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Eli Lilly and Co. v. Arch Insurance Co.

United States District Court, S.D. Indiana, Indianapolis Division

August 17, 2017

ELI LILLY AND COMPANY, Plaintiffs,
v.
ARCH INSURANCE COMPANY, Defendants.

          ORDER ON ATTORNEY'S FEES AWARD

          LARRY J. McKINNEY, JUDGE

         This matter pends on the Court's prior order (the “Prior Order”) awarding attorney's fees and costs to Defendants, Arch Insurance Company and Arch Special Insurance Company (collectively, “Arch”), in relation to their Motion to Compel the Depositions of Ian S. Pettman and Mike Brown or, in the Alternative, to Strike the Affidavits of Ian S. Pettman and Mike Brown, and Motion for Sanctions (the “Motion”). Dkt. No. 683. In the Prior Order, the Court struck the affidavits of Ian S. Pettman and Mike Brown (the “JLT Witnesses”), and all references thereto, as they appear in conjunction with Plaintiffs', Eli Lilly and Company and Lilly do Brasil, Ltda. (collectively, “Lilly's”), Second Amended Complaint and Cross Motion for Partial Summary Judgment, as well as any responses to such documents. Id. at 23. The Court further ordered that “Lilly shall be required to pay Arch's costs in connection with [the] Motion, ” pursuant to Federal Rule of Civil Procedure 37(a)(5)(C) (“Rule 37(a)(5)(C)”). Id. at 21-23.

         In light of the Court's Prior Order, Arch's counsel now seeks attorney's fees and expenses in the amount of $393, 557.79. Dkt. No. 702, Ex. 1 (“Shadley Decl.”), ¶ 8. As evidence of the fees asserted, Arch provided declarations from Fredric X. Shadley (“Shadley”), Arch's U.S. counsel from the law firm of Ulmer & Berne LLP (“Ulmer”), and Paul M. Kirkpatrick, Arch's UK counsel from the law firm of Shoosmiths LLP (“Shoosmiths”), as well as itemized lists describing the legal services rendered and the costs incurred by Ulmer and Shoosmiths in connection to this action. See generally, Shadley Decl.; Dkt. No. 702, Ex. 2. Shadley stated that Ulmer performed legal services related to this action at billable hourly rates ranging from $215 to $528 per hour. Shadley Decl., ¶ 7. He also indicated that Shoosmiths charged between £135 and £350 per hour for their legal services. Id. Furthermore, Shadley noted that “[t]o the extent possible and reasonable under the circumstances, Arch's counsel delegated necessary work to associates and attorneys and trainees with lower billable rates in an effort to keep fees to a minimum.” Id. Shadley claims that all of Arch's costs and fees incurred in their efforts to obtain the depositions of the JLT Witnesses fit into four categories: (1) “[a]ttorney fees and costs incurred in relation to the proceedings under the Hague Convention, including the filings and arguments before the High Court of Justice in the United Kingdom, ” totaling $212, 486.08; (2) “[t]he UK Court's order requiring Arch to pay the JLT Witnesses' attorney fees incurred during the course of the UK Court proceedings, as required by UK law, ” amounting to $76, 541.73; (3) “Arch's meet and confer efforts with counsel for [Lilly] and the JLT Witnesses during and after the proceedings before the UK Court in an effort to resolve the discovery dispute and the issues raised in the Motion … without the need for this Court's intervention, ” accounting for $21, 257.20; and (4) “Arch's briefing of the Motion …, including oral argument and post-hearing status reports and conferences, ” totaling $83, 290.78. Id. at ¶¶ 4, 6.

         In response to Arch's offered proof of fees, Lilly argues that Arch's request of $393, 557.70 is excessive and unreasonable based on the Court's Prior Order. Dkt. No. 721 at 1. Specifically, Lilly contends that Arch cannot recover its fees and costs for all of its prior attempts to obtain discovery from the JLT Witnesses, including its efforts in the UK Court, because the Court limited its attorney's fees award to include only Arch's costs and fees associated with the Motion. Id. at 3-5. Lilly further asserts that, because the Court did not award sanctions under Federal Rule of Civil Procedure 56 (“Rule 56”) and rejected Arch's allegations of ethical violations, Arch's attorney's fees award should only include the costs and fees associated with Arch's Rule 37 motion to compel and should not include any costs attributed to Arch's motion to strike under Rule 56 or its assertions of ethical violations. Id. at 5-11. In light of these restrictions, Lilly claims that Arch should be entitled to recover no more than $21, 952.54 in attorney's fees and costs. Id. at 10-11.

