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`IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF ILLINOIS
`EASTERN DIVISION
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`Case No. 18-cv-6133
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`Judge Mary M. Rowland
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`LiiON, LLC,
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`Plaintiff,
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`v.
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`VERTIV GROUP
`CORPORATION et al.,
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`Defendants.
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`MEMORANDUM OPINION AND ORDER
`On July 6, 2020, the magistrate judge issued an order awarding fees to Vertiv
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`Group Corp. (Vertiv) in the amount of $57,026.70 based on discovery violations by
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`Plaintiff. (Dkt. 385). Vertiv has filed an objection to the amount of the fee award.
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`(Dkt. 387). For the following reasons, this Court adopts in part and rejects in part the
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`magistrate judge’s fee award.
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`A. Background
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`LiiON, LLC (LiiON) alleges in its Second Amended Complaint that it supplies
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`“customers with innovative stored energy solutions designed for data center, telecom,
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`uninterruptable power system, and cable and wind/solar applications.” (Dkt. 135, Sec.
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`Am. Compl. ¶ 2.) LiiON developed proprietary algorithms for controlling lithium-ion
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`systems, (Id. ¶¶ 40-41), and around 2014, entered into a joint venture with
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`Defendants so that LiiON’s technology could be integrated into battery cabinets. (Id.
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`¶¶ 60–67.) According to LiiON, Defendants misappropriated its trade secrets,
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`1
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`including “methods, software systems, and components operating together to form
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`the basis of LiiON’s lithium-ion smart solutions,” and divulged them to third parties,
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`including Samsung. (Id. ¶¶ 100–109.) That conduct was a violation of the parties’
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`mutual nondisclosure agreement. (Id. ¶¶176–79.) In response to the lawsuit, Vertiv
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`alleges LiiON breached a contract related to purchase orders for lithium-ion battery
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`cabinets, breached the implied covenant of good faith and fair dealing, and tortiously
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`interfered with business relationships. (Dkt. 38, Counterclaims ¶¶ 37–79.)
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`B. Discovery disputes
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`The magistrate judge has presided over the contentious discovery since
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`November 2018. (Dkt. 26). During discovery, the parties filed a total of nine (9)
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`motions to compel and Vertiv filed an additional two (2) motions to enforce. On
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`February 28, 2020, the magistrate judge issued a twenty-five (25) page Report and
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`Recommendation granting in part and denying in part Vertiv’s Motion for Discovery
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`Sanctions. (Dkt. 367).1
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`In summary, the magistrate judge found that LiiON’s failure to seek
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`documents from Hoffman, Corcoran, Hankin, Kostan, Sosin, Hehn and Gray
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`sanctionable. The Court rejected Vertiv’s remaining arguments regarding document
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`gathering and production. (Dkt. 367 at 5–10). While the magistrate judge rejected
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`several allegations that LiiON made misrepresentations in certain interrogatory and
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`document request responses, he did find that LiiON made misrepresentations in
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`1 Neither party objected to these findings, and the Court adopted them on May 8, 2020. (Dkt. 374).
`2
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`Case: 1:18-cv-06133 Document #: 419 Filed: 01/22/21 Page 3 of 11 PageID #:5841
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`responding to document requests for communications with third parties. (Id. at 10–
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`15). Finally, the Court considered Vertiv’s argument that LiiON failed to properly
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`complete the corporate disclosures required by Federal Rule of Civil Procedure 7.1
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`and Local Rule 3.2. After a thorough review of the record, the Court determined there
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`was no discovery violation. (Dkt. 367 at 15–19).
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`In fashioning a sanction, the Court correctly noted that the “guiding principal
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`in this task is proportionality.” (Dkt. 367 at 19, citing Goss Graphics Sys., Inc. v. DEV
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`Indus., Inc., 267 F.3d 624, 627 (7th Cir. 2001)). The Court noted that it need not
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`impose the “least drastic sanctions” but should assign a sanction that reflects the
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`severity of the misconduct. (Id. at 19–20, citing Rice v. City of Chi., 333 F.3d 780, 784
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`(7th Cir. 2003). The Court recommended, in pertinent part:
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`a monetary sanction in the amount of half the reasonable fees Defendants
`incurred in deposing the seven witnesses from whom LiiON neglected to collect
`documents, given that their depositions presumably could have been more
`efficient and productive had LiiON gathered relevant documents from them in
`discovery. [. . .] [and] a sanction in the form of half the reasonable fees
`Defendants incurred in filing this motion.
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`Id., at 23.
