David v. Alphin et al

Filing 162

ORDER granting 151 Motion to Compel Defendants to Produce Documents (due within 30 days as per this Order); granting 161 Motion to File Under Seal Unredacted Version of Plaintiff's Reply Brief and Exhibits. Signed by Magistrate Judge Dennis Howell on 3/30/10. (gpb)

IN THE UNITED STATES DISTRICT COURT F O R THE WESTERN DISTRICT OF NORTH CAROLINA C H A R L O T T E DIVISION 3 :0 7 cv 1 1 E L E N A M. DAVID; ARLEEN J. STACH; and V IC T O R M. HERNANDEZ, P l a i n t if f s V s. J . STEELE ALPHIN; AMY WOODS B R IN K L E Y ; EDWARD J. BROWN, III; CHARLES J. COOLEY; RICHARD M. D e M A R T I N I ; BARBARA J. DESOER; J A M E S H. HANCE; LIAM E. McGEE; E U G E N E M. McQUADE; ALVARO G. d e MOLINA; MICHAEL E. O'NEILL; O W E N G. SHELL, JR.; R. EUGENE T A Y L O R ; F. WILLIAM VANDIVER, JR.; B R A D F O R D H. WARNER; CHARLES W. C O K E R ; STEVEN JONES; KENNETH D. L E W IS ; BANK OF AMERICA C O R P O R A T IO N ; BANK OF AMERICA C O R P O R A T IO N CORPORATE B E N E F IT S COMMITTEE, D efen d a n ts. ________________________________________ ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

ORDER

T H IS MATTER is before the court on plaintiffs' Motion to Compel (#151) an d plaintiffs' Motion for Leave to File Under Seal Unredacted Version of Plaintiffs' R ep ly Brief and Exhibits (#161) . Plaintiffs seek to compel production of documents s o u g h t in their first and second requests for production of documents. Plaintiffs seek
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th e following: (1 ) d o cu m en ts responsive to requests 2-3, 6, 9, 11-13, 17, 19, 33, and 38-40 w ith o u t excluding documents or redacting portions of documents that relate to the Bank of America Pension Plan; (2 ) d o cu m en ts responsive to requests 27-32 and 34 that concern the p r o f ita b ility and internal operations of the mutual funds offered as in v estm en t options in the Bank of America 401(k) Plan; (3 ) d o cu m en ts responsive to request 35 seeking trading cost analyses for in v estm en t options in the Bank of America 401(k) Plan; (4 ) d o cu m en ts responsive to request 37 which seeks all Corporate Benefits C o m m ittee minutes and attachments discussing the initial selection of each investment option employed in the 401(k) Plan after January 1, 2 0 0 0 ; and (5) v ersio n s of all documents already produced in response to any request th a t are not redacted to exclude information merely on the grounds that it is non-responsive or irrelevant. P lain tiffs also seek an order "enjoining" defendants from producing documents in the fu tu re redacted to exclude purported non-responsive or irrelevant material. D efen d an ts have timely filed a response and plaintiff's have timely filed their

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rep ly. Having carefully considered such motion, the court enters the following d iscu ssio n and Order, in which the five categories will be addressed seriatim. FINDINGS AND CONCLUSIONS I. D o cu m en ts Related to the Pension Plan In their first request to compel production, plaintiffs seek documents responsive to requests 2-3, 6, 9, 11-13, 17, 19, 33, and 38-40 without excluding documents or red actin g portions of documents that relate to the Bank of America Pension Plan. At th e heart of this dispute is defendants' contention that because the plaintiff's Pension P lan claims were earlier dismissed by this court, documents related to such plans fall o u tsid e the scope of discovery as they are unrelated to defendants' governance of the 4 0 1 (k ) plan. T o summarize, this court earlier dismissed plaintiffs' claims concerning these d efen d an ts' management of the bank's Pension Fund inasmuch as such fund was a d e f in e d benefits plan, which resulted in plaintiffs being entitled to receive a defined s u m regardless of Pension Fund performance. Lacking actionable harm, this court d ism issed such causes of action as plaintiffs failed to state a claim. Defendants claim th a t since the Pension Fund claims have been dismissed, documents related to the P en sio n Fund are not relevant to the claims that remain. For the reasons that follow, th e court disagrees.

