United States District Court, S.D. New York
AMENDED OPINION & ORDER
L. CAVE, United States Magistrate Judge.
the Court is the application of Defendants Citigroup Global
Markets, Inc. and Yield Book, Inc. (“Defendants”)
for an Award of Expenses Pursuant to the Court's Partial
Grant of Motion to Strike the Fourth Declaration of Jianqing
Fan (the “Application”). (ECF No. 242). For the
reasons set forth below, Defendants' Application is
GRANTED in part and DENIED
this action's lengthy history, the Court assumes the
reader's familiarity with the background of this case and
references only facts necessary to explain this opinion. A
comprehensive recitation of the events giving rise to this
action is set forth in the Honorable Henry B. Pitman's
Opinion and Order dated March 26, 2014 granting
Defendants' motion for expenses. (ECF No. 235).
action has been pending for over fifteen years and stems from
the allegations of Advanced Analytics, Inc.
(“AAI”) that Defendants misappropriated AAI's
sequences of numbers used to aid in pricing mortgage-backed
securities and incorporated them into Defendants'
software, the Yield Book, or used them to create new
sequences for use in the Yield Book. (ECF No. 235 at 3). In
January 2012, Magistrate Judge Pitman set a revised discovery
schedule ordering the submission of AAI's expert
disclosures by May 17, 2012 and completion of all discovery
by July 17, 2012; he also admonished the parties to raise
discovery disputes promptly. (Id.). Despite these
instructions, on July 18, 2012, AAI attempted to submit a
“reply expert report from Dr. Jinqing Fan, ” past
the May 17, 2012 deadline (the “Fan Reply”).
(Id. at 3-4). (See July 18, 2012 Disc.
Conf. Tr., ECF No. 226 at 121, 146-49). Defendants moved to
strike the Fan Reply as untimely and not constituting
“a proper ‘reply,' because it contained new
information and opinions that were not within the scope of
either parties' prior expert disclosures.”
(Id. at 4). Magistrate Judge Pitman issued an Order
granting Defendants' motion (ECF No. 174), AAI objected,
and on February 8, 2013, the Honorable Laura T. Swain, United
States District Judge, overruled AAI's objections. (ECF
parties then briefed Defendants' “motion for
summary judgment and their Rule 702/Daubert motion
to exclude Dr. Fan's initial report and testimony based
on that report.” (ECF No. 235 at 5). AAI's
“opposition to both motions included the Fourth
Fan” Declaration, which incorporated by reference and
relied on the entire previously stricken Fan Reply (the
“Fourth Fan Declaration”). (Id. at 6).
On June 10, 2013, Defendants requested a conference for their
“anticipated motion to strike the Fourth Fan
[Declaration] on the grounds that it was untimely and
contained entirely new bases for AAI's claims.”
(Id.). On June 17, 2013, AAI requested a conference
for its “anticipated motion for sanctions against
defendants . . . based on allegations of discovery misconduct
set forth in the Fourth Fan [Declaration].”
(Id.). AAI sought to use the Fourth Fan Declaration
in support of its motion for sanctions. (Id. at 15).
On June 19, 2013, Magistrate Judge Pitman “directed the
parties to complete their briefing on Defendants' motion
to strike the Fourth Fan [Declaration] and . . . deferred
consideration of AAI's contemplated motion for sanctions
until the dispute concerning the Fourth Fan [Declaration] was
resolved.” (Id. at 7).
10, 2013, “pursuant to Rules 16, 26, and 37 of the
Federal Rules of Civil Procedure, ” Defendants moved to
strike the Fourth Fan Declaration, to “exclude Dr.
Fan's 2007 Report and testimony concerning the opinions
set forth in that report, ” and for an award of
“their expenses, including attorney's fees and
costs, incurred in connection with” the motion. (ECF
No. 235 at 1-2).
March 26, 2014, Magistrate Judge Pitman held that AAI was
precluded from using the Fourth Fan Declaration to oppose
Defendants' motion summary judgment “or in
connection with any other dispute involving the merits of the
claims and defenses” because it was “untimely
under [his] scheduling Order and was served in violation of
Rule 26(a)(2), ” and went “beyond Dr. Fan's
timely produced expert disclosures.” (ECF No. 235 at
16, 23, 30-31). Magistrate Judge Pitman also held that AAI
could use “section G, ¶¶ 257-73” of the
Fourth Fan Declaration to respond to “Defendants'
rule 702/Daubert motion, ” but “[g]iven
the age of this matter, the fact that the Fourth Fan
[Declaration] does not rely on information first produced
after the close of discovery, [his] admonition in January
2012 that discovery disputes be raised promptly and the
almost year-long gap between the close of discovery and the
earliest date on which a sanctions motion could possibly have
been made, ” AAI could not use the Fourth Fan
Declaration in support of its motion for sanctions.
