Opinion
Case No. 6:01-cv-1036-Orl-19JGG.
September 30, 2004
ORDER
This case comes before the Court on the following:
1. Report and Recommendation of Judge Glazebrook on Plaintiff's Motion [Doc. No. 233, filed July 31, 2003] for Prejudgment Interest, Enhanced Damages, Attorney's Fees and Expenses, (Doc. No. 264, filed Jan. 30, 2004).
2. Defendants' Objection to [264] Report and Recommendation, (Doc. No. 265, filed Feb. 13, 2004); Plaintiff's Response to [265] Objection, (Doc. No. 266, filed Mar. 1, 2004).
Background
On October 10, 2003, this Court granted Plaintiff's request for prejudgment interest and enhanced damages pursuant to 35 U.S.C. § 284 and attorney's fees pursuant to 35 U.S.C. § 285. (Doc. No. 250, filed Oct. 10, 2004). The case was referred to Magistrate Judge Glazebrook for a determination of the appropriate amount of prejudgment interest and fees to be awarded. ( Id.).
After conducting a hearing on January 16, 2004, at which all parties were represented and the issues were extensively argued (Doc. No. 258, filed Jan. 16, 2004; Doc. No. 263, filed Jan. 29, 2004), Judge Glazebrook issued his recommendation that the Court award to the Plaintiff the following: "$1,974,067.65 in attorney's fees, $94,057.50 in expenses, and $303,532.78 in prejudgment interest through January 31, 2004, plus additional prejudgment interest (on the original $536,000 award) at the then-prevailing commercial prime rate from that day forward to the date of the entry of the judgment." (Doc. No. 264). Defendants object to the Report and Recommendation on several grounds. (Doc. No. 265).
Discussion
Stipulation as to Award of Expenses and Expert Fees
As an initial matter, the Report and Recommendation overlooks Plaintiff's withdrawal of its claims for expenses and expert fees under paragraph 17 of the 1996 Settlement Agreement. (Doc. No. 261, filed Jan. 22, 2004). The parties had previously stipulated to an amount of $40,000 for expenses to which Plaintiff is entitled under 35 U.S.C. § 285 (Doc. No. 253, filed Jan. 9, 2004) and now agree that Plaintiff is not entitled to any additional expenses or expert fees under the 1996 Settlement Agreement. (Doc. No. 265; Doc. No. 266). Accordingly, the $94,057.50 in expenses recommended by Judge Glazebrook will be reduced by $54,057.50, to an award of $40,000 for expenses.
Attorney's Fees
Defendants argue that the amount of attorney's fees awarded to Plaintiff is excessive. (Doc. No. 265). The party seeking to recover attorney's fees bears the burden of documenting the hours spent by counsel in order to sustain the award. Sweeney v. Athens Regional Medical Ctr., 917 F.2d 1560, 1571 (11th Cir. 1990); Johnson v. Univ. College of the Univ. of Alabama, 706 F.2d 1205, 1207 (11th Cir. 1983). Defendant contends that Plaintiff has failed to meet its burden of documenting the hours spent on this litigation. (Doc. No. 265, p. 4). In Sweeney, the Eleventh Circuit held a claim for fees to be unsubstantiated where the attorneys in question presented to the court only "a total figure without any breakdown showing how the hours were spent and without timesheets or any evidence that they made notation of the hours spent on a daily basis." 917 F.2d at 1571. On the other hand, in the instant case, the Court has before it substantial documentation of the thousands of hours spent by Plaintiff's counsel in prosecuting this complicated litigation, enumerating each professional's time and the projects on which each worked. (Doc. No. 234, Ex. F). Judge Glazebrook did not err in finding that Plaintiff had met this burden.
Defendants further argue that, according to a 2003 survey conducted by the American Intellectual Property Law Association (AIPLA), the median cost of patent litigation in the region including Orlando, Florida ("Other Southeast") was $725,000, far shy of the $1.9 million recommended by Judge Glazebrook. (Doc. No. 265, p. 7). As the Report and Recommendation makes clear, however, the survey on which Defendants rely based its findings on only ten responses from the appropriate region, and the survey itself warns: "Percentiles based on fewer than 50 responses should be assumed to have relatively wide margins of error." (Doc. No. 249, filed Sept. 12, 2003, Repl. Ex. 3, p. 7).
In addition, although Defendant's counsel continues to argue that the fee amount it has charged to its own client in this case, approximately $2 million, is irrelevant to this issue, the Court disagrees. Defendant cites the Eleventh Circuit's opinion in Johnson to support its contention that its own fees should not be considered by this Court as a basis for comparison. The Court of Appeals stated that it had "questioned the relevance of the number of hours spent by defense counsel to a determination of the reasonable fee for plaintiffs' attorneys." Johnson, 706 F.2d at 1207. However, the Court went on to reason that a district court may choose to admit such evidence and weigh its relevance based on the facts of a given case. Id. In the instant case, the Court agrees with Judge Glazebrook that Defendants' attorney's fees are relevant to the extent that the amount of such fees contradicts their own reliance on the AIPLA survey. (Doc. No. 264, p. 5).
