DEFENDANTS’ OPPOSITION TO PLAINTIFF’S MOTION TO REDUCE FEES AND COSTS

5/1/24

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OPPOSITION TO MOTION TO REDUCE FEES AND COSTS
Dirk O. Julander, Bar No. 132313
doj@jbblaw.com
Catherine A. Close, Bar No. 198549
cac@jbblaw.com
M. Adam Tate, Bar No. 280017
adam@jbblaw.com
JULANDER, BROWN & BOLLARD
9110 Irvine Center Drive
Irvine, California 92618
Telephone: (949) 477-2100
Facsimile: (949) 477-6355
Attorneys for Defendants
MCNAMARA and
JEREMY WHITELEY
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
BREAKING CODE SILENCE, a
California 501(c)(3) nonprofit,
Plaintiff,
vs.
MCNAMARA, an
Individual; JEREMY WHITELEY, an
individual; and DOES 1 through 50,
inclusive,
Defendants.
Case No. 2:22-cv-002052-SB-MAA
DEFENDANTS’ OPPOSITION TO
PLAINTIFF’S MOTION TO
REDUCE FEES AND COSTS
RELATED TO SUBPOENA
DISCOVERY[Assigned to the Hon. Maria A. Audero] Case 2:22-cv-02052-MAA Document 205 Filed 05/01/24 Page 1 of 20 Page ID #:8636
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OPPOSITION TO MOTION TO REDUCE FEES AND COSTS
TABLE OF CONTENTS
Page
I. INTRODUCTION…………………………………………………………………………………1
II. RELEVANT FACTS AND COURT ORDERS ………………………………………..2
A. Background Regarding Dispute and Court’s Orders…………………………2
B. Outcome of Phase 1 ……………………………………………………………………..5
III. ARGUMENT ……………………………………………………………………………………….6
A. The Court Ordered That All Counsel Attend the August 9 IDC
and Explicitly Stated That Attorneys’ Fees for the IDC Would
Be Recoverable ……………………………………………………………………………6
B. Block Billing is Not Improper Under the Circumstances…………………..7
C. Subpoenas Were Only Issued to Those Identified by BCS as
Either Custodians, Directors or “Persons With Knowledge” ……………..9
1. Kirchoff……………………………………………………………………………10
2. Silverman, Saberi, Alexander, and Furnace ………………………….10
D. Sanctions Should be Awarded Against Both BCS and its Counsel……12
IV. CONCLUSION …………………………………………………………………………………..14
Case 2:22-cv-02052-MAA Document 205 Filed 05/01/24 Page 2 of 20 Page ID #:8637
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OPPOSITION TO MOTION TO REDUCE FEES AND COSTS
TABLE OF AUTHORITIES
Page
CASES
Campbell v. Nat’l Passenger R.R. Corp.
718 F.Supp.2d 1093, 1103 (N.D. Cal. 2010) …………………………………………….8
Christian Research Institute v. Alnor
165 Cal.App.4th 1315, 1325 (2008)…………………………………………………………7
Int’l Woodworkers, Local 3–98 v. Donovan
792 F.2d 762, 767 (9th Cir. 1986)……………………………………………………………7
Langer v. 1600 E Downtown Prop., LLC
No. 2:14-CV-09274-CAS, 2015 WL 3649085, at *4 (C.D. Cal. June 9,
2015)……………………………………………………………………………………………………7
Rodriguez v. County of Los Angeles
No. 10–6342–CBM (AJWx), 2014 WL 8390755, at *10 (C.D. Cal.
Dec. 29, 2014) ………………………………………………………………………………………7
Universal Electronics, Inc. v. Universal Remote Control, Inc.
130 F.Supp.3d 1331, 1340 (C.D. Cal. 2015), aff’d (Fed. Cir. 2016) 669
Fed.Appx. 575 ………………………………………………………………………………………7
Welch v. Metro. Life Ins. Co.
