Opinion
Civil Action 2:23-cv-03546-DCN
08-09-2024
ERIC BEAUMONT, Plaintiff, v. WALTER SCOTTY BRANCH, an individual; SHEA C. HARRELSON, an individual; AVANTE DIAGNOSTICS LLC, a Delaware entity; BIODXX INC., a Pennsylvania entity; INDEPENDENT CLINICAL LABORATORIES INC., a Florida entity; KOR LIFE SCIENCES LLC, a South Carolina entity; KORPATH HOLDINGS, LLC, a South Carolina entity; MEDCOAST LLC, a South Carolina entity; SILVERPATH INC., a Pennsylvania entity; and VIKOR SCIENTIFIC, LLC, a South Carolina entity, Defendants.
Ellis R. Lesemann (Fed. ID No. 7168 Benjamin H. Joyce (Fed. ID No. 11769) LESEMANN & ASSOCIATES LLC Attorneys for Defendants
Ellis R. Lesemann (Fed. ID No. 7168 Benjamin H. Joyce (Fed. ID No. 11769) LESEMANN & ASSOCIATES LLC Attorneys for Defendants
RESPONSE IN OPPOSITION TO PLAINTIFF'S REQUEST FOR $76,734.45 IN ATTORNEYS' FEES AND COSTS
Defendants Walter Scotty Branch (“Branch”), Shea C. Harrelson (“Harrelson”), Avante Diagnostics LLC (“Avante”), BioDxx, Inc. (“BioDxx”), Independent Clinical Laboratories, Inc. (“ICL”), KOR Life Sciences, LLC (“Kor Life”), KorPath Holdings, LLC (“KorPath”), MedCoast LLC (“MedCoast”), Silverpath, Inc. (“Silverpath”), and Vikor Scientific, LLC (“Vikor”) (collectively, the “Defendants”) hereby submit this Response in Opposition to Plaintiff Eric Beaumont's (“Plaintiff' or “Beaumont”) Request for $76,734.45 in Attorneys' Fees and Costs in connection with Plaintiff's Motion to Compel Discovery Responses. (ECF No. 36.)
To date, Plaintiff has served forty-six (46) separate sets of discovery requests in this case, thirty-one of which are pending. Defendants' discovery responses have been delivered, amended upon Plaintiff's request, and delivered again. Defendants and the undersigned counsel have worked in good faith to provide amended responses to hundreds of discovery requests as part of the initial wave of discovery. As discussed more fully below, Plaintiff's request for fees and costs in the amount of $76,734.45, is not appropriate or justified under the circumstances.
FACTUAL BACKGROUND
Plaintiff served the initial set of discovery requests dated November 22, 2023, on Defendants Branch, Harrelson, Avante, MedCoast, and Vikor. The initial wave of discovery included sixty-seven (67) interrogatories, seventy-six (76) requests for admission, and one hundred and seventy-nine (179) requests for production. On December 22, 2023, Defendants served five (5) different Defendants' responses to Plaintiff's Requests for Admission. On January 5, 2024, Defendants served each of the five (5) Defendants' Answers to Plaintiff's First Set of Interrogatories and Responses to Plaintiff's First Requests for Production.
On Friday, January 26, 2024, Plaintiff's counsel issued a seven-page single-spaced letter to the undersigned counsel for Defendants outlining the alleged discovery deficiencies in Defendants' responses to the initial set of discovery requests. Specifically, counsel for Plaintiff took issue with Defendants' objections to the term “Laboratory Ventures” used repeatedly throughout Plaintiff's discovery requests, as well as Defendants' objections as to scope and relevance of Plaintiff's requests. In all, the term “Laboratory Venture” was used in a significant number of the First Set of Interrogatories and Requests for Production to Defendants.
Plaintiff's initial discovery requests provided the following definition of the term “Laboratory Ventures:”
“Laboratory Ventures” includes Avante, MedCoast, and Vikor and any other entities currently or formerly owned or operated in whole or in part by Mr. Branch or Ms. Harrelson relating to medical laboratory or diagnostic testing from January 1, 2016 - present.
By letter dated February 2, 2024, the undersigned counsel for Defendants provided a response to the January 26th letter and explaining the basis for Defendants' objections to the invented term “Laboratory Ventures.” As explained in the February 2nd letter, the use of the term “Laboratory Ventures” extends the scope of Plaintiff's Interrogatories and Requests for Production far beyond the agreements (or evidence of agreement) that Plaintiff relied upon to support his causes of action against Defendants.
