Jones v. Riot Hosp. Grp. LLC
Jones v. Riot Hosp. Grp. LLC
2021 WL 9870324 (D. Ariz. 2021)
August 9, 2021
Snow, Grant M., United States District Judge
Summary
The Court granted Defendants' Motion for Award of Attorneys' Fees and Costs and denied Plaintiff's Motion for a Protective Order. The Court ordered Plaintiff to pay $21,855.50 for Defendants' fees and costs, and $35,709.00 for the costs and fees of expert K.J. Kuchta. The Court also directed the parties to provide the names, addresses, and telephone numbers of all persons who have given relevant statements, and to attach a copy of each statement if it is in their possession.
Additional Decisions
Alyssa Jones, Plaintiff,
v.
Riot Hospitality Group LLC, et al., Defendants
v.
Riot Hospitality Group LLC, et al., Defendants
No. CV-17-04612-PHX-GMS
United States District Court, D. Arizona
Signed
August 06, 2021
Filed August 09, 2021
Counsel
Ekaterina Sokolova, Philip Jeffrey Nathanson, Nathanson Law Firm, Scottsdale, AZ, for Plaintiff.Christopher Thomas Curran, Darrell Eugene Davis, David I. Weissman, Sean Michael Carroll, Clark Hill PLC, Scottsdale, AZ, for Defendants Riot Hospitality Group LLC, RHG Ventures LLC, Ryan Hibbert, 4425 Saddlebag LLC, 4425 Saddlebag 2 LLC, Milo Companies LLC, Rooke LLC.
Snow, Grant M., United States District Judge
ORDER
*1 Before the Court is Defendants’ Motion for Award of Attorneys’ Fees and Costs, (Doc. 415), and Plaintiff's Motion for a Protective Order, Pursuant to F. R. Civ. P. 26(C), (Doc. 427). For the following reasons, Defendants’ Motion is granted, and Plaintiff's Motion is denied.
BACKGROUND
Plaintiff Alyssa Jones and Witnesses Shea Watson, Chelsea Meyers, and Elle Foster (“Plaintiff's Witnesses”) were originally ordered to produce data from their cell phones on March 11, 2020. (Doc. 308.) The Court further ordered the appointment of a forensic neutral and specified that “Defendants shall pay the initial cost for the Specialist, but should additional documents be located in this search that are discoverable, Plaintiff shall promptly reimburse the entire cost of the Specialist to the Defendants.” Id.
On March 2, 2021, after repeated failures to comply with the Court's directions to produce these communications, the Court found Plaintiff and her counsel, Phillip Nathanson, responsible for Defendants’ attorneys’ fees for the costs associated with seeking Plaintiff's compliance with the Court's orders. (Doc. 413.) The Court directed Defendants to “submit documentation in compliance with LRCiv 54.2 for the Court to determine the amount of the sanctions.” Id. In response, Defendants filed the instant Motion. Defendants’ corresponding documentation requests an award of $69,308.50. (Doc. 415.) Defendants’ sought award includes $33,599.50 in attorneys’ fees for counsel's efforts seeking Plaintiff's compliance with the Court's orders, and $35,709.00 for costs and fees charged by Forensic Neutral K.J. Kuchta. Id.
In its March 2, 2021 Order, the Court also ordered Forensic Neutral K.J. Kuchta to turn over Plaintiff's Witnesses’ communications to Defendants. (Doc. 413 at 3.) Mr. Kuchta turned over all communications except those marked as privileged by Mr. Nathanson. The Court further ordered that, pursuant to Federal Rule of Evidence 502(d), Plaintiff was authorized to submit a privilege log within seven days of the disclosure to claw back any privileged communications which were improperly disclosed. Id. Plaintiff did not attempt to claw back any disclosed communications. On April 12, 2021, the Court authorized Plaintiff to move for a protective order in relation to her assertion of marital privilege over a portion of the disclosed documents. (Doc. 425 at 31.)