480 F.3d 942, 948 (9th Cir. 2007)……………………………………………………………8
Case 2:22-cv-02052-MAA Document 205 Filed 05/01/24 Page 3 of 20 Page ID #:8638
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OPPOSITION TO MOTION TO REDUCE FEES AND COSTS
I. INTRODUCTION
Plaintiff BREAKING CODE SILENCE (“BCS”) challenges three aspects of
the attorneys’ fees and costs requested by Defendants MCNAMARA
and JEREMY WHITELEY (collectively “Defendants”): (1) fees sought for the
appearance of counsel at the Court-ordered IDCs; (2) block billed time entries,
including communications related to the subpoenas; and (3) subpoenas issued to
Custodians that BCS deems to be “non-material witnesses.”
With regards to the fees expended for attending informal discovery
conferences, the overwhelming majority of such fees were incurred in connection
with the in person informal discovery conference on August 9, 2024. BCS
apparently takes issue that four different attorneys attended this conference, but
Defendants did not have a choice in the matter. The Court ordered all four attorneys
to attend. (Dkt. 114 [“All attorneys involved in any way with the Motion and the
discovery that is the subject of the Motion are ORDERED to appear in person.”])
There should be no doubt that such fees are recoverable. In fact, while at the
conference, the Court explicitly stated that BCS would be required to pay such
attorney’s fees. (Dkt. 137, Ex. A, p. 55:8-23 [“I would count today as
recoverable”].) BCS’s argument to the contrary is not well taken.
Concerning the block-billed time entries, BCS does not identify any time
within the challenged entries that is unrelated to the Subpoena Discovery. Block
billing is only problematic when the Court cannot parse out unrecoverable fees from
recoverable fees. That is not an issue here since all of the time included within each
challenged time entry directly relates to the Subpoena Discovery, including
communications with counsel, staff, the clients, and the process servers.
Finally, the subpoenas that BCS now argues were “unnecessary” were issued
to Custodians listed by name on both the Joint Proposed Order (Dkt. 128-1) and the
Court’s Interim Order (Dkt. 132). Thus, BCS specifically agreed to pay for the
subpoenas sent to these custodians and BCS cannot now renege on its agreement by
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claiming that the subpoenas were unnecessary. These were also Custodians that
were identified in the EDO, and BCS either listed them as board members in
discovery or identified them as “persons with knowledge” of the allegations in this
action.
Practically, if it were just a matter of simply issuing nine substantivelyidentical subpoenas as BCS claims, the fees and costs incurred by Defendants would
have been significantly less than $30,253.00. But it was BCS’s own conduct in
violating the EDO by failing to collect from its Custodians as agreed (which
necessitated the IDCs), and the conduct of its directors and officers in first refusing
to voluntarily cooperate and then subsequently evading service of the subpoenas,
that caused the attorneys’ fees and costs related to the Subpoena Discovery to
unnecessarily skyrocket. BCS should not be rewarded for its behavior and
Defendants should be fairly compensated for all of the fees and costs they
necessarily incurred.
II. RELEVANT FACTS AND COURT ORDERS
A. Background Regarding Dispute and Court’s Orders
In August 2022, the parties stipulated to a Joint eDiscovery Plan and Protocol
for Discovery of Electronically Stored Information, which was issued on September
13, 2022 (the “EDO”). (Dkt. 41.) Paragraph 4.3 of the EDO required BCS to review
and collect relevant ESI from the following “Custodians”: “Breaking Code Silence
(‘BCS’), Vanessa Hughes, Jennifer Magill, Jesse Jensen, Noelle Beauregard, Lenore
Silverman, Eugene Furnace, the entire BCS Board of Directors,1 Bobby Cook,
Megan Hurwitt, Arianna Conroyd, Shelby Kirchoff and anyone else who had
administrative permissions on the website or any of BCS’ accounts or systems at the
1
According to BCS’s verified discovery responses in the State Action, the
Board of Directors consisted of: Apryl Alexander, Denette Boyd-King, Dee Anna
Hassanpour, Dorit Saberi, Rosanna Salgado McDonald, and Lenore Silverman.
