Trustees of the Iam National Pension Fund v. M & K Employee Solutions, LLC

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
TRUSTEES of the 1AM NATIONAL
PENSION FUND,
Plaintiffs,
v. Case No. 1:20-cv-433-RCL
M & K EMPLOYEE SOLUTIONS, LLC,
et al.,
Defendants.
MEMORANDUM OPINION
Before the Court are two motions by plaintiffs, the Trustees of the IAM National Pension
Fund ("the Trustees"), to recover from defendants M & K Employee Solutions, LLC, M & K
Employee Solutions, LLC-Alsip, M & K Employee Solutions, LLC-Illinois Leasing, M & K
Employee Solutions, LLC-Joliet, M & K Employee Solutions, LLC-Northern Illinois, and M & K
Employee Solutions, LLC-Summit (together, "the M & K Employee Solutions Defendants") and
defendant Laborforce, LLC attorneys' fees and costs incurred in connection with three depositions
in this matter that those defendants abruptly canceled and later rescheduled. The first motion seeks
attorneys' fees incurred in preparing for those depositions, see ECF No. 124, while the second
motion seeks attorneys' fees and costs incurred in taking them, see ECF No. 133.
Both motions followed a Memorandum Opinion from earlier this year in which this Court,
among other things, indicated that it would "sanction the defendants for failing to appear" at the
depositions, "but not for opposing the [Trustees' ] successful motion to compel" them. Trustees of
the JAM Nat 'l Pension Fund v. M & K Empl. Solutions, LLC, ("JAM II"), No. 20-cv-433-RCL,
2022 WL 594539, at *13 (D.D.C. Feb. 28, 2022). Upon further reflection, the portion of that
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Opinion concerning attorneys' fees was inadequately explained, and so the Court will reconsider
sua sponte its conclusion regarding the particular expenses to be awarded. The Court will therefore
DENY both motions for attorneys' fees without prejudice and consider further motions for
attorneys' fees incurred in litigating the successful motion to compel under the standards that
follow.
I. BACKGROUND
The Court explained the broader factual and procedural background of the case at length
in two previous Memorandum Opinions. See JAM II, 2022 WL 594539, at *1-5; Trustees of the
JAM Nat 'l Pension Fund v. M & K Empl. Solutions, LLC ("JAM I"), No. 20-cv-433-RCL, 2021
WL 1546947, at *1-3 (D.D.C. Apr. 20, 2021). Therefore, the Court will summarize here only the
background information pertinent to the present motions for attorneys' fees and costs.
This case grows out of a dispute over defendants' liability under the Multiemployer
Pension Plan Amendments Act ("MP AA"), which amended the Employee Retirement Income
Security Act ("ERISA"), for withdrawing from the IAM National Pension Fund ("the Fund"), a
multiemployer pension plan. Over a year after the Trustees filed this action, on July 13, 2021, an
arbitrator determined that the Fund had improperly assessed the amount of defendants' withdrawal
liability and ordered the Fund to recalculate that amount. JAM II, 2022 WL 594539, at *4. That
same day, the M & K Employee Solutions Defendants and Laborforce canceled their respective
depositions, which were scheduled to take place over the two days that followed. Id. at * 12. The
Trustees moved to compel those depositions and for an award pursuant to Federal Rules of Civil
Procedure 37(a)(5) and 37(d)(3) of attorney's fees and costs incurred in litigating the motion to
compel and in preparing for, and eventually taking, the depositions. See ECF No. 90.
In a February 28, 2022 Memorandum Opinion addressing a host of motions, the Court
indicated that it would sanction the M & K Employee Solutions Defendants and Laborforce
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pursuant to Rule 37 by granting an award of attorney's fees and costs incurred in preparing for and
taking the depositions, but not those incurred in preparing the motion to compel. Id. at *12-13. In
the accompanying Order, the Court instructed "the Trustees to brief the Court on the proposed
amount of attorneys' fees expended in preparing for the aborted depositions." Feb. 28, 2022 Order
at 1, ECF No. 116.
