Diamond Resorts U.S. Collection Development, LLC v. Wesley Financial Group, LLC

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF TENNESSEE

AT KNOXVILLE

DIAMOND RESORTS U.S. COLLECTION )

DEVELOPMENT, LLC, et al., )

)

Plaintiffs, )

)

v. ) No. 3:20-CV-251-DCLC-DCP

)

WESLEY FINANCIAL GROUP, LLC, et al., )

)

Defendants. )

MEMORANDUM AND ORDER

This case is before the undersigned pursuant to 28 U.S.C. § 636, the Rules of this Court,

and Standing Order 13-02.

Now before the Court is Plaintiffs’ Motion to Determine Amount of Attorneys’ Fees

Pursuant to Order Awarding Discovery Sanctions [Doc. 202]. Defendant Wesley Financial Group,

LLC (“Defendant Wesley”) filed a response in opposition [Doc. 206], and Plaintiffs filed a reply

[Doc. 213]. On November 18, 2024, the parties requested that the Court hold this motion in

abeyance pending their efforts to resolve this case [Doc. 353]. The Court granted the parties’

request and held the motion in abeyance until January 31, 2025 [Doc. 354]. The parties filed a

status report on January 31, 2025, requesting additional time to complete their discussions about

an early resolution [Doc. 355]. The Court also granted this request [Doc. 356]. On March 3, 2025,

the parties filed a joint status report stating that they were unable to resolve this matter and that

holding the motion in abeyance is no longer necessary [Doc. 357].

The motion is therefore ripe for adjudication. See E.D. Tenn. L.R. 7.1(a). For the reasons

set forth below, the Court GRANTS IN PART AND DENIES IN PART the motion [Doc. 202].

The Court AWARDS Plaintiffs $55,749.82 in attorneys’ fees.

I. BACKGROUND

The instant filings relate to the Court’s Memorandum and Order entered on September 29,

2023 [Doc. 194]. The Court is familiar with the underlying facts and will not review them in detail

here [See id.]. In summary, the Court allowed Defendant Wesley to designate its current customers

as Attorneys’ Eyes Only (“AEO”) [Doc. 63]. When current customers became former customers,

Defendant Wesley was required to de-designate them [Id.]. Defendant Wesley committed several

errors in designating its customers and reported to the Court that 764 customers should have been

de-designated [Doc. 194 (citing Doc. 150)]. This error led to Plaintiffs’ Second Motion for

Sanctions [Doc. 139], the parties’ Joint Motion to Amend the Scheduling Order and Continue the

Trial (“Joint Motion”) [Doc. 145], and a telephonic hearing before United States District Judge

Clifton Corker [Doc. 149]. Given Defendant Wesley’s issues with de-designating its customers,

Judge Corker continued the deadlines and stayed the trial date [Id.]. Later, in response to Plaintiffs’

Second Motion for Sanctions, Defendant Wesley reversed course and said that its errors with

designations only affected 123 customers [Doc. 194 pp. 10–11 (citing Doc. 150)].1 Plaintiffs then

filed a motion requesting that the Court stay briefing on the Second Motion for Sanctions and

asked that the Court set a hearing [Id. at 11 (citing Doc. 151)].

The parties appeared before the Court on April 4, 2023 [Id. at 11–12]. After hearing from

the parties, the Court proposed to modify the Protective Order to allow certain individuals with

Plaintiffs to review Defendant Wesley’s AEO designations [Id. at 12 (citing Doc. 166)]. The

parties agreed to that proposal [Id.]. That hearing lasted approximately four hours, excluding the

1 In the instant motion, Plaintiffs state that their “post-hearing Court-directed investigation

proved that of [Defendant] Wesley’s roughly 1,900 ‘current’ customers, all designated AEO,

[Plaintiffs] had cancelled the timeshare contracts of approximately 700 of them” or in other words,

“[t]he 123 customers [Defendant] Wesley wrongly maintained as AEO was about 18% right”

[Doc. 202 p. 9 (citations omitted)].

hour that the Court and the parties took for a lunch break [See Doc. 169].

The Court’s modification did not address Plaintiffs’ requested sanctions [Id.]. “Given that

this modification resolved the primary issue—Wesley’s inaccurate designations—the Court

allowed the parties to file supplemental briefs to explain what relief, if any, is appropriate” [Id.].

