AVAYA INC. v. TELECOM LABS, INC. et al

Filing 1463

OPINION. Signed by Chief Judge Jerome B. Simandle on 1/19/2016. (TH, )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

AVAYA, Inc.,

HONORABLE JEROME B. SIMANDLE
Plaintiff,

Civil No. 06-2490
OPINION

v.
TELECOM LABS, Inc., et al.,
Defendants

Simandle, Chief Judge:
This discovery matter comes before the Court in reference to
Telecom Labs, Inc.’s (“TLI/C”) application for attorneys’ fees
and costs as a prevailing party against Avaya, Inc. [Docket Item
1412]. More specifically, the Court address whether TLI/C should
be required to produce the actual detailed billing information
underlying its petition for costs and fees, and, if so, whether
reciprocal production of Avaya’s detailed billing information
should also be required.
1. Procedural history
The late Judge Joseph E. Irenas entered a judgment pursuant
to Section 4 of the Clayton Act in favor of TLI/C, following a
lengthy jury trial, on September 11, 2014. [Docket Item 1398].
TLI/C filed the relevant application for attorney’s fees and
costs on November 11, 2014, requesting upwards of $59 million in
fees. (TLI/C’s Application for Attorneys’ Fees, hereafter “TLI/C

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Fee Application”) [Docket Item 1412]. The application included 58
exhibits with 37 spreadsheets summarizing detailed billing
information. (Id.) The summaries identified the time keepers who
worked on each task, described the work each timekeeper performed
on the task, the hours each billed to the task, the date range
the time keeper worked on the task, the billing rate for each
time keeper, and the total amount of fees the work by that time
keeper would have generated at the discounted rates. (Id.) TLI/C
did not include the daily billing records in the application.
(See Id.)
The fee application also included a report and summary by
expert David Paige of Legal Fee Advisors. [Docket Item 1412, Ex.
5]. The expert report indicates that he considered TLI/C’s
detailed billing records in forming his opinions. (Id.)
After TLI/C submitted their petition for fees and costs,
Avaya wrote a letter to the Court, addressed to Magistrate Judge
Williams, requesting that the Court require TLI/C to produce
their detailed billing information in connection with TLI/C’s fee
application. TLI/C opposed the request for production in a
December 9, 2014 letter to the Court.
Judge Irenas convened a status conference on December 11,
2014. [Docket Item 1420]. Judge Irenas initially suggested that
he would order both sides to produce their billing invoices in
full, but then decided to give the parties time to confer and
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resolve the issues amongst themselves. [Docket Item 1420]. The
parties failed to reach a resolution on this issue. [See Docket
Item 1423]. In a subsequent status conference, on December 22,
2014, Judge Irenas determined that Avaya had sufficient
information to respond, at least initially, to TLI/C’s petition
for attorneys’ fees and costs. [Docket Item 1423]. Judge Irenas
stated that after the briefing was complete, he might appoint a
Special Master and require additional discovery. (Id.) The
parties subsequently briefed the application for attorneys’ fees
and costs without the detailed billing records.
After Judge Irenas’ tragic passing, the case was transferred
to the undersigned. [Docket Item 1453]. The Court convened a
telephone status conference on December 14, 2015 to discuss the
appointment of a Special Master and the Court requested briefing
on the appointment and related matters. [See Docket Item 1456;
Docket Item 1457].
In the additional briefing, Avaya requested that the Court
require TLI/C to produce their billing records. (Avaya’s Brief
Regarding the Proposed Appointment of a Special Master and Other
Related Issues, hereafter “Avaya Special Master Brief”)[Docket
Item 1459]. TLI/C opposed the additional production, but took the
position that if they were required to produce their billing
records, Avaya should also be required to produce its invoices.
(TLI/C Brief in regards to the Proposed Appointment of a Special
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Master, hereafter “TLI/C Special Master Brief”)[Docket Item
1458]. TLI/C also requested that any production remain limited to
“expert eyes only.” (Id.) The Court heard argument on the matter
on January 13, 2016, and also addressed some related discovery
issues as discussed herein.
2. Discussion
Avaya has requested that the Court order TLI/C to produce
their billing records to supplement their $59 million dollar
application for attorneys’ fees. For the following reasons, the
Court will order the production of the billing records.
A.

