Fatpipe Networks India v. Xroads Networks

Filing 449

MEMORANDUM DECISION AND ORDER granting 418 Motion for Attorney Fees and Costs: Fatpipe shall pay XRoads $62,148.65 for fees and expenses incurred in the motion for sanctions. Signed by Magistrate Judge David Nuffer on 3/6/12 (alt)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH, CENTRAL DIVISION
FATPIPE NETWORKS INDIA LIMITED,
n/k/a FATPIPE NETWORKS, LTD.,
an India corporation,
Plaintiff,

MEMORANDUM DECISION AND
ORDER GRANTING MOTION FOR
ATTORNEYS FEES AND COSTS
Case No. 2:09 cv 00186 TC DN

vs.

District Judge Tena Campbell

XROADS NETWORKS, INC., a Delaware
corporation,

Magistrate Judge David Nuffer

Defendant.
Defendant XRoads Networks, Inc. (XRoads) filed a Motion for Sanctions and Dismissal
for Evidence Tampering and Spoliation. 1 XRoads alleged Ms. Sanchaita Datta, as an expert for
FatPipe Networks, Ltd. (FatPipe), tampered with logs of XRoads Edge devices she tested and
gave perjured testimony about the testing. XRoads’ motion was granted in part, and FatPipe was
ordered to pay the expenses, including attorneys’ fees and costs, incurred by XRoads in
connection with bringing the motion. 2 XRoads has filed its motion for attorneys’ fees and costs, 3
and FatPipe responded. 4 This order and award of attorneys’ fees is entered under 28 U.S.C.
§636(b)(1)(A), and the court's inherent authority to award certain fees and costs.

1

Motion for Sanctions and Dismissal for Evidence Tampering and Spoliation, docket no. 301, filed April 8, 2011.

2

Memorandum Decision and Order Granting in Part Defendant’s Motion for Sanctions, docket no. 432, filed
January 23, 2012.

3
4

Motion (Request) for Attorneys’ Fees and Costs, docket no. 418, filed November 29, 2011.

FatPipe’s Response to XRoads’ Motion (Request) for Attorney’s Fees and Costs (FatPipe’s Response), docket no.
429, filed under seal December 16, 2011.

Discussion
Generally, this order awards XRoads its attorneys’ fees and costs relating to the motion.
The award includes expenses related to: (a) the two-day evidentiary hearing conducted on
November 14-15; (b) the papers on the motion for sanctions including the motion to strike; 5 and
(c) the expense of gathering evidence and presentation materials. 6 Contrary to Fatpipe’s
contentions, supporting billing records are not required; the exhibits supporting the fees have
adequate foundation; and proof that fees were billed to XRoads is not required. “It is perfectly
proper to award attorney's fees based solely on affidavits in the record.” 7 However, only
allowable expenses relating to the motion will be granted. Specific decisions on claimed fees and
expenses follow.
1. Jeffrey R. Olsen Fees
Jeffrey R. Olsen is a licensed Utah attorney with Thompson Ostler & Olsen, the firm retained
by XRoads in 2010 as counsel in this case. After the tampering became evident on October
7th Mr. Olsen assisted in legal research, and discussed, prepared and drafted papers related to
the tampering motion. 8 He claims $5,242.50 in attorney fees. 9

5

Motion to Strike the Declaration of Daren French, docket no. 341, filed May 27, 2011.

6

Memorandum in Support of Motion (Request) for Attorney’s Fees and Costs (Supporting Memorandum) at 2,
docket no. 419, filed November 29, 2011.
7

Norman v. Hous. Auth., 836 F. 2d 1292, 1303 (11th Circuit 1988). .

8

Declaration of Jeffrey R. Olsen, docket no. 420, filed November 29, 2011.

9

Id.

2

a. An award for Jeffery Olsen’s fees totaling $5,130.00 is GRANTED. This
excludes fees before October 8, 2010 ($112.50) because those fees were incurred
before tampering was evident. 10
2. Blake T. Ostler Fees
Blake T. Ostler is also a licensed Utah attorney with Thompson Ostler & Olsen. After the
tampering became evident on October 8th, 2010, Mr. Ostler reviewed, drafted, edited, and
filed various papers related to the tampering motion. He also attended inspections, prepared
for and took the deposition of Ms. Sanch Datta, and prepared for and attended the hearing on
the tampering motion. 11 Ostler claimed $40,796.00 in attorney fees 12 and his firm,
Thompson Ostler & Olsen, claimed $4,671.06 in costs. 13
a. An award for Blake Oster’s fees totaling $39,315.50 is GRANTED. This excludes
fees before October 8, 2010 ($1,316,00) because these fees were incurred before
tampering was evident.
i. Fees from Mr. Ostler’s conferences with Dr. Nelson are included because
these conferences were necessary to understand the issues on the
tampering motion.
ii. Any time related to admitting Mr. O’Malley pro hac vice is excluded as
Mr. O’Malley’s admission is related to the case as a whole. On November
3, 2011 Mr. Ostler prepared pro hac vice documents. While the time of

10

Inspection Report Dr. Brent Nelson 8 October 2010, docket no. 304, which is Exhibit C to Memorandum in
Support of Motion for Sanctions and Dismissal for Evidence Tampering and Spoliation, docket no. 303, filed under
seal April 8, 2011.
11

Declaration of Blake T. Ostler, docket no. 421, filed November 29, 2011.

12

Exhibit A to Declaration of Blake T. Ostler.

13

Exhibit C to Declaration of Blake T. Ostler.