Plaintiffs thereafter sought sanctions in the form of attorneys’ fees under Rule 37 of the Federal

Rules of Civil Procedure [Id.]. The Court found sanctions appropriate, reasoning:

Here, Wesley acknowledged that it made mistakes. As noted above,

in December 2022, Wesley erroneously de-designated 764

customers. This led to Plaintiffs’ Second Motion for Sanctions

[Doc. 139], a joint motion to continue [Doc. 145], the parties

attending a telephonic motion hearing before Judge Corker [Docs.

146 & 149], Wesley’s response to Plaintiffs’ second motion [Doc.

150], and Plaintiffs’ Emergency motion to stay and related filings

[Docs. 151, 152, 156]. The Court finds that Plaintiffs are entitled to

an award of their reasonable attorneys’ fees for these above matters.

In addition, the Court addressed these matters, in part, at the April 4

hearing, and therefore, the Court awards Plaintiffs half their time

spent preparing for and attending the hearing. The Court finds an

award of reasonable attorneys’ fees will remediate the prejudice

Plaintiffs incurred by Wesley’s erroneous de-designations.

[Id. at 26] (hereinafter, the “Sanctions Order”). The Court ordered the parties to meet and confer

in an attempt to resolve the amount of attorneys’ fees due, but if they could not agree, the

undersigned directed Plaintiffs to file proof of their requested amount in the record [Id. at 26–27].

The parties could not agree, and therefore, the instant motion followed. Plaintiffs seek

$62,973.00 in attorneys’ fees [Doc. 202 p. 4]. Plaintiffs state that Defendant Wesley convinced

the Court that an AEO order was necessary to protect its legitimate business [Id.]. They deny that

Defendant Wesley has a legitimate business [Id.]. In obtaining the Protective Order, Plaintiffs

assert, “[Defendant] Wesley had to know that it could not reliably verify that a Diamond timeshare

contract had been cancelled and it concealed that from the Court in the motion practice leading to

the confidentiality order” [Id. at 5]. According to Plaintiffs, they advised Defendant Wesley in

July 2022 that its designations were wrong and offered a similar remedy to the one that the Court

fashioned in April 2023 [Id.]. Plaintiffs state that Defendant Wesley denied that its designations

were wrong and rejected Plaintiffs’ offer [Id.]. They explain the time incurred for drafting motions

and attending hearings [Id. at 6–8]. Plaintiffs assert that “these matters dominated this litigation

for several months” [Id. at 10]. As such, they submit that the amount of hours and billing rates are

reasonable under the lodestar analysis [Id. at 13–18]. And, Plaintiffs argue, the lodestar amount

should not be adjusted [Id. at 18–21]. In support of their request, Plaintiffs filed the Declaration

of Phillip A. Silvestri [Doc. 202-1] and the Sworn Declaration of R. Culver Schmid [Doc. 202-2].

Defendant Wesley responds that there are a number of undisputed facts: (1) “that [it]

voluntarily disclosed the discovery errors that are the subject of Plaintiffs’ sanctions motion;” (2)

“that [it] was forthcoming about how the errors were made;” (3) “that [it] agreed to file and

participated in preparing a joint motion to extend discovery deadlines to address the de-designated

information;” (4) “that [it] had agreed to the requested extension before Plaintiffs’ sanctions

motion was filed;” (5) “that the District Court granted the joint motion and extended the discovery

deadlines only 11 days after the joint motion was filed” (6) “that [its] errors were the result of

negligence and were not intentional” [Doc. 206 pp. 1–2 (citations and footnote omitted)].

Defendant Wesley states that the discovery errors involved the AEO designations, which this Court

has allowed [Id. at 2]. It argues that “there was no merit in most of the positions Plaintiffs asserted

in their [S]econd [Motion for] [S]anctions” [Id. at 3]. Defendant Wesley states that “the only bases

for sanctions found by the Court to have merit were those [Defendant] Wesley did not contest: that

[Defendant] Wesley had made mistakes in its designations and that the discovery deadline should

be extended” [Id. (emphasis omitted)]. “In fairness[,]” Defendant Wesley contends, “the Court’s

award of attorneys’ fees should be based on the amount of work reasonably required to bring those

matters to the Court’s attention” [Id.].

