Sanderson-MacLeod, Inc. v. Hobbs Med., Inc.

SANDERSON-MACLEOD, INC., Plaintiff, v. HOBBS MEDICAL, INC., Defendant.

Civil No. 19-30013-MGM

UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS

May 6, 2020

REPORT AND RECOMMENDATION CONCERNING AN AWARD OF ATTORNEYS' FEES

I. Introduction

On November 21, 2019, the Honorable Mark G. Mastroianni granted the motion of defendant Hobbs Medical, Inc. ("Defendant") for attorneys' fees in this patent case (Dkt. Nos. 33, 55). The court found the case exceptional and warranting a fee award because plaintiff Sanderson-MacLeod, Inc. ("Plaintiff") filed a facially insufficient complaint relying on outdated legal authority and failed adequately to amend the complaint notwithstanding the repeated instances in which Defendant brought its deficiencies to Plaintiff's attention (Dkt. No. 33, 55). The court referred the case to the undersigned for a report and recommendation concerning the reasonable amount of a fee award (Dkt. No. 57). See Fed. R. Civ. P. 54(d)(2)(D); Fed. R. Civ. P. 72(b). For the reasons set forth below, I recommend an award of $35,926.19 in fees and litigation expenses ($33,599.00 in fees; $2,327.19 in expenses) to Defendant based on its August 2019 submission. I recommend that the court not award any additional fees or expenses based on Defendant's supplemental fee request filed in November 2019. However, if the court deems it appropriate to increase the award based on this supplemental fee request, I recommend an additional award of $14,587.37 ($12,823.25 in fees; $1,434.12 in expenses) for a total award of $50,513.56 in attorneys' fees and other litigation expenses.

II. Background

Defendant's corrected fee petition, filed pursuant to 35 U.S.C. § 285 on August 30, 2019, and supported by a declaration of attorney Stephen Ball, filed on August 23, 2019 with attachments, seeks recovery of $48,728.69 for legal services invoiced by the Whitmyer IP Group ("WIPG") between January 29, 2019 and August 13, 2019, and by Rome McGuigan, P.C. ("RMPC") between December 3, 2018 (billed in February 2019) and July 29, 2019 (Dkt. Nos. 43 at 8; 43-1 through 43-15).

On November 1, 2019, Defendant filed a motion for leave to file a reply brief in support of its motion for attorneys' fees (Dkt. No. 47), which motion was granted by the court on November 4, 2019 (Dkt. No. 48). The motion for leave to file a reply represented that good cause existed for the filing of a reply brief "in order to address issues raised in the Opposition, including a mischaracterization of legal authority" (Dkt. No. 47 at 1). It is open to dispute whether Plaintiff's opposition to the fee request raised any issue to which a reply was required in the circumstances of this case where the court has been steadfast in its rejection of Plaintiff's claims. It appears that Defendant's purpose in seeking leave to file a reply was, in significant part, to "take[] this opportunity to supplement the amount of its requested attorneys' fees" (Dkt. No. 51 at 3-4). By exhibits to its reply brief, Defendant seeks an additional $24,704.41 in attorneys' fees and litigation costs for a total award of $73,433.10 (Dkt. Nos. 54-1 through 54-4). This supplemental request includes the costs of preparing the original fee petition and an opposition to Plaintiff's motion to alter, amend, or vacate the judgment, which the court disposed of by a five-line docket entry (Dkt. No. 41).

Beginning with Defendant's August 30, 2019 corrected attorney fee petition, WIPG's presentation on hourly rates is as follows:

WIPG attorney Stephen Ball:

$450.00

WIPG attorney Lauren C. Matturri:

$210.00

RMPC attorneys:

$341.00 on average

(Dkt. No. 43-1 at 1-3, ¶¶ 5-7, 24). Lead WIPG attorney Stephen Ball attests that his hourly rate and the hourly rate of Ms. Matturri are below the typical rates charged in Boston for intellectual property litigation (Dkt. No. 43-1 at ¶¶ 5-7 at 1-2). These attestations are supported by a 2017 report of an economic survey of average billing rates for intellectual property work in various locations (Dkt. No. 29-4). RMPC serves as corporate counsel for Defendant and is not, so far as appears from the record, an intellectual property firm. Defendant has not provided information about rates in general for corporate counsel in this district or about the expertise of the RMPC attorneys whose services are reflected in the bills submitted in support of the fee petition.

The fee petition does not seek recovery of time spent by WIPG before the initial complaint was filed communicating with counsel for Plaintiff about Plaintiff's infringement allegations, which are described in Defendant's Memorandum in Support of Motion for Attorneys' Fees (Dkt. No. 29-1 at 1-3). Although it could have done so, the August 2019 fee petition did not seek recovery of fees for preparation of the fee petition. In its opposition to Defendant's fee petition, Plaintiff argues generally that this is not an exceptional case in which fees should be awarded (Dkt. Nos. 44, 45). Plaintiff has not taken issue with the reasonableness of the WIPG and RMPC rates or with the need for the legal work reflected in specific billing entries for purposes of defending the case, nor has it argued that the supervisory work performed by RMPC should not be compensated. Contrast Baychar, Inc. v. Salomon/N. Am., Inc., No.1:04-CV-136-DBH, 2009 WL 418650, at *4-5 (D. Me. Feb. 18, 2009) (the plaintiff opposing the fee petition argued against the hourly rates, specific billings, and compensation for supervisory counsel).

