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Paul D. Ceglia v. Mark Elliot Zuckerberg

November 29, 2012


The opinion of the court was delivered by: Leslie G. Foschio United States Magistrate Judge



This case was referred to the undersigned by Honorable Richard J. Arcara on May 27, 2011 for pretrial matters. It is presently before the court on Defendants' Application for Recovery of Expenses (Doc. No. 517), filed September 7, 2012.


Plaintiff Paul D. Ceglia ("Plaintiff" or "Ceglia"), filed the original complaint in this action on June 30, 2010, in New York Supreme Court, Allegany County. On July 9, 2010, Defendants Mark Elliot Zuckerberg ("Zuckerberg") and Facebook, Inc. ("Facebook") (together, "Defendants") removed the action to this court asserting subject matter jurisdiction based on diversity. In an Amended Complaint filed April 11, 2011 (Doc. No. 39), Plaintiff asserts seven claims for relief based on alleged breaches of a purported contract with Zuckerberg and the partnership established thereunder. Defendants deny the purported contract's authenticity, asserting it is a forgery.

Because the authenticity of the purported contract is critical to this action, in lieu of general discovery the parties agreed to participate in discovery limited to the purported contract's authenticity. In connection with such limited discovery, Plaintiff, on June 21, 2012, noticed depositions of ten of Defendants' expert witnesses, including Eric Friedberg ("Friedberg"), Bryan Rose ("Rose"), Michael McGowan ("McGowan"), Jason Novak ("Novak"), Gerald LaPorte ("LaPorte"), Peter Tytell ("Tytell"), Albert Lyter ("Lyter"), Gerald McMenamin ("McMenamin"), Gus Lesnevich ("Lesnevich"), and Frank Romano ("Romano"), for the last week of July and the first week of August 2012. Plaintiff's attorney Dean M. Boland, Esq. ("Boland"), and Defendants' attorney Alexander H. Southwell, Esq. ("Southwell"), had coordinated the deposition schedules to allow the parties' experts to attend the depositions of the opposing parties in the same field. Boland advised Southwell he intended to depose LaPorte and Lesnevich for seven hours each, but that Defendants' remaining eight experts would be scheduled for half-day depositions with two depositions conducted per day. In a telephone conversation on June 21, 2012, Boland and Southwell also agreed that the deposing party would pay the deposed expert's deposition appearance fees on the scheduled day for the deposition, and would reimburse each expert for reasonable travel and lodging fees incurred, but that the deposed experts' travel time would not be reimbursed. This "Deposition Expense Agreement" was memorialized in a June 22, 2012 letter ("June 22, 2012 Letter"),*fn2 from Southwell to Boland.

Despite confirming each of the ten depositions scheduled, Plaintiff eventually canceled seven of the depositions with less than 48 hours' notice, three with less than 24 hours' notice. Only two of the seven canceled depositions were rescheduled.

On September 7, 2012, Defendants filed the instant Application for Recovery of Expenses (Doc. No. 517) ("Defendants' motion"), seeking payment from Plaintiff of all expenses incurred in connection with Plaintiff's cancellation of seven of ten depositions of Defendants' experts noticed by Plaintiff, with less than 48 hours' notice. Included in the expenses Defendants seek to recover are expenses for their experts' travel and lodging, appearance fees, and preparation time, as well as time Defendants' attorneys spent preparing each expert for their respective depositions and preparing the instant application for expenses. In support of the motion, Defendants filed Defendants' Application for Recovery of Expenses (Doc. No. 518) ("Defendants' Memorandum"), and the Declaration of Alexander H. Southwell, Esq. (Doc. No. 519) ("Southwell Declaration"), with exhibits A through S ("Defendants' Exh(s). __"). On September 24, 2012, Plaintiff filed the Memorandum in Opposition to Defendants' Motion for Deposition Costs and Expenses (Doc. No. 551) ("Defendants' Response"), and the Declaration of Dean Boland, Esq. in Opposition to Defendants' Motion for Deposition Costs and Expenses (Doc. No. 552) ("Boland Declaration"). On September 28, 2012, Defendants filed Defendants' Reply Memorandum in Support of Their Application for Recovery of Expenses (Doc. No. 559) ("Defendants' Reply"), and the Supplemental Declaration of Alexander H. Southwell, Esq. (Doc. No. 560) ("Southwell Reply Declaration"), with attached exhibit A ("Defendants' Reply Exh. A"). Oral argument was deemed unnecessary.

Based on the following, Defendants' motion is GRANTED in part and DENIED in part.