DISCUSSION
I. Defendants’ Motion for Fees
A. Legal Standard
Pursuant to Local Rule 54.2, a party requesting an award of attorneys’ fees and non-taxable expenses must show that it is (a) eligible for an award; (b) entitled to an award; and (c) requesting a reasonable amount of attorneys’ fees. See LRCiv 54.2(c). A party seeking to recover fees must also attach supporting documentation to the memorandum, including (1) a statement of consultation; (2) “a complete copy of any written fee agreement, or a full recitation of any oral fee agreement”; (3) a task-based itemized statement of fees and expenses; (4) an affidavit of moving counsel; and (5) “[a]ny other affidavits or evidentiary matter deemed appropriate under the circumstances or required by law.” LRCiv 54.2(d)(1)–(5).
B. Analysis
1. Eligibility & Entitlement
*2 Pursuant to Rule 37(b)(2), if a party fails to comply with their discovery obligations “the court must order the disobedient party, the attorney advising that party, or both to pay the reasonable expenses, including attorney's fees.” Fed. R. Civ. P. 37(b)(2)(C); Gen. Order No. 17-08, at 4. Moreover, federal courts have inherent authority to impose such sanctions for violations of court orders. See Chambers v NASCO, Inc., 501 U.S. 32, 45 (1991) (“[A] court may assess attorney's fees as a sanction for the ‘willful disobedience of a court order.’ ”).
On March 2, 2021, the Court granted Defendants’ motion for sanctions, ordering that:
Plaintiff and Mr. Nathanson pay Defendants the fees and costs it incurred in pursing their compliance with the Court's orders as follows:
1. Plaintiff Alyssa Jones And Mr. Nathanson are jointly and severally liable for Defendants’ fees and costs incurred pursuing their compliance with the Court's orders between March 25, 2020 and August 17, 2020.
2. Mr. Nathanson is liable for fees and costs incurred pursuing Plaintiff's compliance with the Court's orders between December 11, 2020 and the date of this Order.
(Doc. 413 at 4.) The Court further authorized Defendants to “file a motion seeking reimbursement of the costs of the expert, K.J. Kuchta, in accordance with the Court's prior Order (Doc. 308).” Id. at 5. In Document 308, the Court specified that Defendants were to pay the initial cost for the Specialist, but should additional documents be located in the search that are discoverable, Plaintiff would be required to promptly reimburse the entire cost of the Specialist to the Defendants. (Doc. 308 at 2.)
Plaintiff's contentions that Defendants are not entitled to fees are irrelevant to the present Motion. The time to argue the merits of the sanctions order against Plaintiff has passed. Moreover, Defendants are entitled to fees and reimbursement regardless of whether they are authorized to discover messages outside those between Plaintiff and Plaintiff's Witnesses. Defendants have demonstrated that relevant messages between Plaintiff and Plaintiff's Witnesses were not properly produced. Several messages between Plaintiff and Plaintiff's Witnesses discuss the existence of another, “old” phone which belonged to Plaintiff, and Plaintiff deleting content on her cellphone or social media accounts. See (Doc. 415 at 52–66.) Such evidence is plainly relevant to the veracity of the witnesses in a case where the parties have had a protracted discovery dispute about impeachment evidence on Plaintiff's cell phone. Defendants also point to a conversation between Plaintiff and Ms. Foster which directly discusses the case and Ms. Foster's role as a witness. Id. at 68. These messages demonstrate that the production included relevant communications which entitle the Defendants to both fees and reimbursement of costs for expert, K.J. Kuchta.
Nor does Plaintiff demonstrate that a fee award is not properly enforceable at this stage in the litigation. Discovery sanctions cannot be ignored merely because they are not immediately appealable final decisions. See Blemaster v. Sabo, No. 2:16-CV-04557 JWS, 2018 WL 10322071, at *2 (D. Ariz. Mar. 1, 2018). “An attorney still has an obligation to pay a sanction. Once an appealable final judgment has been entered, the attorney can file an appeal to seek repayment.” Id.; see Hosp. Mgmt., Inc. v. Preferred Contractors Ins. Co., No. 3:18-CV-00452-YY, 2020 WL 8373395, at *1 (D. Or. Aug. 11, 2020) (“No appeal lies from an order imposing purely monetary sanctions under Federal Rule of Civil Procedure 37(c) because it does not pertain to the merits of any claim or defense.... Such an order is immediately enforceable, and a litigant may be held in contempt for failure to timely pay.”) (internal citation omitted).
