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Tech Firm Slams $24M Fee Request in IP Litigation

March 23, 2020 | Posted in : Billing Practices, Billing Record / Entries, Expenses / Costs, Fee Award, Fee Dispute, Fee Expert / Member, Fee Request

A recent Law 360 story by Hannah Albarazi, “Emerson Electric Slams BladeRoom’s $24M Atty Fee Bid,” reports that Emerson Electric told a California federal judge that BladeRoom doesn't deserve $24.5 million in attorney fees and costs, arguing that the data center manufacturer has gotten more than enough from a $77.4 million verdict in their favor over Emerson's use of stolen trade secrets to win a lucrative Facebook contract.  Emerson Electric Co. told U.S. District Judge Edward J. Davila via telephonic hearing that BladeRoom Group Ltd. overbilled for its work and shouldn't be granted its bid for $21 million in attorney fees and $3.5 million in costs.

BladeRoom also overredacted its billing statements, which made it impossible for Emerson to see what activity BladeRoom billed for and whether there was duplication of effort by counsel, said Emerson's counsel, Rudolph A. Telscher Jr. of Husch Blackwell LLP.  "Everything is blacked out," Telscher told the court. "The law does not allow redactions at this level."  But BladeRoom's counsel disagreed, arguing that they have worked hard to redact as little as possible.

Jeffrey M. Fisher of Farella Braun & Martel LLP, counsel for BladeRoom, told the judge that Emerson and Facebook's misconduct "overlapped so much" that it made it a challenge to differentiate the litigation, but that BladeRoom is only seeking to recover money for work that contributed to their victory against Emerson, not Facebook.

U.K.-based BladeRoom sued Facebook and Emerson five years ago, accusing the pair of stealing its method for manufacturing and installing prefabricated data centers, which it had pitched separately to Facebook and Emerson in 2011.  After those meetings, BladeRoom claimed the two larger companies began secretly working together to steal BladeRoom's proprietary techniques for the Facebook project.

Facebook settled BladeRoom's claims mid-trial in April 2018 and a month later, a jury found that Emerson owed BladeRoom $30 million for using its stolen trade secrets to land a $200 million contract to build a Facebook data center in Sweden.  Judge Davila ruled last year that Emerson owed BladeRoom $77.4 million comprising $30 million in compensatory damages, $30 million in exemplary damages and $17.4 million in prejudgment interest on the compensatory damages.

Emerson's counsel urged Judge Davila to adopt a special master's recommendations, which identified overbilling by BladeRoom from duplication of attorney effort and inefficient staffing.  The special master found last year that 40 percent of BladeRoom's billings were either improper or problematic, and recommended a 40 percent reduction in BladeRoom's lodestar, or a reduction of about $8.1 million.

Emerson's counsel told the court that the $77.4 million verdict more than makes BladeRoom whole.  Emerson also challenged BladeRoom's bid to recover in-house counsel fees, saying that they merely acted as a liaison and that BladeRoom failed to provide documentation to the contrary.  Emerson further expressed concern that the Facebook settlement may have funded part of BladeRoom's defense, and if so, that should be considered by the court in determining fees and costs.