Ocean Tomo, LLC vs. Patentratings, LLC

Motion to Strike or Tax Costs

Cal. Super. - 4th Dist.June 26, 2014

BUCHALTER sstoN aL CORPOR 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 A PrRO¥ESSIONAL CORPORATION Irvine ELECTRONICALLY FILED Superior Court of California, County of Orange BUCHALTER 08/21/2017 at 04:28:00 PM : ; Clerk of the Superior Court NCA Noh. 172000) Hy Sogeling; gaye Ce: Heputy Elem STEVEN BROWER (SBN: 93568) BRANDON Q. TRAN (SBN: 223435) 18400 Von Karman Avenue, Suite 800 Irvine, CA 92612-0514 Telephone: (949) 760-1121 Fax: (949) 720-0182 Email: mmeecks@buchalter.com Attorneys for Plaintiff and Cross-Defendant OCEAN TOMO, LLC, an Illinois Limited Liability Company SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF ORANGE OCEAN TOMO, LLC, an Illinois limited CASE NO. 30-2014-00730938-CU-BC-CIC liability company, Honorable Nathan Scott Plaintiff, Dept. C12 VS. OCEAN TOMO, LLC’S NOTICE OF PATENTRATINGS, LLC, a California limited MOTION AND MOTION TO TAX liability company; JONATHAN BARNEY, an COSTS AGAINST PATENTRATINGS, individual, and DOES 1 through 10, inclusive, LLC; DECLARATION OF BRANDON Q. TRAN IN SUPPORT THEREOF Defendants. Date: December 18, 2017 Time: 2:00 p.m. Dept.: C12 Reservation No. 72647759 Complaint filed: ~~ June 26, 2014 AND CROSS-ACTION. Trial date: December 7, 2016 TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE THAT that on December 18, 2017 at 2:00 p.m., or as soon thereafter as the matter may be heard, in Department C12 of the above entitled court, located at 700 Civic Center Drive West, Santa Ana, California, Ocean Tomo, LLC will, and hereby does, move the court for an order taxing PatentRatings, LLC’s (“PatentRatings”) Memorandum of 1 OCEAN TOMO, LLC’S NOTICE OF MOTION AND MOTION TO TAX COSTS AGAINST PATENTRATINGS, LLC BN 29876389V1 1|| Costs. 2 This motion is made on the grounds that PatentRatings’ has requested costs that are either 3|| not authorized by sections 1032 or 1033.5 of the Code of Civil Procedure, or are unreasonable 4|| and/or were unnecessary to the resolution of this case. PatentRatings’ claimed costs include items 5|| which are not recoverable and/or the amount is unreasonable and excessive and should be 6| reduced. J This motion is based on this notice, the attached supporting memorandum, on all 8|| pleadings and papers on file in this action, and such other evidence and oral argument as may be 9|| before the court at the time of the hearing of the motion. 10 11|| DATED: August 21,2017 BUCHALTER ft A Professional Corporation 13 14 -_- - By: 15 MICHAEL L MEEKS STEVEN BROWER 16 BRANDON Q. TRAN Attorneys for Plaintiff and Cross-Defendant 17 OCEAN TOMO, LLC 18 19 20 21 22 23 24 25 26 27 28 2 B } OCEAN TOMO, LLC’S NOTICE OF MOTION AND MOTION TO TAX COSTS ....pis AGAINST PATENTRATINGS, LLC Ii BN 29876389V 1 BUCHALTER 10 1 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 A PROFESSIONAL CORPORATION ixviNg I. INTRODUCTION AND SUMMARY OF ARGUMENT The California Code of Civil Procedure provides that a prevailing litigant is only entitled by law to limited categories of trial costs. However, even then the costs must be reasonable in amount and necessary to the litigation. In submitting its Memorandum of Costs in this case, PatentRatings, LLC (“PatentRatings”) has claimed expenses to which he is simply not entitled to, or he fails to establish that the costs were reasonable and necessary. Consequently, the Court should grant Ocean Tomo, LLC’s Motion to Tax Costs and award PatentRatings only $1,430.00 in costs. In summary form, the following claimed costs are improper or excessive and should be taxed for PatentRatings: Item Description Claimed Allowable 1 Filing and motion fees $1,430.00 $1,430.00 2 Jury fees $150 $0.00 4 Deposition costs © $1,428.90 $0.00 8. Witness costs $47,448.89 $0.00 12. Court Reporter fees $150.00 $0.00 Totals $50,607.79 $1,430.00 IL ARGUMENT A. PatentRatings Is Not Entitled to Recover Expert Witness Fees Even if a Section 998 offer of compromise can provide the basis for recovery of expert fees, any such recovery is discretionary. See, Rouland v. Pac. Specialty Ins. Co. (2013) 220 Cal. App. 4th 220, 229 ("Even when an offer satisfies all of section 998's requirements, the decision whether to award expert witness fees, as opposed to any of the statute's other cost-shifting penalties, is vested in the trial court's sound discretion. [A party] is not entitled to its expert witness fees as a matter of right."). Moreover, such fees must still be reasonable. As the Supreme Court explained, “[a]llowable costs include ordinary witness fees and the fees of experts 3 OCEAN TOMO, LLC’S NOTICE OF MOTION AND MOTION TO TAX COSTS AGAINST PATENTRATINGS, LLC