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Grouse River Outfitters Ltd. v. Oracle Corp.

United States District Court, N.D. California, San Francisco Division

December 6, 2019

GROUSE RIVER OUTFITTERS LTD, Plaintiff,
v.
ORACLE CORPORATION, Defendant.

          ORDER GRANTING MOTION FOR ATTORNEY'S FEES AND COSTS RE: ECF NOS. 387, 400

          LAUREL BEELER UNITED STATES MAGISTRATE JUDGE

         INTRODUCTION

         The plaintiff Grouse River Outfitters was a Canadian outdoor-equipment retailer, and it sued NetSuite, Inc., a provider of commercial software systems, for breach of contract and fraud after the software's functionalities (capturing sales, tracking inventory, and maintaining customer information, for example) allegedly did not perform as NetSuite said they would.[1] The contract had a fees provision providing for fees and costs to the prevailing party.[2] Ultimately, Grouse River elected to proceed only on its fraud theory.[3] The parties agreed that the fees provision meant that the prevailing party at trial would be entitled to recover its fees and costs.[4] Oracle (NetSuite's successor) prevailed at trial.[5] It moved for total fees of $5, 814, 057.73 and non-taxable costs of $77, 996.13.[6] Pursuant to the parties' contract, the court awards the fees and costs.

         STATEMENT

         1. The Subscription Services Agreement

         The full fees provision of the contract is as follows.

This Agreement shall be governed in accordance with the laws of the State of California and any controlling U.S. federal law and excluding the Uniform Computer Information Transactions Act (UCITA). Any disputes, actions, claims or causes of action arising out of or in connection with this Agreement (or the Service) shall be subject to the exclusive jurisdiction of the state and federal courts located in California and must be brought in state or federal courts located in San Mateo or San Francisco County, California, as permitted by law. In the event of any litigation of any controversy or dispute arising out of or in connection with this Agreement, its interpretations, its performance, or the like, the prevailing party shall be awarded reasonable attorneys' fees and/or costs.[7]

         The parties do not dispute that Oracle is the prevailing party and that this provision provides for the award of fees and costs to the prevailing party in this lawsuit.[8]

         2. Facts Relevant to Fees Motion

         As the case docket shows, the parties litigated the case extensively. There were motions to dismiss, discovery disputes (and the accompanying extensive discovery), a mostly successful motion for judgment on the pleadings, a challenge to NetSuite's expert, a shifting landscape before trial that culminated in Grouse River's dropping its contract claim, its dropping of its negligent misrepresentation claim, its proceeding only on its fraud claims, many in limine motions, a shifting damages landscape, a jury trial, and, ultimately, a complete defense verdict.[9]

         Scott Gattey and his associates handled the litigation initially.[10] The Gattey timekeepers billed the following hours at the following rates.

Timekeeper

Position

Rate

Hours Billed

Scott D. Gattey

Partner

$425-$500

1, 504.63

Paul D. Byrne

Senior Attorney

$425

560

Peter Scoolidge

Contract Attorney

$380

545.5

Amy Kashiwabara

Contract Attorney

$380

94.8

Isabelle Smith

Contract Attorney

$380

73.85

Melissa Cardinale

Paralegal

$200

30.20

Total Hours 2, 808.98

         Mr. Gattey gave a 15% discount from his usual rates.[11] The total fees are $1, 187, 077.75.

         The breakdown of the work is as follows. There were three dispositive motions: a motion to dismiss the first amended complaint, a motion to dismiss the second amended complaint, and a motion for judgment on the pleadings that whittled down the actionable fraud allegations to 16.[12]Discovery was extensive and contentious, requiring the court's intervention.[13] Grouse River ultimately produced 44, 000 documents.[14] Mr. Gattey deposed four Grouse River witnesses and defended depositions of three NetSuite witnesses.[15] Mr. Gattey hired an accounting expert, David Perry, and worked with him to prepare the initial report.[16] (Ultimately, the court denied Grouse River's motion to exclude the expert reports.[17]) Under Mr. Gattey's watch, Oracle moved for summary judgment, and the court granted the motion in part, holding that the limitation of liability applied to the non-fraud claim (and also holding that fact issues precluded summary judgment on the fraud claims).[18] Mr. Gattey participated in two mediations.[19]

