, the onus was nevertheless on Spirit to establish that it properly withheld the documents
that were the subject of these motions as privileged and/or work-product. If Spirit believed that it
was entitled to fees in connection with those motions, it should have moved for fees under Federal
Rule of Civil Procedure 37. The court will therefore not allocate the $10,838.50 in attorneys’ fees
Spirit seeks relating to these motions to Lawson. Nor will the court include $1,661 in fees for
counsel to appear at the January 10 discovery conference, which related primarily to Spirit’s
clawed-back documents. (See ECF 221, at 3.)
2.
Reasonable Time Expended
The court will now analyze the fees Spirit seeks directly relating to the TAR, Spirit’s
Motion to Shift Costs, Lawson’s Motion to Compel the Production of Responsive Documents, and
the instant application. To demonstrate reasonable time expended, the party seeking fees must
submit “meticulous, contemporaneous time records that reveal all hours for which compensation
is requested and how those hours were allotted to specific tasks.” Cadena v. Pacesetter Corp., 224
F.3d 1203, 1215 (10th Cir. 2000). Fee applicants should exercise billing judgment with respect to
the number of hours worked and billed. Hensley v. Eckerhart, 461 U.S. 424, 437 (1983). Billing
judgment consists of winnowing hours actually expended down to hours reasonably expended.
Praseuth, 406 F.3d at 1257. If an attorney’s hours would not have been properly billed to a client,
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they “cannot reasonably be billed to the adverse party, making certain time presumptively
unreasonable.” Case, 157 F.3d at 1250.
Where the hours claimed by counsel include those that are “unnecessary, irrelevant and
duplicative,” the court may reduce the reasonable hours awarded. Id. A court is also “justified in
reducing the reasonable number of hours if the attorney’s time records are sloppy and imprecise
and fail to document adequately how he or she utilized large blocks of time.” Id. (quotation
omitted). But the Tenth Circuit “has not established a rule mandating reduction or denial of a fee
request if [a] party submits attorney-records which reflect block billing.” Cadena, 224 F.3d at
1215. The court is not required to “identify and justify each disallowed hour. Nor is [there] any
requirement that district courts announce what hours are permitted for each legal task.” Case, 157
F.3d at 1250 (quotation omitted). The court may instead, for sufficient reasons, impose a “general
reduction of hours claimed in order to achieve what the court determines to be a reasonable
number.” Id. The court has discretion to determine how many hours a party should have expended
on particular tasks. See id.
a.
TAR Direction and Supervision Expenses
Spirit’s counsel spent 105.7 hours on tasks related to planning and initiating the TAR. This
includes conferring with Lawson’s counsel regarding TAR parameters, supervising and directing
Legility throughout the TAR, and coordinating the TAR production. Arcadi Jackson partner Ann
Marie Arcadi spent 22.6 hours on these activities, associate Lee Budner spent 43.4 hours, and of
counsel attorney Seema Tendolkar spent 12.3 hours. Foulston Siefkin partners Jeff DeGraffenreid
and Charles McClellan spent 23.8 hours and 3.6 hours on these activities, respectively.
Lawson objects to a number of these time entries as vague, outside the scope of the June
18 order, and/or block billed. Lawson’s point has some merit because the invoices contain a
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number of block-billed and/or vague time entries, especially for Arcadi and DeGraffenreid. But,
as to Arcadi’s time entries, she explains that some time entries contain multiple tasks if they were
all related to the same overarching “ABA Uniform Task-Based Litigation Codes (e.g., discovery
motions (L350), document production (L320), etc.).” (ECF 388-2 ¶ 27.) She states that, to the
extent that dissimilar tasks were block billed, she reviewed her firm’s time entries and excluded
the unrelated time from the expenses Spirit seeks. (Id.) Indeed, it is apparent from the face of the
invoices that these time entries were adjusted. The court therefore agrees that Arcadi and the other
Arcadi Jackson attorneys’ time entries all appear to be related to the TAR, even where a single
time entry includes multiple tasks.
That is not the case, however, with some of DeGraffenreid’s time entries. Many of his
time entries reference dissimilar tasks and vague “discovery issues.” DeGraffenreid explains that
almost all discovery work from late September 2019 to January 2020 was related to the TAR
process. (ECF 415-2 ¶ 5.) The court credits this explanation and finds it reasonable to believe
that much of this time was related to the TAR, but the court is unable to determine the extent to
which these time entries may have involved other case-related activities. The court will therefore
reduce DeGraffenreid’s time entries for TAR direction and supervision by 25% to account for
vague and block-billed time entries. The remaining hours for these activities appear reasonable.
b.