2. Reasonable Attorney's Fees
*3 To determine whether fees are reasonable, courts evaluate whether the hourly rates are reasonable, and then whether the time spent on the matter is reasonable. See Kaufman v. Warner Bros. Ent. Inc., 2019 WL 2084460, at *11 (D. Ariz. May 3, 2019). Reasonableness is typically determined through the “lodestar method,” calculated by “multiplying the number of hours the prevailing party reasonably expended on the litigation by a reasonable hourly rate.” Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 978 (9th Cir. 2008). A district court has “a great deal of discretion in determining the reasonableness of [a] fee.” Id.
Defendants seek an award of attorneys’ fees in the amount of $33,599.50. This total includes $21,588.50 sought joint and severally from Plaintiff and Mr. Nathanson, and $12,011.00 sought solely from Mr. Nathanson. The amount represents attorney time, and is supported by billing statements specifying hours worked, tasks performed, and rates charged as required pursuant to Fed. R. Civ. P. 54(d)(2) and LRCiv. P. 54.2. (Doc. 415.)
a. Hourly Rates
Defendants’ Counsel applies a discounted rate structure in this matter as follows: Members charge Defendants $275.00 an hour for their services, Senior Counsel and Senior Attorneys charge Defendants $225.00 an hour for their services, Associates charge Defendants $200.00 an hour for their services, and paralegal and assistants charge Defendants $120.00 an hour for their services. (Doc. 415 at 72.) Defendants’ lead counsel, Sean Carroll, is an equity member and has approximately 11.5 years of legal experience. Id. at 71. Senior Counsel David Weissman and Richard Nakamura, Jr. have 24 years and 39 years of experience respectively. Id. at 71–72. Associates Jason Clark and Zachary Fort have seven and eight years of experience respectively. Id. at 72. The Court finds these rates reasonable in the District of Arizona. See, e.g., J & J Sports Prods. Inc. v Patel, No. CV1600234TUCRMBPV, 2018 WL 1609731, at *4 (D. Ariz. Apr. 3, 2018) (finding a rate of $325 per hour reasonable in the District of Arizona); Bray v. Maxwell & Morgan PC, No. CV-17-00486-PHX-DGC, 2017 WL 5668269, at *2 (D. Ariz. Nov. 27, 2017) (finding a rate of $325 per hour higher than average rate in the District of Arizona but reasonable for a lawyer with 20 years of experience); Wood v. Betlach, No. CV12-08098-PCT-DGC, 2017 WL 1398552, at *8 (D. Ariz. Apr. 19, 2017) (finding rate of $350 per hour reasonable); O'Neal v. Am.’s Best Tire LLC, No. CV-16-00056-PHX-DGC, 2017 WL 1311670, at *3–4 (D. Ariz. Apr. 5, 2017) (finding hourly rate of $300 comparable to prevailing rates in the District of Arizona for supervising attorney with specialized expertise).
b. Hours Expended
Courts may reduce an attorney's fee award where “the documentation of hours is inadequate” or where requested hours “are excessive, redundant, or otherwise unnecessary.” Hensley v. Eckerhart, 461 U.S. 424, 433–34 (1983). Defendants billed 156 hours over the relevant periods of the instant discovery dispute. (Doc. 415 at 86.) Plaintiff makes no objection to the hours expended, except to note that “it is an understatement to say that this project went way beyond [Defendants’] alleged need.” (Doc. 426 at 13.) Of course, the number of hours Plaintiff opines about are the direct result of Plaintiff and Mr. Nathanson's repeated refusals to follow Court orders. The Court finds Defendants’ hours expended reasonable.
