Riley v. Quantumscape Corp.

1

2

3 UNITED STATES DISTRICT COURT

4 NORTHERN DISTRICT OF CALIFORNIA

5 SAN JOSE DIVISION

6

7 GILBERT RILEY, Case No. 22-cv-03871-BLF

8 Petitioner,

ORDER GRANTING IN PART

9 v. MOTION FOR ATTORNEYS’ FEES

AND COSTS AND AN AWARD OF

10 QUANTUMSCAPE CORP., POST-JUDGMENT INTEREST

11 Respondent. [Re: ECF No. 49]

12

13 Before the Court is Respondent QuantumScape Corporation’s motion for attorneys’ fees

14 and costs and an award of post-judgment interest. See Mot., ECF No. 49. QuantumScape seeks

15 from Petitioner Gilbert Riley fees and costs related to QuantumScape’s opposition to Riley’s

16 petition to vacate an arbitration award and QuantumScape’s cross-motion to confirm the same.

17 QuantumScape also seeks post-judgment interest under 28 U.S.C. § 1961. Riley opposes the

18 motion. Opp’n ECF No. 54. QuantumScape has replied. Reply, ECF No. 55.

19 The Court found this matter suitable for determination without oral argument. See Order,

20 ECF No. 56. For the following reasons, the Court GRANTS IN PART QuantumScape’s motion.

21 I. BACKGROUND

22 On February 26, 2021, Gilbert Riley initiated an arbitration against QuantumScape after

23 QuantumScape terminated his employment. Decl. of David Marek Supp. Pet. to Vacate

24 Arbitration Award (“Marek Decl.”) Ex. 2, at 1-2 (“Arb. Demand”), ECF No. 2-2. Riley sought to

25 recover shares or the value of shares in QuantumScape of which he was allegedly deprived after

26 his termination. Id. at 9.

27 On June 15, 2022, the Arbitrator issued a Final Award. See Marek Decl. Ex. 34 (“Final

1 awarded QuantumScape fees and costs. Id. at 15.

2 On June 30, 2022, Riley petitioned this Court to vacate the arbitration award. See Pet.,

3 ECF No. 1. Riley argued multiple bases for vacatur under both the Federal Arbitration Act and

4 California Arbitration Act. See Mem. Supp. Pet. Vacate 11, ECF No. 17. Riley asserted that the

5 Arbitrator exhibited bias under both an evident-partiality theory and a failure-to-disclose theory.

6 See id. at 14-20. Riley also asserted that the Arbitrator’s award reflected a manifest disregard of

7 the law in multiple respects. See id. at 20-25. QuantumScape cross-moved to confirm the

8 arbitration award. See Cross-Mot., ECF No. 27.

9 After hearing oral argument, this Court issued an order denying Riley’s petition and

10 granting QuantumScape’s cross-motion. Order, ECF No. 43.

11 QuantumScape now seeks fees and costs under the parties’ Separation Agreement and

12 Release (“Separation Agreement”) and Consulting Agreement. Mot. 2. The Arbitrator already

13 awarded QuantumScape fees and costs for its work in the underlying arbitration. QuantumScape’s

14 request before this Court thus primarily concerns QuantumScape’s attorneys’ work in opposing

15 Riley’s petition to vacate the arbitration award and cross-moving to confirm the arbitration award.

16 II. LEGAL STANDARD

17 California Civil Code § 1717(a), which governs fee applications stemming from contract

18 actions, provides:

19 In any action on a contract, where the contract specifically provides

that attorney's fees and costs, which are incurred to enforce that

20 contract, shall be awarded either to one of the parties or to the

prevailing party, then the party who is determined to be

21 the party prevailing on the contract, whether he or she is the party

specified in the contract or not, shall be entitled to reasonable

22 attorney’s fees in addition to other costs.

Cal. Civ. Code § 1717(a).

23

The Court determines whether a party has prevailed on the contract for the purposes of

24

awarding fees. Cal. Civ. Code § 1717(b)(1). “As long as the action ‘involve[s]’ a contract it is

25

‘on [the] contact’ within the meaning of section 1717.” Brown Bark III, L.P. v. Haver, 219 Cal.

26

App. 4th 809, 821 (2013) (alterations in original).

