Accusoft Corporation v. Quest Diagnostics et al

Filing 367

Magistrate Judge David H. Hennessy: ORDER entered that Plaintiff Accusoft Corp. shall reimburse Defendants MedPlus, Inc. and Quest Diagnostics, Inc., for their attorney's fees in the amount of $12,297, pursuant to Order 362 and Declaration 363 . (DHH, law2)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS

ACCUSOFT CORPORATION,
Plaintiff,

)
)
)
v.
)
)
QUEST DIAGNOSTICS, INC.,
)
and MEDPLUS, INC.,
)
Defendants.
)
______________________________)

CIVIL ACTION
NO. 12-cv-40007-TSH

ORDER
April 7, 2014
Hennessy, M.J.1

Pursuant to this Court’s March 28, 2014 Order (Docket #362), Defendants submitted a
filing itemizing the reasonable expenses they incurred in opposing Plaintiff’s two motions for an
extension of time. See Declaration of John J. Cotter in Support of Defendants’ Application for
Attorney’s Fees. (Docket #363). After careful consideration of the Defendants’ declaration and
the itemization of expenses (which comprise attorney’s fees only), the Court orders that Plaintiff
pay Defendants $12,297 to reimburse Defendants’ costs.

1

Pursuant to 28 U.S.C. § 636(b)(1)(A), an order of referral (Docket #294), I make this Order.
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BACKGROUND2
On March 24, 2014, Plaintiff (“Accusoft”) moved for an extension of time to comply
with the Court’s March 28, 2014 Scheduling Order deadline to exchange expert reports. (Docket
#355). The following day, Accusoft filed an emergency motion for the same relief. (Docket
#356). The thrust of both motions was that Accusoft needed more time to conduct discovery
before it could finalize its expert reports.3 Defendants filed an opposition to Accusoft’s motion
(Docket #357), supported with three declarations (Dockets #358-60). After consideration of the
papers, the Court ruled on nine separate issues raised by Accusoft as supporting its motions.
(Docket #362). With respect to seven of those nine issues, the Court ruled that Accusoft failed to
establish “good cause” for an extension of time. (Id.). See Fed. R. Civ. P. 16(b)(4); O’Connell
v. Hyatt Hotels of Puerto Rico, 357 F.3d 152, 155 (1st Cir. 2004). With respect to the eighth
issue, i.e., lab revenue damages, the Court clarified the Defendants’ obligation to produce certain
documents. (Docket #362). With respect to the ninth issue, i.e., the Epic Viewer, the Court
granted Accusoft’s motion and ordered Defendants to file a response, which resulted in
additional time for Accusoft to serve its expert report on damages. (Id.). The Court also found

2
   This Court’s November 19, 2013 Order warned the parties of the possibility of today’s result,

and supports the sanction herein:
The parties to this dispute have engaged in a protracted, tortured discovery
process characterized by motions – for extensions of time, to compel, to file
supplemental briefing on the motions, et cetera. One year ago to the day, Judge
Hillman warned the parties “that the endless stream of discovery disputes in this
case is counterproductive to the just, speedy, and inexpensive resolution of this
case, and [is] vexing to the court. Further disputes will be scrutinized with an eye
towards sanctions.” (Docket #157). Judge Hillman was, in part, quoting Rule 1
of the Federal Rules of Civil Procedure.
(Docket #297).  
3

