Plaintiffs Awarded $2.5 Million

Plaintiffs Awarded $2.5 Million in Fees in DR Distributors Case: eDiscovery Case Law

In DR Distribs., LLC v. 21 Century Smoking, Inc., No. 12 CV 50324 (N.D. Ill. Oct. 6, 2022), the plaintiffs were awarded $2.5 million (of the almost $4 million requested) by Illinois District Judge Iain D. Johnston as a result of the sanctions awarded in the case on January 2021.

Judge Johnston began his order by stating: “If Dante were a judge, he would have placed fee litigation as an inner circle of judicial hell.” The plaintiffs were awarded $2.5 million after significant sanctions were awarded in Judge Johnston’s ruling on January 19, 2021 (covered by us here and here – the only case law ruling that we have ever needed two posts to cover).

In discussing those sanctions, Judge Johnston noted: “Sanctions included an award of reasonable attorneys’ fees Plaintiff incurred litigating its motion for sanctions plus the work done on summary judgment motions that were derailed because of the discovery failures of Defendants and their former counsel. The Court directed Plaintiff to submit a fee petition, which has now been fully briefed. A ruling was delayed by one of former counsel’s bankruptcy proceeding, but the automatic bankruptcy stay has now been lifted. The Court states no position on the collectability of this fee award in light of the bankruptcy.”

After the plaintiff sought $3,991,138.77, consisting of fees actually paid by the plaintiff of $2,417,552.21, the recovery of discounts, credits and travel time that Plaintiff was never charged amounting to $312,028.40, plus an increase of $1,261,558.16 based on “rare and exceptional circumstances as illuminated by the scope of the Sanctions Parties’ misconduct,” Judge Johnston stated: “For the following reasons, Plaintiff’s motion for fees…is granted in part and denied in part. The Court awards fees totaling $2,526,744.76, to be apportioned as follows consistent with the January 19, 2021, sanctions order: defendant Brent Duke to pay 50% and the former defense counsel to pay the remaining 50%, with former defense counsel Thomas Leavens paying 80% of the 50% and former defense counsel Peter Stamatis paying 20% of that 50%.” (emphasis added)

That means the former outside counsel is responsible for over $1.25 million. Ouch.

As covering the lengthy fee determination discussion would be an inner circle of blogging hell, I’ll leave it to you all to work through that if you desire… 😉

So, what do you think of the fact that the plaintiffs were awarded $2.5 million? Should the former counsel be required to pay half of that? Please share any comments you might have or if you’d like to know more about a particular topic.

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