27

III. DISCUSSION

1

A. Entitlement to Fees Under the Agreements

2

QuantumScape seeks fees under the parties’ Separation Agreement and Consulting

3

Agreement. Mot. 2. The agreements provide as follows:

4

Attorneys’ Fees. Except with regard to a legal action challenging or

5 seeking a determination in good faith of the validity of the waiver

herein under the ADEA, in the event that either Party brings an action

6 to enforce or effect this Agreement, the prevailing Party shall be

entitled to recover its costs and expenses, including the costs of

7 mediation, arbitration, litigation, court fees, and reasonable attorneys’

fees incurred in connection with such action.

8

Separation Agreement § 24.

9 Attorneys’ Fees. In any court action at law or equity that is brought

by one of the Parties to this Agreement to enforce or interpret

10 provisions of this Agreement, the prevailing Party will be entitled to

reasonable attorneys’ fees, in addition to any other relief to which that

11 Party may be entitled.

12 Consulting Agreement § H.

13 Riley opposes QuantumScape’s request. Riley argues that the Court should deny

14 QuantumScape’s motion based on “principles of equity” because: (1) QuantumScape has “unclean

15 hands” due to what Riley viewed as QuantumScape’s improper conduct in arbitration; (2) the

16 contract lacked mutuality; and (3) the Separation Agreement is unenforceable under McLaren

17 Macomb, 372 N.L.R.B. No. 58 (2023). Id. at 3.

18 QuantumScape replies to each of Riley’s arguments. QuantumScape argues that Riley’s

19 “unclean hands” argument fails because QuantumScape did not engage in misconduct and the fees

20 QuantumScape seeks arose from properly opposing Riley’s motion to vacate. Reply 1-2.

21 QuantumScape argues that Riley’s lack-of-mutuality argument has already been rejected by this

22 Court and fails because Riley conceded that he engaged in extensive negotiations over the terms of

23 the agreements. Id. at 2. Finally, QuantumScape argues that McLaren Macomb is inapplicable

24 here for multiple reasons, and even if the Separation Agreement were unenforceable under that

25 decision, QuantumScape would be entitled to fees under the Consulting Agreement. Id. at 2.

26 The Court first addresses Riley’s argument that QuantumScape should be denied fees

27 under the “unclean hands” doctrine. “The defense of unclean hands arises from the maxim, ‘He

1 270, 278 (2008) (quoting Kendall-Jackson Winery, Ltd. v. Superior Ct., 76 Cal. App. 4th 970, 978

2 (1999)). The defense requires “unconscionable, bad faith, or inequitable conduct by the plaintiff

3 in connection with the matter in controversy.” Id. (quoting Fladeboe v. American Isuzu Motors,

4 Inc. 150 Cal. App. 4th 42, 56 (2007)). “Whether the defense applies in particular circumstances

5 depends on the analogous case law, the nature of the misconduct, and the relationship of the

6 misconduct to the claimed injuries.” Id. (quoting Fladeboe, 15 Cal. App. 4th at 56).

7 As an initial matter, Riley has not pointed the court to “analogous case law.” None of the

8 cases Riley cites analyzes a situation in which a party challenged a fee award under the “unclean

9 hands” doctrine. See PLCM Grp. v. Drexler, 22 Cal. 4th 1084, 1088, 1095 (2000) (holding that an

10 entity that is represented by in-house counsel may recover attorney fees under California Civil

11 Code § 1717 and affirming a fee award); Kendall-Jackson, 76 Cal. App. 4th at 974, 985 (holding

12 that “unclean hands” may be raised as a defense to a malicious prosecution claim based on

13 misconduct connected to the subject matter of a litigation that affects the equitable relations

14 between the litigants); Mendoza, 169 Cal. App. 4th 270, 275, 279 (holding that the “unclean

15 hands” doctrine may not be raised as an affirmative defense to a claim under California’s

16 Immigration Consultants Act).

17 Riley has also not identified any “unconscionable, bad faith, or inequitable conduct” that

18 would trigger the “unclean hands” doctrine. As Riley correctly notes, this Court stated in its order

19 confirming the arbitration award that certain processes followed by QuantumScape’s counsel and

20 the Arbitrator were “sloppy.” See Riley v. QuantumScape Corp., No. 22-CV-03871-BLF, 2023

21 WL 1475092, at *9 (N.D. Cal. Feb. 2, 2023). But Riley does not show how such sloppiness rises

22 to the level of unconscionable, bad faith, or inequitable conduct that would trigger the “unclean

23 hands” doctrine. Nor does Riley offer any substantive explanation about why any of the other

24 conduct he challenged would trigger the doctrine. Accordingly, the Court finds that a fee award is

25 not barred by the “unclean hands” doctrine here.

