KANDIS A. WESTMORE, Magistrate Judge.
Pinterest, Inc. moves for sanctions against Pintrips, Inc. and its law firm, Kenyon and Kenyon LLP, pursuant to Federal Rule of Civil Procedure 37 and Civil Local Rule 37-4. Pintrips opposes the motion. For the reasons set forth below, the motion is GRANTED.
This motion for sanctions stems from Pintrips' deficient responses to Pinterest's First Set of Interrogatories,
In the joint letter, the parties outlined their discovery dispute for the Court. (June 2, 2014, Joint Ltr., Dkt. No. 50.) The Court determined that the parties had not sufficiently met and conferred, and it ordered the parties to do so in person, and in good faith, to reach a resolution. (June 9, 2014 Order at 1, Dkt. No. 51.) To guide the parties' meet and confer efforts, the Court also ordered Pinterest to consider whether its interrogatories, as written, were sufficiently detailed to invite a meaningful response. (Id. at 1.) In addition, Pinterest was to identify the interrogatories for which supplemental responses were appropriate, and Pintrips was to provide further verified responses. (Id.) The parties were permitted to file an updated joint letter if they were unsuccessful in resolving their dispute. (Id.)
That joint letter followed on July 28, 2014.
(Id. at 12.)
In the joint letter, Pinterest argued that Pintrips should be required to disclose the names, locations, and employers of the potential investors, certain advisors, and anyone else with whom Pintrips has communicated about this trademark dispute. (Id. at 2.) Pintrips, in turn, expressed its objection to providing the requested information. (Id. at 7.) It claimed:
(Id. at 7.)
On August 7, 2014, the Court issued an order resolving the parties' discovery dispute. (Aug. 7, 2014 Order, Dkt. No. 68.) The Court reasoned that the potential investors and certain advisors with whom Pintrips has discussed this case may have information on the issue of Pintrips' intent, which is one of the elements a court may consider in connection with Pinterest's claim for trademark dilution. (Id. at 3 (citing 15 U.S.C. § 1125(c)(2)(B)(v).) The Court rejected Pintrips' arguments that identifying these individuals would result in catastrophic harm and dismissed Pintrips' assertion that such disclosure would risk funding for its venture as speculation. (Id.) The remainder of the Court's August 7 order reads:
(Aug. 7, 2014 Order at 4.)
Pintrips did not comply. Instead, it moved for a protective order (1) requiring Pinterest to "seek leave of the Court before issuing any subpoenas or otherwise attempting to contact any of the investors and/or potential investors that Pintrips will identify pursuant to the Court's Order of August 7, 2014 (Dkt. No. 68)," (2) providing Pintrips "the opportunity to respond to any such leave that Pinterest may seek," and (3) giving Pintrips three "business days to notify the investor or potential investor that a subpoena will be forthcoming, prior to Pinterest issuing the subpoena." (Def.'s Mot. Protective Order at 3, 4, Dkt. No. 73 (emphasis supplied); Proposed Order, Dkt. No. 73-1.)
Pintrips argued that such an order was warranted for three reasons. First, it claimed that Pinterest should be required to propound discovery on already-identified sources before seeking information from third-party investors. (Id. at 6, 7.) Second, it argued that Pinterest was deliberately raising the costs of litigation by not following this approach.
In ruling on Pintrips' motion for a protective order, the Court referred back to its August 7 order and reiterated that Pintrips' concern about investors withdrawing funding or deterring potential investors from providing funding was speculation. (Sept. 4, 2014 Order at 2, Dkt. No. 83.) It also rejected the argument that Pinterest was engaging in a fishing expedition or other conduct warranting judicial intervention. (Id. at 3.) The Court thus denied Pintrips' motion for a protective order, as it had not made the requisite showing. (Id. at 3-4.) Pintrips was to "supplement its responses to interrogator[y] nos. 16 and 17, as set forth in this Court's August 7, 2014 order, by no later than September 8, 2014." (Id. at 4.)
When Pintrips failed to comply a second time, Pinterest moved for sanctions.
Federal Rule of Civil Procedure 37 provides:
Fed. R. Civ. P. 37(b)(2). The rule also authorizes the court where the action is pending to order sanctions when:
Fed. R. Civ. P. 37(d)(1)(A). "Sanctions may include any of the orders listed in Rule 37(b)(2)(A)(i)-(vi)," and "[i]nstead of or in addition to these sanctions the court must require the party failing to act, the attorney advising that party, or both to pay the reasonable expenses, including attorney's fees, caused by the failure, unless the failure was substantially justified or other circumstances make an award of expenses unjust." Fed. R. Civ. P. 37(d)(3).
