Precision Automation, Inc. v. Technical Services, Inc. et al

Filing 284

FINDINGS and RECOMMENDATION - The court should award $129,432.15 in attorney fees and costs to Krevanko in satisfaction Krevanko's application for attorney fees 258 and defendants' bill of costs 174 . Objections to the Findings and Recommendation are due by 3/2/2010. If objections are filed a party may file a response to those objections within 14 days of being served a copy of the objections. Signed on 2/16/10 by Magistrate Judge John V. Acosta. (peg)

IN T H E UNITED STATES DISTRICT C O U R T F O R T H E DISTRICT OF OREGON P O R T L A N D DIVISION

P R E C I S I O N A U T O M A T I O N , INC., a W a s h i n g t o n Corporation, T I G E R S T O P LLC, a n Oregon Corporation, Plaintiffs,

C i v . No. 0 7 - 7 0 7 - A C FINDINGS AND RECOMMENDATION

v.
T E C H N I C A L S E R V I C E S , INC., a n I o w a Corporation, Defendants.

T E C H N I C A L S E R V I C E S , INC., a n I o w a Corporation a n d DAVID K R E V A N K O , C o u n t e r c l a i m Plaintiffs,

v.

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PRECISION AUTOMATION, INC., a W a s h i n g t o n Corporation, T I G E R S T O P LLC, a n Oregon Corporation, Counterclaim Defendants

ACOSTA, Magistrate Judge:
Introduction

Defendant David K.1·evanko ("Krevanko") moved for an award o f attorney fees and costs associated with the trade secret misappropriation claim brought against him by Plaintiffs Precision Automation, Inc. and TigerStop LLC (collectively "Plaintiffs"). The court granted K.1·evanko's motion o n January 22, 2009. 1 The court must determine the amount o f attorney fees and costs to which K.1·evanko is entitled. 2 Krevanko claims a total o f $202,802.49 i n attorney fees and costs. P r e c i s i o n d i s p u t e s t h i s a m o u n t o n t h e g r o u n d s t h a t i t r e p r e s e n t s a n u m e a s o n a b l e a m o u n t o f time, departs substantially from the estimate given in the original motion for attorney fees, and is insufficiently documented. For the reasons outlined below, K.1·evanko should be awarded

$129,432.15 i n attorney fees and costs.
Discussion

K.1·evanko's motion for attorney fees was granted pursuant to Oregon Revised Statutes ("ORS") 646.467, an Oregon statute that authorizes attorney fees where a trade secret

The Findings and Recommendation issued on January 22, 2009, and Judge Brown formally adopted the recommendation on Api'i128, 2009.
I
2

This disposition also evaluates Defendants' Bill o f Costs (#174), filed o n October 3 , 2 0 0 8 .
2
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FINDINGS A N D R E C O M M E N D A T I O N

misappropriation c l a i m " i s made in bad faith."3 OR. REV. STAT. 646.467 (2007). " I n a n a c t i o n w h e r e a d i s t r i c t c o u r t is e x e r c i s i n g its s u b j e c t m a t t e r

j u r i s d i c t i o n o v e r a state law claim, so long as ' s t a t e law does n o t run counter to a valid federal statute o r rule o f COUlt, and usually it w i l l not, state l a w denying t h e right to a t t o r n e y ' s fees o r giving a right thereto, w h i c h reflects a substantial policy o f t h e state, should be followed.'" M R O Communs., Inc. v. A T & T Co., 197 F . 3 d 1276, 1281 (9th Cir. 1 9 9 9 ) ( q u o t i n g A l y e s k a Pipeline Servo Co. v. Wilderness Society, 421 U.S. 240, 2 5 9 ( 1 9 7 5 » . U n d e r O r e g o n law, attorney fee awards are governed b y ORS 20.075, w h i c h sets fOlth several factors the court "shall consider" b o t h in determining whether fees should be awarded a n d t h e reasonable amount o f those fees: (1) A court shall consider the following factors in determining whether to award a t t o r n e y fees i n a n y c a s e i n w h i c h a n a w a r d o f a t t o r n e y fees i s a u t h o r i z e d b y s t a t u t e and i n w h i c h t h e cOUlt has discretion to decide whether to award attorney fees: (a) T h e c o n d u c t o f the p a t t i e s i n the t r a n s a c t i o n s o r o c c u r r e n c e s t h a t g a v e r i s e to t h e litigation, i n c l u d i n g a n y c o n d u c t o f a p a r t y t h a t w a s reckless, willful, m a l i c i o u s , i n b a d faith o r illegal. (b) T h e o b j e c t i v e r e a s o n a b l e n e s s o f t h e c l a i m s and d e f e n s e s a s s e r t e d b y t h e patties. (c) T h e extent to w h i c h an award o f a n attorney fee in the case w o u l d deter others f r o m asselting good faith claims o r defenses in s i m i l a r cases. (d) T h e extent to w h i c h an award o f an attorney fee in t h e case w o u l d deter o t h e r s f r o m a s s e r t i n g m e r i t l e s s c l a i m s a n d defenses. (e) T h e objective reasonableness o ft h e parties and the diligence o f t h e parties

3 T h e F i n d i n g s a n d R e c o m m e n d a t i o n g r a n t e d a t t o r n e y f e e s u n d e r t h e O r e g o n s t a t u t e , as w e l l as u n d e r Rule 37(c )(2), to the extent that they were "incurred in connection w i t h having to p r o v e the fact w h i c h h i s r e q u e s t f o r a d m i s s i o n a s k e d P l a i n t i f f s t o a d m i t and w h i c h t h e y d e n i e d . " ( D o c k e t N o . 2 1 4 a t 1 2 . ) A s t h e s e fees a r e a s u b s e t o f t h o s e fees a v a i l a b l e t o Kt'evanko u n d e r s t a t e l a w , a n d t h e s t a t e a n d f e d e r a l s c h e m e s a r e s u b s t a n t i a l l y s i m i l a r , t h e c o u r t w i l l a n a l y z e t h e a m o u n t o f a t t o r n e y fees u n d e r t h e state fi'llmework as s e t fOlth in O R S 20.075. FINDINGS A N D R E C O M M E N D A T I O N 3 {KPR}

and t h e i r attorneys during the proceedings.

