1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 EAGLE EYES TRAFFIC INDUSTRY USA Case No. 21-cv-07097-TLT (TSH) HOLDING LLC, 8 Plaintiff, ORDER AND REPORT & 9 RECOMMENDATION RE: v. PLAINTIFF’S MOTION FOR 10 MONETARY AND TERMINATING E-GO BIKE LLC, SANCTIONS 11 Defendant. Re: Dkt. Nos. 49, 53 12 13 I. INTRODUCTION 14 On August 23, 2022, Plaintiff Eagle Eyes Traffic Industry USA Holding’s filed a Motion 15 for Monetary and Terminating Sanctions. ECF No. 49. On September 6, 2022, Defendant E-Go 16 Bike LLC filed an Opposition. ECF No. 51. On September 12, 2022, Plaintiff filed a Reply. ECF 17 No. 52. On October 4, 2022, Judge Trina L. Thompson referred the motion to the undersigned for 18 determination or a report and recommendation. ECF No. 55. 19 Plaintiff’s motion involves two separate requests: one for reasonable attorney’s fees and 20 the other for terminating sanctions. The Court shall address Plaintiff’s request for attorney’s fees 21 in the form of an Order and Plaintiff’s request for terminating sanctions in the form of a report and 22 report and recommendation. 1 23 1 See Scott Griffith Collaborative Sols., LLC v. Falck N. California Corp., 2021 WL 4846926, at 24 *1 (N.D. Cal. Sept. 10, 2021), report and recommendation adopted sub nom. Falck USA, Inc. v. Scott Griffith Collaborative Sols., LLC, 2021 WL 4846244 (N.D. Cal. Oct. 4, 2021) (“The 25 undersigned’s views on this motion are in the form of a report and recommendation under 28 U.S.C. § 636(b)(1)(B), rather than an order, because Falck’s request for terminating sanctions is a 26 potentially dispositive motion that falls outside the scope of a magistrate judge’s authority absence consent of all parties under 28 U.S.C. § 636(c).”); Oracle USA, Inc. v. SAP AG, 264 F.R.D. 541, 27 546 (N.D. Cal. 2009) (“[D]iscovery sanctions in general are non-dispositive unless imposition of 1 The undersigned finds this matter suitable for disposition without oral argument. See Civ. 2 L.R. 7-1(b). Having considered the parties’ positions, relevant legal authority, and the record in 3 this case, the undersigned GRANTS Plaintiff’s motion for monetary sanctions and 4 RECOMMENDS the Court DENY Plaintiff’s motion for terminating sanctions. 5 II. BACKGROUND 6 This case involves the alleged infringement of Plaintiff’s “Exterior Surface Configuration 7 of a Vehicle Headlight Reflector” and “Vehicle Headlight” patents. ECF No. 39 at ¶¶ 15-38. On 8 May 27, 2022, the case was referred to the undersigned for discovery purposes. ECF Nos. 38, 40. 9 On July 1, 2022, the undersigned issued a Discovery Order and granted in part and denied 10 in part Plaintiff’s Motion to Compel. ECF No. 45. On August 23, 2022, Plaintiff filed a Motion 11 for Monetary and Terminating Sanctions. ECF No. 49.2 On October 4, 2022, Judge Trina L. 12 Thompson referred the Motion for Monetary and Terminating Sanctions to the undersigned for 13 determination or a report and recommendation. ECF No. 55. On October 25, 2022, the 14 undersigned ordered supplemental briefing regarding the reasonableness of Plaintiff’s requested 15 fees. ECF No. 59. On November 1, 2022, Plaintiff filed a Declaration in support of the requested 16 fees. ECF No. 60. On November 8, 2022, Defendant filed an Opposition. ECF No. 61. 17 III. DISCOVERY ORDER: MOTION FOR REASONABLE ATTORNEY’S FEES 18 Plaintiff argues the undersigned must require Defendant and its counsel, Dahyee Law 19 Group, to pay Plaintiff’s reasonable attorney’s fees incurred by Defendant’s failure to timely 20 respond to Plaintiff’s interrogatories, requests for admission, and requests for production of 21 documents. ECF No. 49 at 4, 8-9. Defendant argues its failure to timely respond was 22 substantially justified, and an award of expenses would be unjust, because Defendant E-Go Bike 23 LLC was cancelled on November 8, 2021, operated by employees in China, and was in lockdown 24 from April 2022 to June 2022. ECF No. 50 at 2, 7-8. 