LABMD, INC. v. TIVERSA HOLDING CORP. et al
Filing
541
MEMORANDUM ORDER granting 531 Motion for Attorney Fees and granting 534 Motion for Attorney Fees. LabMD is ordered to pay to Tiversa the amount of $4,927.50 on or before June 13, 2021, and to pay to Boback the amount of $2,115.00 on or before June 13, 2021. Such payments are to be delivered to counsel for Tiversa and Boback. Signed by Magistrate Judge Maureen P. Kelly on 5/13/21. (akr)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
LABMD, INC.,
Plaintiff,
vs.
TIVERSA HOLDING CORP. formerly
known as TIVERSA, INC.; ROBERT J.
BOBACK; M. ERIC JOHNSON; DOES
1-10,
Defendants.
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Civil Action No. 15-92
Magistrate Judge Maureen P. Kelly
Re: ECF Nos. 531 and 534
MEMORANDUM ORDER
Presently before the Court is the Motion for Attorneys’ Fees filed by Defendant Tiversa
Holding Corp. (“Tiversa”). ECF No. 531. In the Motion for Attorneys’ Fees, Tiversa seeks the
award of $4,927.50 in attorneys’ fees from LabMD, Inc. (“LabMD”) based on the Memorandum
Opinion and Order of this Court, ECF Nos. 529 and 530, relative to Tiversa’s Motion for Order
to Show Cause for LabMD, Inc.’s Failure to Obey Court Orders, ECF No. 496. Defendant
Robert J. Boback (“Boback”) has also filed a Motion for Attorneys’ Fees, ECF No. 534. LabMD
filed a Response in Opposition. ECF No. 539. Tiversa filed a Reply. ECF No. 540. The
Motions for Attorneys’ Fees are now ripe for consideration.
I.
RELEVANT PROCEDURAL HISTORY
In order to consider the pending Motions for Attorneys’ Fees, it is necessary to only
briefly review the relevant procedural history of this case.
In the Motion for Sanctions, filed by Tiversa and joined by Boback, ECF Nos. 393 and
402, Tiversa argued that LabMD and its counsel had willfully violated the express ruling of this
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Court in the Deposition Protective Order limiting the scope of deposition questions in certain
remaining depositions in this case.
After a status conference on April 23, 2019, this Court was required to deal with
numerous discovery motions, discovery issues and the Motion for Sanctions. ECF Nos. 329,
331, 332, 336, 337, 339, 341, 347, 349, 350, 351, 352, 353, 356, 361, 363, 364, 366, 371, 372,
374, 375, 377, 379, 381, 382, 388, 391, 393 and 402. Almost all of the discovery motions and
issues in the final two-and-one-half months of discovery resulted from the conduct of LabMD
and its counsel.
On August 16, 2019, this Court issued a thirty-seven page Memorandum Opinion
granting the Motion for Sanctions. ECF No. 413. This Court imposed sanctions tailored to
address this misconduct of LabMD and its counsel and the resulting harm. Id. at 35. This Court
imposed the following sanctions:
First, Tiversa and Boback are awarded the reasonable attorneys’ fees and costs
incurred related to the Motion for Sanctions and all filings related thereto.
Tiversa and Boback shall file a petition which documents the attorneys’ fees and
costs incurred by September 6, 2019. LabMD shall file a response, limited to the
issue of reasonableness only, by September 27, 2019.
Second, Attorney James Hawkins is ordered to pay for all of the court reporter
fees and transcript costs incurred by Tiversa and Boback relative to the
depositions of: Robert Boback, Keith Tagliaferri, Richard Wallace, Jeromy Dean,
Sean Ways and Jason Shuck.
Third, LabMD is precluded from using any of the testimony elicited during the
depositions of Robert Boback, Keith Tagliaferri, Richard Wallace, Jeromy Dean,
Sean Ways and Jason Shuck, including in responding to any motion for summary
judgment and for any purpose whatsoever in the trial of this case, should
LabMD’s remaining claim survive the scheduled motion for summary judgment.
