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CSL Silicones, Inc. v. Midsun Group Inc.

United States District Court, D. Connecticut

April 18, 2017

CSL SILICONES, INC., Plaintiff,
v.
MIDSUN GROUP INC., Defendant.

          RULING ON PLAINTIFF'S STATEMENT OF REASONABLE ATTORNEYS' FEES AND EXPENSES

          CHARLES S. HAIGHT, JR. SENIOR UNITED STATES DISTRICT JUDGE.

         On June 27, 2016, the Court denied Defendant Midsun Group Inc.'s Renewed Motion for Protective Order ("Renewed Motion") made pursuant to Fed.R.Civ.P. 26(c)(1)(g) and ordered that Defendant pay Plaintiff's costs and fees in responding to its Motion should Plaintiff CSL Silicones, Inc. seek such fees and costs.[1] Doc. 81 (the "Ruling"). The instant ruling resolves Plaintiff's subsequent request for attorneys' fees, Docs. 82-83. For the reasons that follow, the Court declines to award Plaintiff the amount it requests and directs payment by Defendant of a slightly lesser amount.

         I. Background

         Defendant's Renewed Motion sought an order protecting it against disclosure as to certain of Plaintiff's discovery requests principally on the ground that the information contained purported confidential trade secrets. Doc. 81, at 1, 9. Defendant had filed a nearly identical motion before, and Plaintiff had fully briefed an opposition to it, but the Court denied that earlier motion without prejudice to refiling. CSL Silicones, Inc. v. Midsun Grp. Inc., 170 F.Supp.3d 304, 319-20 (D. Conn. 2016). The parties had filed jointly a Stipulated Protective Order (the "SPO") and the Court specifically noted that it appeared that the SPO "may seem to obviate the need for a ruling by the Court" although it was "not so clear given counsels' statements at the hearing." Id. at 320. The Court denied Defendant's Renewed Motion because the discovery sought was relevant and the SPO adequately protected the trade secrets. See Doc. 81.

         In the Ruling, pursuant to Fed.R.Civ.P. 37(a)(5), the Court held that Plaintiff was entitled to attorney's fees and costs because "[t]here is no doubt that Defendant's motion was not substantially justified and that sanctions are warranted." Doc. 81, at 10.[2] The Court noted that it had already expressed an initial view that the SPO may have obviated any need for the motion, and it was clear that the SPO had in fact obviated that need. Id. More egregiously, Defendant had not even tried to fully explain why the SPO had not obviated the need in its briefings despite already knowing the Court's initial view on the issue. Id. Thus, the Court awarded attorneys' fees and costs pursuant to Fed.R.Civ.P. 37(a)(5) and instructed Plaintiff to file a statement as to those fees.

         The Court later received a statement as to as to the amount of fees to which Plaintiff claims, Docs. 82-83, in the form of a Declaration from Attorney John A. Clifford ("Clifford Decl."), and Defendant submitted a detailed response and objections to Plaintiff's request in a briefing, Doc. 85 ("Def. Response"). Plaintiff also submitted certain exhibits in support of its fees application ("Clifford Ex."). Defendant also submitted exhibits A-C ("Def. Ex."), including a Declaration from Attorney Joseph R. Carvalko ("Carvalko Decl.") and an exhibit attached to that Declaration in support of its response ("Carvalko Ex."). This ruling resolves the parties' dispute as to the award of fees and as to the amount awarded.

         II. Standard for Attorneys' Fees

         To evaluate a request for attorneys' fees, courts must conduct a "lodestar analysis, which calculates reasonable attorneys' fees by multiplying the reasonable hours expended on the action by a reasonable hourly rate." Kroshnyi v. U.S. Pack Courier Servs., Inc., 771 F.3d 93, 108 (2d Cir. 2014). If "at the time the work was performed, a reasonable attorney would have engaged in similar time expenditures, " then the number of hours proffered is reasonable. Grant v. Martinez, 973 F.2d 96, 99 (2d Cir. 1992) (citing Wooldridge v. Marlene Indus. Corp., 898 F.2d 1169, 1177 (6th Cir. 1990)). As to the hourly rate, a district court has discretion but should begin generally with "the prevailing market rates in the relevant community." Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 551 (2010) (quoting Blum v. Stenson, 465 U.S. 886, 895 (1984)) (internal quotation marks omitted).

         "Although there is a strong presumption that the lodestar figure represents a reasonable fee, the district court may, in its discretion, adjust the lodestar based on a variety of factors, " but, "must state its reasons for doing so as specifically as possible." Ayres v. 127 Rest. Corp., No. 99-7723, 1999 WL 1295335, at *1 (2d Cir. Dec. 23, 1999) (citations, internal quotation marks, and alterations omitted). For example, "in dealing with items that are 'excessive, redundant, or otherwise unnecessary, . . . the [district] court has discretion simply to deduct a reasonable percentage of the number of hours claimed as a practical means of trimming fat from a fee application.'" Hines v. City of Albany, 613 F.App'x 52, 54-55 (2d Cir. 2015) (summary order) (quoting Kirsch v. Fleet St., Ltd., 148 F.3d 149, 173 (2d Cir. 1998)). A Court may also deduct a percentage of hours where proffered time entries are overly vague. Kirsch, 148 F.3d at 172-73; see also Conn. Hosp. Ass'n v. O'Neill, 891 F.Supp. 687, 690 (D. Conn. 1994).

