Riley v. Quantumscape Corp., No. 5:2022cv03871 - Document 57 (N.D. Cal. 2023)

Court Description: ORDER GRANTING IN PART 49 MOTION FOR ATTORNEYS' FEES. Signed by Judge Beth Labson Freeman on 8/15/2023. (blflc3, COURT STAFF) (Filed on 8/15/2023)

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1 2 3 UNITED STATES DISTRICT COURT 4 NORTHERN DISTRICT OF CALIFORNIA 5 SAN JOSE DIVISION 6 7 GILBERT RILEY, Petitioner, 8 v. 9 10 QUANTUMSCAPE CORP., Respondent. 11 United States District Court Northern District of California Case No. 22-cv-03871-BLF ORDER GRANTING IN PART MOTION FOR ATTORNEYS’ FEES AND COSTS AND AN AWARD OF POST-JUDGMENT INTEREST [Re: ECF No. 49] 12 13 Before the Court is Respondent QuantumScape Corporation’s motion for attorneys’ fees 14 and costs and an award of post-judgment interest. See Mot., ECF No. 49. QuantumScape seeks 15 from Petitioner Gilbert Riley fees and costs related to QuantumScape’s opposition to Riley’s 16 petition to vacate an arbitration award and QuantumScape’s cross-motion to confirm the same. 17 QuantumScape also seeks post-judgment interest under 28 U.S.C. § 1961. Riley opposes the 18 motion. Opp’n ECF No. 54. QuantumScape has replied. Reply, ECF No. 55. 19 The Court found this matter suitable for determination without oral argument. See Order, 20 ECF No. 56. For the following reasons, the Court GRANTS IN PART QuantumScape’s motion. 21 22 I. BACKGROUND On February 26, 2021, Gilbert Riley initiated an arbitration against QuantumScape after 23 QuantumScape terminated his employment. Decl. of David Marek Supp. Pet. to Vacate 24 Arbitration Award (“Marek Decl.”) Ex. 2, at 1-2 (“Arb. Demand”), ECF No. 2-2. Riley sought to 25 recover shares or the value of shares in QuantumScape of which he was allegedly deprived after 26 his termination. Id. at 9. 27 28 On June 15, 2022, the Arbitrator issued a Final Award. See Marek Decl. Ex. 34 (“Final Award”), ECF No. 2-34. The Arbitrator held that Riley had failed to prove his claims and 1 awarded QuantumScape fees and costs. Id. at 15. On June 30, 2022, Riley petitioned this Court to vacate the arbitration award. See Pet., 2 3 ECF No. 1. Riley argued multiple bases for vacatur under both the Federal Arbitration Act and 4 California Arbitration Act. See Mem. Supp. Pet. Vacate 11, ECF No. 17. Riley asserted that the 5 Arbitrator exhibited bias under both an evident-partiality theory and a failure-to-disclose theory. 6 See id. at 14-20. Riley also asserted that the Arbitrator’s award reflected a manifest disregard of 7 the law in multiple respects. See id. at 20-25. QuantumScape cross-moved to confirm the 8 arbitration award. See Cross-Mot., ECF No. 27. After hearing oral argument, this Court issued an order denying Riley’s petition and 9 10 granting QuantumScape’s cross-motion. Order, ECF No. 43. QuantumScape now seeks fees and costs under the parties’ Separation Agreement and United States District Court Northern District of California 11 12 Release (“Separation Agreement”) and Consulting Agreement. Mot. 2. The Arbitrator already 13 awarded QuantumScape fees and costs for its work in the underlying arbitration. QuantumScape’s 14 request before this Court thus primarily concerns QuantumScape’s attorneys’ work in opposing 15 Riley’s petition to vacate the arbitration award and cross-moving to confirm the arbitration award. 16 17 18 19 20 21 22 23 24 25 26 27 II. LEGAL STANDARD California Civil Code § 1717(a), which governs fee applications stemming from contract actions, provides: In any action on a contract, where the contract specifically provides that attorney's fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney’s fees in addition to other costs. Cal. Civ. Code § 1717(a). The Court determines whether a party has prevailed on the contract for the purposes of awarding fees. Cal. Civ. Code § 1717(b)(1). “As long as the action ‘involve[s]’ a contract it is ‘on [the] contact’ within the meaning of section 1717.” Brown Bark III, L.P. v. Haver, 219 Cal. App. 4th 809, 821 (2013) (alterations in original). 