Orthopaedic Hospital v. DJO Global, Inc.
Opinion
1 2 3 4 5 6 7 10 11 ORTHOPAEDIC HOSPITAL, Case No.: 3:19-cv-00970-JLS-AHG
12 Plaintiff, ORDER: 13 v. (1) GRANTING IN PART AND DENYING IN PART RULE 37 15 Defendant. SANCTIONS ASSOCIATED WITH DEFENDANT’S MOTION TO 16 COMPEL, and 17 (2) GRANTING IN PART AND 18 DENYING IN PART MOTIONS TO
21 [ECF Nos. 173, 250, 267, 270]
28 2 On July 1, 2021, the Court issued an Order Granting in Part and Deferring in Part 3 Defendant’s Motion to Compel and for Sanctions (ECF No. 173) (“Motion to Compel”). 4 ECF No. 238 (the “July 1 Order”). The July 1 Order concerned a discovery dispute 5 regarding Defendant’s pursuit of materials from a prior litigation involving Plaintiff and 6 the patents-in-suit (the “DePuy litigation”). 7 The parties’ dispute regarding DePuy litigation materials was first addressed in part 8 by the Court in its December 22, 2020 Order (ECF No. 144) (the “December 22 Order”), 9 in which the Court granted in part and denied in part the relief sought by Defendant in the 10 parties’ Joint Motion for Resolution of Discovery Dispute (ECF No. 106). In compliance 11 with the December 22 Order, Plaintiff provided a supplemental privilege log (“First 12 Supplemental Privilege Log”) to Defendant by the Court-imposed deadline of 13 January 11, 2021. See ECF No. 173-7. In the Motion to Compel, Defendant argued that the 14 First Supplemental Privilege Log did not comply with the December 22 Order, because the 15 descriptions were insufficient to allow Defendant to verify the claims of privilege, and, 16 further, Defendant contended the log still failed to account for numerous withheld and 17 redacted documents. ECF No. 173 at 8. After meeting and conferring, Plaintiff produced a 18 Second Supplemental Privilege Log and additional documents on February 12, 2021. See 19 ECF No. 173-11. After further meet-and-confer attempts and a discovery conference with 20 the Court, Defendant brought the Motion to Compel. ECF No. 173. 21 In its motion, Defendant contended that Plaintiff had improperly refused to produce 22 all documents responsive to Defendant’s Request No. 36 in its First Set of Requests for 23 Production of Documents (“RFP No. 36”), which sought “[a]ll pleadings discovery, expert 24 reports and disclosures, and correspondence from [the DePuy litigation].” ECF No. 173-2 25 at 48. Defendant further asserted that the new materials Plaintiff produced on 26 February 12, 2021—including 13 new documents, 9 unredacted copies of previously 27 redacted documents, 25 new privilege log entries, and 14 revisions of existing log entries— 28 “strongly suggest[] that [Plaintiff’s] withholding of the information is less than innocent.” 1 ECF No. 173 at 9. To remedy Plaintiff’s purported misconduct, Defendant asked the Court 2 to (1) conduct in camera review of the DePuy litigation documents that Plaintiff continued 3 to withhold and redact, (2) compel Plaintiff to produce all non-privileged documents 4 responsive to RFP No. 36 “related to patent infringement, damages, or validity,”1 and (3) 5 impose fee-shifting sanctions on Plaintiff. 6 In the July 1 Order, the Court granted Defendant’s motion to compel the depositions 7 of Richard Tarr and Brian Tomko from the DePuy litigation, which Plaintiff had withheld 8 as non-responsive but not privileged, and granted Defendant’s request for in camera review 9 of certain other materials from the DePuy litigation that Plaintiff had redacted on the basis 10 of privilege. See ECF No. 238. The Court deferred ruling on Defendant’s request for 11 sanctions pending the completion of its in camera review. 12 On August 23, 2021, the Court issued an Order Regarding Defendant’s Motion to 13 Compel and for Sanctions Following In Camera Review (ECF No. 256) (the “August 23 14 Order”), which resolved all remaining privilege disputes that the Court had previously 15 deferred pending in camera review. The Court discusses the rulings in the August 23 Order 16 in more detail in the Discussion section below. Broadly, however, the Court granted in part 17 and denied in part Defendant’s Motion to Compel, ordered Plaintiff to produce the 18 unredacted versions of certain previously redacted DePuy litigation documents, ordered 19 Plaintiff to review and update certain privilege log entries and to supplement its privilege 20 log to include deposition exhibits that were withheld on the basis of privilege, and gave the 21 parties a further opportunity to be heard through supplemental briefing on Defendant’s 22 request for sanctions in the Motion to Compel in light of the Court’s rulings in the August 23 23 Order. See id. at 20-21. 24 The parties submitted their supplemental briefing to the Court as ordered (see ECF 25
26 27 1 During the meet-and-confer process, the parties had agreed to narrow the scope of RFP No. 36 to documents within these parameters. ECF No. 173-3 at 3. 28 1 Nos. 259, 269, 272). Additionally, the parties submitted Motions to Seal in connection with 2 each supplemental brief on sanctions. See ECF Nos. 257, 267, 270. The Court held a 3 hearing on the supplemental briefing on October 12, 2021. ECF No. 275. During the 4 hearing, the Court gave a tentative ruling and heard oral argument from both sides. 5 Having considered the briefing and the parties’ oral arguments, the Court now 6 GRANTS in part and DENIES in part Defendant’s request for Rule 37 sanctions against 7 Plaintiff, as described in more detail in Section III below. 8 However, before turning to the merits of Defendant’s request for sanctions, the Court 9 will address the parties’ Motions to Seal in turn. 11 A. Legal Standard 12 As discussed in the Court’s July 1 Order, for discovery documents attached to non- 13 dispositive motions and filed under seal pursuant to a valid protective order, “the usual 14 presumption of the public’s right of access [to court filings] is rebutted.” Phillips ex rel. 15 Estates of Byrd v. Gen. Motors Corp., 307 F.3d 1206, 1213 (9th Cir. 2002). Therefore, a 16 particularized showing of “good cause” under Rule 26(c) of the Federal Rules of Civil 17 Procedure will suffice to seal documents produced in discovery. Kamakana, 447 F.3d at 18 1180. 19 Because the underlying motions both relate to a non-dispositive dispute regarding 20 discovery documents, the “good cause” standard applies. “For good cause to exist, the party 21 seeking protection bears the burden of showing specific prejudice or harm will result if no 22 protective order is granted.” Phillips, 308 F.3d at 1210-11 (citing Beckman Indus., Inc. v. 23 Int’l Ins. Co., 966 F.2d 470, 476 (9th Cir. 1992) (holding that “broad allegations of harm, 24 unsubstantiated by specific examples or articulated reasoning, do not satisfy the Rule 26(c) 25 26 27 28 1 test”)). This standard is incorporated into the undersigned’s Chambers Rules, which 2 explain that “[t]he Court will scrutinize any request to file information under seal, and a 3 request will only be granted if a specific showing is made that justifies sealing. Generic 4 and vague references to ‘competitive harm’ will almost always be insufficient to justify 5 sealing.” Chmbr. R. at 2. 6 B. Defendant’s First Motion to Seal 7 First, Defendant filed a Motion to File Supplemental Sanctions Briefing Under Seal 8 (“Defendant’s First Motion to Seal”) on September 7, 2021. Defendant seeks to seal (1) 9 Exhibits 1, 2, and 3 of counsel Brianne Straka’s Declaration in Support of Defendant’s 10 Motion for Sanctions (ECF No.