Specifically, the September 20, 2017 letter referred to by Plaintiff in his Amended Complaint references Avante only. The NCF Sales Representative Employment Agreement mentions MedCoast only in the “Compensation” portion of the document. Notwithstanding these objections, the undersigned counsel agreed to supplement the various discovery responses and assured counsel for Plaintiff that Defendants were working diligently to supplement their prior responses to address the alleged deficiencies identified by Plaintiff's counsel.
On February 12, 2024, Defendants produced additional documents consisting of bank account records, communications, and employment agreements requested by Plaintiff, along with Defendants' Initial Disclosures pursuant to Fed.R.Civ.P. 26(a)(1)(A). The discovery tasks when combined with other obligations exceeded undersigned counsel's ability to meet the self-imposed deadlines for providing amended responses. See Declaration of Ellis R. Lesemann, attached hereto as Exhibit A. Prior to the filing of the Motion by Plaintiff, undersigned counsel for Defendants had already agreed to provide amended responses. However, the amount of time needed to investigate, review, amend, and clarify Defendants' responses to the sixty-seven interrogatories and one hundred and seventy-nine requests for production was underestimated. Furthermore, the other entities for which discovery was being indirectly sought (such as BioDxx, ICL, KOR Life, KorPath, and Silverpath) were not yet parties to the case. Plaintiff's intended scope and pace of discovery and intention to sue ten (10) distinct Defendants was unknown to undersigned counsel at the outset of this case, which initially involved only three (3) Defendants.
On February 28, 2024, Plaintiff filed a Motion to Compel Discovery Responses. (ECF Nos. 36 and 36-1.) Defendants provided each Defendant's First Amended Answers to Interrogatories and First Amended Responses to Requests for Production on a rolling basis from March 25, 2024, through April 10, 2024. In addition to each set of written responses, Defendants also produced 8,673 pages of additional documents between March 25, 2024 and April 5, 2024. Again, Plaintiff took issue with Defendants' amended discovery responses and document production. In an elevenpage single-spaced letter dated April 15, 2024, Plaintiff's counsel demanded that Defendants supplement certain responses and state for all responses whether Defendants have withheld documents based on objections to the use of the term “Laboratory Venture.” Counsel for Plaintiff and the undersigned counsel for Defendants held a second meet and confer on April 29, 2024. Again, the term, “Laboratory Venture” was a point of disagreement between the parties.
On May 6, 2024, Defendants provided Second Amended Responses to Requests for Production for all Defendants as well as Second Amended Answers to Interrogatories for Vikor, Harrelson, and Branch. Defendants also produced an additional 123 pages of documents between April 22, 2024 and May 6, 2024, as well as an updated spreadsheet of redacted attorney-client communications and redacted personal identifiers.
On May 7, 2024, Plaintiff issued thirty (30) separate sets of discovery requests to the Defendants. In all, the Defendants must respond to 63 additional Requests for Admission, 142 additional Interrogatories, and 222 additional Requests for Production within a span of thirty (30) days. Defendants requested an additional twenty-one (21) days to respond to these new 427 discovery requests, but Plaintiff's counsel placed conditions upon granting the request.
LEGAL STANDARD
Rule 37 of the Federal Rules of Civil Procedure provides, in relevant part, as follows:
If the motion [to compel discovery] is granted--or if the disclosure or requested discovery is provided after the motion was filed--the court must, after giving an opportunity to be heard, require the party or deponent whose conduct necessitated the motion, the party or attorney advising that conduct, or both to pay the movant's reasonable expenses incurred in making the motion, including attorney's fees.
But the court must not order this payment if: (i) the movant filed the motion before attempting in good faith to obtain the disclosure or discovery without court action; (ii) the opposing party's nondisclosure, response, or objection was substantially justified; or (iii) other circumstances make an award of expenses unjust.See Fed.R.Civ.P. 37(a)(5)(A) (emphasis added).
A legal position is “substantially justified” if there is a “genuine dispute” as to proper resolution or if “a reasonable person could think it correct, that is, if it has a reasonable basis in law and fact.” See Decision Insights, Inc. v. Sentia Grp., Inc., 311 Fed.Appx. 586, 599 (4th Cir. 2009). Stated differently, if a party has a genuine dispute concerning compliance with the discovery request, that party is substantially justified in objecting and/or responding in a manner that reflects that genuine dispute. See LightStyles, Ltd. ex rel. Haller v. Marvin Lumber & Cedar Co., 2015 WL 4078826, at *2 (M.D. Pa. July 6, 2015) (quoting Tolerico v. Home Depot, 205 F.R.D. 169, 175 (M.D. Pa. 2002) (finding that a party is substantially justified in failing to make required discovery when a reasonable person is satisfied that parties could differ as to whether the party was required to comply with the disclosure request)).
