Mayo Foundation for Medical Education & Research et al. v. Elkin, M.D.
Filing
413
ORDER Granting Plaintiffs' Request for Attorneys' Fees(Written Opinion). Signed by Senior Judge David S. Doty on 8/24/2011. (PJM)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Civil No. 09-322(DSD/JJK)
Mayo Clinic, Mayo Foundation
for Medical Education &
Research and Cerner
Corporation,
Plaintiffs,
ORDER
v.
Peter L. Elkin, M.D.,
Defendant.
Jonathan E. Singer, Esq., Michael E. Florey, Esq., John
C. Adkisson, Esq., and Fish & Richardson P.C., 60 South
Sixth Street, Suite 3200, Minneapolis, MN 55402; Peter
Galindez, Jr., Esq., Mayo Clinic Legal Department, 200
First Street SW, Rochester, MN 55905; Thomas S. Fraser,
Esq., Gregory E. Karpenko, Esq. and Fredrikson & Byron,
200 South Sixth Street, Minneapolis, MN 55402 and Megan
J. Redmond, Esq., Beth Larigan, Esq., B. Trent Webb,
Esq., Daniel Devers, Esq., and Shook, Hardy & Bacon, LLP,
2555 Grand Boulevard, Kansas City, MO 64108, counsel for
plaintiffs.
W. Patrick Judge, Esq., Law Office of W. Patrick Judge,
1321 Pinehurst Avenue, St. Paul, MN 55116; David J.
Massa, Esq., Kenneth Solomon, Esq., Ryan J. McCarty, Esq.
and Gallop, Johnson & Neuman, 101 South Hanley Road,
Suite 1700, St. Louis, MO 63105 and Matthew H. Morgan,
Esq., Nichols Kaster, 80 South Eighth Street, Suite 4600,
Minneapolis, MN 55402, counsel for defendant.
This
matter
is
before
the
court
upon
the
request
for
attorneys’ fees by plaintiffs Mayo Clinic and Mayo Foundation for
Medical Education & Research (collectively, Mayo).
Based on a
review of the file, record and proceedings herein, and for the
following reasons, the court awards $1,900,139.30 in attorneys’
fees to Mayo.
BACKGROUND
On April 27, 2011, following a five-day jury trial, the jury
rendered a special verdict and found that defendant Dr. Peter Elkin
(1) breached his employment contract with Mayo; (2) intentionally
interfered with an existing contractual relationship between Mayo
and Cerner Corporation (Cerner); (3) intentionally interfered with
a prospective contractual relationship between Mayo and Cerner;
(4) willfully and maliciously misappropriated one or more trade
secrets belonging to Mayo; (5) intentionally exercised control over
the medical-informatics software or its source code contrary to
Mayo’s rights; and (6) breached a fiduciary duty he owed to Mayo.
The
jury
also
found
that
Mayo
failed
to
pay
Elkin
certain
royalties, and awarded him $143,222.20.
DISCUSSION
I.
Attorneys’ Fees
Under
Minnesota
statute,
if
“willful
and
malicious
misappropriation exists, the court may award reasonable attorney’s
fees to the prevailing party.”
Minn. Stat. § 325C.04; see also
Zawels v. Edutronics, Inc., 520 N.W.2d 520, 524 (Minn. Ct. App.
2
1994).
The starting point in determining a reasonable fee is the
“lodestar” measure.
See Hensley v. Eckerhart, 461 U.S. 424, 433
(1983); Milner v. Farmers Ins. Exchange, 748 N.W.2d 608, 620-21
(Minn. 2008). The court determines this figure by “calculating the
number of hours reasonably expended on the litigation multiplied by
a reasonable hourly rate.”
Milner, 748 N.W.2d at 621 (quoting
Hensley, 461 U.S. at 433).
The court may then “adjust the fee
upward or downward” to achieve a more reasonable fee under the
circumstances.
Hensley, 461 U.S. at 433-34.
“Factors considered
in determining reasonableness include the time and labor required;
the nature and difficulty of the responsibility assumed; the amount
involved and the results obtained; the fees customarily charged for
similar legal services; the experience, reputation, and ability of
counsel; and the fee arrangement existing between counsel and the
client.”
Milner,
748
N.W.2d
at
621
(citation
and
internal
quotation marks omitted). It is not “necessary for district courts
to examine exhaustively and explicitly, in every case, all of the
factors that are relevant to the amount of a fee award.”
Griffin
v. Jim Jamison, Inc., 188 F.3d 996, 997 (8th Cir. 1999).
Mayo submitted an affidavit and exhibits documenting the hours
expended litigating its claims and the billing rates for these
services.
a
See Galindez Decl. Ex. 1, ECF No. 365.
supplemental
declaration
and
3
exhibits
Mayo submitted
documenting
the
time
expended to litigate its trade secret misappropriation claim.1
Steinert Supplemental Decl. Ex. 2, ECF No. 399.
See
“[A] detailed
affidavit of attorney’s fees and costs, showing the fees broken
down on an hourly basis” is generally “sufficient to justify the
claimed amount of fees.”
(8th Cir. 2006).
Willhite v. Collins, 459 F.3d 866, 869
In total, Mayo expended 5,311.7 hours at an
average hourly billing rate of $461, for a total of $2,447,058.36
in attorneys’ fees.
See Galindez Decl. Ex. 1.
Of its total fees,
$1,900,139.30 are attributable to Mayo’s prosecution of its trade
secret misappropriation claim.
See Steinert Supplemental Decl.
¶ 4, Ex. 2.
This
protracted litigation
required
substantial
time and
labor. Elkin filed a parallel action in the United States District
Court for the Southern District of New York, forcing Mayo to move
See ECF No. 14.2
to enjoin the parallel action.