On March 14, 2022, the Trustees moved for attorneys' fees incurred in preparing for the
aborted depositions, requesting an award of $30,670.00, "payable by the M&K Employees
Defendants, Laborforce, and their respective counsel." Mem. in Supp. of Pis.' Mot. for Atty. Fees
at 6, ECF No. 124-1. Thereafter, the Trustees re-noticed those depositions and conducted them on
April 14 and 18, 2022, with the M & K Employee Solutions Defendants and Laborforce both
designating Chad Boucher and Laura Schneider as deponents and Laborforce also designating Josh
Wolf as a deponent. Deel. of Neil V. Shah ("Shah Deel. II") ,r,r 6-7, ECF No. 133-2. The Trustees
then filed a further motion for attorneys' fees and costs incurred in taking them, requesting
$32,697.15 "payable by the M&K Employees Defendants, Laborforce, and their respective
counsel." Mem. in Supp. of Pis.' Mot. for Atty. Fees and Costs at 6, ECF No. 133-1; Pis.' Reply
in Supp. of Mot. for Atty. Fees and Costs at 4-5, ECF No. 145. 1 Both motions are now ripe for
review.
II. LEGAL STANDARDS
When a court grants a motion to compel discovery pursuant to Federal Rule of Civil
Procedure 37(a), "the court must, after giving an opportunity to be heard, require the party or
deponent whose conduct necessitated the motion, the party or attorney advising that conduct, or
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The Trustees originally requested $34,186.15 but conceded in their reply that that figure was somewhat inflated due
to errors in the accompanying invoice. Pls.' Reply in Supp. of Mot. for Atty. Fees and Costs at 4-5.
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both to pay the movant's reasonable expenses incurred in making the motion, including attorney's
fees," unless "(i) the movant filed the motion before attempting in good faith to obtain the
disclosure or discovery without court action; (ii) the opposing party's nondisclosure, response, or
objection was substantially justified; or (iii) other circumstances make an award of expenses
unjust." Fed. R. Civ. P. 37(a)(5)(A).
Federal Rule of Civil Procedure 37(d)(3) further provides that courts must sanction parties
who fail to appear at their own depositions by, among other options, requiring "the party failing to
act, the attorney advising that party, or both to pay the reasonable expenses, including attorney's
fees, caused by the failure, unless the failure was substantially justified or other circumstances
make an award of expenses unjust." Such expenses may include paralegals' fees as well as
attorneys' fees. See, e.g., Walker v. District of Columbia, 317 F.R.D. 600, 606---07 (D.D.C. 2016).
Rule 37(d)(2) specifically provides that a party's failure to appear at a deposition "is not excused
on the ground that discovery sought was objectionable, unless the party failing to act has a pending
motion for a protective order under Rule 26(c)." Fed. R. Civ. P. 37(d)(2).
When a court grants an award of attorneys' fees and costs under Rule 37, "[t]he initial
estimate for attorneys' fees is calculated by 'multiplying the number of hours reasonably expended
on the litigation times a reasonable hourly rate."' DL v. District of Columbia, 256 F.R.D. 239,242
(D.D.C. 2009) (quoting Blum v. Stenson, 465 U.S. 886, 888 (1984)). "A strong presumption exists
that the product of these two variables-the 'lodestar figure'-represents a reasonable fee." Id.(citing Pennsylvania v. Del. Valley Citizens' Council for Clean Air, 478 U.S. 546, 565 (1986)).
"[A]n attorney's usual billing rate is presumptively the reasonable rate, provided that this rate is
'in line with those prevailing in the community for similar services by lawyers of reasonably
comparable skill, experience, and reputation.'" Kattan by Thomas v. District of Columbia, 995
4
F.2d 274, 278 (D.C. Cir. 1993) (quoting Blum, 465 U.S. at 895-96 n. 11). The Circuit has
established that, as a rough guide for what rates are reasonable, courts may look to the "Laffey
Matrix," a schedule of fees for Washington, D.C.-area lawyers according to years of experience.
See Covington v. District of Columbia, 57 F.3d 1101, 1105 (D.C. Cir. 1995). In determining
whether the number of hours expended is reasonable, courts will exclude hours that are
"duplicative, excessive, or otherwise unnecessary." Ventura v. Bebo Foods, Inc., 738 F. Supp. 2d
8, 34 (D.D.C. 2010).
III. DISCUSSION
A. The Court Will Reconsider its Initial Decision on Attorneys' Fees
As explained above, Rule 37 provides two different possible mechanisms for imposing an
award of attorneys' fees related to depositions: an award under Rule 37(a)(5) for litigating a motion
to compel a deposition and an award under Rule 37(d)(3) for expenses caused by a party's failure
to appear at its own scheduled deposition. Under both rules, a court must not grant the award if the
position of the party against whom it is sought "was substantially justified." Fed. R. Civ. P.
