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Integrated Direct Marketing, LLC. v. May

United States District Court, E.D. Virginia, Alexandria Division

June 28, 2016

INTEGRATED DIRECT MARKETING, LLC, Plaintiff,
v.
DREW MAY and MERKLE, INC., Defendants.

          MEMORANDUM OPINION

          LEONIE M. BRINKEMA UNITED STATES DISTRICT JUDGE.

         Before the Court is Plaintiff, Integrated Direct Marketing, LLC's Motion for Attorneys' Fees and Expert Costs with Respect to its Motion for Sanctions, in which Integrated Direct Marketing, LLC ("plaintiff or "IDM") seeks $98, 494.25, consisting of $63, 142.50 in attorneys' fees for "preparing, prosecuting, and arguing its Motion for Sanctions against Defendant Drew May" ("defendant" or "May") and $35, 351.75 for costs incurred for its forensic computer expert and for additional forensic computer vendors. PL, Integrated Direct Marketing, LLC's Mot. for Att'y's Fees & Expert Costs With Respect to its Mot. for Sanctions [Dkt. No. 300] 1, Sept. 22, 2015 ("Mot. for Fees"). May opposes these requests, arguing that the fees and costs requested are excessive and unjustified. Def. Drew May's Mem. in Opp'n to Integrated Direct Marketing, LLC's Mot. for Att'y's Fees & Expert Costs With Respect to its Mot. for Sanctions [Dkt. No. 303] 1, Sept. 29, 2015 ("Def.'s Opp'n"). For the reasons that follow, plaintiffs motion will be granted in part and denied in part, and plaintiff will be awarded $41, 740.22, consisting of attorneys' fees in the amount of $17, 242.50 and expert costs in the amount of $24, 497.72.

         I. BACKGROUND

         This civil action arises out of IDM's allegations that May, a former IDM employee, misappropriated IDM's confidential and proprietary information as well as its trade secrets and then used that information to benefit himself and his new employer Merkle, Inc. ("Merkle"). Mem. Op. [Dkt. No. 295] 2, Sept. 8, 2015. Both IDM and Merkle work in the highly competitive data-driven marketing industry to provide data-integrated customer relationship management services, hi at 5. May worked for IDM from January 2012 until March 2014, when he was fired and left the company on acrimonious terms. Id. at 6. In May 2014, May began working for Merkle. Id.

         On September 8, 2014, IDM sued May and Merkle, alleging in part that May wrongfully took IDM's confidential and proprietary information when he copied hundreds of electronic files to his personal external hard drive. Am. Compl. [Dkt. No. 57] ¶¶| 18-28, 76-81, Sept. 8, 2014. The day after filing its initial Complaint, IDM moved for a Temporary Restraining Order and Preliminary Injunction barring May from disclosing any of IDM's proprietary and confidential information and requiring that May immediately return any documents or files containing such information. Pl.'s Mot. for TRO & Prelim. Inj. [Dkt. No. 6] 1, Sept. 9, 2014. Attached to May's response to that motion was his affidavit signed under penalty of perjury, in which he averred that he "did not keep any of IDM's information" after being fired, a statement that was later shown to be false. Opp'n to Request for TRO & Prelim. Inj., Ex. 1, AIT. of Drew May [Dkt. No. 13-1] ¶ 9, Sept. 17, 2014 C'May Aff."). The motion for injunctive relief was ultimately denied. Order [Dkt. No. 21], Sept. 19, 2014.

         The unfortunate animosity between the parties resulted in numerous discovery-related disputes. Among the issues raised during discovery were IDM's allegations that May and Merkle had improperly failed to produce certain documents, that Merkle had improperly instructed May not to answer certain questions at his deposition, and that May had submitted an affidavit containing several false statements. See PL, Integrated Direct Marketing, L.L.C.'s Mot. for Sanctions for Defs.' Failure to Produce Documents, Submission of a False Affidavit, and Refusal to Answer Questions at Dep. [Dkt. No. 241] 1, .I Line 8, 2015 ("Mot. for Sanctions"). The Court directed IDM to file a motion for sanctions addressing these allegations. Mots. Hr'g Tr. [Dkt. No. 236] 19-25-20:5, June 5, 2015; see also Order [Dkt. No. 238] 2, June 5, 2015. Plaintiff filed a timely Motion for Sanctions and a supporting memorandum that, among various other issues, identified four false statements that May had allegedly made in his affidavit, the most grievous of which was his statement that he "did not keep any of IDM's information." PI. Integrated Direct Marketing, L.L.C.'s Mem. in Supp. of its Mot. for Sanctions for Defs.' Failure to Produce Documents, Submission of a False Affidavit and Refusal to Answer Questions at Dep. [Dkt. No. 242] 1-2, June 8, 2015 ("Mot. for Sanctions Br.").