The trial court has discretion when determining whether the opposing party's nondisclosure, response, or objection was substantially justified. See, e.g., Cuno, Inc. v. Pall Corp., 117 F.R.D. 506, 509 (E.D.N.Y. 1987); see also Transcontinental Fertilizer Co. v. Samsung Co., Ltd., 108 F.R.D. 650, 653 (E.D.Pa. 1985) (“Whether opposition to a motion to compel is substantially justified depends on the circumstances of the particular case.”) In determining whether an opposition to a motion to compel is substantially justified, courts have focused on “the quality of the justification and the genuineness of the dispute.” Alvarez v. Wallace, 107 F.R.D. 658, 662 (W.D. Tex. 1985).
ARGUMENT
I. DEFENDANTS' RESPONSES AND OBJECTIONS WERE SUBSTANTIALLY JUSTIFIED
Defendants' objections to the term “Laboratory Ventures” were substantially justified based on Plaintiff's proffered definition of the term. “Laboratory Ventures,” as defined by Plaintiff in the First Set of Interrogatories and First Requests Production, “includes Avante, MedCoast, and Vikor and any other entities currently or formerly owned or operated in whole or in part by Mr. Branch or Ms. Harrelson relating to medical laboratory or diagnostic testing from January 1, 2016 - present.”
Plaintiff's claims against Defendants are based upon two documents: (1) a partially executed Sales Representative Employment Agreement with a non-party to this case (the “August 2017 Agreement”); and (2) a document relating to the “commercialization” of Avante (the “September 2017 Agreement”). (ECF No. 42.) Each of Plaintiff's eleven causes of action against Defendants allegedly stem from these two documents. (ECF No. 36-1, p. 2.) The August 2017 Agreement, which has not been signed by any Defendant, references MedCoast only. The September 2017 Agreement refers to Avante only.
The way in which Plaintiff defines “Laboratory Ventures” to seek broad categories information from Defendants is objectionable, as these additional “Laboratory Ventures” have no plausible relationship with either of the alleged contracts upon which Plaintiff's ever-expanding claims are based. The term “Laboratory Ventures” expands the scope of Plaintiff's Interrogatories and Requests for Production far beyond the agreements (or evidence of agreement) that Plaintiff relies upon to support Plaintiff's causes of action against Defendants.
Defendants have articulated the bases for these objections while continuing to provide responses to hundreds of discovery requests. Defendants have not failed to provide a response to any discovery request or refused to amend a response to any discovery request when an amended response was requested. Defendants have not blocked Plaintiff's attempts to conduct meaningful discovery.
II. AN AWARD OF ATTORNEY'S FEES WOULD BE UNJUST UNDER THE CIRCUMSTANCES
In addition to providing responses and objections that are substantially justified, there are other circumstances present here that make an award of expenses unjust. See Fed. R. Civ. P 37(a)(5)(A). Rule 37 of the Federal Rules of Civil Procedure allows the Court to consider the equity or fairness of such an award of fees. See LightStyles, Ltd. ex rel. Haller v. Marvin Lumber & Cedar Co., 2015 WL 4078826, at *2 (M.D. Pa. July 6, 2015).
Defendants have made a good faith effort to resolve the concerns raised by Plaintiff's counsel regarding Defendants' responses and objections. Although the amended responses were admittedly not provided on the dates that the undersigned counsel for Defendants had intended and promised, they have all been provided without the Court having to rule on any issue, compel any Defendant to provide an amended response, or enter any discovery order. To date, Plaintiff has served a total of 789 individual discovery requests upon Defendants:
| 1st INTs | 2nd INTs | 1st RFPs | 2nd RFPs | 1st RTAs | 2nd RTAs | TOTAL | |
| Branch | 12 | 8 | 38 | 15 | 25 | 2 | 100 |
| Harrelson | 12 | 8 | 38 | 14 | 24 | 2 | 98 |
| Avante | 14 | 6 | 33 | 13 | 9 | 4 | 79 |
| BioDxx | 23 | 39 | 9 | 71 | |||
| ICL | 21 | 38 | 10 | 69 | |||
| Kor Life | 20 | 36 | 8 | 64 | |||
| Korpath | 20 | 36 | 4 | 60 | |||
| MedCoast | 13 | 9 | 34 | 14 | 9 | 2 | 81 |
| Silverpath | 23 | 39 | 9 | 71 | |||
| Vikor | 16 | 5 | 36 | 26 | 9 | 4 | 96 |
| Total | 174 | 36 | 368 | 82 | 116 | 14 | 789 |
Plaintiff's request for fees is not appropriate or just under the circumstances, as Defendants agreed to provide amended discovery responses prior to the filing of Plaintiff's Motion to Compel. See, e.g., Grace G. Driggers v. Costco Wholesale Corp. & Cost Wholesale Membership, Inc., No. 2:20-CV-2306-RMG, 2021 WL 2154716, at *3 (D.S.C. May 26, 2021) (finding that an award of attorney's fees unjust where legitimate disputes existed as to an appropriate timeframe for certain requests and where defendant provided responses to most of the discovery requests.)