At Elkin’s
1
Where, as here, all Mayo’s claims for relief “involve a
common core of facts” and are “based on related legal theories ...
the district court should focus on the significance of the overall
relief obtained by the plaintiff in relation to the hours
reasonably expended on the litigation.” Hensley, 461 U.S. at 424.
Therefore, the court need not “parse the requested attorneys’ fees
by claim in order to discount fees spent pursuing claims that may
not, standing alone, permit recovery.” I-Sys., Inc. v. Softwares,
Inc., No. 02-1951, 2005 WL 1430323, at *12 (D. Minn. Mar. 7, 2005).
However, the percentage of time expended on the trade secret
misappropriation claim informs the court’s determination of the
reasonableness of the overall attorneys’ fees award.
2
Elkin stipulated to transfer and consolidate the parallel
action, see ECF No. 28, and Mayo withdrew the motion, see ECF No.
29.
4
request,
the
court
bifurcated
resolution of some claims.
discovery
to
See ECF No. 76, at 2.
encourage
early
Elkin then moved
for summary judgment on topics prohibited by the bifurcated plan,
forcing Mayo to file a motion to compel discovery.
at 4.
See ECF No. 76,
In total, Mayo filed four motions to compel discovery, see
ECF Nos. 61, 170, 180, 212, which the magistrate judge granted or
granted in part, see ECF Nos. 76 (granted), 179 (granted in part),
189 (granted with qualifications), 253 (granted in part).
parties
engaged
in
multiple
mediation
attempts
and
The
informal
settlement discussions, including an 8-hour settlement conference
with the magistrate judge.
Mayo’s settlement offer of October 7,
2009, was closer to the jury’s award than any offer made by Elkin.
See ECF No. 360.
The pre-trial history of this case includes
motions to dismiss, to exclude expert testimony and for summary
judgment.
In short, Elkin’s contumacious litigation strategy
significantly increased the time and resources required to resolve
the present action.
“A party cannot litigate tenaciously and then
be heard to complain about the time necessarily spent overcoming
its vigorous defense.”
Weitz Co. v. MH Washington, 631 F.3d 510,
530 (8th Cir. 2011) (citation omitted).
The trial involved complex questions of intellectual property
and computer science.
Mayo used expert testimony to prove its
claim for trade secret misappropriation and to prove that it was
the lawful and exclusive owner of the medical informatics software
5
and its source code.
See ECF No. 385, at 36-37.
Moreover, Mayo’s
attorneys possess a high level of skill, experience and competence.
See Galindez Decl. ¶¶ 11-17.
Mayo prevailed and is entitled to fees.
At trial, Mayo’s
attorneys secured substantial benefits, including a Rule 50(a)
motion in its favor on the question of ownership of the medical
informatics software and a jury verdict in its favor on every claim
asserted against Elkin.
issues in dispute.
The jury found in Mayo’s favor on the core
Although the jury found Mayo liable for breach
of contract for failing to pay royalties, the jury awarded Elkin a
small percentage of the damages that he sought.
(seeking total of $560,000 in unpaid royalties).
See Answer 30
In light of the
above factors, the court finds $1,900,139.90 in attorneys’ fees
reasonable.3
Mayo also seeks reimbursement for $127,012.57 in costs based
on Elkin’s liability for trade-secret misappropriation.4
Steinert Supplemental Decl. ¶ 4.
See
The Minnesota trade-secret
statute only provides for “reasonable attorney’s fees to the
3
Pursuant to a merger agreement between Cerner and Conceptual
Health Solutions, Mayo may be obligated to indemnify Cerner for
legal fees that Cerner incurred in this action. See Galindez Aff.
¶ 23. At this time, the nature and extent of Mayo’s obligation to
indemnify Cerner is unknown and any award would be purely
speculative. As a result, the court declines to award attorneys’
fees that Mayo may be obligated to pay Cerner.
4
These costs are in addition to those available under 28
U.S.C. § 1920. Section 1920 costs are not at issue in this order.
6
prevailing party.”
costs.
See id.
Minn. Stat. § 325C.04.
It does not include
In contrast, the Minnesota Legislature expressly
includes costs in other statutes. See, e.g., id. § 325D.45 (“Costs
shall be allowed to the prevailing party unless the court otherwise
directs.
The court may award attorneys’ fees to the prevailing
party....”); id. § 177.27 subdiv. 10 (allowing costs and fees in
fair labor standards cases); id. § 10A.20 subdiv. 15 (“A prevailing
party under this subdivision may be awarded attorney fees and costs
by the court.”).
Moreover, § 325C.04 is identical to § 4 of the Uniform Trade
Secrets
Act.
Other
expressly added costs.
states
that
adopted
this
model
statute
See, e.g., Cal. Civ. Code § 3426.4 (2011);
Mont. Code Ann. § 30-14-405 (2009).
As a result, under the plain
language of Minnesota Statutes § 325C.04, costs are not available.
In the present case, Mayo provides no explanation of costs to allow
the court to determine if any of the requested costs are properly
construed as fees.
See Sun Media Sys., Inc. v. KDSM, LLC, 587 F.
Supp. 2d 1059, 1078–79 (S.D. Iowa 2008).
Therefore, the Mayo’s
request for costs under § 325C.04 is denied.5
5
Even if costs were recoverable under § 325C.04, the court
would award the same total sum of $1,900,139.30 in light of the
reasonableness factors discussed above.
7
CONCLUSION
Accordingly, based on the above, IT IS HEREBY ORDERED that
defendant Dr. Peter L. Elkin pay plaintiffs Mayo Foundation for
Medical Education & Research and Mayo Clinic $1,900,139.30 in
attorneys’ fees.
Dated:
August 24, 2011
s/David S. Doty
David S. Doty, Judge
United States District Court
8
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