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1 2 3 4 5 6 7 10 11 ORTHOPAEDIC HOSPITAL, Case No.: 3:19-cv-00970-JLS-AHG
12 Plaintiff, ORDER: 13 v. (1) GRANTING IN PART AND DENYING IN PART RULE 37 15 Defendant. SANCTIONS ASSOCIATED WITH DEFENDANT’S MOTION TO 16 COMPEL, and 17 (2) GRANTING IN PART AND 18 DENYING IN PART MOTIONS TO
21 [ECF Nos. 173, 250, 267, 270]
28 2 On July 1, 2021, the Court issued an Order Granting in Part and Deferring in Part 3 Defendant’s Motion to Compel and for Sanctions (ECF No. 173) (“Motion to Compel”). 4 ECF No. 238 (the “July 1 Order”). The July 1 Order concerned a discovery dispute 5 regarding Defendant’s pursuit of materials from a prior litigation involving Plaintiff and 6 the patents-in-suit (the “DePuy litigation”). 7 The parties’ dispute regarding DePuy litigation materials was first addressed in part 8 by the Court in its December 22, 2020 Order (ECF No. 144) (the “December 22 Order”), 9 in which the Court granted in part and denied in part the relief sought by Defendant in the 10 parties’ Joint Motion for Resolution of Discovery Dispute (ECF No. 106). In compliance 11 with the December 22 Order, Plaintiff provided a supplemental privilege log (“First 12 Supplemental Privilege Log”) to Defendant by the Court-imposed deadline of 13 January 11, 2021. See ECF No. 173-7. In the Motion to Compel, Defendant argued that the 14 First Supplemental Privilege Log did not comply with the December 22 Order, because the 15 descriptions were insufficient to allow Defendant to verify the claims of privilege, and, 16 further, Defendant contended the log still failed to account for numerous withheld and 17 redacted documents. ECF No. 173 at 8. After meeting and conferring, Plaintiff produced a 18 Second Supplemental Privilege Log and additional documents on February 12, 2021. See 19 ECF No. 173-11. After further meet-and-confer attempts and a discovery conference with 20 the Court, Defendant brought the Motion to Compel. ECF No. 173. 21 In its motion, Defendant contended that Plaintiff had improperly refused to produce 22 all documents responsive to Defendant’s Request No. 36 in its First Set of Requests for 23 Production of Documents (“RFP No. 36”), which sought “[a]ll pleadings discovery, expert 24 reports and disclosures, and correspondence from [the DePuy litigation].” ECF No. 173-2 25 at 48. Defendant further asserted that the new materials Plaintiff produced on 26 February 12, 2021—including 13 new documents, 9 unredacted copies of previously 27 redacted documents, 25 new privilege log entries, and 14 revisions of existing log entries— 28 “strongly suggest[] that [Plaintiff’s] withholding of the information is less than innocent.” 1 ECF No. 173 at 9. To remedy Plaintiff’s purported misconduct, Defendant asked the Court 2 to (1) conduct in camera review of the DePuy litigation documents that Plaintiff continued 3 to withhold and redact, (2) compel Plaintiff to produce all non-privileged documents 4 responsive to RFP No. 36 “related to patent infringement, damages, or validity,”1 and (3) 5 impose fee-shifting sanctions on Plaintiff. 6 In the July 1 Order, the Court granted Defendant’s motion to compel the depositions 7 of Richard Tarr and Brian Tomko from the DePuy litigation, which Plaintiff had withheld 8 as non-responsive but not privileged, and granted Defendant’s request for in camera review 9 of certain other materials from the DePuy litigation that Plaintiff had redacted on the basis 10 of privilege. See ECF No. 238. The Court deferred ruling on Defendant’s request for 11 sanctions pending the completion of its in camera review. 12 On August 23, 2021, the Court issued an Order Regarding Defendant’s Motion to 13 Compel and for Sanctions Following In Camera Review (ECF No. 256) (the “August 23 14 Order”), which resolved all remaining privilege disputes that the Court had previously 15 deferred pending in camera review. The Court discusses the rulings in the August 23 Order 16 in more detail in the Discussion section below. Broadly, however, the Court granted in part 17 and denied in part Defendant’s Motion to Compel, ordered Plaintiff to produce the 18 unredacted versions of certain previously redacted DePuy litigation documents, ordered 19 Plaintiff to review and update certain privilege log entries and to supplement its privilege 20 log to include deposition exhibits that were withheld on the basis of privilege, and gave the 21 parties a further opportunity to be heard through supplemental briefing on Defendant’s 22 request for sanctions in the Motion to Compel in light of the Court’s rulings in the August 23 23 Order. See id. at 20-21. 24 The parties submitted their supplemental briefing to the Court as ordered (see ECF 25
26 27 1 During the meet-and-confer process, the parties had agreed to narrow the scope of RFP No. 36 to documents within these parameters. ECF No. 173-3 at 3. 28 1 Nos. 259, 269, 272). Additionally, the parties submitted Motions to Seal in connection with 2 each supplemental brief on sanctions. See ECF Nos. 257, 267, 270. The Court held a 3 hearing on the supplemental briefing on October 12, 2021. ECF No. 275. During the 4 hearing, the Court gave a tentative ruling and heard oral argument from both sides. 5 Having considered the briefing and the parties’ oral arguments, the Court now 6 GRANTS in part and DENIES in part Defendant’s request for Rule 37 sanctions against 7 Plaintiff, as described in more detail in Section III below. 8 However, before turning to the merits of Defendant’s request for sanctions, the Court 9 will address the parties’ Motions to Seal in turn. 11 A. Legal Standard 12 As discussed in the Court’s July 1 Order, for discovery documents attached to non- 13 dispositive motions and filed under seal pursuant to a valid protective order, “the usual 14 presumption of the public’s right of access [to court filings] is rebutted.” Phillips ex rel. 15 Estates of Byrd v. Gen. Motors Corp., 307 F.3d 1206, 1213 (9th Cir. 2002). Therefore, a 16 particularized showing of “good cause” under Rule 26(c) of the Federal Rules of Civil 17 Procedure will suffice to seal documents produced in discovery. Kamakana, 447 F.3d at 18 1180. 19 Because the underlying motions both relate to a non-dispositive dispute regarding 20 discovery documents, the “good cause” standard applies. “For good cause to exist, the party 21 seeking protection bears the burden of showing specific prejudice or harm will result if no 22 protective order is granted.” Phillips, 308 F.3d at 1210-11 (citing Beckman Indus., Inc. v. 23 Int’l Ins. Co., 966 F.2d 470, 476 (9th Cir. 1992) (holding that “broad allegations of harm, 24 unsubstantiated by specific examples or articulated reasoning, do not satisfy the Rule 26(c) 25 26 27 28 1 test”)). This standard is incorporated into the undersigned’s Chambers Rules, which 2 explain that “[t]he Court will scrutinize any request to file information under seal, and a 3 request will only be granted if a specific showing is made that justifies sealing. Generic 4 and vague references to ‘competitive harm’ will almost always be insufficient to justify 5 sealing.” Chmbr. R. at 2. 6 B. Defendant’s First Motion to Seal 7 First, Defendant filed a Motion to File Supplemental Sanctions Briefing Under Seal 8 (“Defendant’s First Motion to Seal”) on September 7, 2021. Defendant seeks to seal (1) 9 Exhibits 1, 2, and 3 of counsel Brianne Straka’s Declaration in Support of Defendant’s 10 Motion for Sanctions (ECF No. 258-2); (2) portions of the Straka Declaration that 11 summarize and describe the contents of Exhibits 1, 2, and 3, as well as “specifics about the 12 sensitive and confidential business arrangement between Defendant and Quinn Emanuel”; 13 and (3) portions of the Supplemental Brief that summarize and describe the timekeeping 14 records, as well as contents of other Exhibits that the Court previously granted leave to file 15 under seal. 16 i. Timekeeping Records 17 Defendant’s argument for why the Court should permit it to file its timekeeping 18 records under seal is that it includes “Quinn Emanuel’s billing rates, as well as the work 19 that Quinn Emanuel has performed for Defendant throughout this matter.” Defendant 20 contents this “information is non-public, and in the normal course of business, both 21 Defendant and Quinn Emanuel take all reasonable steps to maintain it in confidence.” ECF 22 No. 257-1, Straka Decl. ¶ 2. 23 Defendant’s argument falls short of the “good cause” standard. Defendant fails to 24 meet its burden to explain what, if any, “specific prejudice or harm will result” if the Court 25
