NATHANIEL M. GORTON, District Judge.
This is a patent infringement case in which plaintiffs Momenta Pharmaceuticals, Inc. and Sandoz Inc. (collectively, "Momenta" or "plaintiffs") claim that defendants Amphastar Pharmaceuticals, Inc., International Medication Systems, Ltd., Actavis, Inc. and Watson Pharma, Inc. (collectively, "Amphastar" or "defendants") infringed their patent during the course of defendants' manufacture and sale of generic enoxaparin products.
The instant dispute concerns the amount of attorney's fees and costs that Amphastar is to pay Momenta in connection with the imposition of sanctions ordered by a magistrate judge and confirmed by a district judge pursuant to Fed. R. Civ. P. 37 (b) (2) (C). Pending before the Court is Momenta's submission of attorney's fees and costs ("the fee submission"). For the following reasons, the Court will award Momenta $343,863 in fees and $8,522 in costs.
In July, 2010, after receiving approval from the United States Food and Drug Administration ("the FDA"), Momenta began to market the first generic version of Lovenox (otherwise known as enoxaparin) in the United States. Enoxaparin is an anticoagulant used to prevent blood clots. Momenta is the assignee of the '886 patent, issued in August, 2009, which is directed at a set of manufacturing control processes that ensure that each batch of generic enoxaparin includes the individual sugar chains characteristic of Lovenox.
Amphastar received FDA approval to market its generic enoxaparin product in September, 2011. Momenta initiated this action two days later by filing a complaint alleging that Amphastar infringed the '886 patent by manufacturing generic enoxaparin for commercial sale using its patented methods.
In October, 2011, this Court allowed Momenta's motion for injunctive relief by enjoining Amphastar from advertising, offering for sale or selling allegedly infringing enoxaparin products. That decision included the preliminary finding that the safe harbor provision in 35 U.S.C. § 271 (e) (1) did not protect Amphastar's infringing activities because it used the patented process to test products after it had already obtained FDA approval, such that the use was not "reasonably related to the development and submission of information" to the FDA.
The Federal Circuit vacated the grant of the preliminary injunction in August, 2012 and found that this Court applied "an unduly narrow interpretation" of the safe harbor provision.
Shortly thereafter, this Court stayed the case pending the completion of appellate proceedings and denied all outstanding motions without prejudice. The Federal Circuit denied Momenta's petition for a hearing
This Court removed the stay in January, 2013 and Amphastar moved for summary judgment. In March, 2013, the Court allowed Momenta to re-file a motion to compel the production of testing documents and a motion for sanctions, both of which had been denied without prejudice at the time of the stay.
The United States Supreme Court denied Momenta's petition for certiorari in June, 2013. Shortly thereafter this Court entered summary judgment in Amphastar's favor, finding that its activities fell under the safe harbor provision and therefore did not infringe. The Court entered final judgment on Momenta's infringement claims in January, 2014.
In November, 2015, the Federal Circuit vacated the grant of summary judgment with respect to that finding.
The Federal Circuit denied Amphastar's petition for a hearing
In March, 2016, the parties informed this Court of an outstanding issue in connection with a prior imposition of sanctions by the magistrate judge upon defendants for violating certain discovery-related orders.
In December, 2013, Magistrate Judge Robert B. Collings imposed sanctions upon Amphastar after finding that it disobeyed his June 12, 2012 order ("the June 12th order") and June 27, 2012 order ("the June 27th order") by failing to produce 1) documents concerning its testing of certain batches of generic enoxaparin products, 2) unredacted copies of documents previously produced in redacted form and 3) a complete copy of all amendments to any Abbreviated New Drug Application ("ANDA") filed by any defendant. He concluded that sanctions were warranted under Rule 37 (b) (2) (C) and directed Momenta to submit
Amphastar filed objections to the imposition of sanctions which this Court overruled in January, 2014.
Momenta filed a fee submission in December, 2013 which sought 1) $735,209 in fees for work caused by Amphastar's violations of the June, 2012 orders, 2) $70,205 in fees for the preparation of the fee submission and 3) $8,522 in costs caused by those violations. Momenta later informed the Court in footnote 2 of its reply memorandum that there were "two minor errors in the[] Fee Submission" which reduced the requested award by $6,000.
Momenta now seeks $799,414 in fees and $8,522 in costs, figures which Amphastar fervently contests.
Rule 37 provides that a court
Fed. R. Civ. P. 37 (b) (2) (C). The party seeking fees and costs has the burden of showing that the expenses claimed are reasonable and traceable to the failures of the disobedient party.
A court has extremely broad discretion to determine the reasonable fees and costs to award to the entitled party.