26 Riley’s second argument is similarly unavailing. Riley asserts that “the equities should

27 prohibit [QuantumScape] from getting additional fees based on a ‘take it or leave it’ contract that

1 arrangement while Respondent received substantial monetary and non-monetary benefits.” Opp’n

2 3. But Riley does not develop his argument beyond this sentence. And it is not the Court’s duty

3 to formulate Riley’s argument for him. Cf. Foskaris v. Experian Info. Sols., Inc., 808 F. App'x

4 436, 440 (9th Cir. 2020) (“It is not the court's duty, however, to peruse the record to formulate the

5 parties’ arguments.”). Moreover, the Arbitrator already determined that the Separation Agreement

6 was supported by adequate consideration, and this Court already determined that the arbitrator’s

7 decision was not contrary to law. Riley, 2023 WL 1475092, at *16. Thus, Riley has not shown

8 any reason to disregard the fees provisions to which he and QuantumScape agreed when they

9 formed their agreements.

10 Finally, Riley’s reliance on McLaren Macomb to argue that the Separation Agreement is

11 unenforceable is misplaced. Riley asserts based on McLaren Macomb that “a separation

12 agreement with broad confidentiality and/or non-disparagement provisions is unenforceable as a

13 matter of law.” See Opp’n 3. But Riley does not analyze the terms of any provision in the

14 Separation Agreement to explain why the provision would fall within the proscription described in

15 McLaren Macomb. This is particularly troubling given the Board’s emphasis in McLaren

16 Macomb on the importance of the terms of the agreement. See 372 N.L.R.B. No. 58, at *11 (“Our

17 main disagreement with the dissent’s adherence to Baylor and IGT is the refusal in those cases to

18 analyze the terms of the severance agreements.”); see also id. at *5 (stating that in determining

19 whether a severance agreement is unlawful “we will examine . . . the language of the agreement”).

20 Moreover, Riley does not explain why McLaren Macomb would render the fees provision here

21 unenforceable, and if so, why this Court should follow the Board’s non-binding decision. Finally,

22 Riley does not explain how a finding that the fees provision in the Separation Agreement is

23 unenforceable would render the fees provision in the separate Consulting Agreement

24 unenforceable. For all these reasons, the Court finds Riley’s invocation of McLaren Macomb

25 unpersuasive.

26 In sum, the Court finds that QuantumScape has established its entitlement to fees as a

27 prevailing party under the plain terms of the agreement, and none of the “principles of equity”

B. Reasonableness of QuantumScape’s Fees Request

1

Under California law, courts use the lodestar calculation, which “begins with a touchstone

2

or lodestar, based on the ‘careful compilation of time spent and reasonable hourly compensation of

3

each attorney.’” Ketchum v. Moses, 24 Cal. 4th 1122, 1131-32 (2001) (quoting Serrano v. Priest,

4

20 Cal. 3d 25, 48 (1977)); see also PLCM, 22 Cal. 4th at 1095 (“the fee setting inquiry in

5

California ordinarily begins with the ‘lodestar.’”). “The reasonable hourly rate is that prevailing in

6

the community for similar work.” PLCM, 22 Cal. 4th at 1095. “The lodestar figure may then be

7

adjusted, based on consideration of factors specific to the case,” including “the nature of the

8

litigation, its difficulty, the amount involved, the skill required in its handling, the skill employed,

9

the attention given, the success or failure, and other circumstances in the case.” Id. at 1095-96.

10

1. Hourly Rate

11

“Generally, in calculating the lodestar, ‘[t]he reasonable hourly rate is that prevailing in

12

the community for similar work.’” Rey v. Madera Unified Sch. Dist., 203 Cal. App. 4th 1223,

13

1241 (2012) (quoting PLCM, 22 Cal. 4th at 1095). “To inform and assist the court in the exercise

14

of its discretion, the burden is on the fee applicant to produce satisfactory evidence—in addition to

15

the attorney’s own affidavits—that the requested rates are in line with those prevailing in the

16

community for similar services by lawyers of reasonably comparable skill, experience and

17

reputation.” Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 980 (9th Cir. 2008) (quoting Blum v.

18

Stenson, 465 U.S. 886, 895 n.11 (1984)).