Defendants seek to recover from Plaintiff expenses incurred for the travel, lodging, expert preparation time, and attorney preparation time, as well as expert appearance fees for those Defendants' experts whose depositions Plaintiff noticed and scheduled, but then canceled with less than 48 hours' notice. Defendants maintain that Plaintiff's late cancellation of the depositions caused Defendants to needlessly incur costs and expenses, including time spent by the attorneys and the witnesses preparing for the depositions, appearance fees to which each witness was entitled for being available on the date of the scheduled depositions, and the travel and lodging expenses incurred by those witnesses who do not reside in New York City where the canceled depositions were to take place. Defendants' Memorandum at 1-6. In total, Defendants request $98,640.75 in reimbursement of witness, attorney, and appearance fees, as well as travel and lodging expenses. Id. at 7.

In opposition to Defendants' motion, Plaintiff argues that the agreement reached with Defendants prior to scheduling depositions of Defendants' expert witnesses was that the party taking the deposition would pay the reasonable deposition fee for the witness's time in the deposition, and the reasonable travel expenses incurred by the witness to attend the deposition, but that the parties never agreed that any other costs or expenses of depositions would be borne by the deposing party. Plaintiff's Memorandum at 1-2. Plaintiff maintains that although the depositions of Defendants' experts were noticed for Cleveland, Ohio, where Boland's law office is located, Plaintiff agreed to Southwell's request that all Defendants' witnesses be deposed in New York City with the qualification that in scheduling Defendants' expert witnesses' depositions, consideration be given to Boland's need to travel and the attendant travel and lodging costs incurred by Plaintiff. Id. at 2. Plaintiff further asserts that an unanticipated flight cancellation required the postponement of some depositions, id. at 2-3, depositions were timely canceled in good faith, id. at 3-4, Defendants have refused to meet and confer with Plaintiff regarding the instant dispute, id. at 4-5, that Plaintiff never agreed to pay the costs Defendants seek to recover such that allowing Defendants to recover such costs is based on "double billings" resulting in a financial windfall to Defendants, id. at 5-6, and 8, that Defendants' arguments in support of their motion adheres to an "infinitely flexible definition of 'reasonable,'" id. at 6-7, that Defendants' request is illogical, id. at 8-12. Plaintiff further maintains the cancellations were timely and made in good faith under Fed.R.Civ.P. 30(g) ("Rule 30(g)"), pursuant to which the court may order the party who notices a deposition to pay the reasonable expenses incurred by the noticed party where the party who gave notice fails to attend the deposition. Id. at 13-17. Alternatively, Plaintiff challenges as excessive the travel and lodging costs incurred by Defendants' experts. Id. at 17-18.

In further support of their motion, Defendants maintain Plaintiff's opposition to Defendants' motion relies on unsupported and self-serving assertions about the applicability of Rule 30(g) and the reasonableness of Defendants' requests. Defendants' Reply at 1. In particular, Defendants maintain the seek reimbursement not pursuant to Rule 30(g) but, rather, pursuant to caselaw. Id. at 2. Defendants also reiterate they seek reimbursement not pursuant to the Deposition Expense Agreement, but pursuant to the Federal Rules of Civil Procedure and caselaw within the Second Circuit. Id. at 2-3. Defendants argue in disputing Plaintiff's assertion that the cancellations of the depositions of Novak, Friedberg, Lesnevich, and Romano were reasonable because each of these witnesses could have returned home and worked a full day that such assertion ignores the fact that the experts and Defendants' attorneys expended time preparing for the canceled depositions. Id. at 3. According to Defendants, Boland's assertion that an unanticipated flight cancellation and illness required him to cancel the depositions of Tytell, Lyter, and McMenamin is disingenuous given that number other flights and trains were available for Boland and Defendants offered to delay the start of the subject depositions. Id. at 3-4. Finally, Defendants draws the court's attention to Plaintiff's failure to reference any legal authority for Plaintiff's assertion that the costs for which Defendants' seek reimbursement are unreasonable. Id. at 4-5.

To assist the reader, the court provides a detailed discussion of the circumstances under which the depositions for which Defendants seek reimbursement were scheduled and canceled. On June 25, 2012, the depositions of representatives from Defendants' digital forensics experts, Stroz Friedberg, LLC ("Stroz Friedberg"), Novak and Friedberg, were scheduled for July 18 and 19, 2012. Defendants' Memorandum at 2. By letter dated July 5, 2012 ("July 5, 2012 Letter"),*fn3 Southwell advised Boland that the expert fees for those experts whose depositions Plaintiff had noticed ("appearance fees") included:

Novak $1,662.50

Friedberg $3,412.50 Lyter $1,500.00 Tytell $3,400.00 Lesnevich $6,400.00 McMenamin $5,000.00 Romano $875.00 Plaintiff does not deny receiving the July 5, 2012 Letter and nothing in the record establishes Plaintiff raised any objection at that time to ...

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