28 2 1 2 III. DISCUSSION A. Entitlement to Fees Under the Agreements QuantumScape seeks fees under the parties’ Separation Agreement and Consulting 3 Agreement. Mot. 2. The agreements provide as follows: 4 5 6 7 8 9 10 United States District Court Northern District of California 11 12 13 Attorneys’ Fees. Except with regard to a legal action challenging or seeking a determination in good faith of the validity of the waiver herein under the ADEA, in the event that either Party brings an action to enforce or effect this Agreement, the prevailing Party shall be entitled to recover its costs and expenses, including the costs of mediation, arbitration, litigation, court fees, and reasonable attorneys’ fees incurred in connection with such action. Separation Agreement § 24. Attorneys’ Fees. In any court action at law or equity that is brought by one of the Parties to this Agreement to enforce or interpret provisions of this Agreement, the prevailing Party will be entitled to reasonable attorneys’ fees, in addition to any other relief to which that Party may be entitled. Consulting Agreement § H. Riley opposes QuantumScape’s request. Riley argues that the Court should deny 14 QuantumScape’s motion based on “principles of equity” because: (1) QuantumScape has “unclean 15 hands” due to what Riley viewed as QuantumScape’s improper conduct in arbitration; (2) the 16 contract lacked mutuality; and (3) the Separation Agreement is unenforceable under McLaren 17 Macomb, 372 N.L.R.B. No. 58 (2023). Id. at 3. 18 QuantumScape replies to each of Riley’s arguments. QuantumScape argues that Riley’s 19 “unclean hands” argument fails because QuantumScape did not engage in misconduct and the fees 20 QuantumScape seeks arose from properly opposing Riley’s motion to vacate. Reply 1-2. 21 QuantumScape argues that Riley’s lack-of-mutuality argument has already been rejected by this 22 Court and fails because Riley conceded that he engaged in extensive negotiations over the terms of 23 the agreements. Id. at 2. Finally, QuantumScape argues that McLaren Macomb is inapplicable 24 here for multiple reasons, and even if the Separation Agreement were unenforceable under that 25 decision, QuantumScape would be entitled to fees under the Consulting Agreement. Id. at 2. 26 The Court first addresses Riley’s argument that QuantumScape should be denied fees 27 under the “unclean hands” doctrine. “The defense of unclean hands arises from the maxim, ‘He 28 who comes into Equity must come with clean hands.’” Mendoza v. Ruesga, 169 Cal. App. 4th 3 United States District Court Northern District of California 1 270, 278 (2008) (quoting Kendall-Jackson Winery, Ltd. v. Superior Ct., 76 Cal. App. 4th 970, 978 2 (1999)). The defense requires “unconscionable, bad faith, or inequitable conduct by the plaintiff 3 in connection with the matter in controversy.” Id. (quoting Fladeboe v. American Isuzu Motors, 4 Inc. 150 Cal. App. 4th 42, 56 (2007)). “Whether the defense applies in particular circumstances 5 depends on the analogous case law, the nature of the misconduct, and the relationship of the 6 misconduct to the claimed injuries.” Id. (quoting Fladeboe, 15 Cal. App. 4th at 56). 7 As an initial matter, Riley has not pointed the court to “analogous case law.” None of the 8 cases Riley cites analyzes a situation in which a party challenged a fee award under the “unclean 9 hands” doctrine. See PLCM Grp. v. Drexler, 22 Cal. 4th 1084, 1088, 1095 (2000) (holding that an 10 entity that is represented by in-house counsel may recover attorney fees under California Civil 11 Code § 1717 and affirming a fee award); Kendall-Jackson, 76 Cal. App. 4th at 974, 985 (holding 12 that “unclean hands” may be raised as a defense to a malicious prosecution claim based on 13 misconduct connected to the subject matter of a litigation that affects the equitable relations 14 between the litigants); Mendoza, 169 Cal. App. 4th 270, 275, 279 (holding that the “unclean 15 hands” doctrine may not be raised as an affirmative defense to a claim under California’s 16 Immigration Consultants Act). 17 Riley has also not identified any “unconscionable, bad faith, or inequitable conduct” that 18 would trigger the “unclean hands” doctrine. As Riley correctly notes, this Court stated in its order 19 confirming the arbitration award that certain processes followed by QuantumScape’s counsel and 20 the Arbitrator were “sloppy.” See Riley v. QuantumScape Corp., No. 22-CV-03871-BLF, 2023 21 WL 1475092, at *9 (N.D. Cal. Feb. 2, 2023). But Riley does not show how such sloppiness rises 22 to the level of unconscionable, bad faith, or inequitable conduct that would trigger the “unclean 23 hands” doctrine. Nor does Riley offer any substantive explanation about why any of the other 24 conduct he challenged would trigger the doctrine. Accordingly, the Court