19

QuantumScape was represented by five attorneys from the law firm of Wilson Sonsini

20

Goodrich & Rosati (“Wilson Sonsini”). The attorneys were Marina Tsatalis, Matthew Gorman,

21

Alison Renner, Neil Gulyako, and Heather Diles. Tsatalis Decl. ¶¶ 16, 20.

22

Ms. Tsatalis has been a partner at Wilson Sonsini for 21 years. Tsatalis Decl. ¶ 5. She

23

graduated cum laude from Harvard Law School in 1992. Tsatalis Decl. ¶ 3; see also Tsatalis Decl.

24

Ex. 1 (“Tsatalis Bio”), ECF No. 49-2. She has exclusively practiced employment and trade secret

25

litigation throughout her 30 years of practice and is the head of the firm’s employment and trade

26

secret litigation practice. Tsatalis Decl. ¶¶ 4-5. QuantumScape seeks to recover fees for Ms.

27

Tsatalis at a billing rate of $1,430/hour. Id. ¶ 20.

1 Mr. Gorman is Of Counsel in Wilson Sonsini’s Boston office. Tsatalis Decl. ¶ 16.a; see

2 also Tsatalis Decl. Ex. 9 (“Gorman Bio.”), ECF No. 49-10. He graduated from New York

3 University Law School in 2010. Gorman Bio. QuantumScape seeks to recover fees for Mr.

4 Gorman at a billing rate of $1,010/hour. Tsatalis Decl. ¶ 16.a.

5 Ms. Renner is an associate in Wilson Sonsini’s New York Office. Tsatalis Decl. ¶ 12.d; see

6 also Tsatalis Decl. Ex. 12 (“Renner Bio”), ECF No. 49-13. She graduated from Fordham

7 University Law School in 2013. Renner Bio. QuantumScape seeks to recover fees for Ms.

8 Renner at a billing rate of $1,010/hour. Tsatalis Decl. ¶ 16.d.

9 Mr. Gulyako joined Wilson Sonsini in 2019 and is an associate in the firm’s New York

10 office. Tsatalis Decl. ¶ 16.b; see also Tsatalis Decl. Ex. 10 (“Gulyako Bio”), ECF No. 49-11. It is

11 unclear from QuantumScape’s filings when Mr. Gulyako graduated from law school.

12 QuantumScape seeks to recover fees for Mr. Gulyako at a billing rate of $940/hour. Tsatalis Decl.

13 ¶ 16.b.

14 Ms. Diles is an associate in Wilson Sonsini’s New York office. Tsatalis Decl. ¶ 16.c; see

15 also Tsatalis Decl. Ex. 11 (“Diles Bio”); ECF No. 49-12. She graduated magna cum laude from

16 New York University Law School in 2017. Diles Bio. QuantumScape seeks to recover fees for

17 Ms. Diles at a billing rate of $875/hour. Tsatalis Decl. ¶ 16.c.

18 In addition to the attorneys above, QuantumScape was represented by four support staff.

19 Tsatalis Decl. ¶¶ 16.e., 20. QuantumScape seeks to recover fees for the support staff at rates

20 ranging from $250/hour to $500/hour. Id.

21 QuantumScape argues that these rates are reasonable because (1) they reflect the skills and

22 experience of the particular attorney and the firm’s assessment of market rates for attorneys at

23 comparable law firms and (2) are consistent with billing rates at “comparable law firms” in the

24 Bay Area according to a survey by Price Waterhouse. Tsatalis Decl. ¶ 17. Riley responds that

25 QuantumScape has not demonstrated that its rates are reasonable because QuantumScape relies

26 solely on the Tsatalis Declaration. Opp’n 7. Riley notes that QuantumScape provides no

27 affidavits from other attorneys and does not rely on rate determinations in other cases. Id. Riley

1 The Court agrees with Riley that QuantumScape has not demonstrated that its requested

2 rates are comparable to those prevailing in the community. Ms. Tsatalis asserts in her declaration

3 that the rates “reflect the rates that were billed to and paid by firm clients (including Respondent,

4 with a 10% discount” and are based on Wilson Sonsini’s “assessment of the market rates for

5 attorneys and staff at firms of similar size and reputation.” Tsatalis Decl. ¶ 17. But a law firm’s

6 own billing rates are not the only factor considered, and Ms. Tsatalis provides no information

7 about what the firm’s assessment of market rates entailed. Nor does she provide examples of any

8 rates other than those that Wilson Sonsini charged in this case or any comparable awards in the

9 Northern District of California. Ms. Tsatalis also asserts that the rates are reasonable because they

10 are “consistent with hourly rates for attorneys with comparable seniority” charged by “comparable

11 law firms in the San Francisco Bay Area and Silicon Valley” according to Price Waterhouse’s

12 survey of 2022 billing rates. Tsatalis Decl. ¶ 17. But Ms. Tsatalis provides no details about what

13 “comparable law firm” means or what these comparable law firms charge. Nor does she attach the

14 survey to her declaration.