(1) T h e objective reasonableness o f the parties and the diligence o fthe parties i n p u r s u i n g s e t t l e m e n t o f t h e dispute.
(g) T h e amount that the court has awarded as a prevailing p a r t y fee u n d e r O R S 20.190. ( h ) S u c h o t h e r f a c t o r s as t h e c o u r t m a y c o n s i d e r a p p r o p r i a t e u n d e r t h e c i r c u m s t a n c e s o f t h e case. (2) A c o u r t shall c o n s i d e r t h e f a c t o r s s p e c i f i e d i n s u b s e c t i o n ( l ) o f t h i s s e c t i o n i n determining the a m o u n t o f a n award o f attorney fees in any case in w h i c h a n award o f a t t o r n e y fees i s a u t h o r i z e d o r r e q u i r e d b y s t a t u t e . I n a d d i t i o n , t h e c o m t s h a l l consider the following factors in determining the a m o u n t o f a n award o f attomey fees i n t h o s e cases: (a) T h e t i m e a n d l a b o r r e q u i r e d i n t h e p r o c e e d i n g , t h e n o v e l t y a n d d i f f i c u l t y o f the questions involved i n t h e proceeding and the skill needed to properly p e r f o r m t h e legal s e r v i c e s . (b) T h e l i k e l i h o o d , i f a p p a r e n t t o t h e c l i e n t , t h a t t h e a c c e p t a n c e o f t h e p a r t i c u l a r e m p l o y m e n t by t h e attorney w o u l d p r e c l u d e t h e attorney from t a k i n g o t h e r cases. (c) T h e fee customarily charged i n the locality for similar legal services. ( d ) T h e a m o u n t i n v o l v e d i n the c o n t r o v e r s y a n d t h e r e s u l t s o b t a i n e d . (e) T h e t i m e limitations imposed by the client o r the circumstances o f t h e case.

(1) T h e nature and length o f t h e attorney's professional relationship with the client.
(g) T h e experience, reputation and ability o f the attorney performing the services. (h) Whether the fee o f t h e attorney is fixed o r contingent. OR. REV. STAT. 20.075 (2009). I n considering these factors, "[a] trial court m u s t identifY t h e facts a n d legal criteria t h a t i t u s e s w h e n arriving at an a w a r d b u t t h e findings ' n e e d n o t i n c l u d e c r i t e r i a

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immaterial to the decision and not used by the trial c o u r t . ' " Cape Haze In1's., Ltd. v. Eilers, C a s e No. C08-809RSL, 2009 U.S. Dist. LEXIS 35199, a t *5 (W.D. Wash. Apr. 1 3 , 2 0 0 9 ) (quoting Wright 1'. Jones, 155 Or. App. 249, 964 P . 2 d 1048, 1050 (1998)) (internal citation omitted). Although a n " o p p o s i n g p a r t y ' s o b j e c t i o n s t o the a t t o r n e y f e e a w a r d ' p l a y a n i m p o r t a n t r o l e ' i n f r a m i n g t h e i s s u e s relevant to the c o u r t ' s decision . . . [ i n the absence] o f objections from the opposing patty, the court h a s a n independent duty to r e v i e w a fee petition for reasonableness." Kraft 1'. A r d e n , CV. 07-487PK, 2 0 0 9 U.S. Dist. LEXIS 19445, at *6-7 (D. Or. Mar. 9. 2009) (quoting McCarthy v. Oregon Freeze Dry, Inc., 327 Or. 185, 1 8 8 , 9 5 7 P.2d 1200 (1998)). A s a threshold matter, the patties do not dispute the reasonableness o f the hourly rate claimed by Kt·evanko. Consistent w i t h the district c o u r t ' s recommendation under Local Rule 54-3, Kt'evanko refelTed to the m o s t recent Oregon State B a r Economic Survey ("Survey") when m a k i n g his case for t h e h o u r l y r a t e s c h a r g e d i n t h i s m a t t e r . In p a r t i c u l a r , K t ' e v a n k o c i t e d t h e 2 0 0 8 S u r v e y f o r t h e a v e r a g e r a t e s for i n t e l l e c t u a l p r o p e t t y , b u s i n e s s l i t i g a t i o n , a n d g e n e r a l l i t i g a t i o n s e r v i c e s . T h e S u r v e y f o u n d that " t h e average and m e d i a n rate for Intellectual Property lawyers is approximately $275-299 p e r h o u r . " (Johnson Declaration ("Dec\. "), Exhibit ("Ex.") F a t 2.) The same rate for business litigation a n d general l i t i g a t i o n w a s a p p r o x i m a t e l y $299 p e r h o u r a n d $ 2 5 0 - 2 7 4 p e r hour, respectively. (Johnson Dec\., Ex. G a t 2; Ex. E a t 2.) Krevanko calculates the average hourly rate s p e n t o n his d e f e n s e a t $ 2 0 2 . 9 4 p e r h o u r , d e c i d e d l y b e l o w the a v e r a g e r a t e s c h a r g e d l o c a l l y i n e a c h p o t e n t i a l l y applicable categOly o f l e g a l practice. (Johnson Decl. 4.) And, as Kt'evanko points o u t in his reply, Plaintiffs do n o t dispute the average hourly rate claimed b y Kt'evanko in h i s application for attorney fees. B e c a u s e t h e r a t e i s b e l o w t h e r a t e s t y p i c a l l y c h a r g e d f o r l i t i g a t i o n a n d i n t e l l e c t u a l p r o p e r t y l e g a l w o r k i n O ~ ' e g o n a n d b e c a u s e t h e r a t e s u g g e s t e d is r e a s o n a b l e i n l i g h t o f t h e r e c o r d i n t h i s case, FINDINGS AND R E C O M M E N D A T I O N