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T h e court believes defendants are mistaken in concluding that discovery req u ests that may touch on a previously dismissed claim cannot be relevant to the c la im s that remain. In this case, the documents sought are not sought to prove a p r e v io u s ly dismissed claim; rather, they appear to be sought to prove the claims that r em a in . Plaintiffs contend that defendants served not only as the directors or plan ad m in istrato rs of the 401(k) Plan that remains at issue in this lawsuit, but were also d irecto rs or plan administrators of the Pension Plan, and that how they handled bank m u tu a l funds in administering the Pension Plan may well be probative on whether th ey properly handled those same funds in the administration of the 401(k) Plan. T h e scope of discovery in federal civil cases is both broad and liberal. In H ic k m a n v. Taylor, 329 U.S. 495, 507 (1947), the Supreme Court has long held as f o llo w s : W e agree, of course, that the deposition-discovery rules are to be a cc o r d e d a broad and liberal treatment. No longer can the time-honored cry of `fishing expedition' serve to preclude a party from inquiring into th e facts underlying his opponent's case. Mutual knowledge of all the relev an t facts gathered by both parties is essential to proper litigation. To th at end, either party may compel the other to disgorge whatever facts he h as in his possession. The deposition-discovery procedure simply ad v an ces the stage at which the disclosure can be compelled from the tim e of trial to the period preceding it, thus reducing the possibility of su rp rise. But discovery, like all matters of procedure, has ultimate and n e c es sa ry boundaries. As indicated by Rules 30(b) and (d) and 31(d), lim itatio n s inevitably arise when it can be shown that the examination is b ein g conducted in bad faith or in such a manner as to annoy, embarrass o r oppress the person subject to the inquiry. And as Rule 26(b) provides,
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fu rth er limitations come into existence when the inquiry touches upon th e irrelevant or encroaches upon the recognized domains of privilege. Id ., 329 U.S., at 507-508 (footnote omitted). The Court of Appeals for the Fourth C ir cu it has held that a trial court h as wide latitude in controlling discovery and that its rulings will not be o v ertu rn ed absent a showing of clear abuse of discretion. The latitude g iv e n the district court extends as well to the manner in which it orders th e course and scope of discovery. Although it is unusual to find an ab u se of discretion in discovery matters, a district court may not, through d is co v e ry restrictions, prevent a plaintiff from pursuing a theory or entire cau se of action. A rd rey v. United Parcel Service, 798 F.2d 679, 682 (4th Cir.1986) (citations and c o r re sp o n d in g quotation marks deleted). Rule 26 allows parties to obtain discovery reg ard in g "any nonprivileged matter that is relevant to any party's claim or defense." F ed . R. Civ. P. 26(b)(1). Relevant information need not be admissible at trial if the d isco v ery sought appears reasonably calculated to lead to the discovery of admissible e v id e n c e . Hinton v. Conner, 225 F.R.D. 513, 515 (M.D.N.C.2005). It is undisputed that at the core of plaintiffs' remaining claims is their co n ten tio n that defendants improperly favored the bank's own mutual funds, to their o w n enrichment and that of the bank and its affiliates, but to the detriment of the 4 0 1 (k ) Plan participants. Plaintiffs contend that this is a breach of defendants' f id u c ia ry obligations to the 401(k) Plan, and that evidence relevant to that claim may b e found in how these same fiduciaries handled such securities when it was the bank,
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an d not the participants, that were bearing both the costs and the risk. Key to this arg u m en t is plaintiffs' contention that these defendants served as the fiduciaries for b o th plans. Memorandum in Support (Docket Entry # 152), at p. 3. The relevancy of s u c h material is obvious: documents that indicate a material difference in the manner in which defendants administered the Pension Plan as compared to the 401(k) Plan w ith respect to securities offered by the bank and its affiliates could be probative on p la in tif fs ' claim that defendants breached their duties of loyalty and prudence when selectin g 401(k) Plan investment vehicles. T h e court has also closely considered defendants' citation of Spano v. Boeing C o ., 2008 WL 1774460, at *2 (S.D. Ill. April 16, 2008), in which the district court h eld ,1 as follows: P lain tiffs' requests seeking discovery of documents regarding [plans o th e r than the 401(k) plan] are simply not relevant to the subject matter o f the complaint, which deals only with [the 401(k) plan.] Id ., 2008 WL, at *2. While plaintiff has distinguished such decision on a number of g ro u n d s, the pivotal distinction appears to be that in Spano, plaintiffs did not argue th at the fiduciaries who administered the 401(k) Plan also administered the c o m p a r is o n plans. Instead, it appears that they argued "that discovery of the non-VIP p lan s is relevant to finding out how Boeing used the plans in the master trust as a

