Robert Bosch LLC v. A.B.S. Power Brake, Inc. et al
OPINION and ORDER AWARDING SANCTIONS Signed by District Judge Patrick J. Duggan. (MOre)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
ROBERT BOSCH LLC,
Case No. 09-14468
Honorable Patrick J. Duggan
A.B.S. POWER BRAKE, INC., PEDRO
GOMEZ, LUCIO GOMEZ, and
OPINION AND ORDER AWARDING SANCTIONS
At a session of said Court, held in the U.S.
District Courthouse, Eastern District
of Michigan, on August 25, 2011.
THE HONORABLE PATRICK J. DUGGAN
U.S. DISTRICT COURT JUDGE
Robert Bosch LLC (“Plaintiff”) filed this action against A.B.S. Power Brake, Inc.
(“ABS”) and three ABS officers (collectively, “Defendants”), alleging violations of
Michigan and federal law in connection with ABS’s sales of vehicle braking systems.
Before the Court is Plaintiff’s declaration of attorney’s fees and expenses, filed pursuant to
this Court’s order of May 10, 2011. Defendants have objected to Plaintiff’s declaration
and have also filed two additional pleadings requesting various forms of relief. For the
reasons stated below, the Court denies Defendants’ requests and awards Plaintiff sanctions
in the amount of $152,082.65.
I. Procedural Background
On January 20, 2010, shortly after Plaintiff filed this suit, Defendants moved to
dismiss the Complaint for lack of personal jurisdiction. In their motion, Defendants
argued that ABS had “no contacts at all” with the state of Michigan. Magistrate Judge
Donald A. Scheer granted Plaintiff’s request for limited discovery to support its
allegations of personal jurisdiction. Plaintiff conducted discovery and responded to the
motion to dismiss on November 22, 2010, arguing that ABS’s contacts with the state of
Michigan were more than sufficient for this Court to exercise personal jurisdiction.
Defendants withdrew their motion to dismiss a few weeks later.
Plaintiff moved for sanctions, arguing that Defendants’ misrepresentations prolonged
this litigation and caused Plaintiff to incur unnecessary expenses. After holding a hearing
on the matter, the Court granted Plaintiff’s motion in an Opinion and Order dated May 10,
2011. The Court directed Plaintiff to submit a detailed statement of expenses, including
attorney’s fees, incurred in opposing Defendants’ motion to dismiss. Plaintiff filed its
declaration on May 31, 2011, detailing expenses totaling $275,278.25.
Defendants filed objections on June 10, 2011. That same day, Defendants also filed
two distinct pleadings titled “Request for Post-Judgment Postponement of Final Ruling on
Plaintiff’s Motion for Sanctions; Alternatively, for 60 Day Extension of Time to Request
Reconsideration and/or Otherwise Respond to and/or Oppose Plaintiff’s Motion for
Sanctions and/or Declaration in Support of Attorney Fees.”
In the first of these two pleadings, Dkt. #86, Defendants seek a sixty-day stay in
these proceedings while they obtain substitute counsel and local counsel.1 Alternatively,
Defendants argue that Plaintiff’s claimed expenses are improper, and accordingly, the
Court should deny Plaintiff’s request in its entirety or reduce any award to an unspecified
amount less than $18,792.00.
In their second “request,” Dkt. #88, Defendants argue that this Court must delay
resolution of the motion for sanctions because resolving it could lead to a dispute between
Defendants and their previous counsel,2 resulting in the disclosure of information subject
to the attorney-client privilege. Alternatively, Defendants seek a stay to allow their
counsel to raise new arguments for a reduced sanction.
A. Defendants’ Requests to Stay These Proceedings
Defendants seek a stay while they obtain substitute counsel. They have provided no
legal authority in support of this request, asserting only that substitute counsel might argue
that a de minimis sanction is appropriate because Defendants relied on the advice of their
previous counsel. The Court already concluded in its May 10, 2011 Opinion and Order
that the appropriate sanction in this case is the reasonable expenses Plaintiff incurred in
opposing the motion to dismiss. The record before this Court indicates that Defendants
made affirmative misrepresentations of fact. Both the Declaration of Pedro Gomez, Dkt.
In its May 10, 2011 Opinion and Order, the Court directed Defendants to obtain local
counsel as required by Eastern District of Michigan Local Rule 83.20(f).
Defendants’ local counsel entered an appearance with this Court on June 24, 2011, and
their substitute counsel entered an appearance on August 1, 2011.
#7, and Defendants’ responses to Plaintiff’s first set of interrogatories, Dkt. #66, contain
statements misrepresenting the extent of Defendants’ contacts with the state of Michigan.
Defendant Pedro Gomez signed his Declaration, and the responses to interrogatories
indicate that Defendants Pedro Gomez, Guillermo Gomez, and Lucio Gomez provided
information and assisted in the preparation of the responses. Under these circumstances,
the Court has concluded that a de minimis sanction is insufficient. Defendants’ request for
a stay appears to be an improper attempt to relitigate this issue. A stay cannot be justified
on such grounds.