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the court accepts the claimed rate as reasonable. Plaintiffs dispute the reasonableness o fthe number o f hours that Krevanko claims were spent d e f e n d i n g against t h e t r a d e s e c r e t m i s a p p r o p r i a t i o n claim. P l a i n t i f f s c h a l l e n g e t h e a m o u n t o f t i m e claimed b y Krevanko because the increase in fees over the estimate provided in the original motion for fees i s umeasonable; compared to other cases, the amount o f time spent and fees accrued are umeasonable; and Kt'evanko' s documentation is insufficient to support the amount o f fees claimed. The court will address each ground i n turn.

A.

Increase i n F e e s F r o m Original E s t i m a t e Federal Rule o f Civil Procedure ("Rule") 54 states, i n part, that a m o t i o n for attorney fees

must include "the amount sought or provide a fair estimate o f ' that amount. FED. R. ClV. P, 54( d)(2)(b)(iii). In his motion for attorney fees filed October 3, 2008, Kt'evanko sought "attomey[] fees i n the amount o f $86,402 and expenses i n the amount o f $ 1 6 5 0 . " (Motion for Attomey Fees (# 171) at 3.) This motion was granted with the amount to be determined i n subsequent proceedings and, accordingly, Kt'evanko submitted a memorandum setting fOlth the amount o f attorney fees he currently claims, Kt'evanko n o w seeks a total o f $202,802.49 in fees and costs, a n increase in the total amount sought o f $ 1 1 4 , 750.49. Plaintiffs argue that this increase is presumptivelyumeasonable and, therefore, the court must reject Kt'evanko's petition for attorney fees. Plaintiffs also argue that the unexpected increase has prejudiced them in their ability to accurately assess their position and determine the m o s t advantageous litigation strategy. Plaintiffs suggest that, because all claims against Krevanko had been dismissed prior to the filing o f the motion for attorney fees, Kt'evanko should have been able to provide a m o r e accurate estimate o f fees expended on this litigation, Plaintiffs state that permitting such a n increase would effectively render the Rule 54 estimate FINDINGS A N D R E C O M M E N D A T I O N

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requirement moot. Krevanko responds that the increase in fees is due to legal w o r k r e l a t e d to the request for fees a s w e l l a s t h e i n c l u s i o n o f f e e s r e l a t e d t o d e p o s i t i o n s i n t h e fee p e t i t i o n . K r e v a n k o a r g u e s t h a t i t w a s n o t possible to include subsequent legal fees i n the original estimate, namely those expended o n t h e a t t o r n e y fee r e p l y b r i e f a n d K r e v a n k o ' s r e s p o n s e t o P l a i n t i f f s ' o b j e c t i o n s t o t h e c o u r t ' s F i n d i n g s a n d R e c o m m e n d a t i o n . F u r t h e r m o r e , Kt'evanko a d m i t s t h a t h e d i d n o t i n c l u d e d e p o s i t i o n - r e l a t e d f e e s i n t h e o r i g i n a l e s t i m a t e b e c a u s e t h e d e p o s i t i o n s w e r e f o r m a l l y n o t i c e d b y TSI. H o w e v e r , K r e v a n k o e x p l a i n s t h a t i n t h e c u r r e n t f e e r e q u e s t h e c h o s e t o i n c l u d e h a l f o f t h e fees for d e p o s i t i o n s a s s o c i a t e d w i t h t h e t r a d e s e c r e t c l a i m s , r e a s o n i n g t h a t t h e c o n t i s h o u l d a w a r d Kt'evanko t h e fees h e i s e n t i t l e d t o n o w , r a t h e r t h a n l a t e r . H e a l s o c l a i m s all o f t h e f e e s a n d e x p e n s e s a s s o c i a t e d w i t h h i s o w n deposition. A f t e r a c c o u n t i n g for t h e i n c r e a s e i n f e e s a n d e x p e n s e s a s s o c i a t e d w i t h s u b s e q u e n t b r i e f i n g a n d t a k i n g d e p o s i t i o n s , Kt'evanko a r g u e s t h a t the i n c r e a s e f r o m t h e o r i g i n a l r e q u e s t i s o n l y $ 1 4 , 4 2 4 and therefore reasonable. Plaintiffs do n o t specifically o b j e c t to the inclusion o f d e p o s i t i o n r e l a t e d fees i n t h e fee request, e x c e p t to t h e e x t e n t t h a t t h e y a r e n o t properly associated w i t h the m i s a p p r o p r i a t i o n c l a i m a g a i n s t Krevanko. Plaintiffs cite 4 4 L i q u o r m a r t v. R h o d e Island, 940 F. Supp. 437 (D.R.I. 1996) to underscore the impOliance o f compliance w i t h R u l e 54. I n t h a t case, the c o u r t h e l d t h a t the p l a i n t i f f s ' failure to t i m e l y file a m o t i o n for attorney fees d i d n o t qualifY a s " e x c u s a b l e n e g l e c t " under R u l e 6 sufficient to create a n e x c e p t i o n to R u l e 54. Id. a t 439. The c o u t i noted that this w a s fundamentally an e q u i t a b l e determination b a s e d o n the s p e c i f i c facts and circumstances o f the case. Id. at 440. I n order to effectuate the policies Congress advanced i n enacting R u l e 54, i.e., timely consideration o f f e e s f o l l o w i n g t r i a l a n d a l l o w i n g t h e " ' a d v e r s e p a t t y . . . t o a s s e s s h i s p o s i t i o n . . . a n d b e g u i d e d as