         This Circuit has long followed the dictates of Judge Newman's opinion in New York State Association for Retarded Children, Inc. v. Carey, 711 F.2d 1136, 1148, 1154 (2d Cir. 1983) to evaluate a movant's proffered evidence supporting its attorneys' fees request:

Hereafter, any attorney-whether a private practitioner or an employee of a nonprofit law office-who applies for court-ordered compensation in this Circuit . . . must document the application with contemporaneous time records. . . . All applications for attorney's fees . . . should normally be disallowed unless accompanied by contemporaneous time records indicating, for each attorney, the date, the hours expended, and the nature of the work done.

         The Second Circuit subsequently clarified its use of the word "normally" in Carey, holding that while it "indicates that we intend to leave the district courts with some limited discretion to make exceptions to the hard-and-fast rule, " Carey nonetheless "sets out unequivocally that absent unusual circumstances attorneys are required to submit contemporaneous records with their fee applications." Scott v. City of New York, 626 F.3d 130, 133 (2d Cir. 2010). "In other words, Carey establishes a strict rule from which attorneys may deviate only in the rarest of cases." Id.

         III. Plaintiff's Statement of Reasonable Attorneys' Fees and Expenses

         Plaintiff submitted for consideration several exhibits to demonstrate and prove its fees in accordance with this Court's instructions in the prior Ruling. First, Plaintiff submitted Exhibit A, which are the actual monthly invoices for the months of April 2016 and May 2016 reflecting work performed in March and April 2016 sent by Plaintiff's counsel to its client, CSL Silicones, Inc. See Clifford Decl. ¶ 3; Clifford Ex. A. Second, Plaintiff submitted Exhibit B, which "is a table, compiled from [Plaintiff's counsel's] contemporaneous billing records, which calculates the total amount of attorneys' fees [counsel] incurred in opposing" Defendant's Renewed Motion. Clifford Decl. ¶ 4. Exhibit B was created at Attorney Clifford's direction in consultation with each attorney billing time to determine the amount of time actually spent in opposing Defendant's Renewed Motion. Id. Based on the calculations from Exhibit B, the total value of attorneys' fees incurred in opposing Defendants' Renewed Motion that Plaintiff seeks is $16, 146.00 based on 47.9 hours with an average hourly rate of $347.51 per hour.

         Plaintiff also submitted Exhibit C, an American Intellectual Property Law Association 2015 Report of the Economic Survey (the "AIPLA Report") which details the average billing rates for partners and associates specializing in intellectual property law in different areas of the United States. Plaintiff asserts that the billing rates of the three attorneys involved in opposing Defendant's motions were within the ranges identified in Exhibit C taking into account each attorneys' experience and location. Clifford Decl. ¶¶ 6-7. The three attorneys working on the opposition were: (i) Rachel Zimmerman Scobie, a shareholder of Merchant & Gould P.C., practicing law since 2001; (ii) John T. Winemiller, a shareholder of Merchant & Gould P.C., practicing law since 2000; and (iii) Michael A. Erbele, an associate at Merchant & Gould P.C., practicing law since 2012. Id. ¶ 6. Plaintiff does not seek to recover any costs except for the reasonable attorneys' fees in the amount of $16, 146.00. Id. ¶ 9.

         IV. Defendant's Objections to the Plaintiff's Fees Statement

         The Court will address the merits of Defendant's objections below, but summarizes them briefly here. Defendant argues that: (i) the award of attorneys' fees is not proper because Defendant's Renewed Motion was "substantially justified"; (ii) the block billing by Plaintiff obfuscates the amount of time devoted to actually opposing Defendant's motion, (iii) the time entries are vague and often bill for duplicative work and are more generally just "excessive, " (iv) the number of hours claimed is unreasonable in light of the task and the fact that it was a Renewed Motion, and (v) the hourly rates charged are unreasonable because Plaintiff has ignored the "forum rule."

         V. Analysis of Reasonable Attorneys' Fees

         As a preliminary matter, Defendant asserts that attorneys' fees should not be awarded because it was "substantially justified" in bringing its Renewed Motion. The Court disagrees primarily for the reasons stated in its prior Ruling. In that Ruling, the Court concluded that Defendant's relevancy argument was "entirely without merit" and "unsupported by any authority." Doc. 81, at 10. Moreover, Defendant made no effort to fully explain why the SPO did not adequately protect its trade secrets despite the Court expressing that it believed the SPO may have obviated any such concerns. Id. Defendant urges that it did not understand the Court to imitate any view on any potential renewed motions for a protective order when it denied the earlier motion. Def. Response, at 3-4. The Court, of course, did not imitate any views on future motions at that time. The point made in the Ruling was that the Court had, in denying the earlier motions, flagged for both parties that the SPO may have obviated any disagreements. Doc. 81, at 10. Defendant wholly ignored that in its Renewed Motion-failing to address fully and adequately the SPO's provisions and explain how the SPO did or did not affect Defendant's arguments.[3] Again, the Court holds that Defendant's Renewed Motion was not "substantially justified, " and therefore, Plaintiff is entitled to attorneys' fees pursuant to Fed.R.Civ.P. 37(a)(5).

         As discussed above, to determine the amount of attorneys' fees owed to Plaintiff, this Court:

[M]ust: (1) determine the reasonable hourly rate; (2) determine the number of hours reasonably expended; (3) multiply the two to calculate the presumptively reasonable fee; and (4) make any appropriate ...

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