25 26 terminate the litigation, the sanction is considered dispositive and the magistrate judge may only 27 recommend that it be imposed by the district court.”)) 1 Under Federal Rule of Civil Procedure 37, if a motion to compel disclosure or discovery is 2 granted, or if the disclosure or requested discovery is provided after the motion to compel was 3 filed, the Court must “after giving an opportunity to be heard, require the party or deponent whose 4 conduct necessitated the motion, the party or attorney advising that conduct, or both to pay the 5 movant's reasonable expenses incurred in making the motion, including attorney's fees.” Fed. R. 6 Civ. P. 37(a)(5)(A). However, payment is not required if “(i) the movant filed the motion before 7 attempting in good faith to obtain the disclosure or discovery without court action; (ii) the 8 opposing party's nondisclosure, response, or objection was substantially justified; or (iii) other 9 circumstances make an award of expenses unjust.” Id. at 37(a)(5)(A)(i)-(iii). 10 The Court finds E-Go was not substantially justified, and circumstances do not make an 11 award of expenses unjust, in failing to respond to Plaintiff’s interrogatories, requests for 12 admission, and requests for production of documents. As explained in the Court’s July 1, 2022 13 Discovery Order,
14 E-Go’s explanation for its failure to respond is that the company ceased operations toward the end of last year, and it was difficult for 15 U.S.-based counsel to obtain information from the pertinent former E-Go employee due to Covid lockdown in Shanghai and surrounding 16 cities . . . That is a reasonable explanation for why it was difficult to produce documents or provide substantive information that counsel 17 did not possess. But it does not constitute an explanation for why U.S. counsel based in Pleasanton, California did not serve written 18 responses and objections. Drafting objections is an exercise of legal judgment under U.S. law, and a Chinese ex-employee would have 19 been no help with that anyway. 20 ECF No. 30 at 2; cf. Sabel v. City and County of San Francisco, 2017 WL 3670783, at *7 (N.D. 21 Cal. Aug. 25, 2017) (“[A]ttorneys have a professional obligation to represent their clients 22 competently.”). Accordingly, Plaintiff is entitled to reasonable attorney’s fees. 23 The undersigned must now determine whether Plaintiff’s requested fees are reasonable. 24 “The burden of proving that claimed rates and number of hours worked are reasonable is on the 25 party seeking the fee award.” Gosain v. Bergquist Wood McIntosh Seto, LLP, 2022 WL 1714622, 26 at *2 (N.D. Cal. May 27, 2022) (citing Blum v. Stenson, 465 U.S. 886, 897 (1984)). “Courts 27 typically determine reasonableness by conducting a lodestar analysis of the hours expended and 1 *1 (N.D. Cal. May 11, 2018); see also Morales v. City of San Rafael, 96 F.3d 359, 363 (9th Cir. 2 1996) (“The customary method of determining fees . . . is known as the lodestar method.”). 3 Plaintiff’s counsel, Katja Grosch, has been practicing law for fourteen years, is of counsel 4 at the law firm Inhouse Co., and has an hourly rate of $375 per hour. ECF No. 60 at ¶ 7.3 The 5 undersigned finds this rate to be reasonable compared to the “prevailing rates in this district for 6 personnel of comparable experience, skill, and reputation.” Dickey v. Advanced Micro Devices, 7 Inc., 2020 WL 870928, at *8 (N.D. Cal. Feb. 21, 2020); see also Ingram v. Oroudjian, 647 F.3d 8 925, 928 (9th Cir.