BN 29876389V1 BUCHALTER A PROFESSIONAL POR A 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 97 28 ordered by the court, so long as they are ‘reasonably necessary’ to the conduct of the litigation and 'reasonable’ in amount". Davis v. KGO-T.V. (1998) 17 Cal.4th 436, 441. Consequently, PatentRatings has the burden of demonstrating not only that it was reasonably necessary to use an expert, but also that the costs associated with the expert were reasonable. Ladas, 19 Cal. App. 4th at 774. Here, in support of its request for expert fees, PatentRatings does not present any evidence for either Ocean Tomo or the Court to determine whether the expert fees were reasonable in amount or necessary to the litigation. The attachment PatentRatings submitted with its Memorandum of Costs provides no information identifying the hours claimed, the expert's hourly fee, the individuals who performed the work, what work was performed, or any costs which the expert alleged incurred. Significantly, the Memorandum of Costs do not explain why such significant fees were incurred after his expert deposition was taken on December 9, 2015. Based on PatentRatings’ Notice of Expert Designation, Michael Issa would be “sufficiently familiar with the pending action to submit to a meaningful oral deposition concerning the testimony described ..., including his expert opinions and the bases thereof.” See, Declaration of Brandon Q. Tran, § 2 and Exhibit “1.” Moreover, at his deposition, Mr. Issa testified that he did not contemplate any other work after his deposition, outside of reviewing Ms. Deborah Dickson’s deposition testimony. See, Declaration of Brandon Q. Tran, § 3 and Exhibit “2.” Likewise, the attachment fails to explain why there are services being performed in this matter in July 2017, after the trial was concluded. Without any of this information, PatentRatings fails to make a prima facie showing that these expert costs are both reasonable in amount and reasonably necessary to the conduct of the litigation. As a result, the entirety of PatentRatings’ expert costs should be taxed. B. PatentRatings’ Other Costs Are Not Recoverable or is Unreasonable and Unnecessary PatentRatings’ right as the “prevailing party” to recover costs under Code of Civil Procedure section 1032 is not absolute. Even with respect to costs that are otherwise recoverable 4 OCEAN TOMO, LL.C’S NOTICE OF MOTION AND MOTION TO TAX COSTS AGAINST PATENTRATINGS, LLC BN 29876389V 1 A PROFESSIONAL BUCHALTER 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 Coxpagarion under section 1032, this Court retains authority to determine whether PatentRatings’ costs are allowable pursuant to the restrictions of section 1033.5, subdivision (c¢), which require that any award of costs be subject to the following: “(2) Allowable costs shall be reasonably necessary to the conduct of the litigation rather than merely convenient or beneficial to its preparation. “(3) Allowable costs shall be reasonable in amount.” (Code Civ. Proc., §1033.5, subds. (c)(2) and (3); see also Nelson v. Anderson (1999) 72 Cal. App.4th 111, 129; Ladas v. California State Auto. Assn. (1993) 19 Cal.App.4th 761, 774.) The court is “limited to determining whether any allowable costs were reasonably 9% 46 necessary and reasonable in amount,” “and to awarding or denying additional items of costs that are not mentioned as either allowable or nonallowable.” (Code Civ. Proc., §1033.5, subd. (c)(4); see Davis v. KGO-TV, Inc. (1998) 17 Cal.4th 436, 442.) The Court has power to disallow even costs “allowable as a matter of right, if they were not ‘reasonably necessary’; and to reduce the amount of any cost item to that which is “reasonable.” (Perko’s Enterprises, Inc. v. RRNS Enterprises (1992) 4 Cal.App.4th 238, 245 [intent and effect of §1033.5, subd. (c)(2) is to authorize trial court to disallow recovery of costs, including filing fees, when it determines costs were incurred unnecessarily].) Prior to awarding costs, this Court has a duty to determine whether the cost is reasonable in need and amount. (Nelson, supra, 72 Cal. App.4th at p. 129 [in awarding item of costs, court must first determine whether statute expressly allows the particular item and whether it appears proper on its face].) If the correctness of the memorandum is challenged either in whole or in part, the burden is then on the party claiming the costs and disbursements to show that the items charged were for matters necessarily relevant and material to the issues involved in the action. (Oak Grove School Dist. v. City Title Ins. Co. (1963) 217 Cal.App.2d 678, 699.) IL PatentRatings should not recover its jury fees PatentRatings requests $150 in'jury fees. However, this matter was a bench trial. Asa result, jury fees are unnecessary for this matter. 