         I. DISCUSSION

         When a court grants a motion to compel, “the court must, after giving an opportunity to be heard, require the party or deponent whose conduct necessitated the motion, the party or attorney advising that conduct, or both to pay the movant's reasonable expenses incurred in making the motion, including attorney's fees, ” unless (1) “the movant filed the motion before attempting in good faith to obtain the disclosure or discovery without court action;” (2) “the opposing party's nondisclosure, response, or objection was substantially justified;” or (3) “other circumstances make an award of expenses unjust.” Fed.R.Civ.P. 37(a)(5)(A). If a court grants in part and denies in part a motion to compel, that court “may, after giving an opportunity to be heard, apportion the reasonable expenses for the motion.” Fed.R.Civ.P. 37(a)(5)(C). Because district courts are typically “in the best position to determine the reasonableness of an award for work done on litigation in that court, ” a district court's determination of an award of attorney's fees is given great deference. Dobbs v. DePuy Orthopedics, Inc., 842 F.3d 1045, 1048 (7th Cir. 2016) (reviewing a district court's award of attorney's fees under an abuse of discretion standard of review).

         To determine what constitutes reasonable attorney's fees under federal law, the Court starts with the lodestar amount, calculated by multiplying the number of hours the attorney reasonably expended on the litigation times a reasonable hourly rate. See Hensley v. Eckerhart, 461 U.S. 424, 433 (1983); Montanez v. Simon, 755 F.3d 547, 553 (7th Cir. 2014). As “the ‘centerpiece' of attorney's fees determinations, ” the lodestar calculation is applied to contingency fees and fixed fee arrangements. Pickett v. Sheridan Health Care Ctr., 664 F.3d 632, 639 (7th Cir. 2011) (citing Blanchard v. Bergeron, 489 U.S. 87, 94 (1989)). While the lodestar calculation “yields a presumptively reasonable fee, the court may nevertheless adjust the fee based on factors not included in the computation, ” such as the degree of success obtained and the reasonableness of the attorney's hourly rate. Montanez, 755 F.3d at 553 (internal citations omitted). Attorney's fees that are “ʻexcessive, redundant, or otherwise unnecessary'” are unreasonable and should not be calculated into the lodestar amount. Johnson v. GDF, Inc., 668 F.3d 927, 931 (7th Cir. 2012) (quoting Hensley, 461 U.S. at 434). “A reasonable hourly rate is based on the local market rate for the attorney's services, ” which is best evidenced by the rate the attorney actually bills for similar work, or alternatively, by rates charged by similarly experienced attorneys in the community or on similar cases. Montanez, 755 F.3d at 553 (internal citations omitted). “The party seeking the fee award bears the burden of proving the reasonableness of the hours worked and the hourly rates claimed.” Spegon, 175 F.3d at 550 (citing Hensley, 461 U.S. 433).

         Despite Arch's initial request in the Motion to recover all of its fees associated with the Motion “and its prior attempts to obtain the discovery addressed, ” Dkt. No. 632 at 31, the Court concluded in the Prior Order that Arch is entitled to recover only the attorney's fees and cost it incurred in connection with the Motion. Dkt. No. 683 at 23. Based on this determination, the Court only intended to award Arch its attorney's fees and costs that directly resulted from its efforts to develop, draft, administer, and argue the Motion. The Court did not intend to award Arch all of the costs and fees it incurred through its prior attempts to obtain depositions of the JLT Witnesses. The Court also did not intend to award Arch the fees it accrue through its efforts to negotiate with Lilly or JLT directly to obtain the JLT Witnesses' depositions. Therefore, Arch is not entitled to recover any of its fees associated with its Hague Convention proceedings, its reimbursement of JLT's fees in the UK Court, or its meet and confer efforts.

         Furthermore, while Lilly argues that the Court intended only to award fees in connection with certain portions of the Motion, the Court did not indicate that the fees awarded would be limited in such a manner. Although the Court did not grant Arch's primary form of relief by compelling the JLT Witnesses' depositions, the Court did grant Arch's alternative request to strike the JLT Witnesses' affidavits. Dkt. No. 683 at 23. Furthermore, while the Court rejected Arch's allegations of possible ethical violations, the Court still determined that Arch should be able to recover its attorney's fees for the Motion based on Lilly's prior actions in connection with Arch's Hague Convention proceedings that made the Motion necessary. Id. at 18-22. Therefore, because the Motion was necessitated by Lilly's actions and was granted in part and denied in part, Arch is entitled to recover all of its attorney's fees and costs associated with the development, drafting, administration, and argumentation of the Motion as a whole under Rule 37(a)(5)(C). See Estate of Wright v. Forgey, No. 2:13-CV-33-WCL-JEM, 2016 WL 2956699, at *2 (N.D. Ind. May 23, 2016) (concluding that a plaintiff is entitled to recover attorney's fees under Rule 37(a)(5)(C) where the court denied the plaintiff's request to compel discovery but granted the plaintiff's request for alternative relief to set a briefing schedule because the impasse caused by the defendants' efforts to avoid discovery “would likely still be ongoing if Plaintiff had not filed its motion to compel”).