Defendant Wesley acknowledges that the lodestar analysis is applicable here [Id. at 4

(citation omitted)]. It asserts, “Under Rule 37’s plain terms, fees are awarded for work that not

only was ‘caused by’ the discovery error at issue but that also was ‘reasonable’” [Id. at 5 (citation

omitted)]. Defendant Wesley states, “Interpreted in the light of the lodestar factors, that means

work reasonably necessary to bring errors to the Court’s attention and to seek appropriate relief”

[Id.]. Instead of bringing the issues “to the Court’s attention in a straightforward manner[,]”

Defendant Wesley submits that “Plaintiffs elected to expend [time] making unfounded accusations

against Defendants and defense counsel and asserting claims the Court found to be without merit”

[Id. at 6]. Defendant Wesley outlines eight of Plaintiffs’ positions, stating that the Court found

against them [Id. at 8]. While Plaintiffs represent that they brought the issues with Defendant

Wesley’s designations to its attention in July 2022, Defendant Wesley asserts that Plaintiffs fail to

explain why they did not pursue the procedures outlined in the Court’s Discovery Confidentiality

Order [Id. at 10 (citation omitted)]. Defendant Wesley also states that Plaintiffs failed to meet and

confer on their Second Motion for Sanctions [Id.].

In addition, Defendant Wesley argues that “Plaintiffs’ [instant] motion . . . disregards many

of the Court’s rulings and conclusions” [Id. at 11; see also id. at 12–13]. With respect to the novel

and difficulty of the questions presented, Defendant Wesley “agrees that the voluminous nature of

the information (more than two million documents) that [it] has been producing in discovery

inherently involves some logistical complexity” [Id. at 14 (emphasis omitted)]. But, Defendant

Wesley asserts, “Plaintiffs have made no showing whatsoever that they needed six different

lawyers to bring the designation mistake to the Court’s attention” [Id.]. Although the logistics of

the discovery dispute were challenging, Defendant Wesley states that the underlying issue was not

[Id. at 15]. Defendant Wesley outlines the reasons for which it believes the hours on drafting the

motions and attending the hearings should be modified [Id. at 15–19]. In support of its position,

Defendant Wesley filed the Affidavit of Counsel, Wayne Ritchie [Doc. 206-1].

Plaintiffs filed a reply asserting that Defendant Wesley’s position, i.e., that the Court should

not award fees for the claims that the Court denied, “has been repeatedly rejected by the United

States Supreme Court, the Sixth Circuit, and this District” [Doc. 213 p. 2]. Plaintiffs state that

“[Defendant] Wesley’s [o]pposition mirrors the [p]arties’ pre-motion discussions where

[Defendant] Wesley did not . . . dispute the substance of any of [Plaintiffs’] time entries” [Id. at 3

(footnote omitted)]. They maintain that their fees are reasonable [Id. at 4–5]. They state that

because they offered Defendant Wesley a similar proposal about modifying the Protective Order,

Defendant Wesley’s errors could have been avoided [Id. at 5–6].

II. ANALYSIS

The only issue before the Court is whether Plaintiffs’ requested amount of attorneys’ fees

is reasonable. The parties apply the lodestar analysis to Plaintiffs’ fee request. Clark v. Liberty

Mut. Ins. Co., No. 1:22-CV-01089, 2023 WL 7034038, at *1 (W.D. Tenn. Sept. 12, 2023)

(collecting cases that a lodestar analysis is applicable to a sanctions award), aff’d sub nom. Clark

v. Ohio Sec. Ins. Co., No. 23-5808, 2024 WL 4751143 (6th Cir. Nov. 12, 2024). The lodestar

method is “the proven number of hours reasonably expended on the case by the attorney, multiplied

by a reasonable hourly rate.” Isabel v. City of Memphis, 404 F.3d 404, 415 (6th Cir. 2005). The

reasonableness of the hours and the rate is determined by considering twelve factors:

(1) time and labor required; (2) the novelty and difficulty of the

questions presented; (3) the skill needed to perform the legal service

properly; (4) the preclusion of employment by the attorney due to

acceptance of the case; (5) the customary fee; (6) whether the fee is

fixed or contingent; (7) time and limitations imposed by the client

or the circumstances; (8) the amount involved and the results

obtained; (9) the experience, reputation, and ability of the attorneys;

(10) the ‘undesirability’ of the case; (11) the nature and length of the

professional relationship with the client; and (12) awards in similar

cases.

