Knauf Insulation, LLC v. Johns Manville Corp.
Knauf Insulation, LLC v. Johns Manville Corp.
2019 WL 10947458 (S.D. Ind. 2019)
February 27, 2019

Dinsmore, Mark J.,  United States Magistrate Judge

ESI Protocol
General Objections
Failure to Produce
Proportionality
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Summary
The court requested an unredacted copy of JM's billing records for in camera review to determine if the prorated amount for attorneys' fees was both correct and reasonable. The court ultimately granted JM's Motion for Attorneys' Fees in the amount of $45,436.23, taking into account the time spent related to Knauf's motion for extension of time to respond to the Motion to Compel.
Additional Decisions
KNAUF INSULATION, LLC, KNAUF INSULATION GmbH, KNAUF INSULATION SPRL, Plaintiffs,
v.
JOHNS MANVILLE CORPORATION, JOHNS MANVILLE, INC., Defendants

JOHNS MANVILLE CORPORATION, JOHNS MANVILLE, INC., Counter Claimants,
v.
KNAUF INSULATION GmbH, KNAUF INSULATION SPRL, KNAUF INSULATION, LLC, Counter Defendants
No. 1:15-cv-00111-WTL-MJD
United States District Court, S.D. Indiana, Indianapolis Division
Filed February 27, 2019

Counsel

Andrew M. Pendexter, Briana Lynn Clark, Duane R. Denton, Dentons Bingham Greenebaum LLP, Blake R. Hartz, Matthew M. Gardlik, Spiro Bereveskos, Daniel James Lueders, Woodard Emhardt Henry Reeves & Wagner, LLP, Indianapolis, IN, for Plaintiffs.
Brice C. Lynch, Pro Hac Vice, Quinn Emanuel Urquhart & Sullivan, LLP, Redwood City, CA, Catherine R. Lacey, Pro Hac Vice, Charles Verhoeven, Pro Hac Vice, David D. Doak, Pro Hac Vice, Lauren Hudson, Pro Hac Vice, Lindsay Cooper, Pro Hac Vice, Melissa J. Baily, Pro Hac Vice, Tina T. Lo, Pro Hac Vice, Quinn Emanuel Urquhart & Sullivan, LLP, San Francisco, CA, David E. Sipiora, Townsend and Townsend and Crew, Edward J. Mayle, Pro Hac Vice, Kevin M. Bell, Kristopher L. Reed, Pro Hac Vice, Travis D. Whitsitt, Pro Hac Vice, Kilpatrick Townsend & Stockton LLP, Denver, CO, Ella K. Hallwass, Pro Hac Vice, Quinn Emanuel Urquhart & Sullivan LLP, Redwood Shores, CA, Jaclyn Michelle Flint, James W. Riley, Jr., Riley Bennett Egloff LLP, Indianapolis, IN, Lance Yang, Pro Hac Vice, Quinn Emanuel Urquhart & Sullivan, LLP, Los Angeles, CA, for Defendants.
Dinsmore, Mark J., United States Magistrate Judge

ORDER ON MOTION FOR ATTORNEYS’ FEES

*1 This matter is before the Court on Defendants’ Motion for Attorneys’ Fees [Dkt. 202]. Defendants seek $48,684.73 in attorney's fees and expenses incurred in pursuing their Motion to Compel Response to Interrogatory No. 1 [Dkt. 151]. For the reasons set forth below, the Court GRANTS IN PART Defendants’ Motion.
 
I. Background
This is a patent infringement action primarily relating to binding agents used in the manufacture of fiberglass insulation. In this discovery dispute, Defendants Johns Manville Corporation and Johns Manville Inc. (“JM”) asserted that Plaintiffs’ Knauf Insulation, LLC, Knauf Insulation GmbH, and Knauf Insulation SPRL (hereinafter collectively “Knauf”) response to Interrogatory No. 1 was deficient. The interrogatory sought information relating to the conception and reduction to practice of the inventions covered by the patents. Knauf objected, arguing a more detailed response was not necessary unless and until JM raised the defense of prior art for each asserted claim. Knauf raised further objections based upon relevance, undue burden, and proportionality.
 
