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`NIMALKA R. WICKRAMASEKERA (SBN: 268518)
`nwickramasekera@winston.com
`DAVID P. DALKE (SBN: 218161)
`ddalke@winston.com
`LEV TSUKERMAN (SBN: 319184)
`ltsukerman@winston.com
`WINSTON & STRAWN LLP
`333 S. Grand Avenue
`Los Angeles, CA 90071-1543
`Telephone: (213) 615-1700
`Facsimile: (213) 615-1750
`
`BRIAN J. NISBET (Pro Hac Vice)
`bnisbet@winston.com
`SARANYA RAGHAVAN (Pro Hac Vice)
`sraghavan@winston.com
`WINSTON & STRAWN LLP
`35 West Wacker Drive
`Chicago, IL 60601-9703
`Telephone: (312) 558-5600
`Facsimile: (312) 558-5700
`
`CORINNE STONE HOCKMAN (Pro Hac Vice)
`chockman@winston.com
`WINSTON & STRAWN LLP
`1111 Louisiana Street, 25th Floor
`Houston, TX 77002-5242
`Telephone: (713) 651-2600
`Facsimile: (713) 651-2700
`
`Attorneys for Defendants
`ALPHATEC HOLDINGS, INC. AND ALPHATEC SPINE, INC.
`
`Plaintiff,
`
`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF CALIFORNIA – SAN DIEGO DIVISION
`Case No. 18-CV-00347-CAB-MDD
`NUVASIVE, INC., a Delaware
`
`corporation,
`MEMORANDUM OF POINTS AND
`
`AUTHORITIES IN SUPPORT OF
`DEFENDANTS’ MOTION FOR FEES
`
`AND COSTS
`v.
`
`
`ALPHATEC HOLDINGS, INC., a
`
`Judge: Hon. Cathy Ann Bencivengo
`Delaware corporation, and
`Courtroom: 4C
`ALPHATEC SPINE, INC., a
`California corporation,
`
`
`PER CHAMBERS RULES, NO ORAL
`Defendants.
`ARGUMENT UNLESS SEPARATELY
`ORDERED BY THE COURT
`
`
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`MEMO OF PS & AS ISO DEFENDANTS’ MOTION FOR FEES AND COSTS
`CASE NO. 18-CV-00347-CAB-MDD
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`TABLE OF CONTENTS
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`Page
`INTRODUCTION ................................................................................................ 1
`I.
`BACKGROUND .................................................................................................. 1
`II.
`III. ALPHATEC’S FEES AND COSTS TO RESPOND TO NUVASIVE .............. 5
`IV. CONCLUSION .................................................................................................... 7
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`
`TABLE OF AUTHORITIES
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` Page(s)
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`Cases
`IPS Grp., Inc. v. Duncan Sols., Inc.,
`No. 15-cv-1526-CAB (MDD), 2018 U.S. Dist. LEXIS 140046 (S.D.
`Cal. Aug. 17, 2018) .................................................................................................... 5
`LG Corp. v. Huang Xiaowen,
`No. 16-CV-1162 JLS (NLS), 2017 WL 3877741 (S.D. Cal. Sept. 5,
`2017) .......................................................................................................................... 6
`Matlink, Inc. v. Home Depot U.S.A., Inc.,
`No. 07CV1994-DMS BLM, 2008 WL 8504767 (S.D. Cal. Oct. 27,
`2008) .......................................................................................................................... 6
`Zest IP Holdings, LLC v. Implant Direct Mfg., LLC,
`No. 10-CV-0541-GPC WVG, 2014 WL 6851612 (S.D. Cal. Dec. 3,
`2014) .......................................................................................................................... 6
`Other Authorities
`Judge Bencivengo Chamber Rule IV ............................................................................. 5
`Local Cir. R. 83.3(g) ....................................................................................................... 5
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`I.
`
`INTRODUCTION
`At close of business on Friday, December 6, 2019, NuVasive, by and through its
`counsel, Wilson Sonsini Goodrich & Rosati P.C. and Hilgers Graben PLLC, filed a
`motion asking this Court to publicly censure and disqualify Alphatec’s outside counsel
`and Alphatec’s General Counsel. (Doc. No. 218.) NuVasive’s motion was filed in
`violation of the local rules, nearly two years into this case, two weeks before discovery
`was set to close (with key depositions occurring within one week), and just over one
`month before dispositive motions were due. The timing of NuVasive’s motion was
`intentional and disruptive. NuVasive’s decision to wait until the final stretch of
`discovery caused maximum distraction, even though NuVasive claimed Alphatec’s
`alleged misdeeds dated back to the case’s inception. (Doc. No. 218 at 17.) And the
`consequences of NuVasive’s motion, were it to have been granted, cannot be
`understated – Alphatec would have been forced to replace its outside counsel years into
`the litigation and a few months before trial, and turn over its otherwise privileged
`communications to a Special Master for review and judgment. The cost to Alphatec
`would have been tremendous, and Alphatec would have been severely and unfairly
`disadvantaged in this and other litigations against NuVasive.