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`On June 5, 2020, Vertiv filed its petition for fees pursuant to the magistrate
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`judge’s order (Dkt. 379).2 In total, Vertiv requested $139,370.89. Supported by billing
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`records, this was the one-half of the mount paid by Vertiv for the tasks outlined in
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`the magistrate judge’s Order. LiiON responded, objecting to the number of attorneys
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`2 Vertiv filed a corrected petition for fees later that same day. (Dkt. 380).
`3
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`Case: 1:18-cv-06133 Document #: 419 Filed: 01/22/21 Page 4 of 11 PageID #:5842
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`billing on assignments, the billing rates of those attorneys and the hours spent. (Dkt.
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`384). The magistrate judge awarded $57,026.70. (Dkt. 385).
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`C. Standard of Review
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`Federal Rule of Civil Procedure 72 governs this Court’s review of rulings by
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`magistrate judges. For non-dispositive matters, the District Court may only reverse
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`a magistrate judge’s order when the order is “clearly erroneous or is contrary to law.”
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`Fed. R. Civ. P. 72(a).
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`In addition to this deferential standard, the Court is also mindful that the
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`magistrate judge has considerable discretion in establishing the appropriate amount
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`of a fee award. See Hensley v. Eckerhart, 461 U.S. 424, 437 (1983); Pickett v. Sheridan
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`Health Care Ctr., 664 F.3d 632, 639 (7th Cir. 2011); Spegon v. Catholic Bishop of
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`Chicago, 175 F.3d 544, 551 (7th Cir. 1999). The Seventh Circuit has consistently
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`noted that “[b]y virtue of its familiarity with the litigation,” the District Court is in
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`the best position to determine the number of hours reasonably expended. Seventh
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`Ave., Inc. v. Shaf Int'l, Inc., 909 F.3d 878, 881 (7th Cir. 2018) (citing McNabola v.
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`Chicago Transit Auth., 10 F.3d 501, 519 (7th Cir. 1993)).
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`To determine “a reasonable attorney's fee,” the Seventh Circuit has instructed
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`that “the district court must make that assessment, at least initially, based on a
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`calculation of the ‘lodestar’—the hours reasonably expended multiplied by the
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`reasonable hourly rate—and nothing else.” Johnson v. GDF, Inc., 668 F.3d 927, 929
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`(7th Cir. 2012) (citing Pickett, 664 F.3d at 639). Vertiv is correct that there “is a strong
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`4
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`Case: 1:18-cv-06133 Document #: 419 Filed: 01/22/21 Page 5 of 11 PageID #:5843
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`presumption that the lodestar calculation yields a reasonable attorneys’ fee award.”
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`Pickett, 664 F.3d at 639. However, it is equally true that once the Court has
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`established an attorney’s appropriate hourly rate, it next assesses the attorneys’ time
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`entries and should “exclude hours that are ‘excessive, redundant or otherwise
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`unnecessary.’” Small, 264 F.3d at 708 (quoting Hensley, 461 U.S. at 434). What
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`qualifies as a “reasonable” use of a lawyer's time “is a highly contextual and fact
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`specific enterprise,” and the court has “wide latitude” in awarding attorneys’ fees.
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`Sottoriva v. Claps, 617 F.3d 971, 975 (7th Cir. 2010) (internal quotation marks
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`omitted). The Seventh Circuit has observed, “[t]here is no one correct formula for
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`determining a fee award.” Tomazzoli v. Sheedy, 804 F.2d 93, 97 (7th Cir. 1986).
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`However, a Court may not arbitrarily cut a fee request; “a concise but clear
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`explanation of its reasons for any reduction” is required. Id. (internal quotation
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`omitted).
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`D. Depositions
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`The magistrate
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`judge undoubtedly thoroughly reviewed the parties’
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`submissions regarding depositions. He determined the attorneys that conducted each
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`deposition and the amount of time each deposition lasted by reviewing Vertiv’s
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`timesheets. Although he did not say so specifically, he then determined that the time
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`spent preparing for each deposition was unreasonable. For instance, with respect to
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`the Corcoran deposition, it is clear the magistrate judge reviewed the time records
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`and the parties’ arguments and found 65 hours excessive for a 6 ½ hour deposition.
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`As LiiON notes “even after Mr. Bedell, Mr. Walsh and Ms. Watson Moss had
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`5
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`Case: 1:18-cv-06133 Document #: 419 Filed: 01/22/21 Page 6 of 11 PageID #:5844
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`collectively spent nearly 20 billable hours just preparing materials and documents
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`for the deposition, Ms. Wrigley, a senior partner, then spent another 22 hours just to
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`prepare for this one deposition.” (Dkt. 384 at 5). The magistrate judge’s finding that
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`the time spent by Vertiv preparing for each deposition was excessive is not clearly
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`erroneous.
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`The depositions ran in length from 6 ½ hours to 9 hours including breaks.
