CEATS, INC., Plaintiff, v. TICKETNETWORK, INC., TICKET SOFTWARE, LLC, Defendants CIVIL ACTION NO. 2:15-CV-01470-JRG United States District Court, E.D. Texas, Marshall Division Signed March 07, 2019 Counsel George Leo Hampton, IV, Timothy Andrew Burnett, Hall Griffin LLP, Dallas, TX, Cole Alan Riddell, Jeffrey Randall Roeser, Jennifer Haltom Doan, Joshua Reed Thane, Kyle Randall Akin, Haltom & Doan, Texarkana, TX, Colin C. Holley, Hampton Holley LLP, Corona del Mar, CA, David William Affeld, Affeld Grivakes LLP, Los Angeles, CA, for Plaintiff. Carl Edward Bruce, Matthew Alan Colvin, Aaron P. Pirouznia, David Brandon Conrad, Michael R. Ellis, Neil J. McNabnay, Fish & Richardson P.C., Dallas, TX, Andrea Leigh Fair, Jack Wesley Hill, Ward, Smith & Hill, PLLC, Longview, TX, Benjamin C. Jensen, Robinson & Cole, Hartford, CT, John S. Goetz, Pro Hac Vice, Fish & Richardson PC, New York, NY, Kristopher I. Moore, Robinson & Cole LLP, Boston, MA, Jennifer Leigh Truelove, McKool Smith, P.C., Marshall, TX, for Defendants. Gilstrap, Rodney, United States District Judge ORDER *1 Before the Court is Defendants TicketNetwork, Inc. and Ticket Software LLC's (collectively, “TicketNetwork”) Motion to Compel Payment of Deposition-Related Fees and Costs (the “Motion”). (Dkt. No. 310.) For the reasons and to the extent discussed herein, the Court finds that the Motion should be GRANTED-IN-PART and DENIED-IN-PART, as follows:. I. BACKGROUND A. Procedural History A jury trial commenced in this case on January 22, 2018. (Dkt. No. 271.) On January 25, 2018, the jury returned a unanimous verdict finding that TicketNetwork breached a prior settlement agreement with Plaintiff CEATS, Inc. (“CEATS”) and that CEATS should recover $459,800.00 in compensatory damages from TicketNetwork for the breach. (Dkt. No. 273.) The Court entered Final Judgment in favor of CEATS on September 26, 2018, and declared CEATS the prevailing party pursuant to Federal Rule of Civil Procedure 54(d), Local Rule CV-54, and 28 U.S.C. § 1920. (Dkt. No. 331 at 3.) In litigating this case, TicketNetwork retained Dr. Keith R. Ugone as its damages expert, and CEATS took Dr. Ugone's deposition on December 1, 2017. (Dkt. No. 310 at 3; Dkt. No. 315 at 3.) Dr. Ugone prepared for his deposition with the aid of his colleague, Krishnan Ramadas. (Dkt. No. 310 at 4; Dkt. No. 315 at 3.) TicketNetwork also retained Dr. V. Thomas Rhyne as a technical expert. (Dkt. No. 310 at 5.) Counsel for CEATS, Mr. David W. Affeld, deposed Dr. Rhyne on December 6, 2017. (Dkt. No. 315 at 3; Dkt. No. 310 at 5.) Approximately two hours into Dr. Rhyne's deposition, Mr. Affeld suspended the deposition after receiving word that the Skirball Fire in Los Angeles, California, threatened his home and forced his family to evacuate. (See Dkt. No. 310 at 5 n.5; Dkt. No. 310-9 at 1 (Letter from Cole A. Riddell on behalf of CEATS to counsel for TicketNetwork); Dkt. No. 317 ¶ 4 (Affeld Declaration) (identifying the Skirball Fire).) Mr. Affeld was also scheduled to take a deposition of Mr. Doug Kruse (a Rule 30(b)(1) and 30(b)(6) witness for TicketNetwork) on December 7, 2017, in Connecticut. (Dkt. No. 315 at 3; Dkt. No. 310 at 8.) In a subsequent letter to TicketNetwork's counsel, CEATS offered to “bear any costs or expenses that may result from rescheduling” Dr. Rhyne's and Mr. Kruse's depositions. (Dkt. No. 310-9 at 2.) Dr. Rhyne's and Mr. Kruse's rescheduled depositions were taken on December 21, 2017. (Dkt. No. 315 at 2; Dkt. No. 310-15 at 4.) TicketNetwork moves the Court to compel CEATS to pay $74,644.13 in fees and costs for (1) the depositions of Drs. Ugone and Rhyne pursuant to Federal Rule of Civil Procedure 26(b)(4)(E), and (2) the depositions of Mr. Kruse and Mr. Jeffrey Moorad[1] pursuant to Federal Rule of Civil Procedure 30(g)(1). (Dkt. No. 310 at 1.) II. LEGAL STANDARD A. Deposition Costs and Sanctions Under the Federal Rules of Civil Procedure *2 Federal Rule of Civil Procedure 26(b)(4)(E) provides: “[U]nless manifest injustice would result, the court must require that the party seeking discovery pay the expert a reasonable fee for time spent in responding to discovery under Rule 26(b)(4)(A) or (D).” Knight v. Kirby Inland Marine Inc., 482 F.3d 347, 356 (5th Cir. 