Order Regarding Samsung Sanctions Fees

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Case No. 5:11-cv-01846-LHK (PSG)

ORDER SETTING REASONABLE ATTORNEYS FEES AND COSTS
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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN J OSE DIVISION

APPLE INC., a California Corporation,

Plaintiff,
v.

SAMSUNG ELECTRONICS CO., LTD., a
Korean corporation; SAMSUNG
ELECTRONICS AMERICA, INC., a New York
corporation; and SAMSUNG
TELECOMMUNICATIONS AMERICA, LLC,
a Delaware limited liability company,

Defendants.

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ORDER SETTING REASONABLE
ATTORNEYS FEES AND COSTS

(Re: Docket Nos. 2958, 2959, 2964, 2998,
3014)

With the present quiet on the docket, it is easy to forget the long tumult of this case that
once reigned. The ceremonial courtroom has cleared. The fire drills of motions on shortened time
have ceased. All that remains for now, at least for the undersigned, is the relatively mundane issue
of what makes for reasonable fees.
The fees at issue arise from this courts order awarding sanctions to Apple and Nokia. The
sanctions followed the courts finding that Samsung and Quinn Emanuel were responsible for the
Case5:11-cv-01846-LHK Document3117 Filed06/20/14 Page1 of 10

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unauthorized distribution of Apple and Nokia confidential information. Samsung and QE object to
certain of the fees Apple and Nokia now claim, which means the court must wade into the billing
entries and make various calls. So, here goes.
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I. BACKGROUND
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On J une 4, 2013, Nokia and Samsung met for negotiations over a patent license deal. At
that meeting, Dr. Seungho Ahn of Samsung told Paul Melin of Nokia that he knew the terms of
Nokias license agreement with Apple; he then recited the terms and indicated that his lawyers had
told him what they were. As Dr. Ahn put it, all information leaks. On J uly 1, 2013, Nokia filed
a motion for a protective order in the 12-0630 case to prevent further dissemination of its
confidential information. Nokia later withdrew that motion after entering into a stipulated
agreement with Samsung, which was supposed to address the problem.
On August 1, 2013, QE finally notified Apple that there had been a breach of the protective
order, resulting in the dissemination of information designated as attorneys eyes only within
Samsung. In response, Apple filed a motion for sanctions in this case, as well as a motion for
discovery to figure out how far and wide the information had spread. Because progress had been
essentially non-existent on the stipulated remedial agreement, the court granted Apples motion for
discovery, which turned out to be extensive. After reviewing the materials unearthed by discovery,
the court granted Apples motion for sanctions against Samsung and its counsel on two grounds:
(1) failure to institute sufficient safeguards for third-party confidential information and (2) failure
to comply with the notice and cooperation requirements set forth in Section 18(a) of the protective
order entered in this case. The court ordered QE to reimburse Apple and Nokia any and all costs

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For ease of reference, the court will refer to QE alone while intending to encompass both QE and
Samsung.
2
For direct citations to the record or a more fulsome recitation of the facts, see Docket Nos. 2689
and 2935.

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and fees incurred in litigating this motion and the discovery associated with it. QE now challenges
the reasonableness of the fees requested.
II. LEGAL STANDARDS
The touchstone of the attorneys fee award is its reasonableness. As such, to determine the
award, the court begins with the lodestar: reasonable rates multiplied by reasonable hours
expended.
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The resulting figure is presumptively reasonable.
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Attorneys fees awards may only
include hours reasonably expended on the litigation.
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Hours that are excessive, redundant, or
otherwise unnecessary must be excluded.
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The court must base its determination whether to
award fees for counsels work on its judgment as to whether the work product . . . was both useful
and of a type ordinarily necessary to advance the . . . litigation.
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Although parties seeking attorneys fees are required only to provide affidavits sufficient
to enable the court to consider all the factors necessary to determine a reasonable attorneys fee
award, parties are subject to a reduction in the hours awarded when they fail to provide adequate
documentation, notably contemporaneous time records.
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The court also has the authority to
reduce hours that are billed in block format.
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Block-billing is the time-keeping method by which

