IN RE APPLICATION OF HORNBEAM CORPORATION REQUEST FOR DISCOVERY PURSUANT TO 28 U.S.C. § 1782 CASE NO. 14-CV-24887-LOUIS CONSENT CASE United States District Court, S.D. Florida Entered September 27, 2019 Counsel Jane Wollner Moscowitz, Moscowitz & Moscowitz, P.A., Coral Gables, FL, Tucker Harrison Byrd, Byrd Campbell, P.A., Winter Park, FL, Alexandra J. Marinzel, Pro Hac Vice, Carol Elder Bruce, Pro Hac Vice, Robert P. Howard, Jr., Pro Hac Vice, Murphy & McGonigle, Washington, DC, James K. Goldfarb, Pro Hac Vice, Murphy & McGonigle, PC, New York, NY, for Hornbeam Corporation. Jorge David Guttman, William King Hill, Joshua A. Levine, Miami, FL, for 5251 36ST, LLC. Louis, Lauren F., United States Magistrate Judge ORDER ON MOTION TO SHIFT COSTS *1 This cause comes before the Court on Subpoena Respondents’[1] Motion and Incorporated Memorandum of Law to Shift Cost of Compliance with Subpoenas for Production to Hornbeam (ECF No. 290). Subpoena Respondents move the Court to award attorneys’ fees for the costs of certain discovery-related expenses incurred in preparing their response to the subpoena. A hearing was held on the Motion on May 6, 2019. Upon consideration of the Parties’ arguments, the record, applicable case law, and being otherwise fully advised in the matter the Court grants Subpoena Respondents’ Motion, in part, and awards attorneys’ fees and costs in the amount of $16,283.51. I. BACKGROUND The background of this case is well memorialized elsewhere in the record. The underlying dispute arose from the purchase of a steel mill in Ohio by Warren Steel Holdings (“Warren Steel”), which was owned by three Ukrainian businessmen—Vadim Shulman, Igor Kolosky, and Gennadiy Bogolyubov. Subsequently, Warren Steel was purchased by another holding company, Halliwel Assets, Inc. (“Halliwel”). The relationship between the three businessmen has deteriorated over time; now Vadim Shulman contends that Igor Kolomisky and Gennadiy Bogolyubov, have engaged in self-dealing and have functionally shut him out from the business’s operations. Shulman’s allegations implicate several companies, individuals and other entities— including Subpoena Respondents—as involved with Kolomoisky and Bogolyubov’s self-dealing scheme. Shulman is the beneficial owner of Applicant Hornbeam Corporation (“Hornbeam” or “Applicant”). Hornbeam instituted this action pursuant to 28 U.S.C. § 1782 on December 29, 2014, requesting discovery for use in future foreign proceedings in the British Virgin Islands (“BVI”) against Kolomoisky, Bogolyubov, and their related entities Halliwel, Marigold, and Symeou (together, the “Intervenors”). Hornbeam also brought § 1782 actions in other United States district courts and initiated related proceedings in foreign tribunals abroad. Relevant to this Motion, on June 25, 2018, the Court entered an Omnibus Order (ECF No. 209), denying and otherwise rejecting Intervenors’ renewed efforts to vacate the 2015 Order that granted Hornbeam’s § 1782 Application (ECF No. 12). The Court, however, did sustain Intervenors’ objections to the overbreadth of requested discovery, and, accordingly, precluded Applicant’s discovery into certain enumerated “related persons” other than the Subpoena Recipients (ECF No. 209 at 10-11). The Court authorized Hornbeam to serve subpoenas on Subpoena Respondents for the production of documents and testimony regarding dealings and communications with Warren Steel. *2 On July 10, 2018, Hornbeam served the document subpoenas as well as eleven testimonial subpoenas on Subpoena Respondents through counsel. On July 11, 2018, the Court held a hearing on the Joint Discovery Plan, during which counsel for Subpoena Respondents raised the issue of shifting costs of subpoena compliance. Counsel for Subpoena Respondents represented that he had run sample searches of email custodians pursuant to the language in the June 25 Omnibus Order and that there was a large amount of resulting data. While the electronic data searches were being refined, the Court ordered Subpoena Respondents to produce three types of documents by August 1, 2018: organizational charts; loan, credit, and finance transactions involving Warren Steel; and invoices, contracts, and agreements to which Warren Steel was a party. Following the July 11th hearing, the Parties continued to disagree about the scope of discovery authorized by the Court’s Orders. Subpoena Respondents filed a Motion to Quash the Document Subpoenas (ECF No. 249); Hornbeam filed a Motion to Compel (ECF No. 260). The Court heard arguments on both on September 20, 2018 and granted in part Hornbeam’s Motion to