Unable to resolve the dispute, JM filed a Motion to Compel [Dkt. 151], which the Court granted. [Dkt. 197.] The Court then gave JM leave to file this motion for fees with supporting documentation. [Id.]
 
II. Legal Standard
Rule 37(a)(5) provides that if a motion to compel is granted, “the court must, after giving an opportunity to be heard, require the party or deponent whose conduct necessitated the motion ... to pay the movant's reasonable expenses incurred in making the motion, including attorney's fees.” Fed. R. Civ. P. 37(a)(5)(A). Though “the Rule ‘presumptively requires every loser to make good the victor's costs,’ ” Malibu Media LLC v. Harrison, No. 1:12-cv-01117-WTL-MJD, 2014 WL 5392097, at *1 (S.D. Ind. Oct. 23, 2014) (quoting Rickels v. City of S. Bend, Ind., 33 F.3d 785, 786 (7th Cir. 1994)), a court must not order fees if: “(i) the movant filed the motion before attempting in good faith to obtain the disclosure or discovery without court action; (ii) the opposing party's nondisclosure, response, or objection was substantially justified; or (iii) the circumstances make an award of expenses unjust.” Fed. R. Civ. P. 37(a)(5)(A)(i)-(iii). Further, the “burden of persuasion is on the losing party to avoid assessment of fees, rather than on the winning party to obtain such an award.” Malibu Media, 2014 WL 5392097, at *1 (citing Lincoln Diagnostics, Inc. v. Panatrex, Inc., No. 07-cv-2077, 2008 WL 4330182, at *3 (C.D. Ill. Sept. 16, 2016)). Here, JM's Motion to Compel was granted. [Dkt. 197.] Therefore, Knauf can only avoid paying fees if one of the three exceptions applies.
 
III. Discussion
Knauf argues that JM is not entitled to fees because the second and third exceptions apply, which prohibit fees from being awarded when a party's resisting discovery is substantially justified in its objection, and when awarding fees would be unjust. Fed. R. Civ. P. 37(a)(5)(A)(ii)-(iii). Additionally, Knauf asserts that if JM is entitled to attorneys’ fees, the amount requested is unreasonable and should be significantly reduced. The Court will address each of these arguments in turn.
 
A. Substantial Justification
*2 A party's resistance to discovery is substantially justified if there is a genuine dispute. Fogel v. Bukovic, No. 11 C 1178, 2011 WL 2463528, at *3 (N.D. Ill. June 20, 2011); see also Pierce v. Underwood, 487 U.S. 552, 565 (1988). Resistance to discovery is also substantially justified if “reasonable people could differ as to the appropriateness of the contested action.” Pierce, 487 U.S. at 565.
 
Knauf argues it was substantially justified because the burden of providing the requested information vastly outweighed its relevance. According to Knauf, unless and until JM challenged the precise dates of invention by asserting a prior art defense, the information had limited relevance. [Dkt. 208 at 7.] The Court, however, was not persuaded by either of Knauf's arguments regarding the burden or limited relevance. The Court found that Knauf failed to prove its undue burden argument: “Knauf makes no attempt to quantify the burden of providing a more detailed response. Undue burden or expense, actual or potential, must be shown by ‘a particular and specific demonstration of fact, as distinguished from stereotyped and conclusory statements.’ ” [Dkt. 197 at 4 (quoting Gulf Oil Co. v. Bernard, 452 U.S. 89, 102 n.16 (1981)).] Moreover, the Court found that Knauf failed to account for any burden resulting from other information sought in the interrogatory. [Dkt. 197 at 4-5.] Consequently, the Court found that “[t]his is not an argument that will defeat a motion to compel.” [Id. at 5.] Additionally, the Court found Knauf's relevance argument failed: “Knauf's attempt to argue the sought after information has limited relevance likewise fails. JM has alleged affirmative defenses and counterclaims asserting the patents in suit are invalid, rendering the dates of invention and reduction to practice ‘incontrovertibly relevant’ to JM's claims and defenses.” [Dkt. 197 at 5 (quoting Lamoureaux v. Genesis Pharmacy Services, Inc., 226 F.R.D. 154, 160 (D. Conn. 2004)).]
 
