The Blue Buffalo Company, Ltd. v. Wilbur-Ellis Company LLC

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MISSOURI

EASTERN DIVISION

BLUE BUFFALO COMPANY, LTD., )

)

Plaintiff, )

)

vs. )

) Case No. 4:14 CV 859 RWS

WILBUR-ELLIS COMPANY, LLC )

and DIVERSIFIED INGREDIENTS, )

INC., )

)

Defendants, )

)

AND RELATED ACTIONS )

MEMORANDUM AND ORDER

This matter is before me on Plaintiff Blue Buffalo’s objection to Special

Master Bradley A. Winters’s Omnibus Order No. 12, ECF No. [1633]. Defendants

Wilbur-Ellis and Diversified Ingredients (“Diversified”) have filed responses. For

the reasons explained below, I will overrule the objection and adopt the order of the

Special Master.

BACKGROUND

In Omnibus Order No. 12, the Special Master granted Blue Buffalo’s motion

to compel the billing rates for the defendants’ four most expensive outside counsel

from the Nestlé Purina and class action lawsuits and the government’s related

criminal investigation (the “collateral proceedings”). He did not, however, order

production of information about fees expended and work performed by all defense

counsel in the collateral proceedings. Blue Buffalo objects to this determination,

arguing that “it is entitled to explain to a jury that Defendants used their own

employees to cover-up [sic] their illegal scheme and hide the truth…Defendants’

lawyers are no different. Blue Buffalo is entitled to tell the jury that Defendants

used their lawyers to carry out their strategy of deny and delay.” To make this

showing, Blue Buffalo contends that it must be able to discuss the fees that the

defendants’ lawyers were paid, including information or summary information from

the collateral proceedings that consists of counsels’ hourly rates; the total amount of

fees each defendant spent; and information about the work that counsel performed.

In their responses to the objection, Wilbur-Ellis and Diversified argue that this

issue was previously resolved in Omnibus Order No. 6 and is squarely governed by

the United States Court of Appeals for the Eighth Circuit’s decision in Burks v.

Siemens Energy & Automation, Inc., 215 F.3d 880 (8th Cir. 2000).1

ANALYSIS

Omnibus Order Nos. 6 and 12

In Omnibus Order No. 6, the Special Master addressed Blue Buffalo’s request

for discovery of Wilbur-Ellis’s and Diversified’s fee records to support the

1 Additionally, Diversified argues that Blue Buffalo has not attempted to distinguish between its

alleged conduct and that of Wilbur-Ellis, and has instead conflated the defendants’ behavior.

reasonableness of Blue Buffalo’s claimed damages. He concluded that Burks is the

“controlling authority for this issue” and further explained:

[T]he Fees as Damages sought here by Blue Buffalo differ in significant

ways from the traditional “prevailing party” contractual and statutory

fee awards which are properly the subject of Fed. R. Civ. P. 54(d) post-

trial motions. The fees sought as damages here were incurred in

litigation involving different claims (from those made by Blue Buffalo

here), asserted against Blue Buffalo by different parties (from those

sued by Blue Buffalo here) with different counsel (from those

representing BB’s adversaries here). Either the Court or a jury will

decide whether the Fees as Damages sought by Blue Buffalo are

reasonable and whether they were incurred due to Wilbur-Ellis’s or

Diversified’s conduct. The time entries of Wilbur-Ellis’s and

Diversified’s counsel in this case (where Blue Buffalo seeks to recover

fees spent defending the Nestlé Purina and class action claims) offer

nothing of value to a finder of fact (or law) attempting to decide whether

Blue Buffalo’s counsel’s Fees as Damages were reasonable or incurred

due to the conduct of Wilbur-Ellis or Diversified.

ECF No. [1602 at 9].

He concluded:

The C.S.M. believes that Blue Buffalo’s jump from “litigation tactics

are discoverable” to “therefore, Defendants’ legal bills and billing

records must be turned over to Blue Buffalo,” is a syllogistic leap too

far. Blue Buffalo cites many cases, but none that reach the conclusion

that because litigation tactics are discoverable, defendants’ legal bills

and billing records are also discoverable.

ECF No. [1602 at 11].

