James S. Jardine (1647)

Samuel C. Straight (7638)

Ryan B. Bell (9956)

RAY QUINNEY & NEBEKER, P.C.

36 South State Street, Suite 1400

Salt Lake City, Utah 84111

Telephone: (801) 532-1500

Attorneys for Defendant e.Digital Corporation

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH CENTRAL DIVISION
DIGECOR, INC., a Washington corporation, Plaintiff, v. E.DIGITAL CORPORATION, a Delaware corporation; DOES 1 to 20, individuals; Defendants.	MEMORANDUM IN OPPOSITION TO PLAINTIFF’S STATEMENT OF ATTORNEYS’ FEES Civil Case No. 02:06-CV - 00437 Judge Ted Stewart Magistrate Judge David O. Nuffer

Pursuant to the Court’s Order Granting in Part Plaintiff digEcor’s Motion to Compel, Defendant e.Digital submits its Memorandum in Opposition to Plaintiff’s Statement of Attorneys’ Fees.

INTRODUCTION

Plaintiff digEcor, Inc. ("digEcor") has applied for an award of $14,214.10 for its attorneys fees expended in connection with its successful Motion to Compel. This amount is based on billing entries which add up to a total of 57.2 hours billed, a total that is vastly excessive for a straightforward discovery motion. However, David Tufts, lead counsel for digEcor, has affirmed in his affidavit that digEcor’s counsel spent 36.7 hours in connection with

 

the Motion to Compel, which would give rise to a significantly lower amount of fees. The discrepancy of over 20 hours in Mr. Tufts’ affidavit is not explained, but digEcor should not be permitted to seek its fees in connection with the higher number of hours.

Regardless of whether the Court credits Mr. Tufts’ stated total of hours worked, or calculates the total from the included billing entries, the amounts claimed are unreasonably excessive, as they are far out of line with most awards of fees for motions to compel in the Tenth Circuit and reflect unreasonable amounts of time spent on a generally simple motion. Further, digEcor’s statement of fees includes many time entries for tasks that were unnecessary to its motion. digEcor also seeks large amounts of fees for tasks performed before it began work on the motion, and for legal research, which is not generally awarded to prevailing parties. Finally, digEcor’s records do not set forth the detail necessary to separate time spent on proper tasks from that spent on non-compensable ones. Because digEcor bears the burden of showing that it is entitled to these fees, the Court should further reduce its award due to the impossibility of sorting proper billings from improper ones.

ARGUMENT

Concurrent with its Reply in Support of its Motion to Compel, digEcor submitted an affidavit seeking a payment of $14,214.10 for fees it allegedly incurred in connection with its motion. See Affidavit of David W. Tufts, filed as Exhibit G. to Doc. 145 and attached hereto as Exhibit 1. In ruling on the Motion to Compel, the Court ordered e.Digital to pay digEcor’s "reasonable expenses incurred in making [its] motion," but permitted e.Digital to submit a memorandum discussing "the reasonableness of the hourly rate and hours spent on this motion." March 22, 2008 Order, Doc. 159, p. 12. The Court also limited any claimed fees to those

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incurred after work began on the motion on December 18, 2007. See Argument § I.A.3, infra. The fees submitted by digEcor are not reasonable for the filing of a Motion to Compel on simple discovery issues. e.Digital therefore requests that the Court greatly reduce the number sought by digEcor, to craft an award that is more in line with similar awards granted in this Circuit, and to eliminate excessive, unnecessary, and non-compensable expenses.

I. Under the Lodestar Analysis Employed by Federal Courts, digEcor’s Claimed Fees Are Unreasonably Excessive, Unnecessary, and Otherwise Non-Compensable.

In evaluating the reasonableness of a prevailing party’s requested fees, federal courts employ what has been termed the "lodestar" approach, wherein the hours reasonably spent by counsel on a given case or phase of litigation are multiplied by a reasonable hourly rate. See Case v. Unified School Dist. No. 233 v. Johnson Cty., Kan., 157 F.3d 1243, 1249 (10th Cir. 1998); Kayhill v. Unified Gov’t. of Wyandotte Cty., 197 F.R.D. 454, 459 (D. Kan. 2000) (applying lodestar approach to fees awarded in motion to compel). The fee applicant bears the burden of establishing entitlement to an award and documenting the appropriate hours expended and hourly rates. See id. at 437. Such documentation is best provided in the form of "meticulous, contemporaneous time records" which "reveal, for each lawyer for whom fees are sought, all hours for which compensation is requested and how those hours were allotted to specific tasks- for example, how many hours were spent researching, how many interviewing the client, how many drafting the complaint, and so on." Ramos v. Lamm, 713 F.2d 546, 553 (10th Cir. 1983). Where the records do not clearly indicate what time was spent on what task, courts may reduce the fees awarded. See Case, 157 F.3d at 1250.

