Opinion
For Donald Macleod, Petitioner: Joseph C Markowitz, LEAD ATTORNEY, Law Office of Joseph C Markowitz, Los Angeles, CA.
For Emerson Retail Services Inc, Defendant, Counter Claimant: Daisy Manning, Rudolph A Telscher, Jr, PRO HAC VICE, Harness Dickey and Pierce PLC, St Louis, MO; David Frederick Faustman, Patrick James Hagan, Yesenia M Gallegos, Fox Rothschild LLP, Los Angeles, CA.
For Donald Macleod, Counter Defendant: Joseph C Markowitz, LEAD ATTORNEY, Law Office of Joseph C Markowitz, Los Angeles, CA.
PROCEEDINGS: (IN CHAMBERS) ORDER RE: PENDING MOTIONS
Fernando M. Olguin, United States District Judge.
Having reviewed and considered all the briefing filed with respect to defendant Emerson Retail Services, Inc.'s (" defendant" or " Emerson") motion for a new trial, renewed motion for judgment as a matter of law, and ex parte application for sanctions, and plaintiff Donald MacLeod's motion for attorney's fees, the court concludes that oral argument is not necessary to resolve the motions. See Fed.R.Civ.P. 78; Local Rule 7-15; Willis v. Pac. Mar. Ass'n, 244 F.3d 675, 684 n. 2 (9th Cir. 2001).
The ex parte application for sanctions was purportedly filed on behalf of co-defendants Emerson Electric Co. and Emerson Retail Services, Inc. (See Defendants' Ex Parte Application for Sanctions (" Ex Parte Appl. for Sanctions, " Dkt. No. 234) at 1). However, per the parties' agreement, co-defendant Emerson Electric Co. was dismissed as a party, (see Further Amended [Proposed] Pretrial Conference Order, Dkt. No. 199, at 2; Final Pretrial Conference Order (" Pretrial Conference Order, " Dkt. No. 206) at 2), thereby avoiding potential confusion at trial regarding multiple Emerson parties. (See Reporter's Transcript (" RT"), Nov. 7, 2014, Dkt. No. 239, at 21-22) (Emerson's counsel: " So liability one way or the other is going to impact the parties the same, so we did not differentiate [between Emerson entities]. But we will look at the issues and clarify as necessary."). Thus, the court construes the ex parte application as having been filed on behalf of Emerson Retail Services, Inc. Based on the foregoing, the court does not further distinguish between the Emerson entities in this order.
INTRODUCTION
Plaintiff Donald MacLeod (" plaintiff" or " MacLeod") brought this wage and hour case against Emerson, alleging that Emerson erroneously classified him as an " exempt employee" when he worked as a working field supervisor from approximately April 2004 to January 2010, and that Emerson failed to pay him overtime wages. (See Declaration of Cristina K. Armstrong in Support of Removal, Dkt. No. 1, Exh. 1 (" Amended Complaint") at ¶ ¶ 9-11). Plaintiff alleges that while working for Emerson, his duties included " performing on-site inspections of [] refrigeration equipment, " as well as " performing repairs and adjustments to such equipment[.]" (Id. at ¶ 9). Plaintiff further alleges that he worked about 11 hours per day and that despite his job title, he did not spend a significant percentage of his time working as a supervisor and, therefore, he should have been paid overtime. ( See id. at ¶ ¶ 9-11).
In response to plaintiff's overtime claim, Emerson filed counterclaims against MacLeod, alleging, among other things, infringement of U.S. Patent No. 6, 889, 173 (" the '173 patent" or " patent-in-suit"), which is entitled " System for Monitoring Optimal Equipment Operating Parameters." (See Defendant Emerson Retail Services, Inc.'s Counterclaim (" Counterclaims, " Dkt. No. 34) at ¶ ¶ 19 & 40-45). Emerson contends that its " electronic system for controlling and optimizing the use of energy in refrigeration, HVAC, and lighting systems" practices the '173 patent. (Id. at ¶ 10). According to Emerson, MacLeod infringed the '173 patent by continuing to service the equipment of Emerson's former client, Safeway. ( See id. at ¶ ¶ 12-19).
Emerson filed a motion for partial summary judgment as to plaintiff's overtime and retaliation claims. (See Joint Brief in Support and in Opposition to Partial Summary Judgment as to Plaintiff's First and Second Causes of Action, Dkt. No. 138). On April 30, 2014, the court granted in part Emerson's motion for partial summary judgment, dismissing the retaliation claim. (See Court's Order of Apr. 30, 2014, Dkt. No. 146, at 9). On July 30, 2014, the court issued its claim construction order. (See Order Construing Disputed Claim Terms of U.S. Patent No. 6, 889, 173 (" Claim Construction Order, " Dkt. No. 147)).
From November 18 to 21, 2014, the court conducted a jury trial regarding plaintiff's overtime claims and Emerson's patent infringement claims. On November 21, 2014, the jury found in favor of MacLeod on both claims. The jury found that MacLeod was entitled to $101,565.52 in unpaid overtime, and that Emerson willfully failed to pay plaintiff all of his wages on his last day of work. (See Verdict Form, Dkt. No. 220, at 2). The jury also found that plaintiff did not infringe claim 37 or 41 of the patent-in-suit. ( See id. at 3). On December 8, 2014, judgment was entered adjudging that plaintiff shall recover from Emerson $101,565.52 for unpaid overtime, $8,750.00 in penalties for failure to timely pay the overtime, and prejudgment interest of $49,090.00, for a total of $159,405.52, as well as post-judgment interest. (See Judgment, Dkt. No. 225).
Pending before the court are the parties' post-trial motions. Emerson filed a (1) renewed motion for judgment as a matter of law pursuant to Fed.R.Civ.P. 50(b) (see Emerson's Rule 50(b) Renewed Motion for Judgment as a Matter of Law (" JMOL Joint Br., " Dkt. No. 249), (2) a motion for a new trial (see Joint Briefing on Emerson's Motion for a New Trial (" Rule 59 Joint Br., " Dkt. No. 248)), and (3) an ex parte application for sanctions. (See Ex Parte Appl. for Sanctions). Plaintiff filed (4) a motion for attorney's fees. (See Joint Brief on Plaintiff's Motion for Attorneys' Fees and Costs (" Attorney's Fees Joint Br., " Dkt. No. 232)).
EMERSON'S MOTION FOR JUDGMENT AS A MATTER OF LAW
A motion for judgment as a matter of law " is not a patent-law-specific issue, so regional circuit law applies." Harris Corp. v. Ericsson Inc., 417 F.3d 1241, 1248 (Fed. Cir. 2005).
Federal Rule of Civil Procedure 50 permits a district court to grant judgment as a matter of law " when the evidence permits only one reasonable conclusion and the conclusion is contrary to that reached by the jury." Ostad v. Or. Health Scis. Univ., 327 F.3d 876, 881 (9th Cir. 2003). If there is substantial evidence to support the jury's verdict, the court should deny a motion for judgment as a matter of law. See Wallace v. City of San Diego, 479 F.3d 616, 624 (9th Cir. 2007). " Substantial evidence is such relevant evidence as reasonable minds might accept as adequate to support a conclusion even if it is possible to draw two inconsistent conclusions from the evidence." Maynard v. City of San Jose, 37 F.3d 1396, 1404 (9th Cir. 1994). " [T]he court must not weigh the evidence, but should simply ask whether the plaintiff has presented sufficient evidence to support the jury's conclusion." Wallace, 479 F.3d at 624. The court must " view the evidence in the light most favorable to the nonmoving party . . . and draw all reasonable inferences in that party's favor." E.E.O.C. v. Go Daddy Software, Inc., 581 F.3d 951, 961 (9th Cir. 2009), cert. denied, 562 U.S. 827, 131 S.Ct. 68, 178 L.Ed.2d 23 (2010) (internal quotations and citations omitted). Because a postverdict Rule 50(b) motion is " a renewed motion, " it is " limited to the grounds asserted in the pre-deliberation Rule 50(a) motion." Id.
II. INFRINGEMENT.
Emerson argues that the " jury did not have a legally sufficient evidentiary basis to find that MacLeod does not infringe the '173 patent." (JMOL Joint Br. at 3). In trial, Emerson asserted independent claim 37 and claim 41, which depends on claim 37. (See Pretrial Conference Order at 5-6). A finding of patent infringement involves a two-step analysis. " First, the claims of the patent must be construed to determine their scope. Second, a determination must be made as to whether the properly construed claims read on the accused device." Pitney Bowes, Inc. v. Hewlett-Packard Co., 182 F.3d 1298, 1304 (Fed. Cir. 1999) (internal citation omitted); see Carroll Touch, Inc. v. Electro Mech. Sys., Inc., 15 F.3d 1573, 1576 (Fed. Cir. 1993) (same). The first step of claim construction is a question of law; the second step is a question of fact. S ee Pitney Bowes, 182 F.3d at 1304.