In this district, Civil Local Rule 37-4 requires a party seeking sanctions, including an award of attorneys' fees, in connection with a dispute about disclosure or discovery under Rule 37 to file a declaration: (1) stating the facts and circumstances supporting the motion, (2) describing the party's efforts to secure compliance without court intervention, and (3) "itemiz[ing] with particularity the otherwise unnecessary expenses, including attorney fees," incurred as a result of the other party's violation. The moving party must also provide appropriate justification for the hourly rates claimed. (Id.)
Here, Pinterest seeks sanctions based on Pintrips' failure to comply with two orders of this Court and its "related gamesmanship." (Pl.'s Mot. at 1, Dkt. No. 102.) Specifically, it claims that Pintrips has not identified the certain advisors with whom its CEO has discussed Pinterest or this litigation. (Id. at 1, 2; 1st Thompson Decl. ¶¶ 19, 22, Dkt. No. 102-1.) It seeks an order requiring Pintrips and its law firm to pay at least $26,250 in attorneys' fees incurred as a result of their failure to do so.
In its opposition, Pintrips argues that it provided the requested information months ago. (Def.'s Opp'n at 1.) It asserts that it has not disobeyed or otherwise failed to comply with any court order. (Id.) According to Pintrips:
(Def.'s Opp'n at 1-2.)
Pintrips' position is not persuasive. Indeed, the Court noted this argument when it denied the motion for a protective order. (See Sept. 4, 2014 Order at 1 n.1 ("[Pintrips] asserts that it has identified three advisors during discovery, and that if [Pinterest] `really wanted to obtain information from third parties regarding [Pintrips'] communications with its advisors' it could have obtained the information from the advisors [Pintrips] lists on its website.").) Notwithstanding that argument, the Court ordered Pintrips to "supplement its responses to interrogator[y] nos. 16 and 17, as set forth in this Court's August 7, 2014 order." (Sept. 4, 2014 Order at 4.)
Pintrips' most recent responses to interrogatory numbers 16 and 17 are dated October 22, 2014. (1st Thompson Decl. ¶ 22 & Ex. K at 3.) That list consists of the names of 64 "investors and potential investors." (1st Thompson Decl. Ex. K at 3.) It does not include names of any of the "certain advisors" with whom Pintrips has admittedly discussed Pinterest or this litigation, and Pintrips cannot point to any interrogatory response in which it identifies the certain advisors at issue. Nor has it directed the Court to any legal authority that stands for the proposition that a party need not respond to a propounded interrogatory where the information responsive to that interrogatory is publicly-available on the Internet.
For these reasons, Pintrips has not answered interrogatory numbers 16 and 17 as required by this Court's previous orders.
During the hearing on the motion, Pintrips began by explaining, unsuccessfully, why it believed that it had complied with the Court's prior orders. It then proceeded to offer unacceptable excuses for its noncompliance.
Pinterest first argued that an award of expenses would be unjust given its belief that it had complied with the Court's orders when it incorporated its September 4, 2014 list of "investors and potential investors" into a formal supplemental interrogatory response, dated October 22, 2014. This belief is unfounded. According to Pintrips, the parties had reached an understanding that all Pintrips needed to do to sufficiently respond to interrogatory numbers 16 and 17 was to formalize the September 4, 2014 list as a supplemental interrogatory response. Pintrips represents that it did so on October 22, 2014, and as a result, thought it had complied with the Court's orders. Yet, when asked whether the list of investors and potential investors included in its October 22, 2014 responses included the names of the certain advisors at issue, Pintrips responded, "no."
Pintrips then asserted that identifying the certain advisors its CEO alluded to in the company's interrogatory responses was a matter of "burden and memory tests." This is unconvincing. An earlier version of Pintrips' interrogatory responses indicated that Mr. Gotlieb discussed the above-captioned litigation with potential investors and certain advisors on several occasions, so he remembers talking to these certain advisors. (July 28, 2014 Joint Ltr., Dkt. No. 63.) After all, he has repeatedly emphasized that his company is a "small, closely-held start-up." (See Dec. 9, 2014 Gotlieb Decl., Dkt. No. 120-1 ¶¶ 4, 5; see also Aug. 21, 2014 Gotlieb Decl. ¶ 8.) Pintrips' next argument—that identifying these certain advisors would have required it "to go through documents it had produced"—is equally unpersuasive. Pintrips has offered nothing to support its assertion that identifying these certain advisors was, as it claims, "virtually an impossible task."
In light of the above, the Court finds that Pintrips' conduct was not substantially justified.
Pinterest asks that Pintrips and its law firm pay at least $26,250
At the hearing on the motion, Pintrips argued that an award of expenses would be unjust given its belief that it had complied with the Court's orders when it incorporated its September 4, 2014 list of "investors and potential investors" into a formal supplemental interrogatory response, dated October 22, 2014. As discussed above, this belief is unfounded. The Court does not understand how Pintrips could maintain such a belief when, in open court, it admitted that the certain advisors alluded to in Pintrips' initial responses were not identified anywhere in the company's October 22, 2014 supplemental responses. The only plausible explanation here is that Pintrips simply refused to name those advisors and did so in outright defiance of this Court's orders.