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Hon. Donald G. Wilkerson, United States Magistrate Judge. -6-

w h o le to obtain services for each of the plans." Spano v. Boeing Co., 2008 WL 1 7 7 4 4 6 0 , 2 (S.D.Ill. 2008). The court earlier found that all of defendant's defined co n trib u tio n plans were included in a master trust, that they were combined and m a n a g e d together in a Master Trust, and that the plan at issue in the suit comprised 9 4 % of the Master Trust. While the undersigned certainly does not disagree with the disposition in S p an o , the issue before this court appears to be quite different. In Spano, there is no c o n te n tio n that the Pension Plan and the 401(k) were in any way combined or that th ey were managed together.2 In this case, plaintiffs contend that the Pension Plan and 4 0 1 ( k ) Plan were not combined and managed separately - - but by the same fiduciaries - - making any contrast in their management decisions as to the same bank securities p ro b ativ e on the issue of whether they properly exercised their fiduciary obligations as to the 401(k) Plan.3

F in d in g such documents to relevant to plaintiffs' claims, defendants shall p ro d u ce documents responsive to requests 2-3, 6, 9, 11-13, 17, 19, 33, and 38-40
The Spano court states that only the defined contribution plans were combined. Id., 2008 WL, at *1. The court has assumed that the court's reference to "traditional pension plans" means defined benefit plans. Id. Likewise, if there is evidence that these fiduciaries handled the bank securities in an identical fashion, such would also be relevant to showing that they did not breach their fiduciary duty. -73 2

w ith o u t excluding documents or redacting portions of documents that relate to the B an k of America Pension Plan. As plaintiffs stated at page seven of their Reply (D o ck et Entry #160), such production shall be limited to Pension-related documents alread y identified through electronic discovery keyword searches. I I. D o c u m e n t s Related to Profitability and Internal Operations of the Offered M u tu a l Funds P la in tif fs next seek documents responsive to requests 27-32 and 34 that concern th e profitability and internal operations of the mutual funds offered as investment o p tio n s in the Bank of America 401(k) Plan. In this request, plaintiffs seek

in fo rm atio n concerning the Affiliated Funds, specifically, documents that may go to s h o w : (1) how profitable they were; (2) where those profits came from; (3) whether, fo r the Affiliated Funds to survive, they required the banks's 401(k) Plan investments; ( 4 ) whether they treated the bank's 401(k) Plan investors differently from other sh areh o ld ers; and (5) whether the fund Boards engaged in genuine arm's-length n e g o tia tio n s with their investment advisors to obtain low and reasonable fees. See M e m o r a n d u m in Support (Docket Entry #152), at p.6. Plaintiffs contend that