Isabel, 404 F.3d at 415–16 (cleaned up); Blanchard v. Bergeron, 489 U.S. 87, 93 (1989)

(explaining that the above factors “provide[] a useful catalog of the many factors to be considered

in assessing the reasonableness of an award of attorney’s fees”). “The movant bears the burden of

establishing the reasonableness of his claimed hourly rate.” S.B. by & through M.B. v. Lee, No.

321CV00317, 2023 WL 6160615, at *9 (E.D. Tenn. Sept. 21, 2023) (citation omitted).

In Attorney Silvestri’s Declaration, Plaintiffs set forth their attorneys’ rates and the time

requested:

Timekeeper Drafting/Motion Hearing Hours2 Rate Total Requested

Hours

Richard Epstein 6.8 28.5 / 2 $500 $10,525

Jeffrey Backman 14.7 2.7 $425 $6,821.25

Eliot New 11.9 NA $400 $4,760

Phillip Silvestri 55.6 36.7 / 2 $400 $29,580

Andrew Gantz 18.3 NA $300 $5,490

Robert Vance 12.2 12.9 / 2 $295 $5,796.75

[Doc. 202-1 ¶ 16]. In total, Plaintiffs seek $62,973.00 [Id. ¶ 17]. Specifically, they ask:

[R]eimbursement for 60.2 hours associated with the Second Motion

for Sanctions [Doc. 139], 11.1 hours for the motion to extend [Doc.

145], 4.8 hours associated with the hearing with Judge Corker [Doc.

149], 44.4 hours related to [Defendant] Wesley’s Opposition to the

Second Motion for Sanctions and resultant filings [Docs. 150–52,

156], and 80.8 hours related to the April 4 hearing (which, again

2 As Plaintiffs state, the chart reflects the “total hours expended for the lawyers for the April

4, 2023 hearing[,]” but “the fee request seeks payment for only one-half of the time for preparation

and appearance at the hearing” [Doc. 202 p. 10 n. 5].

reimbursement is required at only 50%).

[Id. ¶ 18]. Plaintiffs’ total time requested pursuant to the Sanctions Order is 201.3 hours [See id.].

According to Attorney Silvestri’s Declaration:

The time reflected in Exhibit 1-A [above] is significantly less than

time actually expended, and the fees Diamond has paid. In

compiling this exhibit, I took an extremely critical view of the time

incurred, and excluded time entries collaterally related the motions

and hearing but which contributed to the final product, removed

timekeepers not formally admitted to this case even though

contributing to the work product, time of the third or more lawyers

participating in internal strategy discussions in which more than two

timekeepers were present, and travel time.

[Id. ¶ 14].

Defendant Wesley states that “Plaintiffs’ total fee award should be based on 50.5 hours”

[Doc. 206 p. 19].3

A. Second Motion for Sanctions [Doc. 139]

As noted above, Plaintiffs seek 60.2 hours associated with the Second Motion for Sanctions

[Doc. 202-1 ¶ 18]. They state that their “Second [M]otion for [S]anctions was prompted by

[Defendant] Wesley’s out-of-the-blue admission that its AEO designations were largely wrong”

[Doc. 202 p. 5]. Plaintiffs assert that they “sought to mitigate the damage [Defendant] Wesley had

caused, which required extensive efforts to try and understand what, exactly had gone wrong” [Id.

at 6]. According to Plaintiffs, “this was not a simple discovery dispute, and involved matters, that

3 Defendant Wesley does not challenge Plaintiffs’ counsels’ hourly rates [Doc. 206 p. 19].

Given no opposition, the evidence of each attorney’s relevant skills [see Doc. 202-1 ¶¶ 4–9; id. at

9–28], and this complex litigation [see Doc. 202-2 ¶ 6], the undersigned adopts Plaintiffs’

counsels’ hourly rates.