15 Tellingly, the cases QuantumScape cites in its briefing show lower prevailing rates in the

16 community than the rates QuantumScape requests. Carter v. Jai-Put Enter. Inc., No. 18-CV-

17 06313-DMR, 2022 WL 4371503, at *11-13 (N.D. Cal. Sept. 21, 2022) (finding that rates of $850

18 for lead counsel who was a 1988 law graduate, $325 for a 2014 law graduate, $300 for a 2019 law

19 graduate, and $165 for a paralegal were reasonable); Andrews v. Equinox Holdings, Inc., 570 F.

20 Supp. 3d 803, 807-08 (N.D. Cal. 2021) (finding that rates of $1,250 for the founding partner of a

21 nationally recognized civil rights law firm who was a 1962 law graduate, $875 for a partner who

22 was a 1997 law graduate, $600 for a senior counsel who was a 2010 law graduate, $350 for an

23 associate who was a 2018 law graduate, and $240 for a paralegal clerk were reasonable); Hydros

24 Bottle LLC v. Stephen Gould Corp., No. 16-CV-04077-JST, 2017 WL 3453350, at *8-9 (N.D. Cal.

25 Aug. 10, 2017) (finding that rates of $735-$755 for a Principle with 20 years of litigation

26 experience and $630-$695 for a seventh-year associate were excessive).

27 Riley argues that the Court should determine reasonable hourly rates by reference to the

1 viable. The Laffey matrix is “an inflation-adjusted grid of hourly rates for lawyers of varying

2 levels of experience in Washington, D.C.” See Prison Legal News v. Schwarzenegger, 608 F.3d

3 446, 454 (9th Cir. 2010) (citations omitted). The Ninth Circuit has explained that “just because

4 the Laffey matrix has been accepted in the District of Columbia does not mean that it is a sound

5 basis for determining rates elsewhere, let alone in a legal market 3,000 miles away.” Id.

6 Accordingly, this Court declines to use the matrix. The Court likewise declines Riley’s proposal

7 to make a blanket 1/3 cut, as Riley has not made any attempt to show that the resulting rates reflect

8 the prevailing rates in the District.

9 The Court finds the rates in Andrews, a case cited by QuantumScape, informative. The

10 Andrews court determined that the requested 2021 rates were reasonable based on the opinion of

11 an expert with “extensive experience in the area of attorney billing rates in this district” who “has

12 been widely relied upon by both federal and state courts in Northern California . . . in determining

13 reasonable billing rates.” 570 F. Supp. 3d at 807. The Court finds the analysis in Andrews

14 persuasive and representative of rates awarded in comparable cases in the Northern District of

15 California. See Simon v. Maple Beach Ventures LLC, No. 21-CV-01005-PJH, 2021 WL 1907821,

16 at *4 (N.D. Cal. May 12, 2021) (“Courts also may rely on decisions by other courts awarding

17 similar rates for work in the same geographical area by attorneys with comparable levels of

18 experience.” (citing Nadarajah v. Holder, 569 F.3d 906, 917 (9th Cir. 2009))). The Court

19 recognizes that the Arbitrator approved the rates requested by QuantumScape’s counsel, but notes

20 that the order only summarily accepts the proffered rates as reasonable and does not discuss

21 comparable rates in the District. This Court is not bound by the Arbitrator’s decision on

22 reasonable rates. The Court applies the following rates based on comparators from Andrews:

23

24

25

26

27

Attorney Requested Rate Andrews Comparator: Applied Rate

1

Rate

2 Marina Tsatalis $1,430 Partner Class of 1997: $1050

Partner $875 (increased from Andrews

3

Class of 1992 comparator rate in

4 recognition of position as

head of firm’s employment

5

and trade secret litigation

6 practice)

