The opinion
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
LABMD, INC., )
Plaintiff, )
)
VS. ) Civil Action No. 15-92
) Magistrate Judge Maureen P. Kelly
)
TIVERSA HOLDING CORP. formerly ) Re: ECF Nos. 426 and 427
known as TIVERSA, INC.; ROBERT J. )
BOBACK; M. ERIC JOHNSON; DOES _)
1-10, )
Defendants. )
MEMORANDUM ORDER
Presently before the Court is the Petition for Fees and Costs filed by Defendant Tiversa
Holding Corp. (“Tiversa”). ECF No. 426. In the Petition for Fees and Costs, Tiversa seeks the
award of $23,338.00 in attorneys’ fees from LabMD, Inc. (“LabMD”) and $4,737.75 in costs
from Attorney James Hawkins (“Attorney Hawkins”) based on the Memorandum Opinion of this
Court, ECF No. 413, granting Tiversa’s Motion for Sanctions Pursuant to Federal Rule of Civil
Procedure 37(b)(2) that was joined in by Defendant Robert J. Boback (“Boback’’), ECF Nos. 393
and 402. Boback has also filed a Petition for Attorneys’ Fees and Costs Incurred Related to
Motion for Sanctions, ECF No. 427. LabMD filed a Memorandum in Response to Defendant
Tiversa Holding Corp.’s and Robert J. Boback’s Petitions for Fees and Costs. ECF No. 442.
Tiversa filed a Reply. ECF No. 452.
1. RELEVANT PROCEDURAL HISTORY
In order to consider the pending Petitions for Fees and Costs, it is necessary to only
briefly review the relevant procedural history of this case.
In the Motion for Sanctions, filed by Tiversa and joined by Boback, ECF Nos. 393 and
402, Tiversa argued that LabMD and its counsel had willfully violated the express ruling of this
Court in the Deposition Protective Order limiting the scope of deposition questions in certain
remaining depositions in this case.
After a status conference on April 23, 2019, this Court was required to deal with
numerous discovery motions, discovery issues and the Motion for Sanctions. ECF Nos. 329,
331, 332, 336, 337, 339, 341, 347, 349, 350, 351, 352, 353, 356, 361, 363, 364, 366, 371, 372,
374, 375, 377, 379, 381, 382, 388, 391, 393 and 402. Almost all of the discovery motions and
issues in the final two-and-one-half months of discovery resulted from the conduct of LabMD
and its counsel.
On August 16, 2019, this Court issued a thirty-seven page Memorandum Opinion
granting the Motion for Sanctions. ECF No. 413. This Court imposed sanctions tailored to
address this misconduct of LabMD and its counsel and the resulting harm. Id. at 35. This Court
imposed the following sanctions:
First, Tiversa and Boback are awarded the reasonable attorneys’ fees and costs
incurred related to the Motion for Sanctions and all filings related thereto.
Tiversa and Boback shall file a petition which documents the attorneys’ fees and
costs incurred by September 6, 2019. LabMD shall file a response, limited to the
issue of reasonableness only, by September 27, 2019.
Second, Attorney James Hawkins is ordered to pay for all of the court reporter
fees and transcript costs incurred by Tiversa and Boback relative to the
depositions of: Robert Boback, Keith Tagliaferri, Richard Wallace, Jeromy Dean,
Sean Ways and Jason Shuck.
Third, LabMD is precluded from using any of the testimony elicited during the
depositions of Robert Boback, Keith Tagliaferri, Richard Wallace, Jeromy Dean,
Sean Ways and Jason Shuck, including in responding to any motion for summary
judgment and for any purpose whatsoever in the trial of this case, should
LabMD’s remaining claim survive the scheduled motion for summary judgment.
Fourth, LabMD is expressly barred from using the deposition testimony of Robert
Boback, Keith Tagliaferri, Richard Wallace, Jeromy Dean, Sean Ways and Jason
Shuck in any other litigation in any other forum, based on LabMD’s “fishing
expedition” and LabMD’s obvious attempt to use the 6 depositions of these 6
former Tiversa employees to elicit testimony for use in other cases or other
forums.