Second-Level Review
Spirit’s counsel spent 650.4 hours conducting a second-level review of the TAR documents
and other activities to support document review, including training. Out of these hours, 398.4
hours—or approximately 61%—consist of associate time. Lawson does not object to most of these
time entries. However, Lawson objects to some of them as outside the scope of the June 18 order,
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vague, and/or impermissibly block billed. The court has reviewed these time entries and finds
Lawson’s objections to be without merit.
Lawson generally objects to hours spent on second-level review on the grounds that Spirit
unjustifiably used senior attorneys with high billing rates. (ECF 397-1, at 5.) DeGraffenreid spent
80.2 hours conducting second-level document review, including 2.3 hours training others. Spirit
justifies DeGraffenreid’s involvement based on his “significant experience with Spirit and
familiarity with the types of documents and information at issue, many of which related to internal
Spirit matters on which [he] personally worked” when he was employed as in-house counsel. (ECF
388 ¶ 11.) DeGraffenreid states his involvement in the second-level review was ultimately costeffective because of his “knowledge and understanding of the underlying documents, as well as
the significant privilege confidentiality, [International Traffic in Arms Regulations (‘ITAR’)], and
other issues potentially contained within the documents.” (Id.) Two other Foulston Siefkin
partners—Tara Eberline and Matthew Stromberg—spent 73.7 hours. Arcadi Jackson of counsel
attorneys John M. Farrell and Seema Tendolkar spent 61.4 hours and 36.7 hours, respectively,
conducting second-level document review and related activities, including training and responding
to associate reviewers’ questions. Spirit does not specifically justify Farrell, Tendolkar, Eberline,
or Stromberg’s involvement but does argue that the senior attorneys involved “were wellacquainted with Spirit’s business, the documents, and issues in this case.” (ECF 415, at 4.)
Lawson also argues that if the TAR documents “were as obviously non-responsive as Spirit
contends,” it was unreasonable to use senior attorneys for document review. (ECF 397-1, at 6.)
The court disagrees. The second-level reviewers looked at documents that Predict had identified
as potentially responsive and then Legility first-level reviewers had coded as responsive. So the
second-level reviewers were not conducting a linear review of all documents in the TAR dataset.
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Rather, they were confirming the documents coded as responsive were in fact responsive, and they
also reviewed the documents for confidentiality, privilege, and ITAR compliance. See Lawson v.
Spirit AeroSystems, Inc., No. 18-1100-EFM-ADM, 2020 WL 1813395, at *5, *8 (D. Kan. Apr. 9,
2020). To the extent the second-level reviewers looked at non-responsive documents, they did so
at Lawson’s request. See id. at *8 (discussing Lawson’s request that “Spirit’s second-level
reviewers look at representative samples of documents marked non-responsive to ensure that firstlevel reviewers were not undercoding responsive documents”).
The court also recognizes that tasks that are easily delegable to non-professionals or less
experienced associates should not be billed at a higher hourly rate. N.M. Citizens for Clean Air &
Water v. Espanola Mercantile Co., 72 F.3d 830, 835 (10th Cir. 1996); see also Ursic v. Bethlehem
Mines, 719 F.2d 670, 677 (3d Cir. 1983) (“Nor do we approve the wasteful use of highly skilled
and highly priced talent for matters easily delegable to non-professionals or less experienced
associates. . . . A Michelangelo should not charge Sistine Chapel rates for painting a farmer’s
barn.”). However, a party is not required to entirely exclude mid- and senior-level attorneys from
high-level involvement in document review. Here, the TAR documents came from senior
executives, including the CEO, and contained confidential and sensitive information. (See ECF
386, at 10; ECF 388-2 ¶ 20.) Mid- and senior-level attorneys with experience and knowledge of
the issues in the case were appropriately involved in the TAR to ensure that lower-level reviewers
were correctly and uniformly coding documents for responsiveness, and also to make final
decisions on privilege, confidentiality, and ITAR compliance. Spirit’s litigation team, including
the attorneys making litigation strategy decisions, would need to provide input on sensitive issues
that may come up during document review and develop some level of familiarity with the general
nature of the documents produced through the TAR.
25
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The court has reviewed the second-level review time entries for these senior attorneys.
Tendolkar’s time was spent primarily on tasks appropriate for a senior level, including training
others and responding to questions. The limited time she spent on document review was
reasonable. Spirit has also adequately justified the time DeGraffenreid spent on document review,
which ultimately was less than 15% of the total second-level review time. His hours were
reasonable, with the exception of the two-hour entry on December 5, 2019, that relates to reviewing
non-TAR documents.