Compel and denied Subpoena Respondents’ Motion to Quash (ECF No. 267). Consistently, if not persistently, Subpoena Respondents raised and renewed their demand that the costs of production be borne by Hornbeam, and resisted compliance without assurance that the costs would be shifted pursuant to Federal Rule of Civil Procedure 45. On several occasions, the Court recognized the demand but denied as premature Respondents’ request for an order requiring cost shifting: no costs were itemized or even estimated with a degree of certainty that would have afforded either the Applicant or the Court a realistic opportunity to assess their reasonableness. Subpoena Respondents were ordered to comply with the subpoena without an order determining their entitlement to recover their costs. Subpoena Respondents then reviewed 2,080 documents and produced 1,628 documents totaling 5,239 pages. Subpoena Respondents now seek to shift the total costs of production of $35,140.98, including $3,630.26 in vendor costs, $2,979.72 in employee costs, $4,200.00 in e-discovery management costs, and $24,331.00 in attorneys fees for review and production of documents. II. DISCUSSION a. Subpoena Respondents are Entitled to Recover Reasonable Costs Subpoena Respondents filed this Motion seeking to shift attorneys’ fees and costs associated with the production of documents pursuant to Rule 45. Subsection (d) of Rule 45 requires that a non-party ordered to comply with a subpoena must be protected from significant expense incurred in complying with the subpoena. Fed. R. Civ. P. 45(d). The rule sets out two ways in which a person may be protected by the court. First, it allows a court to issue sanctions for a party who fails to take reasonable steps to avoid undue burden or expense on a person or subject of the subpoena. See Fed. R. Civ. P. 45(d)(1). Second, it allows the court to order the serving party to reasonably compensate the subpoena respondent, including reasonable compensation for attorneys’ fees. See Fed. R. Civ. P 45(d)(3)(C)(ii); In re Domestic Drywall Antitrust Litig., 300 F.R.D. 234, 250 (E.D. Pa. 2014) (“reasonable compensation” under Rule 45(d)(3)(C)(ii))); see also Fed. R. Civ. P. 45(d)(2)(B)(ii) (order compelling compliance of a subpoena “must protect a person who is neither a party nor a party’s officer from significant expense resulting from compliance.”). Other courts have recognized Rule 45’s cost shifting as mandatory upon a finding that the costs incurred are significant. See, e.g., Legal Voice v. Stormans Inc., 738 F.3d 1178, 1184 (9th Cir. 2013) (“when discovery is ordered against a non-party, the only question before the court in considering whether to shift costs is whether the subpoena imposes significant expense on the non-party. If so, the district court must order the party seeking discovery to bear at least enough of the cost of compliance to render the remainder non-significant.”) (internal quotations omitted). *3 Hornbeam does not challenge the availability of cost-shifting under Rule 45 but disputes Subpoena Respondents’ entitlement to a cost-shifting award in this case. Indeed, “[a] non-party can be required to bear some or all of its expenses where the equities of a particular case demand it.” In re Honeywell Int’l, Inc. Sec. Litig., 230 F.R.D. 293, 303 (S.D.N.Y. 2003). Courts have used a balancing approach to examine the equities in each particular case in order to determine how much cost to shift from the non-party to the requesting party, “including whether the non-party actually has an interest in the outcome of the case, whether the non-party can more readily bear its cost than the requesting party, and whether the litigation is of public importance.” Sun Capital Partners, Inc. v. Twin City Fire Ins. Co., No. 12-CIV-81397, 2016 WL 1658765, at *7 (S.D. Fla. Apr. 26, 2016) (citations omitted). Hornbeam’s argument focuses exclusively on the first of these factors. Hornbeam contends that Subpoena Respondents’, and particularly Mordechai Korf’s, past relationship with Intervenors makes Subpoena Respondents interested non-parties. On balance, the Court is not persuaded that the relationship between Mr. Korf and Intervenors demonstrates his personal interest in the outcome of the case. Applicant has declined to identify Mr. Korf as a target of its anticipated foreign suit, which, while not determinative, weighs against a finding that he has an actual interest. Nor will he (or the entities of which he is president, Subpoena Respondents herein) be allaying the costs to the Intervenors. It was represented at the May 6, 2019, hearing that the Subpoena