II. Plaintiff's Motion for Protective Order
A. Legal Standard
*4 Rule 26(c) states that “[t]he court may, for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense” resulting from discovery requests. Fed. R. Civ. P. 26(c)(1). The burden is upon the movant to prove the necessity of a protective order, “which contemplates a particular and specific demonstration of fact as distinguished from stereotyped and conclusory statements.” Whiting v. Hogan, No. 12-CV-08039-PCT-GMS, 2013 WL 2476713, at *2 (D. Ariz. June 7, 2013) (quoting United States v. Garrett, 571 F.2d 1323, 1326 n.3 (5th Cir. 1978)). Further, “[a] district court enjoys broad discretion in controlling discovery.” Harper v. Betor, 95 F.3d 1157 (9th Cir. 1996) (internal citation omitted).
B. Analysis
Plaintiff's Motion for Protective Order fails to establish that (1) Any alleged privilege was not waived by failing to claw back the allegedly privileged documents; and (2) Arizona law supports the conclusion that Plaintiff is eligible for a nunc pro tunc dissolution of her first marriage.
First, Plaintiff offers no explanation for her failure to take advantage of the opportunity to claw back privileged documents in the ordered disclosure. The Court specified at the status conference authorizing the instant motion that Plaintiff would have to “deal with the issue of waiver” in addition to addressing the merits of the asserted privilege. (Doc. 425 at 31.) Plaintiff's allusions to her well-recorded grievances with the production process do not offer any legal justification for counsel's failure to claw back the disclosed messages. The Court thus finds that any marital privilege as to the documents produced by K.J. Kuchta is waived.
Moreover, Arizona law does not support the entry of a divorce order or judgment nunc pro tunc in this matter. The facts and law in Hash v. Henderson, 109 Ariz. 174, 507 P.2d 99 (1973) are not applicable. There, the Court considered nearly 200 divorce decrees which were signed but never filed by a then-deceased attorney. Id. at 175, 507 P.2d at 100. Marital privilege was not at issue, and the Court passed no judgment on the circumstances presented by Plaintiff. Here, Plaintiff's prior divorce was dismissed for lack of prosecution, it was not erroneously unfiled as in Hash. See (Doc. 427 at 1.) Accordingly, the Motion fails for both reasons.
As Plaintiff provides no support for the privilege's application, her Motion for a Protective Order is denied. The Court notes that, as this case is subject to the Mandatory Initial Discovery Pilot project, Plaintiff was obliged to produce the relevant text messages between her and Mr. Candelario at the outset of this case without any request to do so.[1] Because it is clear Plaintiff had no basis for claiming a privilege between herself and Mr. Candelario, withholding the messages was not justified.
CONCLUSION
For the reasons set forth above, Defendants’ Motion for Fees is granted, and Plaintiff's Motion for Protective Order is denied.
IT IS THEREFORE ORDERED that Defendants’ Motion for Award of Attorneys’ Fees and Costs (Doc. 415) is GRANTED. Defendants are awarded fees as follows:
*5 1. Plaintiff Alyssa Jones and Mr. Nathanson are jointly and severally liable for $21,855.50 for Defendants’ fees and costs incurred pursuing Plaintiff's compliance with the Court's orders between March 25, 2020 and August 17, 2020.
2. Mr. Nathanson is liable for $12,011.00 for fees and costs incurred pursuing Plaintiff's compliance with the Court's orders between December 11, 2020 and the date of this Order.
3. Plaintiff is liable for $35,709.00 for the costs and fees of expert K.J. Kuchta.
All sanction amounts must be paid within 90 days of the date of this Order.
IT IS FURTHER ORDERED that Plaintiff's Motion for a Protective Order, Pursuant to F. R. Civ. P. 26(C), (Doc. 427), is DENIED.
Dated this 6th day of August, 2021.
Footnotes
The Pilot directs the parties to:
State the names and, if known, the addresses and telephone numbers of all persons who you believe have given written or recorded statements relevant to any party's claims or defenses. Unless you assert a privilege or work product protection against disclosure under applicable law, attach a copy of each such statement if it is in your possession, custody, or control.
(Doc. 3 at 7.)