finds that a fee award is 25 not barred by the “unclean hands” doctrine here. 26 Riley’s second argument is similarly unavailing. Riley asserts that “the equities should 27 prohibit [QuantumScape] from getting additional fees based on a ‘take it or leave it’ contract that 28 lacked mutuality by ensuring that Riley did not receive any material legal benefits from the 4 1 arrangement while Respondent received substantial monetary and non-monetary benefits.” Opp’n 2 3. But Riley does not develop his argument beyond this sentence. And it is not the Court’s duty 3 to formulate Riley’s argument for him. Cf. Foskaris v. Experian Info. Sols., Inc., 808 F. App'x 4 436, 440 (9th Cir. 2020) (“It is not the court's duty, however, to peruse the record to formulate the 5 parties’ arguments.”). Moreover, the Arbitrator already determined that the Separation Agreement 6 was supported by adequate consideration, and this Court already determined that the arbitrator’s 7 decision was not contrary to law. Riley, 2023 WL 1475092, at *16. Thus, Riley has not shown 8 any reason to disregard the fees provisions to which he and QuantumScape agreed when they 9 formed their agreements. United States District Court Northern District of California 10 Finally, Riley’s reliance on McLaren Macomb to argue that the Separation Agreement is 11 unenforceable is misplaced. Riley asserts based on McLaren Macomb that “a separation 12 agreement with broad confidentiality and/or non-disparagement provisions is unenforceable as a 13 matter of law.” See Opp’n 3. But Riley does not analyze the terms of any provision in the 14 Separation Agreement to explain why the provision would fall within the proscription described in 15 McLaren Macomb. This is particularly troubling given the Board’s emphasis in McLaren 16 Macomb on the importance of the terms of the agreement. See 372 N.L.R.B. No. 58, at *11 (“Our 17 main disagreement with the dissent’s adherence to Baylor and IGT is the refusal in those cases to 18 analyze the terms of the severance agreements.”); see also id. at *5 (stating that in determining 19 whether a severance agreement is unlawful “we will examine . . . the language of the agreement”). 20 Moreover, Riley does not explain why McLaren Macomb would render the fees provision here 21 unenforceable, and if so, why this Court should follow the Board’s non-binding decision. Finally, 22 Riley does not explain how a finding that the fees provision in the Separation Agreement is 23 unenforceable would render the fees provision in the separate Consulting Agreement 24 unenforceable. For all these reasons, the Court finds Riley’s invocation of McLaren Macomb 25 unpersuasive. 26 In sum, the Court finds that QuantumScape has established its entitlement to fees as a 27 prevailing party under the plain terms of the agreement, and none of the “principles of equity” 28 Riley invokes requires otherwise. 5 1 2 3 4 5 6 7 B. Reasonableness of QuantumScape’s Fees Request Under California law, courts use the lodestar calculation, which “begins with a touchstone or lodestar, based on the ‘careful compilation of time spent and reasonable hourly compensation of each attorney.’” Ketchum v. Moses, 24 Cal. 4th 1122, 1131-32 (2001) (quoting Serrano v. Priest, 20 Cal. 3d 25, 48 (1977)); see also PLCM, 22 Cal. 4th at 1095 (“the fee setting inquiry in California ordinarily begins with the ‘lodestar.’”). “The reasonable hourly rate is that prevailing in the community for similar work.” PLCM, 22 Cal. 4th at 1095. “The lodestar figure may then be adjusted, based on consideration of factors specific to the case,” including “the nature of the 8 litigation, its difficulty, the amount involved, the skill required in its handling, the skill employed, 9 the attention given, the success or failure, and other circumstances in the case.” Id. at 1095-96. 10 United States District Court Northern District of California 11 1. Hourly Rate “Generally, in calculating the lodestar, ‘[t]he reasonable hourly rate is that prevailing in 12 the community for similar work.’” Rey v. Madera Unified Sch. Dist., 203 Cal. App. 4th 1223, 13 1241 (2012) (quoting PLCM, 22 Cal. 4th at 1095). “To inform and assist the court in the exercise 14 of its discretion, the burden is on the fee applicant to produce satisfactory evidence—in addition to 15 the attorney’s own affidavits—that the requested rates are in line with those prevailing in the 16 community for similar services by lawyers of reasonably comparable skill, experience and 17 reputation.” Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 980 (9th Cir. 2008) (quoting Blum v. 18 Stenson, 465 U.S. 886, 895 n.11 (1984)). 19 QuantumScape was represented by five attorneys from the law firm of Wilson Sonsini 20 Goodrich & Rosati (“Wilson Sonsini”). The attorneys were Marina Tsatalis, Matthew Gorman, 21 Alison Renner, Neil Gulyako, and Heather Diles. Tsatalis Decl. ¶¶ 16, 20. 22 Ms. Tsatalis has been a partner at Wilson Sonsini for 21 years. Tsatalis Decl. ¶ 5. She 23 graduated cum laude from Harvard Law School in 1992. Tsatalis Decl. ¶ 3; see also Tsatalis Decl. 24 25 Ex. 1 (“Tsatalis Bio”), ECF No. 49-2. She has exclusively practiced employment and trade secret litigation throughout her 30 years of practice and is the head of the firm’s employment and trade 26 secret litigation practice. Tsatalis Decl. ¶¶ 4-5. QuantumScape seeks to recover fees for Ms. 27 Tsatalis at a billing rate of $1,430/hour. Id. ¶ 20. 28 6 Mr. Gorman is Of Counsel in Wilson Sonsini’s Boston office. Tsatalis Decl. ¶ 16.a; see 1 2 also Tsatalis Decl. Ex. 9 (“Gorman Bio.”), ECF No. 49-10. He graduated from New York 3 University Law School in 2010. Gorman Bio. QuantumScape seeks to recover fees for Mr. 4 Gorman at a billing rate of $1,010/hour. Tsatalis Decl. ¶ 16.a. Ms. Renner is an associate in Wilson Sonsini’s New York Office. Tsatalis Decl. ¶ 12.d; see 5 6 also Tsatalis Decl. Ex. 12 (“Renner Bio”), ECF No. 49-13. She graduated from Fordham 7 University Law School in 2013. Renner Bio. QuantumScape seeks to recover fees for Ms. 8 Renner at a billing rate of $1,010/hour. Tsatalis Decl. ¶ 16.d. Mr. Gulyako joined Wilson Sonsini in 2019 and is an associate in the firm’s New York United States District Court Northern District of California 9 10 office. Tsatalis Decl. ¶ 16.b; see also Tsatalis Decl. Ex. 10 (“Gulyako Bio”), ECF No. 49-11. It is 11 unclear from QuantumScape’s filings when Mr. Gulyako graduated from law school. 12 QuantumScape seeks to recover fees for Mr. Gulyako at a billing rate of $940/hour. Tsatalis Decl. 13 ¶ 16.b. 14 Ms. Diles is an associate in Wilson Sonsini’s New York office. Tsatalis Decl. ¶ 16.c; see 15 also Tsatalis Decl. Ex. 11 (“Diles Bio”); ECF No. 49-12. She graduated magna cum laude from 16 New York University Law School in 2017. Diles Bio. QuantumScape seeks to recover fees for 17 Ms. Diles at a billing rate of $875/hour. Tsatalis Decl. ¶ 16.c. 18 In addition to the attorneys above, QuantumScape was represented by four support staff. 19 Tsatalis Decl. ¶¶ 16.e., 20. QuantumScape seeks to recover fees for the support staff at rates 20 ranging from $250/hour to $500/hour. Id. 21 QuantumScape argues that these rates are reasonable because (1) they reflect the skills and 22 experience of the particular attorney and the firm’s assessment of market rates for attorneys at 23 comparable law firms and (2) are consistent with billing rates at “comparable law firms” in the 24 Bay Area according to a survey by Price Waterhouse. Tsatalis Decl. ¶ 17. Riley responds that 25 QuantumScape has not demonstrated that its rates are reasonable because QuantumScape relies 26 solely on the Tsatalis Declaration. Opp’n 7. Riley notes that QuantumScape provides no 27 affidavits from other attorneys and does not rely on rate determinations in other cases. Id. Riley 28 asks that the Court reduce QuantumScape’s rates by a third. Id. at 8. 7 United States District Court Northern District of California 1 The Court agrees with Riley that QuantumScape has not demonstrated that its requested 2 rates are comparable to those prevailing in the community. Ms. Tsatalis asserts in her declaration 3 that the rates “reflect the rates that were billed to and paid by firm clients (including Respondent, 4 with a 10% discount” and are based on Wilson Sonsini’s “assessment of the market rates for 5 attorneys and staff at firms of similar size and reputation.” Tsatalis Decl. ¶ 17. But a law firm’s 6 own billing rates are not the only factor considered, and Ms. Tsatalis provides no information 7 about what the firm’s assessment of market rates entailed. Nor does she provide examples of any 8 rates other than those that Wilson Sonsini charged in this case or any comparable awards in the 9 Northern District of California. Ms. Tsatalis also asserts that the rates are reasonable because they 10 are “consistent with hourly rates for attorneys with comparable seniority” charged by “comparable 11 law firms in the San Francisco Bay Area and Silicon Valley” according to Price Waterhouse’s 12 survey of 2022 billing rates. Tsatalis Decl. ¶ 17. But Ms. Tsatalis provides no details about what 13 “comparable law firm” means or what these comparable law firms charge. Nor does she attach the 14 survey to her declaration. 