After failing to demonstrate the responsive information is irrelevant or unduly burdensome in its Response in Objection to Defendants’ Motion to Compel [Dkt. 166], Knauf included more information in its Response in Objection to Defendants’ Motion for Attorneys’ Fees [Dkt. 208]. Specifically, it argued that providing the information as ordered by the Court was in fact an undue burden, which “is apparent and justifies Knauf's objections.” [Dkt. 208 at 9.] “Knauf estimates that its attorneys spent approximately 420 hours engaging in the above activities and that it incurred about $140,000 in attorneys’ fees and about $24,000 in costs, primarily in travel costs.” [Id. at 10.] JM, meanwhile, argues that “[w]hile Knauf may have expended resources in finally answering JM's Interrogatory No. 1, Knauf's presumably post-motion-filing efforts do not justify resisting the motion to compel (and the specified discovery) in the first instance.” [Dkt. 219 at 7.]
 
The Court finds that Knauf was not substantially justified in resisting the discovery at issue. Knauf's untimely efforts to support its arguments of undue burden and limited relevance do not justify its resistance. Knauf failed to convince the Court and failed to support its argument in its response to the motion to compel – including more information after failing to originally do so is too little, too late.
 
*3 Furthermore, Knauf asserts its resistance was substantially justified because it did not actually refuse to produce the information – it objected to providing additional details on the basis that it was more appropriate to glean that information from the upcoming depositions scheduled. [Dkt. 208 at 8.] But the Court disagrees. This Court found that Knauf's objections were invalid, and its “vague responses to Interrogatory No. 1 and its promises of future supplements and additional documents [did] not satisfy Knauf's discovery obligations under Rule 26(b).” [Dkt. 197 at 4.] Under Rule 37(a)(4), an evasive or incomplete answer is treated as a failure to answer. Fed. R. Civ. P. 37(a)(4). So Knauf's vague responses and promises, without any valid objections, are tantamount to failing to answer, and thus they cannot help show that it was substantially justified in resisting discovery.
 
B. Awarding Fees Would Be Unjust
Knauf also argues that the circumstances of this discovery dispute fall under Rule 37(a)(5)(A)(iii), which indicates that attorney fees may not be awarded when such an award would be unjust. Fed. R. Civ. P. 37(a)(5)(A)(iii). Rule 37(a)(5)(A)(iii)’s exception is a “rather flexible catch-all provision.” Slabaugh v. LG Elecs. USA, Inc., No. 1:12-cv-01020-RLY-MJD, 2014 WL 6453557, at *2 (S.D. Ind. Nov. 17, 2014). According to Knauf, “[t]he sheer volume of discovery in a case of this magnitude demands efficiency and lack of duplication.” [Dkt. 208 at 14.] Knauf asserts it would be unjust to shift fees when it “worked diligently to provide responses to substantial discovery requests, when JM has consistently been behind with respect to the ESI protocol, and where JM could have obtained this information in a more efficient manner through depositions and document discovery.” [Id.] Conversely, JM argues that “[r]esponding to some discovery requests, but refusing to respond to other, relevant discovery because it might take time and effort is not an excuse and comes nowhere close to raising an issue of ‘injustice.’ ” [Dkt. 219 at 8.]
 
The Court does not find that it would be unjust to award fees in this instance. As discussed above, this Court previously found the information to be “incontrovertibly relevant” and found Knauf's objections regarding undue burden to be invalid. The Court was not persuaded by Knauf's vague promises and efficiency arguments then, and it is not persuaded now.
 
In light of these findings, the Court concludes that Knauf lacked a substantial justification for resisting discovery; moreover, awarding fees in this instance would not be unjust. Therefore, Knauf has failed to prove that any of the exceptions to Rule 37(a)(5)(A) apply.
 