Fourth, LabMD is expressly barred from using the deposition testimony of Robert
Boback, Keith Tagliaferri, Richard Wallace, Jeromy Dean, Sean Ways and Jason
Shuck in any other litigation in any other forum, based on LabMD’s “fishing
expedition” and LabMD’s obvious attempt to use the 6 depositions of these 6
former Tiversa employees to elicit testimony for use in other cases or other
forums.
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Fifth, given the gravity of the misconduct and discovery litigation tactics of
LabMD and its counsel in disregarding orders of this Court and violating the
applicable rules, this Court could have imposed a case dispositive sanction under
Rule 37 and considering the six factors set forth in Poulis v. State Farm Fire &
Cas. Co., 747 F.2d 863, 868 (3d Cir. 1984). However, this Court exercises its
discretion and does not do so. Nonetheless, the Court puts LabMD and Attorney
Hawkins on final notice that any further litigation misconduct or disregard of
orders of this Court will result in the dismissal of this case and the termination of
the pro hac vice admission of Attorney Hawkins.
Id. at 35-36.
Based on the sanctions ruling, Tiversa and Boback filed Petitions for Attorneys’ Fees and
Costs. ECF Nos. 426 and 427. On March 11, 2020, the Court granted in part and denied in part
Tiversa’s Petition for Attorneys’ Fees and Costs and granted Boback’s Petition for Fees and
Costs. ECF No. 462. As a result, the Court ordered LabMD to pay to Tiversa the amount of
$10,892.50 and to Boback the amount of $1,163.50, both by April 3, 2020. Id. at 8. 1
Tiversa also filed a Motion to Preclude and/or Strike and for Sanctions asserting that
LabMD violated the orders of this Court imposing sanctions on LabMD and its counsel for
discovery misconduct and repeated defiance of Court orders. ECF No. 444. On March 24, 2020,
the Court issued an Opinion and Order granting the Motion to Preclude and/or Strike and for
Sanctions. ECF No. 463. Tiversa and Boback were awarded reasonable attorneys’ fees and
costs incurred relative to the motion, and they were directed to file petitions documenting such
attorneys’ fees and costs. Id. at 23. Thereafter, on April 15, 2020, Tiversa filed a Petition for
Fees and Costs. ECF No. 488. On the same date, the Court ordered LabMD to file a response to
the Petition by April 29, 2020. ECF No. 489. LabMD failed to file a response in opposition. As
such, on May 5, 2020, the Court granted Tiversa’s Petition for Fees and Costs and ordered
LabMD’s prior counsel, Attorney James Hawkins was also ordered to pay the sum of $4,737.75 to the law firm of
McGuire Woods LLP on or before April 3, 2020. Id. at 8.
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LabMD to pay $7,210.00 in attorneys’ fees and $12.60 in costs to Tiversa by May 20, 2020.
ECF No. 493.
On May 20, 2020, LabMD filed a Notice on the docket stating that it was unable to
comply with the Court’s May 5, 2020 Order requiring the payment of Tiversa’s attorneys’ fees
and costs. ECF No. 495.
On May 26, 2020, Tiversa filed a Motion for Order to Show Cause for LabMD Inc.’s
Failure to Obey Court Orders. ECF No. 496. In the motion, Tiversa informed that Court that
LabMD had not paid the amount of $10,892.50, as directed by the Court in the Order entered at
ECF No. 462, and that LabMD had not paid the amount of $7,210.00 in attorneys’ fees and
$12.60 in costs, as directed by the Court in the Order at ECF No. 493. The Court ordered
LabMD to file a response to Tiversa’s Motion for Order to Show Cause. ECF No. 498. LabMD
was granted an extension of time to respond. ECF No. 505. On June 17, 2020, LabMD filed a
response stating that it was unable to pay the monetary sanctions. ECF No. 506.