d o cu m en ts relevant to such concerns are relevant to supporting plaintiffs' claims of im p ro p er selection and retention of the Affiliated Funds. Id. In response, defendants argue that documents that were not reviewed by the fid u c ia r ie s cannot be relevant as to whether they fulfilled their fiduciary obligations
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to the 401(k) Plan. Defendants argue, as follows: T h e Court should deny Plaintiffs' requests because such d o cu m en ts stretch far beyond any relationship between the mutual funds a n d the 401(k) Plan, and therefore lack relevance. The individual m em b er s of the CBC made the decisions about the 401(k) Plan's in v es tm e n t options that Plaintiffs challenge in this case. What they did, saw , reviewed, and understood is what matters. The "Affiliated Funds" are not defendants in this case, and their actions, separate and apart from th eir connection to the 401(k) Plan, are irrelevant to Plaintiffs' claims th at the individual members of the CBC improperly and disloyally ad m in istered the 401(k) plan and chose illegal investment options. M o r e o v e r , Defendants have produced to Plaintiffs all of the key d o cu m en ts reflecting the analysis and thought-processes of the relevant d e c i s io n - m a k e rs . Within the 1.3 million pages of documents produced to Plaintiffs are those reflecting the CBC's analyses and discussions of th e 401(k) Plan's investment options. The custodians include all of the k ey members of the CBC, advisors to the CBC, and individuals asso ciated in other relevant capacities to the 401(k) Plan. Defendants e v e n produced analyses and discussions that might not have been p erfo r m e d at the direction of or provided to the CBC if they came up w ith in the agreed-upon search parameters.10 (See Schmidt Decl., Ex. H.) W i th search terms including (mutual w/2 fund*), (fund w/3 expense*), ( f u n d w/3 fee(s)) (Id., Ex. E), Plaintiffs received a broad array of d o cu m en ts, including documents reflecting the pertinent decisions of the r ele v a n t decision-makers, and even those documents the CBC may never h av e actually seen or discussed. D efen d an ts' Memorandum in Response (Docket Entry # 156), at pp. 9-10 (emphasis ad d ed ). The court respectfully disagrees with the thesis of defendants' argument, to wit, th at "[w]hat they did, saw, reviewed, and understood is what matters." Id., at p. 9. The court firmly believes that what a fiduciary did not do may also matter. In

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H o ld em an v. Devine, 2007 WL 3254969 (D.Utah Nov. 2, 2007), the district court held th a t the court's ruling will be based solely on the record evidence of what Mr. D ev in e actually did or did not do while serving as Plan fiduciary and the effect those decisions had on the Plan's participants. Id ., 2007 WL, at *6 (emphasis added). The court also disagrees with defendants that the actions of the Affiliated Funds are not relevant to their actions because "such documents stretch far beyond any relatio n sh ip between the mutual funds and the 401(k) Plan." Defendants' M em o ran d u m in Response (Docket Entry # 156), at p. 9. Defendants go on to admit, h o w ev er, that one of the fiduciary-defendants was "CEO of the investment advisor to th e Affiliated funds for part of the relevant period." Id., at p.10. By way of example, if the Affiliated Funds were sold to other institutional buyers with lesser costs and fees, such may be probative on plaintiffs' theory that defendants breached their fid u ciary obligations to the 401(k) Plan, purportedly enriching themselves and the b an k at the expense of plan participants. Such objections being overruled, defendants will be compelled to produce d o c u m e n ts responsive to requests 27-32 and 34 that concern the profitability and in tern al operations of the Affiliated Funds offered as investment options in the Bank o f America 401(k) Plan.

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I II .

