- Case Type:
- Case Status:
- 19-30791 (5th Circuit, Sep 02,2020) Published
- For the last seven years, Christopher Martin Ridgeway and his former employer have waged scorched-earth lawfare against one another. Ridgeway has lost every battle and incurred millions of dollars in damages, sanctions, and attorney’s fees along the way. In this appeal, Ridgeway asks the court to void one part of his litigation liabilities—namely, a $2 million fee award.. The Court refused his request and affirmed.
- Procedural context:
- In July 2018, after a lengthy evidentiary hearing, the bankruptcy court allowed Stryker’s proof of claim, including fees claimed under the Common Core doctrine. The district court affirmed. Ridgeway timely appealed.
- Between October 2001 and September 2013, Ridgeway worked for Howmedica Osteonics Corporation, a subsidiary of Stryker Corporation (collectively, “Stryker”). Stryker believed that Ridgeway intended to use its confidential business information at his next job. So Stryker sued Ridgeway in the United States District Court for the Western District of Michigan for breach of contract, breach of fiduciary duty, and misappropriation of trade secrets in violation of Michigan’s Uniform Trade Secrets Act, Mich. Comp. Laws §§ 445.1901 et seq. (“MUTSA”). A jury found that Ridgeway had breached his contractual obligations, breached his fiduciary duty, and violated MUTSA. What’s more, the jury found the MUTSA violation was willful and malicious. That’s important because MUTSA permits a “court [to] award reasonable attorney’s fees to the prevailing party” if “willful and malicious misappropriation [of trade secrets] exists.” Mich. Comp. Laws § 445.1905. The Michigan district court entered judgment in Stryker’s favor on March 9, 2016. That gave Stryker 14 days—until the end of March 23—to request attorney’s fees. See Fed. R. Civ. P. 54(d)(2)(B)(i). Come March 23, Ridgeway filed a Chapter 11 bankruptcy petition in the Eastern District of Louisiana. The automatic stay caused by the filing of the petition, see 11 U.S.C. § 362(a), prevented Stryker from making an attorney’s fee request in the Michigan proceedings. Instead, Stryker filed a proof of claim for those unliquidated attorney’s fees, totaling $2,272,369.54, and supported by hundreds of pages of time entries billed by Stryker’s lawyers. But the amount claimed—and the corresponding time entries—do not just relate to the lawyers’ work on the MUTSA claim. Stryker says that, by virtue of the “Common Core” doctrine, its win on the MUTSA claim entitles it to attorney’s fees related to all of its claims against Ridgeway. See Hensley v. Eckerhart, 461 U.S. 424, 435 (1983) (holding a civil-rights plaintiff can recover attorney’s fees for claims that “involve a common core of facts or will be based on related legal theories,” even if only one of those claims arises under a fee-shifting statute). Ridgeway filed his initial objection to Stryker’s proof of claim in December 2016. In that objection, Ridgeway argued that Stryker was entitled to nothing—not MUTSA-related attorney’s fees, and certainly not fees for the other claims. Ridgeway’s view is that fee recovery under the Common Core doctrine “is reserved for fee awards in civil rights cases.” Also in the December 2016 objection, Ridgeway faulted Stryker’s attorneys for writing billing entries that did not sufficiently separate MUTSA work from work on other claims. He also cited 27 time entries that did clearly refer to MUTSA. Fast forward to April 2017. On April 3, the bankruptcy court confirmed a plan of reorganization, effective April 13. The plan gave Ridgeway an additional 30 days from the effective date to levy additional challenges to creditors’ claims. On April 6, the court held a scheduling conference with the intent to narrow the issues in dispute. In line with that aim, the court issued an order the following day attempting to focus the dispute over time entries: Not later than May 15, 2017, debtor shall file and serve on Stryker and Howmedica’s counsel a list of time entries in Stryker and Howmedica’s counsel’s billing statements that it contends are objectionable, specifying for each entry the debtor’s basis for claiming that the debtor should not be liable for the charges relating to the time entry, with a concluding summary of the total amounts for each objection category. Purportedly in response to this April 7 order, Ridgeway filed on May 15 a document styled as a “Supplemental Objection” to Stryker’s proof of claim. The Supplemental Objection included grounds not raised in the December 2016 objection. But the Supplemental Objection did not include any argument about the Common Core doctrine or a list of time entries. Seizing on this omission, Stryker argued that Ridgeway had violated the April 7 order. And it moved to strike the portions of Ridgeway’s December 2016 objections that related to the Common Core doctrine. Ridgeway’s retort was two-pronged: First, he asserted that “[n]owhere in [the April 7] order does the Court command the Debtor to prepare any lists related to its objections concerning the ‘common core’ doctrine.” Second, he argued that it was Stryker’s job to identify the MUTSA entries. The bankruptcy court explained at a hearing in July 2017 that it had in fact expected to receive a list of time entries with objections—including Common Core objections—from Ridgeway by the May 15 deadline. Without that list, the judge was “sitting [t]here three months almost to the day after [the April] status conference with the ball having not moved down the field, perceptibly.” Because Ridgeway did not identify specific time entries to which his Common Core objections applied, the court struck those objections. Ridgeway moved for reconsideration, again arguing that he’d complied with the April 7 order. Because the bankruptcy court had already rejected that exact argument, it denied the motion. In July 2018, after a lengthy evidentiary hearing, the bankruptcy court allowed Stryker’s proof of claim, including fees claimed under the Common Core doctrine.
- Smith, Ho, and Oldham
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