Defendants also argue that a stay should be granted because resolving the motion for
sanctions could lead to a dispute between Defendants and their previous counsel, resulting
in the disclosure of information protected by the attorney-client privilege. Defendants
never raised this argument in response to Plaintiff’s motion for sanctions, and therefore
waived it. See Murphy v. Procter & Gamble Co., 695 F. Supp. 2d 600, 603 (E.D. Mich.
2010). Again, such a stay would allow Defendants to effectively relitigate Plaintiff’s
motion for sanctions. Furthermore, even if Defendants later assert that they violated the
discovery rules in reliance on counsel’s advice, they are free to pursue a claim against him
separately without causing further delay in this litigation.
B. Determination of an Appropriate Sanction
Having concluded that a stay is unnecessary, the Court next turns to the matter of
determining a proper sanction. Plaintiff seeks an award of $275,278.25 based on its costs
and attorney’s fees incurred in opposing Defendants’ motion to dismiss. Defendants raise
a variety of arguments in response, and the Court shall address each of these below.
“In an attorneys’ fee case, the primary concern is that the fee awarded be
‘reasonable.’” Gonter v. Hunt Valve Co., 510 F.3d 610, 616 (6th Cir. 2007) (citing Reed v.
Rhodes, 179 F.3d 453, 471 (6th Cir. 1999)). “A reasonable fee is ‘one that is adequate to
attract competent counsel, but . . . [does] not produce windfalls to attorneys.’” Reed, 179
F.3d at 471 (quoting Blum v. Stenson, 465 U.S. 886, 897, 104 S. Ct. 1541, 1548 (1984))
(alteration in original). “The starting point for determining a reasonable fee is the lodestar,
which is the product of the number of hours billed and a reasonable hourly rate.” Gonter,
510 F.3d at 616 (citing Hensley v. Eckerhart, 461 U.S. 424, 434, 103 S. Ct. 1933, 1939
(1983)). The Court may consider a number of other factors in determining whether an
increase or decrease from the lodestar is warranted, including:
(1) the time and labor required; (2) the novelty and difficulty of the questions;
(3) the skill requisite to perform the legal service properly; (4) the preclusion of
employment by the attorney due to acceptance of the case; (5) the customary
fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by
the client or the circumstances; (8) the amount involved and the results
obtained; (9) the experience, reputation, and ability of the attorneys; (10) the
“undesirability” of the case; (11) the nature and length of the professional
relationship with the client; and (12) awards in similar cases.
Hensley, 461 U.S. at 434 n.9, 103 S. Ct. at 1940 n.9. The Court must provide a clear and
concise explanation of its reasons for the fee award. Gonter, 510 F.3d at 616.
Defendants assert that Plaintiff’s counsel’s hourly fees are excessive. “A trial court,
in calculating the ‘reasonable hourly rate’ component of the lodestar computation, should
initially assess the ‘prevailing market rate in the relevant community.’” Adcock-Ladd v.
Sec’y of Treasury, 227 F.3d 343, 350 (6th Cir. 2000) (quoting Blum, 465 U.S. at 895, 104
S. Ct. at 1547). “[T]he ‘prevailing market rate’ is that rate which lawyers of comparable
skill and experience can reasonably expect to command within the venue of the court of
record, rather than foreign counsel’s typical charge for work performed within a
geographical area wherein he maintains his office.” Id. (citing Hudson v. Reno, 130 F.3d
1193, 1208 (6th Cir. 1997)). The prevailing market rate should not exceed the amount
necessary to cause competent legal counsel to perform the work required. Gonter, 510
F.3d at 616 (citing Coulter v. Tennessee, 805 F.2d 146, 148-49 (6th Cir. 1986)).
Plaintiff’s Chicago-based counsel details the billing rates of several individuals
involved in opposing Defendants’ motion to dismiss:
Raymond Geraldson, Jr.
Scrimenti Decl. ¶ 6, 17. The fees of Plaintiff’s Chicago-based counsel may be considered
reasonable in that legal market, but the Court believes that these rates exceed the amount
necessary to cause competent legal counsel in southeast Michigan to perform this work.
Plaintiff states that its local counsel, Seth D. Gould, is an accomplished litigator with 20
years of experience who represents Plaintiff in a variety of matters. Id. ¶ 16. The Court
believes that someone of Mr. Gould’s skill and experience could adequately perform the
work required in opposing the motion to dismiss for lack of jurisdiction, and thus, he
would provide a suitable comparison in the metro Detroit legal market. The Court
concludes that Mr. Gould’s hourly fee of $280.00 is reasonable under the circumstances.
