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Saks Incorporated v. Attachmate Corporation

United States District Court, S.D. New York

May 15, 2015

SAKS INCORPORATED, Plaintiff,
v.
ATTACHMATE CORPORATION, Defendant.

OPINION & ORDER

RONALD L. ELLIS, Magistrate Judge.

I. INTRODUCTION

Plaintiff Saks Incorporated commenced this action under the Declaratory Judgment Act on June 30, 2014. (Doc. No. 2) In its Answer filed on August 21, 2014, Defendant Attachmate Corporation raised counterclaims against Saks alleging copyright infringement and breach of express and implied contract. (Doc. No. 11) The action was referred to the undersigned on December 10, 2014, for the resolution of a specific discovery dispute. (Doc. Nos. 17, 22) During a conference held on January 21, 2015, the Court gave Saks leave to make an application for reasonable costs and attorneys' fees associated with Attachmate's discovery misconduct. On January 30, 2015, Saks filed an application seeking an order granting fees of $31, 131 and costs in the amount of $336.90. (Doc. No. 62-1at5.) For the reasons set forth below, Saks's application is GRANTED in the amount of $21, 791.70 in attorneys' fees and $336.90 in costs.

II. BACKGROUND

Saks served Attachmate with Plaintiffs First Set of Requests for Documents on October 9, 2014. (Doc. No. 62-1) On December 10, 2014, Saks filed a letter informing the Court of several discovery disputes between the Parties. (Doc. No. 24) These disputes included Attachmate's objection and failure to produce documents in response to Saks's Document Request Number Five "All Documents and communications concerning any click-wrap license related to the Software." (Id. ) Attachmate objected to the request as "vague, overly broad, unduly burdensome, and not reasonably calculated to lead to the discovery of admissible evidence" and agreed only to produce documents that "relate to Saks' purchase and use of the Software." (Doc. No. 60-1 at 6.) The Court held a telephone conference with the Parties on December 17, 2014. During this conference, the Court told the Parties that in a contract dispute where there is no clear ruling on the language at issue, an exploration of the meaning, interpretation, and language of the contract in the form of depositions, document requests, and requests to admit is proper. The Court directed the Parties to brief their positions on Saks's Request Number Five by the following day.

Having received the Parties' submissions, the Court held a telephone conference on December 18, 2014. During this conference, the Court held that the following were proper areas of inquiry in discovery: 1) any Attachmate contracts which included the "ability to access" language in dispute in this case or similar language; 2) the drafting process and interpretation of any such Attachmate contracts; 3) any disputes between Attachmate and third Parties arising from the "ability to access" language. The Court held that the proper temporal scope for Saks's document request was three years before the filing of this action to the present and ordered Attachmate to produce documents responsive to Saks's request. In response to Attachmate's concerns that discovery on these topics would be burdensome, the Court directed Attachmate to investigate the existence and availability of documents related to the drafting, interpretation, and enforcement of "ability to access" contracts and report back to the Court.

On December 30, 2014, Attachmate informed the Court that it had conducted a "diligent" investigation" and determined that there were no file or document repositories concerning the drafting or interpretation of the "ability to access" language. (Doc. No. 37 at 2.) Attachmate further stated that its license, sales, compliance and litigation files were organized by client and case, rather than by topic, and that producing relevant documents would require "a manual search of thousands of customer-specific files, a process that would likely take hundreds if not thousands of person hours." (Id. ) Attachmate then reiterated its prior arguments about the propriety of discovery on the topics the Court addressed at the December 17 conference and asked that any request by Saks for further discovery outside of the license agreements already produced be denied. (Id. ) Saks responded to Attachmate in a letter dated December 31, 2014, and argued that: 1) the Court had already ruled on the relevance of the documents at issue; and 2) Attachmate had misconstrued and limited the scope of the Court's order by suggesting that it was "only required to search for license agreements that included the exact ["ability to access"] language." (Doc. No. 39 at 3.) Saks further suggested that Attachmate's compliance team could identify relevant disputes with third parties because Saks had already identified ten such customers itself. After offering to limit its requests to reduce Attachmate's burden, Saks asked the Court to direct Attachmate to comply with its prior order. (Id. at 4.)