(See, Dkt. 98-1, ¶3 and 98-2, Ex. 1, Response to Special Interrogatory No. 20.)
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time the alleged hacking took place.” (Dkt. 41, ¶4.3.) The list of data sources to be
collected from for each Custodian was set forth in paragraph 4.4 of the EDO. (Dkt.
41, ¶4.4.)
After agreeing to collect and produce ESI from the foregoing Custodians,
BCS only collected and produced documents from its own general use email
mailboxes and limited documents from Hughes, Magill and Jensen’s accounts. After
taking the depositions of Noelle Beauregard, Bobby Cook, and Jesse Jensen, it
became clear that all of their data sources were not collected by BCS. (Dkt. 98-1,
¶¶5-6.)
Four IDCs followed in April and May 2023 (IDCs 3, 4, 5 and 6), during
which the Court endeavored to identify what data sources existed for each Custodian
and which were collected from, and strongly encouraged voluntary compliance with
the EDO, warning that unless they complied, the Custodians would be served with
subpoenas. (Dkt. 98-1, ¶¶7, 9, 13, 18.) On May 3, 2023, the Court found that the
parties had exhausted their pre-motion efforts to meet and confer on the subject and
authorized the filing of a discovery motion. (Dkt. 58, p. 2, ¶2.)
The Joint Stipulation Regarding Evidentiary and Monetary Sanctions Under
FRCP 37 was filed on July 14, 2023. After the Joint Stipulation was filed, on
August 7, 2023, the Court scheduled an in-person IDC for August 9, 2023. (Dkt.
114.) The Court’s Scheduling Notice for the August 9 IDC mandated that: “A
representative of Plaintiff is ORDERED to appear in person. All attorneys involved
in any way with the Motion and the discovery that is the subject of the Motion are
ORDERED to appear in person.” (Id. [caps in original; bold italics added].)
Because attorneys Adam Tate, Catherine Close, Adam Schwartz and Bekah
Chamberlin were all in some way involved in the Joint Stipulation or the discovery
that was the subject of thereof, all four appeared in person at the August 9 IDC as
ordered, three travelling from South Orange County. (See Dkt. 120, p. 1.) The
wisdom of the decision to bring all four attorneys to the August 9 IDC was
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confirmed when the Court admonished BCS for failing to comply with its mandate
by not bringing Dennis Kiker. (Dkt. 137, Exhibit A Transcript p. 58:7-17.)
At the August 9 IDC, the Court advised BCS that it was going to lose the
motion but afforded BCS with an option to resolve the issue and avoid the severe
financial and evidentiary impact of the sanctions that would be awarded. (Dkt. 137,
Ex. A, pp. 7:13-8:8.) The Court created a 2-phase process for attempting to obtain
compliance. (Id. at p. 15:1-3.) Phase 1 would require Defendants to issue subpoenas
to the BCS Custodians that were unwilling to voluntarily produce documents
(including Hughes who was present in Court at the August 9 IDC). (Id. at p. 15:4-
10.) The Court warned BCS that (Id. at 15:14-22):
Every dime in attorneys’ fees and costs that [Defendants] spends on these subpoenas will be paid for by BCS, from
preparing the subpoenas to serving them if they choose to
not accept service the nice way, and to fighting every
single motion to quash, every single motion for protective
order. Every single discovery fight that arises from these
subpoenas, the fees and costs that Defendants will incur
will be paid for by BCS.
The Court also informed BCS that the attorneys’ fees for attending the August
9 in person IDC were also recoverable. (Dkt. 137, Ex. A, p. 55:8-23.)
After agreeing to the phased discovery process for the Subpoena Discovery,
the Court issued an August 11 Minute Order which confirmed: “The reasonable
attorneys’ fees and costs incurred by Defendants in any necessary subpoena
discovery related to obtaining the Discovery at Issue—whether incurred as part of
Phase 1 or heretofore—shall be borne by Plaintiff, upon order of this Court on a
motion by Defendants at the conclusion of Phase 1.” (Dkt. 120 [emphasis added].)