Matthew Gorman $1,010 Senior Counsel $600

7

Of Counsel Class of 2010:

8 Class of 2010 $600

Alison Renner $1,010 Senior Counsel $600

9

Associate Class of 2010:

10 Class of 2013 $600

Neil Gulyako $940 Associate $350

11

Associate Class of 2018:

12 Unknown Class $350

Joined Firm in 2019

13

Heather Diles $875 Associate $350

14 Associate Class of 2018:

Class of 2017 $350

15

Support Staff $250-$500 Paralegal Law Clerk: $240

16 $350

17 2. Number of Hours

18 An attorney fee award should include compensation for all hours reasonably

19 spent. Ketchum, 24 Cal. 4th at 1133. “Reasonably spent means padding in the form of inefficient

20 or duplicative efforts is not subject to compensation.” Rey v. Madera Unified Sch. Dist., 203 Cal.

21 App. 4th 1223, 1243 (2012) (quoting Ketchum, 24 Cal. 4th at 1132) (internal quotations omitted).

22 The proponent of the fee request “must prove the hours sought were reasonable and necessary.”

23 Id. (citing El Escorial Owners’ Assn. v. DLC Plastering, Inc. 154 Cal. App. 4th 1337, 1366

24 (2007)).

25 Before turning to the parties’ substantive arguments, the Court notes that Riley correctly

26 identifies that the Fees Chart submitted with QuantumScape’s motion includes a greater number of

27 hours than QuantumScape’s bills reflect. Compare Tsatalis Decl. ¶ 20.3, ECF No. 49-1, with

1 incorrectly summed its hours when drafting the Fees Table. Reply 2-3. QuantumScape submits a

2 corrected Fees Table with its Reply that reflects 159.4 total attorney hours—matching the number

3 of hours in its invoices as calculated by Riley and confirmed by the Court. See Tsatalis Suppl.

4 Decl. ¶ 5, ECF No. 55-1.

5 QuantumScape contends that the hours its counsel spent since the Final Award in the

6 underlying arbitration were necessary to oppose Riley’s Petition to Vacate. Mot. 4-5.

7 QuantumScape states that it primarily staffed the matter with one partner and one associate and

8 relied on other associates and paralegals only as necessary to handle discrete legal issues. Id. at 5.

9 QuantumScape also notes that its fees request accounts for a 10% discount provided by Wilson

10 Sonsini. Id. at 6.

11 Riley responds that the number of hours requested is excessive and duplicative given “the

12 small arbitration record” and “the issues presented in the motion to vacate”—many of which

13 “were also raised before the Arbitrator.” Opp’n 5. Riley asks the Court to award only 50% of the

14 hours QuantumScape requests for its work drafting its Cross-Motion and Opposition and

15 preparing for oral argument. Id. at 6. Riley also asks the Court to deny QuantumScape’s request

16 for reimbursement of fees accrued during the arbitration, after oral argument before this Court, and

17 preparing for a case management conference that did not happen. Id. at 6-8.

18 QuantumScape replies that the hours it spent were necessary and reasonable.

19 QuantumScape argues that the time it spent briefing and preparing for oral argument was

20 necessary and reasonable given the number of issues Riley raised in his Petition. Reply 3.

21 QuantumScape argues that the Court should order Riley to pay QuantumScape’s fees for the

22 underlying arbitration because the relevant invoice was issued after the Arbitrator issued the Final

23 Award. Id. at 5. Finally, QuantumScape argues that the Court should order Riley to pay its fees to

24 prepare for the case management conference because QuantumScape assumed it had to prepare for

25 the conference until the Court took it off calendar. Id.

26 The Court addresses the fees QuantumScape requests in order of accrual.

27 The Court finds that QuantumScape should be reimbursed for its fees in the underlying

1 such fees. Opp’n 9. But Riley does not address why such fees would fall outside of the fees

2 provisions of the Separation Agreement and Consulting Agreement. Nor does Riley address why

3 such fees should be denied despite California Civil Code § 1717, which entitles a party to

4 reasonable attorney’s fees in any action on a contract, where the contract specifically provides for

5 attorneys’ fees and costs. Accordingly, the Court finds that QuantumScape is entitled to these

6 fees.