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to his future action, " , the court strictly enforced the time limits set forth in Rule 54. I d at 443 (quoting Sol Salins, Inc. v. W . M Ercanbrack, ISS F.R.D. 4 (D.C. 1994)). Thus, Plaintiffs argue, i n failing to include a reasonable estimate o f the fees sought i n the original motion, Krevanko prejudiced Plaintiffs by preventing them from developing a litigation strategy in light o f the ful1 amount o f fees ultimately sought. The court agrees that the increase from the original amount is substantial. The major share o f t h i s increase, however, is a result o f the inclusion o f fees and costs associated with depositions. Plaintiffs did not object to the inclusion o f deposition fees and costs, except to the extent that it contributed to the increased amount. From the court's perspective, the inclusion o f fees related to depositions, while tardy, is a reasonable one and Plaintiffs do not contend that deposition related fees and costs are not recoverable. Furthermore, the court's own analysis o f the deposition-related fees and costs results i n an award substantial1y less than that requested by Krevanko and, thus, t h e increase from the original amount is not sufficient to actual1y have prejudiced Plaintiffs in their litigation strategy relative to this motion. B. R e a s o n a b l e n e s s o f the A m o u n t o f T i m e Plaintiffs contend that Krevanko' s fee request reflects an unreasonable amount o f time dedicated to defending against their claim. To illustrate this point, Plaintiffs contrast Kt'evanko's requested award with the amount awarded in Contract Materials Processing v. Kataleuna G m b H
Catalysts, 222 F. Supp. 2 d 733 (D. Md. 2002). Plaintiffs argue that Contract Materials represents

a case significantly more complex than the single claim lodged against Krevanko and one that lasted for a substantial1y longer time. They point out that, despite the increased time and complexity, the award i n that case was m u c h lower than the amount requested here. Kt'evanko responds that FINDINGS A N D R E C O M M E N D A T I O N {KPR}

8

Plaintiffs' characterization is misleading and that the p r e s e n t m a t t e r was also very complex, mostly d u e t o P l a i n t i f f s ' o w n a c t i o n s w h i c h m a d e the m a t t e r d i f f i c u l t t o d e f e n d a n d d e l a y e d i t s r e s o l u t i o n . I n C o n t r a c t M a t e r i a l s , t h e d e f e n d a n t s w e r e a w a r d e d a t t o r n e y fees f o r a t r a d e s e c r e t m i s a p p r o p r i a t i o n c l a i m b r o u g h t i n b a d faith. In d i s m i s s i n g t h e t r a d e s e c r e t c l a i m a t s u m m a t y j u d g m e n t , t h e c o u r t o b s e r v e d t h a t the p l a i n t i f f f a i l e d t o p r o d u c e a n y e v i d e n c e a t a l l t h a t t h e information w a s actually a trade secret, the p l a i n t i f f made no effort to keep the information a secret, and the infOlmation w a s legally transfelTed to t h e defendants; thus, no misappropriation c o u l d h a v e occulTed. 2 2 2 F. Supp. 2d a t 736-37. T h e court wrote: " C M P ' s effort to avoid summary j u d g m e n t as t o its misappropriation claims w a s a singular failure, and m y S e p t e m b e r 18, 2001, opinion e x p l i c a t i n g t h e u t t e r lack o f substantive legal m e r i t i n C M P ' s m i s a p p r o p r i a t i o n o f t r a d e s e c r e t s claims w i l l s p e a k for itself." Id. at 746. A s Plaintiffs p o i n t out, t h e p a t i i e s i n C o n t r a c t M a t e r i a l s e n g a g e d i n " m o n t h s o f e x t e n d e d a n d c o n t e n t i o u s d i s c o v e r y [ , ] " i n v o l v i n g several m o t i o n s to c o m p e l and three p r o t e c t i v e orders. Id. at 748. T h e court ultimately awarded t h e defendants $134,945 in f e e s , r e p r e s e n t i n g 5 3 0 . 8 h o u r s o f legal work. P l a i n t i f f s p o i n t o u t t h a t , i n C o n t r a c t M a t e r i a l s , t h e d i s c o v e l y p r o c e s s w a s l o n g and c o n t e s t e d ; t h e c o u r t a d j u d i c a t e d t h e c l a i m o n s u n u n a t y j u d g m e n t , r a t h e r t h a n a m o t i o n to dismiss; three separate contracts were involved in the litigation; and there were issues involving service o f process to p a t i i e s in Germany. Krevanko responds that the present matter w a s also velY complicated, involving a r e q u e s t for e x p e d i t e d d i s c o v e r y ; t h r e e a m e n d e d c o m p l a i n t s ; a r e q u e s t for a p r e l i m i n a t y i n j u n c t i o n ; s i x d i f f e r e n t r e s p o n s e s to a single i n t e n o g a t o r y ; p r o d u c t i o n o f u n s o u r c e d d o c u m e n t s ; r e p e t i t i o n o f a f a l s e c l a i m t h a t a c o n f i d e n t i a l i t y a g r e e m e n t e x i s t e d ; a n d p r o d u c t i o n o f a fabricated d o c u m e n t at d e p o s i t i o n . T h i s , K r e v a n k o c o n t e n d s , d e m o n s t r a t e s t h a t the c l a i m w a s e x t e n s i v e l y l i t i g a t e d a n d t h a t

