2 Pharma Connect, LLC v. Mission Pharmacal Company

Background

(RC) 2 Pharma Connect filed a complaint alleging that Mission Pharmacal had violated a nondisclosure agreement and had breached, or clearly intended to breach, another agreement. After Mission Pharmacal’s counsel stated that the company was complying with and intended to continue complying with its obligations, (RC) 2 Pharma Connect filed an amended complaint adding a claim for anticipatory breach of contract and sought emergency injunctive relief.

The court later dismissed the amended complaint. It found that the nondisclosure-agreement allegations were speculative, that the complaint did not allege that Mission Pharmacal failed to perform required stability testing, and that the anticipatory-breach claim had been abandoned. The court then granted in part and denied in part Mission Pharmacal’s motion for sanctions under Federal Rule of Civil Procedure 11, 28 U.S.C. § 1927, and the court’s inherent power. It found Rule 11 sanctions appropriate and determined that fees and costs incurred defending against the amended complaint were needed for reimbursement and deterrence, but denied sanctions under Section 1927 and the court’s inherent power.

Fee Request and Analysis

Mission Pharmacal requested $139,608 in attorney fees and $1,090.46 in expenses and costs. (RC) 2 Pharma Connect opposed part of the request, arguing that Mission Pharmacal should not recover fees for preparing the sanctions motion and that some time entries were too vague.

The court agreed that fees for preparing the sanctions motion were not recoverable because the earlier sanctions ruling awarded only fees and costs incurred defending against the amended complaint. It declined to award $30,075 for that work. The court also reduced by 50% fees for entries covering work on both the motion to dismiss and the sanctions motion.

Using the lodestar method—the reasonable hours multiplied by reasonable hourly rates—the court reduced the requested rates. It set the lead partner’s rate at $500 per hour, the other partner’s rate at $550 per hour, the associate’s rate at $250 per hour, and the paralegals’ rates at $100 per hour. The court also reduced the remaining billed hours by 25% to account for excessive or unnecessary work, including time spent on certain emails, an unnecessary reference to preparing an answer, excessive briefing time, and excessive paralegal time.

The court found the requested $1,090.46 for travel, lodging, and a hearing transcript reasonable and allowed those expenses in full.

Reconsideration Request and Disposition

(RC) 2 Pharma Connect appeared to ask the court to reconsider its earlier order awarding sanctions. The court denied that request because the plaintiff identified no intervening change in controlling law, new evidence, overlooked decision or data, clear error, or manifest injustice. Referring only to arguments previously made in opposition to the sanctions motion did not meet the strict standard for reconsideration.

Judge Lewis J. Liman concluded that Mission Pharmacal’s motion for attorney fees and costs was GRANTED IN PART AND DENIED IN PART. Mission Pharmacal was awarded $43,406.25 in attorney fees and $1,090.46 in expenses and costs.