Giacometto Ranch Inc. et al v. Denbury Onshore LLC. et al

Filing 281

IT IS HEREBY ORDERED that Denbury shall pay to Giacomettos the sum of $10,000.00, which represents a reasonable apportionment of attorney fees expended by Giacomettos in addressing the issue of spoliated text messages. Denbury shall have until May 3, 2024 to remit this amount to counsel for Giacomettos. Signed by Magistrate Judge Kathleen L. DeSoto on 4/5/2024. (APP)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
BILLINGS DIVISION
GIACOMETTO RANCH INC. a
Montana Corporation, TOM
GIACOMETTO, a resident of
Montana, and ROBERT
GIACOMETTO, a resident of South
Dakota,

CV 16-145-BLG-SPW-KLD
ORDER

Plaintiffs,
vs.
DENBURY ONSHORE LLC, a
Delaware Corporation, and
DENBURY OPERATING
COMPANY, a Delaware Corporation,
Defendants.
This matter is currently before the Court on Plaintiffs Giacometto Ranch
Inc., Tom Giacometto and Robert Giacometto’s (“Giacomettos”) application for an
award of attorney fees and costs incurred in bringing their motion for sanctions
based on Defendants Denbury Onshore LLC and Denbury Operating Company’s
(“Denbury”) spoliation of text messages. (See Docs. 255 and 269). In its January
19, 2024 Order, the Court granted Giacomettos’ request for fees, and thereafter
required Plaintiffs to submit attorney affidavits and billing timesheets to support
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their request. (Docs. 263 and 264). Denbury was provided the opportunity to
respond to Giacomettos’ request, and the request is now ripe for ruling.
As the parties are familiar with the background of this discovery dispute, the
Court summarizes only those facts necessary to determine the amount of attorney
fees owed to Giacomettos as the prevailing parties in connection with the
spoliation of text messages on Denbury employees’ phones. After oral argument
and two status conferences, the Court granted Giacomettos’ Motion to Compel
(Doc. 107) in part, ordering production of the ArcGIS map and denying all other
requests as moot. (Doc. 161). The Court’s ruling was based, in part, on the parties’
failure to inform the Court, prior to the issuance of Doc. 107, that any outstanding
issues remained as to the text messages. Giacomettos timely objected to the portion
of the Court’s ruling that related to their ability to later seek fees for sanctions if
Denbury did not produce materials it had agreed to produce.
Five months later, Giacomettos filed their motion seeking sanctions for a
number of reasons, including the spoliated text messages. (Doc. 169). In its Order,
the Court agreed that sanctions were warranted because Denbury failed to
implement appropriate safeguards to ensure the text messages were preserved, but
did not agree that the failure was intentional. (Doc. 255 at 10). The Court further
agreed that a permissive inference instruction was warranted, but denied all other
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relief sought in Giacomettos’ motion.
Giacomettos seek $20,095.93 in attorney fees and costs related to both their
motion to compel and motion for sanctions. They reason that the total attributed to
both motions is $100,479.66, based on a word search of billing records for the two
law firms representing them. (Doc. 269 at 2-3). Giacomettos further reason that
based on the number of words in all of the briefing attributed to sections arguing
the spoliation issue, 24% of the briefing was devoted to spoliation. Finally, they
assert that 20% of the total billing is a reasonable estimate of the fees, and further
claim $1,306.91 in travel costs incurred to travel to the November 29, 2023
hearing.
Denbury objects to this amount, arguing that Giacomettos did not prevail on the
majority of the issues in the briefing, and that the use of block-billing prevents
Denbury and the Court from meaningfully separating out fees attributable to the
spoliation issue and other, redacted and unredacted, tasks contained in block-billed
amounts. Denbury also takes issue with the inclusion of any fees attributable to the
motion to compel, arguing the parties did not know of the actual spoliation of text
messages until after the motion to compel was ruled upon by the Court. Denbury
suggests an award of $5,000, or alternatively, 20% of the fees attributable to the
motion for sanctions, which is $9,720.55.
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As an initial matter, the Court notes that although counsel for Giacomettos
represented he would provide a courtesy copy of unredacted relevant time entries,
this was not filed and so the Court is left to decipher redacted timesheets from both
law firms representing Giacomettos in this case. Both firms block-bill to some
extent, further calling into question whether the entire $100,479.66 is truly
attributable to the motions filed by Giacomettos or a mixed bag of other tasks
lumped together.
As an example, on May 26, 2023, there is a billing entry for Attorney Braaten
for attending a settlement conference, calling a redacted named person, two
“reviews” of redacted information, and “begin drafting reply brief re: motion for
sanctions.” (Doc. 269-1 at 68). Ostensibly this entry, for 7.2 hours, was included in
the total amount because the reply brief was worked on during the mediation, but it
certainly is not reasonable to seek fees for attending a mediation and reviewing
unrelated documents. Because the entry is block-billed, the Court has no way to
discern the appropriate breakdown of the fees.
Additionally, there is an entry on September 27, 2023 related to a call with
“Tom” regarding mostly redacted information and the hearing set in November, as
well as a conference with paralegal Price regarding redacted information. (Doc.
269-1 at 79). This entry, for 5.5 hours, cannot reasonably be attributed to the
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motions, as it is extremely unlikely that Attorney Braaten had a 5.5 hour phone call
to explain that the hearing was going to be in November. This entry in particular is
troubling, as paralegal Price has a similarly worded entry for the same day, and
charged only .50 hours. Again, because of how the billing was done and the
redactions in place, the Court has no meaningful way to separate out fees which
should properly be included in an amount attributable to the motions, and those
which should not. The Court additionally cannot divine if the five hour difference
is due to an additional task, or whether such a task was related to the motions.
The party seeking to recover fees bears the burden of submitting sufficient
evidence to support the hours worked and the rates claimed. Hensley v. Eckerhart,
461 U.S. 424, 433 (1983). When a motion is granted in part and denied in part, the
Court may apportion the reasonable expenses after giving the parties a chance to be
heard. F. R. Civ. P. 37(a)(5)(C). There is no issue with the rates charged by any of
the attorneys or staff, but the practice of block-billing, together with the redactions,
has impeded the Court’s ability to meaningfully discern whether the amount
claimed is truly related only to the motions at issue. However, it is undisputed that
Denbury’s spoliation of the text messages resulted in increased attorney fees to
Giacomettos, and it is reasonable to require Denbury to reimburse Giacomettos for
those additional fees as a result of its conduct. After considering all of the facts, the
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Court finds that an award of $10,000.00 is a reasonable apportionment of attorney
fees for the spoliation of the text messages. Accordingly,
IT IS HEREBY ORDERED that Denbury shall pay to Giacomettos the
sum of $10,000.00, which represents a reasonable apportionment of attorney fees
expended by Giacomettos in addressing the issue of spoliated text messages.
Denbury shall have until May 3, 2024 to remit this amount to counsel for
Giacomettos.
DATED this 5th day of April, 2024.

______________________________
Kathleen L. DeSoto
United States Magistrate Judge

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