Blue Buffalo filed an objection to this order. After reviewing Omnibus Order

No. 6 and the parties’ briefs, I issued an order overruling the objection and adopting

the Special Master’s conclusions about the discoverability of Wilbur-Ellis’s

attorneys’ fees related to this litigation. However, I allowed the parties to submit

additional briefs concerning the discoverability of fee information from the collateral

proceedings. This led to the issuance of Omnibus Order No. 12, in which the Special

Master concluded:

Thus, I stand by the observation “that Blue Buffalo's jump from

‘litigation tactics are discoverable’ to ‘therefore, Defendants’ legal

bills and billing records must be turned over to Blue Buffalo,’ is a

syllogistic leap too far.”

And I still believe that the Eighth Circuit's 2000 decision in Burks v.

Siemens Energy & Automation, Inc. is the controlling authority for this

issue.

Notwithstanding the foregoing, to assure that the parties and the Court

have benchmark “reasonableness” information available to them, I will

Order the Defendants to provide certain very limited information set

forth below.

IT IS THEREFORE HEREBY ORDERED that Blue Buffalo's

motion “for information regarding Defendants’ attorney fee invoices”

is DENIED WITHOUT PREJUDICE except that Defendants shall

each provide Blue Buffalo with the names and hourly billing rates of

their four (4) outside counsel in this litigation with the highest hourly

rates between May 1, 2014 and May 31, 2015.

ECF No. [1633 at 15].

Governing standard for theory of relevance

Wilbur-Ellis and Diversified agree with the Special Master’s conclusion that

the Eighth Circuit’s analysis in Burks governs this issue. Blue Buffalo disagrees,

citing three Eighth Circuit cases, in addition to one district court case, in support of

its argument that courts may permit discovery of an opponent’s attorneys’ fees to

prove the reasonableness of a party’s requested fees. See Tussey v. ABB, Inc., 746

F.3d 327, 340-41 (8th Cir. 2014) (upholding trial court’s award of attorneys’ fees,

which considered the hourly rate of defendant’s lawyers and plaintiff’s lawyers, in

the lodestar calculation); Craik v. Minn. State Univ. Bd., 738 F.2d 348, 349 (8th Cir.

1984) (concluding that “the amount of time spent by defendants is a relevant factor,

and in some cases can result, when considered with other circumstances, in a

reduction of the time for which plaintiffs’ counsel are entitled to be compensated”);

Dependahl v. Falstaff Brewing Corp., 653 F.2d 1208, 1220 (8th Cir. 1981) (noting,

without explaining whether discovery into the issue had actually occurred, that the

attorneys’ fees awarded to plaintiff’s counsel seemed “appropriate and reasonable,

as [defendant’s controlling shareholder] testified at trial that [defendant] had

expended close to one million dollars in attorney fees in this case”); Kademani v.

Mayo Clinic, 2012 WL 6014775, at *1 (D. Minn. Dec. 3, 2012) (recognizing that

“an opposing party’s fees and hours are far from dispositive of the reasonableness

of a prevailing party’s fees and hours” but concluding that discovery of defendant’s

billing records “may have some bearing on the reasonableness of [plaintiff’s] fees

and hours because, among other reasons, the two sides worked on identical factual

and legal issues and the attorneys work in the same legal market”).2

2 Kademani cited Dependahl but did not acknowledge Burks.

In Burks, the plaintiff appealed the district court’s reduction of his counsel’s

requested attorneys’ fees, arguing that the district court should have compared the

fees requested to the fees that defense counsel charged. The Eighth Circuit

disagreed, finding that “[s]uch an apples-to-oranges comparison is not required by

law and would not be advisable.” 215 F.3d at 884. The court explained that the

plaintiff’s requested analysis would “not make sense” because “making such a

comparison—where the benchmark for the award of plaintiff’s attorney fees is

‘reasonableness’—would require the trial court to first determine whether the

defendant’s counsel billed a reasonable amount.” Id. Burks does not forbid courts

from ever considering one party’s attorneys’ fees when determining the

reasonableness of another’s fees. However, the case is clear that even if a court can

make this comparison, it generally should not.

My review of subsequent case law further supports this reading of Burks.

Several district courts in this circuit have cited Burks when declining to compare

attorneys’ fees. See, e.g., McKeage v. Bass Pro Outdoor World, LLC, 2018 WL

10648681, at *3 (W.D. Mo. Nov. 8, 2018); Harris v. Chipotle Mexican Grill, 2018

WL 617972, at *7 n. 5 (D. Minn. Jan. 29, 2018); Safelite Grp., Inc. v. Rothman,

Blue Buffalo contends that the Eighth Circuit “refused to follow Burks and returned to the reasoned

positions of Craik and Dependahl” in Tussey. However, Tussey did not cite Burks, Craik, or

Dependahl and merely discussed the district court’s award of attorneys’ fees without providing

substantive analysis on the issue.