         Mr. Gattey submitted a declaration that recounts the experience of his team. Mr. Gattey has 24 years of experience handling software-implementation matters for technology companies and has billed Oracle (and Oracle paid) the rates reflected in the chart for the different timekeepers.[20] He has substantial experience representing NetSuite and was in-house at Oracle and at Siebel Systems.[21] Paul Byrne is a principal at the Cornerstone Law Group with a commercial-litigation practice and 20 years of litigation experience, including trying multiple cases through verdict and handling numerous arbitrations.[22] Amy Kashiwabara is a contract lawyer who graduated from Stanford Law School in 2000 and specializes in, among other things, intellectual property and breach-of-contract cases.[23] Peter Scoolidge, who worked on discovery matters in the case, graduated from Brooklyn Law School cum laude in 2008, clerked for a district judge in the Eastern District of New York, and is an attorney at Scoolidge, Peters, Russotti, and Fox.[24] Isabelle Smith graduated from U.C., Hastings College of the Law in 1998, was Executive Director of the Hastings Law Journal, was a former partner at Howry LLP, and has 20 years of litigation experience.[25]

         After the court's summary-judgment order, Oracle hired Latham & Watkins to try the case.[26]The Latham timekeepers billed the following hours at the following rates.

Timekeeper Position Rate Hours Billed (to July 2019) Hours Billed (to Sept. 2019)

Sara M. Ray

Partner/Lead

$787.50$840.00

1,230.40

1,244.90

Elyse Greenwald

Senior Associate

$746$796

1,167

1,178.60

Alicia R. Jovais

Senior Associate

$713$760

1,079.40

1,185.60

Diana A. Aguilar

Senior Associate

$713$760

884.60

917.60

Chad Hejl

Junior Associate

$510$544

812.50

830.90

Jessica Oglesbee

Junior Associate

$416$444 744

771.20


Katharine White

Litigation Services

$320

20.80

34.60

Andrea Casalett

Litigation Services

$320

5.50

11.50

Victor Cayanan

Paralegal

$330$352

659.30

746.10

Monique Handy-Jones

Paralegal

$333.75$356

235.40

236.50

Total Hours

6,838.9

7,157.5 [27]

         Latham's rates were a “significant discount from the firm's usual rates.”[28] Latham charged, and Oracle paid, the rates reflected in the chart.[29] The total fees are $4, 452.178.20 through July 2019 and (accounting for the fees litigation) $4, 626, 979.98 through September 2019.[30]

         When Latham entered its appearances, the litigation escalated in anticipation of trial. Among the events in the months that preceded trial were the following: pretrial orders compelling Grouse River to produce financial information; pretrial preparation (including motions in limine, challenges to the damages expert, the pretrial order, jury instructions, exhibits, and the verdict form); litigating Grouse River's change of its trial strategy (by withdrawing the breach-of-contract claim and proceeding only on theories of fraud), and challenging Grouse River's lost-profits expert.[31] The month-by-month breakdown of Latham's work is as follows.

         In January 2019, Latham's timekeepers provided the following services: analyzing pleadings, document productions, deposition transcripts, expert reports, and witness-interview materials; discussing case background and litigation strategy with Oracle; legal research; developing case strategy; preparing for and attending a case-management conference; and addressing discovery disputes (including with the court).[32] The timekeepers and their hours in this period were as follows: Sarah Ray (122.70); Elyse Greenwald (75.20); Diana Aguilar (12.80); Alicia Jovais (44.70); Jessica Oglesbee (20.90 hours); and Victor Cayanan (48.30).[33]

         In February 2019, Latham's timekeepers provided the following services: reviewing financial records in the NetSuite database; analyzing over 58, 000 documents (totaling more than 250, 000 pages), discovery responses, deposition transcripts (over 2, 300 pages), and witness interview materials; developing trial themes; identifying documents missing from Grouse River's production and raising discovery issues; legal research; working with Oracle's expert to revise his report based on newly disclosed Grouse River financial information; preparing a case schedule; preparing for and attending a case-management conference; strategizing for fact development; preparing for the deposition of Grouse River's CEO, Glenn Fallis; and working to obtain documents from Grouse River's accounting firm, Grant Thornton.[34] The timekeepers and their hours in this period were as follows: Sarah Ray (114.50); Elyse Greenwald (75.80); Diana Aguilar (41.30); Alicia Jovais (68); Jessica Oglesbee (10.50); and Victor Cayanan (2.90).[35]

         In March 2019, Latham's timekeepers provided the following services: working to revise their expert report based on newly disclosed Grouse River financial information; obtaining documents from Grant Thornton; analyzing “hot” documents and deposition transcripts to develop trial themes; negotiating discovery disputes; analyzing Grouse River's fraud allegations and the contractual commitments; preparing for the depositions of three Grouse River witnesses (including Glenn Fallis); summarizing documents and testimony relating to key software functionalities; and identifying and interviewing witnesses.[36] The timekeepers and their hours in this period were as follows: Sarah Ray (91.30); Elyse Greenwald (97.40); Diana Aguilar (57.70); Alicia Jovais (102.20); Chad Hejl (19.70); Jessica Oglesbee (104.30); and Victor Cayanan (28).[37]

