United States District Court, N.D. Illinois, Western Division
REPORT AND RECOMMENDATION
D. JOHNSTON, UNITED STATES MAGISTRATE JUDGE
and/or counterdefendants DR Distributors LLC, CB
Distributors, Inc. and Carlos Bengoa (collectively
“plaintiffs”) have filed a motion to recover
costs and fees they contend they incurred preparing to depose
the defendants' expert witness before the defendants
cancelled the deposition and withdrew the expert's
report. Dkt. 184. At oral argument the parties reached an
agreement on costs, so that request is moot. As for fees, for
the reasons that follow it is this Court's Report and
Recommendation that the plaintiffs' request for fees on
the basis presented in the motion---Federal Rule of Civil
Procedure 37---be denied.
plaintiff DR Distributors, LLC uses the mark "21st
Century Smoke" for its line of e-cigarettes. It sued
defendants 21 Century Smoking and Brent Duke (collectively
“defendants”) for using the admittedly similar
mark "21 Century Smoking." The defendants responded
with a counterclaim alleging that the plaintiffs infringed
their mark and seek to cancel the plaintiffs' mark. Dkt.
March 28, 2016, the defendants served the plaintiffs with the
report of their expert witness, Michael Donahue, who opined
on the future costs of corrective advertising to resolve
confusion over the parties' similar marks. The parties
agreed to May 4, 2016, as the date for Mr. Donahue's
deposition in Chicago. However, at 3:07pm Chicago time on May
3, 2016, the day before the scheduled deposition, defense
counsel sent an e-mail to plaintiffs' counsel cancelling
the deposition. By then, plaintiffs' New Jersey counsel
had already flown to Chicago, paid for a hotel and rental
car, and was meeting with plaintiffs' Chicago counsel.
Two days later on May 5, 2016, defense counsel called
plaintiffs' counsel notifying them that the defendants
were withdrawing Mr. Donahue's expert report. The
defendants proffered that Mr. Donahue's report was
withdrawn and Mr. Donahue was no longer being offered as a
witness because they were ethically bound not to present
expert opinion testimony that a witness was not qualified to
to the plaintiffs' motion, counsel also discussed the
costs and fees the plaintiffs incurred preparing for Mr.
Donahue's deposition, and defense counsel asked for
copies of New Jersey counsel's airfare and hotel bill.
Over the coming months the plaintiffs provided receipts and
time records and counsel discussed the following costs and
fees the plaintiffs attribute to preparing for Mr.
Donahue's deposition: (1) $2, 400 in airfare, ground
transportation, and hotel costs for plaintiff's New
Jersey counsel; (2) $4, 200 for attorneys' fees incurred
by New Jersey counsel during 7 hours traveling to Chicago and
another 7 hours returning home at $300 an hour; (3) $4,
766.25 for fees paid to the plaintiff's expert Dr. Robert
Vigil for 7.75 hours spent reviewing Mr. Donahue's report
and helping plaintiffs' counsel prepare for the
deposition; and (4) $24, 145 for fees plaintiffs' counsel
incurred preparing for the deposition (30.5 hours by Chicago
counsel at $350 an hour, and 44.9 hours by New Jersey counsel
at $300 an hour). In a letter dated January 31, 2017, defense
counsel declined to pay any of the fees plaintiffs'
counsel sought, but agreed to pay an unspecified reasonable
amount of travel, lodging and meal costs provided that the
plaintiffs provided bills for defense counsel's review.
To date, nothing has been paid.
Federal Rule of Civil Procedure 37(b)(2)(A), a court may
sanction a party who “fails to obey an order to provide
or permit discovery.” The sanction may include an order
to pay “reasonable expenses, including attorney's
fees” unless the failure to comply “was
substantially justified or other circumstances make an award
of expenses unjust.” Fed.R.Civ.P. 37(b)(2)(C).
Court shall begin with costs. In their motion the plaintiffs
reduced the travel, lodging and meal costs sought from $2,
400.00 to $1, 344.14, with a declaration from plaintiffs'
attorney Anthony J. Davis attached to support the calculation
of costs. Although defense counsel never pointed this out,
Mr. Davis' calculations are incorrect. The costs of
airfare ($272.20), Uber ($118.52), rental car ($182.24), one
night at the Hilton Garden Inn ($232.00), and one night at
the Hotel Burnham ($268.59) total $1, 073.55, not $1, 344.14.
