Free Letter - District Court of Delaware - Delaware

Case 1:06-mc-00203-***-MPT

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Bouchard Margules & Friedlander
A PROFESSIONAL CORPORATION

Suite I 4OO
222 Delaware Avenue

Wilmington, Delaware I 98O I
(3O2) 573-35OO FAX (3O2) 573-35O 1

ANDRE G. BOUCHARD
JOEL FRIEDLANDER David J. Margules

JoHN M" SEAMAN

DOM.NICK T GATTUSO James G. McMillan, mi
Sean M Brennecke M.

March 6,2007

Bv CM/ECF and Hand Delivery The Honorable Mary Pat Thynge

United States Magistrate Judge United States District Court for the District of Delaware
844 North King Street
Wilmington, Delaware 19801

Re:

Kentucky Speedway. LLC y. NASCAR, et aL C.A. No. 06-mc-203 (***)

Dear Judge Thynge:

Before the Court is a rare breed of a motion for attorney's fees. Dover Motorsports, Inc.

("Dover") asks this Court to sanction Kentucky Speedway, LLC ("Kentucky") on unprecedented
grounds--first, counterintuitively, that Kentucky be sanctioned for having prevailed on two

different motions; second, that it pay sanctions because Dover was compelled to prepare and file
briefing that was ordered by this Court.
I. Applicable Facts

As this Court is aware, Kentucky served a subpoena on Dover issued out of this Court on

May 30, 2006, asking for approximately 34 categories of documents. After objecting to the
subpoena, counsel for Dover and counsel for Kentucky negotiated in good faith to try to reach

agreement on the subpoena. As part of that agreement, Dover requested that Kentucky reissue
its subpoena without prejudice on 9 narrower categories. The agreement captured in the second subpoena, however, fell apart when Dover would not agree that Kentucky could request more documents from Dover after the defendants in the underlying case completed their production.
After the defendants substantially completed their production, Kentucky went back to Dover

asking approximately 22 categories of documents based on both the first and second subpoenas. When Dover still objected, Kentucky filed a Motion to Compel. (D.I. 1) That Motion was to

compel production on the first and second subpoenas. No other subpoena is at issue.
Immediately after filing the Motion to Compel, Judge Jordan convened a teleconference

on October 26, 2006, asking the parties why the Eastern District of Kentucky should not hear this matter. Kentucky responded that it had no objection. Dover, however, objected, and the Court
ordered briefing on the matter. At that same hearing, Dover objected to Kentucky's Motion to

Seal part of the Motion containing information designated highly confidential material by defendants in the underlying case. The Court overruled Dover's objections to seal.

Case 1:06-mc-00203-***-MPT
The Honorable Mary Pat Thynge
March 6,2007
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Dover now asks for over $25,000 in attorney's fees for (1) the two subpoenas that were the basis of Kentucky's Motion to Compel; (2) briefing on the Motion to Transfer that this Court ordered; and (3) briefing on the Motion to Strike after this Court ordered certain material sealed. All three requests have no basis in fact or law, and Kentucky requests its reasonable attorney's
fees for having to respond to Dover's request for attorney's fees.
II. Applicable Law

This Court should not award attorney's fees to Dover under Rule 11,26, 37,45, or any

other Rule or statute. Kentucky has been unable to find a single case where a court awarded
attorney's fees to a party that lost a discovery motion.
Rule 11

With Dover's objections to the subpoenas, it served a Rule 11 motion on Kentucky. It argued that the subpoenas were overbroad and vague, among other reasons. This Court however, rejected Dover's arguments. To prevail under Rule 11, this Court not only must find that the motion was wrong. It must find that the motion was "patently unmeritorious or frivolous." Likewise, for both the Motion to Transfer and the Motion to Strike, this Court ruled initially for Kentucky. Indeed, with respect to the Motion to Transfer, the Court ordered briefing on the issue. No sanctions are warranted under Rule 11 - "We have repeatedly said that Rule 11 sanctions are reserved for circumstances where a claim or motion is patently unmeritorious or
frivolous." Arab African Int 7 Bank v. Epstein, 10 F.3d 168, 175 (3d Cir. 1993) (internal quotations omitted).
Rule 45 Under Rule 45(c)(l), a Court may order attorney's fees only as a "sanction."

