Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_09-cv-00744/USCOURTS-casd-3_09-cv-00744-1/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1441 Petition for Removal- Breach of Contract

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cal 

1

 The PMK designee was to testify with regard to topic number two of the noticed deposition.

Topic number two refers to “other complaints about powder coating on any Nautilus equipment from

1998 to the present.”

2

 Unless otherwise noted, all subsequent references to the rules refer to the Federal Rules of Civil

Procedure.

1 09cv744

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

SOUTHERN CALIFORNIA STROKE

REHABILITATION ASSOCIATES, INC., 

a California Corporation,

Plaintiff,

v.

NAUTILUS., dba THE NAUTILUS GROUP,

INC., a Washington Corporation; and Does 1

through 10 inclusive,

Defendants. 

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Civil No. 09-CV-744 JLS (AJB)

ORDER SETTING AWARD OF

ATTORNEY’S FEES AND COSTS

[Doc. Nos. 85, 86 and 87.]

The Plaintiff Southern California Stroke Rehabilitation Associates, Inc. (“SCSRA”) filed a

motion to compel the Defendant Nautilus, Inc. (“Nautilus”) to designate and properly prepare a person

most knowledgeable (“PMK”)1

 pursuant to Federal Rule of Civil Procedure 30(b)(6).2 [Doc. No. 71.]

Nautilus did not object or otherwise challenge the notice. Subsequently, Nautilus produced Kevin

McCart as its PMK for deposition in Vancouver, Washington on April 19, 2010. After the deposition in

Vancouver, SCSRA contended that Nautilus failed to properly designate and/or prepare Mr. McCart and

requested sanctions pursuant to Rule 37(d)(3). Having found that Nautilus failed to fulfill its obligations

under Rule 30(b)(6), the Court instructed SCSRA to file a declaration detailing the fees and costs for the

Case 3:09-cv-00744-CAB-MDD Document 91 Filed 07/29/10 Page 1 of 5
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requested amount of $13,091 on or before July 9, 2010. [Doc. Nos. 86 and 87.] Nautilus was instructed

to file objections to the fees and costs on or before July 23, 2010. [Doc. No. 89.] A telephonic hearing

regarding the motion for sanctions was held on the record on July 28, 2010 at 1:30 p.m. Appearing on

behalf of the SCSRA was Mr. Stephen J. Tomasulo and Ms. Whitney B. Kringel. Appearing on behalf

of Nautilus was Mr. Robert W. Harrison and Mr. Patrick J. Kearns. Having fully evaluated the moving

papers and the arguments made by counsel at the telephonic hearing, the court GRANTS IN PART and

DENIES IN PART Plaintiff’s request for sanctions pursuant to Rule 37(d)(3) as set forth below.

Legal Standard

Under Fed.R.Civ.P. 30(b)(6), a party may provide notice of matters for examination to an

organization. That organization is then required to designate one or more persons to testify about the

matters noticed. See id. Such designated person or persons must then “testify about information known

or reasonably available to the organization.” See id. The corporate party then has an affirmative duty to

educate and prepare the designated representative for the deposition. See Sprint Commc'n Co. L.P. v.

Theglobe.com, Inc., 236 F.R.D. 524, 527 (D.Kan.2006). This duty requires a Rule 30(b)(6) designee to

testify to more than just what he or she personally knows. See id. 

Many courts treat the failure of an organization to produce a prepared and educated witness

under Rule 30(b)(6) as tantamount to a nonappearance at a deposition, meriting the imposition of

sanctions pursuant to Rule 37(d)(3). See, e.g., Resolution Trust Corp. v. Southern Union Co., Inc., 985

F.2d 196, 197 (5th Cir.1993); Bank of New York v. Meridien BIAO Bank Tanzania Ltd., 171 F.R.D. 135,

151 (S.D.N.Y.1997). Rule 37(d)(3) states:

. . . the court must require the party failing to act, the attorney advising that

party, or both to pay the reasonable expenses, including attorney's fees,

caused by the failure, unless the failure was substantially justified or other

circumstances make an award of expenses unjust.

Sanctions under Rule 37 are designed to be flexible so that courts have the discretion to “vouchsafe full

discovery for the just, speedy, and inexpensive determination of the lawsuit.” Robison v. Transamerica

Ins. Co., 368 F.2d 37 (10th Cir.1966). Overall, sanctions imposed under Rule 37 should deter the

Defendant's conduct, and remedy any prejudice it caused the Plaintiff. See Pioneer Drive, LLC. v.

Nissan Diesel America, Inc., 262 F.R.D. 552, 560 (D. Mont. 2009).

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3

 Although the Plaintiff only seeks reimbursement of $13,091, it alleges the Motion and McCart

deposition total approximately $14,054 in fees and expenses at minimum. 

4

 The Plaintiff alleges that all expenses incurred as a result of the motion to compel and

deposition of Mr. McCart, have been paid by SCSRA within 30 days of receipt of the billing statement. 