Discovery
The Third Circuit has held that a “prevailing party is not

automatically entitled to compensation for all the time its
attorneys spent working on the case; rather, a court awarding
fees must ‘decide whether the hours set out were reasonably
expended for each of the particular purposes described and then
exclude those that are excessive, redundant, or otherwise
unnecessary.’” Interfaith Cmty. Org. v. Honeywell Int'l, Inc.,
726 F.3d 403, 416 (3d Cir. 2013). “[T]he fee applicant bears the
burden of establishing entitlement to an award and documenting
the appropriate hours expended and hourly rates.” Hensley v.
Eckerhart, 461 U.S. 424, 437(1983). A fee petition must be
specific enough to allow the district court “to determine if the

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hours claimed are unreasonable for the work performed.” Rode v.
Dellarciprete, 892 F.2d 1177, 1190 (3d Cir. 1990).
Discovery in connection with a fee application should
normally be limited, as a “request for attorney's fees should not
result in a second major litigation.” Hensley, 461 U.S. at 437.
However, as the undersigned explained in a previous complex fee
application:
Whether discovery is warranted depends on
consideration of the nature of the adversary
process in determining a reasonable fee after
hearing the objections which have been raised. The
legitimate needs of petitioner counsel for a prompt
adjudication of their fee request must be
accommodated with the needs of the objectors to
obtain reasonable discovery to probe the requested
fees and costs and, ultimately, to frame the issues
for adjudication after a well-focused adversary
proceeding.
In re First Peoples Bank Shareholders Litig., 121 F.R.D. 219, 223
(D.N.J. 1988). Thus, any discovery ordered “must be limited to
information relevant to the factors which the court will
eventually consider in assessing the fee.” Id.
As noted above, TLI/C included spreadsheets containing
summaries of detailed billing information, but did not include
their daily billing records. (TLI/C Fee Application.). Ayava has
argued that TLI/C’s submission is incomplete without the billing
records. (Avaya’s Brief in Opposition to TLI/C’s Application for
Attorneys’ Fees and Expenses, hereafter “Avaya
Opposition”)[Docket Item 1426]. In supplemental briefing to the
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Court, Avaya has argued that the billing records will be
essential to the Special Master’s function. (Avaya Special Master
Brief). Avaya argued that without the full production of the
records, the Special Master will be unable to conduct a “line by
line analysis” to assess reasonableness or accuracy. (Id.) Avaya
has also argued that the Special Master will be unable to
determine if the entries were properly recorded, and will be
unable to separate the fees related to the counter-claims and
state law claims, thereby limiting the Special Master’s ability
to make a report and recommendation. (Id.) Lastly, Avaya claims
that without the complete billing records, Avaya has been unable
to issue a complete defense. (Id.)
Additional discovery may be authorized under Fed. R. Civ. P.
26(b)(1)(eff. Dec. 1, 2015), which holds:
Unless otherwise limited by court order, the scope of
discovery is as follows: Parties may obtain discovery
regarding any nonprivileged matter that is relevant to any
party's claim or defense and proportional to the needs of
the case, considering the importance of the issues at stake
in the action, the amount in controversy, the parties’
relative access to relevant information, the parties’
resources, the importance of the discovery in resolving the
issues, and whether the burden or expense of the proposed
discovery outweighs its likely benefit . . . .
Fed. R. Civ. P. 26 (b)(1).
With $59 million dollars at stake, this Court notes that
this is not an ordinary fee application in scale. The billing
records are at the heart of TLI/C’s claim for attorneys’ fees.

