ResCap Liquidating Trust v. Primary Residential Mortgage, Inc.

Background

ResCap Liquidating Trust submitted attorney billing invoices in support of its motion for attorney fees, costs, and prejudgment interest. ResCap redacted information it believed was protected by attorney-client privilege or the attorney work-product doctrine, which generally protects certain confidential communications and materials prepared for litigation. ResCap also submitted unredacted invoices to the court for private review.

Primary Residential Mortgage, Inc. (PRMI) argued that the redactions prevented it and its fee expert from evaluating whether the billed tasks were excessive, duplicative, or performed by timekeepers with unnecessarily high hourly rates. PRMI asked the court to require ResCap to remove redactions covering nonprotected information and, for protected entries, provide short general explanations. PRMI also objected that ResCap had not produced invoices for January through October 2019 and April 2020, even though ResCap sought fees for those periods.

Parties’ Positions

ResCap said it had used the same process as in an earlier related proceeding involving the same legal counsel, where the court denied requests for unredacted time entries and a privilege log and instead reviewed a limited sample privately. ResCap opposed revising the redactions or providing a privilege log because the parties remained adverse and PRMI intended to appeal the court’s rulings. ResCap also argued that reviewing 175 pages of redacted invoices would be burdensome. It offered to provide additional information if PRMI identified narrower groups of entries and offered to provide redacted invoices for April 2020, but PRMI rejected that offer.

Court’s Ruling

The court directed the parties to continue meeting and conferring under the procedures used in the earlier related proceeding. It found that the burden of preparing a privilege log for all 175 pages outweighed the likely benefit and expressed concern that a privilege log would not resolve PRMI’s concerns.

The court authorized a limited private review of selected billing entries. PRMI must identify and submit no more than 35 pages of the 175 pages for the court to audit concerning attorney-client privilege and work-product protection. ResCap must submit the corresponding unredacted entries to the court for private review, and the parties must meet and confer about which periods, entries, or timekeepers will be reviewed. The court also directed ResCap to provide PRMI with its redacted April 2020 invoices.

After reviewing the entries, the court may allow ResCap to supplement its fee petition for time spent on this work if the redactions were proper. If some redactions were improper, the court may consider reducing the fee petition or requiring more information from ResCap. At that time, the court did not require PRMI to produce a summary of its fees and costs. Judge Susan Richard Nelson issued the order on October 9, 2020.