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Plaintiffs themselves were responsible for the amount o f fees generated o f fees requested b y Krevanko.

and, accordingly, t h e a m o u n t

lish t h a t K r e v a n k o ' s The COUlt agrees that the result in Contract Materials does n o t estab e similarity, they are not so attorney fee request is umeasonable. Although the two cases bear som similar that this COUlt c a n reasonably compare them i n the manner Pla i n t i f f s suggest. P l a i n t i f f s d o j e c t i v e l y u m e a s o n a b l e . The

not assert any other grounds upon which K r e v a n k o ' s fee estimate is ob

able. To the extent that the court is n o t persuaded that the amount, as a whole, is per se umeason i n d i v i d u a l c h a r g e s are o b j e c t i v e l y r e a s o n a b l e a n d s u f f i c i e n t l y d o c u m e n ted, that amount o f fees will t d u t y to r e v i e w

independen be allowed, the exact amount dependant o n the exercise o f the c o u r t ' s the fee petition for reasonableness. C. R e a s o n a b l e n e s s o f C l a i m e d Fees
4

ee r e q u e s t . P l a i n t i f f s Plaintiffs assert several threshold arguments to challenge K.1·evanko' s f argue that K.1·evanko has failed to submit sufficient documentation o f h costs and, thus, the court may reduce the fee award consistent with the p is claimed attorney fees and

r i n c i p l e s set f o r t h i n H e n s l e y

ed that a cOUit should reduce v. Eckerhart, 461 U.S. 424 (1983). In Hensley, the Supreme COUIt stat dequate . . . . " Id. a t 433. a fee award accordingly "[w]here the documentation o f hours is ina h i c h hours w e r e originally Specifically, Plaintiffs assert that Krevanko has failed to identify w l w o r k for umelated claims; claimed and which hours are p a t t o f the new request; has included lega as spent and allow the cOUit and has submitted insufficient information to identify how the time w adequate review. Each argument is addressed below. er analysis and court has divided the claimed fees and costs into subcategories for easi n one category, b u t will be computation. Celtain entries may qualify for inclusion i n more tha purposes. included only in the category the court deems most appropriate for its
4 The

FINDINGS A N D R E C O M M E N D A T I O N

10

{KPR}

1.

Fees not included in original request

P l a i n t i f f s a r g u e t h a t K r e v a n k o f a i l s t o i d e n t i f y w h i c h fees a n d c o s t s w e r e i n t h e o r i g i n a l request and those that are included for the first time i n this request. Krevanko responds that this information is contained i n t h e declaration o f R. Scott J o h n s o n ' ("Johnson Declaration") w h i c h s p e c i f i e s h o w m a n y h o u r s were s p e n t o n discovery ( n o t i n c l u d i n g depositions), depositions, a n d t h e m o t i o n f o r a t t o r n e y f e e s a n d c o s t s . A l t h o u g h t h e d e c l a r a t i o n d o e s n o t e x p l i c i t l y i d e n t i f y t h o s e fees a c c r u e d b e f o r e a n d a f t e r t h e m o t i o n w a s f i l e d , i t d o e s i n d i c a t e i n g e n e r a l t e r m s w h i c h fees w e r e associated w i t h the motion i t s e l f and w h i c h accrued p r i o r to its filing, Furthermore, the briefing explains the source o f t h e increase in fees requested, namely, the inclusion o f f e e s and costs arising f r o m d e p o s i t i o n s a n d t h e fees a n d c o s t s a c c r u e d t o l i t i g a t e t h e m o t i o n f o r a t t o m e y f e e s s u b s e q u e n t t o its filing. K1'evanko has explained this aspect o f his fee request and the fees are recoverable. Plaintiffs provide no authority to SUppOlt denial o f these fees. Regarding t h e sufficiency o f

K1'evanko's documentation generally, the court addresses that issue in detail, below.

2,

Fees associated with other litigation

Plaintiffs also argue that K1'evanko m a y not claim fees associated with litigation between Krevanko and Allstate Insurance or between Plaintiffs and Teclmical Services, Inc, ("TSI"). Th e court addresses Plaintiffs' two objections, in turn,
!h..

A l l s t a t e Insurance

K1'evanko claims entitlement to fees associated w i t h litigation with Allstate after Allstate sought to avoid providing coverage to defend K1'evanko against Plaintiffs' claim. K1'evanko argues

, T h e f o l l o w i n g p a g e s o f E x h i b i t A to t h e J o h n s t o n D e c l a r a t i o n are b l a n k , i . e . , e n t i r e l y r e d a c t e d , a n d c o n t a i n n o e n t r i e s f o r fees o r c o s t s : 2 , 5 , 7 , 1 3 - 1 5 , 1 8 , 2 0 - 2 3 , 2 5 - 2 6 , 3 2 , 3 5 , 4 4 , 4 8 , 52,58,64,69,77,81,85-90,92,97-100, FINDINGS A N D R E C O M M E N D A n O N 11
{KPR}

v e d in litigation w i t h A that, b u t for Plaintiffs' meritless claim, h e w o u l d n o t h a v e been i n v o l

llstate

f h o u r s c l a i m e d are p r o p e r l y a n d i n c u n e d the a s s o c i a t e d f e e s and, t h e r e f o r e , t h e t w o - a n d - a - h a l
7 6 e c o u r t agrees t h a t P l a i n t i f f s ' included i n h i s fee request. T h e s e charges total $700. Although th

a t e , i t i s n o t c l e a r t o the c o u r t claim against Krevanko is the but-for cause o f his dispute w i t h Allst w i t h a n insurance company t h a t P l a i n t i f f s s h o u l d b e r e s p o n s i b l e for f e e s a r i s i n g f r o m l i t i g a t i o n to this effect. W i t h o u t a b a s i s s e e k i n g t o a v o i d a d e f e n s e o b l i g a t i o n , Kt'evanko p r o v i d e s n o a u t h o r i t y o s o a n d Kt'evanko s h o u l d n o t u p o n w h i c h t o i m p u t e s u c h fees o n t o P l a i n t i f f s , t h e c o u r t d e c l i n e s t o d be awarded said fees.