         In April 2019, Latham's timekeepers provided the following services: preparing for and taking the depositions of two Grouse River deponents (including Glenn Fallis); identifying and interviewing potential trial witnesses; finalizing Oracle's expert's final report and preparing a supplemental rebuttal report; legal research; developing trial themes; researching and drafting motions in limine and the trial brief; preparing the exhibit list; designating deposition testimony for trial; and outlining the opening statement.[38] The timekeepers and their hours in this period were as follows: Sarah Ray (177.50); Elyse Greenwald (138.30); Diana Aguilar (110.60); Alicia Jovais (128.60); Chad Hejl (140.50); Jessica Oglesbee (106.80); Monique Handy-Jones (1.20); Victor Cayanan (52.20); Andrea Casalett (1.50); and Katharine White (1.70).[39]

         In May 2019, Latham's timekeepers provided the following services: finalizing Oracle's expert's supplemental rebuttal report; interviewing potential trial witnesses; conferring with Grouse River about pretrial filings; deposing Grouse River's expert; developing trial themes; opposing Grouse River's motion to amend its complaint to withdraw its breach-of-contract claim; researching and filing motions in limine, the trial brief, and jury instructions; opposing Grouse River's motions in limine; preparing the trial exhibit list, witness list, proposed pretrial order, verdict form, jury questionnaire, voir dire questions, and actionable fraud allegations (a key issue in the trial); and designating testimony for trial.[40] The timekeepers and their hours in this period were as follows: Sarah Ray (246.80); Elyse Greenwald (288.30); Diana Aguilar (257.50); Alicia Jovais (247.50); Chad Hejl (232.30); Jessica Oglesbee (187); Monique Handy-Jones (19.10); Victor Cayanan (163.60); Andrea Casalett (0.60); and Katharine White (6.30).[41]

         From May 30 to June 17, 2019, Latham's timekeepers provided the following services: researching, drafting, and filing additional motions in limine; opposing Grouse River's motion in limine; researching, drafting, and filing objections to Grouse River's trial exhibits; preparing for mock-jury exercise; answering Grouse River's amended complaint; preparing witnesses for trial; designating deposition testimony for trial; and drafting the opening statement.[42] The timekeepers and their hours in this period were as follows: Sarah Ray (99.30); Elyse Greenwald (94.80); Diana Aguilar (97.20); Alicia Jovais (96.40); Chad Hejl (93.50); Jessica Oglesbee (99.30); Monique Handy-Jones (48.50); Victor Cayanan (86.50); H. Nguyen (0.60);[43] Andrea Casalett (0.60); and Katharine White (6.30).[44]

         From June 14, 2019 to June 30, 2019, Latham timekeepers provided the following services: a mock jury exercise; researching and drafting a brief regarding Rule 602; preparing objections to late-disclosed evidence; responding to Grouse River's amended proposed jury instructions; participating in the pretrial conference; settlement discussions; drafting briefs regarding the fraud allegations that Grouse River could pursue at trial; drafting a motion in limine to exclude late-disclosed damages figures; drafting direct and cross-examination outlines; drafting the opening and closing argument; and preparing witnesses for trial.[45] The timekeepers and their hours in this period were as follows: Sarah Ray (166.60); Elyse Greenwald (164.10); Diana Aguilar (106); Alicia Jovais (158.20); Chad Hejl (100.90); Jessica Oglesbee (68.40); Monique Handy-Jones (36.90); Victor Cayanan (98.70); Andrea Casalett (2.80); and Katharine White (1.00).[46]

         In July 2019, Latham's timekeepers provided the following services: researching and drafting a motion in limine to exclude Grouse River's late-disclosed damages figures; drafting direct and cross-examination outlines, the opening statement, and closing argument; preparing witnesses; legal research about evidentiary issues; participating in a hearing regarding Grouse River's late-disclosed damages; preparing for motion for judgment as a matter of law; serving as counsel in the week-long trial; preparing a bill of costs; and working on the attorney's fees motion.[47] The timekeepers and their hours in this period were as follows: Sarah Ray (211.70); Elyse Greenwald (233.10); Diana Aguilar (201.50); Alicia Jovais (233.80); Chad Hejl (225.60); Jessica Oglesbee (146.80); Monique Handy-Jones (129.70); Victor Cayanan (179.10); and Katharine White (5.50).[48]

         In August 2019, Latham's timekeepers worked on the attorney's fees motion.[49] The timekeepers and their hours in this period were as follows: Sarah Ray (2.50); Elyse Greenwald (4.50); Diana Aguilar (11.60); Alicia Jovais (61.20); Chad Hejl (18.40); Monique Handy-Jones (1.10); Victor Cayanan (29.70); and Katherine White (10.40).[50]

