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WHITEHEAD v. CHEVROLET

May 6, 2004.

ANGELIA M. WHITEHEAD, Plaintiff
v.
GATEWAY CHEVROLET, OLDSMOBILE, INC., CRAIG ANDREA, LEE DRYZBEK, and THOMAS OKIMOTO, Defendants



The opinion of the court was delivered by: ARLANDER KEYS, Magistrate Judge

REPORT AND RECOMMENDATION

This matter comes before the court for a recommendation on defendants' motion for sanctions pursuant to Rule 37(b). For the reasons set forth below, the court recommends that defendants' motion be granted and that $15,202.00 enter against plaintiff's counsel, Christopher Langone.

BACKGROUND

  Plaintiff, Angelia M. Whitehead, through her counsel, Mr. Langone, filed this RICO action against defendants Gateway Chevrolet, Oldsmobile, Inc., Craig Andrea, Lee Dryzbek, and Thomas Okimoto (collectively "Gateway"). On February 2, 2004, Judge Conlon granted Gateway's motion to dismiss Ms. Whitehead's amended complaint, and also found that Ms. Whitehead's counsel, Mr. Langone, had incorporated confidential information into the amended complaint in flagrant violation of a protective order entered between Gateway and Mr. Langone in a prior and unrelated litigation, Beene v. Gateway Chevrolet, Inc., 02 C 830 (the Protective Order). Judge Conlon further decided that Mr. Langone's deliberate violation subjected him to sanctions under Rule 37(b), and asked this court to determine the appropriate amount.

  Pursuant to Judge Conlon's referral, this court ordered Gateway to provide an itemization of expenses incurred responding to Mr. Langone's violation. Gateway's counsel, Burke, Warren, MacKay & Serritella, has submitted a detailed statement, which requests $21,523.27 in attorney's fees and costs.

  DISCUSSION

  Before calculating the appropriate sanction, the court must address a preliminary matter. Mr. Langone has gone to considerable lengths to argue that the district court does not have the authority to impose Rule 37(b) sanctions for his particular misconduct. Mr. Langone's efforts are in vain. That ship has already sailed. Judge Conlon has determined that the court has such authority, and this court will not revisit her decision. Further, Judge Conlon's referral order is limited to the issue of what should be the appropriate sanction, not whether there should be sanctions. And if there was any doubt regarding the scope of the referral, such doubt was dispelled when Judge Conlon denied Mr. Langone's motion for clarification of her referral order on April 14, 2004. Thus, many of Mr. Langone's arguments in opposition to Gateway's motion are rejected as irrelevant.

  1. Attorney's fees

  Under Rule 37(b), the appropriate sanction is for Mr. Langone to pay Gateway's reasonable expenses, including attorney's fees, caused by his violation. Fed.R.Civ.P. 37(b)(2). A determination of attorney's fee requires calculation of the lodestar. Mathur v. Board of Trustees of Southern Illinois University, 317 F.3d 738, 742 (7th Cir. 2003). The lodestar is the product of an attorney's reasonable hourly rate and the number of hours reasonably expended. Hensley v. Eckerhart, 461 U.S. 424, 434 (1983). The party seeking the fee award bears the burden of proving the reasonableness of the hours worked and the hourly rate claimed. Id.

  a. Hours

  Gateway submits the hours of two attorneys, Ira Levin and Kimberly Smith. Mr. Levin billed 38.6 hours, and Ms. Smith billed 64.1 hours. These hours represent three general categories of work. First, Gateway requests reimbursement for hours spent reviewing Ms. Whitehead's RICO case statement.*fn1 Next, Gateway describes hours spent preparing its motion to strike and dismiss Ms. Whitehead's amended complaint. Lastly, Gateway includes time devoted to drafting the present motion for sanctions. Mr. Langone argues that the first category of work should be excluded entirely, and the second category should be significantly reduced.*fn2

  Before considering these objections, the court must briefly address Mr. Langone's argument that none of Ms. Smith's hours are appropriate. Mr. Langone argues that Gateway should not recover for any of Ms. Smith's work, because she also violated the Protective Order. Ms. Smith is Gateway's counsel. Gateway is certainly free to share its confidential information with its own counsel. Further, the Protective Order expressly provided "[a]ny party may freely disclose . . . its own confidential documents . . . without impairing the obligations imposed by this Order upon others." See Protective Order, par. 11. Thus, Mr. Langone's request is both illogical and directly contrary to the Protective Order, and is, therefore, rejected.

  Turning to Mr. Langone's specific objections, he first argues that Gateway cannot recoup fees for hours spent reviewing the RICO case statement, because this work occurred prior to his misconduct. But, as Gateway correctly recounts, the confidential information first appeared in the RICO case statement, and was later incorporated into the amended complaint. Thus, Mr. Langone's violation occurred when he filed the RICO case statement, and this temporal event marks the beginning of Hr. Langone's misconduct. Thus, Mr. Langone's first objection is overruled.

  Next, Mr. Langone objects to any hours spent reviewing the amended complaint. He claims that, regardless of any violation, Gateway still would have had to review the amended complaint. While this reasoning is incorrect, the objection is not wholly without merit. As discussed above, Gateway first reviewed the confidential information when it appeared in the RICO case statement. It then appears that Gateway reviewed the same information a second time when it surfaced in the amended complaint. The court cannot reimburse Gateway for this duplicative effort, and will, therefore, subtract three hours from Gateway's ...


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