Fifth, given the gravity of the misconduct and discovery litigation tactics of
LabMD and its counsel in disregarding orders of this Court and violating the
applicable rules, this Court could have imposed a case dispositive sanction under
Rule 37 and considering the six factors set forth in Poulis v. State Farm Fire &
Cas. Co., 747 F.2d 863, 868 (3d Cir. 1984). However, this Court exercises its
discretion and does not do so. Nonetheless, the Court puts LabMD and Attorney
Hawkins on final notice that any further litigation misconduct or disregard of
orders of this Court will result in the dismissal of this case and the termination of
the pro hac vice admission of Attorney Hawkins.
Id. at 35-36.
As provided for in the Memorandum Opinion, Tiversa and Boback filed the instant
Petitions for Attorneys’ Fees and Costs. ECF Nos. 426 and 427.
II. TIVERSA’S PETITION FOR ATTORNEYS’ FEES AND COSTS
In the instant Petition for Fees and Costs, ECF No. 426, Tiversa seeks to have the Court
award attorneys’ fees in connection with attorney time spent attending the depositions at issue in
the Motion for Sanctions and for the preparation of the Motion for Sanctions.! Tiversa seeks to
be awarded for legal expenses performed by Attorney Jarrod Shaw, partner, for 21.5 hours of
time at a discounted hourly rate of $575.00, for a total of $12,362.50. Tiversa also seeks to be
awarded for legal services performed by Attorney Natalie Zagari, associate, for 27.1 hours of
time at a discounted hourly rate of $405.00 for a total of $10,975.50. As such, Tiversa seeks a
total award of $23,338.00 in attorneys’ fees. ECF No. 426 at 5-6.
Tiversa also seeks to be awarded $4,737.75 in court reporter fees and deposition
transcript costs for the six at-issue depositions. Id. at 7.
! Tiversa has not submitted portions of invoices for its counsel’s time spent to prepare for the depositions of the six
former employees. ECF No. 426 at 4 n. 2.
Ill. BOBACK’S PETITION FOR ATTORNEYS’ FEES AND COSTS
In his Petition for Attorneys’ Fees and Costs, Boback seeks to have the Court award
attorneys’ fees incurred related to the Motion for Sanctions. ECF No. 427. Boback seeks to be
awarded for legal services provided by Attorney Robert J. Ridge, partner, for .90 hours of time at
an hourly rate of $520.00, for a total of $468.00. Boback also seeks to be awarded for legal
services provided by Attorney Brandon J. Verdream, senior attorney, for 1.3 hours of time at an
hourly rate of $360.00, for a total of $468.00. In addition, Boback seeks to be awarded for legal
services performed by Attorney Ashley J. Wilkinson, associate, for .70 hours of work at an
hourly rate of $325.00, for a total of $227.50. Thus, Boback seeks a total award of $1,163.50 in
attorneys’ fees. Id. at 3.
IV. LABMD’S RESPONSE IN OPPOSITION
In the Memorandum in Response to Tiversa’s and Boback’s Petitions for Fees and Costs,
ECF No. 442, LabMD makes two arguments.
First, LabMD argues that the Court did not award Tiversa or Boback their attorneys’ fees
for attending the six depositions at issue. As such, LabMD asserts that Tiversa should not be
awarded $12,445.50 in fees for attending the six depositions. Of note, LabMD does not contest
the reasonableness of the hourly rates of counsel for Tiversa and Boback. Id. at 5.
Second, LabMD contends that attorneys’ fees and costs cannot be assessed LabMD
because it has no ability to pay. Id. at 1. LabMD argues that it ceased operations, owns no assets
and has $5.00 in its only bank account. Id. at 3.
It is noted that LabMD does not contest the reasonableness of the court reporter fees and
transcript costs for the six depositions at issue.
