Court: District Court, D. Massachusetts; March 26, 2015; Federal District Court
Insurance Recovery Group, Inc. (IRG) seeks a total of $100,852.34 in attorneys’ fees and costs following a partial grant of its motion for sanctions against the law firm Meiselman, Packman, Nealon, Scialabba, Baker P.C., and specific attorneys D. Greg Blankinship and Joshua S. Bauchner. The case originated on May 18, 2011, when IRG filed an action in the Massachusetts Superior Court against ISG Recoveries, LLC and associated individuals, alleging violations of consulting agreements. The defendants removed the case to federal court and retained attorneys from Meiselman.
IRG filed an emergency motion for a preliminary injunction on May 25, 2011, which was granted by Judge Gertner the following day, issuing a ten-day temporary restraining order (TRO) requiring the defendants to return all confidential and proprietary information obtained during their affiliation with IRG within 24 hours. Blankinship subsequently communicated challenges faced by the defendants in meeting this deadline, specifically regarding the retrieval of data from four IRG-owned laptops, which contained privileged communications and potentially relevant emails. To address this, Blankinship proposed creating forensic copies of the laptops before returning them. The laptops were returned to IRG on June 2, 2011, after which IRG's computer experts discovered that the hard drives had likely been wiped, indicating potential tampering.
A four-day bench trial began on June 9, 2011, concerning IRG's claims, during which IRG's counsel reported missing data from laptops, hindering their case. The Defendants’ Counsel raised concerns about sensitive information and retained forensic experts for hard drive imaging. The Court issued a protective order requiring the Defendants to provide these images to IRG while preserving attorney-client privilege. On June 10, the Court learned that forensic recovery faced technical difficulties, leading to a deadline of June 13 for the Defendants to restore data or explain the loss. On that date, a hard drive was provided to IRG, but it contained data from only three laptops and “dynamically provisioned” virtual images rather than the required fixed forensic copies, allowing only partial email recovery.
On June 16, 2011, the Court ruled that the Defendants breached their consulting agreements, closing the case for arbitration. During a January 6, 2012 deposition, Ladenheim testified about inconsistent legal advice regarding his laptop. An arbitrator awarded IRG $1,865,812.08, including attorneys' fees, on July 9, 2012. IRG then moved to confirm the arbitration award, which the Court granted a month later. On September 6, 2012, IRG filed a motion for sanctions against the Defendants’ Counsel for allegedly advising clients to destroy evidence, violating discovery orders. The motion was partially denied on September 30, 2013, for lack of demonstrated bad faith under 28 U.S.C. section 1927. The Court noted evidence supporting claims that the Defendants’ Counsel directed destruction of materials but did not hold them responsible for the technical failures in data recovery. However, IRG was granted costs and attorneys’ fees related to the Defendants’ Counsel's noncompliance with discovery orders.
Defendants’ Counsel failed to comply with the Temporary Restraining Order (TRO) and thus cannot invoke exceptions to Federal Civil Procedure Rule 37 regarding sanctions. The Court found that the failure to provide necessary data from IRG laptops and the indiscriminate purging of IRG-related information without proper identification were not justified. Consequently, the Court granted IRG thirty days to submit documentation for expense reimbursement. Following this, IRG filed for costs and fees on October 30, 2013, with responses and a reply submitted by Defendants' Counsel and IRG, respectively.
On September 30, 2013, the Court reaffirmed that Defendants’ Counsel did not follow the TRO or discovery orders, stating that under Rule 37, the award of reasonable expenses, including attorneys’ fees, is mandatory unless justified otherwise. IRG is entitled to fees directly linked to the Defendants’ Counsel's failures and must provide adequate documentation for the claimed hours and rates, with the Court having the authority to reduce the award if documentation is insufficient.
The Court will determine reasonable attorneys’ fees using the lodestar method, multiplying the hours reasonably spent on the case by a reasonable hourly rate. Although the Court may adjust the lodestar figure based on case-specific factors, it generally represents a reasonable fee award. Tables included in IRG's submissions detail the fees requested by individual attorneys and by category.