On October 29, 2020, the Court held a hearing on Tiversa’s Motion for Order to Show
Cause. ECF No. 525. At the outset of the hearing, counsel for LabMD informed the Court, by
reading from an email from Michael Daugherty (“Daugherty”), President and sole shareholder of
LabMD, that Daugherty refused to attend the contempt hearing. 2 ECF No. 526 at 6:22-7:5, 7:1520. No other corporate representative of LabMD attended the hearing. LabMD did not seek a
continuance or stay of the contempt hearing. Id. at 27:13-16. On February 4, 2021, the Court
issued a Memorandum Opinion and Order finding LabMD in civil contempt for failure to abide
by the prior Orders relative to the imposition of monetary sanctions against LabMD. ECF Nos.
The Court notes that Daugherty had been a near constant presence at Court conferences during the litigation of this
case. Daugherty traveled from Georgia to attend in-person status conferences. ECF Nos. 246, 296 and 324.
Daugherty also attended many of the other status conferences by telephone. ECF Nos. 285, 293, 331, 366 and 391.
Nonetheless, he chose not to attend the contempt hearing either in person or by telephone. ECF No. 525.
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529, 530. In this ruling, the Court permitted Tiversa and Boback to file motions for attorneys’
fees and costs associated with the civil contempt motion and hearing. Id. Thereafter, Tiversa
and Boback filed the pending Motions for Attorneys’ Fees.
II.
TIVERSA’S MOTION FOR ATTORNEYS’ FEES
In its Motion for Attorneys’ Fees, Tiversa seeks to have the Court award attorneys’ fees
in connection with attorney time spent preparing the Motion for Order to Show Cause and to
prepare for and attend the hearing. ECF No. 531. Tiversa seeks to be awarded for legal services
performed by Attorney Jarrod Shaw, partner, for 4.5 hours of time at an hourly rate of $625.00,
for a total of $2,812.50. Tiversa also seeks to be awarded for legal services performed by
Attorney Natalie Zagari, associate, for 4.7 hours of time at an hourly rate of $450.00 for a total of
$2,115.00. As such, Tiversa seeks a total award of $4,927.50 in attorneys’ fees. Id. at 2.
III.
BOBACK’S MOTION FOR ATTORNEYS’ FEES
In his Motion for Attorneys’ Fees, Boback seeks to have the Court award attorneys’ fees
incurred related to the Motion for Order to Show Cause and related hearing. ECF No. 534.
Boback seeks to be awarded for legal services provided by Attorney Brandon J. Verdream,
senior attorney, for 8 hours of time at an hourly rate of $360.00, for a total of $2,880.00. Id. at 2.
IV.
LABMD’S RESPONSE IN OPPOSITION
In the Response in Opposition to Motion for Attorneys’ Fees, ECF No. 539, LabMD does
not contest the amounts of time spent by defense counsel nor the reasonableness of the hourly
rates for counsel for Tiversa and Boback. Instead, LabMD simply repeats its prior arguments
relative to the Court’s denial of the two previous motions to withdraw of Attorney Marc Davies.
The Court notes that Attorney Davies’ first motion to withdraw was denied because it
was deficient and not in compliance with Local Civil Rule 83.2.C. ECF No. 515. The second
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motion to withdraw was denied based on the failure to identify replacement counsel and
Attorney Davies was advised that he could file another motion after substitute counsel entered
his/her appearance. ECF No. 521. The docket reflects that Attorney Lawrence G. McMichael
entered his appearance for LabMD in this case on March 5, 2021. ECF No. 535. However,
LabMD’s Response in Opposition was filed by Attorney Davies on March 24, 2021. ECF No.
539. 3
Nonetheless, LabMD only responds to the instant Motions for Attorneys’ Fees by
complaining about the prior denial of the motions to withdraw. Id.
V.
LEGAL STANDARD
“The starting point in awarding attorney’s fees is the lodestar amount, which is
calculated by multiplying the number of hours reasonably expended on the litigation by a
reasonable hourly rate.” RHJ Med. Ctr., Inc. v. City of Dubois, No. 3:09-131, 2014 WL
3892100, at *3 (W.D. Pa. Aug. 8, 2014).
“The lodestar is strongly presumed to yield a
reasonable fee.” Washington v. Phila. Cty. Ct. of Common Pleas, 89 F.3d 1031, 1035 (3d Cir.