V. LEGAL STANDARD
“The starting point in awarding attorney’s fees is the lodestar amount, which is
calculated by multiplying the number of hours reasonably expended on the litigation by a
reasonable hourly rate.” RHJ Med. Ctr., Inc. v. City of Dubois, No. 3:09-131, 2014 WL
3892100, at *3 (W.D. Pa. Aug. 8, 2014). “The lodestar is strongly presumed to yield a
reasonable fee.” Washington v. Phila. Cty. Ct. of Common Pleas, 89 F.3d 1031, 1035 (3d Cir.
1996). “The party seeking attorneys’ fees has the burden to prove that its request for fees is
reasonable.” Rode v. Dellarciprete, 892 F.2d 1177, 1183 (3d Cir. 1990). To meet this burden,
the prevailing party must “submit evidence supporting the hours worked and rates claimed.” Id.
(quoting Hensley v. Eckerhart, 461 U.S. 424 (1983)) (internal quotations omitted). However, it
“need not go so far as to know the exact number of minutes spent nor the precise activity to
which each hour was devoted or the specific attainments of each attorney.” Brown vy. City of
Pittsburgh, No. 06-393, 2010 WL 2207935, at *3 (W.D. Pa. May 27, 2010) (quoting Evans v.
Port Auth. of N.Y. & N.J., 273 F.3d 346, 362 (3d Cir. 2001)) (internal quotations and citations
omitted),
Thereafter, the burden is on the opposing party to challenge the requested hours and fees,
if it chooses to do so. See Loughner v. Univ. of Pittsburgh, 260 F.3d 173, 178 (d Cir. 2001).
The party opposing the fee award must do so with sufficient specificity, and the Court cannot
decrease a fee award based on factors that are not raised. Id. (citing Rode, 892 F.2d at 1183).
“When considering whether rates charges are reasonable, courts within the Third Circuit
follow the ‘forum rate rule,’ which provides that a court shall rely upon prevailing hourly rates in
the district to determine whether charges are reasonable.” ThermoLife Int’l, LLC v. D.P.S.
Nutrition, Inc., No. 15-273, 2016 WL 6916777, at *4 (W.D. Pa. Feb. 5, 2016). In order to
determine the prevailing market rates, the Court must assess the “experience and skill of the
prevailing party’s attorneys and compare their rates to the rates prevailing in the community for
similar services by lawyers of reasonably comparable skill, experience, and reputation.” Id.
(citing Berkoben v. Aetna Life Ins. Co., No. 2:12-cv-1677, 2014 WL 3565959, at *18 (W.D. Pa.
July 18, 2014)). “[T]he attorney’s normal billing rate is an appropriate baseline for assessing the
reasonableness of the rate requested.” Id. (quoting Chaney v. HVL, LLC, No. 11-0833, 2012
WL 5990124, at *1 (W.D. Pa. Nov. 30, 2012)).
VI. LEGAL ANALYSIS
A. Attorneys’ Fees
1. Scope of attorneys’ fees award
The only disputed issue as to the requests for the award of attorneys’ fees is whether the
Memorandum Opinion of the Court allows Tiversa to recover for attorneys’ fees associated with
attendance of the depositions at issue.
In its Reply, Tiversa correctly argues that “sanctions have been imposed against LabMD
and its counsel, because their conduct violated a Protective Order, which was issued to protect
Tiversa, among others, from LabMD’s improper deposition conduct.” ECF No. 452 at 1.
Tiversa also goes on to argue that “[b]ut for this misconduct and the dozens of improper
questions posed at the six depositions, Tiversa would not have incurred the fees and costs for
attending these depositions.” Id. at 2.
The Court need not recite the extent of LabMD’s discovery and deposition misconduct,
including as to the six depositions at issue, because it was addressed at length in the
Memorandum Opinion. ECF No. 413. That said, this Court specifically tailored five sanctions
to address the deposition misconduct by LabMD and its counsel. Id. at 35-36. The first sanction
awarded Tiversa and Boback attorneys’ fees and costs related to the Motion for Sanctions and all
filings related thereto. Id. In the third and fourth sanctions, this Court precluded LabMD from
the use of the deposition testimony elicited during the six depositions at issue.” As such, the
Court did not award attorneys’ fees associated with attending/defending the six depositions.