37(a)(5)(ii); Fed. R. Civ. P. 37(d)(3). However, only when the award is sought under Rule
37(d)(3)-not when it is sought under Rule 37(a)(5)-the nonmoving party's conduct "is not
excused on the ground that the discovery sought was objectionable, unless the party failing to act
has a pending motion for a protective order under Rule 26(c)." Fed. R. Civ. P. 37(d)(2).
In the February 28, 2022 Memorandum Opinion, the Court granted the Trustees' motion
to compel but found that the opposition to that motion was substantially justified because "[t]here
was a 'genuine dispute' as to whether any additional discovery was necessary or appropriate" in
light of the outcome of the arbitration._ JAM II, 2022 WL 594539, at *13. The Court therefore
determined that an award of attorneys' fees under Rule 37(a)(5) for litigating the motion to compel
was inappropriate. The Court further noted, however, that no motion for a protective order under
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Rule 26(c) was pending at the time the depositions were canceled, and thus the same excuse was
unavailable with respect to an award of attorneys' fees for expenses caused by the wrongful
nonappearance at the depositions under Rule 37(d)(3). ld. That reasoning remains undisturbed.
However, the Court then stated that it would "sanction the defendants for failing to appear"
under Rule 37(d)(3) "by requiring defendants to pay the Trustees' attorneys' fees and costs
incurred in preparing for and conducting the three depositions in question." Id. The Court regrets
that it reached that conclusion without a fuller analysis of what expenses were "caused by the
failure" to appear at the depositions, which is the only basis on which Rule 37(d)(3) authorizes
monetary sanctions. Fed. R. Civ. P. 37(d)(3) (emphasis added). Where a deponent entirely fails to
appear and the deposition is never taken, the moving party's efforts have been wasted, and thus
the appropriate award may be all expenses "attributable directly to the ... depositions." Campbell
v. Nat'! R.R. Passenger Corp., 309 F.R.D. 21, 29 (D.D.C. 2015). But where a deponent initially
fails to appear but later reschedules the deposition, much of the work can be repurposed for the
later deposition, and thus expenses "caused by the failure" to appear, Fed. R. Civ. P. 37(d)(3),
might only include those "incurred for the day of [the deponent's] scheduled deposition,
including," for example, "the cost to secure the services of a court reporter for the purpose of the
deposition," District Title v. Warren, 319 F.R.D. 25, 35 (D.D.C. 2015) (emphasis added).
The record demonstrates that neither the Trustees' counsel's preparation for the depositions
at issue nor their taking of those depositions was "caused by the failure" of the deponents to appear.
Fed. R. Civ. P. 37(d)(3). Those depositions were previously noticed and scheduled to occur, and
the Trustees have not identified any additional preparation that was occasioned by the cancelation
that their attorneys would not have undertaken if the depositions had taken place as previously
scheduled. Nor have the Trustees identified any portion of the eventual depositions that was made
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lengthier or more difficult by the rescheduling-in other words, there is presently no allegation
that the depositions were more expensive when they were rescheduled than they otherwise would
have been had the sanctioned conduct never occurred.
That being said, this case presents an unusual situation in which expenses associated with
litigating a motion to compel-ordinarily recoverable through a Rule 37(a)(5) motion-were
caused by conduct that is sanctionable under Rule 37(d)(3). This is not a case in which, as the
Rules' drafters likely envisioned, a party steadfastly opposed a deposition being taken and then
the other party eventually moved to compel that deposition. Rather, the Trustees noticed a series
of depositions and the M & K Employee Solutions Defendants and Laborforce planned to have
their designees attend those depositions until the day before they were scheduled to occur. The
M & K Employee Solutions Defendants and Laborforce then abruptly canceled the depositions-
the conduct that the Court has decided to sanction. And if not for that conduct, the Trustees would
not have had to litigate a motion to compel. Thus, expenses incurred in litigating the motion to
compel were "expenses ... caused by the failure" of the M & K Employee Solutions Defendants
and Laborforce to attend their own previously scheduled depositions. Fed. R. Civ. P. 37(d)(3); cf
Wye Oak Tech., Inc. v. Republic ofIraq, No. 10-cv-1182-RCL, 2018 WL 6113463, at *2 (D.D.C.
Nov. 21, 2018) (awarding attorneys' fees under Rule 37(d)(3) for moving party's litigation of
nonmoving party's unsuccessful motion for protective order).
That nuance matters because if the only basis for recovering attorneys' fees in this case
were Rule 37(a)(5), the lack of a pending Rule 26(c) motion for a protective order at the time of
the motion to compel would not preclude the M & K Employee Solutions Defendants and
Laborforce from relying on their otherwise substantially justified opposition to the motion to
compel to avoid an award of attorneys' fees. But since the motion to compel was caused by conduct
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independently sanctionable under Rule 37(d)(3), Rule 37(d)(2) bars them from relying on that
justification.
