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Oral surgeon Dr. Deepak Kademani (“Kademani”) sued former employer Mayo Clinic (“Mayo”) for breaching the confidentiality terms of their separation agreement. Kademani claimed that, as a result of that breach, he lost a contract with the Harvard School of Dental Medicine that paid significantly more than the position he ultimately obtained at the University of Minnesota. In a bifurcated trial on the contract claims, the jury found that Mayo had breached the agreement. Because the agreement stated that a breach entitled the prevailing party to recovery of reasonable attorney’s fees, damages to be determined in the second phase of the trial also included Kademani’s attorney fee claim.
To support that claim, Kademani sought discovery from Mayo of the billing records generated in the matter by its attorneys. Mayo objected and Kademani moved to compel production. Reviewing a Magistrate Judge’s decision ordering production, the district court agreed that Mayo had to produce the records. The district court held that an opposing party’s fees and hours are relevant to determining the reasonableness of the prevailing party’s claim for fees. The court reasoned that the defendant’s billing records may have some bearing on the reasonableness of the plaintiff’s fees and hours because, among other reasons, the two sides worked on identical factual and legal issues in the same legal market. Mayo had argued that the court should follow a rule used in some other jurisdictions that only allows production of an opponent’s fee records if that opponent objects to the reasonableness of the prevailing party’s hourly rates or number of hours worked—which Mayo said it would not do. The court rejected the rule Mayo proposed because a defendant’s self-imposed limitation would not bind the finder of fact or establish reasonableness as a matter of law. The court noted that submitting attorney’s fees issues to a jury was unfamiliar territory made possible by a recent Minnesota Supreme Court decision, United Prairie Bank-Mountain Lake v. Haugen Nutrition & Equipment, LLC, 813 N.W.2d 49 (Minn. 2012), a decision that held that a party has a right to a jury trial for contractual claims to recover attorney’s fees. The court concluded that the opposing party’s billing records are potentially relevant, and therefore discoverable, whether or not the opposing party objects to the reasonableness of the prevailing party’s fees.
- Don’t be afraid to ask for the other’s side records. If you are entitled to an award of attorney’s fees, you may be able to seek discovery of the opposing party’s billing records to help demonstrate the reasonableness of your requested fees. Particularly where the parties worked on identical issues within the same market, fees equal to or lower to the opposing party’s billings are more likely to be deemed reasonable.
- Discoverability ≠ admissibility. The court’s order of production of attorney billing records here does not equate to a promise that those records will automatically be allowed into evidence—a fact the court noted along with the deferential role the Magistrate’s opinion played in its ultimate decision.
- Keep an eye on the big picture. Mayo wanted to ensure that Kademani only submitted a claim for fees related to the breach of contract action and not time spent in pursuit of other claims the court dismissed before trial. But that position may have given Kademani access to information that shows the jury more about Mayo and the relative power between the parties than Mayo intended—especially because one of the most important factors in determining reasonableness of an attorney fees award is the magnitude of the prevailing party’s success in the case as a whole.
It’s not just the client who sees legal bills. Both billing attorneys and corporate clients working with billing systems should remember that attorney time entered and actual invoices for services may just end up in front of a judge, a jury or even members of the press.
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