         In September 2019, Latham's timekeepers billed the following hours for the fees motion: Sarah Ray (12); Elyse Greenwald (7.10); Diana Aguilar (21.40); Alicia Jovais (45); Jessica Oglesbee (27); Victor Cayanan (57.10); Katherine White (3.40) and Andrea Casalett (6).[51]

         Ms. Ray submitted a declaration that recounts the experience of her team. Ms. Ray is a graduate of U.C. Berkeley School of Law (where she was Order of the Coif), a former law clerk to two district judges in the Northern District of California, and a partner at Latham with significant experience in federal and state court antitrust and unfair-competition cases and with prior representation of Oracle in competition and contract-related matters.[52] Elyse Greenwald is an associate at Latham, graduated in 2009 from the University of Michigan (magna cum laude and Order of the Coif), and clerked for a district judge in the Eastern District of California.[53] Alicia Jovais is an associate at Latham, graduated summa cum laude from the U.C. Hastings College of the Law, was a senior editor of the law journal, and was a law clerk for a circuit judge of the Ninth Circuit Court of Appeals.[54] Diana Aguilar is an associate at Latham, graduated from Cornell Law School in 2012 (cum laude), and was an associate editor of a journal there.[55] Chad Hejl was an associate at Latham and graduated in 2017 from University of California, Los Angeles, School of Law (where he was Order of the Coif).[56] Jessica Oglesbee is an associate at Latham, graduated from U.C. Berkeley School of Law in 2018, was an associate editor on a journal, and was Moot Court Director for international competitions.[57] Victor Cayanan is a senior paralegal at Latham, has 33 years of litigation experience, and has worked on many trials.[58] Monique Handy-Jones is a senior paralegal at Latham with over 25 years of litigation experience.[59] Andrea Casalett is the Litigation Services Supervising Attorney at Latham, graduated from Golden Gate University School of Law in 2006, and has 13 years of litigation experience.[60] Katharine White is a Litigation Services Attorney at Latham, graduated from Santa Clara University School of Law in 2012, has six years of litigation experience, and has worked on hundreds of filings at Latham.[61]

         In support of its hourly rates, Oracle provided the following information. The lawyers in the case charged - and Oracle paid - the hourly rates and amounts on the invoices.[62] The rates are consistent with the prevailing rates for lawyers in the district and the rates that courts have awarded Latham and other large law firms in complex civil matters.[63] It points out that it is a sophisticated consumer of legal services, and it paid the rates here.[64] The rates of Grouse River's counsel - both high-end lawyers - exceed the rates of its counsel here.[65]

         Oracle offered in its motion to lodge its unredacted billing invoices and complete time entries and - at the court's request - lodged its invoices on November 27 for the court's in camera review (and reflected that lodging on the public record by filing - again at the court's request - a notice of lodging).[66] It notes that - as explained in the Ray and Gattey declarations - it is not asking for fees for work by non-attorneys who billed few hours on the case or costs already taxed by the court.[67] The court reviewed the lodged documents, which match (and thus support) the submissions in the fees motion.

         As set forth in the following charts, Oracle seeks $77, 996.13 in non-taxable costs.[68] (The clerk already taxed costs of $36, 554.95.[69])

Gattey Costs

Air and ground transportation

$ 588.96

Copying

$1, 534.69

Court filing

$ 337.70

Mailing

$ 201.02

Messenger

$ 735.68

Online legal research

$ 260.00

Meals

$ 334.75

Out-of-state subpoena service

$1, 129.60

Transcripts and related costs

$1, 160.95

Travel and lodging

$8, 897.35

Subpoena fees

$ 100.00

Total

$15, 280.70

Latham Costs

Air and ground transportation

$6, 186.82

Copying

$ 818.09

Court filing

$1, 423.10

Mailing

$9, 228.80

Practice support

$6, 263.25

Meals

$2, 472.56

Courtroom technology

$4, 475.15

Travel and lodging

$31, 666.70

Total

$62, 715.43

         ANALYSIS

         The parties do not dispute that under their contract, the prevailing party (here, Oracle) is entitled to fees and costs.[70] Cal. Code Civ. P. § 1021; Cal. Civ. Code § 1717(a). Grouse River contends that Oracle did not justify its fees motion (either by competent evidence about hourly rates or through billing records) and cannot recover non-taxable costs.[71] The parties agree that the relevant legal standard under the contract (applying California law) is the lodestar.[72] Applying the lodestar, the court awards the fees and (under the relevant authority) non-taxable costs.[73]

         1. Lodestar Fees

         Under California law, the lodestar is calculated by multiplying the number of hours that the prevailing party reasonably expended in the litigation by a reasonable hourly rate. PLCM Grp. v. Drexler, 22 Cal.4th 1084, 1095 (2000). ...


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