Furthermore, a sanction under Rule 45 requires a finding of bad faith. See Spencer v. Steinman, 1999 U.S. Dist. LEXIS 23387, *2 (E.D. Pa. Mar. 1, 1999) ("[S]ince Rosen did not knowingly or intentionally cause the violation to occur, the Court cannot conclude that Rosen acted in bad faith and the portion of the Order imposing monetary sanctions on Plaintiffs' counsel must be

vacated."); see also Hampton Forge Ltd. v. Descamps, 2006 WL 469953. *10 (D. N.J. Feb. 23, 2006) (refusing to award sanctions under Rule 45 because plaintiff had a "legitimate basis" for
issuing subpoena); Chambers v. NASCO, Inc., 501 U.S. 32,46 (1991) (attorney's fees award

appropriate only where authorized by statute, party disobeys a direct court order, or has "acted in bad faith, vexatiously, wantonly, or for oppressive reasons"). Rule 45 allows attorney's fees

only for "misuse of a subpoena," Charles Alan Wright & Arthur Miller, 9A Federal Practice and Procedure 2d § 2463 (2006). Not only has Dover not alleged any sufficient bases for a finding
that Kentucky misused a subpoena, this Court--in adjudicating Kentucky's Motion to Compel on the same subject matter--granted the Motion, thereby validating the propriety of Kentucky's

use of the subpoena(s) at issue. Indeed, Dover's argument is that this Court compelled it to produce based upon a vexatious subpoena. Dover does not even argue that Kentucky mis-used a subpoena. Rather, Dover complains of Kentucky's motion with respect to an undisputedly

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The Honorable Mary Pat Thynge
March 6, 2007
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proper subpoena, and by seeking sanctions based thereupon, Dover has confused the difference between a subpoena and a motion related to a subpoena. Rules 26 and 37

These rules are not at issue here. To the extent that the Rules are applicable, or that Dover invokes them, this Court should award attorney's fees to Kentucky. These Rules authorize attorney's fees to the prevailing party on a discovery motion. See Fed. R. Civ. P. 37(a)(4); 26(c). If Dover invokes these Rules, Kentucky requests the Court order Dover to pay for Kentucky's costs and fees in preparing the underlying Motion to Compel. Kentucky will submit an affidavit detailing these costs and fees should the Court grant fees on this basis.
Sanction Against Dover

Kentucky and Dover, through counsel, conferred by telephone with respect to Dover's request for attorney's fees on the bases reviewed herein. During that conference, Kentucky informed Dover that its request for sanctions was meritless based on the frivolity of motions-- when those motions were granted--and the appropriateness of briefing--when a federal court

ordered that briefing. Kentucky also explained the appropriateness of sanctions, in return, if forced to address Dover's meritless sanctions request. Immediately following that meet-andconfer, the parties attended a teleconference with the Court. Dover persisted in its meritless pursuit of attorney's fees. Kentucky has incurred $4,325.00 in responding to this issue. See Declaration of John Seaman, filed herewith. Indeed, its request for fees based on the two Delaware subpoenas are directly contrary to this Court's order that it should not seek reimbursement for issues upon which Kentucky prevailed. Under 28 U.S.C. § 1927 and this Court's inherent power, Kentucky asks this Court to award it $4,325.00 in sanctions for responding to Dover's frivolous requests for sanctions and attorney's fees. See, e.g., In re Prudential Ins. Co. Am. Sales Practice Litigation Agent Actions, 278 F.3d 175, 187-89 (3d Cir.
2002).

Dover is out of line in asking for sanctions against Kentucky for issuing the two

Delaware subpoenas and for responding to the motions as ordered and granted by the Court. This Court should not award Dover its attorney's fees, but instead should order Dover to pay Kentucky's attorney's fees for having to respond to its application.
Respectfully submitted,

John M. Seaman (I.D. No. 3868)
cc: Clerk (by CM/ECF)

Richard G. Placey, Esquire (by CM/ECF and email)

Helen M. Maher, Esquire (by email and U.S. Mail)
Guy I. Wade, III, Esquire (by email and U.S. Mail)
Robert B. Craig, Esquire (by email and U.S. Mail)

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