DCR Workforce, Inc. v. Coupa Software Incorporated

Background

DCR Workforce, Inc. and Coupa Software Incorporated entered an Asset Purchase Agreement governing the sale and transfer of DCR’s vendor-management products. The agreement provided for cash consideration and possible additional stock payments tied to revenue targets. Coupa issued the first contingent stock payment but later determined that the products had not met the second revenue target.

DCR sued Coupa on eight theories, including breach of contract, breach of the duty of good faith and fair dealing, unjust enrichment, declaratory relief, equitable accounting, specific performance, fraud in the inducement, and negligent misrepresentation. DCR sought damages of approximately $72,326,752. The case was initially filed in Florida state court, removed to federal court, and transferred to the Northern District of California under the agreement’s forum-selection clause. This Court denied DCR’s request to compel documents or remand the case and granted Coupa’s motion to dismiss. The Court entered judgment for Coupa.

Fee Request and Governing Standard

Coupa sought $627,735.81 in attorneys’ fees and expenses under the agreement’s provision awarding reasonable fees to the prevailing party in an action to enforce or interpret the agreement. The parties agreed that Coupa was the prevailing party and entitled to reasonable fees. The dispute concerned the amount.

The Court applied Delaware law under the agreement’s choice-of-law provision. Under that law, the party seeking fees must show that the requested amount is reasonable. The Court considered factors including the time and labor required, the difficulty of the issues, customary billing rates, the amount involved, the results obtained, time limitations, counsel’s experience, and whether the fee was fixed or contingent.

Analysis

The Court rejected DCR’s argument that Coupa was required to submit fully detailed invoices for every time entry. However, some entries lacked enough detail for the Court to evaluate their reasonableness.

The Court excluded the $68,350 requested for two Florida lawyers because Coupa had grouped their work into summary entries and acknowledged that the lawyers had not provided an itemized accounting. The Court also excluded $13,946.66 for “Research expenses in drafting briefs” because that description was too vague.

The Court did not reject all of Coupa’s grouped billing entries. It found that the entries generally described the nature of the work, but their generic explanations would weigh against awarding all the claimed hours. The Court also rejected DCR’s challenge to the hourly rates, which ranged from $525 to $1,555 for four attorneys. The Court found that comparable Delaware decisions supported the rates and that Delaware law permitted consideration of rates charged in the locations where counsel practiced.

The Court credited Coupa’s successful defense, including its success on removal, transfer, dismissal, and opposition to DCR’s motion to compel or remand. It also considered that Coupa had paid its counsel before knowing whether it could recover the fees. But the Court concluded that the dispute involved a single contract and that the motions did not present particularly novel or difficult legal questions.

The Court was especially skeptical of the hours billed for transfer, the motion to compel or remand, dismissal, removal, and discovery review. It noted that some discovery work concerned materials that were never provided to DCR and that more than 65 hours of “case analysis” and administrative work overlapped with work on the substantive motions. The Court found that the hours exceeded a reasonable amount and imposed a 30 percent reduction on the remaining fees.

Disposition

The Court excluded $68,350 for Florida counsel and $13,946.66 for unidentified expenses. It then reduced the remaining $545,439.15 request by 30 percent, resulting in a fee award of $381,807.40. The Court granted in part and denied in part Coupa’s motion for attorneys’ fees and stated that the order disposed of Docket No. 70.