g a i n s t TSI. K t ' e v a n k o P l a i n t i f f s o b j e c t t o a t t o r n e y fees a n d c o s t s a s s o c i a t e d w i t h i t s c l a i m s a secrets a n d t h a t they e n g a g e d argues t h a t b o t h h e a n d T S I were a c c u s e d o f m i s a p p r o p r i a t i n g t r a d e substance a n d o n K t ' e v a n k o ' s i n a j o i n t defense o f these claims, w h i c h w e r e r e l a t e d b a s e d b o t h o n P l a i n t i f f s did n o t s p e c i f i c a l l y e m p l o y m e n t r e l a t i o n s h i p w i t h TSI. F m i h e r m o r e , K t ' e v a n k o a r g u e s , Krevanko. identifY w h i c h fee entries are attributable only to T S I and not also to o r k o n b e h a l f o f both S e v e r a l e n t r i e s o n t h e s u b m i t t e d i n v o i c e s are a t t r i b u t a b l e to l e g a l w

e n t i f i e d i n footnotes, S p e c i f i c entries f r o m E x h i b i t A to t h e J o h n s t o n D e c l a r a t i o n w i l l b e i d n t t y o r w h e r e all e n t r i e s o n a i n t h e f o l l o w i n g format. W h e r e a p a g e c o n t a i n s a s i n g l e u n r e d a c t e d e . F o r example, o n page 50 all page b e l o n g i n t h e same categOly, only t h e page n u m b e r will be cited d, therefore, page 50 is cited three entries represent fees t h a t should b e recoverable only by T S I an , t h e s p e c i f i c entries w i l l be w i t h o u t further specificity. W h e r e a p a g e c o n t a i n s m u l t i p l e e n t r i e s relative t o t h e i r o,'der o n the i d e n t i f i e d as f o l l o w s : o n e a c h p a g e , e n t r i e s w i l l b e g i v e n a n u m b e r , a n d s o on, T h i s i n f o r m a t i o n page, i.e., t h e first o r top entty will be one, the second entry will b e two p l e , o n p a g e 27, t h e r e a r e t e n w i l l b e c o n t a i n e d i n a footnote to t h e c i t e d p a g e n u m b e r . F o r e x a m s, the specific c i t a t i o n w o u l d entries, T h o s e associated only with T S I are entries 1-4 and 10. Thu read: 27: 1-4, 10.
6

78; 12.
FINDINGS AND R E C O M M E N D A T I O N 12

{KPR}

Krevanko and TSI. I t is impossible to determine what portion o f many billing entries was spent o n work that benefitted Krevanko, or whether the work benefitted both paliies. E v e n so, the court has, to the extent possible, divided the entries into those that apply only to TSI and those that apply t o both Kt'evanko and TSI, i n whole or in patio Those fees associated w i t h entries that apply only to TSI should n o t be awarded to Krevanko. These fees total $15,534. 8 O f those fees associated w i t h both TSI and Kt'evanko, Kt-evanko should be awarded h a l f o f their total amount. Those fees total $ 3 1 , 3 8 6 . 5 09 a n d , t h u s , K r e v a n k o s h o u l d b e a w a r d e d $ 1 5 , 6 9 3 . 2 5 .

3.

Sufjiciency o fDocumentation

P l a i n t i f f s a l s o a d d r e s s o t h e r a l l e g e d d e f i c i e n c i e s i n K t ' e v a n k o ' s fee p e t i t i o n . T h e y c i t e t h r e e e x a m p l e s they c l a i m a r e i n s u f f i c i e n t t o a l l o w t h e c o u r t a d e q u a t e r e v i e w , a n d o n e e x a m p l e w h e r e hours are claimed without an accompanying hourly rate. Specifically, Plaintiffs cite pages 29, 30, and 36 o f Exhibit A as lacking sufficient description and argue that the cOUli should reject K r e v a n k o ' s c u r r e n t s u b m i s s i o n a n d o r d e r h i m to s u b m i t a d d i t i o n a l i n f o r m a t i o n . K r e v a n k o r e s p o n d s that, even i f the cOUli accepts Plaintiffs' argument, this applies to only three entries and will not significantly reduce the fee award. The cOUli does n o t find that Kt'evanko' s documentation is generally insufficient. Taking into consideration both Plaintiffs' specific objections to Kt'evanko' s documentation as well as the cOUli' s o w n independent duty to review the documentation, the court addresses the reasonableness and sufficiency o f the claimed fees in detail, below.