Further, while Defendant Wesley states that Plaintiffs’ fee award should be reduced to 50.5

hours, Plaintiffs’ attorneys bill at different hourly rates. Thus, Defendant Wesley’s proposal is not

helpful to the Court in determining the amount of reasonable attorneys’ fees.

. . . go to the heart of the issues in this case and potentially involved millions of dollars in damages”

[Id.].

Defendant Wesley suggests a more reasonable time is 16 hours given that “seven of the

eight claims advanced by Plaintiffs were unsuccessful” [Doc. 206 pp. 15–16].

Courts have disagreed on whether unsuccessful claims in a motion should result in a

reduction of time, cf. PepsiCo v. Cent. Inv. Corp., 216 F.R.D. 418, 421 (S.D. Ohio 2002) (“Next,

the Court finds no merit in the contention that [the defendant’s] fees related to the motion for

sanctions should be reduced because it did not get the relief it sought. This is not an application

for fees by a civil rights litigant in which the Court must gauge the plaintiff’s degree of success

versus the relief sought.”), with Outdoor Prod. Innovations, Inc. v. Jest Textiles, Inc., No. 1:18 CV

2457, 2020 WL 13470888, at *1 (N.D. Ohio June 11, 2020) (disagreeing with the holding in

Pepsico). Under these circumstances, however, the Court declines to make reductions.

Specifically, Defendant Wesley’s arguments paint an incomplete picture of what occurred. When

Plaintiffs filed the Second Motion for Sanctions, they did so based on Defendant Wesley’s

inaccurate representation that they incorrectly designated approximately 764 customers as AEO

[See Doc. 139]. It was only later and in response to the Second Motion for Sanctions that

Defendant Wesley provided details into the error and explained that its errors only affected 123

customers, not the 764 customers they previously identified. Plaintiffs’ claims, therefore, in the

Second Motion for Sanctions did not fail because they were meritless—they failed because

Defendant Wesley reversed course. The Court therefore does not find that Plaintiffs are using

sanctions “as a limitless trove for obtaining fees.” Outdoor Prod. Innovations, Inc., 2020 WL

13470888, at *1.

In other words, this was not a straightforward discovery matter. Indeed, although

Defendant Wesley has not pointed to any specific unreasonable time entries, the Court has

reviewed them [see Doc. 202-1 pp. 29–30] and notes that Plaintiffs incurred approximately

$22,586.00 in attorneys’ fees for it [id.].4 It appears that Attorney Silvestri spent the majority of

the time on drafting the motion [See id.]. The Court has reviewed the Second Motion for Sanctions

[Doc. 139], which in substance, spans two pages, and the Memorandum of Law [Doc. 140], which

in substance, spans seventeen pages. The memorandum, however, includes several exhibits, some

of which are declarations [See Docs. 140-2, 140-3]. The Court also notes that many attorneys

worked on this matter, and the time entries include instances of internal correspondence and

strategy. But here, the Court declines to make reductions given that these entries are minimal

compared to the substance of the motion. In light of the length of the filings and the complexity

and unusual nature of this issue, the Court finds the time incurred reasonable. Cf. Outdoor Prod.

Innovations, Inc., 2020 WL 13470888, at *1.

B. Joint Motion to Amend Scheduling Order and Continue Trial (“Joint

Motion”) [Doc. 145]

Plaintiffs seek 11.1 hours for drafting a motion to extend discovery [Doc. 202-1 ¶ 18.].

They state that the motion “needed to be particularly robust because the [p]arties’ prior requested

extension had initially been denied, and when it was ultimately granted, Judge Corker cautioned

the [p]arties that future requests would be met with strict scrutiny” [Doc. 202 p. 6]. They explain

that the 11.1 hours involved “in large part[,] back-and-forth negotiation with [Defendant] Wesley,

requiring extensive revisions on both sides” [Id.].

4 The Court arrived at this figure as follows: Attorney New’s 10.9 hours at $400 per hour +

Attorney Silvestri’s 28.8 hours at $400 per hour + Attorney Ganz’s 10.7 hours at $300 per hour +

Attorney Epstein’s 2.0 hours at $500 per hour + Attorney Backman’s 1.5 hours at $425 per hour

+ Attorney Vance’s 6.3 hours at $295 per hour [Doc. 202-1 pp. 29–30].

