Rouse v. H.B. Fuller Company

Background

This is a class action lawsuit in which plaintiffs allege breach of warranty and misrepresentation in connection with a product called Power Grout, manufactured by defendants H.B. Fuller Company and H.B. Fuller Construction Products Inc. (collectively, "H.B. Fuller"). In late 2024, H.B. Fuller sold the Power Grout business to non-party TEC Specialty, LLC, which is owned by non-party Pacific Avenue Capital Partners ("PACP").

In January 2025, the court allowed plaintiffs a limited reopening of fact discovery — described as "very limited and judicially tightly controlled" — permitting them to seek only a narrow subset of documents from defendants relating to the sale. Despite this restriction, in April 2025 plaintiffs served a deposition subpoena directly on TEC Specialty covering more than 20 topics, most of which exceeded the scope of what the court had permitted. Plaintiffs also served a separate subpoena on PACP, which was later withdrawn after negotiations between counsel.

Because the subpoena required compliance in northern Illinois, TEC Specialty initially filed a motion to quash in the U.S. District Court for the Northern District of Illinois, which transferred the matter to the District of Minnesota. This Court then heard oral argument on May 16, 2025, and granted TEC Specialty's motion to quash from the bench, describing the subpoena as "an impermissible end run around the Court's ruling on the scope of relevant and proportional discovery." The court invited TEC Specialty to submit a motion for fees and costs.

TEC Specialty's Fee Request

TEC Specialty moved for $107,803.95 in attorneys' fees and costs under Federal Rule of Civil Procedure 45(d)(1), broken down as follows: - $17,395.65 for work on the PACP subpoena - $52,914.60 for work on the TEC Specialty subpoena while the matter was before the Northern District of Illinois - $37,493.70 for work on the TEC Specialty subpoena after transfer to the District of Minnesota

TEC Specialty was represented by two law firms: O'Melveny & Myers (lead counsel, billing at $1,489.50/hour for partners and $954/hour for associates) and local counsel Fredrikson & Byron (billing at $710/hour for partners and $484/hour for associates).

Legal Standards

Rule 45(d)(1) of the Federal Rules of Civil Procedure requires any party or attorney who issues a subpoena to "take reasonable steps to avoid imposing undue burden or expense on a person subject to the subpoena," and mandates that courts enforce this duty by imposing sanctions — which may include attorneys' fees — on those who fail to comply. The court also noted its inherent authority to award fees against a party acting in bad faith, vexatiously, wantonly, or for oppressive reasons, and Rule 37(b)(2)(C), which allows fee awards for disobeying a court order.

Analysis and Ruling

PACP Subpoena — Denied

The court declined to award fees for work related to the PACP subpoena ($17,395.65). Because that subpoena was issued, objected to, and withdrawn through negotiation without any judicial involvement, the court found that awarding fees for that work would undermine the policy of encouraging parties to resolve disputes outside of formal court proceedings.

Work in the Northern District of Illinois — Denied

The court also declined to award fees for work performed in the Northern District of Illinois ($52,914.60). The court observed that TEC Specialty both sought to quash the subpoena and sought to transfer the matter to Minnesota — a dual strategy that likely generated unnecessarily duplicative legal work. The court endorsed the observation of the Illinois judge (the Honorable Edmond E. Chang) that the Rule 45 transfer step could often be avoided by simply asking the presiding court to hear the dispute directly.

Work in the District of Minnesota — Granted

The court found that sanctions under Rule 45(d)(1) were mandatory for work performed in this district, because plaintiffs' counsel took no reasonable steps to avoid burdening TEC Specialty. In fact, after the court had already found that even document discovery from third parties would be disproportionately burdensome, plaintiffs served a deposition subpoena — a more demanding form of discovery — on TEC Specialty.

On the question of the fee amount, the court agreed with plaintiffs that O'Melveny & Myers's rates were above the prevailing market rates in the District of Minnesota. The court applied the Fredrikson & Byron rates as the reasonable local market standard, and — because the billing records did not break down hours by individual attorney — applied a single blended rate of $511 per hour (the overall effective hourly rate for Fredrikson & Byron, reflecting that most work was done by associates). Applied to 41.2 hours of work in this district, the court calculated a lodestar fee (baseline reasonable fee calculation) of $21,053.20.

Discretionary Sanctions Payable to Defendants

Separately, invoking its inherent authority, the court also ordered plaintiffs' lead counsel and his firm to pay $8,946.80 to H.B. Fuller for fees and costs associated with the motion to quash and related litigation. The court grounded this award in the documented pattern of discovery misconduct and unprofessional conduct by both sides' lead attorneys throughout the case, describing the conduct as rising to the level of bad faith, vexatiousness, or wanton behavior.

Payments Directed to Counsel, Not Plaintiffs

The court explicitly ordered that all payments be made by plaintiffs' lead counsel and his firm, Vorys, Sater, Seymour and Pease, and must not be passed on to the plaintiffs themselves or factored into any settlement in a way that reduces the relief plaintiffs themselves may be entitled to.

Pattern of Litigation Misconduct

The opinion includes an extended discussion of what the court characterized as a "long history of regrettable behavior" by both sides' counsel. The court identified repeated instances in which plaintiffs' counsel (referred to as Mr. Hine) sought discovery the court had already denied, failed to follow court orders, and engaged in incivility. The court noted that it had warned the parties that continued misconduct would result in escalating consequences, and that this order was intended to make good on that warning.