Although the lodestar figure represents the "presumptively reasonable fee",
Momenta seeks to recover $799,414 in fees and $8,522 in costs. Amphastar asks the Court to deny Momenta all fees and costs in their entirety "because of the outrageousness of the[] request" or, in the alternative, to allow only $40,368 in fees and no costs and to exclude the remainder of the claimed expenses as unreasonable, excessive or duplicative.
Upon careful consideration of the submissions by the parties, the Court finds it reasonable to award Momenta $343,863 in fees and $8,522 in costs.
To calculate the number of hours reasonably spent, courts must first determine the number of hours actually spent and deduct the number of hours which were "duplicative, unproductive, excessive, or otherwise unnecessary."
The December, 2013 order for sanctions instructed Momenta to submit documentation to support the claimed expenses "caused by" Amphastar's violations of the June, 2012 orders.
Momenta asserts that its attorneys engaged in 1,448.4 hours of work "caused by" Amphastar's violations of the June, 2012 orders. Those hours of work were performed by five partner attorneys, two "of counsel" attorneys and six associate attorneys at the law firms of Choate, Hall & Stewart LLP ("Choate") and McDermott, Will & Emery LLP ("McDermott").
Specifically, it contends that Amphastar's non-compliance caused it to perform legal work in connection with
Momenta emphasizes that it excluded from the fee submission charges for which it does not seek recovery because such work was "so intertwined with other work that the Plaintiffs would have done regardless". It regards its fee submission as "already substantially discount[ing] the fees and expenses" caused by the violations.
Momenta thus concludes that the legal work for which it seeks reimbursement was reasonable, necessary and caused by Amphastar's failure to comply with the June, 2012 orders.
Amphastar responds that only the work associated with the motion to enforce, motions for sanctions and fee submission were "caused by" its violations of the June, 2012 orders and thus recovery for any other category of work is unwarranted.
After a comprehensive review of the record, the Court finds that Momenta can properly recover for at least some portion of the work associated with the motion to enforce, motions for sanctions, Rule 56(d) motion, inspection of the ANDA materials, "other matters" and fee submission. The Court will address each category of claimed work
Momenta cannot recover fees in connection with its testing motions which sought the production of all documents concerning "finished product testing, retesting or reevaluation of any kind" for sold, inventoried or destroyed batches of enoxaparin. It filed the original testing motion one month
Similarly, the legal work associated with the interrogatories motion will not be reimbursed because that motion was also filed before the entry of the June, 2012 orders. Momenta would have had to prosecute the interrogatories motion regardless of Amphastar's recalcitrant failure to comply with the June, 2012 orders.
Amphastar concedes that at least some portion of the work related to the motion to enforce, motions for sanctions and fee submission were caused by its non-compliance.
The Rule 56(d) motion, filed in January, 2013, sought production of documents requested in the motion for sanctions which, in turn, asked for the same documents referred to in the June 12th order and the December, 2013 order for sanctions. Amphastar's violation of the June 12th order thus caused Momenta to file the Rule 56(d) motion in continued pursuit of those documents.
Amphastar's non-compliance did not, however, cause Momenta to move to amend its infringement contentions in the manner contemplated by the December, 2013 order for sanctions. If Amphastar had complied with the June, 2012 orders by producing the documents, Momenta would still have been compelled to amend its infringement contentions thereafter. The legal services that Momenta needed in connection with its motion to amend was, therefore, not "caused by" Amphastar's non-compliance.
With respect to "other matters", Amphastar's failure to produce the documents specified in the June, 2012 orders caused Momenta to draft a new motion to compel those documents, to assess the extent of Amphastar's non-compliance with the June 12th order and to prepare for a status conference during which Momenta elaborated on its allegations of Amphastar's non-compliance. The legal work associated with such "other matters" is recoverable.
Finally, Amphastar's recalcitrance caused Momenta to travel to California to inspect the ANDA documents at Amphastar's offices. The magistrate judge found in December, 2013 that 1) the June 27th order required Amphastar to deliver a complete copy of the ANDA amendments to Momenta's attorneys in Boston, 2) Amphastar produced only the transmittal letters to the amendments in reliance upon a nonsensical and "flawed . . . interpretation of what constitutes an `amendment' to the ANDA", 3) Amphastar's attorneys "deliberately rewrote the Court's order" in adopting that interpretation and 4) sanctions were warranted because failing "to disclose more than the transmittal letters
According to the April, 2013 order of the magistrate judge,
If Amphastar had timely produced the ANDA amendments as required by the June 27th order, Momenta would not have had to inspect the documents before conducting its substantive review in Boston. Amphastar's improper withholding of the ANDA amendments thus caused Momenta to conduct the inspection in California. Amphastar's arguments to the contrary are unavailing.