Spirit, however, has not explained why Farrell, Eberline, or Stromberg’s time for secondlevel review was necessary at partner rates. These more senior attorneys’ only role in the TAR
was document review, and it does not appear that they have otherwise been particularly involved
with the case such that they would have provided subject matter or strategic expertise. The time
they spent on second-level review was not necessarily unreasonable, but it appears their work
could have been done at associate rates. The court will therefore assign a billing rate of $275 to
their time spent on second-level review. This rate is at the high end of the range for Foulston
Siefkin second-level review associates, which accounts for these attorneys’ greater experience and
is a reasonable market rate for the reasons discussed below.
c.
TAR Privilege Log
Spirit’s counsel spent 160.4 hours creating privilege logs, with most of those hours billed
by McClellan and 7 hours billed by DeGraffenreid.
According to DeGraffenreid, “of the
approximately 2,500 privilege log entries, the vast majority (2,154) were related to the TAR
production.” (ECF 388 ¶ 13.) When the parties conferred about the amount of expenses to allocate
to Lawson before filing the instant application, Spirit suggested that Lawson pay only half the
amount of expenses related to Spirit’s privilege logs. (Id.)
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Lawson objects to a number of privilege-related time entries as outside of the scope of the
June 18 order, block billed, and/or vague. As explained above, Spirit’s time spent preparing the
TAR privilege log is appropriately within the scope of the June 18 order. But time related to
preparing Spirit’s non-TAR privilege log is not. The time entries to which Lawson objects on this
basis do not specify whether the time was spent on the TAR privilege log, non-TAR privilege log,
or both. The court has also reviewed the privilege logs submitted to the court in February 2020.
Despite DeGraffenreid’s assertion, the privilege logs contain a similar number of entries: 1077
entries on the TAR log and 1003 entries on the non-TAR log, including the entries for documents
with respect to which Spirit withdrew its privilege objection.
After considering the time entries, the privilege logs, and Spirit’s prior offer, the court will
reduce McClellan’s and DeGraffenreid’s time spent on privilege logs by 50% because Spirit has
not established that all 160.4 hours were spent specifically on the TAR privilege log as opposed to
the non-TAR privilege log. This reduction also accounts for DeGraffenreid’s block billed and
vague time entries, including those referencing “discovery issues” and Rule 30(b)(6) issues. The
court finds the reduced hours reasonable for tasks relating to the TAR privilege log.
d.
Motion to Shift Costs
The court granted Spirit’s Motion to Shift Costs of Technology Assisted Review of ESI to
Plaintiff Larry A. Lawson (ECF 133) in full, allocating Spirit’s “actual expenses incurred in
connection with the TAR process, including vendor costs and attorneys’ fees” to Lawson. Lawson,
2020 WL 3288058, at *22. At that time, however, the court did not decide whether the expenses
associated with the motion should be included the amount awarded to Spirit. See id. Generally,
where a court grants a motion for a protective order under Rule 26(c), the prevailing party may
recover associated fees. See FED. R. CIV. P. 37(a)(5)(A) (stating the court “must” impose fees
27
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where a motion is granted unless the movant filed the motion before conferring in good faith, the
opposing party’s response was substantially justified, or other circumstances make an award of
expenses unjust); see also FED. R. CIV. P. 26(c)(3) (stating that “Rule 37(a)(5) applies to the award
of expenses” for motions for protective orders under Rule 26(c)).
The court considers the specifics of the individual case in determining whether to award
fees under Rule 37. See Josendis v. Wall to Wall Residence Repairs, Inc., 662 F.3d 1292, 1314
(11th Cir. 2011). Rule 37(a)(5)(A) and Rule 26(c)(3) provide that if a motion for a protective order
under Rule 26(c) is granted, the court “must” award the movant its reasonable expenses incurred
in making the motion, including attorneys’ fees unless: (1) the movant filed the motion before
attempting to confer; (2) “the opposing party’s nondisclosure, response, or objection was
substantially justified”; or (3) “other circumstances make an award of expenses unjust.” The party
opposing the fee request bears the burden of showing that one of these exceptions applies. See 8B
CHARLES ALAN WRIGHT & ARTHUR R. MILLER, ET AL., FEDERAL PRACTICE AND PROCEDURE §
2288 (3d ed.) (stating the losing party bears the burden to avoid being assessed expenses and fees).