2017 WL 3495768, at *8 (D. Minn. Aug. 11, 2017); Ewald v. Royal Norwegian

Embassy, 2015 WL 1746375, at *15 (D. Minn. Apr. 13, 2015); Gay v. Saline Cty.,

2006 WL 3392443, at *3 (E.D. Ark. Oct. 20, 2006); Mock v. S. Dakota Bd. of

Regents, 296 F.Supp.2d 1061, 1066 (D.S.D. 2003).

The Eighth Circuit has not cited Tussey, Craik, or Dependahl for the

proposition that Blue Buffalo urges, and only a handful of district courts in this

circuit have relied on those cases since Burks was decided in 2000. See, e.g., Tussey

v. ABB, Inc., 2012 WL 5386033, at *4 (W.D. Mo. Nov. 2, 2012) (citing Dependahl

and stating that “comparison of Plaintiffs’ requested fees to the fees Defendants paid

their attorneys may also be relevant to determining reasonableness” in the lodestar

calculation); U.S. ex rel. Thompson v. Walgreen Co., 621 F.Supp.2d 710, 729 (D.

Minn. 2009) (citing Dependahl and explaining that “[t]he Eighth Circuit has

referenced differentials in bills and hourly rates between litigants in addressing

appeals of the awards of attorney’s fees”); Brown v. Miss Elaine, Inc., 2003 WL

21517919, at *1 (E.D. Mo. Apr. 17, 2003) (citing Craik while explaining that “[t]he

Eighth Circuit and the Eastern District of Missouri have recognized that the fees

charged to one party by its attorneys is relevant to the reasonableness of the fees

charged to the opposing party by its attorneys”). None of these cases even

acknowledged Burks. They appear to be outliers and I decline to follow their lead

in this case.3

Even if Blue Buffalo’s reading of Burks was correct—namely, that “[t]he

most [the case] stands for is that permitting the discovery of a defendant’s attorney’s

fees is within the broad discretion of the district court”—I do not believe that

comparing attorneys’ fees would be appropriate in this case because I agree with the

Special Master’s finding that the parties were not engaged in the same kind of work

in the collateral proceedings. The Special Master explained this finding in Omnibus

Order No. 6 and reiterated it in Omnibus Order No. 12, stating: “[w]hile Blue Buffalo

and Wilbur-Ellis may not have been aligned as adversaries in the Collateral

Proceedings pleadings until May 19, 2015 [when Blue Buffalo named Wilbur-Ellis

and Diversified as third-party defendants in its answer to Purina’s Third Amended

Complaint], they were still, qualitatively and quantitatively, in very different

3 Blue Buffalo also cited an unpublished memorandum and order, Gilbert v. Monsanto Co., 4:95-

cv-1180-CDP (E.D. Mo. Mar. 27, 2001), ECF No. [98]. In this order, Judge Catherine Perry

explained why she “ordered limited discovery of Monsanto’s fees in connection with the motion

to enforce the settlement” after Monsanto contested the reasonableness of the fees requested for

that portion of the case:

Certainly, a simple “comparison” between Monsanto’s fees and Gilbert’s fees is not an

appropriate method for me to determine a reasonable fee award in this case. But when

Monsanto claims that the fee application is unreasonable because no client would (or

should) pay for internal conferences between lawyers, I find it probative that Monsanto in

fact paid for 61 of such internal conferences between its Thompson Coburn lawyers. I also

believe that the exchange of ideas and information between attorneys working on the same

matter is an integral part of the litigation process. See Emmenegger v. Bull Moose Tube

Co., 33 F.Supp.2d 1127, 1139 (E.D. Mo. 1998). Judging by the number of internal

conferences billed by Thompson Coburn for this matter, Monsanto must agree.

positions.” ECF No. [1633 at 11]. Although Blue Buffalo argues that “the parties

were working on the same legal and factual issues…analyz[ing] the same

information and documents,” and “collecting and producing documents and

responding to the Government’s requests” throughout the collateral proceedings,

they were not performing “similar work.” This conclusion is supported by the

helpful list supplied by Diversified’s counsel, which sets forth differences between