A. Applicable Law.
" Infringement is assessed by comparing the accused device to the claims; the accused device infringes if it incorporates every limitation of a claim, either literally or under the doctrine of equivalents. If, however, even one claim limitation is missing or not met, there is no literal infringement." MicroStrategy Inc. v. Business Objects, S.A., 429 F.3d 1344, 1352 (Fed. Cir. 2005) (quotation marks and brackets omitted); Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1317 (Fed. Cir. 2009), cert. denied, 560 U.S. 935, 130 S.Ct. 3324, 176 L.Ed.2d 1240 (2010) (" To infringe a method claim, a person must have practiced all steps of the claimed method."); Joy Techs., Inc. v. Flakt, Inc., 6 F.3d 770, 775 (Fed. Cir. 1993) (" A method claim is directly infringed only by one practicing the patented method.") (emphasis omitted).
" A finding of infringement under the doctrine of equivalents requires a showing that the difference between the claimed invention and the accused product was insubstantial. One way of doing so is by showing on a limitation by limitation basis that the accused product performs substantially the same function in substantially the same way with substantially the same result as each claim limitation of the patented product." Crown Packaging Tech., Inc. v. Rexam Beverage Can Co., 559 F.3d 1308, 1312 (Fed. Cir. 2009) (citations omitted); see also Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 535 U.S. 722, 732-35, 122 S.Ct. 1831, 1837-39, 152 L.Ed.2d 944 (2002) (explaining that prosecution history estoppel limits the range of equivalents). " Infringement, either literal or under the doctrine of equivalents, is a question of fact." Brilliant Instruments, Inc. v. GuideTech, LLC, 707 F.3d 1342, 1344 (Fed. Cir. 2013) (citing Crown Packaging Tech., 559 F.3d at 1312). " [P]laintiff has the burden of proving infringement by a preponderance of the evidence." Kegel Co. v. AMF Bowling, Inc., 127 F.3d 1420, 1425 (Fed. Cir. 1997).
B. Claim 37 of the '173 Patent.
Claim 37 of the '173 patent recites as follows:
37. A method comprising:
monitoring respective operating parameters of multiple types of equipment;
comparing a present value of each said respective operating parameter to a previous value for each type of equipment;
determining a difference between each respective value; and
associating a monetary value with said difference.
(Declaration of Vijay Gupta, Ph.D. in Support of Emerson's Motion for Summary Judgment, Dkt. No. 67-1, Exh. 1 (" '173 patent") at col. 9:24-32) (emphasis added).
The court found that " monitor" /" monitoring" should be given its plain and ordinary meaning, and rejected Emerson's argument that the term " monitor" includes a person. (See Claim Construction Order at 11-14). The court construed " operating parameter" as " a setting at which equipment operates." ( See id. at 22). Per the parties' agreement, the court construed " present value" as " current measure of the operating parameter or set point, " and construed " previous value" as " prior measure of the operating parameter or set point." ( See id. at 2 n. 1).
C. Infringement.
Emerson accuses MacLeod of infringing the '173 patent by offering " remote commissioning" services, which involve optimizing settings for equipment such as refrigeration systems. (See RT, Nov. 19, 2014, Dkt. No. 243, at 162). By optimizing the settings, the client can save money by conserving energy. (See RT, Nov. 20, 2014, Dkt. No. 244, at 44).
During trial, plaintiff testified regarding the accused services. (See RT, Nov. 19, 2014, at 162-93; RT, Nov. 20, 2014, at 15-45). Emerson's expert, Dr. Vijay Gupta (" Gupta"), also testified regarding Emerson's infringement theory. (See RT, Nov. 20, 2014, at 60-114 & 117-131). In addition, Scott Moore (" Moore"), Vice President of Sales for Emerson Climate Technologies Retail Solutions, testified regarding the '173 patent and Emerson's set-point services. (See RT, Nov. 19, 2014, at 88-134 & 139-61). Emerson asserted a literal infringement theory. (See RT, Nov. 17, 2014, Dkt. No. 241, at 17-18) (striking as untimely doctrine of equivalents theory).
Plaintiff presented more than sufficient evidence of non-infringement. For instance, MacLeod presented significant evidence that the accused services do not involve a comparison between a " present value" to the " previous values" of " operating parameters." (See, e.g., RT, Nov. 19, 2014, at 162). As discussed, the court construed " previous value" as a " prior measure of the operating parameter[.]" (See Claim Construction Order at 2 n. 1). In turn, the court construed " operating parameter" as " a setting at which equipment operates." ( See id. at 22). MacLeod testified that his services do not involve a comparison to a past operational setting. Rather, the optimized settings are based on a " recommendation that we are giving to the customer to set something at." (See RT, Nov. 19, 2014, at 162-63). Plaintiff explained that " [w]e're being asked to go through and diagnose if there's any problems, if they can see room for improvement. There's no comparison that's made to anything in the past." (Id. at 168). Also, plaintiff presented documentary evidence that the recommendation for an optimized value is " what our technician is stating where they want [the equipment] set, not a previously recorded value." (See RT, Nov. 19, 2014, 179, at Exh. 115). Thus, MacLeod's services involve a comparison with an abstract recommendation, rather than a comparison with the equipment's past settings.
Emerson argues that the recommendations are necessarily " previous values, " because they are " Safeway specifications or engineering values." (See JMOL Joint Br. at 14-15). This argument is unavailing. Emerson's infringement expert, Gupta, (see RT, Nov. 20, 2014, at 60-114 & 117-131), provided an equivocal opinion regarding the alleged " previous values." For example, Gupta testified that " the previous value involves a benchmark value, and the benchmark value, design values are something in this sequence of operations." (Id. at 91). Thus, the jury apparently found that Gupta did not provide credible evidence that MacLeod performed a comparison between present and past values of " a setting at which equipment operates." Further, even assuming Gupta had provided an unequivocal opinion regarding the alleged " previous values, " the jury could have simply believed plaintiff's testimony and discounted Gupta's testimony. See Manual of Model Civil Jury Instructions for the Ninth Circuit Court of Appeals, No. 2.11 (" [expert o]pinion testimony should be judged just like any other testimony. You may accept it or reject it, and give it as much weight as you think it deserves"). In short, there was more than sufficient evidence for " a reasonable mind [to] accept as adequate to support a conclusion" of non-infringement. See Callicrate v. Wadsworth Mfg., Inc., 427 F.3d 1361, 1366 (Fed. Cir. 2005) (citing Gillette v. Delmore, 979 F.2d 1342, 1346 (9th Cir. 1992)).
EMERSON'S POST-VERDICT RULE 59 MOTION
In patent cases, the law of the regional circuit applies in determining whether to grant a new trial. See Wordtech Sys. v. Integrated Networks Solutions, Inc., 609 F.3d 1308, 1313 (Fed. Cir. 2010).
A motion for new trial under Federal Rule of Civil Procedure 59(a) may be granted " only if the verdict is contrary to the clear weight of the evidence, is based upon false or perjurious evidence, or to prevent a miscarriage of justice." Molski v. M.J. Cable, Inc., 481 F.3d 724, 729 (9th Cir. 2007). " [T]he district court's denial of the motion for a new trial is reversible only if the record contains no evidence in support of the verdict." Id. The court has " the duty to weigh the evidence as the court saw it, and to set aside the verdict of the jury, even though supported by substantial evidence, where, in the court's conscientious opinion, the verdict is contrary to the clear weight of the evidence . . . [or] to prevent, in the sound discretion of the trial judge, a miscarriage of justice[.]" Tortu v. Las Vegas Metro. Police Dep't, 556 F.3d 1075, 1087 (9th Cir. 2009) (internal quotation and alteration marks omitted).
II. TRIAL TIME.
Emerson moves for a new trial, on the ground that it purportedly had inadequate trial time, thereby depriving it of due process of law. (See Rule 59 Joint Br. at 1 & 5-13). Emerson asserts that: (1) it was " requir[ed]" to eliminate three trial witnesses; (2) its witness testimony was " unfairly truncated; " (3) it was " [u]nfairly [f]orced" to reduce the number of asserted claims; (4) the short trial time disproportionally penalized Emerson; and (5) the additional time provided did not remedy the purported due process violations. ( See id. at 7-13). Defendant's assertions are unpersuasive.
" Generally, a district court may impose reasonable time limits on a trial." Gen. Signal Corp. v. MCI Telecomms. Corp., 66 F.3d 1500, 1508 (9th Cir. 1995), cert. denied, 516 U.S. 1146, 116 S.Ct. 1017, 134 L.Ed.2d 97 (1996). " Trial courts have discretion to place reasonable limits on the presentation of evidence to prevent undue delay, waste of time, or needless presentation of cumulative evidence." Monotype Corp. PLC v. Int'l Typeface Corp., 43 F.3d 443, 450 (9th Cir. 1994). However, the courts should not adhere " so rigidly to time limits as to sacrifice justice in the name of efficiency." Gen. Signal Corp., 66 F.3d at 1509.
Here, the trial involved relatively straightforward causes of action: plaintiff's unpaid overtime claim, and Emerson's assertion of two patent claims. The court initially gave each side four hours to present its respective case, (see RT, Nov. 7, 2014, at 3), which the court increased to five and a half hours per side. (See RT, Nov. 20, 2014, at 12). Under the circumstances, the trial time provided by the court was more than sufficient for the parties to present evidence for a " reliable judgment." See Sec'y of Labor v. DeSisto, 929 F.2d 789, 796 (1st Cir. 1991).