2007). The purpose of this rule is both “to compensate experts for their time in participating in litigation and to prevent one party from unfairly obtaining the benefit of the opposing party's expert work free from cost.” Hurst v. United States, 123 F.R.D. 319, 321 (D.S.D. 1988). However, an expert's deposition preparation time is only reimbursable to the extent that it “confers value on the deposing party.” Script Sec. Sols., LLC v. Amazon.com, Inc., Case No. 2:15-CV-1030-WCB, 2016 WL 6649721, at *6 (E.D. Tex. Nov. 10, 2016). “A party moving for fees or expenses should substantiate those requests, segregating properly compensable time from non-compensable time.” Rogers v. Penland, 232 F.R.D. 581, 582 (E.D. Tex. 2005). “[T]he burden of proving the reasonableness of the preparation costs under Rule 26(b)(4)(E) falls on the retaining party.” Script Security, 2016 WL 6649721, at *7. “In the absence of a sufficiently detailed explanation of the appropriateness of the time spent on deposition preparation, the costs of the experts’ purported preparation time will be denied.” Id. (quoting SP Techs., LLC v. Garmin Int'l, Inc., No. 08-cv-3248, 2014 WL 300987, at *8 (N.D. Ill. 2014)). Additionally, failure to proceed with a properly noticed deposition is sanctionable conduct. FED. R. CIV. P. 30(g)(1) (“A party who, expecting a deposition to be taken, attends in person or by an attorney may recover reasonable expenses for attending, including attorney's fees, if the noticing party failed to attend and proceed with the deposition.”) Courts look to “all the circumstances, such as whether the failure was inadvertent or in bad faith,” to determine whether sanctions are appropriate. See e.g., Liberty Mut. Fire Ins. Co. v. Ford Motor Co., No. 15-5987, 2016 U.S. Dist. LEXIS 170409, at *5–6 (E.D. La. Dec. 8, 2016); Lewis v. Mazda Motor of Am., Inc., No. 2009-99, 2012 U.S. Dist. LEXIS 180222, at *7 (D.V.I. Dec. 20, 2012). III. DISCUSSION TicketNetwork contends that it incurred $74,644.13 in expert fees, attorneys’ fees (e.g., Mr. Carl Bruce, Mr. Santosh Coutinho, and Ms. Gina Kim), court reporter fees, and travel expenses associated with the depositions of Dr. Ugone, Dr. Rhyne, and Mr. Kruse. (Dkt. No. 310 at 3, 5, 9, 10.) CEATS already tendered $17,348.08[2] to TicketNetwork (“Unopposed Deposition Costs”). (Dkt. No. 322-1 ¶ 2 (Supp. Declaration of David W. Affeld on behalf of CEATS); Dkt. No. 330 (Notice of Payment).) Accordingly, $57,296.05 corresponding to witness preparation time, attorney preparation time, attorney travel to and attendance at deposition, and court reporter time remain in dispute (“Opposed Deposition Costs”). (See Dkt. No. 310 at 3, 5, 9, 10 (charts summarizing TicketNetwork's fee request).) For the reasons discussed below, the Court finds that TicketNetwork is entitled to $1,936.25 in Opposed Deposition Costs. A. TicketNetwork's Expert Preparation Costs *3 TicketNetwork argues that since CEATS deposed Drs. Ugone and Rhyne and it did not depose any of CEATS’ experts, CEATS is required to pay reasonable fees in connection with the expert depositions pursuant to Federal Rule of Civil Procedure 26(b)(4)(E). (Dkt. No. 310 at 1.) CEATS “objects to the [ ]sufficiency of TicketNetwork's documentation” and argues that TicketNetwork is “only entitled to time its experts spent in deposition, and not preparing for deposition.... duplicate preparation time, and time spent with counsel.” (See Dkt. No. 315 at 2; Dkt. No. 322 at 4.) 1. Dr. Ugone's Preparation Costs TicketNetwork argues that $11,759 in reimbursements is justified corresponding to Dr. Ugone's and his assistant's (Mr. Ramadas) preparation for Dr. Ugone's deposition because: (1) the complexity of the damages case required Dr. Ugone and Mr. Ramadas to review an extensive amount of material in advance of his deposition; (2) Dr. Ugone's resulting 1.4:1 ratio of preparation to deposition time falls within this District's endorsed range; (3) Dr. Ugone's deposition conferred value to CEATS; (4) neither Dr. Ugone's nor his assistant time's consisted of trial preparation; and (5) Dr. Ugone's invoices and accompanying declaration reflect the nature of deposition preparation. (See Dkt. No. 310 at 4–5.) TicketNetwork also argues that “Dr. Ugone's