A substantial portion of the capacity of the undersigned counsel's law firm has been devoted to working on hundreds of additional responses to thirty-one (31) sets of discovery requests that Plaintiff simultaneously served on May 7, 2024. See Lesemann Decl., at ¶ 11. The undersigned counsel hired an additional paralegal on February 12, 2024, to assist with discovery tasks. See LesemannDecl., at ¶ 9. Also, to address and minimize issues going forward, new counsel will be entering appearances for eight (8) of the ten (10) Defendants. See Lesemann Decl., at ¶ 6.
Under the circumstances, an award of attorney's fees and costs in the amount of $76,734.45 would be unjust and should be denied.
III. PLAINTIFF'S INAPPROPRIATE ATTEMPT TO SHIFT THE COST OF DISCOVERY TO DEFENDANTS SHOULD BE DENIED
Plaintiff seeks an award of costs and expenses for items that go beyond the making of the
Motion to Compel. Rule 37(a) provides that the Court may require a party to pay “to pay the movant's reasonable expenses incurred in making the motion, including attorney's fees.” See Fed.R.Civ.P. 37(a)(5)(A). However, Defendants should not be compelled to reimburse Plaintiff for excessive, duplicative, and unreasonable fees and costs.
The burden of establishing the reasonableness of the fees and costs is on Plaintiff, as the party requesting an award of attorneys' fees. See Plyler v. Evatt, 902 F.2d 273, 277 (4th Cir. 1990). In calculating an award of attorney's fees, a court must first determine a lodestar figure by multiplying the number of reasonable hours expended times a reasonable rate. See Robinson v. Equifax Info. Servs., LLC, 560 F.3d 235, 243 (4th Cir. 2009). In deciding what constitutes a “reasonable” number of hours and rate, the Fourth Circuit has instructed that a district court's discretion should be guided by the following twelve factors:
(1) the time and labor expended; (2) the novelty and difficulty of the questions raised; (3) the skill required to properly perform the legal services rendered; (4) the attorney's opportunity costs in pressing the instant litigation; (5) the customary fee for like work; (6) the attorney's expectations at the outset of the litigation; (7) the time limitations imposed by the client or circumstances; (8) the amount in controversy and the results obtained; (9) the experience, reputation and ability of the attorney; (10) the undesirability of the case within the legal community in which the suit arose; (11) the nature and length of the professional relationship between attorney and client; and (12) attorneys' fees awards in similar cases.Id. at 243-44. It is within the Court's discretion, upon consideration of the lodestar factors, to adjust the lodestar figure up or down. See Lyle v. Food Lion, Inc., 954 F.2d 984 (4th Cir. 1992).
Courts have recognized that generalized discovery costs and costs incurred for a meet and confer, preparation of letters in advance of meet and confers, and review of discovery responses are excluded from an award of attorney's fees. See, e.g., Dish Network L.L.C. v. Jadoo TV, Inc., 2019 WL 7166067 (C.D. Cal. Nov. 8, 2019) (holding that tasks such as a meet and confer, drafting correspondence in advance of a meet and confer, drafting follow-up correspondence to a meet and confer, and follow-up correspondence with opposing counsel regarding discovery are not compensable as hours reasonably spent in preparing the actual motion to compel); I.R. v. City of Fresno, 2013 WL 2404775, at *7 (E.D. Cal. May 31, 2013) (“Although the Court fully appreciates the level of Defendants' frustration with the meet and confer attempts, these efforts would have been required regardless of whether Defendants had to file a motion to compel.”); Brown v. City of Glendale, 2019 WL 3412585 (D. Ariz. July 29, 2019) (holding a fee award under Rule 37(a)(5)(A) was limited to reasonable attorneys' fees incurred in drafting the motion, any reply in support, reviewing the opposing party's response to the motion, and preparing for and attending the motion hearing); Manning v. Soo Line R.R. Co., 2017 WL 811903 (N.D. Iowa Mar. 1, 2017) (holding efforts to resolve a discovery dispute, including correspondence with opposing counsel, should be excluded from compensable time sought under Rule 37(a)(5)(A)); Hall v. Gov't Emps. Ins. Co., 2008 WL 2704595 (M.D. Ga. July 3, 2008) (holding time for reviewing the opposing party's discovery responses, conferring with opposing counsel about discovery issues, and developing a strategy regarding the opposing party's objections to discovery requests is not compensable under Rule 37).