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`Vertiv chose to send two attorneys to most of the depositions. Including the time spent
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`at the deposition, counsel billed: 65.25 hours for Robert Corcoran’s deposition; 52.75
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`hours for Roger Hankin’s deposition; 36.75 hours for Linda Hehn’s deposition; 108.25
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`for Jerry Hoffman’s deposition; 55.25 hours for Kathryn Gray’s deposition; 125.35 for
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`Dean Kostan’s deposition and 89.25 for Andrew Sosin’s deposition. In each instance,
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`the Court finds no error with the magistrate judge’s conclusion that the time spent
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`on deposition preparation was excessive.
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`Instead of discussing the time spent preparing for each deposition, the
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`magistrate judge applied a formula. He “multiplied the actual number of hours for
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`each deposition by three” to account for preparation and actual deposition time and
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`then divided by two, to divide the hours between the two attorneys who attended the
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`deposition. (Dkt. 385) (citations omitted). The Court believes this was erroneous. The
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`Court believes a more tailored approach is required.3
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`3 The magistrate judge multiplied this number of hours by the hourly rate of the two attorneys who
`deposed the witness or attended the deposition on behalf of Vertiv. (Dkt. 385). In so doing, the
`magistrate judge accepted the billing rates Vertiv paid the attorneys. The Court does not believe that
`was erroneous and accepts these billing rates. (Dkt. 380 at 4).
`6
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`Case: 1:18-cv-06133 Document #: 419 Filed: 01/22/21 Page 7 of 11 PageID #:5845
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`This Court has reviewed the arguments submitted to the magistrate judge,
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`(Dkt. 380, 384), as well as those submitted to this Court. From the outset the
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`magistrate judge determined that an appropriate sanction would be compensation at
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`one-half of the reasonable fees incurred for the depositions. This has not been
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`challenged and will be applied to the calculations below. Having carefully reviewed
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`the billing records and all the briefing, the Court allows the following:
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`Robert Corcoran: It was unreasonable and excessive to bill 65.25 hours for five
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`separate lawyers to locate documents, prepare deposition materials, prepare exhibits,
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`and prepare for this deposition. The Court will allow for the time billed by attorneys
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`Walsh (16 hours) and Wrigley (28.5 hours), only.
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`Attorney
`Walsh
`Wrigley
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`
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`Hours
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`16
`28.5
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`
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`Billable Rate
`$214.50 / hour
`$507.00 / hour
`Sum Total:
`50 % of Sum Total:
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`Total
`$3,432.00
`$14,449.50
`$17,881.50
`$8,940.75
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`Roger Hankin: It was unreasonable and excessive to bill 52.75 hours for this
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`deposition. The Court will allow the time for attorney Walsh (33.25 hours) only,
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`rounding to the nearest cent.
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`Attorney
`Walsh
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`
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`Hours
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`33.25
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`Billable Rate
`$214.50 / hour
`50 % of Sum Total:
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`Total
`$7,132.125
`$3,566.06
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`Linda Hehn: It was unreasonable and excessive to bill 36.75 hours for this 5-hour
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`deposition, including breaks. The Court will allow the time spent preparing for and
`7
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`Case: 1:18-cv-06133 Document #: 419 Filed: 01/22/21 Page 8 of 11 PageID #:5846
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`taking the deposition by attorney Letkewicz on June 17, June 18 and June 19 only,
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`rounding to the nearest cent (22.25 hours).
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`Attorney
`Walsh
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`
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`Hours
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`22.25
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`Billable Rage
`$448.50 / hour
`50 % of Sum Total:
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`Total
`$9,979.125
`$4,989.56
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`Jerry Hoffman: It was unreasonable and excessive to bill 108.25 hours for three
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`separate lawyers to locate documents, prepare deposition materials, prepare exhibits,
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`and prepare for this deposition. The Court will allow attorney Connolly’s billed time
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`except for June 11, 2018 (34.75 hours). The Court will also allow attorney DePizzo’s
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`time billed in June 2018 (36.5 hours). Time billed in April of 2018 is not allowed.
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`Attorney
`Connolly
`DePizzo
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`
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`Hours
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`34.75
`36.5
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`
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`Billable Rate
`$585.00 / hour
`$300.30 / hour
`Sum Total:
`50 % of Sum Total:
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`Total
`$20,328.75
`$10,960.95
`$31,289.70
`$15,644.85
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`Kathryn Gray: It was unreasonable and excessive to bill 55.25 hours for three
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`separate lawyers to locate documents, prepare deposition materials, prepare exhibits,
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`and prepare for this deposition. The Court will allow only the time attorneys Walsh
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`(17.75 hours) and Wrigley (19 hours) billed, rounded to the nearest cent.
