Apple v. Samsung: A Sign of Things to Come? Court Reduces Attorneys' Fees for Both Apple and Samsung for Block Billing

November 19, 2012

The court previously awarded sanctions in the form of attorneys' fees pursuant to Fed.R.Civ.P. 37 to both Samsung and Apple based on various discovery motions. Apple and Samsung both filed applications for attorneys' fees and then objected to each other's applications. The court found the descriptions of the attorneys' fees, despite two attempts to submit detailed invoices, lacking. As explained below, the lack of detailed invoices caused the court to reduce the attorneys' fees for both Apple and Samsung.

Samsung was awarded attorneys' fees because Apple failed to turn over to Samsung certain deposition testimony by Apple's employees in other matters. After granting three motions to compel, the court awarded sanctions in favor of Samsung, and Samsung requested approximately $258,000 in fees. Apple was awarded attorneys' fees because Samsung was dilatory in producing documents to Apple. Apple sought approximately $116,000 in attorneys' fees.

The court did not find that either submission for the attorneys' fees were sufficient. With respect to Samsung, the court stated: "Finding that the documents Samsung provided were inadequate for evaluating the appropriateness of its request, the court ordered Samsung to supply the billing rates for each of the attorneys, including the contract attorneys, and 'a description or breakdown of the hours each attorney billed by task.' On August 30, 2012, Samsung filed a new declaration and a new table. This time, Samsung added a rates column to its table and added language to the declaration allegedly providing the detail the court found lacking in the first request, but it still failed to break down its request according to the tasks performed by each attorney."

With respect to Apple, the court stated that "[i]n the declaration, Apple's counsel described the amount of work required to file the motion to compel and provided highlights of the qualifications of the attorneys who worked on the motion, but provided little more than vague references to their roles in drafting and filing the motion. Like Samsung, Apple also produced merely a name/rank/hours chart that failed to demonstrate for the court how the hours were allocated or even at what rates each attorney billed. And as it did for Samsung, the court gave Apple another opportunity to supplement its request with both the hourly rates for each attorney and 'a description or breakdown of the hours each attorney billed by task.' Although Apple's subsequent request has more detail than its first effort, it again failed to carefully segregate the fees for which it is not entitled to an award."

In analyzing the Samsung request for attorneys' fees, the court noted that Samsung's attorneys used "block billing," which the court found justified reducing the fees requested. "Although the court has highlighted some of the most egregious examples, block-billing is rampant in Samsung's motion. Throughout the declaration, Samsung lumps together various tasks by attorneys, separating the hours only by motion. Perhaps all of the hours were well-spent in efficient pursuit of investigating and drafting the motions. Or reveal inefficiencies in the work. Or reflect nothing more than a best guess by Samsung's counsel at how many hours they spent compiling three motions amidst the immense size and scope of this case. But the court cannot make that determination from the request as presented because of the inherent ambiguity in block-billing, which is why block-billing is a disfavored format for fee requests. Those ambiguities are also the reason the Ninth Circuit condones reducing hours when courts are faced with the practice. Because it cannot evaluate the reasonableness of the hours, and in light of the evidence that block-billing inflates hours by between 10% and 30%, the court trims 20% from the block-billed hours in Samsung's request."

The court also reduced Samsung's attorneys' hourly rates based on the American Intellectual Property Law Association's ("AIPLA") annual survey. "According to the survey, the average rate for partners in San Francisco was $571, with the 25% Quartile at $395, the median at $585, and the 75% Quartile at $700. The average rate for associates was $361, with the 25% Quartile at $260, the median at $370, and the 75% Quartile at $470. The average rate for of counsel was $623, with the 25% Quartile at $574, the median at $613, and the 75% Quartile at $681. These rates accord with the court's experience and knowledge of the market in this district. The court also notes that the AIPLA's survey reveals rates for partners, associates, and of counsel increase with years of experience. Having looked to the AIPLA's survey and considered its own experience and knowledge of the area of law and counsel's performance in this case, and in light of the lack of support Samsung supplied for the rates it requests, the court finds that the AIPLA's 75% Quartile rates for the partners and of counsel are reasonable for Samsung's partners and of counsel."

In terms of Apple's attorneys' fee request, the court also found that Apple's submittal did not appropriately segregate the time billed. "The descriptions of tasks in Apple's request do not allow the court to segregate the time spent on activities to which Apple is not entitled to fees. Although Apple breaks its request down by task, the descriptions of those activities are not specific. For example, '[d]rafting and preparing motion to compel' does not illuminate for the court whether 'preparing' includes analysis of Samsung's compliance or merely research. In light of the many hours devoted by several attorneys to '[d]rafting and preparing the motion to compel' the court suspects the former. To account for possible inflation of fees, the court applies the same 20% reduction for block-billing as it applied to Samsung's request to the hours Apple requests for 'preparing' the motion to compel."

Apple, Inc. v. Samsung Electronics Co., LTD, Case No. C 11-1846 LHK (PSG) (N.D. Cal. Nov. 7, 2012)
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