Lawson has not met his burden to show that an award of expenses is unwarranted. To the
contrary, Lawson does not address Rule 37 at all and instead appears to concede that some award
of expenses incurred in connection with the motion to shift costs is appropriate. (See ECF 395, at
4 (proposing that the court award Spirit 70% of the fees it seeks relating to the cost-shifting
motion).) The court agrees. None of the exceptions listed in Rule 37(a)(5)(A) apply. Spirit
exhausted all efforts to meet and confer. It filed the motion to shift costs only after spending
months trying to appease Lawson’s ESI demands, during which Spirit participated in multiple
conferences with Lawson and the court. See Lawson, 2020 WL 3288058, at *3-*7 (setting forth
the history leading to the TAR). Lawson’s position was not substantially justified—for all the
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reasons set forth in the June 18 order. As but one highlight, unbeknownst to the court at the time,
Spirit had served interrogatory responses that included a detailed, 3-page list of products that Spirit
contended overlapped with Arconic products, and that list included citations to bates numbered
supporting documents. See id. at *12. Yet Lawson continued to insist on proceeding with the
TAR. There is nothing unjust about awarding Spirit its cost-shifting motion expenses. Spirit’s
long-time contention that the TAR process would not be an efficient or effective way to locate
information on business overlap appears to have been borne out, as reinforced by the fact that
Lawson used only one TAR document in his summary judgment briefing to support a fact
unrelated to the issue of business overlap. (See ECF 445, at 11 n.3.) For all of these reasons, the
court will award Spirit its reasonable expenses incurred for the motion to shift costs.
Spirit’s counsel spent 94.3 hours on tasks relating to this motion, including correspondence
with Lawson’s counsel to try to avoid the TAR- and motion-related expenses. Most of the time—
72.6 hours—was billed by Budner and Tendolkar.8 Arcadi and DeGraffenreid billed 8 and 11.2
hours respectively, and Arcadi Jackson partner Greg Jackson billed an additional 1.1 hours.9
Arcadi Jackson paralegal Cynthia Partin also billed 1.2 hours relating to the motion. And Foulston
Siefkin partner Gary Ayers contributed 0.2 hours.
Lawson objects to a number of these time entries as block billed and/or vague. The court
has reviewed them and overrules Lawson’s objections as to the Arcadi Jackson attorneys and
8
The expenses Spirit seeks include those related to 3 hours Budner spent working on a motion
to compel in late September 2019, around the time Spirit’s counsel was also drafting the motion
to shift costs. Spirit appears to have included these hours in its application by mistake because
Spirit did not file a TAR-related motion to compel. The court therefore excludes these hours.
9
DeGraffenreid states that Spirit inadvertently included in the instant application an October
25, 2019 time entry mentioning the reply brief, but it primarily related to a separate document
review. (ECF 415-2 ¶ 6, at 2.) The court therefore does not include these hours in its discussion.
The court also does not include DeGraffenreid’s time entries from January 20, 2020 relating to a
“cost recovery” motion because briefing on the motion to shift costs was finished at that point.
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Partin for reasons similar to those discussed above. Again, Arcadi excluded unrelated time from
the expense Spirit seeks, and the remaining tasks in these time entries all appear to be related to
the motion to shift costs. But the court will again reduce DeGraffenreid’s time entries by 25% to
account for block-billed time entries, including those that vaguely reference “discovery issues”
and reviewing “discovery responses,” in addition to motion-related tasks. This reduction also
accounts for clerical work billed by DeGraffenreid—specifically, communicating with the court
regarding filing. See Fox v. Pittsburg State Univ., 258 F. Supp. 3d 1243, 1256 (D. Kan. 2017)
(“The court must deduct [t]asks that amount to filing . . . .” (quotation omitted)).
The court will also exclude the time billed by Jackson and Ayers.
Arcadi and
DeGraffenreid exercised primary supervisory roles with respect to the motion to shift costs, and a
review of Jackson’s and Ayers’ time entries does not suggest that their work was necessary.
Indeed, it is not clear why Ayers’ billed any time. He appears only once on the invoices Spirit
submitted, billing 0.2 hours for “[r]eview[ing] email and brief.” It does not appear that he was
otherwise involved in any TAR-related tasks.
The remaining attorney and paralegal time is reasonable. In evaluating the hours expended
on the motion to shift costs, the court has considered the length of the briefs, their substance, the
supporting materials submitted, and the court-imposed briefing schedule and page limits. The
motion involved a lengthy factual background, detailed technical information about the parties’
eDiscovery efforts, and some arguably unique legal issues. The court therefore does not find any
further reduction is warranted.
e.
Motion to Compel Production of Responsive Documents
Spirit also seeks expenses related to opposing Lawson’s Motion to Compel the Production
of Responsive Documents (ECF 226). In January 2020, Spirit ceased producing responsive
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documents through the TAR process after reaching an 85% recall rate, meaning that the TAR
algorithm had correctly identified 85% of the responsive documents in the data set. At that point,
Lawson filed a motion to compel Spirit to produce approximately 1,850 additional documents that
the Legility first-level review team had identified as potentially responsive. The court denied
Lawson’s motion, finding that “second-level review and production of the residual TAR
documents [was] not proportional to the needs of the case under Rule 26(b)(1).” Lawson, 2020
WL 1813395, at *9.