Thereafter, the Court issued an Interim Order based on the parties’ agreement
regarding the phased discovery procedure. (Dkt. 132.) Again, the Interim Order
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confirmed that: “The reasonable attorneys’ fees and costs incurred by Defendants in
any subpoena and related motion practice necessary to obtain or compel the
production of the discovery at issue in the Motion from the officers and directors of
BCS—whether incurred as part of Phase 1 or heretofore—shall be borne by
Plaintiff.” (Id at p. 5, ¶7.)
B. Outcome of Phase 1
In connection with Phase 1: Five Custodians (Apryl Alexander, Arianna
Conroyd, Jennifer Magill, Vanessa Hughes, and Jesse Jensen) agreed to search for
documents; three Custodians (Dee Anna Hassanpour, Dorit Saberi, and Denette
King) indicated they had no documents; four Custodians (Eugene Furnace, Shelby
Kirchoff, Meg Hurwitt, and Lenore Silverman) refused to participate; and two
Custodians (Bobby Cook and Noelle Beauregard) already responded to deposition
subpoenas and testified that relevant documents were destroyed and no longer
existed. (Dkt. 168, p. 2.)
Of the Custodians that agreed to locate documents, BCS only produced
documents from three of them – Hughes, Magill and Alexander – but the Hughes
and Magill productions were incomplete. (Id. at pp. 3-4.) Nothing was produced
from Jensen or Conroyd. (Id. at p. 3.)
Subpoenas were served (or attempted) on the Custodians that refused to
participate. Of these: Hurwitt and Silverman claimed to have no records, Kirchoff
never responded to the subpoena, Furnace could not be served, and Hughes and
Jensen actively evaded service of the subpoenas (refused to come to the door when
they were obviously home). (Id. at pp. 4-5.)
On April 5, 2024, the Court held a Status Conference and IDC re: Outcome of
Phase 1, during which the Court ordered supplemental briefing on the motion by
April 22. (Dkt. 196.) However, before the supplemental brief could be filed, on
April 8, 2024, BCS filed a Request for Dismissal With Prejudice. (Dkt. 198.) In
response, the Court issued an order requiring Defendants to submit an accounting of
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their fees/costs incurred with respect to the Subpoena Discovery to BCS and inviting
BCS to file a motion if it challenged those fees/costs. (Dkt. 200.)
III. ARGUMENT
BCS does not challenge the propriety of the rates charged by Defendants’
counsel. BCS’s Motion challenges only three aspects of Defendants’ fee/cost
accounting: (1) attorneys’ fees sought for the appearance of counsel at the Court
ordered IDCs; (2) specific block billed time entries; and (3) fees/costs related to
subpoenas issued to Custodians that, in BCS’s opinion, were “non-material
witnesses.”
A. The Court Ordered That All Counsel Attend the August 9 IDC and
Explicitly Stated That Attorneys’ Fees for the IDC Would Be
Recoverable
Contrary to the assertion in the Motion, the Court’s August 21 Interim Order
on the parties’ stipulation does not limit the recoverable fees and costs to only those
incurred after its issuance. Consistent with the Court’s August 11 Minute Order, the
August 21 Interim Order provides that: “The reasonable attorneys’ fees and costs
incurred by Defendants in any subpoena and related motion practice necessary to
obtain or compel the production of the discovery at issue in the Motion from the
officers and directors of BCS—whether incurred as part of Phase 1 or
heretofore—shall be borne by Plaintiff…” (Dkt. 132, p. 5, ¶7 [emphasis added]; see
also Dkt. 120.) The definition of the word “heretofore” is “up to this time.” (See
https://www.merriam-webster.com/dictionary/heretofore#dictionary-entry-1.) Thus,
fees and costs incurred in connection with the Subpoena Discovery or the motion
incurred prior to the Interim Order are recoverable.
Concerning BCS’s accusation of “padding” or duplicating effort by having
four different attorneys attend an IDC, as set forth above, the Court specifically
ordered that “[a]ll attorneys involved in any way with the Motion and the discovery
that is the subject of the Motion” appear in person at the August 9 IDC. (Dkt. 114.)
