United States District Court, S.D. New York
MEMORANDUM OPINION AND ORDER
NATHAN UNITED STATES DISTRICT JUDGE
January 2, 2018, Magistrate Judge Stewart D. Aaron issued an
Opinion and Order granting Defendant Sloan-Kettering
Institute for Cancer Research's ("SKI") motion
for attorney's fees, and ordering Plaintiff Errant Gene
Therapeutics, LLC ("EGT") to pay SKI the sum of
$88, 339.00. See Dkt. No. 181 [hereafter,
"January 2 Order"]. On January 16, 2018, Plaintiff
filed objections to the Magistrate's determination.
reviewed Plaintiffs objections, for the following reasons the
Court overrules the objections and upholds the attorney's
fees award in full.
Court assumes the parties' familiarity with the facts at
issue. For more background, the Court refers the reader to
Judge Ellis's orders of June 5, 2017 and October 16,
2017, see Dkt. Nos. 149, 177, and Judge Aaron's
January 2 Order. For the limited purpose here, the Court
offers the following summary.
Judge Ronald L. Ellis, to whom the matter was assigned for
general pretrial supervision prior to his retirement, heard
arguments on the parties' proposed protective orders, and
issued an Opinion and Order on September 2, 2016 defining the
scope of the "Attorneys' Eyes Only" (AEO)
designation to include highly confidential research,
development, and commercial information. See Dkt.
No. 77. On November 3, 2016 and February 8, 2017, SKI filed
two motions to enforce the Court's Protective Order and
to sanction EGT for using protected information to initiate
actions in other jurisdictions. See Dkt. Nos. 100,
134. In its November 3 motion, SKI alleged that EGT's
complaint against BlueBird Bio, Inc., filed in the Circuit
Court of Cook County, Illinois on September 27, 2016, used
information learned in discovery that was designated AEO and
confidential. In its February 8 motion, SKI alleged another
violation of the protective order with respect to information
EGT used in filing a complaint in the New York Supreme Court
on January 26, 2017.
5, 2017, Judge Ellis issued an Opinion and Order finding that
EGT did indeed violate the protective order in using AEO and
confidential information obtained through discovery when
filing both its Illinois and New York complaints.
See Dkt. No. 149 at 7, 10 [hereafter, "June 5
Order"]. Judge Ellis enjoined EGT from further misuse of
the AEO and confidential information obtained in this case,
and ordered that EGT pay SKFs "reasonable attorneys'
fees and costs of bringing these two motions for
sanctions." Id. at 11.
thereafter, on June 16, 2017, SKI filed another motion asking
the Court to issue an Order to Show Cause why EGT should not
be held in contempt of Court for continuing to prosecute the
New York action. Dkt. No. 150. Judge Ellis held a contempt
hearing, called for post-hearing briefing on certain issues,
and issued two opinions on October 16, 2017, the first
denying EGT's request to de-designate 17 documents'
AEO designations and to order reclassification of other
documents, Dkt. No. 176, and the second denying SKFs request
to hold EGT in contempt. Dkt. No. 177 [hereafter, the
"October 16 Order"]. In the latter order, Judge
Ellis held that EGT had met its burden of demonstrating that
it had an independently-developed factual basis for the
allegations in its amended New York complaint and
that EGT had not violated the Court's June 5 Order.
October 16 Order at 17.
January 2, 2018, Judge Aaron, to whom the referral was
reassigned following Judge Ellis's retirement, disposed
of the lingering issue of an appropriate fee award following
the June 5 Order. In his Opinion and Order, Judge Aaron
considered SKFs application for $122, 100.20 in fees,
adjusted downward the hourly rates and number of hours
sought, and ordered EGT to pay $88, 339 to SKI on its fee
application. See January 2 Order at 4-6.
January 16, 2018, EGT filed objections to the January 2 Order
arguing, first, that it was unreasonable to award
any legal fees to SKI in light of the subsequent
ruling in the October 16 Order that EGT had an independent
factual basis for its allegations, and, second, that the
amount awarded was unreasonable or unjustified on various
grounds. See generally Objections to Order of
Magistrate Judge Awarding Attorneys' Fees
("Obj."), Dkt. No. 182. On January 30, 2018, SKI
responded to EGT's objections. See SKFs Response
to EGT's Objections to Order of Magistrate Judge
Determining Amount of Attorneys' Fees
("Resp."), Dkt. No. 184.
STANDARD OF REVIEW
initial matter, the parties dispute whether the January 2
Order is a nondispositive matter, review of which is governed
by Federal Rule of Civil Procedure 72(a), or a dispositive
matter under Rule 72(b). If nondispositive, review of the
Order is subject to the standard of "clearly erroneous
or contrary to law." Fed.R.Civ.P. 72(a). If dispositive,
the Court must conduct a de novo review of any part
of the disposition that has been properly objected to.
Order is nondispositive. SKFs two motions for sanctions at
issue in the June 5 Order were brought pursuant to Federal
Rules of Civil Procedure 16 and 37, which govern sanctions
for discovery violations. "Monetary sanctions pursuant
to Rule 37 for noncompliance with discovery orders usually
are committed to the discretion of the magistrate, reviewable
by the district court under the 'clearly erroneous or
contrary to law' standard." Thomas E. Hoar, Inc.
v. Sara Lee Corp., 900 F.2d 522, 525 (2d Cir. 1990).
While there are certain circumstances in which discovery
sanctions have been deemed dispositive, those circumstances
are inapplicable here. See, e.g., Flame S.A. v. Indus.
Carriers, Inc., 39 F.Supp.3d 752, 757 (E.D. Va. 2014)
(deeming sanction designating one party the alter ego of
another dispositive); Cardell Fin. Corp. v. Suchodolski
Assocs., Inc., 896 F.Supp.2d 320, 324 n.3 (S.D.N.Y.
2012) (treating a contempt ruling as dispositive);
Cardiff v. Nat. Grange Mut. Ins. Co., 881 F.Supp.2d
266, 268 (D.R.I. 2012) (striking portions of interrogatory
answers as sanction merits de novo review). The only
authority EGT has offered for the proposition that a monetary
sanctions order of the type at issue here is dispositive is
Kiobel v. Millson. 592 F.3d 78 (2d Cir. 2010).
However, Kiobel focuses on Rule 11 sanctions, and at
the very least, the two judges writing in Kiobel
agree that the imposition of most sanctions under Rule 37 is
nondispositive. See Id. at 88 (Cabranes, J.,
concurring); id. at 97 (Leval, J., concurring);
accord Cleversafe, Inc. v. Amplidata, Inc., 287
F.R.D. 424, 429 (N.D. 111. 2012) ("[A]ll three members
of the Kiobel panel agreed that Rule 37 sanctions
were nondispositive matters, although they could not agree on
how Rule 11 sanctions should be treated."). The only
reason EGT provides for why this order is dispositive is that
the action has been dismissed, but EGT offers no authority
for the proposition that this requires the Court to treat the
January 2 Order any different than it would another monetary
sanctions order for a discovery violation.
the Court reviews Judge Aaron's January 2 Order under the
"clearly erroneous" or "contrary to law"