3

preparation was not itemized on the exhibit to Ostler’s declaration, 14 the
magistrate judge estimates one quarter of Mr. Ostler’s time recorded on
November 3rd as the time spent preparing these documents. This exclusion
of $164.50 is reflected in the award granted.
iii. The firm’s costs including copying, delivering, and transcript costs 15 are
DENIED because these costs are not allowable costs.
3. Chelsea Cope Paralegal Fees
Chelsea Cope is a paralegal employed by Thompson Ostler & Olsen. During the month
of November 2011 she assisted in preparing documents relating to the motion. 16 $704.00
was claimed for her efforts.
a. An award for Chelsea Cope’s fees totaling $704.00 is GRANTED.
4. John C. O’Malley Fees
John C. O’Malley is an attorney licensed in California and is a partner with Newport
Trial Group, APC. He was admitted pro hac vice in this matter as counsel for XRoads.
After the tampering became evident on October 8th, 2010, Mr. O’Malley reviewed,
prepared for and participated in the tampering motion, and appeared at the hearing. 17 Mr.
O’Malley stated that his fees would have normally exceeded $58,000.00 at his standard
rate of $580 per hour, but his firm had an agreement to bill XRoads no more than

14

Exhibit A to Declaration of Blake T. Ostler.

15

Exhibit C to Declaration of Blake T Ostler.

16

Exhibit B to Declaration of Blake T. Ostler.

17

Declaration of John C. O’Malley, docket no. 422, filed November 29, 2011.

4

$20,000.00. 18 His firm, Newport Trial Group, APC, also claimed $592.84 in copying
costs and $636.34 in travel expenditures. 19
a. An award of Mr. O’Malley’s fees totaling $20,000.00 is GRANTED.
b. Mr. O’Malley’s copying costs are DENIED because these are not allowable costs.
c. Mr. O’Malley’s travel expenditures are DENIED because these are not allowable
costs.
5. Daren French Fees
Daren French is a co-founder of XRoads and opines for XRoads as an expert in this case. 20
Mr. French claims $23,700.00 for his work in his expert capacity. 21 His work included
examining evidence. Mr. French also claims $3,510.00 for travel expenditures related to the
October 2010 inspection, the November 14-15, 2011 hearing and $2,129.15 for the hearing
transcript. 22
a. The expert fees for Daren French are DENIED because he is a party-principal and
not a retained expert.
b. The travel costs related to the October 2010 inspection and November 14-15
hearing are DENIED because these costs would have been incurred for his
attendance as a party.

18

Id.

19

Supporting Memorandum at 2; Declaration of John C. O’Malley.

20

Declaration of Daren French re: Factual Background in Support of Award of Attorneys’ Fees and Costs
(Declaration of Daren French), docket no. 423, filed November 29, 2011.
21

Id.

22

Id. at 5-6; Exhibit A to Declaration of Daren French.

5

c. The November 14-15, 2011 hearing transcript itemized in his cost summary was
necessary to prepare the order regarding the motion for sanctions and thus an
award of costs totaling $2,129.15 is GRANTED.
6. Dr. Brent Nelson
Dr. Brent Nelson was retained by XRoads as an outside examiner for this case. 23 Daren
French seeks $2,473.00 for Dr. Nelson’s expert fees. Dr. Nelson implemented the protocol to
obtain testing evidence from the two XRoads devices. 24 The fees to Dr. Brent Nelson are
related to the case as a whole, and while his work revealed problems relating to this motion,
the work he performed has utility for the entire case beyond this motion. These fees and
expenses are DENIED.
7. Mike Deloach Fees
Mike Deloach was retained by XRoads as an expert for this case. 25 Daren French seeks
$2,400.00 for Mr. Deloach’s expert fees in attending the November 14-15 hearing. 26 Mr.
Deloach’s work also included ten hours attempting to duplicate the testing Fatpipe claimed
had been done at a cost of $1,500.00. 27
a. The fees from Mr. Deloach are related to the case as a whole and are thus
DENIED.

23
24

Declaration of Daren French at 2.
Id.

25

Declaration of Daren French at 5.

26

Id., Exhibit A to Declaration of Daren French.

27

Declaration of Daren French at 3, Exhibit A to Declaration of Daren French.

6

FatPipe’s Request for Stay
Additionally, Fatpipe’s request for stay28 of this award is DENIED. The motion FatPipe
intends to file is independent of this motion.
In summary, the following table lists the amounts claimed and the amounts awarded.
Item
Olsen Attorney Fees

Claim
$5,242.50
$40,796.00

Ostler Attorney Fees
Thompson Ostler & Olsen Costs

Award
$5,130.00
$39,315.50

$4,671.06

Cope Paralegal Fees

$704.00

$704.00

O’Malley Attorney Fees

$20,000.00

$20,000.00

O’Malley Copying Costs

$592.84

O’Malley Travel Expenditures

$636.34

French Expert Fees

$23,700.00

th

Nov. 11 Travel Expenditures

$3,510.00

Hearing Transcript

$2,129.15

Nelson Expert Fees

$2,473.00

Deloach Expert Fees

$3,900.00

TOTAL

28

$103,112.39

Fatpipe’s Response at 21.

7

$2,129.15

$62,148.65

ORDER
IT IS HEREBY ORDERED that the Motion (Request) for Attorneys’ Fees and Costs 29 is
GRANTED. Fatpipe shall pay XRoads $62,148.65 for fees and expenses incurred in the motion
for sanctions. This sum is due thirty days after the order of the district judge resolving Fatpipe’s
Objections to Magistrate Judge’s Order (Dkt. No. 432) Re Motion For Sanctions and Dismissal 30
and any objections to this order,.
Dated March 6, 2012.
BY THE COURT:
____________________________
David Nuffer
U.S. Magistrate Judge

29

Docket no. 418, filed November 29, 2011.

30

Docket no. 437, filed February 7, 2012.

8