(Id. at 32, 34, 36). Accordingly, Magistrate Judge
Pitman found that Defendants are “entitled to recover
some of their attorney's fees and costs” from
“AAI and its counsel, ” but only half of
“the fees and costs incurred in making” their
motion “as a result of AAI's failure to comply with
the Scheduling Order and Rule 26(a)(2).” (Id.
Judge Pitman ordered Defendants to submit their Application
within 20 days of his order with AAI's response due 20
days thereafter. (ECF No. 235 at 38). Defendants timely
submitted their Application under seal requesting an award of
$91, 246.55 (ECF No. 242 ¶6), and AAI timely submitted
their response under seal. (ECF No. 246).
and its counsel can be held liable for attorney's fees
and costs incurred for violating the court's scheduling
order or Federal Rule of Civil Procedure 26(a). Fed.R.Civ.P.
16(f), 37(c)(1). Under Federal Rule of Civil Procedure
16(f)(2), “in addition to or instead of sanctions, the
court may award ‘reasonable expenses - including
attorney's fees - incurred because of noncompliance with
this rule, unless the noncompliance was substantially
justified or other circumstances made an award of expenses
unjust.'” Tessemae's LLC v. Atlantis
Capital LLC, No. 18 Civ. 4902 (KHP), 2019 WL 2635956, at
*2 (S.D.N.Y. June 27, 2019) (quoting Fed.R.Civ.P. 16(f)(2)).
Under the law of this Circuit, identical language in Rule 37
of the Federal Rules of Civil Procedure imposes on the
disobedient party the “burden to show that his failure
is justified or that special circumstances make an award of
expenses unjust.” Id. at *3 (internal citation
omitted). The prevailing party is also entitled to costs,
including “reasonable out-of-pocket expenses incurred
by attorneys and ordinarily charged to their clients.”
Kreisler v. Second Avenue Diner Corp., No. 10 Civ.
7592 RJS), 2013 WL 3965247, at *2 (S.D.N.Y. July 31, 2013)
(internal citation omitted).
district court has broad discretion to determine the amount
to be awarded. Vincent v. Comm'r of Soc. Sec.,
651 F.3d 299, 307 (2d Cir. 2011). In Arbor Hill Concerned
Citizens Neighborhood Ass'n. v. Cnty. of Albany, 522
F.3d 182 (2d Cir. 2008), the Second Circuit articulated the
method for calculating reasonable attorney's fees: a
reasonable hourly rate multiplied by a reasonable number of
hours extended on the work constitutes the
“presumptively reasonable fee, ” also known as
the “lodestar.” Kreisler, 2013 WL
3965247, at *1. A court using the lodestar method sets the
lodestar, then considers “whether, in light of
variables such as the difficulty of the case, it should
adjust the lodestar before settling on the reasonable
fee.” Arbor Hill, 522 F.3d at 187.
in the court's analysis, a fee application should be
supported by “contemporaneous time records”
relaying the rates charged and hours worked by each attorney.
N.Y. State Ass'n for Retarded Children, Inc. v.
Carey, 711 F.2d 1136, 1154 (2d Cir. 1983). The attorneys
“should maintain billing time records in a manner that
will enable a reviewing court to identify distinct
claims.” Hensley v. Eckerhart, 461 U.S. 424,
437 (1983); see Themis Capital v. Democratic Republic of
Congo, No. 09 Civ. 1652 (PAE), 2014 WL 4379100, at *7
(S.D.N.Y. Sept. 4, 2014) (reducing hours by twenty percent
for “impermissibly broad” block billing). A court
should look at the “nature of the legal matter and
context of the fee award in considering the reasonable rate
and reasonable time spent on the matter.”
Tessemae's LLC, 2019 WL 2635956, at *3.
determine the hourly rate, a court considers “what a
reasonable, paying client would be willing to pay, given that
such a party wishes to spend the minimum necessary to
litigate the case effectively.” Bergerson v. N.Y.
State Office of Mental Health, Cent. N.Y. Psychiatric
Ctr., 652 F.3d 277, 289-90 (2d Cir. 2011) (internal
citation omitted). In addition, the Second Circuit has a
“forum rule” requiring the use of “hourly
rates employed in the district in which the reviewing court
sits in calculating the presumptively reasonable fee.”
Id. at 289 (internal citation omitted). The
court's determination of the reasonable hourly rate is
aided by the rate “prevailing in the community for
similar services by lawyers of reasonably comparable skill,
experience and reputation.” Blum v. Stenson,
465 U.S. 886, 895 n.11 (1984). “Courts in this District
have determined that hourly rates ranging from $250 to $1,
260 per hour, for attorneys' work on a commercial
litigation matter were reasonable” depending on
complexity, experience, and skill required.
Tessemae's LLC, 2019 WL 2635956, at *4
(collecting cases). The court may adjust base ...