15 Tellingly, the cases QuantumScape cites in its briefing show lower prevailing rates in the 16 community than the rates QuantumScape requests. Carter v. Jai-Put Enter. Inc., No. 18-CV- 17 06313-DMR, 2022 WL 4371503, at *11-13 (N.D. Cal. Sept. 21, 2022) (finding that rates of $850 18 for lead counsel who was a 1988 law graduate, $325 for a 2014 law graduate, $300 for a 2019 law 19 graduate, and $165 for a paralegal were reasonable); Andrews v. Equinox Holdings, Inc., 570 F. 20 Supp. 3d 803, 807-08 (N.D. Cal. 2021) (finding that rates of $1,250 for the founding partner of a 21 nationally recognized civil rights law firm who was a 1962 law graduate, $875 for a partner who 22 was a 1997 law graduate, $600 for a senior counsel who was a 2010 law graduate, $350 for an 23 associate who was a 2018 law graduate, and $240 for a paralegal clerk were reasonable); Hydros 24 Bottle LLC v. Stephen Gould Corp., No. 16-CV-04077-JST, 2017 WL 3453350, at *8-9 (N.D. Cal. 25 Aug. 10, 2017) (finding that rates of $735-$755 for a Principle with 20 years of litigation 26 experience and $630-$695 for a seventh-year associate were excessive). 27 28 Riley argues that the Court should determine reasonable hourly rates by reference to the “Laffey matrix” or by making a 1/3 cut in all rates. Opp’n 7-8. The Court finds neither proposal 8 1 viable. The Laffey matrix is “an inflation-adjusted grid of hourly rates for lawyers of varying 2 levels of experience in Washington, D.C.” See Prison Legal News v. Schwarzenegger, 608 F.3d 3 446, 454 (9th Cir. 2010) (citations omitted). The Ninth Circuit has explained that “just because 4 the Laffey matrix has been accepted in the District of Columbia does not mean that it is a sound 5 basis for determining rates elsewhere, let alone in a legal market 3,000 miles away.” Id. 6 Accordingly, this Court declines to use the matrix. The Court likewise declines Riley’s proposal 7 to make a blanket 1/3 cut, as Riley has not made any attempt to show that the resulting rates reflect 8 the prevailing rates in the District. United States District Court Northern District of California 9 The Court finds the rates in Andrews, a case cited by QuantumScape, informative. The 10 Andrews court determined that the requested 2021 rates were reasonable based on the opinion of 11 an expert with “extensive experience in the area of attorney billing rates in this district” who “has 12 been widely relied upon by both federal and state courts in Northern California . . . in determining 13 reasonable billing rates.” 570 F. Supp. 3d at 807. The Court finds the analysis in Andrews 14 persuasive and representative of rates awarded in comparable cases in the Northern District of 15 California. See Simon v. Maple Beach Ventures LLC, No. 21-CV-01005-PJH, 2021 WL 1907821, 16 at *4 (N.D. Cal. May 12, 2021) (“Courts also may rely on decisions by other courts awarding 17 similar rates for work in the same geographical area by attorneys with comparable levels of 18 experience.” (citing Nadarajah v. Holder, 569 F.3d 906, 917 (9th Cir. 2009))). The Court 19 recognizes that the Arbitrator approved the rates requested by QuantumScape’s counsel, but notes 20 that the order only summarily accepts the proffered rates as reasonable and does not discuss 21 comparable rates in the District. This Court is not bound by the Arbitrator’s decision on 22 reasonable rates. The Court applies the following rates based on comparators from Andrews: 23 24 25 26 27 28 9 1 2 3 Attorney Requested Rate Marina Tsatalis Partner Class of 1992 $1,430 Matthew Gorman Of Counsel Class of 2010 Alison Renner Associate Class of 2013 Neil Gulyako Associate Unknown Class Joined Firm in 2019 Heather Diles Associate Class of 2017 Support Staff $1,010 Andrews Comparator: Rate Partner Class of 1997: $875 4 5 6 7 8 9 10 United States District Court Northern District of California 11 12 13 14 15 $1,010 $940 $875 $250-$500 16 17 18 Senior Counsel Class of 2010: $600 Senior Counsel Class of 2010: $600 Associate Class of 2018: $350 Associate Class of 2018: $350 Paralegal Law Clerk: $350 Applied Rate $1050 (increased from Andrews comparator rate in recognition of position as head of firm’s employment and trade secret litigation practice) $600 $600 $350 $350 $240 2. Number of Hours An attorney fee award should include compensation for all hours reasonably 19 spent. Ketchum, 24 Cal. 4th at 1133. “Reasonably spent means padding in the form of inefficient 20 or duplicative efforts is not subject to compensation.” Rey v. Madera Unified Sch. Dist., 203 Cal. 21 App. 4th 1223, 1243 (2012) (quoting Ketchum, 24 Cal. 4th at 1132) (internal quotations omitted). 