Indeed, at the end of closing arguments, Emerson had more time left to put on their case than plaintiff. (See RT, Nov. 20, 2014, at 220).
For example, with respect to MacLeod's unpaid overtime claim, Emerson asserted that it was entitled to an executive exemption. (See Pretrial Conference Order at 7). For this defense, the primary, if not only, factual issue was whether " MacLeod performed executive duties more than half of the time." (Id.). At trial, the parties relied largely on the testimony of plaintiff, his former supervisor Emerson Zazzara (" Zazzara"), and MacLeod's former subordinates at Emerson, David Beeson and Garry Gertsen (respectively " Beeson" and " Gertsen"), to resolve the overtime claim. (See, e.g., RT, Nov. 19, 2014, at 14-16 & 37-38; RT, Nov. 18, 2014, vol. 2, Dkt. No. 227, at 35-121). Plaintiff testified that the significant majority of his time was spent on non-supervisory work, such as " hands-on work" and being " in the field with the supermarkets making repairs, " and writing reports. (See RT, Nov. 18, 2014, vol. 2, at 52) (estimating " 41 percent" of the time in the field, and " 25 percent of the time" writing reports). According to MacLeod, he spent " about ten percent, " or " [m]aybe even less" time, on " actual supervision duties." ( See id. at 105-06).
Beeson corroborated plaintiff's testimony that MacLeod did not spend a significant amount of his time supervising Beeson. (See RT, Nov. 18, 2014, vol. 2, at 114) (testifying that MacLeod " hired people that he knew he wouldn't have to baby-sit. I don't require a babysitter."). Likewise, Gertsen testified that the commissioning work was full-time work, and that plaintiff served the same number of stores as the other technicians. (See, e.g., RT, Nov. 19, 2014, at 15) (Q: " Were Don -- Don MacLeod's number of stores any different from others on the team?"; A: " No, we all had the same job to do. And Safeway was slamming us with stores, and we had more stores than we could handle. And so we all worked -- but that's what we do. We're refrigerator technicians."). Gertsen also testified that plaintiff would do his administrative work at night. ( See id. ). The jury apparently found plaintiff's evidence case regarding his work more credible than Zazzara's testimony that MacLeod spent more than 50 percent of his time on supervisory work. ( See, e.g., id. at 37-38) (disagreeing with plaintiff's testimony because " there was just too much work for Don not to -- not to be doing more supervisory duties"). This may have been due, in part, to the fact that Zazzara works from Georgia, while MacLeod is based in California, making Zazzara's assessment of the scope of plaintiff's supervisory duties less credible. ( See id. at 35) (Zazzara testifying that he is " based in Atlanta" while MacLeod " was based in Southern California"). In short, there was ample time to present enough evidence to provide a " reliable judgment" as to the overtime claim. See Sec'y of Labor, 929 F.2d at 796.
As for the patent case, the primary, if not only, factual dispute was whether MacLeod performed the " comparison" step of claim 37, namely, whether he compared present values to previous values of operating parameters. (See, e.g., RT, Nov. 20, 2014, at 180-81). As discussed, the parties relied largely on plaintiff's and Gupta's testimony to resolve this issue. Based on the relative simplicity of this case, the trial time, which amounted to three full days of trial, excluding the jury's deliberations, was more than sufficient to provide evidence for a " reliable judgment." See Sec'y of Labor, 929 F.2d at 796.
The court is also not persuaded by Emerson's contention that reducing the number of trial witnesses deprived it of due process. The record indicates that the additional witnesses would have presented " cumulative evidence" and marginally relevant evidence. See Monotype Corp. PLC, 43 F.3d at 450. For example, Emerson contends that Ann Sherman (" Sherman"), Emerson's human resource manager, would have testified about " Emerson's employee policies, " including its classification policies and plaintiff's " employment history" and the " official scope" of plaintiff's work. (Rule 59 Joint Br. at 7). Likewise, Emerson contends that Todd Zimmerman (" Zimmerman") would have testified about " Macleod's employment history, " the " scope" of MacLeod's work, and MacLeod's " access to Emerson's proprietary trade secrets and other intellectual property, including the '173 patent. (Id.). Emerson, however, presented ample testimony regarding plaintiff's work, such as the testimony of Zazzara, who was the director of commissioning services. (See, e.g., RT, Nov. 19, 2014, at 32-50). Moreover, plaintiff's employment history and the scope of his work was largely undisputed and conveyed to the jury through the parties' stipulated facts. (See Jury Instruction No. 17) (stipulated facts regarding MacLeod's employment, salary, and duties as field supervisor); (see also Pretrial Conference Order at 3) (same). Again, the sole dispute as to the overtime claim was whether MacLeod spent more than 50 percent of his time on non-managerial activities, (see, e.g., RT, Nov. 19, 2014, at 35 & 37-38), so much of the evidence Emerson claims it wanted to put forth was either cumulative or irrelevant.
Emerson also argues that Zimmerman, with respect to the patent case, would have testified about " Emerson's climate technologies, the '173 patent, sales and revenue relating to remote monitoring services, and Emerson's business practices specifically in the field of remote commissioning services." (Rule 59 Joint Br. at 7-8). Emerson further argues that a third witness, Chris Culhane (" Culhane"), would have testified about the " specific climate technologies at issue, Emerson's business practices and losses" from plaintiff's purported trade secret misappropriation and patent infringement, and " his understanding of MacLeod's business method." (Id. at 8). As for the testimony regarding Emerson's purported trade secrets, Emerson voluntarily dismissed its trade secret misappropriation claim, as it overlapped with the patent case. (See RT, Nov. 7, 2014, at 9) (Emerson withdrawing trade secret misappropriation cause of action as " largely redundant and superfluous"). In addition, Emerson's business method is irrelevant to plaintiff's alleged patent infringement. See Phillips v. AWH Corp., 415 F.3d 1303, 1312 (Fed. Cir. 2005) (en banc), cert. denied, 546 U.S. 1170, 126 S.Ct. 1332, 164 L.Ed.2d 49 (2006) (" It is a 'bedrock principle' of patent law that 'the claims of a patent define the invention to which the patentee is entitled the right to exclude.'") (emphasis added). Emerson's business methods do not define the claimed invention, and additional testimony regarding Emerson's business methods likely would have been excluded due to the risk of confusion and waste of time under Federal Rule of Evidence 403. See Fed.R.Evid. 403 (" The court may exclude relevant evidence if its probative value is substantially outweighed by a danger of . . . confusing the issues [and] wasting time").
Likewise, Emerson's assertion that the testimony of Emerson's trial witnesses, Moore, Zazzara, and Gupta, were unfairly truncated is unavailing. (See Rule 59 Joint Br. at 9-10). As an initial matter, Emerson does not identify what additional testimony Zazzara would have provided. (See, generally, id.). Further, Emerson's contention that Moore would have testified about Safeway's specifications and " what remote monitoring services actually entails, " ( see id. at 9), deals, again, with Emerson's business practices, and would be speculative regarding plaintiff's activities. In other words, such testimony likely would have been excluded under Federal Rule of Evidence 403.
With respect to Emerson's expert testimony, Gupta testified extensively regarding the patent-in-suit and the infringement theory. Contrary to Emerson's assertion that " Gupta was forced to omit any and all nuance, " (Rule 59 Joint Br. at 10), the parties questioned Gupta extensively regarding the two asserted claims. (See RT, Nov. 20, 2014, at 60-113 & 117-31). It appears that the jury did not consider Gupta's testimony credible, perhaps because of his equivocal opinion about the " previous values" of " operating parameters." (See, e.g., id. at 67-69 & 91). In any event, Gupta referred interchangeably to " design values, " " operational design setting[s], " and " benchmark values." ( See id. ). Moreover, during closing argument, Emerson confirmed that the accused previous values could just be " numbers that [MacLeod] has in his head." ( See id. at 182). Thus, the record did not establish that the alleged " previous values" necessarily represented the past values at which equipment operated.
As for the reduction in claims, the court did not " force" Emerson to reduce the number of asserted claims. (See, generally, RT, Nov. 7, 2014 & Nov. 17, 2014) (pretrial conferences). Indeed, Emerson concedes that it decided to reduce the number of asserted claims based on the court's claim construction order. (See Rule 59 Joint Br. at 11) (discussing withdrawal of claims 1, 6, 10, 12, 19, 21, 28, 29 based in part on the court's construction of " if"). Thus, Emerson selected claims 37 and 41, which were apparently based on stronger infringement theories.
Finally, with respect to Emerson's assertions that the time limit disproportionally impacted it, and that the additional time did not remedy the purported due process violations, (see Rule 59 Joint Br. at 12-14), the court carefully considered the posture and the relatively straightforward nature of the claims. On the overtime claim, the record was largely undisputed regarding plaintiff's job duties and role. As discussed above, the principal factual dispute was whether plaintiff spent more than 50 percent of his time on non-managerial tasks. (See, e.g., RT, Nov. 20, 2014, at 169-70). Likewise, the dispute in the patent case was whether MacLeod compared current values to past values of operating parameters. ( See id. at 181-82). Under the circumstances, the time limits were reasonable, and they did not impair the jury's ability to render a " reliable judgment." See Sec'y of Labor, 929 F.2d at 796.