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See Hensley v. Eckerhart, 461 U.S. 424, 434 (1983); Kraszewski v. State Farm General Ins. Co.,
Case No. 3:79-cv-1261-TEH, 1984 WL 1027, at *5-6 (N.D. Cal. J une 11, 1984).
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See Hensley, 461 U.S. at 434.
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See id. at 433.
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Id.
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Armstrong v. Davis, 318 F.3d 965, 971 (9th Cir. 2003).
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See Ackerman v. W. Elec. Co., Inc., 643 F. Supp. 836, 863 (N.D. Cal. 1986) (citing Williams v.
Alioto, 625 F.2d 845, 849 (9th Cir. 1980)).
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See Welch v. Metropolitan Life Ins. Co., 480 F.3d 942, 948 (9th Cir. 2007).

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each lawyer and legal assistant enters the total daily time spent working on a case, rather than
itemizing the time expended on specific tasks.
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Finally, the Ninth Circuit recognizes that because awarding attorneys fees to prevailing
parties . . . is a tedious business, the trial court should normally grant the award in full if the
party opposing the fee request cannot come up with specific reasons for reducing the fee
request.
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At the same time, nothing in this standard compels a court to overlook ambiguities in a
requesting partys supporting materials that it was in a position to argue.
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III. DISCUSSION
QE raises three broad challenges to Apples and Nokias request for costs and attorneys
fees, which this order will address in order of escalating merit.
A. It Is Not Unjust To Award The Requested Expenses
First, QE urges the court to substantially reduce Apples and Nokias fee requests because
a full award would be unjust in light of newly revealed evidence that Apple and Nokia failed to
adequately protect their own information.
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QE refers, of course, to the revelation in February that
Apple itself mistakenly failed to redact the terms of its license with Nokia from a document filed
on the public docket in October.
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The court has already expressed its view that this disclosure is
not [] relevant to either basis for the courts J anuary 29, 2014 sanctions order, so it declines to
reduce the fee award on those grounds.
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10
Id. at 945 n.2 (internal citations and quotations omitted).
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Moreno, 534 F.3d at 1116.
12
See Welch, 480 F.3d at 948.
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See Docket No. 3000 at 4.
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See Docket No. 2958-1.
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B. Apple And Nokias Work Was Neither Unnecessary Nor Unsuccessful
QE next argues that the requested fees should be reduced to reflect Apple and Nokias
unnecessary work and limited success.
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After all, QE points out, the material relied on to seek
sanctions was voluntarily provided or offered in August, requiring no litigation, and Samsung
stipulated to remedial measures on August 18.
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However, as the court noted in October, the
proposed remedial measures were insufficient, as was Samsungs progress toward implementing
them.
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The court, not Apple or Nokia, concluded that letting Samsung and its counsel investigate
this situation without any court supervision [was] unlikely to produce satisfactory results,
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and on
that basis, the court ordered the discovery that QE now argues was not needed.
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Apple and
Nokia can hardly be faulted for complying with a court order.
QE further asks the court to reduce the fee award in because Apple and Nokia did not
succeed on many claims.
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This is simply incorrect. Apple moved for sanctions on the grounds
that Apple confidential licensing information was disclosed to Samsung employees and others in
violation of the Protective Order, indicating a broad failure to maintain appropriate procedures to
protect the confidential information produced in this case.
22
The courts eventual order noted
specifically that Samsung and QEs willful failure to institute sufficient safeguards for the
information warrants sanctions when considered in light of the vast distribution of confidential

16
Docket No. 3000 at 3.
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Id.
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Id.
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Id. at 4.
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Docket No. 2374-2 at 11.