Spirit’s expenses for this motion fall within the scope of the June 18 order. In addition, if
a motion to compel is denied, the court “must, after giving an opportunity to be heard, require the
movant, the attorney filing the motion, or both to pay the party . . . who opposed the motion its
reasonable expenses incurred in opposing the motion, including attorney’s fees.” FED. R. CIV. P.
37(a)(5)(B). “But the court must not order this payment if the motion was substantially justified
or other circumstances make an award of expenses unjust.” Id. Again, the party opposing the
request for fees bears the burden of showing that these exceptions apply. See 8B WRIGHT &
MILLER, § 2288 (losing party bears the burden to avoid being assessed expenses and fees).
Lawson has not met his burden. His motion was not substantially justified. He essentially
asked the court to compel Spirit to reach a 100% TAR recall rate, yet Lawson cited no authority
suggesting that such a rate was reasonable or that any court had ever required a 100% recall rate.
See Lawson, 2020 WL 1813395, at *7-*8 (discussing recall rates and guidance suggesting that
“rates of 75-85% are appropriate in many cases”). Further, no circumstances would make an award
for these fees and expenses unjust. To the contrary, the court observed that Lawson’s lack of
reasonableness with respect to ESI “bordered on the abusive.” Id. at *9. The court will therefore
award Spirit its reasonable expenses incurred in opposing Lawson’s motion to compel.
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Spirit’s counsel spent 42.9 hours on tasks relating to opposing Lawson’s motion. Most of
this time—30.2 hours—was billed by Budner. In addition, Tendolkar billed 7 hours, Arcadi billed
1.8 hours, and DeGraffenreid billed 3.4 hours. Partin also billed 0.5 hours for the opposition.
Lawson objects to a number of time entries as block billed and to DeGraffenreid’s time
entries as both block billed and vague. The court has reviewed these time entries and finds that
Lawson’s objections have some merit. Budner’s 4-hour time entry from January 17, 2020, and
DeGraffenreid’s time entries also reflect non-compensable time spent on Spirit’s opposition to
Lawson’s Motion to Compel the Production of Clawed Back Documents (ECF 231). The court
will therefore reduce these time entries by 50% to account for the block billing.
The remaining attorney and paralegal time is reasonable and compensable. Again, the
court has considered the length of the opposition brief, its substance, the supporting materials
submitted, and the court-imposed briefing schedule and page limits. Like the motion to shift costs,
the opposition involved a complex factual background, detailed technical information on the
parties’ eDiscovery efforts, and some unique legal issues. The court therefore does not find any
further reduction is warranted.
f.
Total Reasonable Hours
In summary, the court finds that the following hours were reasonably spent by Spirit’s
attorneys and paralegal on TAR-related tasks:
TIMEKEEPER
HOURS
Ann Marie Arcadi (Partner, Arcadi Jackson)
32.4
Seema Tendolkar (Of Counsel, Arcadi Jackson)
89.3
John M. Farrell (Of Counsel, Arcadi Jackson)
61.4
Lee Budner (Associate, Arcadi Jackson)
230.8
Jeff DeGraffenreid (Partner, Foulston Siefkin)
111.65
Charles McClellan (Partner, Foulston Siefkin)
80.3
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Case 6:18-cv-01100-EFM-ADM Document 465 Filed 10/29/20 Page 33 of 40
Foulston Siefkin Document Review Partners
(Eberline, Stromberg)
73.7
Foulston Siefkin Document Review Associates
(Turner, Green, Frobisher, Stula, Mannebach,
Rose, Hanson, Otto, Koehler, Hammes)
278.5
Cynthia Partin (Paralegal, Arcadi Jackson)
1.7
TOTAL:
3.