In this case, then, the Court finds that there are no circumstances that would make an award of expenses unjust.
Pinterest has established its entitlement to an award of sanctions. The next issue to be decided is whether the Court should award sanctions based on the total amount of attorneys' fees Pinterest attributes to Pintrips' misconduct.
Courts in the Ninth Circuit calculate an award of attorney's fees using the lodestar method, whereby a court multiplies "the number of hours the prevailing party reasonably expended on the litigation by a reasonable hourly rate." Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 978 (9th Cir. 2008) (citation omitted). A party seeking attorneys' fees bears the burden of demonstrating that the rates requested are "in line with the prevailing market rate of the in the community." Id. Typically, affidavits of counsel "regarding prevailing fees in the community and rate determinations in other cases . . . are satisfactory evidence of the prevailing market rate." United Steelworkers of Am. v. Phelps Dodge Corp., 896 F.2d 403, 407 (9th Cir. 1990) (citation omitted). The "community is the forum in which the district court sits." Camacho, 523 F.3d at 979 (citation omitted).
Pinterest originally requested sanctions in the amount of $22,125 based on the following: "
At the hearing on the motion, the Court alerted Pinterest to the deficiencies in its submission. The Court noted that the supporting papers did not comply with Civil Local Rule 37-4(b)(3). That rule provides that a motion for sanctions must be accompanied by competent declarations which "itemize with particularity the otherwise unnecessary expenses, including attorney fees, directly caused by the alleged violation or breach, and set forth an appropriate justification for any attorney-fee hourly rate claimed" if attorney fees or other costs or expenses are requested. Id. The Court also explained that it could not determine the reasonableness of claimed attorney fees based on estimates alone. In light of these deficiencies, the Court gave Pinterest the option of providing actual billing records or submitting a supplemental declaration that substantiated the amounts claimed, with the requisite particularity
Pinterest filed a supplemental declaration on December 23, 2014. (2d Thompson Decl., Dkt. No. 126.) In the filing, Pinterest once again requests an increased amount of attorneys' fees, this time increasing the total amount sought to $31,962.50. (Id. ¶ 42.) Even assuming that Pinterest could be entitled to that amount despite its failure to request it in its original moving papers, the Court finds that only $9,075 is a reasonable amount of attorney fees to award as a sanction.
The reduction is not based on the reasonableness of the hourly rates claimed, $375.00 for Mr. Thompson, and $350.00 for Ms. Levich, or the reasonableness of the hours billed for particular tasks. This Court is aware of the prevailing rates in the community for similar services performed by attorneys of comparable skill, experience, and reputation, and it finds that both the hourly rates claimed and the hours billed for specific tasks are reasonable. See, e.g., Recouvreur v. Carreon, 940 F.Supp.2d 1063, 1070 (N.D. Cal. 2013) (finding an ordinary billing rate of $300 per hour reasonable for a lawyer in private practice); see also 2d Thompson Decl., Ex. B. Rather, the reduction is warranted based on the Pinterest's failure to remedy the deficiencies the Court highlighted during the hearing on the motion, namely, that relying on estimates is insufficient, as it precludes the Court from properly scrutinizing the amounts claimed.
For example, the supplemental declaration contains such entries as:
(2d Thompson Decl. ¶¶ 28, 34, 36 (emphasis supplied).)
It is unclear why Pinterest relied on estimates in its supplemental declaration. In the filing, counsel states in preparing it, he reviewed his firm's billing reports. (2d Thompson Decl. ¶ 1.) According to him, the reports "identify the dates services were performed, a description of the services performed that day, the name of the attorney who performed the services, the number of hours devoted to those services, and the monetary value of those services." (Id.) Yet, instead of providing the actual billing reports, which would have provided the Court will actual time expended on tasks, Pinterest has instead relied solely on its counsel's declaration. That declaration, however, seems internally inconsistent. On the one hand, counsel states that the firm's billing reports provide specifics. On the other hand, he provides estimates on the time he spent on certain tasks, and he gives a date range, rather than a date certain, during which he completed certain work. In light of this, then, the Court questions the accuracy of any estimates provided by counsel, and given that Pinterest declined the Court's invitation to provide actual billing records,
For the reasons set forth above, Pinterest's motion for sanctions is GRANTED. Pintrips and its law firm, Kenyon and Kenyon LLP, are hereby sanctioned in the amount of $9,075. Both are jointly and severally liable for payment, which is to be made to Pinterest by no later than March 13, 2015.