Requested attorney fees total $94,346, broken down by individual attorneys and categories of work. Joseph M. Downes, a partner, billed 192.3 hours at $295 per hour for a total of $56,728.50. Lawrence S. Delaney, also a partner, billed 1.7 hours at $325 per hour for $29,152.50. Other attorneys, including managing partner Joseph L. Demeo and associate Ellee McKim, submitted fees totaling $1,137.50 and $1,327.50, respectively.
The fees are categorized by specific tasks: initial triage, expert testimony, motion for sanctions, subsequent motion practice, post-motion discovery, motions to compel, and presentation of evidence, with total amounts calculated for each category. For instance, initial triage fees total $9,814.50, while fees related to motions to compel amount to $9,179.
The document emphasizes the necessity for the court to assess the reasonableness of the hours billed, highlighting that some entries were block billed, which the court disapproves of due to insufficient itemization of tasks. This lack of specificity hinders the court’s ability to evaluate the reasonableness of the hours expended. Consequently, the court plans to apply a global reduction of twenty percent to the fees requested after more specific deductions are made, citing precedent cases to support this decision.
Defendants’ Counsel contend that IRG's fee request should be decreased due to time spent on the spoliation issue, which the Court denied in IRG's sanctions motion. However, an unsuccessful claim does not automatically bar fee recovery for related time. If claims arise from a common core of facts or related legal theories, no reduction is necessary, as established in Bogan v. City of Boston. Although the Court did not find Defendants’ Counsel liable for spoliation, it acknowledged their non-compliance with discovery orders. Thus, IRG is entitled to fees for all related issues.
Regarding administrative and clerical tasks, Defendants’ Counsel argue that IRG improperly seeks fees for such work. The First Circuit has ruled that clerical tasks should not be billed at attorney rates. Commonly recognized administrative tasks include document preparation, scheduling, and correspondence. The distinction between legal and administrative tasks can be ambiguous, as evidenced by Defendants’ reference to email entries. Many entries adequately describe the tasks, but some, like drafting letters and emails, might be deemed administrative. Despite acknowledging the presence of administrative tasks, the Court finds they constitute a minor portion of the total hours worked and does not see the need for a fee reduction based on this criterion.
Defendants' Counsel argue that IRG's fee requests include charges not linked to their non-compliance with discovery orders and that IRG has inflated the hours worked. The Court will systematically review the categorized entries to assess the reasonableness of IRG's billing.
First, regarding conferencing, IRG's attorneys conferred among themselves, which the Court acknowledges as a standard practice. Despite challenges in evaluating block billing, the Court finds approximately ten hours allocated to conferencing reasonable and will not reduce these hours for excessive billing.
Second, concerning the initial triage of laptops and images, Defendants’ Counsel assert that time spent on this task is unrelated to their failures. However, the Court maintains that the discovery orders pertained to the laptops and data, and the Defendants were responsible for their conduct regarding the data’s integrity. The time spent by IRG’s attorneys on the triage, including communications with their client and experts, is justified given the altered state of the data they received. The Court also supports the hours spent on spoliation-related research during the triage. Ultimately, the Court finds the fees requested for the initial triage of laptops and images to be appropriate and will award them to IRG.
Elysium's expert testimony was necessitated by Defendants' Counsel's noncompliance with discovery orders, particularly their failure to provide mirrored images of laptops and the indiscriminate deletion of IRG-related data. This led IRG’s attorneys to engage Elysium to analyze the implications of the data purging and the condition of the laptops. The Court finds no excess in the time billed for this expert testimony and grants the requested hours.
Regarding the motion for sanctions, the Court maintains that the time spent should not be reduced despite IRG's unsuccessful spoliation claim, as the motion was a direct result of Defendants' Counsel's misconduct in discovery. The hours spent preparing the motion are deemed reasonable and are approved in full.