A fee application considered under the lodestar analysis is subject to challenges regarding whether the fees are excessive, unnecessary or otherwise non-compensable. See Hensley v.

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Eckerhart, 461 U.S. 424 (1983). Because digEcor’s claim of fees is vulnerable on all three counts, the Court should find that the amount of hours claimed by digEcor is unreasonable, and should reduce the total accordingly.

A. The Total of 57.2 Hours Spent Working on digEcor’s Motion to Compel is Not a Reasonable Amount of Time.

In evaluating the applicant’s statement of fees, the district court should "look at the hours expended on each task to determine if they are reasonable." See Case, 157 F.3d 1243, 1250. To do so, the Court must determine whether the submitted fees indicate that the prevailing party has "exercised billing judgment with respect to the number of hours worked and billed. . . . Billing judgment consists of winnowing hours actually expended down to hours reasonably expended." Praseuth v. Rubbermaid,Inc., 406 F.3d 1245, 1257 (19th Cir. 2005). The court’s determination may also hinge on the level of detail offered in the applicant’s billing records. "A district court is justified in reducing the reasonable number of hours if the attorney’s time records are sloppy and imprecise and fail to document adequately how he or she utilized large blocks of time." Case, 157 F.3d at 1250. Based on these criteria, the Court should reject several large amounts of fees claimed by digEcor as detailed below.

1. digEcor’s Claimed Fees Are Excessive, Far Outstripping the Awards Commonly Granted in the Tenth Circuit to Parties Prevailing on Similar Motions.

As a general matter, digEcor’s claimed fees are excessive, given the relatively simple nature of the Motion to Compel. In his affidavit, David W. Tufts, lead counsel for digEcor, summarized the fees billed on the motion to compel as follows: "Ms. Middleton, Mr. Davis and myself spent approximately 36.7 hours on digEcor’s Motion to Compel to date . . . " Tufts Aff., ¶ 4. Contrary to this statement, the billing entries provided in Mr. Tufts’ affidavit add up to a

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much higher number—57.2 attorney hours worked. The lower total of hours stated by Mr. Tufts, if true, would give rise to a number that is substantially smaller than the total fees presently claimed by digEcor—approximately $9725.50 (if using only the highest rate billed by digEcor’s attorneys), rather than the $14,214.10 presently proposed. While digEcor’s attorneys may have intended to reduce their total claimed hours to 36.7 upon recognizing that the original number of 57.2 was excessive, they failed to reduce the actual fees billed accordingly. Regardless of the cause of the discrepancy, the Court should use the reduced figure of $9725.50 as the maximum starting point for fees billed by digEcor’s attorneys. There is no basis to credit the higher number suggested by the time entries given Mr. Tufts’ own calculation of hours worked offered in his signed affidavit.

This raises the question of whether it is reasonable for attorneys to spend so many hours—whether 36.7 or 57.2—on a motion to compel that involves relatively simple discovery issues. See, e.g., Rich Prod.’s Corp. v Impress Indust., Inc., 5-187, slip op., 2008 WL 203020, *3 (W.D.N.Y. 2008) (limiting hours worked in connection with Motion to Compel and Reply to 13.8 hours of attorney time); CoStar Group, Inc. v. LoopNet, Inc., 106 F. Supp. 2d 780, 789 (D. Md. 2000) (finding that 47.75 hours claimed in connection with relatively simple motion to compel was excessive); Westman Com’n. Co. v. Hobart Corp., 562 F.Supp. 729, 734 (D.C. Colo. 1983) (finding 44.9 hours spent on motion to compel "unproductive" where only 13.50 hours were spent actually drafting the motion) judgment rev’d. on merits of claims.1

1 The fees charged in connection with the drafting of the memorandum in support of the motion are also excessive, in that Mr. Tufts appears to have done all primary drafting, at the high shareholder’s rate of $265.00 per hour. Given that the drafting of a Motion to Compel could easily have been left to a lower-billing associate, Mr. Tufts’ rate should be reduced as to such activities. See 10 James Wm. Moore et al., Moore’s Federal Practice ¶ 54.190[2][a] ("Hours might also be reduced if the Court determines that partners have spent too much time in the litigation, rather than leaving the work to associates . . .").