827: 1-4, 10; 28: 3 - 7 , 1 3 ; 29: 3 , 1 1 ; 33: 3; 37: 3-4; 50; 53: 2; 79: 2; 80. 96; 9; 10; 16; 27: 5-9; 28: 8-9; 29: 1 , 5 ; 30: 1-6; 31: 2; 34: 4-7; 36; 37: 1 - 2 , 5 - 8 ; 38: 1 , 3 - 4 ; 39: 1 , 2 , 5 - 6 ; 40: 1 , 3 ; 41; 42; 45; 46: I; 47; 49:1; 51: 3-6; 53: 1; 54; 55: 1 , 3 - 5 ; 56: 2-4; 57: 1-2; 59: 1-4; 60: I; 62: 2-3; 63: 1; 66; 68; 78: 2,4. F I N D I N G S AND R E C O M M E N D A T I O N 13 {KPR}

a.

Fees Explicitly Associated with Kl'evanko Only

A f t e r r e v i e w i n g t h e a t t a c h e d e x h i b i t s d o c u m e n t i n g a n d d e s c r i b i n g t h e s e r v i c e s for w h i c h fees a n d c o s t s a r e c l a i m e d , the c o u r t i d e n t i f i e d t h e e n t r i e s f r o m E x h i b i t A t o t h e J o h n s o n D e c l a r a t i o n t h a t a r e e x p l i c i t l y a s s o c i a t e d w i t h t h e c l a i m a g a i n s t K r e v a n k o o n l y , n o t i n c l u d i n g t h o s e fees a n d c o s t s associated w i t h h i s deposition. These fees total $ 3 3 , 3 8 4 . 5 0 10 a n d s h o u l d be a w a r d e d i n full to KJ·evanko. E x h i b i t C to t h e J o h n s o n D e c l a r a t i o n is a n i n v o i c e f r o m B a n a n L i e b m a n LLP, u p o n w h i c h KJ'evanko claims $2785.00 i n fees i n c u n e d by K a r e n L. O ' C o n n o r . I n their opposition brief, P l a i n t i f f s o b j e c t t h e s e fees b e c a u s e t h e i n v o i c e d o e s n o t i n c l u d e a n h o u r l y rate a n d o n l y i d e n t i f i e s t h e t a s k p e r f o r m e d a n d t h e n u m b e r o f h o u r s s p e n t o n t h a t task. H o w e v e r , i t i s c l e a r f r o m the J o h n s o n D e c l a r a t i o n t h a t t h o s e f e e s w e r e i n c u r r e d b y Ms. O ' C o n n o r a t a r a t e o f a p p r o x i m a t e l y $ 2 7 5 . 0 0 p e r h o u r . P l a i n t i f f s g i v e n o o t h e r g r o u n d u p o n w h i c h t o d e n y t h e c l a i m e d fees a n d , t h u s , t h e c o u r t s h o u l d award the fees s e t forth i n E x h i b i t C, t o t a l i n g $2785.00, to KJ·evanko. E x h i b i t D comprises invoices for c o s t s a n d fees attributable to KJ'evanko' s representation b y D u n n C a r n e y A l l e n H i g g i n s & T o n g u e , p r i o r t o t h a t f i r m ' s w i t h d r a w a l from the case. P l a i n t i f f s d o n o t dispute these fees o n a specific o r a general basis. These fees are solely attributable to KJ'evanko a n d t h e c o u r t s h o u l d a w a r d s a i d fees, t o t a l i n g $ 4 6 , 0 0 6 . 7 0 .

b.

Fees Associated with Depositions

KJ'evanko seeks fees for t h o s e depositions t h a t were at l e a s t i n p a t t associated w i t h the m i s a p p r o p r i a t i o n o f t r a d e s e c r e t s c l a i m . K r e v a n k o s e e k s h a l f o f t h e f e e s t h o s e d e p o s i t i o n s a n d all

1; 3; 4; 11; 17; 19; 24; 28: 1-2, 10-12; 29: 2, 4, 6-10, 12; 30: 7; 31: 1; 33: 1-2; 34: 1-3; 38: 2; 39: 3-4; 43; 46: 2-7; 65; 78: 1 , 3 ; 79: 1 , 3 - 6 , 8 ; 82: 1 , 3 ; 83: 2-3; 84; 91; 93-95; 96: 1.
10

FINDINGS A N D R E C O M M E N D A T I O N

14

{KPR}

of the fees associated w i t h his o w n deposition. H e reasons that m o s t o f the depositions would have t a k e n place e v e n i f t h e t r a d e secret c l a i m had n o t b e e n alleged against him, b u t t h a t t h e y w o u l d have b e e n sh01ler. Krevanko acknowledges that s o m e o f the fees sought were beneficial to b o t h defendants, but argues t h a t i f h e does not recover the fees now, TSI will s e e k them in the future. Plaintiffs do n o t specifically object to the request for deposition-related fees and costs, but generally object to fees that are associated w i t h other litigation, i.e., those related t o Plaintiffs' claims against TSI. A c c o r d i n g t o t h e J o h n s o n D e c l a r a t i o n , E x h i b i t A , f e e s i n c u n e d for K r e v a n k o ' s o w n d e p o s i t i o n a m o u n t t o $ 5 , 2 0 0 . " T h e c o u r t s h o u l d a w a r d t h e s e fees t o K r e v a n k o i n t h e i r e n t i r e t y . Costs and fees associated w i t h o t h e r depositions 12 related to this matter, t o the extent the COUll deems them reasonable, total $77,634. Kt'evanko is not entitled to the full m e a s u r e o f fees and costs for depositions and, i n fact, seeks only h a l f o f said fees. T h e court believes this estimate allocates too m u c h o f t h e d e p o s i t i o n - r e l a t e d fees t o K r e v a n k o . B e a r i n g i n m i n d t h a t t h e d e p o s i t i o n e x p e n s e s c i t e d by Krevanko were beneficial to b o t h defendants and m a y have addressed both trademark and patent claims, t h e COUll concludes that Krevanko should recover one-quarter o fthe total claimed deposition f e e s a n d c o s t s for a t o t a l o f $ 1 9 , 4 0 8 . 5 0 .

c.