         During oral argument on plaintiffs Motion for Sanctions, May testified after being placed under an affirmation to tell the truth. Mots. Hr'g Tr. [Dkt. No. 270] 21:1, June 29, 2015 ("Sanctions Hr'g Tr."). After hearing May's testimony and having considered evidence from IDM's forensic computer expert regarding May's suspiciously-timed deletions of IDM files, see Mem. Op. 59, the Court concluded that May's statement that he had not kept any of IDM's information was "just not accurate" and that his affidavit therefore contained "a false statement, " Sanctions Hr'g Tr. 39:15-18; however, to incentivize the parties to settle their dispute, the Court withheld its ruling on the Motion for Sanctions. Instead of resolving their dispute, the parties continued the litigation, which proceeded to the summary judgment stage.

         After hearing oral argument on the parties' motions for summary judgment, the Court granted Merkle's Motion for Summary Judgment in total, granted May's Motion for Summary Judgment in part, and granted IDM's Motion for Sanctions only with respect to "May's submission of [the] false statement" that he "did not keep any of IDM's information." See Mem. Op. 59-60 (internal quotation marks omitted); Order [Dkt. No. 296], Sept. 8, 2015 ("Summ. J. Order"). Specifically, the Court found that not only was May's false statement sanctionable, but that his "lack of candor regarding his retention of IDM files, coupled with his inflammatory text messages regarding stealing IDM's clients and employees, poisoned the well for settlement purposes and caused unnecessary additional litigation, including necessitating IDM filing both its Spoliation Motion and Motion for Sanctions." Id. (footnote omitted). For these reasons, the Court ruled that IDM would "be awarded the costs associated with hiring its forensic computer expert, as well as its reasonable attorneys' fees and costs in preparing and prosecuting its Motion for Sanctions." Ia\ at 60. IDM was directed to file "a motion and supporting documentation for its reasonable attorneys' fees and expenses incurred in preparing and arguing its Motion for Sanctions and for its forensic computer expert." Summ. J. Order[1].

         II. DISCUSSION

         IDM's Motion for Attorneys' Fees and Expert Costs seeks $63, 142.50 in attorneys' fees and $3 5, 351.75 for costs associated with forensic computer services. Mot. for Fees 1. This request is based on 166.8 hours of work performed by four attorneys, in addition to the costs incurred by IDM's forensic computer expert and two other forensic computer vendors. Pi., Integrated Direct Marketing, LLC's Mem. in Supp. of its Mot. for Att'y's Fees & Expert Costs with Respect to its Mot. for Sanctions [Dkt. No. 301] 5, 9-10, Sept. 22, 2015 ("PL's Br."). May opposes the amount sought, arguing that IDM failed to carry its burden of demonstrating the reasonableness of the fees sought and that it seeks reimbursement for forensic computer work that was unrelated to the false statement for which sanctions were awarded. Def.'s Opp'n 1.

         A. Standard of Review

         To calculate an appropriate attorneys' fee award, "a court must first determine a lodestar figure by multiplying the number of reasonable hours expended times a reasonable rate." Robinson v. Equifax Info. Services. LLC, 560 F.3d 235, 243 (4th Cir. 2009) (citing Grissom v. The Mills Corp., 549 F.3d 313, 320 (4th Cir. 2008)). A "fee applicant bears the burden of establishing entitlement to an award and documenting the appropriate hours expended and hourly rates." Henslev v. Eckerhart, 461 U.S. 424, 437 (1983). To demonstrate the reasonableness of the hourly rates, the applicant must "produce satisfactory specific evidence of the prevailing market rates in the relevant community for the type of work for which he seeks an award." Robinson. 560 F.3d at 244 (quoting Plvler v. Evatt, 902 F.2d 273, 277 (4th Cir. 1990)) (emphasis omitted). "The applicant should [also] exercise 'billing judgment' with respect to hours worked, and should maintain billing time records in a manner that will enable a reviewing court to identify distinct claims." Henslev. 461 U.S. at 437 (internal citations omitted). "Where the documentation of hours is inadequate, the district court may reduce the award accordingly." Id. at 433.

         In evaluating "what constitutes a 'reasonable' number of hours and rate" for the work performed, "a district court's discretion should be guided by the following twelve factors:"[2]

(1) the time and labor expended; (2) the novelty and difficulty of the questions raised; (3) the skill required to properly perform the legal services rendered; (4) the attorney's opportunity costs in pressing the instant litigation; (5) the customary fee for like work; (6) the attorney's expectations at the outset of the litigation; (7) the time limitations imposed by the client or circumstances; (8) the amount in controversy and the results obtained; (9) the experience, reputation and ability of the attorney; (10) the undesirability of the case within the legal community in which the suit arose; (11) the nature and length of the professional relationship between attorney and client; and (12) attorneys' fees awards in similar cases.

Robinson. 560 F.3d at 243-44 (quoting Barber v. KimbreH's Inc.. 577 F.2d 216, 226 n.28 (4th Cir. 1978)). Some of these "factors may not have much, if anything, to add in a given case, " but those "that do apply should be considered." In re Abrams & Abrams, P.A., 605 F.3d 238, 244 (4th Cir. 2010).[3]

         "After determining the lodestar figure, the 'court then should subtract fees for hours spent on unsuccessful claims unrelated to successful ones.'" Robinson, 560 F.3d at 244 (quoting Grissom, 549 F.3d at 321) (internal quotation marks omitted). After subtracting those fees, the court "then awards some percentage of the remaining amount, depending on the degree of success enjoyed by ...


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