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The production of these records will not cause undue delay and
will lead to a better understanding of the summaries and
categories of attorney services that TLI/C has identified. The
Court will therefore grant Avaya’s request for discovery of
TLI/C’s billing records for which TLI/C seeks attorneys’ fees.
While TLI/C has argued that production of billing records
will add to the delay of an already protracted case, the Court
observes that TLI/C has already provided the billing records to
TLI/C’s own expert to review, and that TLI/C has grouped and
summarized them with considerable effort. (TLI/C Special Master
Brief). Given TLI/C’s previous production of and familiarity with
the records, the Court believes that TLI/C should be able to
produce the records without significant delay or expense.
This discovery obligation shall also extend to the records
underlying all fees sought in TLI/C’s supplemental application
pertaining to fees incurred up to February 28, 2015 [Docket Item
1443]. Finally, TLI/C will not be required to produce
documentation pertaining to services for which it is not seeking
recovery of attorneys’ fees.
B. Local Rule 54.2
Fee applications filed in the District of New Jersey must
also comply with Local Civil Rule 54.2(a), which requires the fee
petitioner to set forth:

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1) The nature of the services rendered, the amount of the
estate or fund in court, if any, the responsibility
assumed, the results obtained, any particular novelty or
difficulty about the matter and other facts pertinent to
the valuation of services rendered;
2) A record of the dates of services rendered;
3) A description of the services rendered on each of such
dates by each person of that firm including the identity
of the person rendering the service and a brief
description of that person’s professional experience
4) The time spent in the rendering of each such services;
and
5) The normal billing rate for each of said persons for the
type of work performed.
L. Civ. R. 54.2(a).
This Court finds that the materials produced to date by
TLI/C do not comply with the obligation to produce particularized
information envisioned by Local Civil Rule 54.2(a).

The

spreadsheets are detailed as to only a broad category of task and
the person who completed such task, but not as to particular
services and dates. As Avaya points out, some of the entries
describe tasks that span years and probably hundreds of discrete
attorney events, providing only a broad range of dates. (Avaya
Special Master Brief). The rule requires “a description of the
services rendered on each of such dates.” See L. Civ. R.
54.2(a)(3). This Court finds that entries describing work
undertaken over many years is insufficient to meet the
requirements of Local Civil Rule 54.2(a).
Judge Irenas, of course, was well acquainted with Local
Civil Rule 54.2, and he was willing to permit TLI/C to attempt a