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Unlike BCS, Defendants took the Court’s order seriously and complied, bringing all
four attorneys that worked on the motion or the discovery to the hearing, three of
which travelled from South Irvine. (See Dkt. 120, p. 1.) After violating the Court’s
mandate that all attorneys appear, BCS audaciously challenges the $10,800.00 in
attorneys’ fees necessarily incurred based on Defendants’ compliance. (Dkt. 203,
pp. 5-6.)
As the Court advised during the IDC, the attorneys’ fees incurred in
connection with attending the August 9 in person IDC are recoverable “because[they] came from the motion.” (Dkt. 137, Ex. A, p. 55:8-23 [“I would count today as
recoverable”].) That the attorneys travelling from South Orange County billed more
time than Adam J. Schwartz (who lives in LA) does not make those travel hours any
less compensable. See Int’l Woodworkers, Local 3–98 v. Donovan, 792 F.2d 762,
767 (9th Cir. 1986). In this District, courts generally compensate attorneys at their
full hourly rate for travel time. See, e.g., Langer v. 1600 E Downtown Prop., LLC,
No. 2:14-CV-09274-CAS, 2015 WL 3649085, at *4 (C.D. Cal. June 9, 2015);
Rodriguez v. County of Los Angeles, No. 10–6342–CBM (AJWx), 2014 WL
8390755, at *10 (C.D. Cal. Dec. 29, 2014).
Like the August 9 IDC, the October 5 telephonic IDC also “came from the
motion” because IDC 13 was specifically convened to “monitor the progress of the
Phase 1 discovery production at issue in the [Joint Stipulation] (“Sanctions Motion,”
ECF No. 98).” (Dkt. 142, p. 1.) Thus, the additional $987.00 in fees incurred for one
attorney (Adam Tate) to attend IDC 13 were reasonable and necessarily incurred.
Accordingly, there is no basis for the $11,787.00 reduction urged by BCS.
B. Block Billing is Not Improper Under the Circumstances
Block billing is a commonly-used billing practice that is not per se
objectionable. Universal Electronics, Inc. v. Universal Remote Control, Inc. 130
F.Supp.3d 1331, 1340 (C.D. Cal. 2015), aff’d (Fed. Cir. 2016) 669 Fed.Appx. 575;
Christian Research Institute v. Alnor, 165 Cal.App.4th 1315, 1325 (2008). In ruling
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on a motion for fees, courts “may include amounts ‘block-billed’ without a
reduction because counsel is not required to record in great detail how each minute
of his time was expended.” Ibid. The only challenge block billing presents in the
context of a fee motion is that it makes it difficult for the Court to determine the
amount of time spent on specific tasks. Welch v. Metro. Life Ins. Co., 480 F.3d 942,
948 (9th Cir. 2007). But when “individual tasks are specified” and the entries are
“detailed enough for the Court to assess the reasonableness of the hours billed,” a
reduction for block-billed hours is not appropriate. Campbell v. Nat’l Passenger R.R.
Corp., 718 F.Supp.2d 1093, 1103 (N.D. Cal. 2010).
Because each of the challenged billing entries are sufficiently detailed to
advise the Court of the specific tasks performed during each day so that it may
assess the reasonableness of the time billed, the $7,109.35 reduction in fees urged by
BCS is wholly inappropriate.
It should also be noted that, with only four exceptions, each challenged block
billed entry was for an hour or less. (See, Dkt. 203-3, pp. 8-11 and 14-17 [Yellow
highlighted entries].) Performing multiple tasks – each relating to the Subpoena
Discovery – in under an hour in a given day is hardly unreasonable. Those few time
entries that exceed one hour include tasks such as drafting (of the subpoenas,
attachments, or court-ordered supplemental pleadings), or legal research. (See, e.g.,
Dkt. 203-3, p. 7, Tate 8/18/23 entry; p. 10, Close 8/31/23 entry; p. 15, Saller 7/21/23
entry.)