Defendants also object to several distinct categories of fees which were argued at length at the January 16 hearing. First, Defendants suggests that Plaintiff's award of fees should be "reduced by at least one half" to account for claims they characterize as having been abandoned or having failed. (Doc. No. 265, p. 9). The "failed" claims on which Defendants rely are those which were dismissed with prejudice based on a stipulation between the parties (Doc. No. 114, filed Dec. 12, 2002) and those which were dropped by Plaintiff "in order to streamline the trial" (Doc. No. 157, filed May 2, 2003; see also Doc. No. 266). As Plaintiff points out, however, the Supreme Court has held that "[w]here a plaintiff has obtained excellent results, his attorney should recover a fully compensatory fee. . . . In these circumstances the fee award should not be reduced simply because the plaintiff failed to prevail on every contention raised in the lawsuit. . . . The result is what matters." Hensley v. Eckhart, 461 U.S. 424, 435 (1983). Plaintiff was successful in this case. In addition to obtaining a jury verdict in its favor, Plaintiff succeeded in its effort to obtain enhanced damages from the Court. (Doc. No. 250). Judge Glazebrook did not err in declining to recommend a reduction in the overall amount of attorney's fees.
The next objection to the Report and Recommendation raised by Defendants concerns two motions drafted by Plaintiff's counsel. (Doc. No. 265, pp. 9 — 11). The first such document was a motion to compel discovery of information concerning sales figures, and filing the motion became unnecessary when Plaintiff and Defendants had a meeting in Chicago at which they entered a stipulation on the issue. (Doc. No. 263, pp. 54 — 57). Defendants' counsel acknowledged at the hearing that Plaintiff's counsel had indicated the intention to file such a motion ( Id. at p. 55), and it was reasonable for Judge Glazebrook to find that in preparing the motion, Plaintiff's counsel ensured the resolution of the dispute.
Defendant also argues that it should not pay fees for Plaintiff's motion to exclude expert testimony which was denied by the Court. (Doc. No. 130, filed Jan. 23, 2003; Doc. No. 143, filed Mar. 21, 2003). In Eli Lilly Co. v. Zenith Goldline Pharmaceuticals, Inc., cited by Defendants, a district court reduced the total amount of attorney's fees by the time spent on an unsuccessful motion for summary judgment. 264 F. Supp.2d 753, 773 (S.D. Ind. 2003). That case is distinguishable, however, in that the Court based its decision on its assessment that the summary judgment motion was a "virtually certain loser" on which it was unreasonable for the attorneys to spend their time. Id. The Court stated that, in determining whether to award to the prevailing party fees for time spent on an unsuccessful motion, "[t]he question is whether it was reasonable at the time for the prevailing party's lawyers to make the effort." Id. (emphasis in original). In this case, the fact that this Court did not issue an opinion to accompany its denial of Plaintiff's motion to exclude expert testimony does not indicate that the motion itself was unreasonable at the time. Once again, in keeping with the holding in Hensley, the Court will not reduce the amount of attorney's fees "simply because the plaintiff failed to prevail on every contention raised in the lawsuit." 461 U.S. at 435.
Defendants object to the award of fees charged for the travel time of Plaintiff's counsel between Chicago and Orlando. (Doc. No. 265, p. 11). The case cited by Defendants to support this position is unavailing, however, because that opinion concerns the issue of whether travel costs incurred by counsel traveling between New York and Chicago should be awarded, not whether the attorneys' time should be charged. See Thermovac Indus. Corp. v. Virtis Co., 1968 WL 8409 (S.D.N.Y. 1968). The recommendation to award fees for travel time in the instant case is reasonable.
Defendants argue that they should not pay attorney's fees for junior associates who were part of Plaintiff's legal team at trial, arguing that they took no active role in the proceedings. (Doc. No. 265, p. 11). "An award for time spent by two or more attorneys is proper as long as it reflects the distinct contribution of each lawyer to the case and the customary practice of multiple-lawyer litigation." Am. Civil Liberties Union v. Barnes, 168 F.3d 423, 432 (11th Cir. 1999). At the January 16 hearing, Plaintiff's counsel described the work performed by each of the junior associates at trial, including legal research on issues raised at trial, witness preparation and exhibit coordination. (Doc. No. 263, pp. 85 — 87). The Court finds that the presence of these associates at trial was participatory and more than mere training, as Defendants suggest, and their time may be reasonably included in the total fee award.
Finally, Defendants object to paying for Plaintiff's counsel to respond to Defendants' subpoena for more detailed billing records in support of the motion for attorney's fees, and for Plaintiff's motion to compel production of Defendants' billing records. (Doc. No. 265, pp. 12 — 13). As discussed supra, Defendants' attorney's fees are relevant in the instant case. Therefore, the Court will permit Plaintiff to recover fees incurred in the pursuit of those records. Furthermore, although Defendants argue that they were forced to subpoena additional records when Plaintiff originally failed to submit the appropriate documentation to support its motion for fees (Doc. No. 233), it appears from the record that such activity became necessary only because Defendants themselves originally refused to produce their own records. (Doc. No. 263, pp. 61 — 62). The Court will not reduce the amount of fees on this account.
Prejudgment Interest
Defendant objects to Judge Glazebrook's recommendation that prejudgment interest be awarded at the prime rate, compounded annually, treating the jury award of $536,000 as a lumpsum royalty. (Doc. No. 265, p. 14). The reasoning contained in the Report and Recommendation with regard to this issue is thorough and persuasive (Doc. No. 264). The Court adopts such reasoning without further explication.
Conclusion
Based on the foregoing, the Report and Recommendation (Doc. No. 264) is ADOPTED IN PART and the Court rules as follows:
1. Plaintiff is awarded $1,974,067.65 in attorney's fees;
2. Plaintiff is awarded $40,000 in expenses under 35 U.S.C. § 285 as stipulated by the parties;
3. Plaintiff is awarded $303,532.78 in prejudgment interest through January 31, 2004, plus additional prejudgment interest (on the original $536,000 jury award) at the thenprevailing commercial prime rate from that day forward to the date of the entry of the judgment.
DONE and ORDERED