         In light of the Court's restrictions set forth in the Prior Order, the Court will not award Arch any fees that are not related to the development, drafting, administration, and argumentation of the Motion. Therefore, because the Motion was only necessary after the UK Court ordered that Arch would not be permitted to perform U.S.-style depositions of the JLT Witnesses on March 16, 2017, see Dkt. No. 652, Ex. A-1, the Court limits its review of Arch's purported attorney's fees to include only fees and costs incurred after March 16, 2017. Based on the itemized invoices attached to the Shadley Decl., Arch incurred fees and costs amounting to $105, 117.89 after March 16, 2017. Shadely Decl. at 69-254.

         The Court further deducts all of Arch's claimed attorney's fees that are not directly related to the development, drafting, administration, and argumentation of the Motion after March 16, 2017. Because they relate to services other than those directly associated with the Motion, the following charges are excluded from Arch's award of attorney's fees:

Date

Description

Hours and Fees

3/19/17

Review of 2008-2010 emails and documents in preparation for Saltsgaver deposition

FXS, 10.4 hours, $5, 241.60

3/20/17

Drafted and revised meet and confer letter to plaintiffs' counsel based on JLT discovery and demand for payment of fees

JAK, 2.8 hours, $966.00

3/20/17

Review and provide substantive comment to draft correspondence to plaintiffs' counsel regarding meet and confer regarding JLT affidavits and potential motion to strike and motion for costs

GMS, 0.4 hours, $158.00

3/21/17

Analyzed issues relating to demand for fees and further discovery based on JLT proceedings in the UK

JAK, 1.4 hours, $483.00

3/28/17

Finalized meet and confer letter regarding JLT costs

MBG, 0.4 hours, $138.00

3/29/17

Communication with client regarding JLT's costs and attorney's fees

MBG, 0.1 hours, $34.50

3/29/17

Review correspondence to plaintiffs' counsel regarding meet and confer letter regarding JLT discovery and witnesses

GMS, 0.1 hours, $39.50

3/30/17

Developed strategy regarding service of United Kingdom order on counsel and court in the United States proceedings

MBG, 0.1 hours, $34.50

4/4/17

Communication with United Kingdom counsel regarding payment details for JLT's costs

MBG, 0.1 hours, $34.50

4/4/17

Reviewed communication from opposing counsel regarding JLT depositions, documents, and costs

MBG, 0.3 hours, $103.50

4/4/17

Review correspondence from Plaintiffs' counsel regarding meet and confer regarding JLT motion to strike

GMS, 0.2 hours, $79.00

4/6/2017

Review transcript of attorney argument at London hearing regarding JLT discovery

GMS, 0.3 hours, $118.50)

4/10/2017

Communication with United Kingdom counsel regarding judgment

MBG, 0.1 hours, $34.50

4/12/17

Review transcript of English Court's opinion regarding JLT discovery

GMS, 0.4 hours, $158.00

4/18/17

Drafted communication to opposing counsel regarding JLT documents

MBG, 0.3 hours, $103.50

4/25/17

Developed strategy, relating to motion to strike/motion for sanctions; analyzed correspondence from plaintiffs' counsel regarding MJ documents and strategy for motion relating to same; analyzed issues relating to agency arguments and issues relating to ethics issues in briefing [1]

JAK, 2.3 hours, $793.50

5/8/17

Review and analyze plaintiffs' counsel's correspondence to J. Thomas regarding meet and confer and proposals regarding JLT depositions

GMS, 0.2 hours, $79.00

5/8/17

Reviewed letter from plaintiffs' attorney regarding JLT depositions and documents; reviewed letter from plaintiffs' attorney to JLT regarding the same

FXS, 0.3 hours, $151.20

5/9/17

Drafted response to plaintiffs' counsel regarding joint efforts to obtain JLT depositions

