Orchestrate HR, Inc. v. Blue Cross Blue Shield Kansas

District Court, D. Kansas·Decided September 25, 2023·No. 5:19-cv-04007·Unknown

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF KANSAS

ORCHESTRATE HR, INC. and VIVATURE, INC.,

Plaintiffs, Case No. 19-4007-DDC v.

BLUE CROSS AND BLUE SHIELD OF KANSAS, INC.,

Defendant.

MEMORANDUM AND ORDER

This matter comes before the Court on Defendant Blue Cross and Blue Shield of Kansas, Inc.’s Motion for Award of Attorney’s Fees, ECF No. 534, which the District Judge has referred to the undersigned Magistrate Judge for disposition. ECF No. 546. The District Judge previously awarded Defendant its reasonable costs, including attorneys’ fees, incurred in responding to Plaintiffs Orchestrate HR, Inc. and Vivature, Inc.’s motion to compel and directed Defendant to “present the issue to the court for decision” if the parties could not reach an agreement on the amount of that award. ECF No. 515 at 3. The parties could not reach an agreement, and on July 18, 2023, Defendant filed a motion for attorneys’ fees seeking $39,806.50. ECF No. 534. Plaintiffs oppose the Motion on multiple grounds. ECF No. 539. For the reasons explained below, the Motion is granted. I. BACKGROUND On April 28, 2023, Plaintiffs filed a seven-page motion to compel, ECF No. 504, and nine exhibits totaling 77 additional pages. ECF Nos. 504-1 to 504-9. The motion stated that the parties had engaged in meet-and-confer conferences beginning on April 19 and continuing until April 25, 2023. ECF No. 504 at 1 n.1. When these discussions reached an impasse, Plaintiffs filed a motion seeking to compel documents from Defendant Blue Cross and Blue Shield of Kansas (“BCBSKS”) pursuant to Plaintiffs’ Sixth Set of Requests for Production, as partially amended. Id. at 1. As stated in the motion, the “dispute centers on the inclusion of BCBSKS’ counsel in the definition of BCBSKS.” Id. Specifically, Defendant objected to the express inclusion of “the Spencer Fane law firm”—the outside, retained law firm for Defendant in this litigation—in the definition of

“BCBSKS” and “Your” or “You.” Id. Defendant responded to Plaintiffs’ motion to compel on May 5, 2023. ECF No. 506. The substantive portion of the brief spans three pages, with the signature block on the fourth page and a certificate of service on the fifth page. Id. Defendant also attached eight exhibits, spanning 121 pages in total. See ECF No. 506-1 through 506-8. Among those exhibits are: • Exhibit 1, which is a 40-page document, which includes a two-page declaration from BCBSKS counsel Jason Cross and supporting exhibits reflecting some of the meet-and-confer communications between the parties regarding potential custodians and search terms for the document requests; and

• Exhibit 8, a 17-page exhibit, which includes a four-page declaration from Leslie Witterschein, Spencer Fane’s internal Certified eDiscovery Specialist. The declaration sets forth a detailed description of the time and effort entailed with responding to Plaintiffs’ Requests for Production (“RFPs”) and the projected costs of such efforts, which are estimated between $127,800 and $148,000. ECF No. 506-8. Ms. Witterschein’s declaration includes as an exhibit the 11-page privilege log created by Defendant and produced to Plaintiffs, which reflects “any privileged, responsive documents and communications (including communications to or from Spencer Fane) within BCBSKS’s custodians’ files.” ECF No. 506-8 at 4 n.2, 7-17.

On June 2, 2023, the District Judge held a hearing on Plaintiffs’ motion to compel and on a separate motion to compel filed by Defendant, ECF No. 481. See ECF No. 515 (reciting the rulings made during the hearing). As stated on the record and memorialized in a subsequent order, the District Judge granted in part and denied in part Defendant’s motion and denied Plaintiffs’ motion. Id. The District Judge found that the parties should cover their own fees and expenses with respect to Defendant’s motion but that Defendant was entitled to its reasonable expenses, including attorneys’ fees, associated with Plaintiffs’ motion to compel. Id. at 3. As the order states: The court awarded sanctions under Rule 37 for one of the two motions—as it advised the parties it would during a recent telephone conference. See Fed. R. Civ. P. 37(a)(5)(B) (the court may “require the movant . . . to pay the party . . . who opposed the motion its reasonable expenses incurred in opposing the motion, including attorney’s fees”). The court ruled that the parties will cover their own fees associated with defendant’s Motion to Compel (Doc. 481). And plaintiffs will pay both parties’ attorney’s fees and costs associated with their Motion to Compel (Doc. 504). The court directed the parties to comply with D. Kan. Rule 54.2 to present their fee award agreement (if they reach one) and, failing that outcome, to present the issue to the court for decision. See D. Kan. Rule 54.2. Id. at 3. On July 18, 2023, Defendant filed its Motion for Award of Attorney’s Fees. ECF No. 534. In the Motion, Defendant requests that the Court award $39,806.50 in attorneys’ fees based upon the following submitted lodestar: Attorney Hourly Rate Hours Billed Total Jason Cross $740 26.7 $19,758 Casey Murray $565 1.3 $734.50 Preston Enoch $460 36.7 $16,882 Leslie Witterschein $320 7.6 $2,432 TOTALS 72.3 $39,806.50

Id. at 13. On August 1, 2023, Plaintiffs filed their response. ECF No. 539. Despite the District Judge’s June 2, 2023 order explicitly memorializing that the Court had “awarded sanctions” and that “plaintiffs will pay both parties’ attorney’s fees and costs associated with their Motion to Compel (Doc. 504),” Plaintiffs argue that the Court should not award fees at all. Id. Plaintiffs contend that the Motion is untimely, that their original position asserted in the motion to compel is substantially justified or that other circumstances make an award unjust. Plaintiffs additionally argue that if the Court were to decide to impose fees, that the Court should deny or reduce the overall award because counsel’s hourly rates are excessive, and counsel billed too many hours. Id. at 9. The Court first addresses Plaintiffs’ timeliness and substantial justification/other

circumstances arguments before turning to the issue of Defendant’s reasonable attorneys’ fees. II. TIMELINESS OF DEFENDANT’S MOTION In arguing that Defendant’s Motion is untimely, Plaintiffs rely on the District Judge’s order citing D. Kan. Rule 54.2 to claim that the time limits specified in that rule apply here. The District Judge directed the parties to comply with “D. Kan. Rule 54.2 to present their fee award agreement (if they reach one) and, failing that outcome, to present the issue to the court for decision.” ECF No. 515. The order did not state that the presentation of either the agreement or the motion was due within 30 days of the order or provide any other deadline for filing a motion seeking fees. Local Rule 54.2 is entitled “Award of Statutory Attorney’s Fees” and is included in “Section VII Judgment” of the Local Rules. It provides in pertinent part:

(a) Consultation Required. A party who moves for statutory attorney’s fees pursuant to Fed. R. Civ. P. 54(d)(2) must promptly initiate consultation with the other party or parties. (b) Where the Parties Agree. If the parties reach agreement, they must file an appropriate stipulation and request for an order. (c) Where the Parties Disagree. If they are unable to agree, the moving party must file the following within 30 days of filing the motion: (1) a statement that, after consultation in accordance with this rule, the parties have been unable to reach an agreement with regard to the fee award; and (2) a memorandum setting forth the factual basis for each criterion that the court is asked to consider D. Kan.

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