`But, after a thorough review, the Court denied NuVasive’s motion, determined it
`was meritless and frivolous, and authorized Alphatec to file a motion to recover its fees
`and costs expended in response. (Doc. No. 232.) After unsuccessfully attempting to
`informally reach agreement and seek monetary recovery from NuVasive, Alphatec now
`moves the Court and respectfully submits its fees and costs expended to respond to
`NuVasive’s motion.
`II. BACKGROUND
`On December 6, 2019, NuVasive, by and through its counsel, Wilson Sonsini
`Goodrich & Rosati P.C. and Hilgers Graben PLLC, filed an Ex Parte Motion for
`Protective Order and Appointment of Special Master. (Doc. No. 218.) In its 300+ page
`motion, NuVasive charged Alphatec’s counsel and Alphatec’s General Counsel with
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`violations of various contractual and ethical obligations based on 1) the false claim that
`Alphatec’s outside counsel and Alphatec’s Executive Vice President, Clinical Strategies
`were texting each other NuVasive’s confidential and privileged information during a
`deposition, solely because the two women were (allegedly) seen using their phones at
`the same time, and 2) Alphatec’s counsel asking a current NuVasive employee three
`innocuous questions during that deposition, about his duties and responsibilities. (Doc.
`No. 218 at 19-22, Doc. No. 218-18.)
`Based on that conduct, NuVasive demanded, almost two years into the litigation
`and at a critical time in the case, that the Court enter “a protective order prohibiting the
`Former NuVasive Employees from disclosing any of NuVasive’s Protected
`Information to Alphatec or its counsel, prohibiting Alphatec’s counsel from
`communicating ex parte with the Former NuVasive Employees on any matter related
`to this litigation, and prohibiting Alphatec’s counsel from representing any of the
`Former NuVasive Employees in any matter related to this litigation.” (Doc. No. 218
`at 2.) The Former NuVasive Employees at issue included Alphatec’s General Counsel
`and Chairman and CEO. NuVasive also demanded that “all communications” between
`Alphatec’s counsel and/or General Counsel and certain former NuVasive employees be
`turned over to a Special Master for review and judgment. (Doc. No. 218 at 36.)
`After receiving NuVasive’s motion (which was filed without any notice
`whatsoever), Alphatec and its counsel immediately began to formulate a response.
`NuVasive’s motion required Alphatec’s immediate and exclusive attention because, had
`it been granted, the consequences would have been both broad and severe.
`First, as the Court recognized, Alphatec’s current counsel would have been
`disqualified for mishandling privileged information and violating various ethical
`obligations—a serious charge for any lawyer to carry forward. (Ex. 1, 12/12/2019 Mot.
`Hr’g Tr. at 4-5, 13.)
`Second, otherwise privileged communications regarding the litigation between
`Alphatec’s counsel and certain former NuVasive employees now at Alphatec, including
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`the General Counsel and Chairman and CEO, would have been exposed and turned over
`to a Special Master for review and judgment.
`Third, and most importantly, Alphatec would have been deprived of its choice of
`counsel and would have been forced to find replacement counsel capable of
`immediately taking over an unduly complicated patent infringement case. In a very
`short period of time, new counsel would have had to learn two years of nuanced and
`technical background in order to complete fact and expert discovery, draft dispositive
`and Daubert motions, and prepare for trial only a few short months away. Worse,
`Alphatec’s new counsel would have been forced to litigate this case without being able
`to communicate with Alphatec’s General Counsel, Chairman and CEO (who NuVasive
`has made a central witness in this patent infringement suit), and other former NuVasive
`employees that NuVasive has implicated in this suit, unless NuVasive’s counsel or the
`Court were present.
`Further, as explained in Alphatec’s opposition papers, if NuVasive’s motion were
`granted, the impact would have been far-reaching—there are nearly ten other lawsuits
`pending, brought mostly by NuVasive, resulting, directly or indirectly, from the
`departure of Alphatec’s current Chairman and CEO from NuVasive. (Doc. No. 225 at
`1; Doc. No. 227 ¶¶ 7-11.) In many of these lawsuits, NuVasive alleges that Alphatec
`exploited improper access to NuVasive’s confidential information. (Doc. No. 225 at 1;
`Doc. No. 227 ¶¶ 7-11.) Any order from this Court granting NuVasive’s requested relief
`would have been used in those cases to gain an unfair tactical advantage over Alphatec.
`And, in addition to being unable to assist Alphatec in the defense of this suit where
`NuVasive has made them central characters, Alphatec’s Chairman and CEO and
`General Counsel, as former NuVasive employees, would likewise have been prohibited
`from communicating with other Alphatec employees or advising Alphatec on these
`myriad litigations without NuVasive or the Court being present.