T r a d in g Cost Analyses P lain tiffs also seek documents responsive to request 35 seeking trading cost

an alys e s for investment options in the Bank of America 401(k) Plan. Defendants' o b je ctio n s , which appear to be based on relevancy, appear to be without merit as tr ad in g costs appear to be most relevant to a fiduciary's evaluation of various plan in v estm en t options. In Understanding Retirement Plan Fees and Expenses (May 2 0 0 4 ), the United States Department of Labor advises, as follows: T h e Federal law governing private-sector retirement plans, the Employee R etirem en t Income Security Act (ERISA), requires that those r es p o n s ib le for managing retirement plans -- referred to as fiduciaries -carry out their responsibilities prudently and solely in the interest of the p la n 's participants and beneficiaries. Among other duties, fiduciaries h a v e a responsibility to ensure that the services provided to their plan are n e c es sa ry and that the cost of those services is reasonable. h ttp ://w w w .d o l.g o v /eb s a /p u b lic a tio n s /u n d r s tn d g r tr m n t.h tm l , at p. 1. Again,

d efen d an ts also raise the issue of a fiduciary not being responsible for what he or she d o e s not know; however, as discussed above, such does not appear to be the case. C o m p o u n d in g the problem for defendants is their own admission that at least one fid u ciary was the CEO of Bank of America Capital Management, the investment ad v iso r to the Affiliated Funds, making access to such information practically u n f e tte r e d . Defendants' objections will be overruled and they will be compelled to provide

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d o cu m en ts responsive to request 35 seeking trading cost analyses for investment o p tio n s in the Bank of America 401(k) Plan. IV. M in u t es and Attachments In the fourth category of documents, plaintiffs seek documents responsive to req u est 37 which seeks all Corporate Benefits Committee minutes and attachments d is cu s s in g the initial selection of each investment option "employed in the 401(k) Plan a fte r January 1, 2000." Motion to Compel, at 1. This statement in the motion appears to be wrong, inasmuch as Request 37 seeks for "each Affiliated Fund, the following documents whether created prior to or during the Time Period [January 1, 2000 to the Present]: (i) all B e n e fits Committee minutes (with exhibits) relating to the initial d ecisio n or deliberations regarding whether to offer the fund as a 401(k) P lan investment option and (ii) any documents submitted to or co n sid ered by the Benefits Committee in making the initial decision to o ffer the fund as a 401(k) Plan investment option. S e e Moore Decl., Ex. C, at 5. Inasmuch as all parties appear to have understood that th e issue raised is whether documents generated prior to January 1, 2000, should be d isclo sed as such documents are outside the statute of limitations for ERISA. In objecting to such request, defendant argues that the request is overbroad. F u rth er, in response to the Motion to Compel, defendant argues, as follows: A cc o m m o d a ti n g Plaintiffs' request would eviscerate ERISA's s ta tu te of limitations which is either six years after the violation occurred o r three years from the date plaintiffs had "actual knowledge" of the v io la tio n . 29 U.S.C. § 1113. Plaintiffs filed their complaint on October
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1 6 , 2006. Even assuming Plaintiffs are entitled to the six-year p erio d -- w h ich Defendants contest-- the earliest date of conduct for w h ich Defendants could be liable is October 16, 2000. Defendants ag reed to produce documents as far back as January 1, 2000. (Schmidt D ecl., Ex. D at pp. 2-3.) Plaintiffs should not be entitled to anything m o r e because such documents will relate to unactionable, and therefore irrelev an t, conduct. See Buccino v. Continental Assur. Co., 578 F. Supp. 1 5 1 8 , 1521 (S.D.N.Y. 1983) (Under ERISA, defendants are immune fro m liability for initial investment decisions preceding the statute of lim itatio n s accrual date, even if they may be liable for subsequent actions s te m m in g from those decisions.). P la in tif fs ' request should also fail because it is limitless. They arg u e that Request 37 is "not overbroad but quite narrow, since it is lim ite d to committee minutes and documents considered by or submitted to the committee." (Mot. at 11.) Under this theory, Plaintiffs are entitled to any CBC minutes, no matter how old. The burden on Defendants of h av in g to review and produce any and all CBC minutes outweighs P lain tiffs' need when Defendants have already produced documents p r e d a tin g the accrual date. M em o ran d u m in Response (Docket # 156), at pp. 11-12. T h u s, the issue raised is whether discovery related to decisions that predate the co m m en cem en t of the period of limitations are discoverable, and if so, is such request o v erly broad or limitless, making such unduly burdensome on defendants under Rule 2 6 . Clearly, what plaintiffs seek are documents related to the initial decision to in clu d e Affiliated Funds in the 401(k) Plan portfolio. The court agrees with