BCS includes within its requested $7,109.35 fee reduction time spent on what
BCS perceives as “unrelated tasks,” primarily focusing on communications between
counsel and staff, with the clients, and with the process servers related to the
subpoenas and service thereof. Defendants are not aware of any authority that stands
for the proposition that fees for communications between attorneys, staff, clients,
and vendors is not compensable, and BCS has not cited any. Instead, BCS argues
that the time spent communicating between counsel and with the clients/process
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servers about the subpoenas, the status of service, etc., is not a cost “incurred by
Defendants in any subpoena and related motion practice.” (See Dkt. 203, p. 9.) Not
surprisingly, BCS takes an overly narrow view of what that term means.
If BCS had just complied with its discovery obligations and collected from
the Custodians as required by the EDO, Defendants would never have been forced
to issue the subpoenas, investigate the whereabouts of each of the Custodians (with
the clients’ assistance since BCS never provided addresses), and served/attempted
unsuccessfully to serve the various subpoenas (necessitating communications with
the process servers). And Defendants’ counsel would have no need to communicate
regarding the status of the subpoenas or seek information from the clients regarding
the Custodians. If BCS’s officers/directors did not actively evade service of the
subpoenas, or if they had just accepted service, these fees/costs would either be
avoided entirely or significantly reduced. Regardless, because these fees were
directly related to the Subpoena Discovery, BCS is required to compensate
Defendants for all of them in accordance with its agreement. (Dkt. 132, p. 5, ¶7; see
also Dkt. 120.)
C. Subpoenas Were Only Issued to Those Identified by BCS as Either
Custodians, Directors or “Persons With Knowledge”
Finally, BCS argues that a $2,066.50 reduction in the fees/costs requested is
warranted because, in its opinion, the subpoenas to Silverman, Saberi, Alexander,
Furnace, and Kirchoff were “unnecessary” since these Custodians were “not
material witnesses.” (Dkt. 203, p. 10-11.) As discussed below, each of these people
were either named as Custodians in the EDO, identified as a board member, or
identified by BCS in discovery as a “person[] with knowledge of DEFENDANTS’
actions to unlawfully access or block access of BCS’s account or computer,” or a
“Person[] with knowledge of the termination of McNamara’s rights [to the accounts
at issue].”
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More importantly, the subpoenas that BCS now argues were “unnecessary”
were issued to the Custodians listed by name on both the Joint Proposed Order (Dkt.
128-1) and the Court’s Interim Order (Dkt. 132). Thus, BCS specifically agreed to
pay for the subpoenas sent to these custodians. It would be entirely unfair to allow
BCS to renege on its agreement after Defendants incurred the fees.
1. Kirchoff
In addition to being specifically listed as a Custodian in Paragraph 4.3 of the
EDO, in response to Special Interrogatories in this action, Shelby Kirchoff was
identified by BCS as both a “person[] with knowledge of DEFENDANTS’ actions
to unlawfully access or block access of BCS’s account or computer,” and as a
“[p]erson[] with knowledge of the termination of McNamara’s rights [to the
accounts at issue].” (See, Dkt. 152-64, pp. 18, 22-23.) For BCS to identify a witness
in a discovery response as a “person with knowledge” and later argue that a
subpoena to that witness for documents related to the case is “unnecessary,” or that
the witness is somehow “not material,” is beyond absurd. The Court should bear in
mind that the Subpoena Discovery started in May 2023 and BCS did not agree to
limit its claims to only the deindexing of its website until October 25, 2023, after the
subpoenas were already issued and either served or out for service. (See Dkt. 146.)
Accordingly, any fees/costs related to the subpoena issued to Shelby Kirchoff are
compensable.
2. Silverman, Saberi, Alexander, and Furnace
Silverman and Furnace were specifically listed as a Custodian in Paragraph
4.3 of the EDO. (Dkt. 41, ¶4.3.) In addition, Silverman, Saberi, Alexander and
Furnace were each identified by BCS as board members at or around the time this
frivolous action was commenced. The members of BCS’s board of directors were
also listed as Custodians in Paragraph 4.3 of the EDO. (Dkt. 41, ¶4.3.)