C. Reasonable Fees
Based on the above analysis, the Court will award JM its “reasonable” expenses, including attorneys’ fees. Fed. R. Civ. P. 37(a)(5)(A). This Court utilizes the “lodestar” method to determine reasonable attorneys’ fees by multiplying a reasonable rate by the number of hours reasonably expended on the motion. Grady v. Affiliated Comput. Servcs. ACS, No. 1:13-cv-00342-TWP-MJD, 2014 WL 6066049, at *2 (S.D. Ind. Nov. 13, 2014) (citing Johnson v. GDF, Inc., 668 F.3d 927, 929 (7th Cir. 2012)). In determining a reasonable rate, the prevailing attorney is presumptively entitled to the rate actually charged, regardless of how that rate compares to the market average. Gunsman v. Unisys Corp., 986 F.2d 1146, 1150 (7th Cir. 1993). District courts have exceptional discretion to determine whether the time an attorney spends on a motion to compel is reasonable. Gautreaux v. Chicago Hous. Auth., 491 F.3d 649, 659 (7th Cir. 2007); see also Murray v. Conseco, Inc., No. 1:03-cv-1701-LJM-MJS, 2009 WL 363803, at *5 (S.D. Ind. Feb. 6, 2009) (reducing fee award after reviewing attorneys’ rates and time records relating to a motion to compel). The prevailing party bears the burden of demonstrating that its hours and fees are reasonable. Grady, 2014 WL 6066049, at *2.
 
*4 Here, the hourly rates are not at issue because Knauf does not challenge the reasonableness of the rates billed by JM's attorneys. [Dkt. 208 at 15 n.10.] However, Knauf objects to JM's method of prorating its block-billed records to determine reasonable time spent on entries that contain both relevant and irrelevant tasks to the motion to compel. Additionally, Knauf contends that JM seeks fees for tasks unrelated to making Defendants’ Motion to Compel and “for excessive charges on alleged relevant tasks.”
 
First, Knauf generally objects to JM's method for prorating the block time entries, and argues it is unsound and should be rejected by the Court. [Dkt. 208 at 16.] JM submitted a redacted copy of its block-billed records, in which it redacted any tasks that are irrelevant to the motion to compel. [Dkt. 203-1.] For the entries that contained both relevant and irrelevant tasks, JM “prorated the invoiced amount by the number of relevant, unredacted tasks, in comparison to the total tasks.” [Id.] Knauf asserts that the redactions prevent Knauf and the Court from verifying whether JM has correctly prorated because Knauf and the Court cannot determine the correct number of total tasks for each block-billed entry. [Dkt. 208 at 18.] Additionally, Knauf contends that prorating assumes that all tasks in each entry are equal, thus leading to unreasonable fee requests. [Dkt. 208 at 18-19.] For example, under this method, the time listed for sending a three-line email could be the same as participating in a two-hour conference.
 
While block billing is not ideal, it is a common and accepted practice in fee requests in the Seventh Circuit. Farafas v. Citizens Bank & Trust, 433 F.3d 558, 569 (7th Cir. 2006). “If counsel submit bills with the level of detail that paying clients find satisfactory, a federal court should not require more.” In re Synthroid Mktg. Litig., 264 F.3d 712, 722 (7th Cir. 2001) (citation omitted). Prorating is also a common billing practice. As with block billing, the Court will not impose an “automatic” negative treatment on the prorated entries; the fees requested must simply be reasonable. “[I]n considering a motion for attorneys’ fees, the Court ‘need not, and indeed should not, become green-eyeshade accountants. The essential goal in shifting fees (to either party) is to do rough justice, not to achieve auditing perfection.’ ” Reynolds v. EOS CCA, No. 1:14-cv-01868-JMS-DML, 2016 WL 6876575, at *6 (quoting Fox v. Vice, 563 U.S. 826, 838 (2011)). Therefore, “the Court will not nitpick the attorneys’ invoices, but rather will attempt to reach what it finds to be a fair result.” Id.
 
