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

Filing 1496

MEMORANDUM OPINION FOR PAYMENT OF SPECIAL MASTER'S COMPENSATION AND COSTS. Signed by Chief Judge Jerome B. Simandle on 12/22/2016. (TH, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
AVAYA INC.,

HONORABLE JEROME B. SIMANDLE
Plaintiff,
Civil Action No.
06-2490 (JBS/KMW)

v.
TELECOM LABS, INC.,
TEAMTLI.COM CORP.,
CONTINUANT, INC., SCOTT
GRAHAM, DOUGLAS GRAHAM, and
BRUCE SHELBY,

MEMORANDUM OPINION
FOR PAYMENT OF
SPECIAL MASTER’S
COMPENSATION AND COSTS

Defendants.
SIMANDLE, Chief Judge:
This matter comes before the Court upon Motion [Docket Item 1485] of
John E. Keefe, Sr. for compensation and costs for services as Special Master in
the within matter pursuant to Rules 53 & 54(d), Fed. R. Civ. P., filed on
September 21, 2016; and
The Court finding:
1.

The Hon. John E. Keefe, Sr. (Ret.), of the firm Keefe Bartels, was

selected by the parties and appointed by the Court to serve as Special Master
by order entered January 25, 2016 [Docket Item 1466]. Under that Order, the
Special Master was tasked with addressing, on a report and recommendation
basis, the voluminous and complex attorney fee petition on behalf of the TLI
Defendants, who had been entitled to seek reasonable fees and costs as the
prevailing party after trial, as well as the TLI Defendants’ application for costs.

2.

The Order provided for the Court to approve the compensation and

reimbursement of the Special Master under the procedure of ¶ 9 of that Order,
which has been followed herein.
3.

On September 15, 2016, John E. Keefe, Sr., completed his

comprehensive Report and Recommendation and filed same with the Court
[Docket Item 1482] and provided it to the parties, recommending an award of
costs and fees in favor of the TLI Defendants as prevailing parties, for reasons
set forth therein.
4.

Thereafter, both parties timely indicated that there were areas in

which they sought partial reconsideration by the Special Master. The court
directed the parties to address their reconsideration motions to the Special
Master in the first instance and to forego filing objections to the Report and
Recommendation with the District Court until the Special Master resolved the
reconsideration requests [Docket Item 1486].
5.

Before the Special Master’s reconsideration process commenced,

on September 30, 2016, the United States Court of Appeals for the Third
Circuit vacated the underlying judgment in Avaya, Inc. v. Telecom Labs, Inc., et
al., 838 F.3d 354 (3d Cir. 2016). The Third Circuit denied DefendantCounterclaimant TLI’s petition for panel rehearing and rehearing en banc, and
it issued its mandate returning the case to this Court on December 5, 2016.
[Docket Item 1492.]
6.

It is clear that the TLI Defendants are no longer the prevailing

party and that they are not entitled to press their applications for an award of
attorney’s fees and costs.
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7.

It is also clear that the work of the Special Master is at an end and

that he should be paid by the parties in accordance with the Order under
which he earned such compensation and reimbursement for fees. There is no
just reason for delay in making the reimbursements to the Special Master. The
Special Master’s motion for compensation and costs has been pending since
September 21, 2016 [Docket Item 1485].
8.

The Court notes that neither side objects to the quantum of the

Special Master’s compensation and fees, which have been properly itemized in
the motion and accompanying Certification. Such fees shall be paid to the
Special Master in the amount of $162,202.50 and such costs shall be
reimbursed in the amount of $2,824.86, for a total of $165,027.36.
9.

The Order Appointing Special Master [Docket Item 1466] provided

that “[i]n the event that the Third Circuit reverses the underlying judgment, the
Special Master’s approved fees and costs may be recoverable to the prevailing
party as costs, subject to any reallocation by the Court at the conclusion of the
Special Master proceedings.” Id. at 12. This Court thus recognized that any
obligation to pay the Special Master’s costs and fees must first be satisfied and
that it would be subject to reallocation to the other party as costs after it is
ultimately determined who the prevailing party is. At the present time, the
Third Circuit has vacated and remanded the prior judgment on the merits, but
it has not “reversed,” that is, it has not determined who the ultimate prevailing
party is. In this situation, the Special Master should not have to wait for
reimbursement for the services faithfully and timely rendered to both sides of

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the disputes on attorney’s fees and costs. The Court will thus impose the
burden equally upon both parties as the case awaits retrial on the merits.
10.

The Court determines that each party shall bear one-half of the

Special Master’s fees and costs. It would not be fair to subject Plaintiff Avaya
Inc. to pay 100% of these fees and costs where it is no longer liable for fee
shifting from Defendant-Counterclaimant TLI. Likewise, it would not be fair to
subject the TLI Defendants to pay the entire amount of Special Master costs,
since TLI was the prevailing party, entitled to seek reasonable attorney’s fees
and costs from Avaya, at the time when the Special Master completed its
Report and Recommendation.
11.

Accordingly, the Court will split the obligations 50/50 and enter an

Order for Payment in favor of Special Master Keefe and against Avaya, Inc. in
the amount of $82,513.68, and against the TLI Defendants in the amount of
$82,513.68. These payments are regarded as costs, which are subject to
reallocation in favor of the prevailing party upon final adjudication of this case.
12.

Because of the delay in reimbursement awaiting the return of this

case the court’s docket, which has now occurred, the Court hereby directs
Avaya, Inc. and the TLI Defendants to make expedited payment within seven (7)
days of entry of the accompanying Order.

December 22, 2016
Date

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

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