26 27 2 Judge Goddard’s Chambers Rules are available at https://www.casd.uscourts.gov/judges/goddard/docs/Goddard%20Civil%20Pretrial%20Pr 28 1 does not allow the timekeeping records to be filed under seal. See Phillips, 308 F.3d at 2 1210-11. Moreover, courts frequently deny requests to file attorney billing records and 3 hourly rates under seal, because “[i]t is commonplace for the number of hours billed and 4 the hourly rate of attorneys to be openly filed on court dockets; without this information 5 the final fees award appears to be drawn from thin air.” Linex Techs., Inc. v. Hewlett- 6 Packard Co., No. C 13-159 CW, 2014 WL 6901744, at *1 (N.D. Cal. Dec. 8, 2014). See 7 also, e.g., Grouse River Outfitters Ltd. v. Oracle Corp., No. 16-CV-02954-LB, 2019 WL 8 8752333, at *2 (N.D. Cal. Sept. 27, 2019) (rejecting a party’s motion to seal its counsel’s 9 billing rates and invoices because the party “[did] not adequately explain why disclosure 10 of [the firm’s] billing rates and number of hours billed would prejudice it or allow 11 competitors to exploit this sensitive information” and otherwise had “not shown it will 12 suffer any ‘specific prejudice or harm’ if the documents are not filed under seal”). 13 Accordingly, the Court DENIES the Motion to Seal the timekeeping records. To the 14 extent the records may have contained privileged information, it appears Defendant has 15 already adequately redacted the records to avoid disclosure of privileged materials. 16 ii. Portions of Straka Declaration 17 For the same reasons the Court denied the request to seal the timekeeping records, 18 the Court also denies the request to seal portions of the Straka Declaration referring to 19 contents of the records and to “specifics about the sensitive and confidential business 20 arrangement between Defendant and Quinn Emanuel.” Defendant asks that this 21 information be sealed because the details of the business arrangement between Defendant 22 and Quinn Emanuel are “non-public, and in the normal course of business, both Defendant 23 and Quinn Emanuel take all reasonable steps to maintain it in confidence.” ECF No. 257- 24 1, Straka Decl. ¶ 3. 25 Once more, Defendant’s reason does not constitute a showing of particularized 26 harm, as needed to justify sealing. The Court’s conclusion in this regard holds firm even 27 where, as here, the timekeeping records and portions of Straka Declaration reveal that 28 Defendant’s counsel have offered a discounted billing rate to Defendant. See, e.g., Muench 1 Photography, Inc. v. Pearson Educ., Inc., No. 12-CV-01927-WHO, 2013 WL 6698465, at 2 *2 (N.D. Cal. Dec. 18, 2013) (“Billing rates for legal services, even discounted ones, are 3 not entitled to be sealed.); United States ex rel. Doe v. Biotronik, Inc., No. 2:09-CV-3617- 4 KJM-EFB, 2015 WL 6447489, at *6–7 (E.D. Cal. Oct. 23, 2015). In Biotronik, the court 5 rejected a request to seal a party’s fee arrangements with its law firm under very similar 6 circumstances, even in the face of declarations from lead outside counsel and corporate 7 counsel insisting that disclosure of the firm’s discounted rates “would hamper the firm’s 8 financial relationships with other clients and provide cannon fodder to the firm’s 9 competitors” and that “disclosure of the rates Biotronik pays Holland & Knight would 10 impair [Biotronik’s] negotiations with other firms.” Id. at *6. The declarations produced 11 there set forth far more extensive argument than the argument Defendant puts before the 12 Court here,3 and yet the Court still found it fell short of a “particularized explanation of 13 harm” because the declarations “sketch only rough outlines of hypothetical competitive 14 and litigation difficulties. The same harms could befall any large corporation that employs 15 any large law firm.” Id. at *7. 16 For these reasons, the Court DENIES the request to seal those portions of the Straka 17 Declaration discussing the contents of the timekeeping records and the discounted rates 18 offered by Quinn Emanuel to Defendant in this litigation. 19 \\ 20 \\ 21 \\ 22 23 24 3 Specifically, the court explained that corporate counsel’s declaration “generally describes 25 ‘a significant legal matter’ in which Biotronik now pursues settlement, and he believes disclosure of Biotronik’s obligations to Holland & Knight in this case may derail those 26 negotiations. On a similar note, he reports that Biotronik is currently litigating disputes 27 with one of its three princip[al] competitors and that disclosure of amounts owed to Holland & Knight here would put the firm at a disadvantage in those cases.” Biotronik, 2015 WL 28 1 iii. Portions of the Supplemental Brief 2 Finally, Defendant seeks to seal portions of the Supplemental Brief that summarize 3 and describe the timekeeping records, as well as contents of other Exhibits that the Court 4 previously granted leave to file under seal. 5 Specifically, Defendant redacted portions of pages 8, 15, 16, and 17 of the 6 Supplemental Brief. The redacted portions on pages 15-16 and 16-17 discuss the total fees 7 associated with the briefing and the discounted rates that Quinn Emanuel has offered to 8 Defendant throughout this matter. For the reasons already discussed, the request to 9 maintain these portions of the Supplemental Brief under seal is DENIED. 10 Page 8 of the supplemental brief contains two separate redactions. First, Defendant 11 has redacted a portion of the brief that discusses the so-called “Tomko letter,” which the 12 Court previously allowed to be filed under seal. See ECF No. 238 at 7. Defendant’s request 13 to keep this portion of the brief under seal is GRANTED. 14 Second, Defendant has redacted a portion of the brief that quotes deposition 15 testimony from Dr. Harry McKellop. See ECF No. 258 at 8. However, the Court previously 16 ordered the McKellop deposition transcript to be filed publicly after Plaintiff dropped its 17 request to be filed under seal. ECF No. 238 at 4, 7. For that reason, the Court DENIES the 18 request to maintain the reference to the McKellop testimony in Defendant’s Supplemental 19 Brief under seal. 20 C. Plaintiff’s Motion to Seal 21 Plaintiff filed a Motion to Seal along with its Supplemental Brief in Opposition to 22 Sanctions (“Response Brief”) on September 28, 2021. ECF No. 267. Plaintiff seeks to seal 23 portions of the Response Brief and Exhibit 3 to the accompanying Declaration of 24 Christopher Bruno. Id. at 2. 25 In support, Plaintiff argues both the redacted portions of the Response Brief and 26 Exhibit 3 to the Bruno Declaration “contain confidential business information” about 27 DePuy. Id. Specifically, the brief “contains information that appears to be sensitive 28 communications among DePuy employees related to patent prosecution opinions 1 designated as ‘Highly Confidential – Attorneys’ Eyes Only’” in the DePuy Litigation. Id. 2 Similarly, Plaintiff contends that Exhibit 3 to the Bruno Declaration contains “information 3 that appears to be sensitive communications among DePuy employees related to patent 4 prosecution opinions and competitive royalty rate information designated as ‘Highly 5 Confidential – Attorneys’ Eyes Only’” in the DePuy litigation. Id. 6 Plaintiff has failed to meet its burden of showing that specific harm or prejudice will 7 result if the Court does not seal Exhibit 3 to the Bruno Declaration or the portions of the 8 Response Brief at issue. Indeed, Plaintiff does not point to any harm or prejudice that will 9 result at all, much less specific harm or prejudice. Although Plaintiff mentions that Exhibit 10 3 “appears to” contain “competitive royalty rate information,” as explained above, the 11 Court generally finds “[g]eneric and vague references to ‘competitive harm’” to be 12 insufficient to justify sealing. Chmbr. R. at 2. Therefore, Plaintiff’s Motion to Seal is 14 D. Defendant’s Second Motion to Seal 15 In connection with its reply, Defendant filed another Motion to File Supplemental 16 Reply Brief in Support of Sanctions Request Under Seal (“Second Motion to Seal”) on 17 October 5, 2021. ECF No. 270. The Second Motion to Seal seeks the same relief as the 18 First Motion to Seal. Namely, Defendant seeks to seal (1) Exhibit 7 to the Supplemental 19 Declaration of Brianna Straka in Support of Defendant’s Motion for Sanctions 20 (“Supplemental Straka Declaration”), which contains the timekeeping records associated 21 with the Reply Brief (ECF No. 271-2); (2) portions of the Supplemental Straka Declaration 22 (ECF No. 271-1), all of which refer to defense counsel’s billing rates and the discounted 23 rate negotiated by Quinn Emanuel and Defendant; and (3) portions of the Reply Brief, 24 which also indirectly refer to the billing rates of counsel by setting forth the total fee 25 amounts sought by Defendant in connection with the Reply Brief. 26 For the same reasons the Court denied Plaintiff’s requests to seal billing rate 27 information in its First Motion to Seal, the Court DENIES Plaintiff’s Second Motion to 28 Seal. 2 A. Legal Standard 3 If the Court grants a motion to compel discovery, Rule 37 of the Federal Rules of 4 Civil Procedure provides that “the court must, after giving an opportunity to be heard, 5 require the party [] whose conduct necessitated the motion, the party or attorney advising 6 that conduct, or both to pay the movant’s reasonable expenses incurred in making the 7 motion, including attorney’s fees.” Fed. R. Civ. P. 37(a)(5)(A). But the Court must not 8 order such payment if the opposing party’s nondisclosure was substantially justified or if 9 other circumstances make an award of expenses unjust. Fed. R. Civ. P. 37(a)(5)(A)(ii)-(iii). 