959.75
Reasonable Hourly Rate
The court turns next to the reasonable hourly rates for these attorneys. Spirit requests the
following rates for Foulston Siefkin attorneys in the firm’s Wichita and Overland Park offices:
NAME
POSITION
EXPERIENCE
HOURLY RATE
Jeff DeGraffenreid
Partner
28 years
$375
Tara Eberline
Partner
14 years
$340
Charles McClellan
Partner
12 years
$275
Matthew Stromberg
Partner
12 years
$310
Eric Turner
Associate
9 years
$250
David Green
Associate
6 years
$275
Kelsey Frobisher
Associate
5 years
$250
Sarah Stula
Associate
4 years
$225
Nathan Mannebach
Associate
3 years
$225
Niki Rose
Associate
3 years
$225
Travis Hanson
Associate
3 years
$225
Sarah Otto
Associate
2 years
$225
Jeremy Koehler
Associate
1 year
$225
Morgan Hammes
Associate
1 year
$225
Spirit also requests the following rates for Dallas-based Arcadi Jackson attorneys and a paralegal:
NAME
POSITION
EXPERIENCE
HOURLY RATE
Partner
27 years
$625
John M. Farrell
Of Counsel
13 years
$425
Seema Tendolkar
Of Counsel
18 years
$415
Ann Marie Arcadi
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Case 6:18-cv-01100-EFM-ADM Document 465 Filed 10/29/20 Page 34 of 40
Lee Budner
Associate
7 years
$350
Cynthia Partin
Paralegal
27 years
$185
“To determine what constitutes a reasonable rate, the district court considers the prevailing
market rate of the relevant community.” Lippoldt v. Cole, 468 F.3d 1204, 1224 (10th Cir. 2006)
(internal quotations omitted); see also Perdue v. Kenney, 559 U.S. 542 (2010) (same). The relevant
community is “the area in which the litigation occurs” or “the area in which the court sits.” Ramos
v. Lamm, 713 F.2d 546, 555 (10th Cir. 1983); Case, 157 F.3d at 1256. The party seeking fees
“must provide evidence of the prevailing market rate for similar services by ‘lawyers of reasonably
comparable skill, experience, and reputation’ in the relevant community.” Lippoldt, 468 F.3d at
1224-25 (quoting Blum v. Stenson, 465 U.S. 886, 895 n.11 (1984)). An attorney’s customary rate
is relevant but not conclusive. Ellis v. Univ. of Kan. Med. Ctr., 163 F.3d 1186, 1203 (10th Cir.
1998).
In support of the reasonableness of the requested hourly rates, DeGraffenreid states that
the “rates charged by Foulston and Arcadi Jackson . . . are generally consistent with market rates
in Kansas and Sedgwick County, which can range from approximately $150 to $350 per hour for
associates and $250 to $650 per hour for partners.” (ECF 388 ¶ 9.) He states that rates at the
higher end of these ranges are appropriate because of the nature of the claims in this case. (Id.)
His opinion is based on his experience and familiarity with hourly rates charged for business
litigation in state and federal court by attorneys in Kansas and Sedgwick County and a review of
rates in published Kansas opinions. (Id.) In addition, Spirit points out that Lawson’s lead counsel
at Willkie Farr & Gallagher in New York City charge rates that far exceed those of Spirit’s
attorneys. According to Lawson’s engagement letter with the firm in 2017, Willkie Farr’s standard
hourly rates are $995-1,425 per hour for partners and of counsel attorneys, $330-965 for associates,
and $230-380 for legal assistants. (ECF 416-1, at 2.) As Spirit points out, many of the rates at
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Case 6:18-cv-01100-EFM-ADM Document 465 Filed 10/29/20 Page 35 of 40
issue in Spirit’s fee application “are similar to those charged by Willkie Farr for its paralegals and
are a fraction of the rates charged for its attorneys.” (ECF 415, at 4 (emphasis in original).)
The “relevant community” for determining the prevailing market rate in this case is the
entire District of Kansas. Although Wichita is the place of trial where Spirit’s headquarters are
located, “the Tenth Circuit has not held that the relevant community is limited to a specific
metropolitan area where the case is designated for trial.” In re Twiford Enters., Inc., No. BAP
WY-19-037, 2020 WL 6075691, at *9 (B.A.P. 10th Cir. Oct. 15, 2020) (quoting Pipeline Prods.,
Inc. v. Madison Cos., No. 15-4890-KHV-ADM, 2019 WL 3252743, at *4 (D. Kan. July 19, 2019)).
This lawsuit is not particularly Wichita- or Kansas-centered, but rather is essentially national in
scope. Lawson is a Florida citizen. (ECF 1 ¶ 26.) The other major players in this litigation include
third-parties Elliott Associates, L.P. and Elliott International, L.P. (together, “Elliott”), which are
headquartered in New York,10 and Arconic, which has its principal place of business in Pittsburgh,
Pennsylvania. All of these parties engaged national counsel—Lawson and Elliott’s lead counsel
in New York, Spirit’s lead counsel in Dallas, and Arconic’s lead counsel in Florida. They therefore
all appear to view the relevant market to be national legal market. Furthermore, the dynamics of
this case support hiring top-tier employment litigators from anywhere within the District given
“the importance of the litigation to Spirit and the complexity of and amount in controversy in the
case—after all, this is a case brought by Spirit’s former CEO, who seeks tens of millions of dollar
in damages, and involves a violation of the restrictive covenant within his Retirement Agreement.”
(ECF 386, at 5.)
10
Elliott Management Corporation, About Elliott, available at
https://www.elliottmgmt.com/about-elliott/ (last visited Oct. 27, 2020) (noting Elliott is
headquartered in New York).