Diversified’s conduct and that of Blue Buffalo throughout the course of the collateral

proceedings. ECF No. [1633 at 9-10] (noting, for example, that during this time

period, Blue Buffalo defended against Purina’s claims of false advertising and

violations of the Lanham Act, while Diversified did not; and Diversified brought

cross claims and third-party claims against Wilbur-Ellis and Custom AG

Commodities, LLC, and engaged in discovery disputes in other courts, while Blue

Buffalo did not).4 It makes sense to compare fees, or even allow discovery into the

issue, when parties are litigating against one another in the same case. See, e.g.,

4 Counsel for Wilbur-Ellis explained how it and Blue Buffalo were also in different positions

during the collateral proceedings, writing to the Special Master:

…Wilbur-Ellis’s costs defending itself against criminal charges are in no way a legitimate

proxy for, or logically comparable to, Blue Buffalo’s costs incurred while voluntarily

participating in that investigation as a non-defendant and alleged victim. Nor is there any

reason to believe that, in late 2014 and early 2015, the costs Wilbur-Ellis incurred

responding to third party subpoenas as a non-party in the present action would bear any

resemblance to what Blue Buffalo spent defending against Purina’s much broader claims

as a defendant before Judge Sippel, let alone shed any light on the reasonableness of Blue

Buffalo’s fees for defending against Purina’s claims.

ECF No. [1633 at 8].

Kademani, 2012 WL 6014775, at *1 (discovery of opposing counsel’s attorneys’

fees was relevant because “the two sides worked on identical factual and legal issues

and the attorneys work in the same legal market”). But here, such a comparison

would not speak to the reasonableness of Blue Buffalo’s requested attorneys’ fees,

as the parties were not engaged in the same work in the collateral proceedings.

However, Blue Buffalo contends that “regardless of whether Blue Buffalo and

Defendants were performing similar work in the Collateral Proceedings,” the

requested fee information possesses independent relevance and is therefore

discoverable under Federal Rule of Civil Procedure 26. Specifically, Blue Buffalo

contends that the fee information will aid the jury’s causation and punitive damages

assessments. In support, Blue Buffalo cites CGB Occupational Therapy, Inc. v.

RHA Health Servs., Inc., 499 F.3d 184, 195 (3d Cir. 2007) and Rasidescu v. Globe

College, Inc., 2005 WL 8164751 (D. Minn. June 8, 2005) for the proposition that

“[w]hen a party seeks punitive damages…evidence of litigation tactics and conduct

intended to prolong and draw out the proceedings is relevant to that calculation.”

However, Blue Buffalo has not cited, and I have not identified, any cases indicating

that a court has ordered the disclosure of a party’s attorney billing records under

these circumstances. And while it is well-established that the reprehensibility of a

defendant’s conduct is relevant to assessing punitive damages, I do not wish to

seemingly endorse the position that Blue Buffalo appears to advance—namely, that

mounting a vigorous defense can or should be viewed as evidence of sinister or

nefarious behavior. Without commenting specifically on the propriety of Wilbur-

Ellis and Diversified’s conduct in the collateral proceedings, I emphasize the Special

Master’s assertion that “[u]nder our system of justice, the vigor and extent of a

party’s defense is not evidence of that party’s guilt.” ECF No. [1633 at 10].

The Special Master ordered the production of “certain very limited” fee

information from defense counsel “to assure that the parties and the Court have

benchmark ‘reasonableness’ information available to them.” I believe that was

appropriate. Requiring the production of any further fee information from the

collateral proceedings, particularly time entries detailing the work that defense

counsel performed, is “not required by law and would not be advisable.”5 Burks,

215 F.3d at 884. As a result, I will overrule Blue Buffalo’s objection and adopt the

Special Master’s Omnibus Order No. 12 in its entirety.

Accordingly,

5 In their response briefs, Wilbur-Ellis and Diversified both argued that portions of the fee

information that Blue Buffalo requested would be protected by the work product privilege and/or

the attorney-client privilege. The Special Master also indicated, in Omnibus Order No. 6 and

Omnibus Order No. 12, that some of the information would likely be privileged and the billing

records, if produced, would have to be redacted.

Because I have determined that the requested fee information will not be compelled, I need not

address the issue in detail. However, I agree that the records, if compelled, would likely be

redacted—especially the time entries, which would seem to be most crucial to proving Blue

Buffalo’s claims.

IT IS HEREBY ORDERED that Blue Buffalo’s objection to Omnibus

Order No. 12, [1635], is OVERRULED.

RODNEY W. SIPEEL

UNITED STATES DISTRICT JUDGE

Dated this 20th day of December, 2021.

12