invoices distinguish between time spent preparing for and attending the deposition.” (Dkt. No. 321 at 2 (citing Dkt. No. 310-8).) CEATS argues that Dr. Ugone's and Mr. Ramadas’ preparation time is not compensable because their invoice indicates that their combined 10.90 preparation hours on November 30, 2017, involved “[a]ttend[ing] deposition preparation meeting with counsel.” (Dkt. No. 322 at 3 (citing Dkt. No. 310-8 at 5.)) The preparation time was “not segregated between lawyer time and alone time,” and Dr. Ugone's declaration in support of the Motion “acknowledges that the meetings with lawyers included discussion of ‘issues that TicketNetwork's attorneys believed would be the subject matter of questioning during the deposition.’ ” (Dkt. No. 322 at 3–4 (quoting Dkt. No. 310-1 ¶ 3).) The Court finds that Dr. Ugone's and Mr. Ramadas’ preparation time on November 30, 2017, is not compensable. “[T]ime that [an] expert spends consulting with counsel for the retaining party is not likely to be preparation time that confers value on the deposing party.” Script Security, 2016 WL 6649721 at *7. Neither Dr. Ugone's and Mr. Ramadas’ joint invoice nor Dr. Ugone's supporting declaration provide a sufficiently detailed breakdown of their preparation time distinguishing what was beneficial to CEATS versus what was beneficial to TicketNetwork. As such, the Court has no reasonable way to segregate and “exclude any time the expert spends in consultation with an attorney or other representative of the retaining party.” Script Security, 2016 WL 6649721, at *7. Accordingly, TicketNetwork has not met its burden of proving the reasonableness of Dr. Ugone's and Mr. Ramadas’ preparation costs. 2. Dr. Rhyne's Preparation Costs TicketNetwork argues that Dr. Rhyne's preparation time (e.g., ten hours in advance of his first deposition and eight hours in advance of his second deposition) are reasonable and recoverable because: (1) “Dr. Rhyne's approximately 2.6:1 ratio of preparation to deposition time falls below the 3:1 upper limit endorsed in this District”; (2) “the preparation for the second deposition was necessitated by CEATS taking Dr. Rhyne's deposition across two days, two weeks apart”; (3) CEATS benefited from Dr. Rhyne's deposition by using Dr. Rhyne's deposition responses in “motion practice to successfully strike portions of his report”; (4) Dr. Rhyne's invoices and declaration show that “none of his time consisted of consulting with counsel in preparation for trial”; and (5) “Dr. Rhyne's invoices and declaration reflect the nature of the preparatory work undertaken that was directly related to deposition preparation.” (Dkt. No. 310 at 6–7.) TicketNetwork also argues that Dr. Rhyne's second round of preparation was “needed between the first partial deposition and the rescheduled deposition because in the interim he was deposed in another case involving different technologies.” (Dkt. No. 321 at 3.) *4 CEATS argues that TicketNetwork has submitted an insufficient, essentially barebones, invoice for Dr. Rhyne's proffered preparation time. (Dkt. No. 315 at 5–6 (citing Dkt. No. 310-12 at 2).) CEATS also argues that Dr. Rhyne's declaration in support of the Motion indicates that his preparation time involved “meeting with TicketNetwork's attorneys” and “discussing issues TicketNetwork's attorneys believed would come up during the deposition.” (Dkt. No. 322 at 3 (quoting Dkt. No. 310-2 ¶¶ 4, 7).) Additionally, CEATS argues that the “passage of a mere two weeks, whether or not Dr. Rhyne testified in another case in the interim, does not warrant compensation for wholesale duplication of preparation time.” (Dkt. No. 322 at 4; see also Dkt. No. 315 at 6.) CEATS also argues that since Dr. Rhyne's rescheduled deposition took place one month before trial, “[i]t defies credulity that ... the meetings between TicketNetwork's counsel and its witnesses ... did not confer any trial benefit to TicketNetwork.” (Dkt. No. 315 at 8.) The Court finds that Dr. Rhyne's preparation time, as presented, is not compensable. Dr. Rhyne's invoice provides only cursory descriptions for his preparation time—e.g., “Webex for Depo. Prep.” on December 4, 2017; “Depo Prep in Dallas” on December 5, 2017; and “Depo. Prep.” on December 20, 2017. (Dkt. No. 310-12 at 2.) See also Script Security, 2016 WL 6649721 at *7 (“barebones invoices that merely distinguish between ‘deposition preparation’ (or ‘deposition prep’) and ‘expert deposition’ (or ‘deposition’), without any further elaboration as to the nature of the ‘preparation’ .... [are] not sufficient to satisfy [movant]’s burden of showing that the claimed preparation time was ‘spent in responding to discovery.’ ”). Additionally, Dr. Rhyne's declaration in support of the Motion indicates that his preparation time was not entirely for CEATS's benefit. For example, “[o]n December 4 and 5, 2017, [Dr. Rhyne] prepared for [his] December 6, 2017 deposition by meeting with TicketNetwork's attorneys for a total of 10 hours,” which included “discussing issues TicketNetwork's attorneys believed would come up during the deposition.” (Dkt. No. 310-2 at ¶ 4.) Similarly, “[o]n December 20, 2017, [Dr. Rhyne] prepared for [his] December 21, 2017 deposition by meeting with TicketNetwork's attorneys for a total of 8 hours,” which included “discussing issues TicketNetwork's attorneys believed would come up during the deposition.” (Dkt. No. 310-2 at ¶ 7.) Accordingly, the Court has no reasonable means by which to segregate and “exclude any time [Dr. Rhyne] spen[t] in consultation with [TicketNetwork's] attorney[s].” As a result, TicketNetwork has not satisfied its burden to “provide sufficient detail to the Court to enable the Court to make the determination required by Rule 26(b)(4)(E).” Script Security, 2016 WL 6649721 at *7. B. TicketNetwork's Rescheduling Costs TicketNetwork argues that its request for reimbursement of costs and fees associated with the rescheduled depositions of Dr. Rhyne and Mr. Kruse is premised on CEATS’ voluntary, written offer to TicketNetwork to “bear any costs or expenses that may result from rescheduling these two depositions” and TicketNetwork's reliance thereon. (Dkt. No. 321 at 2 (citing Dkt. No. 310-9 at 2; FED. R. CIV. P. 30(g)(1)); Dkt. No. 310 at 8.) TicketNetwork contends that the rescheduled depositions forced it to pay additional court reporter fees, travel expenses for TicketNetwork's attorneys, and attorneys’ fees for deposition preparation and attendance time. (Dkt. No. 310 at 5, 8 (charts summarizing costs sought under Rule 30).) TicketNetwork argues that the passage of time between Dr. Rhyne's and Mr. Kruse's original and rescheduled depositions necessitated additional deposition preparation with TicketNetwork's attorneys. (Id. at 7–9) CEATS argues that although it agreed in its letter to TicketNetwork to “bear only those costs or expenses caused by the rescheduling[,] TicketNetwork has not identified such costs or expenses” and overreaches by “charg[ing] carte blanche for impermissible amounts for lawyer meetings with the experts, lawyer time spent with the experts, and duplicative preparation.” (Dkt. No. 322 at 5 (emphasis in original).) CEATS argues that the legal fees TicketNetwork seeks for its lawyers (Mr. Bruce, Ms. Kim, and Mr. Coutinho) to participate in duplicate witness preparation and to attend Dr. Rhyne's and Mr. Kruse's December 21 depositions are not recoverable. (Dkt. No. 315 at 6.) *5 As an initial matter, the Court is persuaded that sanctions are not appropriate pursuant to Rule 30(g)(1). CEATS did not cancel Dr. Rhyne's and Mr. Kruse's depositions on the eve of the depositions or without a justification. Mr. Affeld “attend[ed] and proceed[ed] with the deposition” until he was notified that the Skirball Fire threatened his family and home. Cf. FED. R. CIV. P. 30(g)(1). The Court takes judicial notice[3] of the state of emergency attributable to wildfires across Southern California in 2017.[4] In these circumstances, cancellation during and on the eve of a deposition is not unreasonable conduct that warrants sanctions under Rule 30(g)(1).