Export Development Canada v. East Coast Power & Gas, LLC

Background

This action seeks to enforce an arbitration award. In an earlier order, the court awarded Export Development Canada (EDC) attorney’s fees under Rule 37 of the Federal Rules of Civil Procedure after EDC successfully compelled East Coast Power & Gas, LLC (East Coast) to produce the Kowal Report. East Coast had described the report as protected by attorney-client privilege or the work-product doctrine. The court found that East Coast’s description of the report as having been prepared for legal analysis was fictional and directed EDC to submit a fee application limited to work associated with obtaining the report.

EDC sought fees for eight categories of work, including its motions and briefing concerning production of the report, its requests for fee shifting, and its fee application. EDC submitted records showing 129.4 hours of work and $59,802.50 in fees before voluntary discounts. It requested $41,513.95 after waiving certain time, including all paralegal time, and applying discounts to several categories of work.

Court’s Analysis

The court found that all eight categories of filings were specifically associated with compelling production of the Kowal Report, rather than with unrelated alleged deficiencies in East Coast’s privilege log. It accepted David Mannion’s hourly rate of $465 as reasonable. The court also found that some of Mannion’s work involved tasks that could have been performed at a lower billing rate, such as checking case citations. Because the existing discounts did not fully account for those concerns, the court applied an additional 20 percent discount to the two briefs concerning the Kowal Declaration.

The resulting fee award was $37,979.95, representing approximately 82 hours of work. The court concluded that the amount was reasonable because East Coast’s improper privilege claim required multiple rounds of letters and briefing over many months before EDC obtained the report.

The court also considered who should pay. Rule 37 permits a monetary sanction to be imposed on the disobedient party, the attorney advising that party, or both. The court found that East Coast was responsible for the report’s original privilege and work-product markings and for representations made through the Kowal Declaration. It also found that East Coast’s attorneys were responsible because reasonable review of the report should have shown that it was a financial analysis with no legal analysis, legal advice, or indication that it was prepared for anticipated litigation. The attorneys also continued resisting production through multiple rounds of briefing.

Ruling

Magistrate Judge Robert W. Lehrburger awarded EDC $37,979.95 under Rule 37. East Coast is solely responsible for paying $18,990.00. East Coast and its counsel of record, Levitt LLP, are jointly and severally liable for the remaining $18,989.95, meaning EDC may collect that portion from either or both of them, subject to the court’s allocation. The court stated that East Coast’s culpability was greater than its attorneys’ culpability, so it did not impose joint and several liability on counsel for the entire award.