10 “The party contesting the discovery sanction on a properly brought motion under Rule 11 37(a)(5) bears the burden of establishing substantial justification or that other 12 circumstances make an award of expenses unjust.” RG Abrams Ins. v. L. Offs. of C.R. 13 Abrams, No. 221CV00194FLAMAAX, 2021 WL 4974050, at *16 (C.D. Cal. July 8, 2021) 14 (citing Hyde & Drath v. Baker, 24 F.3d 1162, 1171 (9th Cir. 1994)). See also Falstaff 15 Brewing Corp. v. Miller Brewing Co., 702 F.2d 770, 784 (9th Cir. 1983) (“The party 16 against whom an award of expenses is sought has the burden of showing the special 17 circumstances that make his or her failure to comply substantially justified”). 18 Additionally, where—as here—the motion to compel is granted in part and denied 19 in part, the Court “may, after giving an opportunity to be heard, apportion the reasonable 20 expenses for the motion.” Fed. R. Civ. P. 37(a)(5)(B). 21 Ultimately, the imposition of Rule 37 sanctions is “left to the sound discretion” of 22 the Court. O’Connell v. Fernandez-Pol, 542 F. App’x 546, 547-48 (9th Cir. 2013) (citing 23 Craig v. Far West Eng’g Co., 265 F.2d 251, 260 (9th Cir. 1959), cert denied, 361 U.S. 816. 24 B. Summary of the Court’s Rulings on Defendant’s Motion to Compel 25 In Defendant’s Motion to Compel (ECF No. 173), Defendant requested three forms 26 of relief: (1) that the Court conduct in camera review of five deposition transcripts from 27 the DePuy litigation (Tarr, Tomko, Hanes, Narayan, Shen) and certain redacted discovery 28 responses from the DePuy litigation; (2) that the Court compel production of all non- 1 privileged documents subject to its review that are responsive to Defendant’s RFP No. 36 2 “related to patent infringement, damages, or validity,” and require Plaintiff to properly log 3 each privileged document; and (3) that the Court impose Rule 37 fee-shifting sanctions for 4 costs Defendant incurred in “exposing and seeking the Court’s assistance with [Plaintiff’s] 5 conduct.” ECF No. 173 at 11-17. 6 The Court granted the Motion to Compel in part in its July 1 Order, by requiring 7 Plaintiff to produce the Tarr and Tomko depositions to Defendant outright and granting in 8 camera review of the majority of the remaining DePuy litigation materials requested by 9 Defendant. In the August 23 Order, the Court made privilege rulings following its in 10 camera review of the unredacted versions of: (1) the deposition transcript of Dr. Mark 11 Hanes; (2) the deposition transcript of Venkat Narayan; (3) the deposition transcript of Dr. 12 Fu-Wen Shen; and (4) certain of Plaintiff’s discovery responses from the DePuy litigation 13 (ECF Nos. 172-10, 172-11, 172-12), with certain exceptions.4 A summary of the Court’s 14 privilege rulings from the August 23 Order is as follows, with findings of improper 15 privilege designations or log descriptions provided in bold: 16 i. Hanes Deposition 17 (1) Hanes Dep. 23:14-27:17: Not privileged 18 (2) Hanes Dep. 43:10-19: Not privileged 19 (3) Hanes Dep. 44:17-45:7: Privileged and properly logged 20 (4) Hanes Dep. 45:19-46:14: Not privileged 21 (5) Hanes Dep. 46:15-24: Privileged and properly logged 22 23 4 Plaintiff was not required to produce its responses to DePuy’s Interrogatories Nos. 8 or 24 10 to the Court for in camera review, because the Court found Defendant failed to meet its 25 burden under the test set forth in United States v. Zolin, 491 U.S. 554, 572 (1989) to “show a factual basis sufficient to support a reasonable, good faith belief that in camera inspection 26 may reveal evidence that information in the materials is not privileged.” See In re Grand 27 Jury Investigation, 974 F.2d 1068, 1075 (9th Cir. 1992) (applying the Zolin test to determine the propriety of in camera review of materials subject to a claimed attorney- 28 1 (6) Hanes Dep. 47:16-48:9: Privileged and properly logged 2 (7) Hanes Dep. 50:16-63:7: Not privileged 3 (8) Hanes Dep. 181:19-198:5: Privileged but improperly logged 4 (9) Hanes Dep. 203:13-208:9: Privileged but improperly logged 5 (10) Hanes Dep. 211:10-218:4: Privileged but improperly logged 6 (11) Hanes Dep. 237:11-249:5: Privileged but improperly logged 7 (12) Hanes Dep. 249:6-251:3: Not privileged and improperly logged 8 (13) Hanes Dep. 252:23-253:18: Not privileged 9 ii. Narayan Deposition 10 (1) Narayan Dep. 210:7-216:14: Not privileged 11 (2) Narayan Dep. 267:23-292:20: Privileged but improperly logged 12 iii. Shen Deposition 13 (1) Shen Dep. 60:19-63:5: Not privileged 14 (2) Shen Dep. 154:7-156:24: Not privileged 15 iv. Discovery Responses from DePuy Litigation 16 (1) Supplemental Response to DePuy Interrogatory No. 6: Properly redacted and 17 logged 18 (2) Additional Supplemental Response to DePuy Interrogatory No. 6: Not 19 privileged5 20 (3) Supplemental Response to DePuy Interrogatory No. 8: Defendant’s request 21 for in camera review denied in July 1 Order 22 (4) Supplemental Response to DePuy Interrogatory No. 10: Defendant’s request 23 for in camera review denied in July 1 Order 24 25 5 The Court allowed Plaintiff an opportunity to be heard regarding whether a certain portion 26 of this response summarizing the contents of “[i]nternal DePuy communications” is 27 privileged. Plaintiff declined to do so and voluntarily produced that portion along with the remainder of the response the Court found not privileged. Therefore, the Court treats the 28 1 (5) Supplemental Response to DePuy Interrogatory No. 14: Not privileged 2 (6) Response to DePuy Interrogatory No. 24: Not privileged 3 In sum, of 23 redactions, the Court ruled fully in Plaintiff’s favor with respect to 4 only six, by denying in camera review of two of the redactions and finding four others 5 were properly redacted and logged. The Court also found that five other redacted portions 6 were privileged but were improperly logged. The Court found the remaining 12 redacted 7 portions that it reviewed were not privileged and were improperly redacted on that basis. 8 Based on these rulings, Defendant asks the Court to order Plaintiff to compensate 9 Defendant’s counsel for three discrete categories of the attorney fees Defendant argues it 10 incurred as a result of Plaintiff’s discovery abuses: (1) fees associated with Defendant’s 11 first motion to compel, filed on October 1, 2020 as a Joint Motion for Resolution of 12 Discovery Dispute (ECF No. 106) and precipitating the Court’s December 22 Order; (2) 13 fees associated with Defendant’s second Motion to Compel and for Sanctions (ECF No. 14 173), filed on March 25, 2021, which precipitated the Court’s July 1 and August 23 Orders; 15 and (3) fees associated with Defendant’s supplemental briefing and attorney fees 16 application, including the supplemental reply brief (“fees on fees”). 17 C. Whether Plaintiff’s Position was Substantially Justified 18 In its supplemental response brief, Plaintiff argues that the Court should award no 19 fees to Defendant because Plaintiff’s position was substantially justified under Rule 20 37(a)(5). Specifically, Plaintiff argues that the “substantially justified” standard of Rule 37 21 is satisfied “if there is a ‘genuine dispute’ . . . or ‘if reasonable people could differ as to the 22 appropriateness of the contested action.’” ECF No. 268 at 5 (quoting Pierce v. Underwood, 23 487 U.S. 552, 565 (1998)). While true, the Court finds that Plaintiff has failed to show why 24 this principle is apposite here. Plaintiff was given the opportunity both in its supplemental 25 brief and during the subsequent hearing to explain why any given redaction was 26 substantially justified, even where the Court found the redacted material was not privileged 27 and ordered it to be produced to Defendant. Yet Plaintiff fails to point to any specific 28 unfavorable ruling in the Court’s August 23 Order that is “subject to reasonable debate[.]” 1 See id. at 6. 2 Instead, Plaintiff makes broad, general arguments about the complexity of the 3 privilege analysis required under the specific circumstances of reviewing documents from 4 the DePuy Litigation. Namely, Plaintiff explains that, because DePuy and Plaintiff had 5 once been joint clients when pursuing the patents at issue, the joint client doctrine applies 6 to many of the discovery materials from the DePuy Litigation—i.e., certain documents 7 relating to the patent prosecution are not privileged as between DePuy and Orthopaedic 8 Hospital, and thus could be produced freely in that litigation, but remain privileged as to 9 the outside world. Because Plaintiff wished to exercise due care to protect documents 10 potentially subject to the joint privilege, it erred on the side of caution when making 11 redactions. Additionally, Plaintiff cites to case law for the various propositions that (1) 12 communications between non-lawyer employees about matters on which the parties intend 13 to seek legal advice are covered by the attorney-client privilege; (2) a communication of 14 technical information that is primarily concerned with giving legal guidance remains 15 privileged; (3) two parties jointly prosecuting a patent application are commonly 16 considered joint clients; and (4) confidential communications between inventors or 17 employees who work for the same employer can retain their privilege so long as they are 18 made in furtherance of securing legal advice. Based on these principles, Plaintiff explains 19 that it “had to make determinations regarding whether DePuy employees and OH 20 employees (including non-lawyers), even when discussing technical information, were 21 doing so in the context of their efforts to seek legal advice. That is no easy task nor one 22 amenable to bright line drawing.” ECF No. 268 at 8. 