On June 22, 2020, United States District Court Judge Analisa Torres ruled that Plaintiff LCS Group, LLC (“LCS”) and its counsel, Stephen Lobbin, and Foundation Law Group LLP, were jointly and severally liable for attorney’s fees in the amount of $133,803.75 to Defendants Shire LLC, Shire Development LLC, Shire PLC, and Haug Partners LLP (collectively, “Defendants”). The Court ruled that LCS and its counsel also missed the deadline to object to the Magistrate Judge’s ruling on attorney’s fees because, instead of objecting to the ruling, Plaintiff improperly appealed to the Second Circuit Court of Appeals.
LCS filed suit against Defendants claiming fraud stemming from a patent dispute. The Court granted Defendants’ motion to dismiss and its motion for sanctions, including payment of reasonable attorney’s fees. The amount of attorney’s fees was referred to Magistrate Judge Aaron for determination. Defendants filed the motion to set the amount of attorney’s fees on April 5, 2019.
On April 10, 2019, Plaintiff LCS appealed to the Second Circuit from the Court’s ruling on the motion to dismiss and the motion for sanctions. On May 29, 2019, Magistrate Judge Aaron issued an order that fixed the amount of attorney’s fees due to Defendants. On June 12, 2019, LCS moved for reconsideration of Judge Aaron’s order, and on June 15, 2019, LCS appealed Judge Aaron’s fee decision to the Second Circuit. However, on January 3, 2020, the Second Circuit found that it lacked jurisdiction to hear the appeal of Judge Aaron’s decision, because it was not properly appealable. The ruling was either a report and recommendation of a dispositive issue by a magistrate judge, or a ruling on a non-dispositive issue, neither of which could be heard by the Second Circuit. On January 13, 2020, LCS filed objections to Judge Aaron’s rulings on attorney’s fees.
Judge Torres found that LCS and its attorneys failed to timely file the objections to Magistrate Judge Aaron’s award of attorney’s fees. Judge Torres ruled that because the original order from Judge Aaron was issued on May 29, 2019, LCS had 14 days from then to object to the rulings under FRCP 72. The Court ruled that LCS and its counsel’s misunderstanding of statutory deadlines was not a ground for receiving an extension of time to object to the Court’s findings.
The Court separately determined that a motion for attorney’s fees posed “dispositive questions” for the Court. It noted that the Second Circuit expressly stated that this issue was “unsettled,” but found the arguments in favor of a “dispositive” issue more persuasive. Nevertheless, this assessment did not impact the timing of LCS’s objections under FRCP 72.
The case is LCS Grp., LLC v. Shire LLC, No. 18-cv-2688 (S.D.N.Y. June 22, 2020).