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information that occurred because such protections were not in place.
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Apple further moved for
sanctions based on Samsungs failure to take immediate and thorough action following the
discovery of those breaches to prevent further mishandling of Apples information,
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and the court
granted sanctions based on Quinn Emanuels failures to follow the procedures set forth in
Section 18(a) of the protective order once it learned of the inadvertent disclosures.
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Finally,
Apple also moved for sanctions because Samsung executives appear[ed] to have improperly used
the Apple confidential licensing information.
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Though the court was ultimately unpersuaded
that Samsung had misused the inadvertently disclosed information, it took the full scope of the
discovery tendered to reach that conclusion.
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This was not a case where the parties tested a wild
legal theory, or pushed the bounds of a subjective standard in seeking sanctions. Apple and Nokia
had concrete evidence indicating wrongdoing at the time that the motion was brought. Two of
their three allegations were eventually confirmed, and though the court rejected the third, it noted
that Samsungs excuses and explanations were shaky at best.
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Apple and Nokia succeeded on
most of their claims, and the court declines to reduce its fee award to indicate anything less.
QE pushes for additional reductions based on Nokias inappropriate scorched earth
litigation strategy and duplicative work, such as sending multiple attorneys to attend depositions
and hearings. J ust recently, this court declined to hold that, as a matter of law, it is unreasonably
duplicative to have [multiple] attorneys at mediation sessions, depositions, meetings, and trial;
often, there are numerous moving pieces at each of these events, such that having [multiple]

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Id.

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attorneys present is more or less required to follow everything.
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It is disinclined to reach a
contrary conclusion here. Neither can it fault Nokia for zealously pursuing the relief granted by
this court. QEs request to make various reductions on these grounds also is denied.
Finally, QE asks the court to strike seven specific sets of costs and fees.
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1. Expenses for an unfiled motion by Nokia: denied. The bulk of the work was
eventually used in a different form, and the court does not wish to create an
incentive to file unnecessary motions simply because the drafting process has
begun.
2. Expenses incurred in depositions of Jeff Rischer, Paul Melin and Eeva Hakoranta:
denied. Failure to discover that Apple/Nokia license terms had been accidentally
posted on the public docket does not amount to a failure to conduct a reasonable
investigation in preparation for the deposition.
3. Business or first class airfare: granted-in-part. While striking those expenses
entirely would be extreme, it is appropriate to reduce them to approximately the
cost of a coach class ticket. QE suggests a 70% reduction in all business/first class
airfare to make this adjustment, which seems reasonable to the court. Apple shall
recover $3,367.55 of its requested $11,225.15 costs for business and first class
airfare. Breaking out Nokias business class fares is not feasible, as they are
presented as part of a single trip entry for each of three trips, covering airfare,
lodging, transportation and food, so the discount will be applied to the entire entry;
Nokia shall recover $9,436.80 of its requested $31,456 for trips which included a
business class airfare.
4. Nokia meals and transportation expenses: denied. Subsistence and transportation
are commonly accepted costs of business travel.
5. RealTime and video service expenses: denied. Again, these are commonly accepted
costs of conducting discovery.
6. Expenses incurred for the Ken Korea deposition: denied. Having reviewed the Ken
Korea deposition transcript, he was subject to extensive questioning by both Apple
and Nokia.
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7. Expenses incurred sending Nokia counsel to Korea: granted. Nokia has presented
insufficient evidence to justify its decision to send counsel to Korea for the
beginning of the Stroz review despite being told that counsel would not be
permitted within the premises.

29
Muan v. Vitug, Case No. 5:13-cv-0331-PSG, Docket No. 73 at 3 (N.D. Cal. J une 18, 2014).
30
31
See Docket No. 2557-10.