Accordingly, the Court will allow Momenta to recover at least some of the legal fees incurred with respect to the motion to enforce, motions for sanctions, Rule 56(d) motion, inspection in California, "other matters" and fee submission.
The Court will reduce the fees assessed for hours billed on work that was "duplicative, unproductive, excessive or otherwise unnecessary."
Amphastar contends that Momenta's attorneys at Choate spent an "extremely excessive, unavoidably duplicative, and wholly unreasonable" number of hours in preparing and prosecuting their motions for sanctions.
Specifically, defendants assert that 79.5 of the 253.7 hours of work claimed by Momenta's attorneys at Choate in connection with those motions were "unnecessary" because the attorneys spent 1) 66.25 hours drafting reply memoranda that they ultimately did not file, 2) 10.5 hours in document review, 3) 1.7 hours of work during "the interim time period after the Court's hearing on the Re-Filed Sanctions motion but before the Court's Order" and 4) 1 hour assessing "Amphastar's compliance with the Court's June 27, 2012 order, [before] the date for compliance had [] passed".
The Court finds that the legal fees incurred by Momenta with respect to its motions for sanctions was excessive and that a reduction of those fees by 25% is reasonable.
Amphastar seeks to exclude about 40 hours of work performed by a senior associate in reviewing and redacting client bills because "[c]lerical or administrative tasks cannot be billed at lawyer rates . . . even when a lawyer performs them",
Momenta responds that the disputed hours involved "tasks that had to be performed by a lawyer" such as 1) analyzing 300 pages of monthly invoices and time records in order to identify hours of compensable work and 2) reviewing the records for privilege. Amphastar counters that "[a]pproximately 90% of the 300 pages are client bills" which should have required only a few hours of review.
The Court agrees with Momenta. Examples of clerical or administrative tasks include
Courts in the First Circuit Court of Appeals
Attorney Michael E. Murawski ("Attorney Murawski") recorded 10.2 hours of time spent flying between Boston and California and commuting to and from Amphastar's offices. His travel hours will be reduced by 5.1 hours.
Attorney Jessica Gan Lee ("Attorney Lee") recorded 21.6 hours of time spent flying and commuting to and from Amphastar's offices. Her travel hours will be reduced by 10.8 hours.
Attorney Sophie F. Wang ("Attorney Wang") recorded 16.1 hours of time spent traveling to and from Amphastar's offices in California. Her travel hours will be reduced by 8.1 hours.
The fee submission reported no other travel time with the exception of an entry by Attorney Thomas. P. Steindler ("Attorney Steindler") who, on July 1, 2013, "[p]repare[d] for and attend[ed] summary judgment hearing and sanctions hearing and return travel (5.0)". Because Attorney Steindler does not specify the amount of time that he spent traveling, the Court will treat the entry as a block billed record subject to a 20% global reduction. The Court will reduce his 5 hours of work by 1 hour.
Accordingly, the Court will deduct 1 hour of work performed by partner attorneys and 24 hours of work performed by associate attorneys to account for the travel time.
The term "block billing" refers to the time-keeping method of "itemiz[ing] several tasks within a single time entry rather than maintaining separate time entries for each task performed".
If the block billed records submitted by the moving party are "rife with questionable entries", courts have broad discretion to apply across-the-board global reductions to the fee requests.
In its fee submission, Momenta presents monthly invoices for services performed by its attorneys from Choate and McDermott. The invoices from Choate contain block billed entries describing the completed tasks, relevant communications and the purpose of memoranda drafted. Those contemporaneous records and explanations would render the use of block billing "not unreasonable",
For example, on June 20, 2012, Attorney Murawksi recorded 5.4 hours of work for reviewing "discovery motions filed with the court concerning Amphastar's failure to answer discovery and produce documents" and performing a separate, unknown and redacted task. In the "Hours" column, Murawski recorded 5.4 hours of work under which Momenta has since added a boxed notation of 2.0 hours. Momenta does not explain the nature of the redacted activity in that record or its method of estimating 2.0 hours of claimed work and 3.4 hours of unclaimed work.
Many of the entries submitted by Momenta's attorneys from Choate contain similarly redacted activities and reduced hours. The Court lacks sufficient information to determine whether the hours in those entries were reasonably attributable to defendants' sanctionable conduct. The Court therefore deems a 20% global reduction to the hours recorded by Choate attorneys reasonable.