Plaintiff's request for an award of attorney's fees and costs in the amount of $76,734.45 is blatantly excessive and unreasonable. The documentation submitted in support of the Declaration of Erin M. Gettel, Esq., contains billable entries for tasks that are unrelated to the making of the Motion to Compel. Plaintiff requests an award of attorney's fees for “time spent preparing for the first meet and confer on January 29, 2024,” multiple entries relating to meetings “to strategize,” email and telephone correspondence among counsel for Plaintiff, and “planning and follow-up” tasks. See GettelDecl., at ¶¶ 30, 31, 32, 32. Plaintiff seeks an award of fees incurred by multiple attorneys involved in duplicative tasks. Defendants should not be required to pay Plaintiff for the unnecessary duplication of effort by Plaintiff's counsel. See Aevoe Corp. v. AE Tech Co., 2013 WL 5324787, at *5 (D. Nev. Sept. 20, 2013) (finding that billed time that includes unnecessary duplication of effort should be excluded from the lodestar.); see also Aevoe Corp. v. Shenzhen Membrane Precise Electron Ltd., 2012 WL 2244262, *10 (D. Nev. June 15, 2012) (finding that while attorneys and their clients are free to staff matters as they see fit, they are not entitled to recover fees as sanctions for hours that are deemed to be excessive).
In addition to requesting excessive attorneys' fees, Plaintiff also seeks reimbursement of travel costs and expenses incurred for two attorneys to attend the status conference held on April 11, 2024. Plaintiff is represented by local counsel. The presence of any one of Plaintiff's local counsel at the status conference would have sufficed. See Aevoe Corp. v. AE Tech Co., 2013 WL 5324787, at *6 (D. Nev. Sept. 20, 2013) (“Courts are especially reluctant to award fees for traveling to a hearing where an insufficient showing has been made that local counsel alone could not have attended and/or the out-of-state counsel could not have attended telephonically”); see also Herrington v. County of Sonoma, 883 F.2d 739, 747 (9th Cir. 1989) (“[C]ourts ought to examine with skepticism claims that several lawyers were needed to perform a task, and should deny compensation for such needless duplication as when three lawyers appear for a hearing when one would do.”).
Plaintiff's request for attorneys' fees and costs is excessive, unreasonable, and improper under the circumstances and therefore, should be denied.
IV. NEW COUNSEL WILL ENTER APPEARANCES FOR EIGHT DEFENDANTS UPON RESOLUTION OF PLAINTIFF'S FEE REQUEST
To avoid issues with the timing of discovery responses going forward and to better distribute the representation of ten (10) distinct Defendants, new counsel of record will be entering appearances for eight (8) Defendants as follows:
| DEFENDANTS REPRESENTED | NEW COUNSEL OF RECORD |
| SHEA C. HARRELSON; MEDCOAST, LLC; AND VIKOR SCIENTIFIC, LLC | Jamie Khan, Esq. McCullough Khan Appel, LLC J. Brady Hair, Esq. The Law Offices of J. Brady Hair |
| BIODXX INC.; SILVERPATH, INC.; INDEPENDENT CLINICAL LABORATORIES, INC.; KOR LIFE SCIENCES LLC; AND KORPATH HOLDINGS, LLC | Gregory L. Horton, Esq., and Beth Manning Lee, Esq. Womble Bond Dickinson (US), LLP |
New counsel will enter their appearances upon the resolution of Plaintiff's request for fees to avoid any confusion or appearance that they were involved with the discovery process up through the date that the Court resolves the fee request. Undersigned counsel will continue to represent Mr. Branch and Avante Diagnostics, LLC.
CONCLUSION
For the reasons set forth above, Defendants Walter Scotty Branch, Shea C. Harrelson, Avante Diagnostics LLC, BioDxx, Inc., Independent Clinical Laboratories, Inc., KOR Life Sciences, LLC, KorPath Holdings, LLC, MedCoast LLC, Silverpath, Inc., and Vikor Scientific, LLC respectfully request that the Court deny Plaintiff's request for sanctions.