22 The proponent of the fee request “must prove the hours sought were reasonable and necessary.” 23 Id. (citing El Escorial Owners’ Assn. v. DLC Plastering, Inc. 154 Cal. App. 4th 1337, 1366 24 (2007)). 25 Before turning to the parties’ substantive arguments, the Court notes that Riley correctly 26 identifies that the Fees Chart submitted with QuantumScape’s motion includes a greater number of 27 hours than QuantumScape’s bills reflect. Compare Tsatalis Decl. ¶ 20.3, ECF No. 49-1, with 28 Tsatalis Decl. Exs. 2-8, ECF Nos. 49-3 – 49-9. QuantumScape explains in its Reply that it 10 1 incorrectly summed its hours when drafting the Fees Table. Reply 2-3. QuantumScape submits a 2 corrected Fees Table with its Reply that reflects 159.4 total attorney hours—matching the number 3 of hours in its invoices as calculated by Riley and confirmed by the Court. See Tsatalis Suppl. 4 Decl. ¶ 5, ECF No. 55-1. 5 6 underlying arbitration were necessary to oppose Riley’s Petition to Vacate. Mot. 4-5. 7 QuantumScape states that it primarily staffed the matter with one partner and one associate and 8 relied on other associates and paralegals only as necessary to handle discrete legal issues. Id. at 5. 9 QuantumScape also notes that its fees request accounts for a 10% discount provided by Wilson 10 11 United States District Court Northern District of California QuantumScape contends that the hours its counsel spent since the Final Award in the Sonsini. Id. at 6. Riley responds that the number of hours requested is excessive and duplicative given “the 12 small arbitration record” and “the issues presented in the motion to vacate”—many of which 13 “were also raised before the Arbitrator.” Opp’n 5. Riley asks the Court to award only 50% of the 14 hours QuantumScape requests for its work drafting its Cross-Motion and Opposition and 15 preparing for oral argument. Id. at 6. Riley also asks the Court to deny QuantumScape’s request 16 for reimbursement of fees accrued during the arbitration, after oral argument before this Court, and 17 preparing for a case management conference that did not happen. Id. at 6-8. 18 QuantumScape replies that the hours it spent were necessary and reasonable. 19 QuantumScape argues that the time it spent briefing and preparing for oral argument was 20 necessary and reasonable given the number of issues Riley raised in his Petition. Reply 3. 21 QuantumScape argues that the Court should order Riley to pay QuantumScape’s fees for the 22 underlying arbitration because the relevant invoice was issued after the Arbitrator issued the Final 23 Award. Id. at 5. Finally, QuantumScape argues that the Court should order Riley to pay its fees to 24 prepare for the case management conference because QuantumScape assumed it had to prepare for 25 the conference until the Court took it off calendar. Id. 26 The Court addresses the fees QuantumScape requests in order of accrual. 27 The Court finds that QuantumScape should be reimbursed for its fees in the underlying 28 arbitration. Riley argues—citing no authority—that this Court “does not have authority” to award 11 1 such fees. Opp’n 9. But Riley does not address why such fees would fall outside of the fees 2 provisions of the Separation Agreement and Consulting Agreement. Nor does Riley address why 3 such fees should be denied despite California Civil Code § 1717, which entitles a party to 4 reasonable attorney’s fees in any action on a contract, where the contract specifically provides for 5 attorneys’ fees and costs. Accordingly, the Court finds that QuantumScape is entitled to these 6 fees. The Court next finds that the hours QuantumScape spent briefing its Cross-Motion and United States District Court Northern District of California 7 8 Opposition are generally reasonable. Riley primarily argues that QuantumScape’s attorneys 9 should