III. CLAIM CONSTRUCTION ORDER.
Emerson argues that a new trial is warranted, due to the court's adverse claim construction ruling on the terms " monitor" /" monitoring" and " if." (See Rule 59 Joint Br. at 17-21). Emerson's argument is unpersuasive. First, Emerson did not file a timely motion for reconsideration after the court issued its claim construction order in July 2014. Accordingly, if the court conducted a new trial at this stage, it would still apply the same construction that Emerson now disputes.
IV. CONSTRUCTION OF THE TERM " PREVIOUS VALUE" AT TRIAL.
Emerson asserts that plaintiff improperly argued that " previous value" refers to an " actual recorded measured previous value." (Rule 59 Joint Br. at 24). As discussed, the court construed " previous value" as a " prior measure of the operating parameter[.]" (Claim Construction Order at 2 n. 1). In turn, the court construed " operating parameter" as " a setting at which equipment operates." ( See id. at 22). The court has reviewed the record and finds that plaintiff's arguments and testimony were consistent with the claim construction order. ( See, generally, id.; RT, Nov. 18-20, 2014). Moreover, Emerson's arguments and testimony are vulnerable to the same attack that they improperly departed from the claim construction order. As discussed earlier, Gupta testified equivocally about the design values or benchmark values as meeting the court's claim construction. (See, e.g., RT, Nov. 20, 2014, at 67-69 & 91). Moreover, during closing, Emerson admitted that it believed that the accused " previous values" could just be " numbers that [MacLeod] has in his head." ( See id. at 182). Such argument is in conflict with the court's construction of " operating parameter, " which is " a setting at which equipment operates." (See Claim Construction Order at 22).
V. PATENT " INVALIDITY."
Emerson also argues that although plaintiff withdrew his invalidity defense, he nevertheless " improperly testified regarding prior art, " for instance, by testifying that " he and others had been performing the accused method for 25 years." (See Rule 59 Joint Br. at 29). This argument is also unpersuasive. As an initial matter, the verdict form did not contain any question relating to invalidity. (See, generally, Verdict Form). Further, plaintiff's testimony about his experience, (see Order re: Motions in Limine, Dkt. No. 171, at 1), helped provide proper context for the infringement allegations and plaintiff's activities. Moreover, it is undisputed that for decades, MacLeod and others in the industry provided commissioning services, in order to save clients money through more efficient equipment operation. (See, e.g., RT, Nov. 20, 2014, at 38) (MacLeod: " Everything that I'm doing right now at this time with my business is the same process, the same practice of making repairs, adjustments, diagnostics on systems, as I have when I got into the industry"). The testimony regarding plaintiff's experience was relevant to the claims and defenses, including damages. MacLeod did not provide such evidence in order to invalidate the patent-in-suit, which in any event he could not have done since the issue was not in the Verdict Form, i.e., it was not before the jury.
VI. EMERSON'S CHALLENGES TO EVIDENTIARY RULINGS.
Emerson makes additional miscellaneous arguments challenging various evidentiary rulings. First, Emerson asserts that the rulings regarding those in the industry " practicing the steps of the patent-in-suit, " (see Rule 59 Joint Br. at 33), for years prior to the issuance of the patent-in-suit, was prejudicial. The court has addressed and rejected this argument. (See supra at § V). Such testimony was properly allowed, because it put the patent-in-suit in proper context and helped inform damages issues.
Second, Emerson argues that the court's decision " to limit Mr. Moore's testimony on the relationship between the '173 patent and the set-point services offered by Emerson" was prejudicial. (See Rule 59 Joint Br. at 33). The claims of the patent-in-suit define the scope of the invention, see Phillips, 415 F.3d at 1312, and Emerson's set point activities are largely irrelevant. Third, Emerson asserts that the striking of Gupta's supplemental report was unwarranted. (See Rule 59 Joint Br. at 34). However, the court struck Gupta's report based on Emerson's failure to move to amend. (See RT, Nov. 13, 2014, Dkt. No. 240, at 21; RT, Nov. 17, 2014, at 16-19). Even so, despite the court's order, defense counsel elicited substantial testimony regarding Gupta's October 2014 declaration, i.e., Gupta's supplemental opinion. (See, e.g., RT, Nov. 20, 2014, at 86-87 & 117-18).
Fourth, Emerson's contention that third party testimony regarding Emerson's overtime policies was unfairly prejudicial, (see Rule 59 Joint Br. at 34), is unpersuasive. Plaintiff presented testimony by other former Emerson technicians, who testified credibly regarding Emerson's billing system and plaintiff's non-supervisory work in the field. (See, e.g., RT, Nov. 19, 2014, at 13) (Gary Gertsen testimony that Emerson's system would not permit billing entries above 40 hours per week). Given the relevance of the testimony provided by former Emerson employees, the court is not persuaded that such testimony should have been excluded. See, e.g., Heyne v. Caruso, 69 F.3d 1475, 1480 (9th Cir. 1995) (testimony of co-workers is admissible to prove plaintiff's claims). Finally, Emerson argues that it was denied due process when the court allowed MacLeod to proffer Exhibits 111 and 122 at trial, which were opinions of counsel that MacLeod did not infringe the '173 patent. (See Rule 59 Joint Br. at 36-37). Opinions of counsel regarding infringement, however, are relevant to whether an infringer willfully infringed a patent. But as the jury found plaintiff did not infringe the patent-in-suit, the jury did not need to address willful infringement. Accordingly, Emerson's challenge to these exhibits is unpersuasive.
EMERSON'S APPLICATION FOR SANCTIONS
Emerson seeks sanctions, based on MacLeod's purported failure to adequately meet and confer regarding attorney's fees. (See Ex Parte Appl. for Sanctions at 6). Specifically, Emerson argues that it met and conferred with plaintiff's counsel on December 15, 2014, regarding his request for attorney's fees. Emerson contends that MacLeod was not fully prepared for the meet and confer, and that over the next several days, plaintiff's counsel provided little additional authority or evidence. Emerson seeks to preclude plaintiff from recovery of attorney's fees for the patent issues and " relief for other areas of fees, including a multiplier award." (Id. at 1).
During the meet and confer, MacLeod's counsel said he would probably seek attorney's fees under California Labor Code § 1194 and Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S.Ct. 1749, 188 L.Ed.2d 816 (2014), and that he might present an " equitable argument" that defending all the claims were " necessary to vindicate [plaintiff's] rights under the Labor Code." (See Declaration of Joseph C. Markowitz (" Markowitz Decl., " Dkt. No. 229-1), at Exh. A, Dkt. No. 230-1) (" M& C Transcript") at 3, 7-8 & 14). In addition, plaintiff's counsel said that he might seek a multiplier for attorney's fees. ( See id. at 20). Thus, plaintiff presented the general theories that are the subject of his motion. While MacLeod's counsel arguably should have provided additional support, (see Order of December 10, 2014, Dkt. No. 226, at 2-3) (requiring discussion of " each issue" raised in the motion), the combination of unpaid overtime and patent infringement claims makes this motion for attorney's fees relatively unusual. In addition, the Supreme Court's Octane Fitness ruling was recent, making it more difficult to prepare for the meet and confer. Based on the foregoing, the court is persuaded that Emerson's request for sanctions is overly broad. However, some sanctions are warranted, based on the failure to comply with all of the requirements of the Court's Order of December 10, 2014. Based on the foregoing, the court awards Emerson $500 in sanctions, which shall be imposed against plaintiff's counsel.
Emerson also objects to the request for costs, because plaintiff did not adequately raise the costs in the December 15, 2014, meet and confer, and MacLeod did not include the section in the draft brief until the day before the December 22, 2014, deadline. (See Attorney's Fees Joint Br. at 29; Declaration of Alan C. Chen in Support of Emerson's Opposition to Motion for Attorneys Fees (" Chen Decl., " Dkt. No. 233-2) at Exh. 4). While the court is troubled by plaintiff's counsel's failure to participate in good faith in the meet and confer relating to plaintiff's motion for attorney's fees and costs, Emerson did have an opportunity to challenge the costs requested by plaintiff in its supplemental brief in opposition to the motion for attorney's fees and costs. In any event, the court will sanction plaintiff's counsel an additional $500 for his failure to meet and confer in good faith regarding his costs, including his failure to timely provide the section of his draft joint brief regarding costs to opposing counsel. In all, the court sanctions plaintiff's counsel $1,000.
MACLEOD'S MOTION FOR ATTORNEY'S FEES AND COSTS
Plaintiff seeks $467,014.45 in attorney's fees and costs, which includes attorney's fees from multiple law firms, expenses, estimated fees for the fee motion, and a 1.5 times multiplier on the fees of his current counsel. (See Attorney's Fees Joint Br. at 30). MacLeod seeks attorney's fees and costs for the overtime claim under California Labor Code § 1194 and for the patent case under 35 U.S.C. § 285. ( See id. at 5, 6-8 & 16-19).