Respondents, not Intervenors, have borne the costs of document production and that any costs recovered would go to Subpoena Respondents. Again, while not determinative, this undermines Hornbeam’s insistence that Mr. Korf’s interest is so intermingled with the Intervenors as to make him an “interested” non-party. Moreover, even if the Court were to find that Subpoena Respondents were not “classic disinterested parties,” that would not deprive the Court of the discretion to apportion some of the costs to the propounding party. Cases cited by Applicant recognize as much. See, e.g., In re First Am. Corp., 184 F.R.D. 234, 244–45 (S.D.N.Y. 1998) (reducing $210,990.67 costs incurred to an award of $75,000); In re Seroquel Prod. Liab. Litig., No. 6:06-MD-1769-ORL-22DAB, 2007 WL 4287676, at *5 (M.D. Fla. Dec. 6, 2007) (ordering an award for respondent’s actual costs of duplication, but not overhead costs or attorneys’ fees). With respect to the other factors the Court may consider, neither side advanced any basis to conclude that one side is in a superior position to bear the costs, or that the litigation is a matter of public importance. Ultimately, the Court finds that some portion of the Subpoena Respondents’ costs, if significant, will be shifted to Applicant. “Whether a cost is ‘significant’ necessarily relates to the nature of the case and the parties’ respective financial situations.” Siltronic Corp. v. Employers Ins. Co of Wausau, No. 3:11-cv-1493-ST, 2014 WL 991822, at *1 (D. Or. Mar. 13, 2014) (citing Williams v. City of Dallas, 178 FRD 103, 113 (N.D. Tex. 1998) (finding that $9,000 was a significant amount in discovery to shift costs.)). b. Attorneys’ Fees and Costs Subpoena Respondents seek an award of $35,140.98 in total, of which $24,331.00 is attorneys’ fees. Hornbeam contends that attorneys’ fees incurred as a result of Subpoena Respondents’ own desire to check for privileged and confidential documents are not subject to reimbursement, relying on Steward Health Care Sys. LLC v. Blue Cross & Blue Shield of Rhode Island, No. 15-272, 2016 WL 8716426, at *4 (E.D. Pa. Nov. 4, 2016). Other courts have reached the opposite conclusion, including district courts in this Circuit. See, e.g., Kipperman v. Onex Corp., No. 1:05-CV-1242-JOF, 2008 WL 11333467, at *11 (N.D. Ga. Mar. 19, 2008) (awarding fees to subpoena respondent but reducing total costs sought by two-thirds and awarding $88,804.17 to respondent, despite finding respondent was not “a completely disinterested party”). *4 Subpoena Respondents asserted that they incurred 59.6 hours for a total of $24,331.00 in attorneys’ fees. While Subpoena Respondents may recover some portion of the fees, the Court will reduce the total amount to be awarded. 1. Legal Standard The Eleventh Circuit has adopted the lodestar method to determine the reasonableness of an award of attorneys’ fees. Norman v. Hous. Auth. of City of Montgomery, 836 F.2d 1292, 1299 (11th Cir. 1988). The lodestar method consists of determining the reasonable hourly rate and multiplying that number by the number of hours reasonably expended on the litigation by counsel. See, e.g., Loranger v. Stierheim, 10 F.3d 776, 781 (11th Cir. 1994); Norman, 836 F.2d at 1299; Harbaugh v. Greslin, 365 F. Supp. 2d 1274, 1279 (S.D. Fla. 2005). The fee applicant bears the burden of establishing entitlement to the award and documenting the appropriate hours and hourly rates. Am. Civil Liberties Union of Ga. v. Barnes, 168 F.3d 423, 427 (11th Cir. 1999). That burden includes submitting “specific and detailed evidence” from which the court can determine the reasonably hourly rate as well as billing records that reflect the time spent on different claims; “the general subject matter of the time expenditures ought to be set out with sufficient particularity so that the district court can assess the time claimed for each activity.” Id. (quoting Norman, 836 F.2d at 1303); see also S.D. Fla. L. R. 7.3(a). a. Hourly Rate The undersigned begins with an analysis of the hourly rate sought by Subpoena Respondent’s attorneys. The undersigned then considers whether the submissions demonstrate that the number of hours claimed are reasonable. Finally, the undersigned considers whether the results in the case warrant adjustment of the lodestar calculated. Hornbeam raised no objection to the hourly rates claimed by any of Subpoena Respondent’s counsel, the highest of which was $515.00 per hour charged by Jorge Guttman. Notwithstanding, the Court must consider whether the hourly rate was reasonable. A reasonable rate is defined as the “prevailing market rate in the relevant