5 OCEAN TOMO, LLC’S NOTICE OF MOTION AND MOTION TO TAX COSTS AGAINST PATENTRATINGS, LLC BN 29876389V1 A PROFESSIONAL BUCHALTER Iving 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 . CORPORATION 2. PatentRatings fails to establish that its Depositions Costs were reasonable and necessary "Deposition costs" are only recoverable for "taking, videotaping, and transcribing necessary depositions including an original and one copy of those taken by claimant and one copy of the depositions taken by the party, and travel expenses to attend the depositions." Cal. Code. Civ. Proc. § 1033.5(a)(3) (emphasis added). Travel expenses must be "necessary" for the deposition. Thon v. Thompson (1994) 29 Cal. App. 4th 1546, 1549. Section 1033.5(a) does not contemplate that there will be recovery for every type of expense that could conceivably be related to depositions. - For its deposition costs, PatentRatings fails to provide any evidence to support its claim for $1,428.90. PatentRatings simply identifies the costs but does not explain or substantiate the costs. Without any evidence as to what costs total $1,428.90 for the deposition of Joel Lutzker, it is impossible for Ocean Tomo to determine whether such costs were reasonable and necessary to the litigation. Consequently, the Court should tax PatentRatings’ deposition costs. 3. PatentRatings fails to establish that its Depositions Costs were reasonable and necessary Recovery of “[c]ourt reporters fees as established by statute” is allowable. (Code Civ. Proc., § 1033.5, subd. (a)(11); Gov. Code, § 68086.) Section 1033.5(b)(5) prohibits the recovery of costs for "[t]ranscripts of court proceedings not ordered by the court." Here, there is no evidence that the Court ordered the transcripts of the proceeding identified in the Memorandum of Costs. Consequently, the entire amount of $150.00 should be taxed. 6 OCEAN TOMO, LL.C’S NOTICE OF MOTION AND MOTION TO TAX COSTS AGAINST PATENTRATINGS, LLC BN 29876389V1 Ww Co 0 3 O Y Wn A 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 BUCHALTER A PUOFESHION AL CORPORATION Ixvine mr. CONCLUSION For the reason stated above, Ocean Tomo respectfully requests that the Court grant this motion and tax PatentRatings’ costs in the amount of $49,177.79. DATED: August 21,2017 BUCHALTER A Professional Corporation By: -Z-- MICHAEL L MEEKS STEVEN BROWER BRANDON Q. TRAN Attorneys for Plaintitt and Cross-Defendant OCEAN TOMO, LLC 7 OCEAN TOMO, LLC’S NOTICE OF MOTION AND MOTION TO TAX COSTS AGAINST PATENTRATINGS, LLC BN 29876389V1 BUCHALTER PESSION Coron A Proressiasar IRVINE Oo 0 93 OY 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DECLARATION OF BRANDON Q. TRAN, ESQ. I, Brandon Q. Tran, declare: 1. I am, and continuously have been since 2002, an active member in good standing of the State Bar of California. I am a Senior Counsel with Buchalter, A Professional Corporation, counsel of record for Plaintiff and Cross-Defendant Ocean Tomo, LLC (“OT”). I am one of the attorneys in my firm principally responsible for OT’s representation in this action. Each of the matters hereinafter stated is within my own, first-hand knowledge, or is disclosed by the information contained in the documents attached hereto; and, if called as a witness, I could and would competently testify thereto under oath. 2. On or about October 26, 2015, I received the Notices of Expert Witness Designations and Expert Witness Declaration from both Jonathan Barney and PatentRatings, LLC. Both Notices were identical and designated Mr. Michael Issa as an expert. Attached as Exhibit “1” is a true and correct copy of PatentRatings” Notice, which provided that Mr. Issa would be “sufficiently familiar with the pending action to submit to a meaningful oral deposition concerning the testimony described ..., including his expert opinions and the bases thereof.” 3. Thereafter, on or about December 9, 2015, I conducted the deposition of Mr. Issa. Near the conclusion of the deposition, after [ had questioned him about his opinions and the basis for those opinions, I asked what work he contemplated. Mr. Issa testified that he planned to revise the exhibits for trial to make it more user friendly and review Ms. Dickson’s files. Attached hereto as Exhibit “2” is a true and correct copy of the pertinent pages of Mr. Issa’s testimony. [ declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct, and that this Declaration is executed on August 21, 2017 at Irvine, -gp Tm Brandon Q. Tran California. 