The Court held a conference on January 6, 2015, during which Attachmate again raised the burden of producing the "ability to access" documents previously ordered by the Court. The Court informed Attachmate that to the extent the organization of its files was a barrier to producing the documents the Court ordered, Attachmate would need to provide an affidavit from a technical person explaining the difficulty in full detail.[1] The Court further expressed its doubt that production would be as difficult as Attachmate alleged, but informed the Parties that if the Court determined Attachrnate's characterization of the files was accurate, it would order that Attachmate be precluded from producing such files at trial. After Saks offered to help narrow the scope of the search, the Court agreed that a meet and confer between the Parties was warranted.

On January 9, 2015, Attachrnate filed a Motion for a Protective Order Regarding Saks's Request for Production Number Five without permission from the Court and in violation of the Individual Practice Rules of the undersigned. (Doc. No. 43) In this motion, Attachmate reiterated the arguments it had previously raised concerning the relevance and burden of producing the documents ordered by the Court. Attached to the motion was the Declaration of Senior Database Administrator for Attachmate, Richard Counsell. (Doc. No. 46) This affidavit did not meet the Court's specifications and lacked sufficient detail. In a letter dated January 12, 2015, Saks wrote the Court concerning "Attachrnate's continued refusal to search for and produce documents" that the Court had ordered and Attachmate's Motion for a Protective Order. (Doc. No. 48 at 1.) Saks asked the Court to order Attachmate "to produce an IT representative at the Court's earliest convenience to explain (1) the steps Attachmate ha[d] taken to search for the Disputed Documents, (2) why none of Saks' suggestions set forth in its January 7 letter [were] feasible, and (3) why Attachmate ha[d] been unable to produce any documents responsive to the Court's prior orders." (Id. at 3.)

The Court held a conference with the Parties on January 22, 2015. During this conference the Court: 1) Denied Attachmate's Motion for a Protective Order; 2) precluded Attachmate from relying on documents at trial that could have been produced in response to Saks's Document Request Number Five: and 3) permitted Saks to file an application for fees and costs related to pursuing documents responsive to its request. Saks filed its fee application on January 30, 2015 (Doc. No. 62) Attachmate filed its opposition on February 2, 2015, and Saks filed a reply on February 3, 2015. (Doc. Nos. 63, 66)

III. DISCUSSION

A. Saks's Requested Attorneys' Fees

A Court may impose sanctions against counsel and against a party and counsel pursuant to the Court's inherent authority to manage the cases before it. 28 U.S.C. § 1927 ("§ 1927"); see Chambers v. NASCO, Inc., 501 U.S. 32, 43 (1991) (holding that a court's inherent power to sanction is "governed not by rule or statute but by the control necessarily vested in courts to manage their own affairs so as to achieve orderly and disposition of cases"); accord Revson v. Cinque & Cinque, P.C., 221 F.3d 71, 78 (2d Cir. 2000). Under§ 1927, any attorney "who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys' fees reasonably incurred because of such conduct." 28 U.S.C. § 1927.

In determining the appropriate amount of attorneys' fees to award, the Court must calculate the "presumptively reasonable fee" by multiplying a reasonable hourly rate by the reasonable number of hours worked. Arbor Hill Concerned Citizens Neighborhood Ass'n v. County of Albany, 493 F.3d 110, 117-18 (2d Cir. 2007), amended on other grounds, 522 F.3d 182 (2d Cir. 2008). A "reasonable hourly rate is the rate a paying client would be willing to pay." McDaniel v. County of Schnectady, 595 F.3d 411, 414 (2d Cir. 2010). The factors relevant to this determination include: "(1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the level of skill required to perform the legal service properly; (4) the preclusion of employment due to acceptance of the case; (5) the attorney's customary hourly rate; (6) whether the fee is fixed or contingent (7) the time limitations imposed by the client or the circumstances; (8) the amount involved in the case and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the undesirability of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases." Arbor Hill, 493 F.3d at 114 n.3 (internal quotation marks omitted). Furthermore, this Circuit has ...


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