`On December 9, 2019, Alphatec filed an initial response to NuVasive’s motion
`seeking to stay the litigation and an in-person status conference with the Court.
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`(Doc. No. 222.)
`On December 9, 2019, the Court granted Alphatec’s request for an in-person
`status conference. (Doc. No. 223.) The Court also ordered Alphatec to submit a full
`response to NuVasive’s motion on December 11, 2019. (Id.)
`On December 11, 2019, Alphatec submitted its full response to NuVasive’s
`motion per the Court’s order. (Doc. No. 225.)
`Then, on December 12, 2019, the Court held an in-person hearing on NuVasive’s
`motion. The Court opened:
`
`Where to start? I have to tell you, frankly, coming in here, my primary
`purpose for holding this hearing this morning was to figure out how much
`to sanction NuVasive for bringing this motion, which I think is entirely
`meritless and frivolous. It appears to the Court based on the materials that
`I’ve received and read for this hearing this morning that it was brought
`solely for the purpose of derailing the ability of Alphatec to finalize and
`finish discovery in this case and prepare their dispositive motions and to
`disrupt the Court’s schedule and just take all of my dates and set them
`aside.
`
`(Ex. 1, 12/12/2019 Mot. Hr’g Tr. at 2.)
`After hearing NuVasive’s oral argument, during which NuVasive’s counsel was
`unable to identify any evidence to substantiate NuVasive’s allegations against Alphatec
`and its counsel, the Court concluded:
`
`All right. Thank you. I’ve heard the argument. The request is denied. At
`this late date in this case, knowing all these people have been consulting
`with counsel from the beginning, that you have a protective order in place
`that addressed these issues, that counsel has represented to you that they
`are following their ethical responsibilities, and you have asserted nothing
`more than vague suspicions, and discomfort that has no concrete evidence
`that any violations have taken place, I find it an insult to Alphatec’s counsel
`that you are arguing – Counsel, sit down, because I’m not hearing any more
`argument on this. We’re done.
`. . .
`So the motion for this protective order and for the special master is denied.
`
`(Ex. 1, 12/12/2019 Mot. Hr’g Tr. at 18.)
`Finally, the Court ruled that Alphatec was entitled to its fees and costs associated
`with having to prepare its response to NuVasive’s motion:
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`With regard to a sanction, the Court finds it appropriate to reimburse
`Alphatec for the cost of preparing their opposition to this motion. Be
`conservative, please, with that. But I will award you recovery of the fees
`that you expended to deal with this motion, because the Court finds it
`without merit.
`(Ex. 1, 12/12/2019 Mot. Hr’g Tr. at 21.)
`III. ALPHATEC’S FEES AND COSTS TO RESPOND TO NUVASIVE
`Alphatec has provided the Court the actual total fees and costs of its counsel to
`prepare its opposition to NuVasive’s motion.1 (Nisbet Declaration; Ex. 2.) Alphatec
`respectfully requests that NuVasive be ordered to fully reimburse Alphatec for its actual
`costs and fees in connection with the motion, which Alphatec submits was designed to
`both disrupt and drive up the cost of Alphatec’s defense of this case. This Court has
`discretion in calculating the award. IPS Grp., Inc. v. Duncan Sols., Inc., No. 15-cv-
`1526-CAB (MDD), 2018 U.S. Dist. LEXIS 140046, at *5 (S.D. Cal. Aug. 17, 2018)
`(noting the court has discretion in calculating reasonable fees and does so by
`“determin[ing] the number of hours reasonably expended on the litigation multiplied by
`a reasonable hourly rate.”).
`Hours Expended: As noted, Alphatec had no warning about NuVasive’s
`motion. NuVasive never met and conferred with Alphatec about the specifics. (See
`Local Cir. R. 83.3(g); Judge Bencivengo Chamber Rule IV.) Nor did NuVasive raise
`its impending motion despite the parties holding a telephonic conference with the Court
`less than one hour before NuVasive began filing its motion.
`After being blindsided, Alphatec’s lead counsel, whose ethics and conduct had
`been directly called into question in NuVasive’s baseless motion, took the lead in
`formulating Alphatec’s defense. She was supported by members of the litigation team,
`which primarily included one Partner, one Of Counsel, one mid-level Associate, and
`two first-year Associates. Given the severity of NuVasive’s motion, which NuVasive
`
`1 These fees do not reflect the time of Mr. Craig Hunsaker, Alphatec’s General Counsel,
`who spent several hours preparing a declaration in support of Alphatec’s opposition.
`(Doc. No. 227.)