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streamlined approach of using groupings and summaries of this
enormous cache of data, while leaving open the possibility that a
more detailed production would be required. There is no reason
why a fee petition could never be decided through analysis of
categories summarizing the efforts undertaken, and indeed the
possibility of categorical decision may be considered by the
parties and the Special Master in this case, a possibility
envisioned by Judge Irenas, too. Local Civil Rule 54.2 enjoys
flexibility in its application to individual case circumstances,
and the grouping of attorney services into categories remains an
option. As a practical matter, no party — neither TLI/C nor
Avaya — reasonably expects a judicial determination of the
recoverability of each of TLI/C’s 90,000 plus billing entries, on
an atomic, individual basis. How fine-grained the analysis needs
to be will remain for the Special Master to decide in the first
instance.
But whether or not categorical argument and determination is
the preferable procedure, the spirit of Local Civil Rule 54.2(a)
informs the discoverability of the underlying attorney fee
services and billings. Before Avaya can be called upon to accept
TLI/C’s summaries and categories as being reasonably accurate,
Avaya, as the party defending this fee petition, should have
access to the underlying billing entries for which fee-shifting
is sought. Without this data, it would not be in a position to
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rely upon TLI/C’s summaries and categorizations of services and
fees. Where $60 million is sought in this petition, it is highly
proportional to require production of these records.
That the data underlying a summary must be produced to the
adversary is also a well-recognized rule. To the extent TLI/C
seeks to admit summaries of its attorney services and billing
into evidence, admissibility is governed by Rule 1006 of the
Federal Rules of Evidence, which provides:
The proponent may use a summary, chart, or calculation to
prove the content of voluminous writings, recordings, or
photographs that cannot be conveniently examined in court.
The proponent must make the originals or duplicates
available for examination or copying, or both, by other
parties at a reasonable time and place. And the court may
order the proponent to produce them in court.
Fed. R. Ev. 1006.
Thus, it is axiomatic that before TLI/C’s summaries and flow
charts are considered as evidence, Avaya must have access to,
including making copies of, the underlying records, pursuant to
Fed. R. Ev. 1006. Today’s order serves that purpose as well.
As discussed above, this Court does not hold that summaries
can never comply with L. Civ. R. 54.2. Courts in this district
have held that sufficiently detailed summaries may be appropriate
for fee applications. See, e.g., D’Onofrio v. Borough of Seaside
Park, No. CIV. 09-06220, 2012 WL 6672303, at *4 (D.N.J. Dec. 20,
2012). Again, the production of the underlying billing records in
discovery is fundamental to understanding and employing the
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summaries as evidence. The Court will therefore order TLI/C to
produce the daily billing records for which TLI/C seeks
reimbursement in its initial and supplemental applications.
C. Production under Rule 26 disclosures
The Court also finds, alternatively, that production of the
billing records is required under Federal Rule of Civil Procedure
26(a)(2)(B)(ii). As noted, TLI/C has submitted the expert report
of David Paige on TLI/C’s billing practices, but has not
submitted the billing records that Paige reviewed. [Docket Item
1412]. The report will be considered by the Special Master. Rule
26(a)(2)(B) requires that certain disclosures accompany expert
testimony “if the witness is one retained or specially employed
to provide expert testimony in this case.” Fed. R. Civ. P.
26(a)(2)(B). The required disclosures include “the facts or data
considered by the witness in forming them.” Id. As a Court in the
Eastern District of Pennsylvania explained, the required
disclosures under Rule 26(a)(2)(B) include “any information
furnished to a testifying expert that such an expert generates,
reviews, reflects upon, reads, and/or uses in connection with the
formulation of his opinions, even if such information is
ultimately rejected.” Fialkowski v. Perry, No. CIV.A. 11-5139,
2012 WL 2527020, at *3 (E.D. Pa. June 29, 2012). In fact, in a
previous order for this case, Magistrate Judge Williams required
the disclosure of an email to Avaya under Fed. R. Civ. P.
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26(a)(2)(B) after it was provided to TLI/C’s testifying damages
and causation expert. [Docket Item 961]. Since Paige was retained
to provide testimony specific to the fee application, under Fed.
R. Civ. P. 26(a)((2)(B), TLI/C must produce the billing records
that were given to TLI/C’s expert and necessarily informed the
expert’s review. For all the above reasons, the Court will direct
TLI/C to produce the individualized billing records for which it
seeks compensation in this petition, within fourteen (14) days of
the entry of the accompany Order.
D. Avaya’s reciprocal production of billing records
TLI/C has also argued that if TLI/C is required to produce
their daily billing records, Avaya should be required to produce
their daily billing records. (TLI/C Special Master Brief). The
Court declines to require simultaneous production. However, if
Avaya brings a challenge to TLI/C’s billing records, this Court
will grant TLI/C’s request and require Avaya to produce evidence
of their reciprocal daily billing records for comparison with
respect to all challenged matters.
The Third Circuit has stated that the disclosure of fees
paid by settling defendants in the underlying litigation could be
relevant to the reasonableness of the fees requested. See In re
Fine Paper Antitrust Litig., 751 F.2d 562, 587 (3d Cir. 1984).
While the District Court declined to require the disclosure of
such fee information, and the Third Circuit did not find this
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ruling to be an abuse of discretion, the Third Circuit
nonetheless observed, “The request was made for the purpose of
enlightening the court as to reasonable hours and hourly rates
for comparable lawyers in complex litigation. The information
sought certainly was relevant, and arguably even helpful.” Id.
Courts in this Circuit have permitted such reciprocal fee
discovery. For instance, in a fee application case where the
defendant raised issues of reasonableness and overlap, the Court
in the District of Delaware permitted discovery of the
defendant’s billing information. Coal. To Save Our Children v.
State Bd. of Educ. of State of Del., 143 F.R.D. 61, 66(D. Del.
1992).
This Court looks also to Professor Herbert B. Newberg’s
treatise on fee awards, where Newberg explained:
While not precisely comparable to plaintiff’s
hours expended or rates charged, corresponding
information of defendants may be desirable to
permit the court to assess defendants’ litigation
efforts and fees as compared to the plaintiff, and
to discourage challenges to the total hours or
normal rates claimed in the fee application as
excessive, when defendants’ hours or rates are
similar or significantly higher.
See id. n.3 (citing Fee Awards § 6.07 at 194-95).
This Court finds that if Avaya brings a further challenge to
TLI/C’s billing records, a comparison of Avaya’s reciprocal
billing records may be relevant and helpful to the Special
Master. The Court will therefore require Avaya to produce
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portions of their billing records that correspond to any
remaining objections to TLI/C’s petition.
As discussed at oral argument, the Court will give Avaya the
opportunity to identify the aspects of TLI/C’s fee petition to
which it does not object. 1 For all areas that remain in dispute,
Avaya will be required to produce this reciprocal discovery
within 45 days of receiving TLI/C’s billing records ordered
herein, for services through February 28, 2015.
Avaya is also granted the opportunity for its expert to
supplement his prior report as to TLI/C’s fee request with the
benefit of TLI/C’s billing records. Avaya proposed, and the Court
agreed, that it should have the opportunity to narrow and refocus
the areas of dispute in this application. Therefore, within this
same 45 day period, Avaya shall serve its supplemental expert
report and its supplemental statement identifying the matters and
extent, with specificity, as to which it does not dispute TLI/C’s
fee request.
Finally, TLI/C is similarly granted leave, not more than 21
days after it receives Avaya’s supplemental expert report,
reciprocal discovery, and statement identifying the matters and
extent as to which Avaya does not dispute the fee request, to