III. Discussion

1. Applicable Legal Principles

"Section 285 of the Patent Act authorizes a district court to award attorney's fees in patent litigation." Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545, 548 (2014). The conventional framework for calculating fee awards under a federal fee-shifting statute such as § 285 of the Patent Act is the lodestar method. Spooner v. EEN, Inc., 644 F.3d 62, 67 (1st Cir. 2011) (citing Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 546 (2010); Lipsett v. Blanco, 975 F.2d 934, 937 (1st Cir. 1992)). "This approach requires the district court to ascertain the number of hours productively expended and multiply that time by reasonable hourly rates." Id. at 68 (citing Hensley v. Eckerhart, 461 U.S. 424, 433 (1983); Gay Officers Action League v. Puerto Rico, 247 F.3d 288, 295 (1st Cir. 2001)). The party seeking a fee award must support its request as to the time and rate components, relying on appropriate supporting documentation, including contemporaneous bills and information establishing customary hourly rates for attorneys with similar credentials. Id. The party opposing a fee petition may "proffer countervailing evidence." Id. (citing Foley v. City of Lowell, 948 F.2d 10, 20-21 (1st Cir. 1991)). "Once the parties have made their submissions, the court determines how much compensable time counsel spent on the case, deleting any 'duplicative, unproductive, or excessive hours.'" Id. (quoting Gay Officers Action League, 247 F.3d at 295). While application of the lodestar calculation "represents a presumptively reasonable fee," Lipsett v. Blanco, 975 F.2d 934, 937(1st Cir. 1992), other factors may warrant an upward or downward adjustment in the lodestar calculation. Spooner, 644 F.3d at 68.

In Torres-Rivera v. O'Neill-Cancel, 524 F.3d 331, 336 (1st Cir. 2008), the First Circuit set out certain guideposts that should inform a district court's review of billing records. "[A] district court may deem an expenditure of time unreasonable if the reported hours are 'excessive, redundant, or otherwise unnecessary.'" Id. (quoting Hensley, 461 U.S. at 434; citing U.S. v. Metro. Dist. Comm'n, 847 F. 2d 12, 18-19 (1st Cir. 1988); Grendel's Den, Inc. v. Larkin, 749 F.2d 945, 952-55 (1st Cir. 1984)). "By like token, [the court] may discount or disallow the total hours claimed if it determines that the time is insufficiently documented." Id. (citing Hensley, 461 U.S. at 433; Grendel's Den, 749 F.2d at 952). If "time records [are] too generic and, thus, insufficient as a practical matter to permit a court to answer questions about excessiveness, redundancy, and the like ... the court may either discount or disallow those hours." Id. (citing Gay Officers Action League, 247 F.3d at 297; Tenn. Gas Pipeline Co. v. 104 Acres of Land, 32 F.3d 632, 634 (1st Cir. 1994)). An award of "attorney fees under section 285 should be tailored by a court to the situation before it." Power Mosfet Techs. LLC v. Siemens AG, 378 F.3d 1396, 1415 (Fed. Cir. 2004). "[T]he award of the total amount of a fee request is unusual." Takeda Chem. Indus., Ltd. v. Mylan Labs., Inc., 549 F.3d 1381, 1390 (Fed. Cir. 2008).

"The essential goal in shifting fees (to either party) is to do rough justice, not to achieve auditing perfection." Cushing v. McKee, 853 F. Supp. 2d 163, 170 (D. Me. 2012) (quoting Fox v. Vice, 563 U.S. 826, 838 (2011) ("[T]rial courts may take into account their overall sense of a suit, and may use estimates in calculating and allocating an attorney's time.")).

2. August 30, 2019 Fee Application

a. Lodestar Calculation

i. Result Achieved

Defense counsel achieved a very good result for Defendant. The presiding District Judge dismissed Plaintiff's amended complaint with prejudice for failure to state a claim, observing that Plaintiff was relying on a form and a version of Fed. R. Civ. P. 84 that had been abrogated and that the amended complaint failed to satisfy the pleading standards that apply generally and in patent cases as to the factual content that must be included in a complaint (Dkt. No. 26). Because of Defendant's early success, Defendant did not incur the expense and related inconveniences of non-expert and expert discovery, a claim construction hearing, or the briefing of a dispositive motion. The result achieved supports a full fee award to the extent justified by the loadstar calculation.

ii. Reasonableness of Rates

Plaintiff has not challenged the reasonableness of the hourly...