Accordingly, the fees incurred for hours expended by Momenta's attorneys from Choate will be globally reduced by 20%.
The Court will not, however, apply the global reduction to the hours recorded by Momenta's attorneys from McDermott because their block billed entries include contemporaneous records of the amount of time spent on each activity within each entry.
The moving party must demonstrate the reasonableness of its requested rates through evidence, such as affidavits from the reporting attorneys, that its rates are consistent with those "prevailing in the community for similar services by lawyers of reasonably comparable skill, experience and reputation."
Momenta submits that it is reasonable for 1) its partner attorneys,
It presents affidavits from Attorneys Frank and Steindler and declares that those hourly rates are the standard billing rates charged to its clients and are comparable to the rates billed by intellectual property and business litigation attorneys with similar experience, reputation and skill at peer firms.
Attorney Frank claims that the rates charged by the Choate attorneys are competitive with the rates charged by other major law firms with principal offices in Boston based upon the results of a survey conducted by an independent consulting firm in 2013 ("the 2013 survey"). He also suggests that the hourly rates at Choate are "in many instances [] lower than other Boston firms that have similar patent litigation practices."
Attorney Steindler proffers that the rates charged by the McDermott attorneys are "competitive with those charged by other premier national firms operating in Boston" based upon aggregated data from peer law firms.
Amphastar asks the Court to discredit Attorney Frank's declarations that the Choate rates are competitive because the 2013 survey excluded data from comparable firms that operate in Boston but have their principal offices elsewhere. By relying on the results from that survey, Amphastar alleges, Momenta departs from the "prevailing market rate" standard and redefines "community" to include only attorneys employed in Boston by law firms with principal offices in Boston.
The Court is persuaded by Amphastar that Momenta relied upon a survey that improperly excluded data from attorneys employed in Boston by law firms without principal offices in Boston. The inquiry with respect to whether the requested rates are reasonable focuses on the comparison between the requested rates and those charged by similarly credentialed
Amphastar further contends that, based upon the results from a survey by its own independent consulting firm, the prevailing market rates for similarly experienced attorneys in the community fall between 1) $491 and $780 for partner attorneys, 2) $409 and $515 for "of counsel" attorneys and 3) $369 and $451 for associate attorneys. The survey results upon which it relies, however, are over-inclusive because they include billing data from attorneys working in various practice areas, which vary by hourly rate, rather than only from attorneys who practice intellectual property law.
The Court will allow Momenta to recover fees based upon reasonable hourly rates of 1) $800 for each of the five partner attorneys from Choate and McDermott, 2) $600 for each of the two "of counsel" attorneys from McDermott and 3) $475 for each of the six associate attorneys from Choate. Those hourly rates are in line with those charged by similarly experienced patent litigators in the Boston community.
Accordingly, the lodestar figure is $343,863 as shown below:
Amphastar requests that the lodestar figure undergo a further reduction because 1) Momenta engaged in "wasteful litigation" by filing a
2) Momenta opted not to inspect the ANDA materials in California in June, 2012 and instead waited until April, 2013 to conduct the inspection and thus 3) the requested award of over $800,000 is disproportionate to the results that Momenta obtained. Amphastar further contends that the requested award of over $800,000 is "unprecedented" in every circuit.
As discussed above, the legal work relating to the motion to enforce, motions for sanctions, Rule 56(d) motion, inspection in California, "other matters" and fee submission was part of Momenta's legitimate efforts to enforce the June, 2012 orders. That litigation was caused by Amphastar's violations and was neither wasteful nor superfluous. The Federal Circuit decision in August, 2012 did not excuse Amphastar's compliance with the June, 2012 orders or preclude the imposition of sanctions upon it for violating those orders.
Accordingly, the Court finds that an award of $343,863 of legal fees incurred by Momenta in connection with the sanctionable conduct of defendants is not disproportionate in this action in which the damages may exceed $160 million.
The Court will also award Momenta $8,522 in travel and subsistence costs incurred by Attorneys Murawksi, Lee and Wang in connection with their April, 2013 inspection of the ANDA files in California. Those costs were caused by Amphastar's violations and reasonably incurred. The Court makes that finding in light of the April, 2013 order by the magistrate judge concluding that Amphastar's non-compliance with the June 27th order left him with "no viable alternative but to require plaintiff[s'] counsel to inspect" the ANDA materials in Boston or California. The magistrate judge forewarned counsel in the order that
Accordingly, the Court will award Momenta $8,522 in costs.
For the foregoing reasons, and in consideration of plaintiffs' submission for fees and costs (Docket No. 545), plaintiffs are awarded $343,863 in fees and $8,522 in costs.