23 Plaintiff’s argument stops short of establishing its position was substantially 24 justified, however, because Plaintiff gives no example of any of the 17 redactions listed 25 above that the Court found not privileged or improperly logged to illustrate how its 26 complex privilege analysis resulted in a mis-designation or inaccurate log description. The 27 only example Plaintiff offers is the so called “Tomko letter” discussed in the Court’s 28 July 1 Order (OH_DJO_00075245), a letter from a DePuy representative, Brian Tomko, to 1 Plaintiff’s CEO, Dr. Anthony Scaduto, regarding the licensing agreement between DePuy 2 and Plaintiff. See ECF No. 172-2. Plaintiff explains that it previously redacted the Tomko 3 letter because it “reasonably believed DePuy’s understanding [regarding the value of the 4 patents] was likely based on communications with DePuy’s and OH’s joint prosecution 5 counsel.” ECF No. 268 at 9. However, the Tomko letter was not one of the documents the 6 Court compelled Plaintiff to produce following in camera review. Rather, Plaintiff 7 voluntarily provided an unredacted version of the Tomko letter to Defendant in February 8 2021 along with its Second Supplemental Privilege Log, following meet-and-confer efforts 9 regarding Plaintiff’s First Supplemental Privilege Log. Therefore, whether Plaintiff’s 10 previous redaction of the Tomko letter was substantially justified has no bearing on the 11 question at hand—namely, whether Plaintiff’s 17 redactions and corresponding privilege 12 log entries that the Court found improper when evaluating the documents Defendant sought 13 to compel were substantially justified. 14 Plaintiff has thus failed to meet its burden of showing that its conduct was 15 substantially justified. 16 D. Whether Other Circumstances Make an Award of Fees Unjust 17 Plaintiff also argues that a fee award would be unjust here for four reasons. First, 18 Plaintiff argues that where the results of a discovery dispute are a “mixed bag,” Rule 37 19 fees are often inappropriate. ECF No. 268 at 9. To bolster this point, Plaintiff notes that the 20 Court refused to award Plaintiff attorney fees in the December 22 Order because the Court 21 had granted Defendant at least some of the relief it sought. Id. at 10 (citing ECF No. 144 22 at 16). 23 The Court rejects Plaintiff’s first argument. A key purpose of Rule 37 sanctions in a 24 situation where one party’s discovery conduct necessitates a motion to compel is to 25 “discourage unnecessary involvement of the court in discovery.” Marquis v. Chrysler 26 Corp., 577 F.2d 624, 642 (9th Cir. 1978). For that reason, the rule incorporates a 27 presumption that fee-shifting sanctions will be awarded to the moving party where the 28 Court orders disclosure of materials that are the subject of a motion to compel. Fed. R. Civ. 1 P. 37(a)(5)(A); see also Rickels v. City of S. Bend, Ind., 33 F.3d 785, 786–87 (7th Cir. 1994) 2 (“Fee shifting when the judge must rule on discovery disputes encourages their voluntary 3 resolution and curtails the ability of litigants to use legal processes to heap detriments on 4 adversaries [] without regard to the merits of the claims.”) (citation omitted). 5 As the Court discussed in its August 23 Order, Plaintiff’s unwillingness to review 6 and revise its privilege designations and log during the meet-and-confer process with 7 Defendant in February 2021—when Defendant pointed out apparent and suspected 8 deficiencies with Plaintiff’s supplemental production and Second Supplemental Privilege 9 Log—led to a significant amount of unnecessary court involvement, often on issues that 10 were not at all close calls. See ECF No. 256 at 17 (“It is concerning to the Court that 11 Plaintiff failed to recognize at any point during this lengthy process of meeting and 12 conferring, reviewing, and supplementing its privilege log that many of its redactions of 13 the DePuy litigation documents based on claims of privilege were improper”). 14 For example, Plaintiff chose to stand by privilege designations with respect to such 15 materials as deposition testimony regarding deposition exhibits that were already 16 produced to Defendant. See id. at 7-8 (discussing redacted deposition testimony 17 concerning an email that was already produced to Defendant); 10 (same). Similarly, many 18 of Plaintiff’s privilege log descriptions were completely inaccurate with respect to the 19 authors, recipients, and subject matter of the redacted material. See id. at 6, 7, 8, 9 20 (discussing various deposition exhibits discussed in redacted deposition testimony with 21 corresponding log entries that inaccurately described the conversation participants, 22 authors, and/or the nature or subject matter of the communication). Plaintiff also redacted 23 certain materials on the basis that they “summariz[ed] communication” between attorneys 24 and clients even where the content of any such discussion was not revealed, or where there 25 was no indication whatsoever that an attorney-client communication formed the basis of 26 the redacted statements at issue. See, e.g., id. at 12 (discussing a response that referenced 27 an attorney only in a citation to the statement that “[o]ver the course of the 110 Patent 28 Family prosecution, Dr. McKellop had regular contact with DePuy personnel and 1 researchers to exchange confidential information regarding patent prosecution and patent 2 development” but that made no mention of the content of such conversations); id. at 13 3 (discussing a response that merely stated that the inventors “worked closely with 4 prosecution counsel” to file a provisional and final application for a certain patent, which 5 Plaintiff redacted as a response that summarized communication between the inventors and 6 prosecution counsel). 7 Although not every improper redaction or log entry is necessarily as egregious as 8 these examples, only Plaintiff was in a position to know which redactions were proper and 9 which were not, and, for the reasons discussed in the Court’s July 1 Order granting in 10 camera review, Defendant had ample reason to believe that at least some of the redacted 11 materials were not in fact privileged. Thus, these circumstances are quite different from the 12 circumstances before the Court in its December 22 Order. Here, Plaintiff’s refusal to 13 reconsider its privilege designations ultimately spawned multiple rounds of unnecessary 14 briefing on issues that could have been easily avoided if Plaintiff’s counsel had taken a 15 more cooperative and collaborative tack. See, e.g., Big City Dynasty v. FP Holdings, L.P., 16 336 F.R.D. 507, 513 (D. Nev. 2020) (“Instead of forcing judicial oversight of every dispute, 17 attorneys are expected to approach discovery with an eye toward cooperation, practicality, 18 and sensibility. The governing rules reflect this in several ways, including providing a 19 presumption that reasonable expenses—including attorneys’ fees—will be awarded to the 20 party that prevails on a discovery motion. By design, these ‘rules should deter the abuse 21 implicit in carrying or forcing a discovery dispute to the court when no genuine dispute 22 exists.’”) (quoting Fed. R. Civ. P. 37(a)(4)6 advisory committee’s note to 1970 amendment) 23 (other internal citations omitted). It is under such circumstances that Rule 37 sanctions are 24 typically granted. See Rickels, 33 F.3d at 786–87; Marquis, 577 F.2d at 642. 25
26 27 6 Subdivision (a)(4) of Rule 37 previously provided for an award of expenses, including attorney fees, to the prevailing party on a motion to compel. That provision is now 28 1 Second, Plaintiff characterizes Defendant’s privilege-related complaints as “an ever- 2 shifting target” and contends it was “[a]mbushed by [Defendant’s] no-win scenario with 3 its revised position regarding the scope of necessary production from the DePuy case and 4 its changed stance on the privilege log in violation of the parties’ prior agreement[.]” ECF 5 No. 269 at 10. This position relies on arguments that the Court has already rejected. The 6 Court found in the December 22 Order that there was no evidence that Defendant had 7 changed its stance on the privilege log in violation of the parties’ prior agreement. See ECF 8 No. 144 at 10-12. The Court also found in its July 1 Order that “Plaintiff’s assertion that 9 Defendant is newly seeking materials beyond the agreed-upon scope of documents 10 responsive to RFP No. 36 is easily refuted by the motion itself” and accordingly rejected 11 Plaintiff’s argument in that regard. ECF No. 238 at 12. 12 The parties’ entire dispute stems from a single Request for Production for documents 13 from the DePuy litigation related to validity, damages, and infringement. The Court 14 disagrees that this represents an “ever-shifting target.” And even if the Court accepted that 15 Defendant had repeatedly changed its request or “demanded more and more,” as Plaintiff 16 argues, that would still offer no explanation for Plaintiff’s improper privilege designations 17 and completely inaccurate privilege log descriptions. If a party believes that another party 18 is not engaging in discovery in good faith, retaliating in kind is not an appropriate solution. 