EPAC Technologies, Inc. v. Thomas Nelson, Inc.
3:12-cv-00463
M.D. Tenn.Mar 31, 2022Background
- EPAC moved to appoint Special Master Craig Ball (appointed Nov. 18, 2014) to investigate Thomas Nelson’s preservation, collection, and production of ESI.
- Special Master Ball (Jan. 29, 2016) found negligent preservation and loss of ~1.5 million emails and other data, recommended curative measures and only a nominal fee award to EPAC.
- The Magistrate Judge adopted portions of the Special Master’s report: ordered curative jury instructions, some evidence exclusion, redepositions, shifted 75% of the Special Master’s fees to Thomas Nelson, and assessed Thomas Nelson for 50% of EPAC’s reasonable fees/costs “incurred during the Special Master proceedings.”
- Chief Judge Crenshaw affirmed the 50% allocation but excluded fees attributable to EPAC’s unreasonable litigation tactics and noted other orders assigning costs (e.g., Delta Set Protocol, ERP/WMS) to EPAC.
- EPAC sought 50% of $1,434,165.24 (fees $1,260,138.14; costs $174,027.10). The Magistrate Judge limited the award to fees/costs incurred during the Special Master proceedings (including the motion to appoint), found EPAC’s billing records insufficiently specific, reduced fees by 80%, declined to award Redgrave LLP fees, and awarded Thomas Nelson payment of $65,601 in fees and $3,531.73 in costs.
Issues
| Issue | EPAC's Argument | Thomas Nelson's Argument | Held |
|---|---|---|---|
| Scope of award: what qualifies as "incurred in connection with the Special Master proceedings" | Broad reading: includes later discovery work tied to Special Master issues (Delta Set, ERP/WMS, Delta Set Protocol) | Narrow reading: limited to work during Special Master appointment (Nov 18, 2014–Jan 28, 2016) and tasks directly related to Special Master | Limited to fees/costs incurred during Special Master appointment and the motion to appoint; excludes post-report work (Delta Set Protocol, ERP/WMS) and items specifically ordered paid by EPAC elsewhere |
| Sufficiency and reasonableness of billing records | Submitted large volume of time entries; argues fees were caused by Thomas Nelson’s misconduct and thus recoverable | Many entries are block-billed, vague, mix tasks inside/outside scope; unreasonable hours/rates; burden on EPAC to document | Records inadequate to permit precise award; across-the-board reduction applied (80%); only ~20% of requested fees deemed attributable and reasonable |
| Fees for out-of-state e-discovery specialist (Redgrave LLP) | Retention was reasonable given anticipated Special Master work and technical complexity | Redgrave retained after Special Master report; entries largely post-report and relate to excluded tasks; rates and necessity challenged | No fees awarded for Redgrave; majority of his work fell outside award scope |
| Taxable costs claimed beyond initial submission | EPAC sought additional invoices as Special Master–related costs | Thomas Nelson objected to invoices outside timeframe or related to excluded protocols | Awarded original costs and excluded specific later invoices (DSicovery and LegalVision); total costs award to EPAC $3,531.73 (50% of $7,063.45) |
Key Cases Cited
- Hensley v. Eckerhart, 461 U.S. 424 (1983) (fee applicant bears burden to document hours and rates; inadequate documentation may reduce award)
- Imwalle v. Reliance Med. Prods., Inc., 515 F.3d 531 (6th Cir. 2008) (documentation must enable court to determine with high degree of certainty that hours were reasonably expended)
- United States ex rel. Lefan v. Gen. Elec. Co., 397 F. App’x 144 (6th Cir. 2010) (billing records must permit high degree of certainty about time/necessity)
- Lorillard Tobacco Co. v. Elston Self Serv. Wholesale Groceries, Inc., 259 F.R.D. 323 (N.D. Ill. 2009) (fees must relate to conduct that produced awardable relief)
- Fox v. Vice, 563 U.S. 826 (2011) (district courts may make percentage reductions to achieve rough justice rather than perfect accounting)
- Ne. Ohio Coal. For the Homeless v. Husted, 831 F.3d 686 (6th Cir. 2016) (courts need not achieve auditing perfection; rough justice standard)
- Loranger v. Stierheim, 10 F.3d 776 (11th Cir. 1994) (where documentation is voluminous and imprecise, across-the-board reductions are permissible)
- Coulter v. Tennessee, 805 F.2d 146 (6th Cir. 1986) (endorsing percentage reductions of fee awards)
- Howe v. City of Akron, [citation="705 F. App'x 376"] (6th Cir. 2017) (block billing with inadequate descriptions may justify reductions)