The Court therefore concludes that an hourly fee of $280.00 should be applied to the hours
worked by Ms. Scrimenti, who appears to be Plaintiff’s lead attorney in this case based on
hours billed. This figure represents approximately a 49% reduction from the stated hourly
rates of Plaintiff’s counsel, and the Court concludes that the remaining professionals’ fees
should be similarly adjusted. This leads to the following hourly rates:
Raymond Geraldson, Jr.
These hourly rates, when multiplied by the number of hours billed, provide the following
Raymond Geraldson, Jr.
Plaintiff has also itemized the costs incurred in opposing the motion, totaling $19,368.25.
Summing these amounts provides a total award of $152,082.65.
Defendants argue that Plaintiff’s counsel engaged in “block billing,”3 but have failed
to support this assertion. The Court has carefully reviewed the records provided by
Plaintiff’s counsel, see Scrimenti Decl. Exs. A-Q, and notes that time records are provided
Defendants have described “block billing” as the practice of reporting one time period
during which multiple discrete tasks are completed. They allege that this practice can
result in a 10-30% increase in billings.
for each task. As there is no evidence of “block billing,” the Court rejects Defendants’
objection. Defendants also assert that Plaintiff’s counsel submitted to the Court “raw”
numbers of hours worked, rather than hours billed. Plaintiff’s counsel denies this, and
Defendants have failed to point to anything in the timekeeping records supporting this
Defendants next argue that Plaintiff’s counsel has included in its records time spent
on tasks unrelated to opposing the motion to dismiss. Defendants specifically point to a
review of lists of trade shows attended by ABS, but Plaintiff’s counsel has explained that
this review was necessary to demonstrate ABS’s contacts with Michigan attendees at the
shows. This task is obviously connected with the establishment of personal jurisdiction
over ABS. Defendants also point to 1.7 hours spent planning Plaintiff’s response to the
motion to dismiss, but the Court cannot agree that such analysis was excessive under these
circumstances. The Court has carefully reviewed the records provided by Plaintiff’s
counsel, and concludes that the hours claimed are limited to those spent opposing the
motion to dismiss.
Defendants contend that the lodestar should be reduced by 75% based on the result
obtained. Defendants assert that Plaintiff only established personal jurisdiction over ABS,
rather than the remaining three Defendants. Plaintiff correctly points out that Defendants’
motion to dismiss only addressed personal jurisdiction over ABS, and did not argue that
jurisdiction over the remaining three Defendants was lacking. The remaining Defendants
therefore waived any objection to this Court’s exercise of personal jurisdiction. See Fed.
R. Civ. P. 12(h)(1). The Court concludes that Plaintiff was completely successful in
opposing the motion to dismiss, as Defendants withdrew the motion shortly after Plaintiff
responded to it.
Finally, Defendants assert that Plaintiff’s counsel should not be permitted to include
travel time in the expenses claimed. Defendants argue that allowing such expenses would
penalize them for Plaintiff’s choice to retain counsel outside from outside Michigan. The
Court may consider the length and nature of counsel’s professional relationship with the
client in determining whether a fee is reasonable. Hensley, 461 U.S. at 434 n.9, 103 S. Ct.
at 1940 n.9. Plaintiff’s counsel has represented Plaintiff for twenty years in intellectual
property matters and is familiar with Plaintiff’s staff and products. In this light, Plaintiff’s
decision to retain its usual counsel in this litigation appears to be reasonable. Although
this arrangement may have required travel in a few instances, the Court believes that
counsel’s accumulated knowledge and experience with Plaintiff’s affairs probably saved
time and money in pursuing this lawsuit. Nor do the travel costs themselves appear to be
excessive. Plaintiff’s counsel has stated that economy-class airfare was used, and it
appears that travel costs relating to the two hearings held in Detroit are only a small
portion of the expenses Plaintiff incurred. Defendants cannot complain about the costs of
travel to Los Angeles for depositions, as jurisdictional discovery was required in order to
expose Defendants’ misrepresentations, and such travel costs would have been incurred
even by Detroit-based counsel.
The Court has carefully reviewed the records provided by Plaintiff’s counsel and has
considered the objections raised by Defendants. Defendants’ misrepresentations required
Plaintiff’s counsel to engage in jurisdictional discovery over a period of several months to
prove their allegations. Even after turning over considerable evidence of ABS’s contacts
with the state of Michigan, Defendants did not withdraw their motion to dismiss until
Plaintiff formally responded to the motion. Defendants’ misconduct needlessly prolonged
this litigation for almost a year and caused Plaintiff to incur considerable expense. The
Court also notes that Plaintiff was successful in opposing the motion to dismiss.
IT IS ORDERED that Plaintiff is awarded attorney’s fees and costs in the amount of
$152,082.65 based on Defendants’ conduct in opposing personal jurisdiction.
s/PATRICK J. DUGGAN
UNITED STATES DISTRICT JUDGE
Belinda J. Scrimenti, Esq.
Seth D. Gould, Esq.
Brian Kinder, Esq.
Jeffrey P. Thennisch, Esq.
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