I. LEGAL STANDARD.
Before 1946, the Patent Act did not authorize attorney's fees awards to the prevailing party. See Octane Fitness, 134 S.Ct. at 1753. Rather, the Patent Act instead followed the " American Rule, " where each party must bear its own attorney's fees and costs. See id. Today, pursuant to 35 U.S.C. § 285, " [t]he court in exceptional cases may award reasonable attorney fees to the prevailing party." In 2014, the Supreme Court rejected the Federal Circuit's legal test for determining whether a case is exceptional under 35 U.S.C. § 285. See Octane Fitness, 134 S.Ct. at 1756. Under the previous standard, a case was deemed " exceptional" if a district court either found litigation-related misconduct of an independently sanctionable magnitude -- such as Rule 11 violations -- or determined that the litigation was both " brought in subjective bad faith" and " objectively baseless." Brooks Furniture Mfg., Inc. v. Dutailier Int'l, Inc., 393 F.3d 1378, 1381 (Fed. Cir. 2005).
In Octane Fitness, the Supreme Court rejected such a formal approach and held that an exceptional case under 35 U.S.C. § 285 is " simply one that stands out from others with respect to the substantive strength of a party's litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated." 134 S.Ct. at 1756. In so doing, the Supreme Court instructed the district courts to " determine whether a case is 'exceptional' in the case-by-case exercise of their discretion, considering the totality of the circumstances." Id. Accordingly, " a case presenting either subjective bad faith or exceptionally meritless claims may sufficiently set itself apart from mine-run cases to warrant a fee award." Id. at 1757.
In addition, the Supreme Court rejected the Federal Circuit's requirement that a party show subjective bad faith and objective baselessness by clear and convincing evidence. Octane Fitness, 134 S.Ct. at 1757-58. Rather, entitlement to fees under § 285 need only be shown by a preponderance of the evidence. Id. In a companion case, the Supreme Court clarified that on appellate review of exceptional case determinations, the Federal Circuit should apply the abuse of discretion standard. See Highmark Inc. v. Allcare Health Mgmt. Sys., Inc., 134 S.Ct. 1744, 1748, 188 L.Ed.2d 829 (2014). Attorney's fees under § 285 includes " those sums that the prevailing party incurs in the preparation for and performance of legal services related to the suit." Central Soya Co., Inc. v. Geo. A. Hormel & Co., 723 F.2d 1573, 1578 (Fed. Cir. 1983).
As for the overtime claim, California Labor Code § 1194 provides that " [n]otwithstanding any agreement to work for a lesser wage, any employee receiving less than . . . the legal overtime compensation applicable to the employee is entitled to recover in a civil action the unpaid balance of the full amount of this . . . overtime compensation, including interest thereon, reasonable attorney's fees, and costs of suit." The court may award a multiplier for violations of California Labor Code § 1194. See Pellegrino v. Robert Half Int'l, Inc., 182 Cal.App.4th 278, 287-88, 106 Cal.Rptr.3d 265 (2010) (applying multiplier for California Labor Code § 1194 violation); Mangold v. Cal. Pub. Utils. Comm'n, 67 F.3d 1470, 1478 (9th Cir. 1995) (applying fee multiplier under state law).
II. WHETHER THIS CASE IS EXCEPTIONAL UNDER OCTANE FITNESS.
Plaintiff seeks to recover attorney's fees and costs incurred in defending this action pursuant to 35 U.S.C. § 285. On November 21, 2014, the jury found that MacLeod did not infringe the asserted claims. (See Verdict Form). On December 8, 2014, the court issued final judgment in favor of MacLeod. (See Judgment). Thus, plaintiff is the prevailing party.
Under Octane Fitness, a finding of bad faith is no longer required and the court considers the " substantive strength of a party's litigating position" and whether the litigation was conducted in an " unreasonable manner" in deciding whether a case qualifies as " exceptional" within the meaning of the § 285. See 134 S.Ct. at 1756. The court considers the totality of the circumstances and exercises its equitable discretion in deciding whether a case qualifies as exceptional under § 285. See id. at 1756 n. 6 (analogizing to the Copyright Act context where the Supreme Court has instructed district courts applying a similar fee-shifting provision to consider a " 'nonexclusive' list of 'factors, ' including 'frivolousness, motivation, objective unreasonableness (both in the factual and legal components of the case) and the need in particular circumstances to advance considerations of compensation and deterrence.'").
As for the strength of the parties' litigation positions, Emerson's infringement case was very weak. The patent-in-suit is generally directed to the remote, automated monitoring of equipment. In the claim construction order, the court rejected Emerson's proposed construction of " monitor" to encompass a human actor. (See Claim Construction Order at 12-14). In addition, the court construed the term " if" to mean " on the condition that." ( See id. at 22). Based on the foregoing, Emerson withdrew most of the asserted claims shortly before trial. (See Rule 59 Joint Br. at 11) (discussing withdrawal of claims 1, 6, 10, 12, 19, 21, 28, 29 based in part on construction of " if"). As for claims 37 and 41, the court gave serious consideration to plaintiff's pre-verdict motion for judgment as a matter of law. (See Order of November 24, 2014, Dkt. No. 222, at 2). Thus, the weakness of Emerson's infringement case favors the award of attorney's fees.
In addition, Emerson conducted itself in an " unreasonable manner" during litigation. Emerson sought leave to file patent infringement and trade secret misappropriation counterclaims after learning in plaintiff's deposition that plaintiff, after leaving Emerson, began competing against it and got an account with Safeway to serve about 300 stores. (See Defendant Emerson Retail Services, Inc.'s Motion for Leave to File a Counterclaim (" Counterclaims Motion, " Dkt. No. 15) at 3). Emerson's allegations appear to have been based principally on the fact that MacLeod was competing with Emerson, not that he was practicing the required steps of the '173 patent. (See, e.g., Reply in Support of Defendant's Motion for Leave to File a Counterclaim, Dkt. No. 22, at 7) (discussing Emerson's " suspicion" based on plaintiff's deposition where he " refused to answer" questions about patent infringement). Similarly, Emerson's trade secret case was based largely on the customer list identifying Safeway. (See Counterclaims at ¶ 24) (" Emerson's customer list has independent economic value")).
Plaintiff, in his opposition to Emerson's Counterclaims Motion, promptly identified the deficiencies in Emerson's patent infringement and trade secret misappropriation theories. As for the patent dispute, MacLeod explained that the services he provided Safeway, namely, (1) " [c]ontrol system commissioning" based on Safeway specifications, (2) " [f]ield commissioning services" based on Safeway specifications, (3) " [l]ighting repair services" based on Safeway specifications, and (4) " [m]inor filed [sic] repair services" do not infringe the '173 patent. (See Opposition to Motion for Leave to File Counterclaims, Dkt. No. 20, at 8-9). MacLeod explained that Emerson's claimed set point services are " entirely different, " because, for instance, the claimed method involves " comparing a present value of each said respective operating parameter to a previous value for each type of equipment." ( See id. at 9). As for the trade secret case, plaintiff explained that Emerson's customer list identifying Safeway is publicly available, and therefore does not qualify as a trade secret. ( See id. at 7). In his opposition, plaintiff further argued that Emerson's counterclaims would delay recovery of the unpaid overtime, and that the cost of a patent trial, which according to an AIPLA October 2011 survey averaged $767,000 before trial, would be highly prejudicial. ( See id. at 2 & 4) (" While publicly traded defendants can afford patent litigation, plaintiff cannot.").
Moreover, plaintiff presented evidence during trial that Emerson refused to discuss a design-around in order to resolve the patent dispute. For example, MacLeod sent Emerson a report called an " exception report" or " punch list, " (see RT, Nov. 19, 2014, 179, at Exh. 115; RT, Nov. 20, 2014, at 182), that proposed changing plaintiff's business methods to resolve the dispute. The report, which includes a column for " [c]urrent [v]alue" of the equipment, states in a side note directed to Emerson that " [w]hat we will do is omit this all together." (Exh. 115). For a column regarding estimated annual financial loss, MacLeod included another note to Emerson, stating that " [w]e will also omit any monetary value as well." (Id.). The exception report further explained that the recommended " [o]perational [s]etting" refers to the value where the technician " want[s] it set, not a previous recorded value." (Id.). At trial, plaintiff testified that he was explaining to Emerson, " [i]f these are the things that are bothering you, we can omit those things. But I don't think you have proprietary rights to that, but if that will get you to leave us alone --." (RT, Nov. 19, 2014, at 185). Plaintiff further testified, " We tried to work with you guys. We tried, you know -- you guys, every time we came back with something, you told us something we were doing wrong, we said, 'Okay. We're not doing that, ' we'd show you, and then you'd turn around and change the scope of your patent. Every time we turn around, you're making it into something that it's not. And so we couldn't win, and now we're here today." (Id. at 186).
The record further suggests that Emerson was unwilling to negotiate settlement in good faith. (See, e.g., Markowitz Decl. at ¶ 6) (discussing early meeting with Emerson's business representatives, who " abruptly canceled the meeting" after MacLeod incurred the expense of non-refundable travel).