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A representative sampling of the recent decisions throughout the Tenth Circuit awarding fees in connection with motions to compel indicates that digEcor’s total amount of $14,214.10 in claimed fees goes far beyond the awards being granted by courts in this circuit, and even beyond the amounts ordinarily sought by prevailing parties. See, e.g., Thompson v. Assurant Employee Ben’s., No. 07-1062, slip op., 2008 WL 373711, *1 (D. Kan. 2008) (awarding $580 in fees in connection with motion to compel that had been mooted by non-movant’s post-motion production); Kincaid v. Sturdevant, No. 05-2418, slip op., 2000 WL 320345, *1 (D. Kan. 2008) (awarding $1,302.00 in attorneys fees in connection with motion to compel regarding interrogatory responses and requests for production.); Stone v. Deagle, No. 05-1438, 2007 WL 4150298, *4 (D. Colo. 2007) (awarding $2850 in attorneys fees in connection with motion to compel); Clark v. Wilkin, No. 6-693, slip op., 2007 WL 2325188, *1 (D. Utah 2007) (awarding attorneys fees of $1973.50 to party who prevailed on motion to compel seeking responses to interrogatories and requests for production). These awards, and numerous others related to motions to compel, highlight the excessiveness of the fees digEcor seeks in connection with its straightforward motion to compel.

Because digEcor’s claimed fees are far larger than those normally awarded for similar issues, the fees are excessive and should be drastically reduced.

2. digEcor Has Claimed Fees for Work That Was Not Necessary or Related to its Motion to Compel.

digEcor’s claim for fees includes numerous time entries that are either obviously unrelated to its Motion to Compel, or lacking in any indicia of such relationship. For example: Mr. Tufts claims fees for a "telephone call with S. Straight [sic] re settlement meeting," (see Tufts Aff., time entry for 11/07/07); "correspondence from R. Bell," without any topic stated

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2 Further, no authority could be located stating that fees incurred in connection with the parties’ meet and confer efforts should be awarded in connection with a successful motion to compel. Yet fees related to digEcor’s meet and confer efforts make up a large portion of its total fee claim. Without a strong legal basis for such an award, digEcor’s application on this point should be rejected. See Creative Resources Grp. of New Jersy v. Creative Resources Grp., Inc., 212 F.R.D. 94, 104 (E.D.N.Y. 2002) (holding that time spent on tasks that may have occurred even without a motion to compel should not be awarded to prevailing party). The Court’s order awarded only those fees "incurred in making [the motion to compel]." See March 22, 2008 Order, p. 12. Further, policy considerations weigh against awarding fees in connection with meet and confer efforts, as they would effectively penalize non-movants who, like e.Digital, spent significant time attempting to resolve disputed issues.

Cir. 2000) ("when a fee petition is vague or inadequately documented, a district court may either strike the problematic entries or . . . reduce the proposed fee by a reasonable percentage.). (see Tufts Aff., time entry for 12/21/07); "correspondence from R. Bell re e.Digital’s designation of documents as attorneys eyes only; attention to stipulation re same," (see Tufts Aff., time entry for 01/09/08); multiple emails and telephone calls with S. Straight, with no topic stated (see, e.g., Tufts Aff., time entries for 1/11/08, 1/15/08, 1/16/08, 1/23/08). digEcor should not receive an award of fees for such activities that are not related to its Motion to Compel.2 digEcor also should not receive fees for entries which are simply too vague to allow e.Digital and the Court to determine what work was actually done—i.e., "Begin work on motion to compel," "office conference with D. Tufts re motion to compel," etc. See Harper v. City of Chicago Heights, 223 F.3d 593, 605 (7th

Further complicating digEcor’s statement of fees, many of the above activities appear in time entries where several other activities are combined under a single portion of time billed. While the Court could simply deduct the time spent on an unrelated project if digEcor had delineated the time spent on each activity, there is no means of doing so based on the time entries as submitted. digEcor’s attorney fee award should be discounted due to its failure to keep records that permit analysis of the reasonableness of time spent on each activity. "Where the documentation of hours is inadequate, the district court may reduce the award accordingly."

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Hensley, 461 U.S. at 433; see also Mallinson-Montague v. Pocrnick, 224 F.3d 1224, 1235 (10th Cir. 2000) (reducing award due to lack of clarity caused by block-billing); Robinson v. City of Edmond, 160 F.3d 1275, 1281 (10th Cir. 1998) (stating that district courts may discount requested attorney hours if the attorney fails to keep "meticulous, contemporaneous time records that reveal all hours for which compensation is requested and how those hours were allotted to specific tasks.").

Because digEcor’s claimed fees include numerous entries for tasks not necessary to its Motion to Compel, its total award should be substantially reduced. Recognizing that the deductions proposed herein are complex, e.Digital has attached a chart as Exhibit 2 summarizing all of its proposed deductions, to assist the Court in making its own fee determinations.