However, in light of Knauf's argument, the Court requested an unredacted copy of JM's billing records for in camera review. [Dkt. 363] With the unredacted copies, the Court was able to review all of the tasks listed for each block-billed entry to determine if the prorated amount was both correct and reasonable. The Court looked at the total number of hours spent on each entry with both relevant and irrelevant tasks; it was then able to determine whether the prorated number of hours for the relevant tasks appeared reasonable. As a result of this analysis, the Court finds that JM's method of prorating the block-billed entries is generally acceptable. Apart from a few entries, which will be discussed below, the fees requested that were prorated appear to be reasonable.
 
In addition to general objections regarding the method used to calculate fees, Knauf objects to specific entries which it argues are either unrelated to the motion or are excessive and thus unreasonable. [Dkt. 208 at 20-24.] Knauf has organized its objections by six “events” concerning the motion to compel.
 
Event 1: JM's February 8 Letter and Knauf's Response
*5 Knauf argues the time for these tasks is excessive, but the Court disagrees. After reviewing the letter and response in context with the billing entries, the Court finds the amount requested to be reasonable.
 
Event 2: Meet and Confer
Next, Knauf argues the hours listed here are both excessive and unrelated. [Dkt. 208 at 21.] Knauf contends that the call with Mr. Bell and Knauf attorney Mr. Denton was unrelated to the motion to compel, as counsel only discussed “the ESI protocol being negotiated between counsel.” [Id. at 22.] To support this notion, Knauf has attached an email from Mr. Denton to Mr. Bell allegedly summarizing the call, and Mr. Denton does not reference Interrogatory No. 1. [Dkt. 208-5.] JM, who has the burden to prove its fees are reasonable, has not responded to this specific objection. [Dkt. 219 at 13.] The Court will therefore strike this task as irrelevant; the prorated time for three relevant tasks becomes 3.10 hours, which is excessive, given the three tasks are emails. Thus the Court will ultimately reduce the requested prorated time to two hours, or $1,100.
 
Event 3: March 14 Status Conference[1]
Knauf then argues the hours listed for this event are excessive because the dispute over Interrogatory No. 1 was only a fraction of the discussion; the rest of the topics discussed are wholly unrelated to the motion to compel. [Dkt. 208 at 22.] For support, Knauf cites to the joint status report submitted before the conference identifying the issues to be addressed [Dkt. 143]. Considering the number of issues addressed in the conference, and JM's failure to account for the irrelevant issues addressed, the Court will reduce the amount requested by fifty percent. Thus Mr. Bell's requested amount will be reduced to $1,225.71; Mr. Sipiora's amount will be reduced to $631.94; and Mr. Riley's requested amount will be reduced to $217.50.
 
Event 5: Knauf Motion for Time
Knauf also argues that any tasks related to Knauf's motion for extension of time to respond to the motion to compel should be stricken, as “[t]here is no justification for JM to seek from Knauf fees its counsel claim to have incurred in opposing a routine motion for time, certainly not 4.3 hours of attorney time.” [Dkt. 208 at 23.] JM responds by arguing its “time spent addressing Knauf's seemingly-spurious extension request should be recoverable in full.” [Dkt. 219 at 12.] The Court finds that JM should recover for time spent related to the motion for extension of time, as it is ultimately related to making the motion to compel.
 
Events 4 and 6: JM's Motion to Compel and JM Reply Brief
Lastly, Knauf objects to time spent on JM's motion to compel and its reply brief, arguing it is excessive and includes time spent on unrelated tasks. Having reviewed the briefs and associated billing entries, the Court does not find the fees requested to be unreasonable.
 
IV. Conclusion
Based on the foregoing, the Court finds that JM is entitled to attorneys’ fees for its Motion to Compel in the amount of $45,436.23; as such, the Court GRANTS IN PART JM's Motion for Attorneys’ Fees [Dkt. 202].
 
SO ORDERED.

Footnotes
Knauf incorrectly refers to this as the March 18 Status Conference [Dkt. 208 at 22].