Defendant Wesley responds that this motion “was a stipulated, straightforward motion”

[Doc. 206 p. 16]. It states that much of the time was spent on “Plaintiffs’ demands that their

allegations of serious, intentional misconduct be included in the text without [Defendant] Wesley

agreeing to them” [Id.]. Defendant Wesley suggests that Plaintiffs be awarded 4 hours for this

motion [Id.].

The Court has reviewed Plaintiffs’ time entries relating to the Joint Motion [See Doc. 202-

1 pp. 29–30] and notes that Plaintiffs incurred approximately $4,545.50 for attorneys’ fees on this

filing [see id.].5 The Court finds some of the time entries unreasonable. The Joint Motion was

eleven pages in substance [Doc. 145], most of which outlined the case’s history. While the Court

declines to reduce the time for drafting the motion in light of the parties’ acknowledgment that

there was some back-and-forth between them about revisions, the Court finds that some of the

time entries spent for strategizing, review, and internal correspondence—on a Joint Motion—

unreasonable. The Court therefore reduces this time by 20% to account for this work, which results

in a reduction of $909.10.

C. Hearing before Judge Corker [Doc. 149]

Plaintiffs seek 4.8 hours associated with the January 30, 2023, hearing before Judge Corker

[Doc. 202-1 ¶ 18.]. They state that two attorneys and local counsel attended and prepared on behalf

of Plaintiffs [Doc. 202 p. 5.].

Defendant Wesley states that the telephonic conference before Judge Corker “was

relatively brief” and that it “would have been much shorter but for one of Plaintiffs’ counsel

spending a significant amount of time attempting to give an overview to the District Court of the

5 The Court arrived at this figure as follows: Attorney Silvestri’s 6.7 hours at $400 per hour

+ Attorney Epstein’s 1.5 hours at $500 per hour + Attorney Backman’s 2 hours at $425 per hour

+ Attorney Vance’s 1.9 hours at $295 per hour [Doc. 202-1 pp. 29–30].

allegations of intentional wrongdoing” [Doc. 206 p. 16]. Defendant Wesley proposes 1.5 hours

for this telephone call [Id.].

The Court has reviewed the billing entries for preparing and attending the January 30

hearing before Judge Corker [see Doc. 202-1 p. 30] and notes that Plaintiffs incurred

approximately $1,862.50 in attorneys’ fees for this hearing [see id.].6 According to Attorney

Ritchie’s Affidavit, the hearing lasted approximately 35 minutes [Doc. 206-1 ¶ 3], which is

consistent with Plaintiffs’ counsels’ billing entries [see Doc. 202-1 p. 30.]. Given that the hearing

was on a straightforward Joint Motion, the Court finds the participation of multiple attorneys

excessive. In light of the time entries demonstrating Attorney Backman and Attorney Silvestri

primarily prepared for the hearing [Doc. 202-1 p. 30], the Court will reduce Plaintiffs’ award by

$375 (which accounts for the 1.0 hour that Attorney Vance billed at $295 and the .2 that Attorney

Silvestri billed at $400 for discussing the matter with Attorney Vance).

D. Opposition to the Motion for Sanctions and Related Filings [Docs. 150–152,

156]

Plaintiffs seek 44.4 hours related to Defendant Wesley’s opposition to the Second Motion

to Compel and the related filings [Doc. 202-1 ¶ 18]. Plaintiffs state that “[Defendant] Wesley’s

opposition reversed course and again changed its story about its AEO designations” [Doc. 202 p.

7]. Plaintiffs explain that they “immediately began analyzing [Defendant] Wesley’s response, and

attempting to draft [the r]eply in support of its Motion for Sanctions, but given [Defendant]

Wesley’s ever-changing excuses, it became clear that discovery would likely be necessary to get

to the bottom of what happened” [Id.]. Plaintiffs state that “[t]his necessitated [their] [m]otion to

6 The Court arrived at this figure as follows: Attorney Backman’s 1.9 hours at $425 per hour

+ Attorney Silvestri’s 1.9 hours at $400 per hour +Attorney Vance’s 1 hour at $295 per hour [Doc.