d efen d an ts that they cannot be held liable for such initial decision (if it was made b efo re the limitations period commenced) as it is outside the period of limitations. D is co v e ry under Rule 26 is not, however, limited to materials upon which liability can

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o r cannot be founded; rather, discoverable material needs to be relevant to any party's claim or defense -- including the existence, d escrip tio n , nature, custody, condition, and location of any documents o r other tangible things and the identity and location of persons who k n o w of any discoverable matter. F e d .R .C iv .P . 26(b)(1). Based on the arguments in plaintiffs' Reply, they do not seek s u c h material to hold defendants liable for the initial decision to include the Affiliated F u n d s in the portfolio, but "to understand the original decision that led to those [su b seq u en t] actions . . . ." Memorandum in Reply (Docket Entry # 160), at p. 10. In other words, plaintiffs desire to paint a complete picture at trial. Indeed, while d efen d an ts cannot be held liable for any purported improper decision that predates the c o m m e n c em e n t of the statute of limitations, such may well be relevant to whether d efen d an ts knew or did not know of allegedly unlawful nature of the investment and w h eth er defendants had a continuing obligation, throughout the actionable period, to d iv est the fund of such securities.4 A t this point, the court has not been made aware of the date on which the d ecisio n was made to include the Affiliated Funds in the portfolio offered by d efen d an ts to the 401(k) Plan participants. Whatever that date is, however, should be

The court's statement is not an endorsement of the legality or illegality of the inclusion of the Affiliated Funds; rather, the court is simply considering the possible relevance of such materials to plaintiffs' remaining claims under Rule 26. For all the court knows, the funds may well have been competitive with other similar funds and/or there may have other reasons to include such funds, such as demand from participants to include products of their employer. -14-

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d iscern ab le from the minutes of the committee or from transaction records. Thus, the req u est is not limitless as there is a point in time at which the decision to include these fu n d s was first debated, and it is from there that logic dictates the production. Defendants' objections are overruled and defendants shall produce documents resp o n siv e to request 37 which seeks all Corporate Benefits Committee minutes and attach m en ts discussing the initial selection of the Affiliated Funds from the date in clu sio n of such funds was debated, discussed, or raised before the committee. V. R e d a c t io n In the fifth category, plaintiffs seek to compel versions of all documents already p r o d u ced in response to any request in unredacted form where such redactions were b ased on grounds that the material is non-responsive or irrelevant. While defendants h av e pointed to case law which allows redaction of discovery materials by a producing p arty, the court is troubled by wholesale unilateral reduction of documents. As recen tly noted by another district court, [ r]e d a ctio n is, after all, an alteration of potential evidence. The Federal R u les sanction only very limited unilateral redaction, see Fed.R.Civ.P. 5 .2 . Outside of these limited circumstances, a party should not take it u p o n him, her or itself to decide unilaterally what context is necessary fo r the non-redacted part disclosed, and what might be useless to the c as e. It should not come as a shock to those involved in litigation, that p a r tie s may see the outcome differently. Moreover, protective orders are a v a ila b le to shield irrelevant, but important-to-keep-confidential in fo rm atio n , and unless the protective order permits partial production, a document should be produced in its entirety. On the other hand, where
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a specific document is very large, and separated by clearly marked d e s ig n a tio n s , or separate volumes, each section/volume becomes, more o r less, a document in itself. However, generally worded sections of the la rg e document may apply to specific sections whose potential relevance is unquestioned. Thus, unless a particular section unmistakably has no r e le v an ce whatsoever to the allegations in a complaint or d e n ia ls /d e f en s e s in an answer, it should be produced along with the other r ele v a n t sections. And a word of warning to those who redact even under th is standard-if you make unwarranted redactions, a court may well aw ard sanctions for non-disclosure of requested evidence up to and in clu d in g default/dismissal based on a seeming bad faith hiding of in f o r m a tio n . E v o n v. Law Offices of Sidney Mickell, 2010 WL 455476, f.n.1 (E.D.Cal. Feb. 3, 2010). In this case, a Protective Order is in place as well as a confidentiality