7 The Court next finds that the hours QuantumScape spent briefing its Cross-Motion and

8 Opposition are generally reasonable. Riley primarily argues that QuantumScape’s attorneys

9 should have been able to perform their tasks in less time. See Opp’n 6. He asks that the Court

10 impose “at least a 50% reduction in billable time” for these tasks. But Riley raised many issues in

11 his Petition and fiercely sought to vacatur of the arbitration award. “A defendant cannot litigate

12 tenaciously and then be heard to complain about the time necessarily spent by the plaintiff in

13 response.” Peak-Las Positas Partners v. Bollag, 172 Cal. App. 4th 101, 114 (2009) (internal

14 quotation marks omitted). And like other courts in this District, this Court is reluctant to second-

15 guess the staffing decisions of the prevailing party’s counsel, given that the approach taken by

16 counsel was successful. See, e.g.., Cruz v. Starbucks Corp., No. C-10-01868 JCS, 2013 WL

17 2447862, at *8 (N.D. Cal. June 5, 2013). The Court therefore declines Riley’s invitation to

18 impose a blanket 50% cut to QuantumScape’s requested hours.

19 But the Court agrees with Riley that certain of the hours requested for Ms. Tsatalis are

20 unreasonable. Ms. Tsatalis seeks 38.7 hours for work related to the “Petition to Vacate Arbitration

21 Award/Cross-Petition to Confirm Arbitration Award,” Tsatalis Supp. Decl. ¶ 5, including about

22 14.3 hours of preparation time for oral argument,1 see Tsatalis Decl. Exs. 6-7. This is on top of

23 74.9 hours contributed by Mr. Gorman, an Of Counsel in the firm’s employment litigation practice

24 who has been practicing law for over a decade. See Tsatalis Supp. Decl. ¶ 5; Gorman Bio. The

25 Court finds the request for Ms. Tsatalis’s time to be excessive for an attorney of her vast skill and

26

1 Ms. Tsatalis’s final entry regarding hearing preparations lists 5.6 hours for “prepare for and

27

represent client at hearing on Petition to Vacate and Confirm Arbitration Award; telephone calls re

1 experience. The Court finds 25 total hours for Ms. Tsatalis’s work related to the Petition to

2 Vacate Arbitration Award and Cross-Petition to Confirm Arbitration Award to reflect a reasonable

3 number of hours.

4 The Court next addresses QuantumScape’s request for time billed shortly after oral

5 argument. The Court agrees with Riley that QuantumScape has not shown that the hours spent on

6 these tasks were “reasonable and necessary.” Rey, 203 Cal. App. 4th at 1244. Riley identifies that

7 Ms. Renner, an attorney who did not work on the Opposition to the Petition or Cross-Motion to

8 Confirm, billed 8.9 hours for work done in the two days immediately after oral argument. See

9 Opp’n 6. Riley also identifies that Ms. Tsatalis billed 1.6 hours of work shortly after the hearing.

10 See id. QuantumScape does not address in its Reply why these hours were reasonable and

11 necessary. Accordingly, the Court finds that QuantumScape has not met its burden to show that it

12 is entitled to recover fees for these hours.

13 Finally, the Court addresses QuantumScape’s request for fees to prepare for the case

14 management conference that the Court vacated. QuantumScape requests 3.5 hours for Ms.

15 Tsatalis and 0.9 hours for Mr. Geritano for time spent preparing for the case management

16 conference. See Tsatalis Decl. ¶ 20.e; Tsatalis Supp. Decl. ¶ 7. The Court finds that these hours

17 were not reasonable and necessary given that the Court issued judgment before the parties ever

18 submitted a case management statement.

19 * * *

20 With the reductions discussed above, the Court finds that QuantumScape is entitled to

21 recover fees in the total of $92,101 in accordance with the following hours and rates:

22 Attorney Hours:

Marina Matthew Alison Neil Heather

23

Tsatalis Gorman Renner Gulyako Diles

24 Rate $1050 $600 $600 $350 $350

Arbitration 2.7 1.1 0 0 1

25

(Hours)

26 Petition to 25 74.9 0 6.4 22.2

Vacate/Cross-

27

Motion to Confirm

Case Management 0 0 0 0 0

1

Conference

2 (Hours)

Total Hours 27.7 76 0 6.4 23.2

3

Total Fees $29,085 $45,600 $0 $2,240 $8,120

4

Support Staff Hours:

5

Anthony Candida Lee Ann Tracy Fritz

6 Geritano Malferrari Almeida

Rate $240 $240 $240 $240

7

Arbitration 0 0 0 0

8 (Hours)

