United States of America v. Academy Mortgage Corporation

Background

Academy Mortgage Corporation asked the district court for relief from a nondispositive pretrial order issued by Magistrate Judge Kim. That order denied Academy’s request to compel production of documents from Thomas & Solomon, the law firm representing relator Gwen Thrower. The documents were sought during supplemental discovery concerning Thrower’s request for attorney’s fees.

Academy’s Requests Nos. 48 and 49 sought raw time entries and metadata associated with those entries. Thrower objected that producing the documents would be unduly burdensome and disproportionate to the needs of the case. Her counsel had already produced records showing contemporaneous billing, including more than 9,000 entries organized by date and timekeeper.

Legal standard

Under Federal Rule of Civil Procedure 72(a), a district court must set aside a magistrate judge’s order if it is clearly erroneous or contrary to law. A decision is clearly erroneous when the reviewing court has a definite and firm conviction that a mistake was made. The district court reviews the magistrate judge’s legal conclusions independently to determine whether they are contrary to law.

The discovery question also involved proportionality under Federal Rule of Civil Procedure 26(b)(1), which requires balancing the burden of producing information against the needs of the case.

Court’s analysis

The court rejected Academy’s assertion that the billing records were likely reconstructed. Nelson Thomas, a founding partner of Thomas & Solomon, stated that timekeepers were required to record their work when it was performed or direct a staff member to do so. Although the records were later reviewed for accuracy, duplication, unnecessary work, and privilege, the underlying reports were represented to have been created contemporaneously.

Academy relied partly on the 178.9 hours that Thomas & Solomon spent reviewing and preparing the time records. The court found that this amount of time did not establish reconstruction because the review covered more than 9,000 entries over seven years and included checking entries against emails, looking for inefficiency or duplication, and conducting a privilege review.

The court found that producing the raw records would impose a substantial burden. The entries could contain privileged information, including details of communications between Thrower and her counsel, the identities of unretained experts, communications about litigation strategy, and the identity of potential co-counsel. The court also rejected Academy’s assertion that privilege had been waived merely because some time records were submitted with the fee motion.

The court noted that any issue about whether time spent reviewing the records should be compensated could be addressed when deciding the attorney-fee motion. If the submitted documentation did not adequately support compensation for those hours, the fee award could be reduced. The court also explained that its earlier approval of limited supplemental discovery had not resolved the specific proportionality objections to Requests Nos. 48 and 49.

Disposition

The court concluded that Magistrate Judge Kim’s decision was not clearly erroneous or contrary to law. It therefore denied Academy’s request for relief from the magistrate judge’s order denying Academy’s request for production of documents.