In short, the record demonstrates that Emerson conducted itself in bad faith, and indicates that Emerson was improperly motivated to assert its counterclaims through trial. Emerson's conduct suggests that it was pursuing a " predatory strategy" to drain a competitor's resources and to distract MacLeod, based on his " inability or unwillingness . . . to engage in litigation." See Lumen View Tech., LLC v. Findthebest.com, Inc., 24 F.Supp.3d 329, 336 (S.D.N.Y. 2014). Moreover, " considerations of compensation" weigh in favor of a finding that this is an exceptional case. Octane Fitness, 134 S.Ct. at 1756 at n. 6; (see, e.g., Opposition to Motion for Leave to File Counterclaims at 4) (" While publicly traded defendants can afford patent litigation, plaintiff cannot."). Thus, the preponderance of the evidence establishes that this is an " exceptional case" under 35 U.S.C. § 285. Based on the foregoing, plaintiff is entitled to reasonable attorney's fees and costs for the patent-related claims.
The court is not persuaded by Emerson's argument that the absence of motion practice establishes that there was no misconduct. (See Attorney's Fees Joint Br. at 25). The lack of motion practice was probably due to plaintiff's lack of resources. (See, e.g., Markowitz Decl. at ¶ 3). Indeed, it appears that Emerson's intransigence in this matter was in part motivated by the significant disparity of resources between the parties, i.e., an individual former employee who asserted nothing more a run-of-the-mill overtime claim and an international corporation(s) with, comparatively, unlimited resources.
III. ATTORNEY'S FEES AND COSTS.
Plaintiff obtained excellent results and prevailed on all the claims that went to trial. Also, it was defendant who raised the patent infringement counterclaims in response to plaintiff's overtime claim. Given that plaintiff had to defend against the counterclaims as part of his affirmative overtime claim, and " the significance of the overall relief obtained by the plaintiff in relation to the hours reasonably expended on the litigation[, ]" Hensley v. Eckerhart, 461 U.S. 424, 435, 103 S.Ct. 1933, 1940, 76 L.Ed.2d 40 (1983), the court is persuaded that plaintiff should receive his entire lodestar. See id. (" Much of counsel's time will be devoted generally to the litigation as a whole, making it difficult to divide the hours expended on a claim-by-claim basis. Such a lawsuit cannot be viewed as a series of discrete claims. Instead the district court should focus on the significance of the overall relief obtained by the plaintiff in relation to the hours reasonably expended on the litigation. Where a plaintiff has obtained excellent results, his attorney should recover a fully compensatory fee. Normally this will encompass all hours reasonably expended on the litigation[.]"); see also Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 554, 130 S.Ct. 1662, 1673, 176 L.Ed.2d 494 (2010) (" [T]here is a 'strong presumption' that the lodestar figure is reasonable, but that presumption may be overcome in those rare circumstances in which the lodestar does not adequately take into account a factor that may properly be considered in determining a reasonable fee.").
MacLeod seeks $467,014.45 in attorney's fees and costs incurred in the litigation. (See Attorney's Fees Joint Br. at 30). Under the lodestar method, the court calculates the attorney's fees based on " the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate." Hensley, 461 U.S. at 433, 103 S.Ct. at 1939. After providing the lodestar figure, the court may adjust the lodestar " to account for other factors which are not subsumed within it." Staton v. Boeing Co., 327 F.3d 938, 965 (9th Cir. 2003).
A. Reasonableness of Hourly Billing Rates.
To determine the appropriate lodestar amount, the court assesses the reasonableness of the hourly billing rate. See Credit Managers Ass'n of S. Cal. v. Kennesaw Life & Accident Ins. Co., 25 F.3d 743, 750 (9th Cir. 1994). In doing so, the court must look to the prevailing market rates in the relevant community for similar work by attorneys of comparable skill, experience, and reputation. See Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 979 (9th Cir. 2008). Generally, the relevant community is the forum where the district court sits. Id.
For intellectual property cases, courts frequently refer to the American Intellectual Property Law Association's surveys for billing rates in the relevant community. See, e.g., Perfect 10, Inc. v. Giganews, Inc., 2015 WL 1746484, *16 (C.D. Cal. 2015) (rates from AIPLA Report of Economic Survey: median intellectual property partner billing rate in Los Angeles (2012): $575 per hour; median Los Angeles associate billing rate (2012): $395); Partners for Health & Home, L.P. v. Yang, 488 B.R. 431, 436-437 (C.D. Cal. 2012) (citing AIPLA Report).
As for labor and employment cases, the hourly rates are comparable. See, e.g., Viveros v. Donahoe, 2013 WL 1224848, *4-5 (C.D. Cal. 2013) (citing 2012 ALM study that provides $378 as the average hourly billing rate for labor/employment attorneys in the Los Angeles area; identifying $500 as hourly rate for employment attorney with extensive experience).
1. Law Office of Sandra L. Noë l .
In February 2010, plaintiff retained Sandra L. Noë l (" Noë l"), who has over ten years of experience, and has served as lead counsel in civil litigation. See, e.g., McVay v. Fedex Ground, *1 (C.D. Cal. 2003) (identifying S. Noë l-Leyva as lead counsel). Noë l's billing agreement provides that her hourly rate is $450.00 per hour, (see Markowitz Decl., Exh. B, Dkt. No. 231, at 2), which the court finds is reasonable.
2. Sheldon Mak & Anderson/Law Office of Elizabeth Swanson .
From September 2011 through about June 2012, MacLeod retained Elizabeth Swanson (" Swanson"), who worked for Sheldon Mak & Anderson (" Sheldon Mak") and then at her own law firm.
The hourly rates for the relevant attorneys at Sheldon Mak ranged from $250.00 to $625.00 per hour. (See Markowitz Decl., Exh. C, Dkt. No. 230-3). Elizabeth Swanson, an attorney with over 20 years of experience, focuses on intellectual property litigation. See, e.g., Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558 (Fed. Cir. 1994) (E. Swanson work on Federal Circuit brief). Swanson's time was billed at $395.00 per hour in 2011, and $410.00 per hour in 2012. (See Markowitz Decl. at Exh. C). While at her own firm, Swanson billed at an hourly rate of $410.00. ( See id. ).
As for Swanson's colleagues at Sheldon Mak, Jeffrey Sheldon, who has over 20 years of experience in intellectual property law, billed at a rate of $625.00 per hour in 2011, and $645.00 in 2012. (See Markowitz Decl. at Exh. C). Douglas Morseburg also has decades of experience as an attorney and has served as lead counsel. See, e.g., Hipsaver Co. v. J.T. Posey Co., 497 F.Supp.2d 96 (D. Mass. 2007) (identifying D. Morseburg as lead counsel); Cybiotronics, Ltd. v. Golden Source Elecs., Ltd., 2001 WL 327826 (C.D. Cal. 2001) (identifying D. Morseburg and J. Sheldon as counsel). Teddy Hsu, who was apparently a junior attorney, billed at $250.00 per hour. (See Markowitz Decl. at Exh. C).
While plaintiff did not provide documentation regarding Teddy Hsu's experience and background, the billing rate is consistent with that of a relatively junior associate. Thus, the court finds the $250.00 billing rate for Teddy Hsu to be reasonable.
As for additional staff, David Zimelis, who appears to be a paralegal, billed at $155.00 per hour. (See Markowitz Decl. at Exh. C). Christine Williams, a pleading assistant, billed at a rate of $125.00 per hour. ( See id. ). Information regarding Mr. Zimelis's or Ms. Williams's background or experience is not available in the record. Thus, the court reduces their hourly rates to $75.00 per hour. Otherwise, the hourly rates for Swanson and the Sheldon Mak attorneys are within a reasonable range.
3. Law Offices of Joseph C. Markowitz .
MacLeod's trial counsel, Joseph Markowitz (" Markowitz"), has over 30 years of experience as a business trial lawyer, and has significant experience in both patent and employment law. (See Markowitz Decl. at ¶ ¶ 8-9). Markowitz's time was billed at $475.00 per hour. ( See id. at ¶ 17). Based on Markowitz's extensive experience in commercial litigation, this hourly rate is within a reasonable range.
4. Law Offices of Liu & Liu .
Plaintiff's motion includes an invoice from Liu & Liu, a patent law firm that consulted on the case. (See Attorney's Fees Joint Br. at 28; Markowitz Decl. at ¶ 18). Wen Liu, a patent attorney, billed at a rate of $400.00 per hour. (See Markowitz Decl., Exh. E, Dkt. No. 230-5, at ECF p. 22). The record is unclear regarding Wen Liu's experience and skill. Accordingly, the court reduces the billing rate to $395.00 per hour based on the AIPLA Report.
B. Reasonableness of Hours.
To determine the appropriate lodestar amount, the court also assesses the " number of hours reasonably expended on the litigation." Credit Managers Ass'n of S. Cal., 25 F.3d at 750.
1. Law Office of Sandra L. Noël .
Noë l represented plaintiff from the onset of the case in February 2010 through about February 2012. (See, e.g., Notice of Removal; Stipulation for Protective Order of Feb. 8, 2012, Dkt. No. 46) (identifying S. Noë l as counsel). Noë l charged an $8,000 fixed fee and waived her contingency fee. (See Attorney's Fees Joint Br. at 5).