MBG, 0.8 hours, $276.00

5/10/17

Communication to opposing counsel regarding JLT depositions

MBG, 0.1 hours, $34.50

5/18/17

Communications with opposing counsel regarding JLT depositions

MBG, 0.4 hours, $138.00

5/18/17

Developed strategy regarding negotiations with JLT

MBG, 0.6 hours, $207.00

5/18/17

Review communications from plaintiffs' counsel regarding JLT deposition issue

GMS, 0.1 hours, $39.50

5/18/17

Confer with plaintiffs' new counsel, A. Detherage, regarding JLT depositions and issues involved in reaching a viable resolution; confer with J. Klarfield regarding facts as they occurred in London and strategy to take in response to plaintiffs' offering

FXS, 0.6 hours, $302.40

5/22/17

Developed strategy regarding Barnes Thornburg lawyer's request to approach JLT regarding depositions

MBG, 0.3 hours, $103.50

5/22/17

Reviewed and analyzed JLT's proposed stipulation regarding depositions

MBG, 0.5 hours, $172.50

5/22/17

Reviewed email from A. Detherage (plaintiffs' attorney) regarding JLT depositions and call to same

FXS, 0.1 hours, $50.40

5/23/17

Communication with plaintiffs' counsel regarding negotiations with JLT about depositions

MBG, 0.4 hours, $138.00

5/23/17

Prepare red-lined version of JLT's deposition stipulation

MBG, 0.8 hours, $276.00

5/23/17

Review proposed stipulation from JLT's counsel regarding JLT witness depositions

GMS, 0.2 hours, $79.00

5/23/17

Review communications among counsel regarding negotiations involving JLT's proposed stipulation

GMS, 0.1 hours, $39.50

5/23/17

Review redline of JLT's proposed stipulation regarding JLT witness testimony

GMS, 0.2 hours, $79.00

5/23/17

Worked on response and edits to JLT's proposed stipulated agreement as to depositions

FXS, 0.3 hours, $151.20

5/24/17

Met and conferred with plaintiffs' counsel regarding JLT deposition proposal

MBG, 0.2 hours, $69.00

5/24/17

Review continued negotiations among counsel regarding JLT witness depositions

GMS, 0.1 hours, $39.50

5/24/17

Reviewed draft email from plaintiffs' attorney for joint proposal to JLT's counsel

FXS, 0.2 hours, $100.80

5/25/17

Reviewed and analyzed plaintiffs' counsel's proposed email to JLT regarding depositions

MBG, 0.5 hours, $172.50

5/25/17

Drafted communication to opposing counsel regarding JLT negotiations

MBG, 0.5 hours, $172.50

5/25/17

Developed strategy with respect to JLT negotiations

MBG, 0.8 hours, $276.00

5/26/17

Prepared for conference with JLT and plaintiffs' counsel regarding depositions of Pettman and Brown

MBG, 0.2 hours, $69.00

5/26/17

Attended conference with JLT and plaintiffs' counsel regarding depositions of Pettman and Brown

MBG, 0.9 hours, $310.50

5/26/17

Analyzed issues relating to JLT discovery, including conference call with counsel for JLT and plaintiffs regarding proposed depositions, and analysis of issues relating to document requests

JAK, 1.3 hours, $448.50

5/26/17

Review communications among counsel regarding production of additional JLT documents

GMS, 0.1 hours, $39.50

5/26/17

Review communications among counsel regarding continued negotiations involving JLT witnesses

GMS, 0.1 hours, $39.50

5/28/17

Developed strategy relating to JLT discovery, including analysis of law for witnesses' voluntary withdrawal of affidavits

JAK, 0.6 hours, $207.00

5/30/17

Reviewed communication from JLT's counsel; developed strategy regarding response

MBG, 0.4 hours, $138.00

5/30/17

Developed strategy relating to JLT proposal on depositions and analyzed issues relating to voluntary withdrawal of affidavits and issues relating to chronology of Manufacturing Agreement and control of Cosmopolis site

JAK, 2.1 hours, $724.50

5/30/17

Review communications from JLT's counsel regarding continued negotiations regarding possible JLT depositions

GMS, 0.1 hours, $39.50

5/30/17

Evaluate JLT's current proposal to resolve deposition dispute and call to plaintiffs' attorney regarding same

FXS, 0.5 hours, $252.00

5/31/17

Analyzed proposal from JLT regarding depositions

MBG, 0.2 hours, $69.00

5/31/17

Analyze issues surrounding JLT depositions and offer of JLT for some compromise, and how to respond