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Although this case is not particularly Wichita- or Kansas-centered, the relevant market is
no broader than the District of Kansas. For example, Spirit also submitted a declaration from
Arcadi in which she states that Arcadi Jackson’s rates are below market in Dallas for similar work.
(ECF 388-2 ¶ 16.) But unless a case “is so unusual or requires such special skills that only an outof-state attorney possesses, the fee rates of the local area should be applied even when the lawyers
seeking fees are from another area.” Lippoldt, 468 F.3d at 1225. Here, this litigation is not so
unusual and it does not require such special skills that only an out-of-district attorney could handle
the case. There are sufficient skilled and reputable lawyers within the District who could handle
this case. Therefore, the court does not rely on the reasonableness of Arcadi Jackson’s rates in the
Dallas market, but rather considers prevailing market rates from anywhere within the District.
Based on this relevant market, the court finds Spirit’s requested rates are reasonable for
essentially two reasons.
First, Lawson does not argue that Spirit’s counsel’s rates are
unreasonable, nor does he submit any evidence of market rates. Thus, given the lack of evidence
to contradict Spirit’s record about the reasonableness of its requested rates, the court finds those
rates to be reasonable. See, e.g., SFF-TIR, LLC v. Stephenson, 452 F. Supp. 3d 1058, 1196 (N.D.
Okla. 2020) (“[T]he Plaintiffs do not object to the hourly rates that the Defendants’ counsel
requests. The Court therefore will use [those] hourly rates . . . .”).
Second, the court finds the requested rates to be reasonable in view of Spirit’s record and
the court’s own experience. The rates for Foulston Siefkin attorneys ($275-375 for partners and
$225-275 for associates) are commensurate with top-tier Wichita rates, and the rates for Arcadi
Jackson attorneys ($625 for partner Arcadi, $415-425 for of counsel, and $350 for associate
Budner) are commensurate with top-tier employment litigation rates in the Kansas City
metropolitan area. See Fox, 258 F. Supp. 3d at 1264 (considering Kansas City metropolitan area
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Case 6:18-cv-01100-EFM-ADM Document 465 Filed 10/29/20 Page 37 of 40
rates because those practitioners typically practice in both Kansas and Missouri and do not
differentiate their rates based on where the case is filed). The court has accounted for the disparity
between Foulston Siefkin rates and Arcadi Jackson rates by considering the relative distribution
of hours between the two firms and the overall division of labor amongst attorneys throughout the
TAR review process. For example, Arcadi has the highest billing rate at $625, but her 32.4 hours
accounted for only 3% of the total hours. She was not involved in reviewing, tagging, or producing
TAR documents except for limited instances in which she responded to specific questions. (ECF
388-2 ¶ 21.) The Arcadi Jackson of counsel attorneys ($415-425/hour) accounted for 16% of the
total hours. Arcadi Jackson associate Budner and Foulston Siefkin partner DeGraffenreid ($350375/hour) accounted for 36% of the total hours.
And lower-rate attorneys (predominantly
associates) at Foulston Siefkin and a paralegal accounted for the remaining 45% of the total hours.
Thus, it appears that Spirit responsibly managed expenses by trying to push work down, to the
extent practicable, to the attorneys with the lowest billing rates. Overall, this resulted in a blended
rate of approximately $327, which is imminently reasonable given the nature and extent of
litigation counsel’s overall involvement in the TAR review process. See, e.g., United States ex
rel. Awad v. Coffey Health Sys., No. 16-2034-CM-JPO, 2019 WL 6910280, at *5 (D. Kan. Dec.
19, 2019) (approving $425 per hour for partner with 25 years of experience and $335 per hour for
an associate with 14 years of experience in complex litigation in a False Claims Act case); Pipeline,
2019 WL 3252743, at *6-*8 (approving $550 and $450 per hour for attorneys with 15 years of
experience in a complex contract dispute); Hoffman v. Poulsen Pizza LLC, No. 15-2640-DDCKGG, 2017 WL 25386, at *6-*7 (D. Kan. Jan. 3, 2017) (finding $600 per hour for a managing
partner and $400-450 for other experienced attorneys to be reasonable in a Fair Labor Standards
Act (“FLSA”) case); Barbosa v. Nat’l Beef Packing Co., No. 12-2311-KHV, 2015 WL 4920292,
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Case 6:18-cv-01100-EFM-ADM Document 465 Filed 10/29/20 Page 38 of 40
at *9-*10 (D. Kan. Aug. 18, 2015) (approving $325 per hour in an FLSA case for an attorney with
14 years of experience); Rogers v. Bank of Am., N.A., No. 13-1333-CM-TJJ, 2014 WL 6632944,
at *2 (D. Kan. Nov. 21, 2014) (approving $225 per hour for an associate).