Obviously, the Court also directed Attorney Hawkins to pay for all of the court reporter fees and
transcript costs incurred by Tiversa and Boback relative to the six depositions. Id. Therefore,
Tiversa is not entitled to recover for its attorneys’ fees (in the amount of $12,445.50 for 23.3
hours) associated with attending the six depositions at issue.
2. Ability to pay
LabMD’s argument that attorneys’ fees cannot be assessed because it has no ability to
pay is without merit and disingenuous. First, LabMD clearly has the financial ability to file,
fund and pursue this federal action and a multitude of other lawsuits in federal and state courts.
ECF No. 413 at 3; id. at 6 n. 5. Second, as noted by Tiversa in its Reply, LabMD has the
apparent financial means to recently retain and pay an “electronic technology” expert at the rate
of $700 per hour to review 15 categories of documents and file a 15-page declaration in support
of LabMD’s Brief in Opposition to pending motions for summary judgment in this case. ECF
No. 433-18 4 4.
For the reasons set forth herein, Tiversa and Boback are entitled to be awarded their
attorneys’ fees incurred relative to the Motion for Sanctions. The Court finds that such
attorneys’ fees are reasonable. As such, attorneys’ fees are awarded as follows, based on the
hourly rates set forth herein.
2 In support of its Motion for Sanctions, Tiversa previously argued that it was entitled to its attorneys’ fees and costs
to prepare and file the Motion for Sanctions, at a minimum. Tiversa suggested that the Court impose sanctions
“barring” the improper testimony from use in this litigation or dismissing the case. ECF No. 393 at 14. However,
Tiversa deferred to this Court’s judgment as to the sanctions warranted by the conduct of LabMD and its counsel. Id.
Tiversa is awarded attorneys’ fees in the amount of $10,892.50 (21.5 hours — Attorney
Zagari and 3.8 hours — Attorney Shaw).
Boback is awarded attorneys’ fees in the amount of $1,163.50 (.9 hours — Attorney
Ridge, 1.3 hours — Attorney Verdream and .7 hours — Attorney Wilkinson).
B. Costs
In the second sanction, this Court ordered Attorney James Hawkins, counsel for LabMD,
to pay all of the court reporter fees and transcript costs incurred by Tiversa and Boback relative
to the six depositions at issue. ECF No. 413 at 35.
Tiversa has presented evidence that it incurred court reporter fees and transcript costs for
the six depositions in the amount of $4,737.75. ECF No. 426 at 27. Boback has not presented
evidence of court reporter fees and transcript costs. LabMD and Attorney Hawkins do not
dispute the reasonableness of the court reporter fees and transcript costs. ECF No. 442 at 5.
Accordingly, Tiversa is awarded $4,737.75 in court reporter fees and transcript costs to
be paid by Attorney Hawkins.
AND NOW, this Hb day of March, 2020, for the reasons set forth herein, it is
HEREBY ORDERED that Tiversa’s Petition for Attorneys’ Fees and Costs, ECF No. 426, is
GRANTED IN PART and DENIED IN PART. It is further ordered that Boback’s Petition for
Attorneys’ Fees and Costs, ECF No. 427, is GRANTED.
LabMD is ordered to pay to Tiversa the amount of $10,892.50 on or before April 3, 2020,
and to pay to Boback the amount of $1,163.50 on or before April 3, 2020. Such payments are to
be delivered to counsel for Tiversa and Boback.
Attorney James Hawkins is ordered to pay the sum of $4,737.75 to the law firm of
McGuire Woods LLP on or before April 3, 2020.
Failure to comply with this Order may result in further sanction, up to and including
dismissal of this case.
BY THE COURT:
hdege So of dt an
CG l Att Ab kedbe KD 2 Ke fom
MAWREEN P. KELLY NA
UNITED-SPATES MAGISTRATE JUDGE
ce: All counsel of record via CM/ECF.