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C. With Limited Exceptions, Apple And Nokias Requests Have Been Sufficiently
Supported To Sustain The Requested Award
In its most persuasive argument, QE argues that the court should reduce the fees and costs
requested because the billing records submitted are insufficiently detailed to allow anyone to
evaluate their reasonableness. QE argues that Apple and Nokias billing records in the present
matter reflect the same flawsgeneric descriptions and block billingfor which the court
previously imposed a 20% reduction. The parties in this case are aware that the court takes such
allegations seriously and will not reward obtuse billing practices that deprive others of the ability to
meaningfully evaluate how the time was spent.
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That said, Apple and Nokias billing records are much clearer than those for which the
court previously imposed a 20% penalty. Apples previous billing included things like 60.7 hours
spent drafting and preparing motion to compel, and 20.8 hours preparing motion for
administrative relief and motion to seal.
33
This time, in the over four hundred pages of
correspondence and billing records submitted for review, the court has identified only 19 records
that it finds troubling. In each of these entries, partners and senior associates block bill ten or more
hours on drafting, preparing revising or paying attention to various briefs.
34
These are
precisely the type of entries that the court condemned in its prior order and are therefore subject to
the same 20% reduction.
35
The relevant entries are provided in the table below in both their
original and reduced forms.
36

32
See Apple Inc. v. Samsung Electronics Co., Ltd., Case No. 5:11-cv-1846-LHK (PSG),
2012 WL 5451411, at *5 (N.D. Cal. Nov. 7, 2012).
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Docket No. 1948-1.
34
See Docket Nos. 2965-20 at 34, 2965-21 at 52-53.
35
See Apple, 2012 WL 5451411, at *8.
36
For the entries listed below, Nokia originally requested $87,082, but shall be awarded
$69,667.20. Apple originally requested $20,498.17 but shall be awarded $16,398.54.

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Team Member Task Original
Hours
Reduced
Hours
Parker Miller Draft and revise response to Samsung motions to
stay and for relief from Apple and Stipulated Order
10.2 8.2
Ed Bonapfel Edit and revise Brief in Support of Sanctions and
supporting documents related to same
10.2 8.2
Ryan Koppelman Attention to access to redacted Samsung filings,
deposition scheduling, meet and confer status,
proposal for potential sanctions, draft Motion for
Contempt.
10.3 8.2
Parker Miller Draft and revise Brief in Support of Sanctions. 10.3 8.2
Andy Tuck Finalize and file sanctions brief. 10.3 8.2
Parker Miller Draft, revise and file Supplemental filing on Motion
for sanctions.
10.6 8.5
Alex Wuste Research and draft filings related to J udge Grewals
October 2
11.3 9.0
Parker Miller Draft and revise supplemental motion and support
ongoing depositions.
11.7 9.4
for sanctions.
11.8 9.4
Alex Wuste Update, cite check, finalize R. Koppelman
declaration and final brief
12.4 9.9
Parker Miller Draft and revise opposition to Samsung motion for
privilege
12.8 10.2
for sanctions.
12.9 10.3
Ryan Koppelman Attention to supplemental brief 13 10.4
Parker Miller Draft and Revise response to Samsung Motion for
Leave
13.1 10.5
Parker Miller Draft and revise brief; respond to Samsung's letter
on privilege.
13.2 10.6
Ed Bonapfel Edit and revise Supplemental Brief and prepare for
filing.
14.7 11.8
Parker Miller Draft and revise supplemental brief 16.8 13.4
Andrew Liao Prepare, file brief and supporting papers regarding
appropriate sanctions for Samsungs protective
order
11.4 9.1
Derek Gosma Draft materials related to sanctions motion, discuss
same with team, finalize filing
12.1 9.7
Richard ONeill Revise sanctions supplemental brief 15.1 12.0
The court notes and appreciates that both Apple and Nokia have applied a series of
discounts to their requests already. However, as the court understands it, theses discounts were
intended to account for potential over-billing or expenditures that were not, strictly speaking,

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necessary. The haircut now applied to the requests submitted addresses the problem of
insufficient record keeping, not overbilling or unnecessary time spent.
IV. CONCLUSION
With the limited exceptions described above, the court finds that the remaining costs and
fees requested by Apple and Nokia are reasonable and shall be awarded.

No later than 30 days
from this order, Samsung and QE are to pay Nokia a total of $1,145,027.95 and Apple a total of
$893,825.77 in fees and costs.
IT IS SO ORDERED.
Dated: J une 20, 2014
_________________________________
PAUL S. GREWAL
United States Magistrate J udge


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Case No. 5:11-cv-01846-LHK (PSG)

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