IN RE: NAVIDEA BIOPHARMACEUTICALS LITIGATION

Background

Michael Goldberg, a defendant and counterclaim plaintiff, sought advancement or indemnification of attorneys’ fees and expenses connected with litigation involving Navidea Biopharmaceuticals, Inc. The court had previously dismissed Navidea’s breach-of-fiduciary-duty claim against Goldberg and determined that he was entitled to indemnification for reasonable fees incurred defending that claim. The court also determined that he was entitled to advancement of reasonable fees incurred defending Navidea’s remaining claims.

The court had repeatedly instructed Goldberg to submit detailed billing records separating time spent on each claim and explaining the work performed. It had also warned that using broad, conclusory percentage estimates instead of task-specific, contemporaneous documentation could harm his fee requests.

Magistrate Judge’s Recommendation and Objections

Goldberg moved for advancement of fees and expenses incurred between September 1, 2020, and March 31, 2022. The request included fees for attorneys and expenses involving a court-reporting service and an electronic-discovery vendor. Goldberg also sought fees incurred in connection with earlier fee-advancement motions.

Magistrate Judge Figueredo recommended awarding Goldberg $12,600 for the earlier fee-related work, sometimes called “fees on fees,” and denying the remainder of the application. The recommendation identified three recurring defects in Goldberg’s records: the entries were not separated by claim, the percentage reductions were not adequately explained, and supporting documentation did not allow the court to verify the calculations.

Goldberg objected. He argued that the court should not second-guess his attorneys’ judgment about the time spent on matters related to Navidea’s advancement obligations, that an arms-length negotiation between sophisticated parties made an independent reasonableness review unnecessary, and that claim-by-claim allocation was not required because some claims involved common facts or legal theories. Navidea opposed the motion and responded to Goldberg’s objections.

Court’s Analysis

Because Goldberg’s objections largely repeated arguments he had already made to the magistrate judge, Judge Caproni reviewed the challenged recommendation for clear error rather than conducting a fresh review of every issue.

The court held that Goldberg had repeatedly failed to comply with its instructions concerning fee applications. He again did not provide a claim-by-claim breakdown, used percentage reductions without adequate documentation, and asked the court to accept his attorneys’ estimates at face value. The court explained that the party requesting fees bears the burden of showing that the fees are reasonable and ordinarily must provide contemporaneous records identifying, for each attorney, the date, hours spent, and nature of the work.

The court also reiterated that it had to assess the reasonableness of the fees and ensure that amounts related to non-advanceable claims, including Goldberg’s own claims, were not included in the amount Navidea was required to advance. Because Goldberg’s deficient submissions prevented the court from assessing the reasonableness of the requested fees, the court agreed that denying that portion as a sanction under Federal Rule of Civil Procedure 16 was appropriate.

Neither party objected to the recommendation that Goldberg receive $12,600 for fees related to prior advancement motions. The court therefore reviewed that part for clear error and adopted it, finding no clear error.

Disposition

Judge Valerie Caproni adopted Magistrate Judge Figueredo’s Report and Recommendation in its entirety. Goldberg’s application for advancement or indemnification of attorneys’ fees and expenses was granted in part and denied in part. The court awarded $12,600 for the earlier fee-related work and denied the balance of the application. The clerk was directed to terminate the motion at docket entry 275.