Petition to 4.7 19.3 3.4 2

9

Vacate/Cross-

10 Motion to

Confirm

11

(Hours)

12 Case 0 0 0 0

Management

13

Conference

14 (Hours)

Total Hours 4.7 19.3 3.4 2

15

Total Fees $1,128 $4,632 $816 $480

16

C. Costs

17

QuantumScape requests $2,309.95 in costs for legal research database fees and certain

18

shipping, copying and printing, filing, and court reporter fees. QuantumScape contends that “[its]

19

right to reimbursement of costs is vested by contract . . . and also reflected in Rule 54(d) of the

20

Federal Rules of Civil Procedure.” Mot. 7. Riley does not dispute that costs are permitted under

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the parties’ agreements. Riley argues, however, that QuantumScape is not entitled to costs here

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because (1) QuantumScape waived its right to costs by failing to file a separate bill of costs as

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required by Civil Local Rule 54-1 and (2) the costs QuantumScape seeks are nontaxable. Opp’n

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9. QuantumScape agrees that it seeks only nontaxable costs. Reply 5. QuantumScape argues that

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because its costs are nontaxable, it did not need to submit a bill of costs. Id.

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Under Civil Local Rule 54-1 “a prevailing party claiming taxable costs must serve and file

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a bill of costs” within 14 days of entry of judgment. Civil L.R. 54-1(a). The Rule states that

1 “[a]ny party who fails to file a bill of costs within the time period provided by this rule will be

2 deemed to have waived costs.” Civil L.R. 54-1(c). Here, QuantumScape does not seek any

3 taxable costs, and therefore had nothing to put on a bill of costs submitted under Rule 54-1(a).

4 The issue is thus whether QuantumScape’s failure to submit a blank bill of costs under Rule 54-

5 1(a) bars QuantumScape from seeking nontaxable costs that the parties do not dispute are

6 permitted under their contracts.

7 The Court finds that QuantumScape did not waive its right to seek nontaxable costs by

8 failing to file a bill of costs. Rule 54-1(c) broadly states that any party who fails to file a bill of

9 costs waives costs. Civil L.R. 54-1(c). But read together with Rule 54-1(a), which requires a bill

10 of costs for taxable costs, it is clear that Rule 54-1(c) applies to parties who seek taxable costs that

11 should have been listed on a bill of costs. The Court thus concludes that Rule 54-1(c) does not

12 result in waiver here because QuantumScape seeks only nontaxable costs. Accordingly, the Court

13 finds that QuantumScape is entitled the costs it requests.

14 D. Post-Judgment Interest

15 QuantumScape requests post-judgment interest under 28 U.S.C. § 1961 on any attorney’s

16 fees and costs through the actual payment date. Mot. 1. Riley does not oppose this request.

17 QuantumScape’s request for post-judgment interest is therefore granted.

18 E. Deferral of Enforcement

19 In his opposition, Riley asks the Court to stay under Federal Rule of Civil Procedure 62(h)

20 “enforcement of the February 13, 2023 Order until at least 30 days after the date on which the

21 Court enters its order on QuantumScape’s request for attorneys’ fees and costs.” Opp’n 10. Riley

22 seeks this relief because it “will give Riley an opportunity to know the total amount of the order

23 before enforcement proceedings begin.” Id. QuantumScape opposes the request, arguing that

24 “there is no reason the [Riley] cannot begin satisfying the Judgment before knowing the final

25 amount of additional fees and costs owed.” Reply 5.

26 “Federal Rule of Civil Procedure 62(h) provides that when a court has entered final

27 judgment, it may upon its discretion, ‘stay enforcement of that judgment until the entering of a

1 946, 955 (9th Cir. 2006) (quoting Fed. R. Civ. P. 62(h)). The Court denies Riley’s request for a

2 stay here.

3 || IV. ORDER

4 For the foregoing reasons, IT IS HEREBY ORDERED that QuantumScape’s motion is

5 GRANTED IN PART as follows:

6 1. QuantumScape is AWARDED $92,101 in attorneys’ fees.

7 2. QuantumScape is AWARDED $2,309.95 in costs.

8 3. QuantumScape is AWARDED post-judgment interest on the attorney’s fees and costs

9 through the date of payment.

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11 Dated: August 15, 2023

a (12

BETH h BSON SEMAN

13 United States District Judge

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