The Court now concludes that the Trustees are entitled to an award of attorneys' fees under
Rule 37(d)(3) for (1) expenses incurred in litigating the motion to compel and (2) any other
incideQtal expenses that were caused by the cancelation and rescheduling of the depositions rather
than preparing for and taking them in general. The Court will entertain a further motion for
attorneys' fees and costs on those bases and expect the parties to provide additional briefing
quantifying the award sought.
In addition, although the February 28, 2022 Memorandum Opinion did not address this
point in detail, the Court now concludes that the award should be payable not only by the M & K
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Employee Solutions Defendants and Laborforce, but also by their respective counsel. The Trustees
note that the M & K Employee Solutions Defendants and Laborforce have both represented to the
Court that they have insufficient revenue to pay anything, see Defs.' Opp'n to Mot. for Contempt
at 5-7, ECF No. 81; Defs.' Opp'n to Mot. for Contempt at 1-5, ECF No. 82, and argue that the
award will be ineffectual if it is only against the parties themselves. The M & K Employee
Solutions Defendants and Laborforce oppose any award against their respective counsel, noting
that the Court's earlier Memorandum Opinion stated simply that it would "sanction the
defendants." JAM II, 2022 WL 594539, at *13 (emphasis added). But neither the M & K Employee
Solutions Defendants nor Laborforce dispute that they are unable pay any award of attorneys' fees
and costs. Rule 37(d)(3) authorizes an award against "the party, the attorney advising that party,
or both," and in this case, the Court finds it appropriate to impose an award against both. After all,
the M & K Employee Solutions Defendants and Laborforce do not dispute that it was counsel who
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canceled the depositions in response to the arbitrator's decision, and it appears that making counsel
jointly responsible for the fees and costs is the only way to ensure that the award is ever paid.
B. All But One of the Billing Rates the Trustees Seek Are Reasonable
In the interest of expediting the briefing to come and the eventual ruling thereon, the Court
will now consider the reasonableness of the attorney and paralegal rates listed in the present papers.
The Trustees represent that their counsel, Proskauer Rose LLP, billed hours associated with the
depositions at the following rates:
• Anthony S. Cacace (Partner): $795 per hour
• Neil V. Shah (Senior Associate): $695 per hour
• Anastasia S. Gellman (Staff Attorney): $525 per hour
• Megan K. Cutaia (Senior Labor Paralegal): $375 per hour
Deel. of Neil V. Shah ("Shah Deel. I") ,r 6, ECF No. 124-2.
The Court finds that the rates for each of the attorneys are reasonable but that the rate for
Ms. Cutaia, the paralegal, is not reasonable. The M & K Employee Solutions Defendants and
Laborforce do not dispute that these are the rates actually billed by each attorney or paralegal.
Each of the three attorneys' rates is substantially close to rates listed on the Laffey Matrix for
attorneys of comparable experience. See Shah Deel. I ,r,r 6-9; Laffey Matrix, Ex. 2 to Shah Deel.
I, ECF No. 124-4.
However, the rate listed for Ms. Cutaia, $375 per hour, is approximately 80 percent higher
.
than the paralegal rate listed on the Laffey Matrix, $208 per hour. See Shah Deel. I ,r,r 6, 10; Laffey
Matrix. To be sure, as the Trustees note, Ms. Cutaia is a senior paralegal with over eight years of
experience, Shah Deel. I ,r 10, and the Laffey Matrix lists only a flat rate for all paralegals
regardless of experience. But even such experience, without more, cannot explain such an
unusually high rate. See Spanski Ents., Inc. v. Telewizja Polska S.A., 278 F. .Supp. 3d 210, 220
(D.D.C. 2017) (finding unreasonable paralegal rates that "appear[ed] to rival rates for qualified
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attorneys in their first three years of practice"). The Court will not award sanctions at such a high
rate and therefore will not award fees for Ms. Cutaia's work at a rate in excess of her Laffey rate
of $208 per hour.
IV. CONCLUSION
For the foregoing reasons, the Court will DENY both motions for attorneys' fees without
prejudice to a further motion under Rule 37(d)(3) for attorneys' fees incurred in litigating the
successful motion to compel.
IT IS SO ORDERED.
Date: __,_,,,.~/_s-;~1~
:i.
~..,_-_ __
Royce C. Lamberth
United States District Judge
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