Shire LLC v. Abhai, LLC

323 F.Supp.3d 112

SHIRE LLC and Shire US Inc., Plaintiffs,

v.ABHAI, LLC, Defendant.

CIVIL ACTION NO. 15-13909-WGY

United States District Court, D. Massachusetts.

Signed July 11, 2018

Alaina M. Whitt, David M. Parker, Eric R. Sonnenschein, Erica N. Andersen, George F. Pappas, Jeffrey B. Elikan, Kevin B. Collins, Miles L. Galbraith, Pro Hac Vice, Covington & Burling LLP, Washington, DC, Jennifer L. Robbins, Covington & Burling LLP, New York, NY, Tess A. Hamilton, Pro Hac Vice, Covington & Burling LLP, Redwood Shores, CA, Eric J. Marandett, Margaret E. Ives, Patrick S. Boyd, Choate, Hall & Stewart, Boston, MA, for Plaintiffs.

Alison C. Casey, Heather B. Repicky, Nutter, McClennen & Fish, LLP, Boston, MA, Chad A. Landmon, Seth I. Heller, Thomas K. Hedemann, Pro Hac Vice, Axinn Veltrop & Harkrider LLP, Hartford, CT, William C. Rose, Pro Hac Vice, Veltrop & Harkrider LLP, Washington, DC, for Defendant.

MEMORANDUM & ORDER

YOUNG, D.J.

I. INTRODUCTION

This memorandum and order arises out of post-trial motions for attorney's fees and other costs following a lengthy trial regarding Abhai, LLC's ("Abhai") unauthorized use of Shire LLC and Shire US Inc.'s (collectively "Shire") United States Reissued Patent No. RE42,096 and United States Reissued Patent No. RE41,148. See Shire LLC v. Abhai, LLC, 298 F.Supp.3d 303, 304-06 (D. Mass. 2018). With two days of trial remaining, Abhai revealed that its stability dissolution testing data was incorrect. Id. at 305, 329. It proceeded to provide Shire with the correct data, but by then the damage had been done. Id. at 329, 331. Shire had relied on the incorrect data, as it was crucial to its case and the overall trial. Id. at 331.

Abhai's decision to withhold the correct data caused a delay in trial, extra expenses for Shire, and a drain on judicial resources.

Id. at 335-36. The Court thus sanctioned Abhai in the amount of $30,000.00. Id. at 337. The Court also ordered Shire to file a revised claim for attorney's fees and costs limited to "(a) recovering for the time wasted dealing with Abhai's inaccurate stability and dissolution data, (b) discovering the litigation misconduct discussed immediately above, and (c) dealing with Abhai's revised stability and dissolution data." Id. at 335.

Following the Court's orders, Shire filed a motion seeking to recover attorney's fees and expenses that it incurred due to Abahi's misconduct. Pls.' Appl. Reasonable Atty's Fees & Expenses ("Pls.' Mem."), ECF No. 342. Both parties have briefed the issue of how much in attorney's fees and expenses the Court ought award Shire. See Pls.' Mem.; Def.'s Response Pls.' Appl. Atty's Fees & Expenses ("Def.'s Resp."), ECF No. 347; Decl. William C. Rose with Exhibits A-M ("Rose Decl. I"), ECF No. 348; Decl. William C. Rose with Exhibits AA-MM ("Rose Decl. II"), ECF. No. 349; Pls.' Reply Supp. Appl. Reasonable Attys' Fees & Expenses ("Pls.' Reply"), ECF No. 355; Decl. Kevin B. Collins ("Collins Decl."), ECF No. 356; Def.'s Sur-reply to Pls.' Appl. Atty's Fees & Expenses ("Def.'s Sur-reply"), ECF No. 359.

II. ANALYSIS

Following the denial of a motion to seal Shire's motion for reasonable attorney's fees, the Court explained that it is not evaluating the reasonableness of the fees requested by Shire, unless such fees are unreasonably high. Electronic Order, ECF No. 341. Rather, the Court is only concerned with the attorney's fees and costs that Shire paid "for necessary work its counsel performed due to the misconduct of Abhai." Id.

As instructed by the Court, Shire divided its billing entries into the three categories. See Shire LLC, 298 F.Supp.3d at 335 ; Pls.' Mem. at 6-9. The following is a description of the work performed by Shire due to Abhai's misconduct:

For category (a) ["time wasted dealing with Abhai's inaccurate stability and dissolution data"], the time entries included in the calculation from September 2016 to April 2017 include:

• time spent analyzing Abhai's ANDA containing dissolution and stability data;

• time spent reviewing Abhai's lab notebooks containing dissolution and stability data;

• time spent working with [Juniper Pharma Services ("Juniper") ] on dissolution testing;

• time spent working on [Dr. Shen Yung Luk's ("Dr. Luk") ] opening expert report related to dissolution testing (including the four pages in his 37-page opening report plus the short description in Appendix E of his dissolution testing methodology);

• time spent working with [Dr. Jennifer Dressman ("Dr. Dressman") ] on her reply report addressing dissolution data;

• time spent preparing Dr. Dressman for deposition;

• time spent reviewing [Dr. Diane Burgess's ("Dr. Burgess") ] expert report on inaccurate dissolution data;

• time spent deposing Dr. Burgess on inaccurate dissolution data;

• time spent preparing Dr. Luk for deposition;

• time spent deposing Abhai/[KVK Tech, Inc. ("KVK") ] employees on inaccurate dissolution data;

• time spent preparing Dr. Dressman and Dr. Luk for trial on inaccurate dissolution data; and• time spent preparing to cross examine Dr. Burgess on inaccurate dissolution data.