FXS, 0.6 hours, $302.40

6/1/17

Drafted communication to client regarding most recent JLT proposal on Pettman and Brown

MBG, 1.4 hours, $483.00

6/1/17

Drafted correspondence to opposing counsel and JLT's counsel rejecting deposition proposal

MBG, 1.6 hours, $552.00

6/1/17

Analyzed Rule 408 in connection with JLT deposition negotiations

MBG, 0.2 hours, $69.00

6/1/17

Case law research regarding FRE 408 in order to determine if Arch has grounds to keep negotiations with JLT regarding depositions confidential

ESP, 1.4 hours, $301.00

6/1/17

Review communication with JLT's counsel regarding continued negotiations regarding JLT depositions

GMS, 0.1 hours, $39.50

6/2/17

Case law research regarding FRE 408 in order to determine if Arch has grounds to keep negotiations with JLT regarding depositions confidential

ESP, 2.4 hours, $516.00

6/2/17

Drafted memorandum summarizing results of case law research regarding FRE 408 in order to determine if Arch has grounds to keep negotiations with JLT regarding depositions confidential

ESP, 1.9 hours, $408.50

6/5/17

Reviewed and analyzed research on applicability of Rule 408 to JLT negotiations

MBG, 0.2 hours, $69.00

6/5/17

Reviewed correspondence from JLT's counsel regarding depositions

MBG, 0.3 hours, $103.50

6/5/17

Analyzed issues relating to JLT negotiations over discovery and preparation for upcoming motion hearing

JAK, 1.2 hours, $414.00

6/5/17

Drafted memorandum summarizing results of case law research regarding FRE 408 in order to determine if Arch has grounds to keep negotiations with JLT regarding depositions confidential

ESP, 1.3 hours, $279.50

6/5/17

Reviewed emails from JLT and plaintiffs' attorney regarding proposals for JLT depositions

FXS, 0.1 hours, $50.40

6/6/17

Communication with opposing counsel regarding JLT deposition negotiations

MBG, 0.3 hours, $103.50

6/6/17

Review communications from JLT's counsel regarding continued negotiations regarding JLT witness depositions

GMS, 0.1 hours, $39.50

6/6/17

Reviewed emails from JLT and plaintiffs' attorneys regarding offers and responses on depositions of JLT affiants

FXS, 0.3 hours, $151.20

6/6/17

Confer with Andy (plaintiffs' attorney) regarding negotiations with JLT; conference with the court regarding JLT witness deposition negotiations and negotiations on plaintiffs' motion to suppress; calls to plaintiffs' attorneys after same [2]

FXS, 0.8 hours, $403.20

6/8/17

Reviewed JLT's response offer on voluntary JLT depositions

FXS, 0.2 hours, $100.80

6/8/17

Reviewed email from JLT's counsel regarding offer to provide JLT witness depositions, and compare to past offers

FXS, 0.2 hours, $100.80

6/13/17

Communication to opposing counsel regarding JLT negotiations

MBG, 0.4 hours, $138.00

6/14/17

Supplemented communication to opposing counsel regarding JLT negotiations about depositions

MBG, 0.6 hours, $207.00

6/16/17

Review plaintiffs' counsel's communications regarding further negotiations involving JLT depositions

GMS, 0.1 hours, $39.50

6/19/17

Supplemented response to JLT's counsel regarding negotiation efforts

MBG, 0.4 hours, $138.00

6/19/17

Reviewed communication from plaintiffs' counsel regarding JLT depositions

MBG, 0.2 hours, $69.00

6/19/17

Review communications from JLT's and plaintiffs' counsel regarding further negotiations involving JLT depositions

GMS, 0.1 hours, $39.50

6/19/17

Reviewed email from JLT attorney with additional compromise offer on depositions; analyze open issues and confer with co-counsel regarding our response to the same

FXS, 0.4 hours, $201.60

6/20/17

Supplemented communication to opposing counsel regarding JLT depositions

MBG, 0.2 hours, $69.00

6/20/17

Supplemented communication to JLT's counsel regarding JLT depositions

MBG, 0.2 hours, $69.00

Id. at 71-241. Therefore, Arch's attorney fee award shall be reduced by the amounts attributed to these unrelated services in the amount of $21, 329.00.

         Furthermore, as stated above, fees that are considered excessive, redundant, unnecessary, or otherwise unreasonable should also be excluded from an attorney's fees award. See Johnson, 668 F.3d at 931. As such, the following charges are excluded from Arch's attorney's fees ...


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