Defendants have a right to know whether the filing and maintenance of this
action was actually approved by the BCS board of directors and, if so, on what
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basis. Defendants have a right to know whether the filing and maintenance of this
action was instead purely an act of vengeance orchestrated by Hughes/Magill for
daring to question their leadership. Because the latter motivation appeared highly
likely (as confirmed by Chelsea Papciak in her deposition and document
production), Defendants sought discovery into all board member communications
regarding the allegations of BCS’s complaint and the initiation and maintenance of
this action from the persons identified by BCS as its board members.
As discussed above, BCS’s discovery responses in the State Action, verified
by Magill on December 9, 2022, state that the BCS’s board of directors included
Alexander, Saberi and Silverman. (See, Dkt. 98-1, ¶3 and 98-2, Ex. 1, Response to
Special Interrogatory No. 20 [subsequently de-designated as Confidential].) In
BCS’s response served on December 16, 2022, Magill swore, under penalty of
perjury, that: Dr. Apryl Alexander was a board member from “6/13/2022 to
present”; Lenore Silverman was a board member from “1/18/2022 to present”; and
Dr. Dorit Saberi was a board member from “6/18/2022 to present.” (Id.) Though not
listed in BCS’s discovery responses as a board member, Eugene Furnace was also
identified by BCS as a board member in 2022, along with Silverman and Alexander,
in its public filings. (See Dkts. 202-13, p. 9 and 202-14, p. 4.) Silverman and Saberi
were also identified in documents received in response to Freedom of Information
Act requests as being board members during the relevant time period.
Accordingly, Defendants had good reason to believe – based on BCS’s own
public filings and verified discovery responses – that these Custodians were not
“immaterial witnesses” as BCS claims. If BCS wants to claim that it lied under
penalty of perjury, fine (it probably did). But that does not excuse BCS from paying
fees and costs related to the issuance of subpoenas to Custodians based on BCS’s
lies.
Accordingly, the $2,066.50 reduction in the fees/costs requested by BCS is
entirely inappropriate.
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OPPOSITION TO MOTION TO REDUCE FEES AND COSTS
D. Sanctions Should be Awarded Against Both BCS and its Counsel
Defendants feel compelled to advocate that it is appropriate to issue sanctions
not just against BCS, but also its counsel (the Motion requested sanctions against
both). This is not a request being made lightly, but given that BCS is taking the
position that it has no material assets, Defendants’ hands are being forced.
At the April 18, 2023 IDC Tamany Bentz, Jason Lueddeke, and Dennis Kiker
all lied to the Court about having collected the documents from the Custodians. For
example:
• Tamany Bentz claimed that BCS had been diligent in producing
documents to defendants and she specifically represented that “we
collected from a large number of sources and a large number of
custodians.” (Tate Decl., ¶2, Ex. 1, at pp. 30:20-32:5)
• Shortly thereafter, Jason Lueddeke elaborated on BCS’s collection
efforts and specifically represented that “we collected from 18 different
custodians…” (Id. at 32:18-25.) Mr. Lueddeke continued, “[J]ust for the
sake of perspective, the defendants only had to collect from two
custodians. We collected from 18. So the process on our side has been –
– it has taken longer because it takes longer to collect from so many
sources across so many custodians.” (Id. at 33:4-19.)
• Sometime later, Dennis Kiker cut Adam Tate off after Mr. Tate claimed
that BCS had not collected from all of the custodians interjecting,
“That’s false. That is false…” Mr. Kiker then told the Court that BCS
had collected from every single one of the custodians other than Shelby
Kirchoff. (Id. at 52:22-53:14.)
• Mr. Tate then informed the Court that he suspected that BCS had only
collected the BCS emails to which Mr. Kiker said “No. That is not true.