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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 EAGLE EYES TRAFFIC INDUSTRY USA Case No. 21-cv-07097-TLT (TSH) HOLDING LLC, 8 Plaintiff, ORDER AND REPORT & 9 RECOMMENDATION RE: v. PLAINTIFF’S MOTION FOR 10 MONETARY AND TERMINATING E-GO BIKE LLC, SANCTIONS 11 Defendant. Re: Dkt. Nos. 49, 53 12 13 I. INTRODUCTION 14 On August 23, 2022, Plaintiff Eagle Eyes Traffic Industry USA Holding’s filed a Motion 15 for Monetary and Terminating Sanctions. ECF No. 49. On September 6, 2022, Defendant E-Go 16 Bike LLC filed an Opposition. ECF No. 51. On September 12, 2022, Plaintiff filed a Reply. ECF 17 No. 52. On October 4, 2022, Judge Trina L. Thompson referred the motion to the undersigned for 18 determination or a report and recommendation. ECF No. 55. 19 Plaintiff’s motion involves two separate requests: one for reasonable attorney’s fees and 20 the other for terminating sanctions. The Court shall address Plaintiff’s request for attorney’s fees 21 in the form of an Order and Plaintiff’s request for terminating sanctions in the form of a report and 22 report and recommendation. 1 23 1 See Scott Griffith Collaborative Sols., LLC v. Falck N. California Corp., 2021 WL 4846926, at 24 *1 (N.D. Cal. Sept. 10, 2021), report and recommendation adopted sub nom. Falck USA, Inc. v. Scott Griffith Collaborative Sols., LLC, 2021 WL 4846244 (N.D. Cal. Oct. 4, 2021) (“The 25 undersigned’s views on this motion are in the form of a report and recommendation under 28 U.S.C. § 636(b)(1)(B), rather than an order, because Falck’s request for terminating sanctions is a 26 potentially dispositive motion that falls outside the scope of a magistrate judge’s authority absence consent of all parties under 28 U.S.C. § 636(c).”); Oracle USA, Inc. v. SAP AG, 264 F.R.D. 541, 27 546 (N.D. Cal. 2009) (“[D]iscovery sanctions in general are non-dispositive unless imposition of 1 The undersigned finds this matter suitable for disposition without oral argument. See Civ. 2 L.R. 7-1(b). Having considered the parties’ positions, relevant legal authority, and the record in 3 this case, the undersigned GRANTS Plaintiff’s motion for monetary sanctions and 4 RECOMMENDS the Court DENY Plaintiff’s motion for terminating sanctions. 5 II. BACKGROUND 6 This case involves the alleged infringement of Plaintiff’s “Exterior Surface Configuration 7 of a Vehicle Headlight Reflector” and “Vehicle Headlight” patents. ECF No. 39 at ¶¶ 15-38. On 8 May 27, 2022, the case was referred to the undersigned for discovery purposes. ECF Nos. 38, 40. 9 On July 1, 2022, the undersigned issued a Discovery Order and granted in part and denied 10 in part Plaintiff’s Motion to Compel. ECF No. 45. On August 23, 2022, Plaintiff filed a Motion 11 for Monetary and Terminating Sanctions. ECF No. 49.2 On October 4, 2022, Judge Trina L. 12 Thompson referred the Motion for Monetary and Terminating Sanctions to the undersigned for 13 determination or a report and recommendation. ECF No. 55. On October 25, 2022, the 14 undersigned ordered supplemental briefing regarding the reasonableness of Plaintiff’s requested 15 fees. ECF No. 59. On November 1, 2022, Plaintiff filed a Declaration in support of the requested 16 fees. ECF No. 60. On November 8, 2022, Defendant filed an Opposition. ECF No. 61. 17 III. DISCOVERY ORDER: MOTION FOR REASONABLE ATTORNEY’S FEES 18 Plaintiff argues the undersigned must require Defendant and its counsel, Dahyee Law 19 Group, to pay Plaintiff’s reasonable attorney’s fees incurred by Defendant’s failure to timely 20 respond to Plaintiff’s interrogatories, requests for admission, and requests for production of 21 documents. ECF No. 49 at 4, 8-9. Defendant argues its failure to timely respond was 22 substantially justified, and an award of expenses would be unjust, because Defendant E-Go Bike 23 LLC was cancelled on November 8, 2021, operated by employees in China, and was in lockdown 24 from April 2022 to June 2022. ECF No. 50 at 2, 7-8. 