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`had apparently prepared in secret over the course of a month (Doc. No. 218 at 19-22),
`Alphatec’s counsel focused almost exclusively on rebutting NuVasive’s serious
`allegations, which if entertained by the Court meant dire consequences to Alphatec.
`And in six days, Alphatec reviewed NuVasive’s 300+ page motion, analyzed the
`“evidence” and cases cited therein, evaluated the allegations, conducted its own
`research, drafted an initial response, a separate full 25-page opposition and
`accompanying 10 pages of testimony from Alphatec’s General Counsel, and then
`prepared for a hearing on NuVasive’s motion. In short, the time Alphatec spent
`preparing its response to NuVasive’s deliberately timed and very consequential
`motion—which posed significant risks to Alphatec and included troubling accusations
`against Alphatec and Alphatec’s counsel—was reasonable and necessary.
`Rates: The rates billed by Alphatec’s counsel are market-competitive. Other
`courts have found similar rates to be reasonable. LG Corp. v. Huang Xiaowen, No. 16-
`CV-1162 JLS (NLS), 2017 WL 3877741, at *2 (S.D. Cal. Sept. 5, 2017) (finding billing
`rates that ranged from $130 to $890 an hour to be reasonable as they are in line with
`attorney rates at peer intellectual property firms); Matlink, Inc. v. Home Depot U.S.A.,
`Inc., No. 07CV1994-DMS BLM, 2008 WL 8504767, at *3 (S.D. Cal. Oct. 27, 2008)
`(finding defendants’ rates to be reasonable as they were comparable to other attorneys’
`rates in large, international law firms and counsel who specialize in patent litigation);
`Zest IP Holdings, LLC v. Implant Direct Mfg., LLC, No. 10-CV-0541-GPC WVG, 2014
`WL 6851612, at *6 (S.D. Cal. Dec. 3, 2014) (finding rates reasonable where plaintiffs
`sought “an hourly rate of between $ 170 per hour and $ 895 per hour depending on the
`particular attorney or paralegal” for work by a “multi-state/national law firm” with
`attorneys who specialize in patents).
`Per the Court’s closing instruction inviting Alphatec to be conservative in
`submitting this Motion, Alphatec herein provides the Court with the total fees and costs
`actually required to respond to NuVasive’s meritless motion, without change or
`embellishment. From Alphatec’s perspective, there are three options moving forward
`
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`as to how these fees and costs are addressed: (a) Alphatec pays, (b) Alphatec’s counsel
`pays (i.e., writes off/waives), or (c) NuVasive pays. Alphatec respectfully submits that
`it would be manifestly unfair for Alphatec to pay, as it did nothing to warrant
`NuVasive’s surprise motion, which the Court deemed meritless, insulting, and not based
`on evidence. The only basis for suggesting Alphatec’s counsel contribute (i.e., by
`walking away from fees for time worked) would be to criticize them for the time spent
`seeking to preserve their ability to represent Alphatec in this litigation, to protect their
`privileged communications with Alphatec’s General Counsel and Chairman and CEO,
`and to prevent an unjust order sanctioning their firm without any basis whatsoever.
`Alphatec submits that this too would be an unfair outcome under these circumstances.
`Thus, the only fair result is for NuVasive, a multi-billion-dollar corporation represented
`by an Am Law 100 law firm, to reimburse Alphatec in full for the costs of defending a
`motion it intentionally brought with no notice or good-faith basis, but instead calculated
`to harass and drive up litigation costs while unfairly gaining a strategic advantage by
`disrupting Alphatec’s defense of this case.
`IV. CONCLUSION
`For all the foregoing reasons, Alphatec respectfully requests an order granting it
`$242,118.80 in attorneys’ fees and costs pursuant to Doc. No. 232.
`
`Dated: January 29, 2020
`
`WINSTON & STRAWN LLP
`
`
`
`By: /s/ Nimalka R. Wickramasekera
`NIMALKA R. WICKRAMASEKERA
`BRIAN J. NISBET
`DAVID P. DALKE
`SARANYA RAGHAVAN
`CORINNE STONE HOCKMAN
`LEV TSUKERMAN
`
`Attorneys for Defendants
`ALPHATEC HOLDINGS, INC. AND
`ALPHATEC SPINE, INC.
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`CERTIFICATE OF SERVICE
`I hereby certify that the foregoing document was filed with the Court’s CM/ECF
`system which will provide notice to all counsel deemed to have consented to electronic
`service. All other counsel of record not deemed to have consented to electronic service
`were served with a true and correct copy of the foregoing document by mail on this day.
`I declare under penalty of perjury under the Laws of the United States of America
`that the above is true and correct. Executed this 29th day of January, 2020 at Los
`Angeles, California.
`
`Dated: January 29, 2020
`
`
`
`WINSTON& STRAWN LLP
`
`By: /s/ Nimalka R. Wickramasekera
`NIMALKA R. WICKRAMASEKERA
`
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