The Scheduling Order included a March 28, 2014 deadline for the exchange of expert reports
on issues upon which the party bore the burden of proof at trial. (Docket #317).
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that Accusoft failed to confer with Defendants under L.R. 7.1(A)(2) in good faith to resolve or
narrow the issues, to wit:
I find that Accusoft’s representations are inaccurate or incomplete based
on the sworn statements submitted by Defendants. This failure to confer
as required by rule, has resulted in considerable time and effort by the
Court to address a purported “emergency” (created by Accusoft, for the
most part) and to address each of the many arguments raised by Accusoft,
most of which are completely refuted by the declarations filed by
Defendants. Pursuant to Local Rule 1.3, failure to comply with Local
Rule 7.1(A)(2) “may result in dismissal, default, or the imposition of other
sanctions as deemed appropriate by the judicial officer.” The Court deems
it appropriate to ORDER Accusoft to pay Defendants’ reasonable
expenses, including attorney’s fees, in responding to Accusoft’s two
motions. Defendants are ORDERED to submit a filing to this Court,
under seal if they so desire, that itemizes their responsible [sic] expenses.
(Docket #362, pp. 6-7). The Court found that Accusoft’s failure to comply with L.R. 7.1(A)(2)
warranted the sanction, under L.R. 1.3, that Accusoft be required to reimburse Defendants for
their reasonable expenses, including attorney’s fees. (Docket #362). In response, Defendants
filed their declaration setting forth their expenses. (Docket #363).
DISCUSSION
It is settled that a court is within its discretion to award monetary sanctions for a
violation of the local rules. Bailey v. Dart Container Corp. of Mich., 980 F. Supp. 584, 589-90
(D. Mass. 1997). In order to determine whether Defendants’ expenses are reasonable, this Court
looks to Massachusetts law. In re Volkswagen and Audi Warranty Extension Litigation, 692 F.
3d 4, 15 (1st. Cir. 2012) (the issue of attorney’s fees has long been considered for purposes of
Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938), to be substantive and not procedural, and so
state-law principles normally govern the award of fees) (citing cases). Massachusetts law
permits an award of fees based on the multi-factor analysis outlined in Cummings v. National
Shawmut Bank of Boston, 284 Mass. 563, 569 (1934). Using this analysis, to determine whether

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the fees proposed are reasonable, a court considers the ability and reputation of the attorneys, the
nature of the case and the issues, the time spent, prices usually charged by similar attorneys in
the locale, and the result obtained. Id.
This case centers on whether, and to what extent, Defendants have used a computer
program copyrighted by Accusoft, in violation of copyright laws. The case has generated over
350 docket entries in its two-year existence. Needless to say, the nature and issues of the case
have been difficult. Defendants are represented by attorneys from K&L Gates, LLP.4 Three
attorneys at K&L Gates worked to respond to Accusoft’s two motions. (Docket #363). All three
of those attorneys specialize in the field of intellectual property litigation, and the two senior
attorneys have thirty-nine years of experience between them. (Id.). Defendants submitted billing
records created by a time-keeping software program showing that, collectively, Defendants’
attorneys spent 34.7 hours responding to the motions, with the Boston senior attorney billing at
$750 per hour, and the Washington state partner billing at $450 per hour, and the Washington
state associate at $200 per hour. (Id.). Defendants’ attorneys billed a total of $15,810 in fees
(Id.). Defendants represented that their time expended and hourly rates were reasonable and
customary for this type of dispute.5 (Id.). This Court agrees.

4

According to its website, K&L Gates, LLP comprises more than 2,000 lawyers who practice
in 48 offices located on five continents. See http://www.klgates.com/about.
5

To support their claim that their rates are reasonable, Defendants submitted a link to the
American Intellectual Property Law Association’s 2013 Report of the Economic Survey.
(Docket #363, p. 3). The Court was not able to access the information via the link.
Notwithstanding, the Court is satisfied that the billing rates are reasonable based on findings
from other courts. See Ascion, LLC v. Ruoey Lung Enter. Corp., Nos. 09-11550-GAO, 0910293-GAO, 2014 WL 972138 *2 (D. Mass. 2014) (finding Boston rates of $480 to $685 for
partner, and $175 to $400 for associates, were reasonable rates in an intellectual property
dispute); Specialized Tech. Res., Inc. v. JPS Elastomerics Corp., 2011 WL 1366584 *10 (Mass
Supr. Feb 10, 2011) aff’d, 80 Mass. App. Ct. 841 (2011) (finding reasonable: Boston partner
rates of $560-$885 per hour and associate rates of $350-$415 per hour).  
4 

However, not every argument raised by Accusoft in its motions reflected a failure to
confer; thus, it would be unreasonable to conclude that those arguments warranted sanctions.
Accusoft pressed two arguments that appear both to have merit and were opposed by
Defendants: 1) the need for clarification regarding which documents were discoverable
regarding lab revenue damages; and, 2) a request for information regarding the Epic Viewer.
(Docket #362, pp. 2, 5-6). Insofar as the Court has determined Accusoft presented seven of nine
arguments that showed a failure to comply with local rules, the Court finds it is equitable for
Accusoft to reimburse Defendants for seven-ninths (7/9) of their reasonable attorney’s fees of
$15,810, or $12,297.

CONCLUSION
For the foregoing reasons, Plaintiff is ORDERED to forthwith reimburse Defendants for
their attorney’s fees in the amount of $12,297.

/s/ David H. Hennessy
David H. Hennessy
United States Magistrate Judge

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