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Paul D. Ceglia v. Mark Elliot Zuckerberg

May 9, 2013

PAUL D. CEGLIA, PLAINTIFF, AND
v.
MARK ELLIOT ZUCKERBERG, AND FACEBOOK, INC., DEFENDANTS.



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

DECISION ORDER

JURISDICTION

This case was referred to the undersigned by Honorable Richard J. Arcara on May 27, 2011 for pretrial matters. The action is presently before the court on Defendants' Fee Application filed November 19, 2012 (Doc. No. 600) for attorney's fees and costs awarded pursuant to this court's Decision and Order filed November 7, 2012 (Doc. No. 584).

BACKGROUND and FACTS*fn1

The parties to this action dispute the authenticity of a contract ("the contract")*fn2 allegedly executed between Plaintiff Paul D. Ceglia ("Plaintiff") and Defendant Mark Elliot Zuckerberg ("Zuckerberg"), on April 28, 2003, pursuant to which Plaintiff and Zuckerberg, then a student at Harvard University ("Harvard"), established an agreement for the development and commercialization of two separate Internet business ventures, including an on-line database developed by Plaintiff, and the social-networking website created and maintained by Zuckerberg, and now known as Defendant Facebook, Inc. ("Facebook"). In anticipation of Defendants' challenging the alleged contract's authenticity, the parties cross-moved for expedited discovery limited to determining whether the alleged contract was genuine. In a Decision and Order filed July 1, 2011 (Doc. No. 83), the undersigned granted limited expedited discovery. The parties then engaged in numerous discovery disputes requiring judicial intervention. On March 26, 2012, Defendants moved to dismiss the action because the alleged contract on which Plaintiff relies in support of his claims against Defendants is a recently-created fabrication (Doc. No. 318) ("Defendants' Motion to Dismiss").*fn3

On September 5, 2012, Defendants filed Defendants' Eighth Motion to Compel (Doc. No. 511) ("Eighth Motion to Compel"), seeking three documents referenced in another document Defendants have pursued through document production requests since February 2012, referred to as the "April 13 Kasowitz Letter," and to overrule as improper Plaintiff's designation of the April 13 Kasowitz Letter as confidential. In the April 13 Kasowitz Letter, an attorney from the New York law firm of Kasowitz, Benson, Torres & Friedman LLP ("Kasowitz"), advised attorneys from DLA Piper LLP ("DLA Piper") and Lippes Mathias Wexler Friedman LLP ("Lippes Mathias"), two law firms that formerly represented Plaintiff in this action, that Kasowitz was withdrawing from Plaintiff's case*fn4 based on a determination that the purported contract at issue is a fraud. Defendants did not learn until the April 13 Kasowitz Letter was finally produced to Defendants, and after additional motion practice by Plaintiff seeking to avoid such production, of the existence of the three additional communications, which were the subject of Defendants' Eighth Motion to Compel.

In a Decision and Order filed November 7, 2012 (Doc. No. 584) ("D&O"), the undersigned granted in part and denied in part Defendants' Eighth Motion to Compel, ordering Plaintiff to produce one of the three documents sought, referred to as the March 30 Capsicum Communication, D&O at 11-15, holding Plaintiff had improperly designated the April 13 Kasowitz Letter as confidential and ordering such designation removed, D&O at 15-16, and directing Plaintiff to pay only those attorney's fees incurred in connection with that portion of Defendants' Eighth Motion to Compel requesting production of the March 30 Capsicum Communication. D&O at 20-21. Defendants were also directed to file within ten days an affidavit of attorney's fees incurred. D&O at 22.

As directed in the D&O, Defendants filed on November 19, 2012, Defendants' Fee Application in Connection With Their Eighth Motion to Compel (Doc. No. 599) ("Fee Application"), and the supporting Declaration of Alexander H. Southwell, Esq. (Doc. No. 600) ("Southwell Declaration"), with attached exhibit A (Doc. No. 600-1) ("Defendants' Exh. A"). On November 29, 2012, Plaintiff filed in opposition a Memorandum (Doc. No. 616) ("Plaintiff's Response"). Oral argument was deemed unnecessary.

Based on the following, Defendants' Fee Application is GRANTED; Defendants are awarded in connection with their Eighth Motion to Compel $3,747.68 in attorney's fees, and are also entitled to an award of costs, including attorney's fees, incurred preparing and defending the Fee Application.

DISCUSSION

1. Attorney Fee Award as Rule 37 Sanction

Defendants were awarded as a sanction pursuant to Fed.R.Civ.P. 37(a)(5)(A), the costs, including attorney's fees, incurred in connection with preparing and defending that portion of the Eighth Motion to Compel pertaining to the March 30 Capsicum Communication. D&O at 20-22. Accordingly, Defendants' Fee Application seeks fees for the legal services of four attorneys only for that portion of the Eighth Motion to Compel requesting production of the March 30 Capsicum Communication, but not for their request for production of the other two communications sought, but denied, or for the request that Plaintiff be ordered to remove the "confidential" designation from the April 13 Kasowitz Letter. Defendants' Fee Application at 3-4. Defendants explain that to calculate the time and fees associated with only the legal services related to the March 30 Capsicum Communication request, Defendants first considered their Eighth Motion to Compel as requesting two forms of relief, including (1) compelling production of three communications, and (2) seeking removal of the confidential designation from the April 13 Kasowitz Letter. Id. at 4. Defendants then calculated the total amount of time expended by each of the four attorneys on the Eighth Motion to Compel, and then divided each attorney's time in half "to best reflect the amount of time dedicated to each of the two issues." Id. Next, to determine how much time each attorney dedicated only to the March 30 Capsicum Communication, each attorney's time was further divided by three, thereby reflecting that only one of the three communications Plaintiff's sought was ordered produced. Id. Defendants also seek reimbursement for the time spent preparing the Fee Application, as anticipated by the court, D&O at 22, asserting information concerning such additional fees will be submitted after this motion is fully briefed and oral argument, if any, occurs. Id. at 4.

The four Gibson Dunn attorneys for whose work Defendants seek payment from Plaintiff include partner Thomas H. Dupree, Jr. ("Dupree"), partner Alexander H. Southwell ("Southwell"), sixth-year associate Matthew Benjamin ("Benjamin"), and second-year associate Amanda Aycock ("Aycock"). The following schedule sets forth these attorneys' standard and claimed, i.e., discounted, hourly billing rates, the hours each attorney worked, and the total fees claimed by each attorney calculated using the claimed rate:

Attorney Standard Rate Claimed Rate Hours Total Fees Dupree $900 $675.00 0.26 $174.38 Southwell 910 682.50 0.75 511.50 Benjamin 720 540.00 4.43 2,394.00 Aycock 560 ...


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