3. digEcor’s Seeks Fees that Are Not Compensable to a Prevailing Party.

Beyond submitting fees for compensation which are excessive and unnecessary, digEcor also seek fees which simply should not be awarded under the circumstances. First, the Court has held that digEcor may receive its attorneys’ fees beginning on December 18, 2007. See March 22, 2008 Order, p. 12. Thus, all of the billing entries for dates prior to December 18—representing a total amount of $1192.50—may be deducted from the claimed amount, leaving a total of $13,021.60. Second, digEcor’s original claimed total includes one hour for anticipated time preparing and appearing for oral argument on the Motion to Compel, at a rate of $265.00 per hour. Because the Court did not hear oral argument on the motion, the total may be further reduced by $265.00, to $12,756.60.

Finally, digEcor seeks an award of its fees expended on legal research. Tenth Circuit Courts generally do not award fees for time spent conducting research. Praseuth v. Rubbermaid,

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3 If the Court prefers not to deduct the entire amount of fees billed pursuant to time entries including research time, the amount should be substantially reduced to attempt to eliminate billings for research time. See Mallinson-Montague v. Pocrnick, 224 F.3d 1224, 1235 (10th Cir. 2000) (upholding large reduction in total fees due to prevailing party’s failure to delineate between hours spent on research and hours spent on other activities); Brewer v. Southern Union Co., 607 F. Supp. 1511, 1526 (D.C. Colo. 1984) (reducing rate of experienced attorney for time spent on legal research).

Inc., 406 F.3d 1245, 1258 (10th Cir. 2005); Browder v. City of Moab, No. 99-CV-807, slip op., 2008 WL 687526, *9 (D. Utah). This rule was helpfully applied by the District of Kansas in Starlight Int’l., Inc. v. Herlihy, 190 F.R.D. 587, 591 (D. Kan. 1999). The Court noted the rule which discourages awards of fees billed for research time, and went on to eliminate from its award all entries including any research time. This included billing entries containing other categories of compensable activities, because the entries lacked sufficient detail to permit the Court to determine how much of the given time entry was spent on research, and how much on a valid billing activity. See id. The Starlight International Court reasoned that because the burden is on the party seeking fees, any lack of the needed detail must be construed against that party.

digEcor’s fee affidavit suffers from the same weaknesses as that in the Starlight International case. Namely, Mr. Tufts presents seven different billing entries in which digEcor’s attorneys conducted or discussed their research on various issues. See Tufts Aff., time entries for 12/20/2007, 12/21/2007, 1/30/08, 1/21/08, 1/31/08, 2/1/08 (7.00 hours), and 2/1/08 (1.4 hours). These entries do not delineate the amounts of time spent specifically on research as opposed to time spent on other activities. The entries total 29.4 hours of billed time, adding up to a dollar amount of $7592.50. Because digEcor has not provided sufficient information to determine how much of this total amount was actually incurred for background research, the total number should be deducted from digEcor’s fee award. See Browder, 2008 WL 687526, *9; Starlight Int’l., Inc., 190 F.R.D. 587, 591.3

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digEcor’s award should be reduced by the amount of fees that were billed before December 18, 2007, the amount anticipated for attending oral argument, and the amount charged in all entries containing billings for legal research.

CONCLUSION

For the foregoing reasons, e.Digital requests that the Court substantially reduce the amount of fees sought by digEcor for its work in connection with its Motion to Compel, to a sum that is more reasonable in light of the ordinary nature of the Motion to Compel, and which is more consistent with similar awards made throughout the Tenth Circuit. As set forth in the chart attached as Exhibit 2, a reasonable fee for the work involved in digEcor’s Motion to Compel is $1551.50.

DATED this 4th day of April, 2008.

RAY QUINNEY & NEBEKER, P.C.

/s/ Ryan B. Bell

James S. Jardine

Samuel C. Straight

Ryan B. Bell

Attorneys for Defendants e.Digital Corporation, Fred Falk, and William Blakeley

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CERTIFICATE OF SERVICE

I hereby certify that on this 4th day of April, 2008, I electronically filed the foregoing MEMORANDUM IN OPPOSITION TO PLAINTIFF’S STATEMENT OF ATTORNEYS’ FEES with the Clerk of Court using the CM/ECF System which sent notification of such filing to the following:

David W. Tufts

DURHAM JONES & PINEGAR

111 E. Broadway, Suite 900

Salt Lake City, Utah 84111

/s/ Lisa Bonnell __________________________

976693

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