In terms of subsequent motion practice and briefs, while the Court agrees that the time spent was excessive, it acknowledges that this is typical in litigation. The attorneys' experience is noted, and their time spent drafting a ten-page reply to the motion for sanctions was considered excessive; thus, the Court reduces the hours claimed by both attorneys by half, awarding 16.15 hours to Downes and 8.6 hours to Delaney.
For post-motion discovery, the Court finds that the time requested by IRG's attorneys should not be reduced, as it is directly linked to the sanctions motion. The Court does not perceive any unproductive or excessive billing in this context and approves the hours requested for the discovery initiated by Defendants’ Counsel.
IRG's motions to compel were deemed necessary due to Defendants' Counsel's unclear position, which warranted further clarification. The court found that had Defendants responded appropriately to the initial motion, subsequent motions would not have been necessary. Consequently, the court approved IRG's fee request related to these motions without noting excessive billing.
IRG also sought fees for presenting alternate evidence at trial, but the court reduced these fees due to the presence of two attorneys, which, while strategic, was not compensable. The court halved the hours billed by Joseph M. Downes for trial preparation and attendance, leading to an awarded total of 25.95 hours for this work.
Additionally, IRG requested $6,000 for documentation supporting its fee request, but failed to provide sufficient details regarding the hours and rates that justified this amount, resulting in a denial of the request.
A summary of hours compensated outlines the hours requested and granted across various categories, with adjustments made for subsequent motion practice and the presentation of evidence. The total hours compensated amount to 258.1, down from the requested 291.4.
Regarding the reasonableness of attorneys' rates, IRG must demonstrate both the experience of its lawyers and the prevailing market rates. Defendants' Counsel did not dispute the rates, which were approved at $295 for Downes, $325 for Delaney and Demeo, and $225 for McKim.
The document outlines a fee award and costs associated with legal services rendered by various attorneys. Total attorneys' fees amount to $62,611.60 after a 20% reduction for block billing, with detailed breakdowns provided for different categories of work, including initial triage of laptops, expert testimony, motions for sanctions, subsequent motion practice, post-motion discovery, motions to compel, and trial evidence presentation.
The total fees for each category are as follows:
- Initial Triage: $9,814.50
- Expert Testimony: $7,043.50
- Motion for Sanctions: $14,306.00
- Subsequent Motion Practice: $12,672.75
- Post-Motion Discovery: $9,696.00
- Motions to Compel: $9,179.00
- Trial Evidence Presentation: $15,552.75
Costs requested by IRG amount to $6,506.34, which include specific expenses for expert fees, in-house copies, and deposition transcripts. The court denies reimbursement for in-house copying costs as overhead but grants the costs for the deposition transcript and Elysium's expert fees, totaling $6,300.99.
In summary, the court awards IRG a total of $68,912.59, which includes both attorneys' fees and costs. The document also notes a name change for the law firm involved and references prior court orders for context.
The case was initially assigned to former Chief Judge Wolf, who likely issued an order granting IRG’s emergency motion while serving as the district's emergency judge. Subsequently, the case was reassigned to the current Court on June 2, 2011. The term "zeroing out" refers to the process of overwriting a hard drive with the character '00h', which eliminates recoverable data. Fixed provisioned forensic images include unallocated space for deleted files, whereas dynamically provisioned images do not, preventing data recovery. Twenty-two filtered emails involving Salters' daughter were found but are not relevant to the case. At the time of the arbitration award, Connolly was the only respondent liable for the payment, having settled with IRG, while Salters was dismissed after filing for bankruptcy. Downes has transitioned from Demeo, LLP to Downes McMahon LLP. The Court reviewed documents such as IRG’s Attorneys' Invoices to assess attorney billing entries, particularly focusing on conference and strategy time. The Court evaluated billable hours based on general time spent on tasks in other entries. Both Downes and Delaney submitted trial time entries; however, the Court opted to reduce Downes' hours due to the simplicity of his trial entries compared to Delaney's, which involved a mix of tasks.