That is not true.” Mr. Kiker went on to tell the Court that they had
collected from each Custodian and each data source listed in Section
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4.3 provided that the data sources were accessible. (Id. at 55:24-57:9.)
• Mr. Kiker specifically and falsely represented that they had collected
BCS’s Skype account. (Id. at 59:4-60:17 [“I know that BCS has a
Skype account and we collected that.”].)
• Mr. Lueddeke later clarified that he did not believe that BCS had an
obligation to collect the personal accounts of the Custodians and
admitted that BCS only collected from BCS accounts. (Id. at 62:17-
63:7.)
Ultimately, because there was some ambiguity about what data sources BCS
had actually collected from, the Court continued the conversation to another IDC
and ordered BCS to prepare a chart showing what BCS had collected from each
Custodian. (Dkt. 52, p. 3.)
At the next informal discovery conference on April 24, 2023, BCS presented
the infamous spreadsheet with the giant grey box showing that BCS had collected
virtually nothing from the Custodians. BCS’s attorneys then admitted that they did
not even ask many of BCS’s custodians if they could collect from their data sources
because, based on the attorneys’ interview with three of the Custodians, BCS’s
attorneys did not think it was necessary to do so. (Tate Decl., ¶3, Ex. 2 at 40:25-
42:15.) BCS’s attorneys also repeated the argument that BCS was not under an
obligation to collect from many of the data sources because they were not within
BCS’s possession, custody, or control. (Id. at 42:18-22.)
The Court then had BCS at least ask the Custodians whether they would be
willing to produce documents. (Id. at 42:23-43:22.) At least some of the Custodians
agreed to produce documents from some of their data sources, suggesting that such
documents could have been produced sooner had the attorneys only asked.2
2 The Court also inquired about the data accounts that that had not been
collected from BCS (not the other custodians), including the Skype account. Ms.
Bentz told the Court that BCS does not have a Skype account – directly
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Thereafter, and up through the IDCs, BCS’s attorneys continued to advocate
that BCS was not under an obligation to collect from the data sources belonging to
the Custodians because the Custodians’ data sources were outside of the possession,
custody, and control of BCS. (See, e.g., Dkt. 98, p. 6:6-8.)
Based on the above, three facts are undisputable. First, at least during the
initial period, BCS’s attorneys did not seek to collect documents from most of the
Custodians because the attorneys did not think it was necessary to do so. Second,
until the August 9 in-person IDC, the attorneys consistently argued that there was
no obligation to collect the data sources from the Custodians. Third, the attorneys
lied to the Court about having collected all of the data sources from all of the
Custodians, or at least disingenuously suggested that they had done so at the April
18 IDC.
Ultimately, someone needs to pay for the attorneys’ fees expended in
connection with the Subpoena Discovery and it should not be Defendants.
IV. CONCLUSION
For the foregoing reasons, Defendants request that the Court deny BCS’s
Motion in its entirety and award Defendants all of the attorneys’ fees and costs
reasonably and necessarily incurred, totaling $30,253.00.
contradicting Mr. Kiker’s previous statement to the Court that BCS had a Skype
account and that it had already been collected. (Id. at 61:22-62:4 [“I do not think
BCS has a Skype Account.”].)
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OPPOSITION TO MOTION TO REDUCE FEES AND COSTS
DATED: May 1, 2024 JULANDER, BROWN & BOLLARD
By: /s/ M. Adam Tate
M. Adam Tate
Catherine Close
Attorneys for Defendants
MCNAMARA and
JEREMY WHITELEY
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L.R. 11-6.2 CERTIFICATION
The undersigned, counsel of record for Defendants certifies that this brief
contains 4,457 words, which complies with the word limit of L.R. 11-6.1.
Date: May 1, 2024 /s/ M. Adam Tate
M. Adam Tate
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CERTIFICATE OF SERVICE
I hereby certify that on this 1
ST day of May, 2024, I electronically filed the
foregoing paper(s) with the Clerk of the Court using the ECF system which will
send notification to all parties of record or persons requiring notice.
/s/ Helene Saller
Helene Saller
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