202-1 p. 30].

[s]tay . . . and associated response and reply” [Id.]. They seek over 44 hours “associated with

dealing with the fall-out of Wesley’s revelatory [o]pposition and resultant motion practice” [Id.

(citation omitted)].

Defendant Wesley submits that its response to the Second Motion for Sanctions “led to

Plaintiffs making additional filings and requesting a hearing, which ultimately led to the Court’s

solution of the AEO issue, and which mooted Plaintiffs’ motions” [Doc. 206 p. 17.]. Instead of

addressing the “matters in a straightforward manner[,]” Defendant Wesley asserts that Plaintiffs

“continu[ed] to advance the seven claims and positions found by the Court to lack merit” [Id.].

With respect to the discovery that Plaintiffs sought due to its errors, Defendant Wesley states that

it was cooperative with Plaintiffs [Id.]. It contends that Plaintiffs should be awarded “no more

than 8 hours of time” for reviewing Defendant Wesley’s filings and submitting a request for a

hearing [Id.].

The Court has reviewed the time entries [see Doc. 202-1 pp. 30–31] and notes that Plaintiffs

incurred approximately $17,037.00 in attorneys’ fees on these issues [See id.].7 Defendant

Wesley’s opposition [Doc. 150] was approximately fourteen pages in substance, but it included

two declarations and email correspondence [Docs. 150-1 to 150-3]. Plaintiffs’ Emergency Motion

was approximately six pages in substance [Doc. 151] but includes an email [Doc. 151-1];

Defendant Wesley’s response thereto was approximately seven substantive pages [Doc. 152]; and

the reply was five pages in substances [Doc. 156].

After reviewing the time entries, the Court finds that some of the time entries are

7 The Court arrived at this figure as follows: Attorney Silvestri’s 18.2 hours at $400 per hour

+ Attorney Ganz’s 7.6 hours at $300 per hour + Attorney Backman’s 9.3 hours at $425 per hour +

Attorney New’s 1 hour at $400 per hour + Attorney Vance’s 5 hours at $295 per hour + Attorney

Epstein’s 3.3 hours at $500 per hour [Doc. 202-1 pp. 30–31].

unreasonable. For example, four attorneys billed to review Defendant Wesley’s opposition—

Backman, Epstein, Silvestri, and Vance [Doc. 202-1 pp. 20–22]. While the Court acknowledges

that Defendant Wesley’s opposition was significant to the case, it is not clear to the undersigned

why it was necessary that four attorneys review it. Further, there are too many instances (i.e., over

20 entries) relating to internal correspondence/communications and strategy [See id.].

Given the multiple billing entries, the Court has not endeavored to reduce the time on a

line-by-line basis. See Howe v. City of Akron, 705 F. App’x 376, 382–83 (6th Cir. 2017)

(“Requiring the district court to parse the bills in even greater detail would be tantamount to

requiring a complete audit. This court has approved the across-the-board approach to fee

determinations in the past.”). The Court finds a 10% reduction (or $1,703.70) appropriate. The

Court declines to make further reductions given that Defendant Wesley’s opposition reversed the

case’s course, and some internal conferences and strategies sessions were warranted.

E. Time for the April 4, 2023 Hearing

Plaintiffs’ time entries reflect 80.8 hours related to preparing for and appearing at the April

4, 2023 hearing, before the undersigned [Doc. 202-1 p. 7]. Pursuant to the Sanctions Order,

however, Plaintiffs are only seeking half this time [Doc. 202 p. 8]. They argue, “The significance

of this hearing cannot be overstated” [Id. at 7]. According to Plaintiffs, Defendant Wesley

acknowledged at the hearing that it cannot determine when Plaintiffs terminate contracts [Id.].

Plaintiffs state that “[t]his admission ultimately obviated the need for [them] to present the

substantial majority of the evidence that it had prepared, and essentially mooted [their] motion for

sanctions” [Id.].