have been able to perform their tasks in less time. See Opp’n 6. He asks that the Court 10 impose “at least a 50% reduction in billable time” for these tasks. But Riley raised many issues in 11 his Petition and fiercely sought to vacatur of the arbitration award. “A defendant cannot litigate 12 tenaciously and then be heard to complain about the time necessarily spent by the plaintiff in 13 response.” Peak-Las Positas Partners v. Bollag, 172 Cal. App. 4th 101, 114 (2009) (internal 14 quotation marks omitted). And like other courts in this District, this Court is reluctant to second- 15 guess the staffing decisions of the prevailing party’s counsel, given that the approach taken by 16 counsel was successful. See, e.g.., Cruz v. Starbucks Corp., No. C-10-01868 JCS, 2013 WL 17 2447862, at *8 (N.D. Cal. June 5, 2013). The Court therefore declines Riley’s invitation to 18 impose a blanket 50% cut to QuantumScape’s requested hours. But the Court agrees with Riley that certain of the hours requested for Ms. Tsatalis are 19 20 unreasonable. Ms. Tsatalis seeks 38.7 hours for work related to the “Petition to Vacate Arbitration 21 Award/Cross-Petition to Confirm Arbitration Award,” Tsatalis Supp. Decl. ¶ 5, including about 22 14.3 hours of preparation time for oral argument,1 see Tsatalis Decl. Exs. 6-7. This is on top of 23 74.9 hours contributed by Mr. Gorman, an Of Counsel in the firm’s employment litigation practice 24 who has been practicing law for over a decade. See Tsatalis Supp. Decl. ¶ 5; Gorman Bio. The 25 Court finds the request for Ms. Tsatalis’s time to be excessive for an attorney of her vast skill and 26 27 28 Ms. Tsatalis’s final entry regarding hearing preparations lists 5.6 hours for “prepare for and represent client at hearing on Petition to Vacate and Confirm Arbitration Award; telephone calls re same.” Tsatalis Decl. Ex. 7. The hearing was about 1.2 hours long. See Minute Entry, ECF No. 36. The Court therefore attributes 4.4 hours of this entry to hearing preparations. 12 1 United States District Court Northern District of California 1 experience. The Court finds 25 total hours for Ms. Tsatalis’s work related to the Petition to 2 Vacate Arbitration Award and Cross-Petition to Confirm Arbitration Award to reflect a reasonable 3 number of hours. 4 The Court next addresses QuantumScape’s request for time billed shortly after oral 5 argument. The Court agrees with Riley that QuantumScape has not shown that the hours spent on 6 these tasks were “reasonable and necessary.” Rey, 203 Cal. App. 4th at 1244. Riley identifies that 7 Ms. Renner, an attorney who did not work on the Opposition to the Petition or Cross-Motion to 8 Confirm, billed 8.9 hours for work done in the two days immediately after oral argument. See 9 Opp’n 6. Riley also identifies that Ms. Tsatalis billed 1.6 hours of work shortly after the hearing. 10 See id. QuantumScape does not address in its Reply why these hours were reasonable and 11 necessary. Accordingly, the Court finds that QuantumScape has not met its burden to show that it 12 is entitled to recover fees for these hours. 13 Finally, the Court addresses QuantumScape’s request for fees to prepare for the case 14 management conference that the Court vacated. QuantumScape requests 3.5 hours for Ms. 15 Tsatalis and 0.9 hours for Mr. Geritano for time spent preparing for the case management 16 conference. See Tsatalis Decl. ¶ 20.e; Tsatalis Supp. Decl. ¶ 7. The Court finds that these hours 17 were not reasonable and necessary given that the Court issued judgment before the parties ever 18 submitted a case management statement. * 19 20 21 recover fees in the total of $92,101 in accordance with the following hours and rates: 23 25 26 27 28 * With the reductions discussed above, the Court finds that QuantumScape is entitled to Marina Tsatalis $1050 2.7 Attorney Hours: Matthew Alison Gorman Renner $600 $600 1.1 0 Neil Gulyako $350 0 Heather Diles $350 1 25 74.9 6.4 22.2 22 24 * Rate Arbitration (Hours) Petition to Vacate/CrossMotion to Confirm (Hours) 0 13 1 2 3 Case Management Conference (Hours) Total Hours Total Fees 0 0 0 0 0 27.7 $29,085 76 $45,600 0 $0 6.4 $2,240 23.2 $8,120 4 5 6 7 8 9 10 United States District Court Northern District of California 11 12 13 14 15 Rate Arbitration (Hours) Petition to Vacate/CrossMotion to Confirm (Hours) Case Management Conference (Hours) Total Hours Total Fees Anthony Geritano $240 0 Support Staff