1

Avaya’s overall objection to any fee shifting on the basis that
TLI/C’s prevailing party status was erroneous, is of course
preserved.
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serve a supplemental report of its own expert to refocus the
remaining dispute for disposition.
E. Attorney Client Privilege and Confidentiality
TLI/C has requested time to redact some of the information
TLI/C believes to be protected by attorney client privilege. The
“protection of the privilege extends only to communications and
not to facts.” Rhone-Poulenc Rorer Inc. v. Home Indem. Co., 32
F.3d 851, 862 (3d Cir. 1994). This Court will allow limited
redaction of attorney client communications contained within the
billing records.
The Court will not permit TLI/C to claim privilege to
protect the records themselves, nor any relevant information
describing the specific tasks and work product conducted by
TLI/C’s attorneys. TLI/C has placed their billing records in
issue by moving for attorneys’ fees. In so doing, TLI/C has
necessarily waived the protections of attorney client privilege
or work product relating to the billing records. “Privilege may
not be used both as sword and shield.” In re Human Tissue
Products Liab. Litig., 255 F.R.D. 151, 158 (D.N.J. 2008). There
is an “implied waiver of the attorney-client and/or attorney work
product privilege where a client affirmatively places otherwise
privileged information at issue in the case.” Id.

Given the

waiver, the Court does not expect significant redactions, but
will permit redaction of specific confidential communications
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between attorney and client that are not needed for an
understanding of the services for which TLI/C seeks compensation
herein. Any such redactions will be listed in a privilege log as
required by Rule 26(b)(5)(A), Fed. R. Civ. P.
Additionally, TLI/C has also requested that the Court limit
the issuance of the billing records to “expert eyes only.” The
Court declines to make such a determination. The Court does not
find that the billing information is sufficiently sensitive or
confidential to require such a designation. Especially where
reciprocal discovery of billing information has been required,
the tactical advantage of receiving such work product indicators
from an opponent, if any, is also reciprocal.
3. Conclusion
For the aforementioned reasons, TLI/C will be ordered to
produce the billing records for which they have petitioned for
attorneys’ fees and costs on the initial and supplemental
applications. TLI/C may produce records of the hours for which
TLI/C is not seeking fees, but is not required to do so.
Reciprocal discovery by Avaya, 45 days after receiving TLI/C’s
production of billing records, is also required. An appropriate
order will follow.
January 19, 2016
Date

s/ Jerome B. Simandle
JEROME B. SIMANDLE
Chief U.S. District Judge

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