19 Plaintiff forced the Court to intervene in basic issues like whether a privilege log 20 description accurately describes the authors, recipients, or subject matter of a withheld 21 communication, or whether a deponent’s description of a deposition exhibit is privileged 22 notwithstanding the fact that the exhibit itself has not been withheld as privileged. That 23 cannot be justified by any conduct of Defendant. There is no valid reason why those issues 24 could not have been resolved by Plaintiff through further review of the privilege log and 25 redacted materials. 26 Third, Plaintiff argues that Defendant has not shown it was prejudiced by Plaintiff’s 27 discovery conduct. However, as discussed during the hearing, Defendant seeks only 28 attorney fees to compensate it for the unnecessary briefing caused by Plaintiff’s 1 unreasonable withholding of certain materials. The cost incurred in briefing what would 2 otherwise be an unnecessary issue to bring to the Court is itself sufficiently prejudicial to 3 warrant fee-shifting sanctions, as is clear from the very structure of Rule 37. That is, Rule 4 37(a)(5) provides that a party whose improper nondisclosure necessitates a motion to 5 compel should “pay the movant’s reasonable expenses incurred in making the motion, 6 including attorney’s fees.” However, other, more serious sanctions are available under 7 other provisions of Rule 37 dealing with conduct that results in additional prejudice beyond 8 the incursion of unnecessary fees and expenses—i.e., Rule 37(b)(2) sanctions, which 9 include evidentiary, exclusionary, and even default sanctions to mitigate prejudice that 10 cannot be addressed by fee-shifting sanctions alone. See Fed. Rs. Civ. P. 37(b)(2) 11 (providing for more serious sanctions where a party disobeys a court order to provide or 12 permit discovery or fails to produce a person for an IME under Rule 35), (c)(1) (providing 13 for more serious sanctions where a party fails to disclose or supplement its disclosures as 14 required by Rule 26(a) or (e)), (d)(3) (providing for more serious sanctions where a party 15 fails to appear for deposition or to answer interrogatories or a request for inspection). 16 Therefore, Defendant need not establish prejudice beyond the fees and expenses 17 associated with its motion to compel and subsequent briefing on sanctions, all of which 18 would not have been necessary if not for Plaintiff’s misconduct. Indeed, in ordering 19 supplemental briefing on sanctions, the Court required Defendant to “address whether, 20 after reviewing the compelled materials . . . Defendant believes additional Rule 37 21 sanctions are warranted beyond the fee-shifting sanctions requested in the March 25, 22 2021 Motion to Compel.” ECF No. 256 at 19 (emphasis added). To that end, the Court 23 required Defendant to “explain whether it has been prejudiced by the late production of 24 any information compelled by this Order or by the July 1 Order.” Id. In other words, a 25 showing of prejudice caused by the late production of the compelled materials might 26 support a request for additional sanctions beyond payment of the fees and expenses 27 necessitated by Plaintiff’s discovery misconduct. Because Defendant does not seek 28 additional sanctions, however, it need not show additional prejudice. 1 Finally, Plaintiff argues an award of fees would be unjust here because Defendant 2 has wasted court resources through its litigiousness, while Plaintiff has sought to 3 compromise when disputes have arisen. Plaintiff contends that the defense counsel who 4 “got more involved” in this case in mid-August 2020 is the source of the discovery conflicts 5 between the parties, because discovery had previously proceeded “unremarkably” with 6 only one discovery dispute when another attorney had been “running the case day to day[.]” 7 ECF No. 268 at 12. Additionally, Plaintiff notes that it did not seek sanctions against 8 Defendant for what it considered unreasonable litigation behavior with respect to an earlier 9 dispute between the parties (the so-called “entities dispute”), instead “stipulat[ing] away 10 discovery sanctions in exchange for an agreement to move forward.” Id. Plaintiff insists 11 that it has avoided unnecessary disputes by examining its own prior decision-making and 12 voluntarily producing information when Defendant has raised deficiencies with its 13 production. Finally, Plaintiff contends that it has avoided overzealous litigation and the 14 unnecessary incursion of fees by choosing not to object to the Court’s privilege 15 determinations, despite its disagreement with the Court’s rulings. Id. at 13. 16 The Court finds these arguments unavailing. Defendant’s prior conduct is not 17 squarely before the Court and, in any event, is not relevant to the Court’s determination of 18 whether Plaintiff’s at-issue conduct is sanctionable. While the Court appreciates that 19 Plaintiff made efforts to review its supplemental production and log and voluntarily 20 produce a Second Supplemental Privilege Log in February 2021 when Defendant raised 21 deficiencies with the same, Plaintiff’s efforts ultimately fell far short of curing its privilege 22 mis-designations and inaccurate log descriptions, as the Court explained in detail in the 23 August 23 Order. And, for the same reasons the Court found Plaintiff’s conduct was not 24 substantially justified, the Court finds the improper claims of privilege and inadequate log 25 entries that Plaintiff failed to remedy—thus forcing court intervention—are in many cases 26 so egregious that the Court is unpersuaded by Plaintiff’s claim that its course of conduct is 27 that of a “conscientious, cost-sensitive litigant.” Id. As for Plaintiff’s argument that the 28 Court should credit Plaintiff for judiciously choosing not to object to the Court’s discovery 1 orders under Rule 72, the Court once more notes that Plaintiff was invited to explain why 2 its conduct was substantially justified in the very supplemental brief where it indicates it 3 would have had valid objections to the Court’s rulings. Yet Plaintiff failed to defend its 4 designations or privilege log entries underlying any of the Court’s unfavorable privilege 5 rulings from the August 23 Order. 6 Therefore, Plaintiff has failed to meet its burden of showing that other circumstances 7 would make an award of fees unjust pursuant to Rule 37(a)(5). 8 For these reasons, the Court will award fee-shifting sanctions to Defendant pursuant 9 to Rule 37(a)(5). However, because Defendant’s Motion to Compel was granted in part 10 and denied in part, the Court must consider whether to apportion the reasonable expenses 11 for the motion. Fed. R. Civ. P. 37(a)(5)(B). 12 E. Whether the Court Should Apportion Fees 13 Defendant argues that the Court should not apportion the fee award, and should 14 instead grant the entirety of the fees incurred in all three categories. In support, Defendant 15 points to the “blatant willfulness” of Plaintiff’s conduct, and argues that although the Court 16 denied both motions to compel in part, the result is that Plaintiff was ordered to produce 17 “nearly all of the information Defendant sought[.]” Thus, Defendant contends “the equities 18 here support granting Defendant’s full fee request without apportionment.” ECF No. 258 19 at 14-15. 20 The Court agrees with Defendant in part. However, as discussed at oral argument, 21 the Court will not reimburse Defendant for the fees it incurred in connection with the 22 parties’ October 1, 2020 Joint Motion for Resolution of Discovery Dispute (ECF No. 106) 23 (the “Joint Motion”), which led to the Court’s December 22 Order. The Court finds that 24 these fees are too far afield from the sanctionable conduct at issue. Although the Court 25 recognizes that at least some of the disputes raised by Defendant in the October 2020 Joint 26 Motion developed over time into the disputes raised in Defendant’s later Motion to 27 Compel, the Court denied the majority of the relief Defendant sought in the first motion. 28 More significantly, the Court’s decision to award sanctions at this juncture is driven 1 primarily by its finding that Plaintiff acted unreasonably after the Court issued its 2 December 22 Order, by refusing to continue reviewing and revising its privilege claims 3 and privilege log when Defendant raised obvious persistent deficiencies. Therefore, the 4 Court DENIES Defendant’s request for fees incurred on the Joint Motion. 5 For its part, Plaintiff asserts that because the Court found numerous of Plaintiff’s 6 privilege claims justified, any fee-shifting sanction should be apportioned accordingly. 