Johnson v. Oak Creek Investments

Background

The court had previously entered the parties’ joint consent decree for injunctive relief, requiring Oak Creek Investments to remediate the subject property by December 31, 2019. After the parties inspected the property, Johnson made a settlement demand exceeding $20,000 and later made a reduced demand. Oak Creek repeatedly requested documents supporting Johnson’s attorneys’ fees and costs under General Order 56, but Johnson did not provide those documents.

The court had referred the case to mediation and set November 25, 2019, as the mediation deadline. Oak Creek again requested fee and cost documentation before that deadline. Johnson’s counsel responded only after Oak Creek filed its administrative motion and after the mediation deadline had passed. Johnson then filed a motion to strike Oak Creek’s motion.

Motion to Strike

Johnson argued that Oak Creek’s motion should be stricken because it contained information about confidential settlement negotiations. The court inferred that Federal Rule of Evidence 408 was the basis for this argument. Rule 408 generally limits the use of compromise negotiations to prove liability, the invalidity or amount of a disputed claim, or to impeach a witness through a prior inconsistent statement or contradiction. The court held that Rule 408 did not prohibit Oak Creek from referring to the negotiations to show Johnson’s alleged noncompliance with General Order 56.

The court also found that Johnson’s cited earlier proceeding did not support striking the entire motion because that proceeding had struck only portions describing settlement negotiations. The court found no other basis for striking Oak Creek’s motion and denied Plaintiff’s Motion to Strike.

Administrative Relief and Fee Documentation

General Order 56(6) states that, when the parties reach a tentative agreement on injunctive relief, the plaintiff must provide a statement of costs and attorneys’ fees and, if requested, documentation supporting the fees similar to a client billing statement. The court held that the parties’ consent decree constituted a tentative agreement on injunctive relief. Because Oak Creek requested documentation, the court held that General Order 56 required Johnson to provide detailed information about his costs and attorneys’ fees.

Johnson argued that the word “should” in General Order 56 made the documentation optional. He also argued that attorney-client privilege protected the information. The court rejected both arguments. It reasoned that the request came after the injunctive-relief portion of the case had been resolved, that the remaining issue was the amount of damages, and that the requested invoices should concern settlement-related work rather than litigation strategy or legal advice. The court therefore held that the fee information could be disclosed without revealing privileged information. It allowed Johnson to describe tasks at a high level, such as “legal research” or “drafting complaint,” to reduce the risk of revealing privileged material.

Order and Fees

The court granted Defendant’s Motion for Administrative Relief and ordered Johnson to provide Oak Creek and the mediator, Katherine Clark, with a line-item fee invoice identifying the date, biller, hourly rate, justification for the hourly rate, task, and amount of time billed per task by December 31, 2019. Because the original mediation deadline had passed, the court ordered the parties to complete mediation by January 28, 2020.

The court also found that defense counsel had billed a reasonable number of hours at a reasonable hourly rate and that the requested amount was appropriate. It granted Oak Creek’s request for $3,380 in fees associated with bringing the motion. The opinion was signed by United States District Judge Edward J. Davila.