legal community for similar services by lawyers of reasonably comparable skills, experience, and reputation.” Norman, 836 F.2d at 1299 (emphasis added). The Court itself is considered an expert on the issue of reasonably hourly rates in the local market. See id. at 1303. Jorge Guttman is a partner at Gunster, Yoakley & Stewart, P.A., an international law firm. He is barred in the state of Florida, the United States District Court for the Southern District of Florida, United States District Court for the Middle District of Florida, and the United States Court of Appeals for the Eleventh Circuit, and has been practicing for 14 years. Mr. Guttman states that he billed at an hourly rate on this matter of $515. While Mr. Guttman’s billable rate may be reasonable for other litigation matters, his time here was spent coordinating, reviewing, and conducting document review relevant to the subpoenas served on Subpoena Respondents. He was joined in this effort by a junior associate, who billed for the same work at an hourly rate of $350. Because the services for which Subpoena Respondents seek reimbursement was not complex work, a factor this Court must consider under Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974), the Court finds that billing a partner’s rate of $515.00 for document review for privilege was not reasonable. The Court will apply the same rate of $350.00 for both attorneys. b. Hours Sought *5 Next, the Court looks to see if the number of hours expended on the task at hand are reasonable. A fee applicant must set out the general subject matter of the time expended by the attorney “with sufficient particularity so that the court can assess the time claimed for each activity.” Norman v. Hous. Auth. of City of Montgomery, 839 F.2d 1292, 1303 (11th Cir. 1988). Excessive, redundant, or otherwise unnecessary hours should be excluded from the amount claimed. Id. at 1301. Fee applicants must exercise “billing judgment” and exclude “excessive, redundant, or otherwise unnecessary” hours from their fee petitions. Barnes, 168 F.3d at 428 (quoting Hensley v. Eckerhart, 461 U.S. 424, 434 (1983)). The party opposing fees also has an obligation to provide specific and precise objections concerning hours that should be excluded. Id. at 427 (stating that objections from fee opponents must be specific and “reasonably precise”); Norman, 836 F.2d at 1301 (“[a]s the district court must be reasonably precise in excluding hours thought to be unreasonable or unnecessary, so should be the objections and proof from fee opponents.”). Generalized statements that the time spent was unnecessary or unreasonable are not particularly helpful and not entitled to much weight. Id.; see also Gray v. Lockheed Aeronautical Support Srvcs. Inc., 203 F. Supp. 2d 1328, 1332–33 (M.D. Fla. 2002). Although Hornbeam’s arguments are generalized statements that time spent was unnecessary or unreasonable, courts are not permitted “to be generous with the money of others, and it is as much the duty of courts to see that excessive fees and expenses are not awarded as it is to see that an adequate amount is awarded.” Barnes, 168 F.3d at 428. However, a court reviewing fees is not a “green-eyeshade accountant[ ].” Fox v. Vice, 563 U.S. 826, 838 (2011). Rather the essential goal for a court is to “do rough justice, not to achieve auditing perfection.” Id. The Court may cut an attorneys’ fee award if the hours are “excessive, redundant, or otherwise unnecessary.” Barnes, 168 F.3d at 428. Thus, when a court finds that a fee applicant has failed to exercise billing judgment, the court is obligated to do it for them. Id. The Court may cut fees either by “conduct[ing] an hour-by-hour analysis or it may reduce the requested hours with an across-the-board cut,” but it cannot do both. See Bivins v. Wrap It Up, Inc., 548 F.3d 1348, 1351 (11th Cir. 2008). After reviewing the billing statements submitted by Jorge Guttman (ECF No. 290-1) the Court finds that although a majority of the hours billed by Jorge Guttman and Joshua Levine are not excessive, redundant, or otherwise unnecessary, there are some that are, and therefore must be cut. The Court finds that the 1.5 hours billed by Joshua Levine on September 28, 2018 for “correspondence with J. Guttman and F. Owens re issues pertaining to document review” and .1 hours billed by Joshua Levine on September 29, 2019 for “correspondence with J. Guttman” are redundant with other entries submitted by Mr. Guttman. Therefore, the Court will cut 1.6 hours from those submitted by counsel for Subpoena Respondents. This reduction in hours, coupled with