8 OCEAN TOMO, LLC’S NOTICE OF MOTION AND MOTION TO TAX COSTS AGAINST PATENTRATINGS, LLC BN 29876389V1 Exhibit “1” William E. Halle (State Bar No. 150686) bhalle@oneil-lip.com Lawrence J. llilton (State Bar No. 156524) thilton@oneil-lip.com O'NEILL Lup 19900 MacArthur Boulevard Suite 1050 Irvine, California 92612 Telephone: (949) 798-0500 Facsimile; (949) 798-0511 Attorney for Defendant and Cross-Complainant PATENTRATINGS, LLC SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF ORANGE, CENTRAL JUSTICE CENTER OCEAN TOMO, LIC, an llinois limited CASE NO. 30-2014-00730938-CU-BC-CJC lability company, NOTICE OF EXPERT WITNESS Plaintiff, DESIGNATION AND EXPERT WITNESS DECLARATION Vs. [Code of Civil Procedure § 2034.260] PATENTRATINGS, LLC, a California imited liability company; JONATHAN BARNTY, an individual, and DOES 1 through 10, inclusive, | ASSIGNED FOR ALL PURPOSES TO THE HON, KIRK H. NAKAMURA, DEPT. C15 Defendant, PATENTRATINGS, LLC, a California limited | TRIAL DATE: December 14, 2015 liability company, Cross-Complainant, vs. OCEAN TOMO, LLC, an Hlinots himited lability company, ee Soros Defendant, JONATHAN BARNEY, Cross-Complainant, VS. OCEAN TOMO, 1.L.C, an Ulinois limited liability company, __Crogs-U NOTICE OF EXPERT WI] 18 8] 2 wn 6 9 10 12 13 14 16 TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that pursuant to Code of Civil Procedure § 2034.260, Defendant and Cross-Complainant PatentRatings, LLC (“PR”) hereby designates the following individual as an expert trial witnesses for the December 14, 2015 jury trial in the above-captioned matter: 1s J. Michael Issa, GlassRatner Advisory & Capital Group, LLC, 19800 MacArthur Boulevard, Suite 820, Irvine, California 92612. Mr. Issa has been retained as an expert witness by PatentRatings, LLC. PLEASE TAKE FURTHER NOTICE that PR reserves the right to call as witnesses at trial any and all experts designated by other parties in this case, including experts designated by Plaintiff and Cross-Defendant Ocean Tomo, LLC and Defendant and Cross-Complainant Jonathan Barney, and any and all experts that PR may wish to call to impeach the testimony of any other expert witnesses, pursuant to Code of Civil Procedure § 2034.310. Discovery is not yet completed in this case. PR reserves the right to supplement its expert witness list upon completion of discovery. In addition, PR reserves the right to serve a supplemental expert list as provided by Code of Civil Procedure § 2034.280, DATED: October 26, 2015 O'NEIL LLP © William E. [alle Attorney for Defendant and Cross-Complainant PATENTRATINGS, LLC 2 CUWITNESS DESIGNATION J G o 8 9 EXPERT WITNESS DECLARATION OF WILLIAM E, HALLE I, WILLIAM E. HALLE, hereby declare as follows: Is I am an attorney licensed to practice in the State of California. Iam a partner al the law firm O'Neil LIP, counsel of record for defendant and cross-complainant PatentRatings, LLC ("PR™y in this action. [ have responsibility for PR's representation and am generally familiar with all (or almost all) aspects of the case. | make this declaration of my own personal knowledge and, if called upon to testify to the following facts, could do so competently. 2. This Declaration is made pursuant to Code of Civil Procedure § 2034.260. 3. Accompanying this Declaration is the name of the person whose expert opinion testimony PR intends to offer at the trial of this action, cither orally or by deposition testimony. That person is J. Michael Issa, GlassRatner Advisory & Capital Group, LIC, 19800 MacArthur Boulevard, Suite 820, Irvine, California 92612. 4, This expert is discussed below. J. MICHAEL ISSA 5. Mr. Issa intends to offer opinion testimony at the trial of this action either orally or by deposition testimony. Mr. Issa is a principal with GlassRatner Advisory & Capital Group LLC, a national advisory firm with offices in six major cities. Mr. Issa is a Certified Public Accountant; is licensed by the California Department of Real Estate; holds a FINRA Series 65 license; and has served on the boards of both public and private companies, as well as various non-profit organizations. Mr. Issa’s professional qualifications are described more fully in his curriculum vitae, a copy of which 1s attached as Exhibit © and incorporated herein by reference. 6. Mr. Issa is expected to testify in the above-entitled matter regarding the executive salary for the Chief Exceutive Officer of PatentRatings, LLC (“PR”); operating expenses, including litigation expenses as the issue relates to PR; and capital contributions as the issue relates to PR. The expected scope of Mr. Issa’s testimony may change depending upon outstanding discovery matters and his ongoing study of the issues in this case. Mr. [ssa is also expected to offer rebuttal testimony in response fo opinions that Plaintiff and Cross-Defendant