7 ECF No. 269 at 14-15. This argument misses the mark. Prior to the Court’s in camera 8 review, only Plaintiff had access to the redacted materials. For Defendant, the withheld and 9 redacted documents were a black box. Thus, only Plaintiff could meaningfully assess 10 whether its claims of privilege were valid. Yet despite numerous meet-and-confer efforts 11 and even in the face of a Court order requiring Plaintiff to revisit its privilege designations 12 and privilege log, Plaintiff failed to reasonably reassess its designations. Indeed, Plaintiff 13 has presented argument to the Court indicating that Plaintiff may not have reassessed its 14 claims of privilege at all. As the Court noted in its August 23 Order: 15 [I]t seems that Plaintiff believed its only obligation pursuant to the December 22 Order was to log the redactions and include descriptions allowing 16 Defendant to verify its claims of privilege—never mind if the descriptions 17 were accurate or if the redacted portions of the documents were actually privileged. If so, that belief would be based on an unreasonable reading of the 18 December 22 Order. 19 ECF No. 256 at 18. 20 Apportioning fees based on how many redactions were found proper in the end 21 would only condone this unreasonable, uncooperative discovery conduct. In its Motion to 22 Compel, Defendant sought in camera review of a very limited universe of DePuy litigation 23 documents. Plaintiff had ample opportunity both before and after Defendant filed the 24 Motion to Compel to reevaluate whether its claims of privilege over those documents (or 25 redacted portions thereof) were legitimate. Instead, Plaintiff left it to Defendant to initiate 26 motion practice on the issue, and left it to the Court to parse through which redactions were 27 proper and which were not. All of that time was wasted. Therefore, in its discretion, the 28 1 Court finds that apportioning the fees according to the percentage of privilege claims that 2 were ultimately found to be valid and properly logged would run counter to the purpose of 3 Rule 37 sanctions, which is to incentivize attorneys to act cooperatively and to deter parties 4 from forcing unnecessary motion practice. Big City Dynasty, 336 F.R.D. at 513.7 5 Therefore, the Court will require Plaintiff to pay Defendant all reasonable expenses 6 that Defendant incurred in preparing the second Motion to Compel, as well as the 7 supplemental briefing Defendant was ordered to prepare regarding Rule 37 sanctions. 8 F. Reasonableness of the Fees Sought 9 The task of apportionment involves not only an evaluation of which work performed 10 by the movant’s attorneys is fairly compensable as a result of the conduct that “necessitated 11 the motion,” but also an analysis of whether counsel’s reported hourly rates and hours 12 expended on the motion are “reasonable.” Reasonable attorney fees are calculated based 13 on the lodestar method, which requires the Court to “multiply[] the number of hours the 14 prevailing party reasonably expended on the litigation by a reasonable hourly rate.” 15 Morales v. City of San Rafael, 96 F.3d 359, 363 (9th Cir. 1996). See also Allergan USA, 16 Inc. v. Prescriber's Choice, Inc., No. SACV1701550DOCJDEX, 2018 WL 4745303, at *1 17 (C.D. Cal. July 16, 2018) (explaining that the lodestar method is generally used to calculate 18 attorney fees for the purpose of Rule 37(a)(5) fee-shifting sanctions); Collinge v. 19 IntelliQuick Delivery, Inc., No. 2:12-0824 JWS, 2014 WL 2569157, at *1 (D. Ariz. June 20 9, 2014) (same). 21
22 23 7 Additionally, the Court notes that Plaintiff’s argument regarding fee apportionment for Defendant’s second Motion to Compel focuses only on which of Plaintiff’s claims of 24 privilege were found to be proper. See ECF No. 269 at 14-15. This argument is not well- 25 taken insofar as it ignores the significant amount of redacted material that the Court found to be improperly logged. The Court finds it important to drive home that providing an 26 accurate privilege log is essential to allow the opposing party the ability to evaluate the 27 basis of the claimed privilege. An inaccurate log description is no more justified than an improper privilege designation. 28 1 Defendant bears the burden of demonstrating that its counsel’s hourly rates are 2 reasonable and in line with prevailing rates in the relevant legal community of the Southern 3 District of California. See Herring Networks, Inc. v. Maddow, No. 19-cv-1713, 2021 WL 4 409724, at *4 (S.D. Cal. 2021). To do so, Defendant must produce “satisfactory evidence, 5 in addition to the affidavits of its counsel, that the requested rates are in line with those 6 prevailing in the community for similar services of lawyers of reasonably comparable skill 7 and reputation.” Jordan v. Multnomah County, 815 F.2d 1258, 1263 (9th Cir. 1987); see 8 also Blum v. Stenson, 465 U.S. 886, 895 n.11 (1984); Roberts v. City & Cty. of Honolulu, 9 938 F.3d 1020, 1025 (9th Cir. 2019) (“It is the responsibility of the attorney seeking fees 10 to submit evidence to support the requested hourly rate”). 11 In calculating the number of reasonable hours to include in the lodestar, the Court 12 may award fees under Rule 37(a)(5) only for time expended “in actually preparing the 13 moving papers[.]” Shaw v. Ultimate Franchises, No. 81802273JLSADSX, 2020 WL 14 5539963, at *3 (C.D. Cal. Aug. 25, 2020). On the other hand, “hours actually expended in 15 the litigation are not to be disallowed without a supporting rationale.” United Steelworkers 16 of Am. v. Phelps Dodge Corp., 896 F.2d 403, 407 (9th Cir. 1990). “Only in rare or 17 exceptional cases will an attorney’s reasonable expenditure of time on a case not be 18 commensurate with the fees to which he is entitled.” Cunningham v. Cty. of Los Angeles, 19 879 F.2d 481, 488 (9th Cir. 1988). 20 Additionally, although Defendant bears the initial burden of documenting its 21 reasonable hours and submitting evidence in support, Plaintiff bears “a burden of rebuttal 22 that requires submission of evidence to the district court challenging the accuracy and 23 reasonableness of the hours charged or the facts asserted by the prevailing party in its 24 submitted affidavits.” Gates v. Deukmejian, 987 F.2d 1392, 1397–98 (9th Cir. 1992) 25 (citations omitted). The Court “has a great deal of discretion in determining the 26 reasonableness of the fee[,]” including “the reasonableness of the hours claimed by the 27 prevailing party.” Id. at 1398. 28 In its fee application, Defendant reports that its counsel expended 133.1 total hours 1 on the March 2021 Motion to Compel and 77.6 total hours on the supplemental “fees on 2 fees” briefing, amounting to attorney fees of $99,320.43 on the Motion to Compel and 3 $50,199.18 on the supplemental briefing, for a total of $149,519.61. 4 Specifically, defense counsel’s billing rates and hours are broken down as follows: 5 • Lazar Raynal, partner and lead trial counsel: hourly billing rate of $1,225 from October 2019 - August 2020 and $1,260 from September 6 2020 to the present 7 o 16.4 hours on Defendant’s Second Motion to Compel 8 o 2 hours on supplemental sanctions briefing • Brianne Straka, partner: hourly billing rate of $925 in August 2020, 9 $1,005 from September 2020 – August 2021, and $1,140 from 10 September 2021 to the present 11 o 27.2 hours on Defendant’s Second Motion to Compel o 8.9 hours on supplemental sanctions briefing 12 • John Poulos, fifth-year associate: hourly billing rate of $770 from 13 October 2019 – August 2020 and $875 from September 2020 to August 2021 14 o 32.8 hours on Defendant’s Second Motion to Compel 15 o 1 hour on supplemental sanctions briefing 16 • William Odom, fifth-year associate: hourly billing rate of $875 from September 2020 – August 2021 and $1,065 from September 2021 to 17 present. 18 o 56.7 hours on Defendant’s Second Motion to Compel 19 o 65.7 hours on supplemental sanctions briefing 20 Additionally, Defendant explains that Quinn Emanuel has provided a flat percentage 21 discount on its attorney fees (15% during the relevant period related to the Second Motion 22 to Compel and 35% during the relevant period related to the supplemental sanctions 23 briefing), resulting in a total request of $99,320.43 in attorney fees for 133.1 hours spent 24 on Defendant’s Second Motion to Compel, and $50,199.18 in attorney fees for 77.6 hours 25 spent on the supplemental sanctions briefing. 26 To support the requested lodestar amount, Defendant submits a Declaration of 27 defense counsel Brianne Straka, which explains in detail the amount of experience, skill, 28 and reputation of each attorney involved in working on the Second Motion to Compel and 1 supplemental sanctions briefing. Specifically, Ms. Straka and Lazar Raynal are both 2 partners at Quinn Emanuel. ECF No. 258-1, Straka Decl. ¶¶ 3, 4. Mr. Raynal is an 3 “internationally recognized, preeminent trial lawyer” admitted to practice before the 4 Supreme Court, the United States Courts of Appeals for the Third, Seventh, and Tenth 5 Circuits, and the United States District Courts for the Northern District of Illinois and 6 Eastern District of Wisconsin. Id. ¶ 3. He has “served as lead trial counsel in dozens of 7 high-stakes cases” and has been “widely recognized by leading publications” for his work 8 throughout the United States. Id. Ms. Straka is admitted to practice before the Federal 9 Circuit and the United States District Courts for the Northern District of Illinois and Eastern 10 District of Texas, and is further admitted to practice before the United States Patent and 11 Trademark Office (“USPTO”). Ms. Straka also has a Bachelor’s of Science in Electrical 12 Engineering, and background in designing and developing software, and has “represented 13 both plaintiffs and defendants in high-stakes intellectual property disputes through all 14 phases of litigation through trial.” Id. ¶ 4. John Poulos and William Odom are both fifth- 15 year associates. Id. ¶¶ 5, 6. Mr. Poulos has a master’s degree in Electrical Engineering and 16 is a registered patent attorney admitted to practice before the USPTO, and he has significant 17 federal litigation experience. Id. ¶ 5. Mr. Odom, too, has litigated “all types of intellectual 18 property disputes in state and federal court[s] across the United States[.]” Id. ¶ 6. 