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`Attorney
`Walsh
`Wrigley
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`
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`Hours
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`17.75
`19
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`
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`Billable Rate
`$214.50 / hour
`$507.00 / hour
`Sum Total:
`50 % of Sum Total:
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`Total
`$3,807.375
`$9633.00
`$13,440.375
`$6,720.19
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`8
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`Case: 1:18-cv-06133 Document #: 419 Filed: 01/22/21 Page 9 of 11 PageID #:5847
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`Dean Kostan: The court recognizes the complexity of taking this deposition over
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`two days and the fact that Kostan was involved in creating source code. But it was
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`unreasonable and excessive to bill 125.35 hours for five separate lawyers to locate
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`documents, prepare deposition materials, prepare exhibits, and prepare for this
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`deposition. The Court will allow the time billed by attorneys Letkewicz (22.6 hours)
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`and Wrigley (32.75 hours) in August 2019, rounded to the nearest cent.
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`Attorney
`Letkewicz
`Wrigley
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`
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`Hours
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`22.6
`32.75
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`
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`Billable Rate
`$448.50 / hour
`$507.00 / hour
`Sum Total:
`50 % of Sum Total:
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`Total
`$10,136.10
`$16,604.25
`$26,740.35
`$13,370.18
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` Andrew Sosin: It was unreasonable and excessive to bill 89.25 hours for three
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`separate lawyers to locate documents, prepare deposition materials, prepare exhibits,
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`and prepare for this deposition The Court will allow the time billed by attorneys
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`Walsh (19.25 hours) and Wrigley (32 hours) between June 15 and July 1, 2019,
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`rounded to the nearest cent.
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`Attorney
`Walsh
`Wrigley
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`
`
`
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`Hours
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`19.25
`32
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`
`
`Billable Rate
`$214.50 / hour
`$507.00 / hour
`Sum Total:
`50 % of Sum Total:
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`Total
`$4,129.125
`$16,224.00
`$20,353.125
`$10,176.56
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`E. Motion for Sanctions.
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`The magistrate judge thoroughly reviewed the billing records and determined
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`that spending 265.75 hours was excessive. This Court agrees. The magistrate judge
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`Case: 1:18-cv-06133 Document #: 419 Filed: 01/22/21 Page 10 of 11 PageID #:5848
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`deleted the time spent by those attorneys who spent the least amount of time on the
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`motion: Bedell’s 9.5 hours; Walsh’s 7.5 hours; Wrigley’s 22.75 hours; and Connolly’s
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`21.25 hours. He allowed all of Watson Moss’s 74.25 hours and Letkewicz’s 25.75 plus
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`the paralegal’s 20 hours. He allowed each of these three individuals to be billed at
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`their respective hourly rates. It was not clear error to award 100 hours of attorney
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`time and 20 hours of paralegal time for an 18-page motion and a 17-page reply,
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`particularly when much of the motion was rejected on the merits. (See Dkt. 367 at 1
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`“only a small subset of the conduct [Vertiv] highlight[s] is sanctionable.”) As ordered
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`originally, this award was reduced by 50% to a total of $20,664.70. The Court will not
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`disturb this portion of the award.
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`F. Conclusion
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`The Court therefore awards a total of $63,408.15 for the time spent preparing
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`for and taking the pertinent depositions. The Court affirms the magistrate judge’s
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`award of $20,664.70 for the work performed on the motion for sanctions. The total
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`award is $84,072.85. The magistrate judge ordered that $57,026.70 of this was to be
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`paid by December 11, 2020. (Dkt. 392). The balance shall be paid as follows: $10,000
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`by February 15, 2021; $10,000 by March 15, 2021; and $7,046.15 by April 15, 2021.
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`10
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`Case: 1:18-cv-06133 Document #: 419 Filed: 01/22/21 Page 11 of 11 PageID #:5849
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`Total
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`$8,940.75
`$3,566.06
`$4,989.56
`$15,644.85
`$6,720.19
`$13,370.18
`$10,176.56
`$20,664.70
`$84,072.85
`$57,026.70
`$10,000
`$10,000
`$7,046.15
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` E
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` N T E R:
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`Billable Time
`Corcoran Deposition
`Hankin Deposition
`Hehn Deposition
`Hoffman Deposition
`Gray Deposition
`Kostan Deposition
`Sosin Deposition
`Motion for Sanctions
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`Sum Total Due:
`Paid per Judge Kim’s Order:
`Due February 15, 2021:
`Due March 15, 2021:
`Due March 15, 2021:
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`Dated: January 22, 2021
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`MARY M. ROWLAND
`United States District Judge
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`11
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