the hourly rate cut of Mr. Guttman results in a total calculation of $19,220 in fees reasonably incurred: $9,590 for Mr. Guttman plus $9,660 for Mr. Levine. c. Costs An award of costs pursuant to the Rule 45 is not limited by statutory provisions that dictate specific costs that may be recovered. See e.g. 28 U.S.C. § 1927. Reasonable compensation includes payment for out-of-pocket production expenses. See Fed. R. Civ. P. 45(d)(3)(C)(ii); Cohen v. City of New York, 255 F.R.D. 110, 126 (S.D.N.Y. 2008) (reasonable compensation includes payment for “time expended and expenses incurred in complying with the subpoenas”). Subpoena Respondents seek costs for time spent by an eDiscovery manager, Frederick Owens, JD, employed by counsels’ firm, costs for an eDiscovery vendor, and costs for the time spent by two employees of Subpoena Respondents collecting documents. *6 Although Mr. Owens does hold a law degree, Counsel for Subpoena Respondents categorized his time spent as costs because he was not working in the role of an attorney. The billing statements submitted by Mr. Guttman reflect that Mr. Owens primary job was to coordinate the document review with Mr. Guttman, Mr. Levine, and the eDiscovery vendor. Mr. Owens’ rate, billed at $400 an hour, was not reasonable for the non-legal services performed. His role in this review was similar to that of a case manager or certified paralegal. Accordingly, his rate will be reduced to $150 per hour, for a total amount of $1,575. Counsel for Subpoena Respondents submitted a bill for an eDiscovery vendor that was used to manage and review the documents relevant to the subpoenas ($3,630.26). No objection has been raised with respect to this cost. This Court views this expense as reasonable. Finally, counsel for Subpoena Respondents submitted the declaration of Thad Florence (ECF No. 290-3). Mr. Florence is the chief legal counsel for Felman Trading Americas, Inc. a corporation associated with one of Subpoena Respondents. The costs sought in the affidavit of Thad Florence are for the time of employees of Georgian American Alloys that were required to pull the relevant documents from Subpoena Respondents’ computers. The declaration explains that the hourly rate of these employees was calculated based on their respective yearly compensation. The time billed by these employees thus was not a cost that was incurred by the client and is therefore not included in the total costs awarded. d. Apportionment Having determined that Subpoena Respondents incurred the reasonable costs of $24,425.26 in complying with this Court’s Orders compelling response to the subpoena, the question remains: how much should each party bear? At the hearing, Applicant urged the Court to recognize that the costs are split among the various Subpoena Respondents, thus minimal costs incurred by each. Subpoena Respondents resist that characterization, and note the burden particularly placed on the single representative, Mr. Korf, who appeared for deposition and whose emails were collected, reviewed and produced. The Court agrees that Applicant here must share in some portion of the costs, but not all. The factors the Court here considers include Subpoena Respondent’s interest in the litigation, which will not preclude Subpoena Respondents from allaying some of the costs, but did here drive the zealous litigation and resistance to compliance, and ultimately increased the total costs incurred. The Court recognizes that Subpoena Respondents seeks to shift only a small portion of those overall costs in this 4-year litigation, but similarly, Applicant’s costs were necessarily driven up by the often contentious litigation (on both sides). With respect to this narrow subset of costs incurred in complying with the Court’s Order compelling compliance, Applicant will cover two-thirds of Subpoena Respondents’ reasonable costs, for a total award of $16,283.51. III. Conclusion For the foregoing reasons, Subpoena Respondents’ Motion to Shift Costs is hereby GRANTED in part in that Hornbeam is ordered to pay Subpoena Respondents’ counsel a total of $16,283.51 in costs. DONE AND ORDERED in Chambers in Miami, Florida this 27th day of September, 2019. Footnotes [1] Mordechai Korf, Felman Trading Inc., Felman Production LLC, Optima International of Miami, Inc., Optima Fixed Income LLC, Optima Industrial Management, LLC, Georgia American Alloys Inc., Optima Specialty Steel, Inc. (now known as Specialty Steel Works, Inc.), Optima Ventures LLC, Optima Acquisitions LLC, Optima Group, LLC, Optima Highland LLC, 5251 36st LLC, CC Metals & Alloys LLC, and Felman Production Inc.