19 Defendant explains that its counsel, Quinn Emanuel, “is one of the top law firms in 20 the world.” ECF No. 258 at 16 (quoting Proofpoint, Inc. v. Vade Secure, Inc., 2020 WL 21 7398791, at *3 (N.D. Cal. Dec. 17, 2020) (describing Quinn Emanuel as “a large 22 international firm with a highly regarded reputation”) and Transweb, LLC v. 3M Innovative 23 Properties Co., 2013 WL 11312429, at *14 (D.N.J. Sep. 24, 2013) (describing Quinn 24 Emanuel as “one of the premier litigation firms in the country, particularly in the field of 25 patent litigation”)). Defendant also points to another case before this Court where similar 26 rates were approved for attorneys in the relevant legal community with similar experience 27 at a premier law firm. See Herring Networks, 2021 WL. 409724, at *5, *7 (approving 28 hourly rates of $1,150 and $1,050, respectively, for two partners at Gibson, Dunn & 1 Crutcher LLP, each with over 30 years of legal experience, approving a rate of $720 for a 2 senior associate with more than 10 years of legal experience, and approving a rate of $470 3 for two mid-level associates with three years of experience each, for work done in 2019 4 and 2020 on an anti-SLAPP motion). See also Amphastar Pharms. Inc. v. Aventis Pharma 5 SA, No. 5:09-CV-00023-SHK, 2020 WL 8680070, at *25 (C.D. Cal. Nov. 13, 2020) 6 (quoting an attorney fee expert’s declaration opining in part that Quinn Emanuel is a “peer 7 firm of” Gibson Dunn and of a “similar caliber”). 8 Defendant also notes that this is a technically complex and high-stakes patent case, 9 further justifying Defendant’s choice to retain “top-flight counsel[.]” ECF No. 258 at 16. 10 The Court agrees that the fact that this matter is a complex, high-stakes patent litigation 11 justifies approval of higher billing rates. See NuVasive, Inc. v. Alphatec Holdings, Inc., No. 12 3:18-CV-347-CAB-MDD, 2020 WL 6876300, at *3 (S.D. Cal. Mar. 20, 2020) (approving 13 a Winston & Strawn partner’s billing rate of $1,005 per hour and other attorneys’ rates of 14 $860 and $885 per hour, and collecting cases from this district to support that these rates 15 were “consistent with the rates charged by attorneys at large national law firms like 16 Winston & Strawn in complex high stakes patent litigation in this district.”). 17 Finally, Defendant argues that its rates are made “all the more reasonable” by the 18 “significant discount off its standard rates” that Quinn Emanuel has provided to Defendant. 19 ECF No. 258 at 16-17. By the Court’s calculations, the total discounted fee amount 20 requested by Defendant for its Second Motion to Compel and supplemental sanctions 21 briefing ($149,519.61) works out to an average hourly rate of $709.63 for 210.7 hours of 22 attorney work across both motions. 23 Significantly, Plaintiff did not challenge the hourly rates set forth in Defendant’s fee 24 application in its briefing, and Plaintiff’s counsel confirmed during the October 12 hearing 25 that Plaintiff does not object to the hourly rates reported. Plaintiff also did not argue in its 26 supplemental briefing that the hours expended by defense counsel thus far were 27 unreasonable. See generally ECF No. 272. However, during the hearing, Plaintiff’s counsel 28 argued that the hours that defense counsel incurred on the supplemental briefing are 1 unreasonable, and that this argument was not waived with respect to the hours spent on 2 Defendant’s supplemental reply brief. 3 Considering all the evidence before it, the Court finds that Defendant has met its 4 burden of establishing its reasonable expenses incurred as a result of unnecessary motion 5 practice related to Plaintiff’s improper privilege designations and inadequate privilege log. 6 Defendant has adequately documented the hours its counsel expended on the Second 7 Motion to Compel and the supplemental sanctions briefing, and has supported its attorneys’ 8 hourly billing rates with sufficient evidence in the form of Ms. Straka’s Declaration 9 documenting their experience, skill, and reputations, as well as citations to cases from this 10 district awarding comparable rates to attorneys from comparable firms. The fact that this 11 is a high-stakes, complex patent litigation further justifies the fee award. Thus, especially 12 taking into account the discount afforded to Defendant by Quinn Emanuel, the Court 13 approves the average hourly rate of $709.63 for 210.7 hours of attorney work, for a total 14 of $149,519.61. 15 In reaching this conclusion, the Court emphasizes that Plaintiff has not refuted the 16 reasonableness of Defendant’s billing rates, only the reasonableness of Defendant’s billed 17 hours on its supplemental reply brief. Although Defendant bears the initial burden of 18 documenting its reasonable hours, Plaintiff bears a burden of rebuttal requiring submission 19 of evidence to the Court challenging the accuracy and reasonableness of the hours. Gates, 20 987 F.2d at 1398. Plaintiff did not object to the hours billed on Defendant’s Second Motion 21 to Compel or on the initial Supplemental Brief in Support of Sanctions. Plaintiff’s sole 22 objection was to the hours billed on Defendant’s supplemental reply brief, which Plaintiff 23 raised during oral argument and without submitting evidence to the Court in support. 24 Accordingly, Plaintiff has failed to meet its burden of rebuttal in challenging the 77.6 hours 25 expended by counsel on Defendant’s supplemental reply brief. 26 \\ 27 \\ 28 \\ 2 Defendant’s request for Rule 37 fee-shifting sanctions in connection with its Motion 3 to Compel (ECF Nos. 173, 181) and supplemental briefing on sanctions (ECF Nos. 259, 4 272) is GRANTED in part and DENIED in part. 5 The Court awards Defendant fees in the amount of $149,519.61 to reimburse it for 6 the reasonable expenses and fees incurred in briefing the Motion to Compel and the 7 supplemental sanctions briefing. This amount represents a total of 16.4 hours for Mr. 8 Raynal at an average post-discount rate of approximately $1,040.27 per hour, a total of 9 36.1 hours for Ms. Straka at an average post-discount rate of approximately $772.54 per 10 hour, a total of 33.8 hours for Mr. Poulos at an average post-discount rate of approximately 11 $738.57 per hour, and a total of 122.4 hours for Mr. Odom at an average post-discount rate 12 of approximately $636.99 per hour. Defendant’s request for fee-shifting sanctions in 13 connection with its briefing on the First Motion to Compel (ECF No. 106) is DENIED. 14 Defendant’s First Motion to Seal (ECF No. 257) is GRANTED in part and 15 DENIED in part. Defendant’s request to file information related to its counsel’s billing 16 rates (including information regarding the discounted billing rates) is DENIED. Defendant 17 is accordingly ORDERED to separately file Brianne Straka’s Declaration in Support of 18 Defendant’s Motion for Sanctions (ECF No. 258-1) and Exhibits 1, 2, and 3 of the Straka 19 Declaration (ECF No. 258-2) in a public docket entry. Additionally, Defendant is 20 ORDERED to file its Supplemental Brief in Support of Motion for Sanctions (ECF No. 21 258) in a public docket entry, with only the redaction on page 8 on lines 9-11 related to the 22 Tomko letter. All other redactions must be removed from the public filing. 23 Plaintiff’s Motion to Seal (ECF No. 267) is DENIED. Plaintiff is ORDERED to 24 separately file a completely unredacted version of its Supplemental Brief in Opposition to 25 Sanctions (ECF No. 268) and Exhibit 3 to the accompanying Declaration of Christopher 26 Bruno (ECF No. 268-1) on the public docket. 27 Defendant’s Second Motion to Seal (ECF No. 270) is DENIED. Defendant is 28 ORDERED to separately file its Supplemental Reply Brief in Support of Sanctions 1 ||Request Under Seal (ECF No. 271), the Supplemental Straka Declaration (ECF No. 271- 2 || 1), and the timekeeping records regarding the fees expended on the Reply Brief (ECF No. 3 ||271-2) on a public docket entry.® 5 6 Dated: November 19, 2021 hice H. Kovolare Honorable Allison H. Goddard 8 United States Magistrate Judge 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Defendant may maintain all existing redactions contained in its timekeeping records that 26 are currently filed under seal (ECF Nos. 258-2 and 271-2). The Court recognizes that these redactions protect attorney-client privileged information. See Real v. Cont'l Group, Inc., 27 || 116 F.R.D. 211, 213 (N.D. Cal. 1986) (explaining that “attorney-client privilege embraces 28 attorney time, records and statements to the extent that they reveal litigation strategy and the nature of the services provided.”). 30
Orthopaedic Hospital v. DJO Global, Inc. (Orthopaedic Hospital v. DJO Global, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.