Emerson objects to Noë l's fees due to lack of documentation. (See Attorney's Fees Joint Br. at 6). Emerson also seeks a deduction in attorney's fees based on MacLeod's unsuccessful employment claims. ( See id. at 26-28). In Hensley, the Supreme Court stated that " [t]here is no precise rule or formula for making these determinations, " and that the district court " necessarily has discretion in making this equitable judgment." 461 U.S. at 436-37, 103 S.Ct. at 1941. Moreover, the " absence of time records and billing statements" does not preclude the court from awarding attorney's fees. See, e.g., Davis v. Advanced Care Techs., Inc., 2007 WL 2825716, *3 n. 5 (E.D. Cal. 2007).
Here, Noë l performed extensive work on the wage and hour case, including drafting the complaint, defending plaintiff's deposition, and working on the opposition to Emerson's motion for leave to file counterclaims. (See Amended Complaint; Declaration of David F. Faustman in Support of Emerson's Motion for Leave to File a Counterclaim, Dkt. No. 15-2, Exh. A; Opposition to Motion for Leave to File Counterclaims). As for the unsuccessful theories, " it is well established that failure to recover on all theories of liability is not a bar to recovery of attorney's fees." Mendez v. Cnty. of San Bernardino, 540 F.3d 1109, 1125 (9th Cir. 2008) (emphasis in original) (internal quotation marks and modification marks omitted). Under the circumstances, the court is persuaded that a deduction in Noë l's fees is not warranted, given the amount of work she performed over two years. Also, plaintiff's unsuccessful labor and employment claims appear to arise from a common core of facts associated with plaintiff's overtime claim. For example, just as MacLeod's overtime claim depended on whether he was a non-exempt or executive exempt employee, plaintiff's retaliation claim similarly depended on his complaints pertaining to the reclassification of technicians as non-exempt employees, which MacLeod alleges caused Emerson to terminate his employment that same month. (See Court's Order of Apr. 30, 2014, at 4 & 7); see McCown v. City of Fontana, 565 F.3d 1097, 1103 (9th Cir. 2008) (" [W]here the plaintiff presents different claims for relief that involve a common core of facts . . . the district court should not attempt to divide the request for attorney's fee on a claim-by-claim basis.") (internal quotation marks omitted). In short, the record is sufficient to substantiate plaintiff's request for Noël's fees, and the court is persuaded that $8,000 fee is reasonable -- if not a bargain -- for two years of substantial work performed at an hourly rate of $450.00. (See Markowitz Decl. at Exh. B). Thus, the court awards $8,000.00 for Noël's attorney's fees.
2. Sheldon Mak & Anderson/Law Office of Elizabeth Swanson .
Plaintiff seeks $59,036.08 for the work performed by Elizabeth Swanson and her former colleagues at Sheldon Mak in the 2011-2012 time frame. (See Attorney's Fees Joint Br. at 30; Markowitz Decl. at Exh. C). This figure includes $58,828.75 in attorney's fees and $207.33 in costs. (See Markowitz Decl. at Exh. C). Swanson's work was directed to the '173 patent, helping MacLeod form a corporation for his new business, working on the opposition to Emerson's motion for leave to file counterclaims, drafting the response to Emerson's counterclaims, coordination with Safeway, and discussions with plaintiff's insurance carrier. (See, generally, id.).
Emerson argues that Swanson's billing should be reduced for her work relating to (1) corporate formation, (2) correspondence with Safeway, and (3) correspondence with the insurance company. (See Attorney's Fees Joint Br. at 25-26). In addition, (4) Emerson argues that plaintiff is not entitled to attorney's fees for defending the breach of contract, unfair competition, and trade secret misappropriation claims. ( See id. at 27-28).
The court agrees that (1) Swanson's billing regarding the corporate formation should not be included, and accordingly deducts $592.50. (See Markowitz Decl., Exh. C at ECF p. 4) (Oct. 17, 2011 billing entry re: " Formation of CNRG, Inc."). As for the (2) Safeway correspondence, it is clear from the record that Emerson's litigation claims were directed to the services MacLeod provided to Safeway. (See, e.g., RT, Nov. 19, 2014, at 38, 43-44 & 88-90) (Zazzara and Moore discussing Safeway account); (see RT, Nov. 20, 2014, at 62) (Gupta discussing Safeway documents for infringement theory). Thus, it is reasonable for MacLeod and his counsel to work with Safeway on the patent issues. Likewise, (3) it was reasonable for plaintiff's counsel to work with plaintiff's insurance carriers, due to potential coverage for patent infringement claims.
As for (4) Emerson's argument that plaintiff is not entitled to fees as to Emerson's additional counterclaims, the court may award attorney's fees for dismissed claims, where they involve a " common core of facts." Sorenson v. Mink, 239 F.3d 1140, 1147 (9th Cir. 2001); see McCown, 565 F.3d at 1103. Emerson's claims for breach of contract, trade secret misappropriation, and unfair competition arise from plaintiff's commissioning services that competed against Emerson. (See, generally, Motion for Counterclaims). Accordingly, these theories are sufficiently related, so that they should not be " viewed as a series of discrete claims." See Sorenson, 239 F.3d at 1147.
Finally, based on its independent review of the billing records, the court makes several additional deductions. See Gates v. Deukmejian, 987 F.2d 1392, 1401 (9th Cir. 1992), aff'd after appeal on remand, Gates v. Shinn, 82 F.3d 422 (1996) (court has duty " to independently review plaintiffs' fee request even absent defense objections"). Based on the lack of support for Mr. Zimelis's or Ms. Williams's billing rates, the court has reduced their entries by $162.00. In addition, the court reduces the fees by $242.00, due to a fee discount that was not taken into account in plaintiff's calculation. The court also disallows a $246.00 entry by Swanson regarding a Westlaw invoice.
The court deducts: Ms. Williams entry dated Oct. 31, 2011 (total billed: 1 hour x $125.00) (reduction to $75.00 hourly rate; total $50.00 deduction); Mr. Zimelis entries dated Nov. 6, 2011; Nov. 22, 2011; Nov. 23, 2011) (total billed: 1.4 hours x $155.00) (reduction to $75.00 hourly rate; total $112.00 deduction).
(See Markowitz Decl., Exh. C, at ECF p. 21) ($242.00 discount on May 3, 2012, Invoice).
(See Markowitz Decl., Exh. C, at ECF p. 23) ($246.00 entry for negotiations with Westlaw regarding $2,000.00 client invoice).
Based on the foregoing, the court awards $57,586.25 in reasonable attorney's fees for the work of Sheldon Mak and the Law Offices of Elizabeth Swanson.
This amount does not include the $207.33 in costs, which will be addressed below.
3. Law Offices of Joseph C. Markowitz .
Plaintiff also seeks reasonable attorney's fees for the work of Joseph Markowitz (" Markowitz"), his trial counsel who has represented plaintiff since mid-2012. (See, generally, Markowitz Decl. at Exhs. E, Dkt No. 230-5 & G, Dkt. No. 230-7). Plaintiff's request for attorney's fees includes $227,245.00 in billed fees. (See Attorney's Fees Joint Br. at 14-15 & 30). Markowitz roughly estimates that he spent about half of his hours on patent claims, and the other half on the wage and hour claims. (See M& C Transcript at 30-31). MacLeod also seeks additional fees based on a law firm discount, estimated fees for the attorney's fee motion, and a 1.5 multiplier. (See Attorney's Fees Joint Br. at 30).
In general, Emerson does not dispute the total number of hours billed. (See, generally, Attorney's Fees Joint Br.). Rather, Emerson makes several arguments regarding alleged deficiencies in Markowitz's billing records. First, Emerson asserts that Markowitz's records include " block billing, " including monthly invoices without daily time entries. ( See id. at 8-9). Second, Emerson contends that Markowitz's billing entries should distinguish between the patent and wage and hour claims. ( See id. at 9-13). Third, Emerson argues that the fees are excessive, because they include entries for work on the " retaliation, breach of contract, defamation/slander, and infliction of emotional distress" claims. ( See id. at 27). Finally, Emerson asserts that plaintiff is not entitled to attorney's fees based on Emerson's dismissed counterclaims. ( See id. at 27-28).
Block billing " does not justify an across-the-board reduction or rejection of all hours." Mendez v. San Bernardino, 540 F.3d at 1129 (2008), overruled on other grounds in Arizona v. Asarco, LLC, 773 F.3d 1050 (9th Cir. 2014); see Hensley, 461 U.S. at 433, 103 S.Ct. at 1939 (court has discretion to reduce award based on inadequacy of documentation). The court has reviewed Markowitz's billing records and calendar entries, and while they are not a model of clarity, the invoices and calendar entries are sufficiently detailed for the court to assess a reasonable attorney's fee award. (See, generally, Markowitz Decl. at Exhs. E & G). Moreover, the parties do not dispute that Markowitz's hours were reasonably expended. (See, generally, Attorney's Fees Joint Br.); see Hensley, 461 U.S. at 433, 103 S.Ct. at 1939. Markowitz represented MacLeod through trial for about $225,000, which seems very reasonably low given the unusual hybrid nature of this overtime/patent case.
As for the argument that the entries should distinguish between the patent and the overtime claim, many of the tasks and projects involved both, such as mediation, pre-trial filings, and trial preparation. Moreover, Markowitz's billing records are fairly comprehensive. (See, generally, Markowitz Decl. at Exhs. E & G). Based on the invoices, calendar entries and case history, Markowitz's rough estimate that half of the time was for the patent case, and the other half for the overtime claim, is not unreasonable. (See M& C Transcript at 30-31).
