The opinion of the court was delivered by: Howard R. Lloyd United States Magistrate Judge
** E-filed June 1, 2011 **
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION RE: EXPERT WITNESS FEES FOR DEPOSITIONS
The Securities and Exchange Commission ("SEC") filed this civil enforcement action in 2007 in relation to alleged improper stock option backdating at KLA-Tencor Corporation ("KLA") 20 and Juniper Networks, Inc. ("Juniper"). Defendant Lisa Berry ("Berry") was General Counsel of KLA from September 1996 to June 1999 and of Juniper from June 1999 to January 2004. The SEC 22 alleges that she oversaw these companies' stock option granting processes.
The case is now in the expert discovery phase. The SEC disclosed two
experts: (1) certified
public accountant Kenneth Avery ($600 per hour); and (2) economist
and professor Dino Falaschetti
($500 per hour). Berry disclosed six experts: (1) economist Kenneth
Lehn ($950 per hour); (2) 26 attorney Michael Diamond ($750 per hour);
(3) Michael Bean ($295 per hour); (4) certified public 27 accountant
Charles Lundelius ($750 per hour); (5) certified public accountant
($575 per hour); and (6) certified public accountant Roman Weil
($1,600 per hour).
other side. The SEC says that each party should bear the costs of their own experts, and it moved for 3 an order so requiring. Docket No. 212 ("Motion"). Berry says that the deposing party should pay the 4 fees of the expert deponent. See Docket No. 215 ("Opp'n"). Pursuant to Civil Local Rule 7-1(b), the Court finds the matter suitable for determination without oral argument.
Federal Rule of Civil Procedure 26(b)(4) was revised in 1993 to provide that "[a] party may depose any person who has been identified as an expert whose opinions may be presented at trial."
The parties disagree over who will pay these experts' fees when they are deposed by the
FED. R. CIV. P. 26(b)(4)(A). "Unless manifest injustice would result, the court must require that the 10 party seeking discovery . . . pay the expert a reasonable fee for time spent in responding to discovery
. . . ." FED. R. CIV. P. 26(b)(4)(E). For this reason, "[c]oncerns regarding the expense of such depositions should be mitigated by the fact that the expert's fees for the deposition will ordinarily be 13 borne by the party taking the deposition." See Advisory Committee Notes to 1993 amendments to FED. R. CIV. P. 26, subdivision(b).*fn1
A. Whether Requiring the SEC to Pay Berry's Experts' Fees Would Constitute "Manifest
The manifest injustice exception is a "stringent standard." See Reed v. Binder, 165 F.R.D. 424, 427 (D.N.J. 1996) (quoting Gorlikowski v. Tolbert, 52 F.3d 1439, 1444 (7th Cir. 1995)). "To 20 apply the exception, the court must find (1) that the plaintiff is either "indigent or [(2)] that requiring 21 him to pay a deposition fee incurred in litigation that he voluntarily initiated would create an undue 22 hardship." Harris v. San Jose Mercury News, Inc., 235 F.R.D. 471, 473 (N.D. Cal. 2006) (Chen,
"In making the determination of undue hardship, the court must 'weigh the possible hardships 25 imposed on the respective parties . . . [and] balance the need for doing justice on the merits between
M.J.) (quoting Edin v. The Paul Revere Life Insurance Co., 188 F.R.D. 543, ...