After Issuing Terminating Sanctions, Court Awards Prevailing Party Counsel Fees
As reported last month, in Singh et. al. v. Hancock Natural Resources Group, Inc., et. al., Case No. 15-1435 (E.D. Cal., May 24, 2017), the court ordered production of certain emails in TIFF format with metadata. The Defendant Goose Pond Ag, Inc., filed a Motion for Terminating Sanctions, alleging that Plaintiffs had failed to comply with the court’s December order and that Plaintiffs had “fraudulently altered” important emails. The magistrate judge found that Defendant Goose Pond had demonstrated Plaintiffs’ “willingness to ignore deadlines imposed by the court, disrupt the course of litigation, and prepare falsified documents to respond to discovery requests.” As a result, the magistrate judge recommended terminating sanctions, and the district judge adopted her recommendation on April 17, 2017, dismissing the case with prejudice.
Shortly after issuing terminating sanctions, Defendant filed a motion for attorneys’ fees and costs of over half a million dollars based upon the contractual obligations between the parties. The contract at issue provided for the losing party to pay the prevailing party’s legal expenses in the event of litigation. Plaintiffs opposed the motion, arguing that Defendant was not the prevailing party with respect to the contract, because the case was not dismissed on the merits. The court followed California law with respect to the award of fees, as the case was in federal court under diversity jurisdiction. Under California law, however, the court found that Defendants were “prevailing” for purposes of an award of fees and that such an award was mandatory. The court did, however, reduce the amount sought by nearly half, reducing Defendants’ hourly rate and the hours worked.