Hours: Candida Lee Ann Malferrari Almeida $240 $240 0 0 Tracy Fritz $240 0 4.7 19.3 3.4 2 0 0 0 0 4.7 $1,128 19.3 $4,632 3.4 $816 2 $480 16 C. 17 18 19 20 21 22 23 24 25 26 27 Costs QuantumScape requests $2,309.95 in costs for legal research database fees and certain shipping, copying and printing, filing, and court reporter fees. QuantumScape contends that “[its] right to reimbursement of costs is vested by contract . . . and also reflected in Rule 54(d) of the Federal Rules of Civil Procedure.” Mot. 7. Riley does not dispute that costs are permitted under the parties’ agreements. Riley argues, however, that QuantumScape is not entitled to costs here because (1) QuantumScape waived its right to costs by failing to file a separate bill of costs as required by Civil Local Rule 54-1 and (2) the costs QuantumScape seeks are nontaxable. Opp’n 9. QuantumScape agrees that it seeks only nontaxable costs. Reply 5. QuantumScape argues that because its costs are nontaxable, it did not need to submit a bill of costs. Id. Under Civil Local Rule 54-1 “a prevailing party claiming taxable costs must serve and file a bill of costs” within 14 days of entry of judgment. Civil L.R. 54-1(a). The Rule states that 28 14 1 “[a]ny party who fails to file a bill of costs within the time period provided by this rule will be 2 deemed to have waived costs.” Civil L.R. 54-1(c). Here, QuantumScape does not seek any 3 taxable costs, and therefore had nothing to put on a bill of costs submitted under Rule 54-1(a). 4 The issue is thus whether QuantumScape’s failure to submit a blank bill of costs under Rule 54- 5 1(a) bars QuantumScape from seeking nontaxable costs that the parties do not dispute are 6 permitted under their contracts. United States District Court Northern District of California 7 The Court finds that QuantumScape did not waive its right to seek nontaxable costs by 8 failing to file a bill of costs. Rule 54-1(c) broadly states that any party who fails to file a bill of 9 costs waives costs. Civil L.R. 54-1(c). But read together with Rule 54-1(a), which requires a bill 10 of costs for taxable costs, it is clear that Rule 54-1(c) applies to parties who seek taxable costs that 11 should have been listed on a bill of costs. The Court thus concludes that Rule 54-1(c) does not 12 result in waiver here because QuantumScape seeks only nontaxable costs. Accordingly, the Court 13 finds that QuantumScape is entitled the costs it requests. 14 D. 15 QuantumScape requests post-judgment interest under 28 U.S.C. § 1961 on any attorney’s Post-Judgment Interest 16 fees and costs through the actual payment date. Mot. 1. Riley does not oppose this request. 17 QuantumScape’s request for post-judgment interest is therefore granted. 18 E. 19 In his opposition, Riley asks the Court to stay under Federal Rule of Civil Procedure 62(h) Deferral of Enforcement 20 “enforcement of the February 13, 2023 Order until at least 30 days after the date on which the 21 Court enters its order on QuantumScape’s request for attorneys’ fees and costs.” Opp’n 10. Riley 22 seeks this relief because it “will give Riley an opportunity to know the total amount of the order 23 before enforcement proceedings begin.” Id. QuantumScape opposes the request, arguing that 24 “there is no reason the [Riley] cannot begin satisfying the Judgment before knowing the final 25 amount of additional fees and costs owed.” Reply 5. 26 “Federal Rule of Civil Procedure 62(h) provides that when a court has entered final 27 judgment, it may upon its discretion, ‘stay enforcement of that judgment until the entering of a 28 subsequent judgment or judgments.’” AmerisourceBergen Corp. v. Dialysist W., Inc., 465 F.3d 15 1 946, 955 (9th Cir. 2006) (quoting Fed. R. Civ. P. 62(h)). The Court denies Riley’s request for a 2 stay here. 3 IV. 4 5 ORDER For the foregoing reasons, IT IS HEREBY ORDERED that QuantumScape’s motion is GRANTED IN PART as follows: 6 1. QuantumScape is AWARDED $92,101 in attorneys’ fees. 7 2. QuantumScape is AWARDED $2,309.95 in costs. 8 3. QuantumScape is AWARDED post-judgment interest on the attorney’s fees and costs 9 through the date of payment. 10 United States District Court Northern District of California 11 12 13 Dated: August 15, 2023 ______________________________________ BETH LABSON FREEMAN United States District Judge 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 16

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