4.
Lodestar Calculation
In view of the above, following is the appropriate lodestar calculation:
TIMEKEEPER
HOURS
RATES
Ann Marie Arcadi
32.4
$625
$20,250.00
Seema Tendolkar
89.3
$415
37,059.50
John M. Farrell
61.4
$275
16,885.00
Lee Budner
230.8
$350
80,780.00
1.7
$185
314.50
Jeff DeGraffenreid
111.65
$375
41,868.75
Charles McClellan
80.3
$275
22,082.50
Foulston Siefkin Document Review
Partners
73.7
$275
20,267.50
Foulston Siefkin Document Review
Associates
278.5
$225-275
64,522.50
Cynthia Partin
TOTAL:
TOTAL
$304,030.25
The lodestar amount is presumed to be a reasonable fee. Robinson v. City of Edmond, 160
F.3d 1275, 1281 (10th Cir. 1998). The court may adjust this lodestar amount based on the factors
set forth in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974). See
Brown v. Phillips Petro. Co., 838 F.2d 451, 454-55 (10th Cir. 1988) (approving the Johnson factors
to determine a reasonable fee in a common fund case). The lodestar analysis, however, remains
the primary consideration when determining a reasonable fee and often subsumes the Johnson
factors. See Fox, 258 F. Supp. 3d at 1254. Here, neither party expressly addresses the Johnson
factors, and the court therefore finds no adjustment based on those factors is warranted.
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III.
EXPENSES RELATING TO THE CURRENT APPLICATION
Spirit seeks $83,000 in costs and fees that it incurred corresponding and conferring with
Lawson after the June 18 order, reviewing and redacting invoices, and otherwise preparing the
instant application. (ECF 386, at 11; ECF 415, at 6.) The hours spent in preparing a fee application
are generally compensable. See Case, 157 F.3d at 1254 (award of fees to the prevailing party in a
civil rights case could include work performed in preparing the application); see also Ad Astra
Recovery Servs., Inc. v. Heath, No. 18-1145-JWB-ADM, 2020 WL 4346965, at *8 (D. Kan. July
29, 2020) (awarding fees incurred in preparing a motion seeking attorneys’ fees pursuant to Rule
37(a)(5)). Based on the court’s experience with similar briefing exercises, this appears to be a
reasonable range because of the nature of the issues and the details involved with preparing the
current fee application and replying to Lawson’s response brief. However, the court is unable to
make this determination based on the present record because Spirit did not submit billing records,
declarations, or other evidence showing how many hours Spirit’s attorneys spent on the application
or their billed rates, as required by governing law.
Accordingly, the court provisionally grants Spirit’s application with respect to its expenses
incurred in submitting the current fee application. This includes time spent reviewing and
redacting invoices, corresponding and conferring with Lawson as required by the court’s June 18
order, and otherwise preparing the current application and reply brief; it may also include Spirit’s
expenses incurred in preparing the renewed application. To that end, the court directs Spirit to
prepare a renewed application for these expenses not to exceed 3 pages. The renewed application
must contain the information needed for the court to conduct a lodestar analysis—namely, a chart
that summarizes the numbers of hours billed by each timekeeper and their respective rates—and
attach the supporting time entries. For the most recent expenses (e.g., those incurred in preparing
the renewed application), Spirit does not need to submit time entries but may instead rely on
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attorney declaration(s) explaining number of hours and hourly rates for each timekeeper. Spirit
must serve the renewed motion on Lawson by November 12, 2020. No later than November 17,
2020, Lawson must notify Spirit whether he agrees to pay the amount sought. If not, Spirit may
file the renewed application no later than November 18, 2020. Lawson must file his response to
the renewed application no later than November 24, 2020. Lawson’s response must not exceed 3
pages, and Lawson must attach an annotated exhibit that identifies the time entries to which he
objects and the grounds for each objection, similar to Lawson’s Annotated TAR Exhibits (ECF
409). No reply will be allowed.
IV.
CONCLUSION
The court court finds that Spirit reasonably incurred $449,999.21 in expenses paid to
Legility and $304,030.25 in attorneys’ fees, totaling $754,029.46.
The court will also
provisionally grant Spirit its expenses reasonably incurred in preparing the current application, but
the court cannot determine a specific dollar amount at this time. Spirit is therefore directed to
prepare a renewed application for expenses and follow the procedure set forth above.
IT IS THEREFORE ORDERED that Spirit AeroSystems, Inc.’s Application for TAR
Expenses (ECF 385) is granted in part and denied in part as set forth above.
IT IS SO ORDERED.
Dated October 29, 2020, at Topeka, Kansas.
s/ Angel D. Mitchell
Angel D. Mitchell
U.S. Magistrate Judge
40
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