25 26 terminate the litigation, the sanction is considered dispositive and the magistrate judge may only 27 recommend that it be imposed by the district court.”)) 1 Under Federal Rule of Civil Procedure 37, if a motion to compel disclosure or discovery is 2 granted, or if the disclosure or requested discovery is provided after the motion to compel was 3 filed, the Court must “after giving an opportunity to be heard, require the party or deponent whose 4 conduct necessitated the motion, the party or attorney advising that conduct, or both to pay the 5 movant's reasonable expenses incurred in making the motion, including attorney's fees.” Fed. R. 6 Civ. P. 37(a)(5)(A). However, payment is not required if “(i) the movant filed the motion before 7 attempting in good faith to obtain the disclosure or discovery without court action; (ii) the 8 opposing party's nondisclosure, response, or objection was substantially justified; or (iii) other 9 circumstances make an award of expenses unjust.” Id. at 37(a)(5)(A)(i)-(iii). 10 The Court finds E-Go was not substantially justified, and circumstances do not make an 11 award of expenses unjust, in failing to respond to Plaintiff’s interrogatories, requests for 12 admission, and requests for production of documents. As explained in the Court’s July 1, 2022 13 Discovery Order,
14 E-Go’s explanation for its failure to respond is that the company ceased operations toward the end of last year, and it was difficult for 15 U.S.-based counsel to obtain information from the pertinent former E-Go employee due to Covid lockdown in Shanghai and surrounding 16 cities . . . That is a reasonable explanation for why it was difficult to produce documents or provide substantive information that counsel 17 did not possess. But it does not constitute an explanation for why U.S. counsel based in Pleasanton, California did not serve written 18 responses and objections. Drafting objections is an exercise of legal judgment under U.S. law, and a Chinese ex-employee would have 19 been no help with that anyway. 20 ECF No. 30 at 2; cf. Sabel v. City and County of San Francisco, 2017 WL 3670783, at *7 (N.D. 21 Cal. Aug. 25, 2017) (“[A]ttorneys have a professional obligation to represent their clients 22 competently.”). Accordingly, Plaintiff is entitled to reasonable attorney’s fees. 23 The undersigned must now determine whether Plaintiff’s requested fees are reasonable. 24 “The burden of proving that claimed rates and number of hours worked are reasonable is on the 25 party seeking the fee award.” Gosain v. Bergquist Wood McIntosh Seto, LLP, 2022 WL 1714622, 26 at *2 (N.D. Cal. May 27, 2022) (citing Blum v. Stenson, 465 U.S. 886, 897 (1984)). “Courts 27 typically determine reasonableness by conducting a lodestar analysis of the hours expended and 1 *1 (N.D. Cal. May 11, 2018); see also Morales v. City of San Rafael, 96 F.3d 359, 363 (9th Cir. 2 1996) (“The customary method of determining fees . . . is known as the lodestar method.”). 3 Plaintiff’s counsel, Katja Grosch, has been practicing law for fourteen years, is of counsel 4 at the law firm Inhouse Co., and has an hourly rate of $375 per hour. ECF No. 60 at ¶ 7.3 The 5 undersigned finds this rate to be reasonable compared to the “prevailing rates in this district for 6 personnel of comparable experience, skill, and reputation.” Dickey v. Advanced Micro Devices, 7 Inc., 2020 WL 870928, at *8 (N.D. Cal. Feb. 21, 2020); see also Ingram v. Oroudjian, 647 F.3d 8 925, 928 (9th Cir. 2011) (“[J]udges are justified in relying on their own knowledge of customary 9 rates and their experience concerning reasonable and proper fees.”); compare with Schneider v. 10 Chipotle Mexican Grill, Inc., 336 F.R.D. 588, 600-01 (N.D. Cal. Nov. 4, 2020) (finding rates 11 between $425 and $695 for associates and up to $1,275 for partners reasonable); In re Yahoo! Inc. 12 Customer Data Sec. Breach Litig., 2020 WL 4212811, at *26 (N.D. Cal. July 22, 2020) (finding 13 rates up to $900 for partners and $850 for non-partner attorneys reasonable). 