ag reem en t. As this court has witnessed firsthand, the parties are not shy in using eith e r to protect (and rightfully so) documents that could be misused by those not p a r ty to this litigation. The court knows of no better way to ensure that a motion to co m p el will be filed than to unilaterally black out large portions of documents as the h u m an mind is naturally curious. Other courts have approved the judicious use of u n ilateral redaction, allowing the offended party to challenge the redaction through in camera inspection. See Gates v. Rohm and Haas Co., 2007 WL 295416, f.n.1 ( E .D .P a . Jan. 29, 2007). The court believes, however, that the better view is that w h ere a Protective Order is in place, that generally th e Federal Rules provide no procedural device for unilateral redaction b y a party and it is a procedure that is not favored. See Fed.R.Civ.P. 2 6 ( c) "(the court ... may make any order which justice requires to protect
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a party or person from annoyance, embarrassment, oppression, or undue b u rd en or expense." (emphasis added)). Further, this litigation has a p ro tectiv e order in place that prevents non-litigants from viewing sen sitiv e information. In re FedEx Ground Package System, Inc., 2007 WL 79312, *5 (N.D.Ind. Jan. 5., 2007). T h e court will, therefore, compel versions of all documents already produced in response to any request in unredacted form where such redactions were based on g ro u n d s that the material is non-responsive or irrelevant. *** F in a lly, the court has considered plaintiffs' entitlement to fees and costs by p rev ailin g on its Motion to Compel, as well as defendants' argument that much of w h at plaintiffs have sought is outside the terms of the "words and phrases" agreement u n d er which this material was produced. Counterbalancing, at least in this court's m in d , plaintiffs' right under Rule 37 is the additional cost that defendants will n ecessarily expend in producing or reproducing this material. The court believes the p arties should resolve this issue between themselves and concentrate on concluding d isc o v e r y and preparing for dispositive motions and trial as the last enlargement of tim e has been granted by the undersigned. While this court is compelling production o f certain documents, at no time does it appear that defendants withheld any d o c u m e n ts for any improper reason; rather, in each instance it appears that they had
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a good faith and articulable belief that they had fully produced. While the court encourages respective counsel to resolve the issue of attorneys fees and costs amicably, all counsel are advised that this court strictly adheres to the f ed e r al rules and applicable case law in the award of attorneys fees and costs under R u le 37(a)(5), Federal Rules of Civil Procedure. As has been made clear by the d e c is io n s of the Court of Appeals for the Fourth Circuit, an award of attorneys fees as part of an award of expenses to a prevailing party requires submission of affidavits. S u ch affidavits will typically include hourly rate statistics from a Bar association. D e te rm in a t io n of the reasonableness of hourly rates is part of the required lodestar d e te r m in a tio n . In calculating an award of attorney's fees, a court must first d e term in e a lodestar figure by multiplying the number of reasonable h o u rs expended times a reasonable rate. Grissom v. The Mills Corp., 549 F .3 d 313, 320 (4th Cir.2008). In deciding what constitutes a "reasonable" n u m b er of hours and rate, we have instructed that a district court's d iscretio n should be guided by the following twelve factors: (1 ) the time and labor expended; (2) the novelty and d ifficu lty of the questions raised; (3) the skill required to p ro p erly perform the legal services rendered; (4) the atto rn ey's opportunity costs in pressing the instant litig atio n ; (5) the customary fee for like work; (6) the atto rn ey's expectations at the outset of the litigation; (7) the tim e limitations imposed by the client or circumstances; (8) th e amount in controversy and the results obtained; (9) the ex p erien ce, reputation and ability of the attorney; (10) the u n d esirab ility of the case within the legal community in w h ich the suit arose; (11) the nature and length of the p ro fessio n al relationship between attorney and client; and
