LCS Group LLC v. Shire LLC

Background

LCS Group LLC brought claims against Shire LLC, Shire Development LLC, Shire PLC, and Haug Partners LLP arising from a patent dispute. On March 8, 2019, the court dismissed the complaint and granted the defendants’ motion for sanctions under Federal Rule of Civil Procedure 11. The court ordered LCS Group and its counsel, Stephen Lobbin and Lobbin’s former law firm, Foundation Law Group LLP, to pay the defendants’ reasonable attorney’s fees and other expenses connected with the dismissal and sanctions motions.

The defendants later moved for attorney’s fees. The motion was referred to Magistrate Judge Stewart D. Aaron. Judge Aaron granted the fee motion in part and denied it in part, and later denied Lobbin’s motion for reconsideration. Lobbin appealed those rulings directly to the U.S. Court of Appeals for the Second Circuit. The Second Circuit held that it lacked jurisdiction over the appeal because Judge Aaron’s decision was either a report and recommendation on a dispositive issue or a ruling that first had to be reviewed by the district court.

The district court then ruled that the attorney’s-fee motion should have been treated as dispositive, meaning it required a report and recommendation for district-court review. The court also extended the time for objections. The defendants sought reconsideration of that order, and Lobbin filed objections to Judge Aaron’s fee rulings.

Motion for reconsideration

The court granted the defendants’ motion for reconsideration in part and denied it in part. It denied reconsideration of the ruling that the attorney’s-fee motion presented a dispositive issue. The court explained that the Second Circuit had expressly left that issue unresolved, and the defendants had not shown that the district court overlooked controlling authority, made clear error, or caused a manifest injustice.

The court granted reconsideration concerning the extension of time for Lobbin to object. Under Federal Rule of Civil Procedure 72, objections to a magistrate judge’s ruling or report and recommendation generally must be filed within 14 days. The court held that Lobbin’s deadline had expired in 2019 and that his direct appeals did not extend or suspend the deadline. It further held that the prior extension, made after the deadlines had passed, was not supported by excusable neglect. The court considered Lobbin’s failure to follow the objection procedure, the length of the delay, and the effect of reopening review nearly a year later.

The court therefore vacated the portion of its January 13, 2020 order that extended the objection period and deemed Lobbin’s objections untimely filed.

Attorney’s-fee ruling and disposition

Because the objections were untimely, the parties waived further judicial review of Judge Aaron’s fee decisions. The district court reviewed the recommendation for clear error and found none. It adopted the report and recommendation in its entirety. The court also stated that, even if it considered Lobbin’s objections, it would overrule them because they repeated earlier arguments or sought to relitigate issues already decided.

The court granted in part and denied in part the defendants’ motion for attorney’s fees. It ordered LCS Group LLC, Stephen Lobbin, and Foundation Law Group LLP, jointly and severally, to pay the defendants $133,803.75. Judge Analisa Torres directed the Clerk of Court to terminate the reconsideration motion.