Third, as noted earlier, plaintiff's unsuccessful labor and employment claims appear to arise from a common core of facts associated with plaintiff's overtime claim. Thus, the court overrules this objection. With respect to Emerson's dismissed counterclaims, the court overrules Emerson's objection, for the reasons discussed above, i.e., the court is persuaded that the additional counterclaims arise from a " common core of facts, " thus warranting the award of attorney's fees. See Sorenson, 239 F.3d at 1147; see also Padgett v. Loventhal, 706 F.3d 1205, 1209 (9th Cir. 2013) (" where attorney work proves beneficial to a successful claim, district courts should generally award these fees in full."). Here, one of MacLeod's case themes was his right to compete with Emerson in the marketplace. (See, e.g., Pretrial Conference Order at 4) (stipulated fact that " MacLeod is entitled to compete with Emerson, subject to Emerson's patent rights"). Markowitz's work on the trade secret counterclaims and other dismissed counterclaims was critical to plaintiff's success in trial.
Plaintiff argues that he " dismissed all but one of his other employment claims from the case voluntarily, " and that he " offered to dismiss the retaliation claim if Emerson would agree to drop its summary judgment motion." (Attorney's Fees Joint Br. at 27).
In any event, the amount plaintiff's counsel spent on the unsuccessful labor and employment claims was pretty minimal. (See M& C Transcript at 29) (discussing Markowitz's " pretty minimal amount of time" on retaliation claim and dismissal of other employment claims).
Plaintiff also seeks $11,669.50 in attorney's fees which plaintiff designates as " Fee discounts." (Attorney's Fees Joint Br. at 30). The court declines the request for attorney's fees based on the fee discount, as the paid fees represent a reasonable attorney's fee.
With respect to plaintiff's request for a fee multiplier, the court considers factors such as " (1) the novelty and difficulty of the questions involved, (2) the skill displayed in presenting them, (3) the extent to which the nature of the litigation precluded other employment by the attorneys, (4) the contingent nature of the fee award." Pellegrino, 182 Cal.App.4th at 287-88 & 290-91 (multiplier for violation of Cal. Labor Code § 1194). The purpose of the enhancement is " to fix a fee at the fair market value for the particular action." Id. at 291.
Here, (1) the wage and hour issues were not particularly challenging. It was undisputed that Emerson failed to pay overtime compensation to plaintiff, (see Pretrial Conference Order), so (2) it did not require unusual skill to present the issues. As for (3) other employment, the record does not indicate that this case precluded Markowitz from taking other cases. Moreover, (4) Markowitz took the case on an hourly basis. (See Markowitz Decl. at Exh. D). Last, the purpose of the multiplier is to set the fee at the " fair market value." See Pellegrino, 182 Cal.App.4th at 291. The court is persuaded that the billing arrangement has done so.
Plaintiff also seeks $20,000 in attorney's for drafting plaintiff's portion of the Attorney's Fees Joint Brief. (See Attorney's Fees Joint Br. at 30). Attorney's fees for preparing motions for attorney's fees are allowed. See D'Emanuele v. Montgomery Ward & Co., Inc., 904 F.2d 1379, 1387-88 (9th Cir. 1990) overruled on other grounds in Burlington v. Dague, 505 U.S. 557, 112 S.Ct. 2638, 120 L.Ed.2d 449 (1992). Here, the court has carefully reviewed plaintiff's portion of joint brief as well as the supporting documents and is persuaded that ten hours of time was necessary to prepare the subject papers. Accordingly, the court awards $4,750.00 (10 x hourly rate of $475) for the preparation of the papers relating to the motion for attorney's fees.
Finally, based on the court's independent review of the billing records, Gates, 987 F.2d at 1401, the court makes several additional deductions. Due to fairly minor discrepancies between the invoices and the daily entries, the court deducts $1,282.50 from the $227,245.00 sought. Moreover, the court deducts $1,900.00 from Markowitz's entries for getting up to speed in the May-June 2012 time frame. (See, e.g., Markowitz Decl., Exh. G at ECF p. 2-5).
This deduction represents 2.7 hours in minor discrepancies between the invoices and daily calendar entries. (See Markowitz Decl., Exhs. E & G).
This deduction represents 4.0 hours for Markowitz's work done getting up to speed from Swanson in the mid-2012 time frame.
Based on the foregoing, the court awards $228,812.50 in reasonable attorney's fees for Markowitz's services.
4. Liu & Liu .
MacLeod's request includes a request for $10,000 for the services of Liu & Liu, which is based on " fees capped at 25 hours" multiplied by $400.00 per hour. (See Markowitz Decl., Exh. E at ECF p. 22). Emerson objects to the submission of the Liu & Liu invoice as a " cost, " and argues that such a request should be " considered an attorney fee." (See Attorney's Fees Joint Br. at 29). Emerson further argues that the billing is improper, because Liu & Liu submitted the bill after trial, based on the potential motion for attorney's fees. ( See id. ).
The court agrees that Liu & Liu's services should be reviewed as attorney's fees, not as a cost. However, Emerson has not identified any authority barring the payment of attorney's fees in this context. Accordingly, the court turns to the reasonableness of the hours. As discussed, the court has reduce the hourly rate of the Liu & Liu fees to $395.00 per hour. The invoice states that Liu & Liu provided services regarding the patent counterclaim, including review of the asserted patent and file history, claim construction, invalidity, non-infringement, " attending trial, " and " considering issues with testimony of Emerson's expert[]." (Markowitz Decl., Exh. E at ECF p. 22). Markowitz corroborates that Wen Liu provided " invaluable advice and assistance throughout the course of this representation, " including attending part of the trial. (Id. at ¶ 18). The invoice caps the hours at 25 hours. ( See Id., Exh. E at ECF p. 22). Under the circumstances, the record is sufficient to support an award of attorney's fees. Moreover, as Liu & Liu worked on the case for a substantial time period and provided services during trial, 25 hours of time is not unreasonable. The court awards $9,875.00 as reasonable attorney's fees for the services of Liu & Liu.
D. Costs.
Plaintiff seeks $4,795.00 in reimbursable expenses, and $6,811.87 in expenses paid by the client. (See Attorney's Fees Joint Br. at 30). The reimbursable expenses consist of $1,350.78 for non-refundable plane tickets purchased in advance of the meeting that Emerson " abruptly cancelled." (See Markowitz Decl. at ¶ ¶ 6, 18 & Exh. E at 7). The balance of $3,444.22 consists of filing fees, travel expenses, photocopies, and postage. ( See id. at ¶ 18). The expenses paid by plaintiff consist of $2,945.00 in mediation fees and $3,866.87 in travel expenses for plaintiff and two employees to attend trial. ( See id. at Exh. F). Although represented as attorney's fees, plaintiff seeks $207.33 in costs for messenger, FedEx, and Pacer expenses by Sheldon Mak and Swanson. ( See id. at Exh. C).
This calculation excludes the $10,000 invoice from Liu & Liu, which was addressed in the motion for attorney's fees.
In general, fees claimed for costs and expenses that are customarily billed by private attorneys to fee-paying clients may be awarded as attorney's fees. See Davis v. City and Cnty. of San Francisco, 976 F.2d 1536, 1546 n.4 & 1557 (9th Cir. 1992), vacated in part on denial of rehearing on other grounds in 984 F.2d 345 (9th Cir. 1993); United Steelworkers of Am. v. Phelps Dodge Corp., 896 F.2d 403, 407 (9th Cir. 1990) (" Out-of-pocket litigation expenses are reimbursable as part of the attorneys' fee"). As noted earlier, Emerson objects to the request for costs, because plaintiff did not adequately raise the costs in the December 15, 2014, meet and confer, and MacLeod did not include the section in the draft brief until the day before the December 22, 2014, deadline. See supra at Emerson's Application for Sanctions. Emerson, however, does not otherwise dispute the costs. (See, generally, Attorney's Fees Joint Br. at 29; Emerson's Supplemental Brief in Opposition to Plaintiff's Motion for Attorneys' Fees, Dkt. No. 259). In any event, the court has reviewed the costs and finds that they are reasonable. Accordingly, the court awards $11,814.20 in costs.
This Order is not intended for publication. Nor is it intended to be included in or submitted to any online service such as Westlaw or Lexis.
CONCLUSION
Based on the foregoing, IT IS ORDERED THAT:
1. Defendant's Motion for a New Trial (Document No. 248) is denied.
2. Defendant's Renewed Motion for Judgment as a Matter of Law (Document No. 249) is denied.
3. Defendant's Ex Parte Application for Sanctions (Document No. 234) is granted in part and denied in part. Plaintiff's counsel (Markowitz) shall, no later than five (5) court days after receiving his first payment of attorney's fees in this matter, pay defendant monetary sanctions in the amount of $1,000.00.
4. Plaintiff's Motion for Attorney's Fees (Document No. 229) is granted in part and denied in part. Plaintiff shall be awarded $316,087.95 in reasonable attorney's fees and costs ($304,273.75 in attorney's fees + $11,814.20 in costs). Judgment shall be entered with respect to the attorney's fees motion.