The discrepancy appears to arise from the stay at the Hotel
Burnham, which actually lasted two nights, but for which the
plaintiffs seek reimbursement for only one night. At oral
argument, defense counsel agreed to pay these reduced travel
costs. Under the parties' agreement, the defendants owe
costs in the amount of $1, 073.55, and therefore the issue of
costs before this Court is moot.
now to fees, in their motion the plaintiffs limit their
argument for fees to one brought under Fed.R.Civ.P. 37. As
mentioned above, Rule 37 empowers courts to award sanctions
for various discovery violations, such as failing to make
initial disclosures or to supplement earlier responses (Rule
37(c)), a party's failure to attend its own deposition or
to respond to interrogatories (Rule 37(d)), or failing to
preserve electronically stored information (Rule 37(e)). But
the plaintiffs' motion never specifies which discovery
rule covered by Rule 37 the defendants allegedly violated. At
oral argument the plaintiffs supplemented their motion by
arguing that the defendants' conduct falls under Rule
37(b)(2)(A), which addresses disobeying a discovery order.
But this Court never ordered the defendants to use a retained
expert. The Court merely set a deadline by which any expert
needed to be made available to be deposed. The defendants
have withdrawn Mr. Donahue's report and, therefore, under
Fed.R.Civ.P. 26(a)(2)(B) would be unable to present Mr.
Donahue as a retained expert witness at trial. For added
comfort, at oral argument, defense counsel confirmed on the
record they will not offer Mr. Donahue as a retained expert
witness. And because the date for identifying retained
experts and serving expert reports has expired, defendants
may not offer retained expert opinion testimony on this
issue. Fed.R.Civ.P. 37(c)(1).
their brief, the plaintiffs argue that an award of fees is
also warranted under this Court's decision in
Milliman v. McHenry County, 11 CV 50361, 2015 U.S.
Dist. LEXIS 85709 (N.D. Ill. June 11, 2015) (a Report and
Recommendation accepted by Judge Kapala at 2015 U.S. Dist.
LEXIS 85028). In Milliman this Court recommended
that the plaintiff be allowed to identify a substitute expert
after withdrawing the original expert, conditioned on
plaintiff's payment of the reasonable fees and costs
expended in preparing for the original expert's
deposition. Id. at ** 1-2. The situation presented
in Milliman is distinguishable, though, because fees
were imposed not because the plaintiff abandoned its expert
last minute, but rather only as a condition of identifying a
substitute expert. Id. Under the terms of that
order, had the plaintiff decided against identifying a
substitute expert, no fees would have been due. Therefore,
the Milliaman decision provides no support for the
plaintiffs' argument that fees should be awarded merely
because a party decides against using a previously-disclosed
plaintiffs have cited no discovery rule or court order that
requires the defendants to arrange for the deposition of
experts they intend not to use. Accordingly, the plaintiffs
have identified no basis under Rule 37(b)(2)(A) for imposing
sanctions for cancelling the deposition of Mr. Donahue and
withdrawing him as a retained expert. Indeed, the plaintiffs
have identified no basis under any provision of Rule 37 -
which was and is the only source of authority relied upon -
to impose attorneys' fees and expert witness expenses
under these circumstances.
argument on the motion, for the first time, the plaintiffs
cited three additional cases: Simmons v. Fox, 14 C
309, 2016 U.S. Dist. LEXIS 57811 (N.D. Ill. May 2, 2016);
Emergency Response Specialists, Inc. v. CSA Ocean
Sciences, Inc., 14 CV 2214, 2016 U.S. Dist. LEXIS 113221
(N.D. Ala. Aug. 4, 2016); Farace v. American Airlines,
Inc., 10 CV 724, 2011 U.S. Dist. LEXIS 126731 (D. Nev.
Nov. 1, 2016). All three cases are easily distinguishable
and do not support the request for attorneys' fees and
expert expenses preparing for the cancelled deposition of Mr.
Donahue. The Simmons decision, authored by District
Judge Harry D. Leinenweber, involved a party's failure to
attend his own deposition, which is specifically identified
as sanctionable under Rule 37(d). Judge Leinenweber also
noted that the party “walked out” of the
deposition, cancelled the deposition scheduled the next day,
and left town, all based upon a reason Judge Leinenweber
called “ludicrous.” The Emergency
Response decision is distinguishable in three important
facets: (1) again, the case involved the representative of a
party failing to attend a scheduled deposition, which is
sanctionable under Rule 37(d); (2) the witness had a history
of shenanigans; and (3) the moving party was merely seeking
attorneys' fees for time appearing at the deposition, not
preparing for the deposition. The Farace decision
merely sought reimbursement for the cost of a non-refundable
airline ticket, which the defendants have already agreed to
in this case; the movant did not seek attorneys' fees and
expert witness expenses preparing for the deposition.
the plaintiffs solely relied upon Rule 37 as the basis for
sanctions, the plaintiffs' motion should be denied. There
is no authority under that rule ...