14 Regarding hours expended, Plaintiff’s counsel submitted an itemized billing record 15 showing a total of 17 hours spent on discovery matters. ECF No. 60 at ¶ 7. The undersigned has 16 reviewed the itemized billing record and finds the hours are not excessive, redundant, or otherwise 17 unnecessary. See Van Gerwen v. Guarantee Mut. Life Co., 214 F.3d 1041, 1045 (9th Cir. 2000) 18 19 3 Defendant argues Ms. Grosch’s declaration does not meet the requirements of Civil Local Rule 20 37-4(b)(3). ECF No. 61 at 2. Rule 37-4(b)(3) states that motions for an award of attorney’s fees must be accompanied by competent declarations and “[i]f attorney fees or other costs or expenses 21 are requested, itemize with particularity the otherwise unnecessary expenses, including attorney fees, directly caused by the alleged violation or breach, and set forth an appropriate justification 22 for any attorney-fee hourly rate claimed.” The undersigned has reviewed Ms. Gorsch’s declaration and finds that the declaration 23 itemizes Ms. Gorsch’s fees with sufficient particularity and meets Rule 37-4(b)(3)’s requirements. Attorneys seeking fee awards are “not required to record in great detail how each minute of [their] 24 time was expended.” Hensley v. Eckerhart, 461 U.S. 424, 437 n.12 (1983). Moreover, Ms. Grosch “declare[d] under penalty of perjury under the laws of the State of California that the 25 foregoing [in her declaration] is true and correct.” ECF No. 60 at 5; see Luxul Technology Inc. v. NectarLux, LLC, 2016 WL 3345464, at *5 (N.D. Cal. June 16, 2016) (“Substantial compliance 26 requires the declarant to make two assertions in the declaration: (1) that the statements in the declaration were made ‘under penalty of perjury,’ and (2) ‘that the contents were true and 27 correct.’”) (internal citation omitted); Barroca v. Santa Rita Jail, 2006 WL 571355 (N.D. Cal. 1 (“A district court should exclude from the lodestar amount hours that are not reasonably expended 2 || because they are excessive, redundant, or otherwise unnecessary.”’). 3 Accordingly, the undersigned GRANTS Plaintiff Motion for Reasonable Attorney’s Fees 4 and awards Plaintiff reasonable attorney’s fees of $6,375 (17 hours @ $375/hour rate). 5 IV. REPORT & RECOMMENDATION RE: TERMINATING SANCTIONS 6 Plaintiff's motion includes a request for terminating sanctions. ECF No. 49. 7 However, Plaintiff fails to include any argument or briefing in support of its request. Accordingly, 8 || the undersigned recommends the Court DENY Plaintiffs motion for terminating sanctions. 9 V. CONCLUSION 10 For the foregoing reasons, the Court GRANTS Plaintiff's Motion for Monetary Sanctions 11 and ORDERS Defendant’s counsel, Dahyee Law Group, to pay Plaintiff $6,375 in attorney’s fees. 12 See Proofpoint, Inc. v. Vade Secure, Inc., 2020 WL 7398791, at *5 (N.D. Cal. Dec. 17, 2020) 13 (“When choosing how to make this allocation, courts are directed to follow an approach designed 14 || to solve the management problem. If the fault lies with the attorneys, that is where the impact of 2 15 sanction should be lodged. If the fault lies with the clients, that is where the impact of the sanction 16 || should be lodged.”) (internal quotation and citation omitted). The undersigned RECOMMENDS 2 17 || the Court DENY Plaintiffs Motion for Terminating Sanctions. 18 IT IS SO ORDERED. 19 20 || Dated: November 22, 2022 21 ALN. □ 7 THOMAS S. HIXSON United States Magistrate Judge 23 24 25 26 27 28