Fees Associated with Forensic Insepection

Kt'evanko a l s o s e e k s f e e s a s s o c i a t e d w i t h t h e f o r e n s i c i n s p e c t i o n t h a t w a s r e q u i r e d a f t e r Plaintiffs produced a seemingly fabricated document a t deposition. Entries relating to these fees are

" 6 1 : 6, 7. 51: 1-2; 59: 5; 60: 2, 4-6; 61: I , 3-4, 8-10; 62: 1,4; 63: 2; 70: 1 - 2 , 4 , 6, 8; 71: 1 , 3 - 5 , 8, 10, 1 2 , 1 5 ; 72: 1 - 6 , 8 - 1 2 , 14; 73; 74: 1- 2 (less $100 for overweight baggage), 3-7, 16; 76: 2, 96: 4. FINDINGS AND R E C O M M E N D A T I O N 15 {KPR}
12

found i n the J o h n s o n Declaration, E x h i b i t A a n d total $3,212. 13 T h e c o u r t s h o u l d award these costs a n d f e e s i n total.

d.

Bill o f Costs

E x h i b i t B t o t h e J o h n s o n D e c l a r a t i o n c o m p r i s e s a s e r i e s o f i n v o i c e s f r o m P r o Copy, a c o p y i n g service i n Des Moines, Iowa. Plaintiffs do n o t specifically object to the costs c l a i m e d i n this exhibit. T h e m a j o r i t y o f t h e c l a i m e d c o s t s a r e also c l a i m e d i n D e f e n d a n t s ' B i l l o f C o s t s ( # 1 7 4 ) . T h e c o u r t w i l l a w a r d t h e s e c o s t s o n l y o n c e and, t h e r e f o r e , t h i s d i s p o s i t i o n r e p r e s e n t s t h e final a w a r d f o r b o t h K r e v a n k o ' s a t t o r n e y f e e p e t i t i o n a n d D e f e n d a n t s ' B i l l o f Costs. T h e c o u r t , u p o n r e v i e w i n g t h e i n d i v i d u a l e n t r i e s , finds n o r e a s o n t o q u e s t i o n t h e i r validity. A c c o r d i n g l y , t h e c o u r t s h o u l d g r a n t t h e s e c o s t s i n full f o r a t o t a l o f $ 3 , 7 4 2 . 2 0 .

e.

Entries Specifically Excluded

T h e court has e x c l u d e d specific entries from t h e a w a r d t h a t c o n t a i n insufficient description o r are umeasonable. First, certain entries c o n t a i n insufficient description to justifY m u l t i p l e attorneys billing for a single task. I n these instances, t h e billed t i m e is r e d u n d a n t a n d the c o u r t declines to g r a n t attorney fees for e a c h attorney. 14 Instead t h e court grants fees associated w i t h e a c h task to o n l y o n e attorney. S e c o n d , t h e c o u r t s t r i k e s t w o s p e c i f i c f e e e n t r i e s c o n t a i n i n g i n s u f f i c i e n t d e s c r i p t i o n to either justifY their length and p u r p o s e l 5 o r to identifY h o w much time w a s s p e n t o n m u l t i p l e

13

67; 71: 7, 14; 75; 76:1.

14 E x c l u d e d fee e n t r i e s found a t 40: 2; 55: 2; 57: 3; 60: 3, 7; 79: 7; 82: 2; 83: 1; 96: 2 ( r e d u c e d by one-half), 3.

15

49: 2. 16 {KPR}

FINDINGS A N D R E C O M M E N D A T I O N

tasks. 16 Third, the court will not award attorney fees for the t i m e o f two lawyers traveling to Portland, Oregon for the same depositions.1 7 The billing statement does n o t explain why the p r e s e n c e o f t w o a t t o r n e y s w a s r e q u i r e d , o r w h a t s p e c i f i c r o l e e a c h a t t o r n e y played, a n d i n d i c a t e s t h a t o n l y o n e o f t h e t w o a t t o r n e y s actually c o n d u c t e d t h e q u e s t i o n i n g d u r i n g t h e s e depositions. The c o u r t declines to grant attorney fees for the additional travel and deposition expenses where it is unclear whether t h e expenditure o f t i m e a n d m o n e y was justified.

f

Total A w a r d

The total costs and fees K1'evanko should be awarded are $129,432.15.
Conclusion

F o r the reasons above stated, the court should award $129,432.15 i n attorney fees and costs to K1'evanko in satisfaction K1'evanko's application for attorney fees (#258) and Defendants' Bill o f Costs (# 174).

II II II
S c h e d u l i n g Order

The Findings and Recommendation will be referred to a district judge. Objections, i f any, are due March 2, 2010. l f n o objections are filed, then the Findings and Recommendation will go under advisement on that date. I f objections are filed, then a response is due within 14 days after being served with a copy

16

56: 1. 70: 3 , 5 , 9 ; 71: 2, 6, 9, I I , 13, 16; 72: 7 , 1 3 ; 74: 8 , 9 (reduced by one-half), 10-15, 17-19. 17 {KPR}

17

F I N D I N G S AND R E C O M M E N D A T I O N

of the objections. W h e n the response is due o r filed, whichever date is earlier, the Findings and Recommendation will go under advisement. DATED this $ h day o f February, 2010

JOHN V. ACOSTA UnitelGitates Magistrate Judge

\ ~"'"

FINDINGS AND RECOMMENDATION

18

{KPR}