5

 The Plaintiff contends that a total of 19.8 hours, equating to $6,120, was spent researching,

preparing and writing the motion. In reaching this sum, the Plaintiff alleges Ms. Kringel spent 17.8

hours at $300 per hour and Mr. Tomasulo spent 2 hours at $390 per hour.

6

 The Plaintiff contends hours, equating to $6,162, was spent preparing for and traveling to and

from the deposition. Of these 15.8 hours, the Plaintiff states 6.8 hours were spent preparing and

traveling to the deposition and 9 hours were spent preparing for, taking, and traveling from the

deposition.

7

 The Plaintiff alleges it incurred $1,772 in deposition related expenses. These expenses include

$526 for an airplane ticket, $182 for a rental car, $40 for parking at the airport, $681 for deposition

transcript fees and $343 in hotel expenses. Of the $343 in hotel expenses, $139 was attributed to the

room rate, $117.20 to dinner at the London Grill Restaurant, $29 to hotel parking, $32.40 to room

service, $17.38 to room occupancy tax and $8 to a miscellaneous expense at Palm Court.

3 09cv744

Discussion

In the Plaintiff’s declaration in support of the request for sanctions, the Plaintiff seeks reimbursement of $13,091 in attorney’s fees and costs associated with the motion to compel and deposition of Mr.

McCart.3 See Pl.’s Decl. at pg. 4. [Doc. No. 86.] Of the $13,091 total,4 the Plaintiff alleges $6,120 was

spent to prepare the motion to compel,5 $6,162 was incurred as a result of the deposition of Mr.

McCart,6

 and $1,772 was spent as expenses7 related to the deposition.

The Defendant filed an objection to the Plaintiff’s request for fees and costs, arguing the request

was excessive and not fully documented. Defendants further argued that the deposition of Mr. McCart

was not a “total loss” and Defendant should not have to pay for meals and room service. See Def.’s

Opp’n at pgs. 2, 4 and 6. [Doc. No. 89.] The Defendants contend that only four days after the deposition

of Mr. McCart, the Plaintiff submitted a third-set of written requests for production of documents.

Within this document request, several of the documents specifically referenced the deposition of Mr.

McCart, showing that the Plaintiff did in fact receive “some value” from the deposition. See Def.’s

Opp’n at pg. 3. [Doc. No. 89.] The Defendants also contend that the hours spent by the Plaintiff’s

counsel are excessive and based solely on representations in the declarations that are “estimates” or

based upon “pre-bills.” See Def.’s Opp’n at pg. 5 [Doc. No. 89.]

Based on the moving papers submitted by both parties and arguments presented at the telephonic

hearing on July 28, 2010 at 1:30 p.m., the Court finds that the hours represented by the Plaintiff’s

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8

 At the July 28, 2010 hearing, counsel for the Plaintiff conceded that the $117.50 dinner at the

London Grill Restaurant should not an expense included in the request for sanctions.

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counsel in regards to the motion to compel and the deposition are unreasonable, but finds the deposition

expenses reasonable.8 In light of the fact that this was a single motion to compel on a simple issue, the

Court finds 10 hours, equating to $3,090, to be reasonable. Of these ten hours, nine hours will be billed

at Ms. Kringle’s rate of $300 per hour, equating $2,700, and one hour will be billed at Mr. Tomasulo’s

rate of $390 per hour, equating $390. Regarding deposition fees, because time spent traveling to the first

deposition has been lost and additional preparation on behalf of the Plaintiff will be needed to prepare

for the subsequent deposition, the Court finds 11.3 hours at $390 per hour, equating to $4,407 reasonable. This time accounts for the 6.8 hours the Plaintiff’s counsel spent traveling to and preparing for the

deposition and 4.5 hours the Plaintiff’s counsel spent preparing for, taking, and traveling from the

deposition. Finally, because the Plaintiff’s counsel will need to take a subsequent deposition all

expenses incurred as a result of the first deposition of Mr. McCart have been lost. Therefore, the Court

finds deposition expenses in the amount $1,654.50 reasonable. 

Conclusion

Based on the foregoing, the Court GRANTS IN PART and DENIES IN PART the Plaintiff’s

request for sanctions pursuant to Rule 37(d)(3). The Court finds that sanctions in the amount of $3,090

for the motion to compel, $4,407 for fees associated with the deposition of Mr. McCart, and $1,654.50

for deposition expenses are reasonable. Thus, pursuant to Rule 37(d)(3) Nautilus is hereby ORDERED

to pay $9,151.50 to SCSRA for reasonable attorney’s fees and expenses as a result of failing to

designate and adequately prepare its PMK Mr. McCart. Payment is to be made forthwith and in no

event later than August 20, 2010.

IT IS SO ORDERED. 

DATED: July 29, 2010

Hon. Anthony J. Battaglia

U.S. Magistrate Judge

United States District Court

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