...

For category (b)["discovering the litigation misconduct"], the time entries included in the calculation from April 2017 to August 2017 include:

• time spent during first trial reviewing newly disclosed dissolution and stability data;

• time spent opposing Abhai's attempt to amend the pretrial order and introduce evidence at the first trial not produced during fact discovery;

• time spent at the court hearing convened to determine the best path forward;

• time spent drafting discovery requests;

• time spent reviewing Abhai's responses to interrogatories and request for production;

• time spent reviewing Abhai documents produced after the first trial in April 2017;

• time spent pressing Abhai for more information and additional documents;

• time spent moving to compel production of documents and additional information, including related legal research;

• time spent researching the relationship between KVK and Abhai;

• time spent collecting dissolution testing for third parties to show issues with Abhai's testing; and

• time spent preparing for and taking the depositions of Anthony Tabasso, Jordan Rees, Ashvin Pancheal, Frank Nekovanik, Murty Vepuri, Ranga Namburi, Todd Leo, Benjamin Roembke, Sameer Late, and Kevin O'Loughlin.

...

For category (c)["dealing with Abhai's revised stability and dissolution data"], the time entries included in the calculation from April 2017 to September 2017 include:

• time spent developing a response to the revised stability and dissolution data;

• time spent analyzing Abhai's document productions in light of revised stability and dissolution data;

• time spent with Dr. Luk and Juniper regarding new dissolution studies being conducted;

• time spent with Dr. Dressman on a supplemental expert report addressing Abhai's revised stability and dissolution data;

• time spent working with consulting experts to understand issues raised by the revised dissolution data;

• time spent collecting information about other dissolution studies for Adderall XR, including those in Shire's NDA;

• time spent moving to compel Abhai to produce more documents and provide additional information relevant to understanding the revised stability and dissolution data; and

• time spent preparing Dr. Dressman for the second trial.

Shire's total request for fees and costs as a result of the misconduct is $2,335,034.91. See Pls.' Mem., Ex. A at 86. Abhai disagrees and argues that Shire's award should be reduced to $998,465.91. Def.'s Resp. at 16. Abhai argues that Shire is not entitled to all the fees associated with the following categories of billing entries:

• "time spent analyzing Abhai's ANDA containing dissolution and stability data;"

• "time spent reviewing Abhai's lab notebooks containing dissolution and stability data;"

• "time spent working with Juniper on dissolution testing;"• "time spent working on Dr. Luk's opening expert report related to dissolution testing;"

• "time spent preparing Dr. Luk for deposition;"

• "time spent preparing Dr. Luk for trial on inaccurate dissolution data;"

• "Shire's discovery motion practice;"

• "Shire's depositions of current and former KVK employees;"

• "time spent researching the relationship between KVK and Abhai and the ownership of KVK;"

• "time spent with Dr. Luk and Juniper regarding new dissolution studies being conducted" and "work performed by Dr. Luk and Juniper;"

• "time spent collecting dissolution testing [from] third parties;"

• "time spent collecting information about other dissolution studies for Adderall XR;" and

• "fees and costs associated with Dr. Dressman."

Id. at 4-14 (quoting Pl's Mem. at 7-9).

Abhai is correct that Shire is not entitled to all the fees associated with the above-referenced entries because they are not all but-for results of Abhai's misconduct. See Goodyear Tire & Rubber Co. v. Haeger, ––– U.S. ––––, 137 S.Ct. 1178, 1187, 197 L.Ed.2d 585 (2017).

A. Standard

Federal courts have "the ability to fashion an appropriate sanction for conduct which abuses the judicial process." Id. at 1186 (quoting Chambers v. NASCO, Inc., 501 U.S. 32, 44-45, 111 S.Ct. 2123, 115 L.Ed.2d 27 (1991) ). An assessment of attorney's fees is a proper sanction. Id. The assessment, however, must be compensatory and not punitive. Id. The goal is to "redress the wrong party 'for losses sustained' " as a result of the improper conduct. Id. (quoting Mine Workers v. Bagwell, 512 U.S. 821, 829, 114 S.Ct. 2552, 129 L.Ed.2d 642 (1994) ). "The complaining party [ ] may recover 'only the portion of his fees that he would not have paid but for' the misconduct." Id. at 1187. "This but-for causation standard generally demands that a district court assess and allocate specific litigation expenses -- yet still allows it to exercise discretion and judgment." Id." 'The essential goal' in shifting fees is 'to do rough justice, not to achieve auditing perfection.' " Id. (quoting Fox v. Vice, 563 U.S. 826, 838, 131 S.Ct. 2205, 180 L.Ed.2d 45 (2011) ).

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