Viahart, LLC v. Creative Kids Online, LLC

Background

Viahart, LLC, a designer and manufacturer of children’s toys, sued Creative Kids Online, LLC, Creative Kids Far East, Inc., Creative Kids Enterprises, LLC, and CK Online, LLC. Viahart alleged, among other things, that the defendants infringed its “Brain Flakes” trademark by selling a similar toy under that trademark or confusingly similar marks.

During discovery, Viahart sought an order requiring more complete responses. On July 18, 2022, the court overruled the defendants’ objections and ordered them to produce specified categories of documents. After the defendants allegedly failed to comply for nearly two years, Viahart moved for sanctions under Rule 37(b)(2)(A) of the Federal Rules of Civil Procedure. The court granted that sanctions motion and ordered the defendants to pay certain reasonable expenses. The court limited the fee award to fees and costs attributable to briefing Viahart’s sixth motion in limine and efforts to compel production of the requested materials.

Fee application

Viahart filed an application seeking $63,866.50 for fees connected to discovery matters and $13,500 for 25% of the time spent on its summary-judgment motion. James H. Creedon submitted a declaration and invoices, but provided information about his own litigation experience only. The submission did not provide qualifications for the other people who billed time, and many billing entries identified billers only by initials. The declaration also did not state that the listed rates were the rates billed to and paid by Viahart’s client.

The defendants opposed the application. They argued that Viahart had not provided enough information to establish that the fees were reasonable, sought fees for work unrelated to the discovery defaults, and used block billing. Block billing combines multiple tasks in one time entry, making it difficult to determine how much time was spent on a particular task. The defendants also argued that the sanction did not cover work on Viahart’s summary-judgment motion.

Viahart’s reply offered additional information and stated that portions of some entries had been highlighted. It offered to provide a more detailed explanation of the highlighted portions but did not provide additional information about the billers’ qualifications. The application was then delayed by an automatic stay after one defendant filed for bankruptcy protection. The stay was later lifted, and the court considered the fee motion.

Legal standard

The court explained that a fee request for discovery misconduct begins with a lodestar analysis. The lodestar is the product of a reasonable hourly rate and a reasonable number of hours, and it is generally presumed to be a reasonable fee. A fee applicant must support the request with contemporaneous time records identifying, for each attorney, the date, hours worked, and nature of the work. The court may consider the billers’ experience and qualifications, the customary rates for similar work in the district, the difficulty of the matter, the time required, and what a reasonable paying client would be willing to pay.

Court’s analysis

The court held that the application was inadequate in several respects. First, the lack of information about the qualifications of the people who billed time prevented the court from deciding whether the requested hourly rates were reasonable. The court could not determine whether the billers were partners, associates, or legal assistants, and in many instances did not know their full names.

Second, the court found that the application appeared to seek reimbursement for work outside the scope of the earlier sanction. For example, it included time spent drafting the initial discovery requests, even though those requests led to the dispute. The application also sought compensation for part of the summary-judgment briefing. The court stated that the sanction covered the motion-in-limine briefing and efforts to compel production, not all work related to the subject matter of the requested discovery.

Third, the court found that the use of block billing made the requested amount impossible to audit. In some entries, Viahart sought only part of the time recorded, but did not explain how much of each entry it claimed or why. The court also could not determine whether particular work—such as reviewing discovery responses—was connected to the deficiencies that led to the sanctions.

Disposition

The court stated that Viahart was entitled to some amount of money for the defendants’ sanctionable conduct, but that the application did not provide enough information to evaluate the amount and appeared to include work outside the sanction’s scope. The court denied Viahart’s motion for attorney’s fees without prejudice and directed the Clerk of Court to terminate the motion at Dkt. No. 269.