Defendant Wesley responds that “the time for Plaintiffs’ counsel spent preparing to

advance the seven claims[,] which the Court rejected would not be reasonable or fair” [Doc. 206

pp. 17–18]. “[It] acknowledges that it may be the Court’s intention to allow Plaintiffs’ counsel

half of the time they were in attendance for the April 4 hearing without regard for the particular

arguments made at the hearing itself since Plaintiffs’ counsel needed to be present, at a minimum,

to discuss the issues, and ultimately, to hear and agree to the solution devised by the Court” [Id. at

18]. If so, Defendant Wesley “submits that 9 hours of in-court time (half of the 18 total hours—6

for each Plaintiffs’ three counsel), plus an additional 4 hours for half of the two out-of-town

attorneys’ travel time, for a total of 13 hours is reasonable for the hearing itself [Id.].

With respect to preparing for the hearing, “[Defendant] Wesley submits that the lion’s

share of Plaintiffs’ preparation time was expended on claims that the Court rejected—including

but not limited to the demonstrative exhibit prepared in an effort to advance claims of intentional

misconduct and to eliminate AEO designations from the Discovery Confidentiality Order” [Id.].

According to Defendant Wesley, “at most, two full days—16 hours—would be a reasonable

amount of time to prepare for the hearing overall and, accordingly, 8 hours is an appropriate

amount of time to award as half of the preparation time for the hearing as provided in the Court’s

[Sanction] Order [Id. at 18–19].

The Court has reviewed Plaintiffs’ counsels’ time entries [see Doc. 202-1 pp. 31–32] and

notes that Plaintiffs incurred appropriately $33,883.00 in attorneys’ fees for preparing and

attending the hearing [See id.].8 As noted above, the Court awarded Plaintiffs half of their time

for preparing and attending the hearing [Doc. 194 p. 26], and therefore, they only seek

approximately $16,941.50. The Court observes that the April 4 hearing lasted approximately 4

8 The Court arrived at this figure as follows: Attorney Silvestri’s 36.7 hours at $400 per hour

+ Attorney Epstein’s 28.5 hours at $500 per hour + Attorney Backman’s 2.7 hours at $425 per

hour + Attorney Vance’s 12.9 hours at $295 per hour [Doc. 201-2 p. 31–32]. Half of this amount

equals $16,941.50.

hours—half of which is 2 hours [See Doc. 169].9 Despite that, Plaintiffs’ counsel requests that the

Court award it approximately 40 hours—five workdays—for time spent preparing for and

attending the hearing.

With respect to the preparation, although the Court has noted that the hearing was not long,

the undersigned acknowledges that the brevity of the hearing was due to the Court’s proposal to

modify the Protective Order, thereby obviating the need for the parties to argue over the other

matters for which they prepared (i.e., Plaintiffs’ request for discovery into Defendant Wesley’s

errors). But five workdays to prepare for a hearing wherein counsel had already billed for

reviewing and analyzing all the pertinent filings appears unreasonable.

As noted above, the Court has carefully reviewed all the time entries for the April 4 Hearing

[See Doc. 202-1 pp. 31–32]. Much of the time was spent on internal communications, including

with Attorney Backman, who did not attend the hearing, and preparing demonstrative exhibits that

the Court found to be unhelpful. Considering the number of entries for the April 4 Hearing, the

Court has not endeavored to reduce them by line item. See Howe, 705 F. App’x at 382–83. But

given the magnitude of the hearing and the complexity of the issues, the Court will only reduce

the hours by 25% of the requested amount of $16,941.50, or a $4,235.38 reduction.

III. CONCLUSION

For the reasons set forth below, the Court GRANTS IN PART AND DENIES IN PART

Plaintiffs’ Motion to Determine Amount of Attorneys’ Fees Pursuant to Order Awarding

Discovery Sanctions [Doc. 202]. Specifically, the Court has subtracted $909.10 for the Joint

Motion, $375 for the hearing before Judge Corker, $1,703.70 for the Opposition and related filings,

9 Specifically, the hearing started at 9:30 and concluded at 2:30, but the Court and the parties

took an hour lunch break [Doc. 169].

and $4,235.38 for the April 4 hearing from Plaintiffs’ requested amount of $62,973.00. The Court

AWARDS Plaintiffs $55,749.82.

IT IS SO ORDERED.

ENTER:

i / { .-

Ns / ieAa: |. bow LI

Debra C. Poplin J

United States Magistrate Judge

17