[5] It is hard to imagine that opposing counsel, in the same situation, would have ignored such catastrophic risks to their homes and families. That said, the Court is persuaded that TicketNetwork is entitled to recover at least some portion of its requested fees and costs pursuant to CEATS’ voluntarily agreement “to bear any costs or expenses that may result from rescheduling these two depositions.” (Dkt. No. 310-9 at 2.) TicketNetwork would not have incurred additional court reporter fees and travel expenses for TicketNetwork's attorneys to attend the rescheduled depositions but for the rescheduling of Dr. Rhyne's and Mr. Kruse's depositions. However, TicketNetwork's attorneys would have prepared for and attended Dr. Rhyne's and Mr. Kruse's depositions, even if their original depositions had not been cancelled. Accordingly, the Court finds that TicketNetwork is entitled to recover $1,271.85 in court reporter fees and $664.40 in unresolved travel expenses for Ms. Kim from CEATS.[6] IV. CONCLUSION For the reasons discussed above, the Court hereby GRANTS-IN-PART and DENIES-IN-PART TicketNetwork's Motion to Compel Payment of Deposition-Related Fees and Costs (Dkt. No. 310). The Court GRANTS to TicketNetwork $1,936.25 in Opposed Deposition Costs. However, the Court DENIES TicketNetwork's request for $55,359.80 in Opposed Deposition Costs. Accordingly, it is hereby ORDERED that CEATS shall pay TicketNetwork deposition-related costs and expenses that are consistent with the Court's ruling herein. Payment shall be made no later than thirty (30) days from the date of this Order, and CEATS shall promptly notify the Court by a Notice filed on the docket when payment has been made. *6 So ORDERED and SIGNED this 7th day of March, 2019. Footnotes [1] Mr. Moorad was a CEATS fact witness whose deposition was rescheduled. (Dkt. No. 310 at 10.) CEATS does not dispute that a nonrefundable airline ticket incurred by CEATS’ counsel in relation to the deposition is compensable. (Dkt. No. 315 at 6.) [2] “CEATS accepts the hourly rates of TicketNetwork's experts, Dr. V. Thomas Rhyne and Dr. Keith Ugone.... [F]or two days of expert deposition testimony: 10 hours in deposition for Dr. Ugone at $626 per hour, or $6,250; plus 10.5 hours in deposition for Dr. Rhyne at $695 per hour, or $7,297.50.” (Dkt. No. 315 at 2–3.) Additionally, “CEATS acknowledges that it is responsible for the non-refundable airfare of $453.96 incurred by TicketNetwork in connection with the postponement of [Mr. Jeffrey Moorad's] deposition.” (Id. at 6.) The parties further agreed that CEATS would pay TicketNetwork for Mr. Bruce and Mr. Coutinho's travel expenses in the amounts of $1,924.43 and $1,422.19, respectively. (Dkt. No. 330.) [3] Courts may take judicial notice of matters of public record. See FED. R. EVID. 201; U.S. ex rel. Lam v. Tenet Healthcare Corp., 481 F. Supp. 673, 680 (W.D. Tex. 2006) (“Courts have the power to take judicial notice of the coverage and existence of newspaper and magazine articles.”). [4] “U.S. President Donald Trump on Friday declared a state of emergency in California due to raging wildfires that have destroyed hundreds of structures and forced thousands from their homes.” Maria Caspani, Trump declares emergency in California over wildfires, REUTERS (Dec. 8, 2017, 10:08 AM), https://www.reuters.com/article/us-usa-wildfires-emergency/trump-declares-emergency-in-california-over-wildfires-idUSKBN1E226U; see also Skirball Fire: List of evacuations, school, road closures, ABC7 (Dec. 8, 2017), https://abc7.com/skirball-fire-evacuations-school-and-road-closures/2747146/ (“The Skirball Fire is leading to thousands of mandatory evacuations as well as road and school closures in the Los Angeles area.”); California Skirball Fire (FM-5227), FEMA, https://www.fema.gov/disaster/5227 (last updated July, 13, 2018, 4:00 AM) (identifying the incident period from December 6–15, 2017). [5] TicketNetwork suggests that, instead of rescheduling Dr. Rhyne's deposition, “CEATS’ local firm—which led CEATS’ trial team—could continue Dr. Rhyne's deposition the following day.” (Dkt. No. 310 at 5 n.5.) However, CEATS responds that Mr. Cole Riddell could not have continued Dr. Rhyne's deposition as he “had been a lawyer for just over a month at the time” and “was not ... prepared” to take the deposition. (Dkt. No. 315 at 5.) The Court is not persuaded that Rule 30(g)(1) requires an attorney to step into the shoes of another attorney who is prepared for the deposition to avoid sanctions. [6] CEATS already paid TicketNetwork for Mr. Bruce and Mr. Coutinho's travel expenses. (Dkt. No. 330.) See also supra note 2.