Saks Incorporated v. Attachmate Corporation, 1:14-cv-04902

Background

Saks sued under the Declaratory Judgment Act; Attachmate counterclaimed for copyright infringement and breach of contract. The court referred a discovery dispute to Magistrate Judge Ellis.
Saks served document requests seeking communications and documents about Attachmate’s "ability to access" or click-wrap license language; Attachmate objected as overbroad and burdensome and produced only customer-specific license agreements.
The Court ordered Attachmate to produce documents (three years pre-suit to present) about contracts with similar language, drafting/interpretation, and disputes with third parties, and required Attachmate to investigate availability of such materials.
Attachmate reported it had no topic-based repositories and claimed a manual search of client files would take hundreds/thousands of hours; it filed a protective order motion and submitted an inadequate IT affidavit.
The Court denied the protective order, precluded Attachmate from using at trial documents it could have produced, and authorized Saks to seek fees and costs for pursuing the ordered discovery.
Saks sought $31,131 in fees and $336.90 in costs; the Court found counsel’s hourly rates reasonable but reduced the requested fee by 30% for excessive/duplicative hours, awarding $21,791.70 in fees plus $336.90 in costs, jointly and severally payable by Attachmate and its counsel.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Attachmate must search for and produce documents about the "ability to access" language beyond produced licenses	Saks: documents about drafting, interpretation, and enforcement of similar language are relevant and discoverable	Attachmate: request is vague, overbroad, unduly burdensome; files are organized by client, not topic, making search impracticable	Court ordered production (3-year temporal scope) and required Attachmate to investigate; denied protective order
Whether Attachmate’s affidavit satisfied court's requirement to show burden of search	Saks: Attachmate failed to provide a sufficiently detailed technical affidavit	Attachmate: offered declaration from database administrator describing burden	Court: affidavit was insufficiently detailed; ordered more specific explanation or face sanctions/preclusion
Whether sanctions (fees/costs) are appropriate for Attachmate’s discovery misconduct	Saks: seeks attorneys’ fees and costs for time spent pursuing ordered discovery	Attachmate: opposes amount and contends insufficient market-rate proof and that fees should be limited to response to protective order	Court granted fees and costs but reduced requested fees by 30% for excessive/duplicative time; awarded $21,791.70 fees and $336.90 costs
Standard and reasonableness of requested rates and hours	Saks: proffers hourly rates ($450 for partners/associates; $180 for law clerk) and detailed time records totaling 70.5 hours	Attachmate: challenges absence of market rate proof and argues hours excessive	Court found rates reasonable based on district practice, but hours excessive; imposed 30% across-the-board reduction

Key Cases Cited

Chambers v. NASCO, Inc., 501 U.S. 32 (1991) (courts possess inherent authority to manage cases and impose sanctions)
Revson v. Cinque & Cinque, P.C., 221 F.3d 71 (2d Cir. 2000) (discussing inherent power to sanction and manage litigation)
Arbor Hill Concerned Citizens Neighborhood Ass'n v. County of Albany, 493 F.3d 110 (2d Cir. 2007) (lodestar method and factors for determining reasonable attorney’s fees)
McDaniel v. County of Schenectady, 595 F.3d 411 (2d Cir. 2010) (reasonable hourly rate is what a paying client would accept)
Blum v. Stenson, 465 U.S. 886 (1984) (burden on fee applicant to submit sufficient evidence supporting hours and rates)
Kirsch v. Fleet St., Ltd., 148 F.3d 149 (2d Cir. 1998) (time records should be contemporaneous and detailed)
Clarke v. Frank, 960 F.2d 1146 (2d Cir. 1992) (court may rely on its familiarity with the case when assessing reasonable hours)
Luciano v. Olsten Corp., 109 F.3d 111 (2d Cir. 1997) (approach to reductions for excessive or unnecessary time)