1996). “The party seeking attorney’s fees has the burden to prove that its request for attorney’s
fees is reasonable.” Rode v. Dellarciprete, 892 F.2d 1177, 1183 (3d Cir. 1990). To meet this
burden, the prevailing party must “submit evidence supporting the hours worked and rates
claimed.” Id. (quoting Hensley v. Eckerhart, 461 U.S. 424 (1983)) (internal quotations omitted).
However, it “need not go so far as to know the exact number of minutes spent nor the precise
activity to which each hour was devoted or the specific attainments of each attorney.” Brown v.
City of Pittsburgh, No. 06-393, 2010 WL 2207935, at *3 (W.D. Pa. May 27, 2010) (quoting
Evans v. Port Auth. of N.Y. & N.J., 273 F.3d 346, 362 (3d Cir. 2001)) (internal quotations and
citations omitted).
As of the date of this Memorandum Order, Attorney Davies is still counsel of record in this case and he did not file
a motion to withdraw his appearance after Attorney McMichael entered his appearance over two months ago.
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Thereafter, the burden is on the opposing party to challenge the requested hours and fees,
if it chooses to do so. See Loughner v. Univ. of Pittsburgh, 260 F.3d 173, 178 (3d Cir. 2001).
The party opposing the fee award must do so with sufficient specificity, and the Court cannot
decrease a fee award based on factors that are not raised. Id. (citing Rode, 892 F.2d at 1183).
“When considering whether rates charged are reasonable, courts within the Third Circuit
follow the ‘forum rate rule,’ which provides that a court shall rely upon prevailing hourly rates in
the district to determine whether charges are reasonable.” ThermoLife Int’l, LLC v. D.P.S.
Nutrition, Inc., No. 15-273, 2016 WL 6916777, at *4 (W.D. Pa. Feb. 5, 2016). In order to
determine the prevailing market rates, the Court must assess the “experience and skill of the
prevailing party’s attorneys and compare their rates to the rates prevailing in the community for
similar services by lawyers of reasonably comparable skill, experience, and reputation.” Id.
(citing Berkoben v. Aetna Life Ins. Co., No. 2:12-cv-1677, 2014 WL 3565959, at *18 (W.D. Pa.
July 18, 2014)). “[T]he attorney’s normal billing rate is an appropriate baseline for assessing the
reasonableness of the rate requested.” Id. (quoting Chaney v. HVL, LLC, No. 11-0833, 2012
WL 5990124, at *1 (W.D. Pa. Nov. 30, 2012)).
VI.
LEGAL ANALYSIS
LabMD does not dispute the reasonableness of the hours expended by counsel for Tiversa
and Boback relative to the Motion for Order Show Cause and related hearing. ECF No. 539. In
addition, LabMD does not dispute the reasonableness of the hourly rates of Attorneys Shaw and
Zagari for Tiversa and Attorney Verdream for Boback. Therefore, based on this Court’s review,
an award of the attorneys’ fees in the amounts sought by Tiversa and Boback is reasonable and
appropriate.
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VII.
CONCLUSION
For the reasons set forth herein, the Motions for Attorneys’ Fees, ECF Nos. 531 and 534,
will be granted. An appropriate order follows.
AND NOW, this 13th day of May, 2021, for the reasons set forth herein, it is HEREBY
ORDERED that Tiversa’s Motion for Attorneys’ Fees, ECF No. 531, is GRANTED. It is further
ordered that Boback’s Motion for Attorneys’ Fees, ECF No. 534, is GRANTED.
LabMD is ordered to pay to Tiversa the amount of $ 4,927.50 on or before June 13, 2021,
and to pay to Boback the amount of $ 2,115.00 on or before June 13, 2021. Such payments are
to be delivered to counsel for Tiversa and Boback.
Failure to comply with this Order may result in further sanction.
BY THE COURT:
__/s/ Maureen P. Kelly___________
MAUREEN P. KELLY
UNITED STATES MAGISTRATE JUDGE
cc: All counsel of record via CM/ECF.
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