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(1 2 ) attorneys' fees awards in similar cases. B a r b e r v. Kimbrell's Inc., 577 F.2d 216, 226 n. 28 (4th Cir.1978) (ad o p tin g twelve factors set forth in Johnson v. Ga. Highway Express, I n c ., 488 F.2d 714 (5th Cir.1974), abrogated on other grounds by B la n ch a rd v. Bergeron, 489 U.S. 87, 109 S.Ct. 939, 103 L.Ed.2d 67 (1989)). A fter determining the lodestar figure, the "`court then should su b tract fees for hours spent on unsuccessful claims unrelated to s u c ce ss fu l ones.' " Grissom, 549 F.3d at 321 (quoting Johnson v. City of A ik en , 278 F.3d 333, 337 (4th Cir.2002)). Finally, "[o]nce the court has s u b tr ac te d the fees incurred for unsuccessful, unrelated claims, it then aw ard s some percentage of the remaining amount, depending on the d e g r e e of success enjoyed by the plaintiff." Id. (internal quotation marks a n d citation omitted). R o b i n s o n v. Equifax Information Services, LLC, 560 F.3d 235, 243 -244 (4 th Cir. 2 0 0 9 ). Of particular note in this case (inasmuch as the bulk of the legal work for p lain tiffs appears to have been accomplished outside of the Charlotte Division), the C o u rt of Appeals for the Fourth Circuit has repeatedly held that: `[i]n addition to the attorney's own affidavits, the fee applicant must p r o d u ce satisfactory specific evidence of the prevailing market rates in th e relevant community for the type of work for which he seeks an aw ar d .' Id., at 244 (citation omitted). In this case, the court believes the relevant legal co m m u n ity would be the Charlotte legal community rather than the District of C o lu m b ia legal community. Indeed, the appellate court went on to hold in that case th a t [a]lthough we recognize that the district court authored a very th o r o u g h memorandum opinion, we nonetheless conclude that it abused
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its discretion by awarding the hourly rates requested by Robinson in the a b s en c e of `satisfactory specific evidence of the prevailing market r a te s ....' Id ., at 245 (citation omitted). Any motion for fees, properly supported, must be filed within 14 days of entry o f this Order. If the parties resolve such issue amicably -- which the court again e n c o u r a g e s under Rule 1 -- such settlement of that issue should also be communicated to the court by a Notice filed through ECF within the same time frame. *** F in ally, the court wishes to point out that while mediation is not due to be c o m p le te d until discovery concludes, now may be an excellent time to consider m ed iatio n as it appears that the case has reached a critical juncture and claims and d efen ses are clearly coming into focus.

ORDER IT IS, THEREFORE, ORDERED that (1) p lain tiffs' Motion to Compel (#151) is GRANTED, and defendants shall p ro d u ce the documents as provided supra within 30 days of entry of this

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O r d e r; (2 ) an y Motion for Attorneys Fees and Costs (or notice of amicable reso lu tio n ) must be filed within 14 days of entry of this Order and p ro p erly supported; and (3) p lain tiffs' Motion for Leave to File Under Seal Unredacted Version of P lain tiffs' Reply Brief and Exhibits (#161) is ALLOWED for the same r ea so n s and under the same conditions as outlined in the court's Order d a te d March 16, 2010 (#157).

Signed: March 30, 2010

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