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IN THE UNITED STATES DISTRICT COURT . "oj'

FOR THE NORTHERN DISTRICT OF GEORGI

ATLANTA DIVISION

INSITUFORM TECHNOLOGIES, )

INC., et aI, )
)
Plaintiffs, )
) CIVIL ACTION FILE
v. )
) NO. 1:08-cv-333-TCB
AMERIK SUPPLIES, INC., et aI, )

Defendants, )

v. ) FILED UNDER SEAL


)
COSMIC-SONDERMASCHINENBAU )
GMBH, et aI, )
)
Third-Party Defendants. )

ORDER

This matter is before the Court on Plaintiffs Insituform Technologies,

Inc. and INA Acquisition Corp.'s C'Insituform") motion for reconsideration,

modification, and/or clarification of the Court's February 19, 2010

Order [587], Insituform's submission of attorneys' fees and expenses [580],


and Feldman Gale, P.A.'s emergency motion to withdraw as counsel for

Cosmic Sondermaschinenbau GmbH and Cosmic TopHat LLC [606].

I. Insituform's Motion for Reconsideration

A. Background

On March 3, 2010, Insituform filed its motion for reconsideration,

modification, and or clarification [587]. In its motion, Insituform raises

three issues regarding the February 19, 2010 order.

First, Insituform requests clarification regarding the Court's order

that "[a]ll costs associated with the re-inspection [of Cosmic's Austrian

facility] shall be borne by Cosmic." Insituform asserts that it believes the

Court intended for Cosmic to pay for all of Insituform's fees and expenses

related to the re-inspection, but requests clarification on this issue.

Second, Insituform requests reconsideration of the Court's ruling

regarding Insituform's disclosure of information about Richard Beck. In

the February 19, 2010 order, the Court found that Insituform failed to

adequately disclose information about Beck that was responsive to Cosmic's

discovery requests and sanctioned Insituform $7,500 for its failure to fully

respond and supplement its responses to the discovery requests.

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Insituform asserts that the Court's finding constitutes clear error. It

contends that the Order did not provide which discovery request

(interrogatory nineteen or twenty-one) gave rise to Insituform's duty to

disclose details about Becks' work with Cosmic. Insituform asserts that

(1) Beck did not participate in Insituform's development of the technology

claimed in the patents-in-suit and therefore is not responsive to

interrogatory twenty-one; and (2) Insituform's disclosure of Beck in

response to interrogatory nineteen is consistent with Beck's declaration,

acknowledgement forms, and disqualification briefing stating that Beck was

not employed by Insituform prior to 1998. Further, Insituform asserts that

even if the Court were to find that Insituform failed to provide proper

discovery responses regarding Beck, the Court should not sanction

Insitufornl because Cosmic: (1) never met and conferred with Insituform

regarding its responses; (2) never moved to compel supplemental

responses; and (3) was not prejudiced.

Third, Insituform requests that the Court modify its order regarding

additional destructive testing of a sample Cosmic Top Hat. In the February

19 order, the Court found that Insituform improperly requested Dr. Richard

Parnas to conduct destructive testing on the Top Hat without first seeking

leave of the Court to do so and allowing Cosmic to observe the testing. As a

consequence, the Court ordered Insituform to instruct Parnas to repeat his

tests on another Top Hat sample, should Cosmic so request. The Court

ordered that all costs associated with the test shall be borne by Insituform.

In the motion, Insituform first requests that during the re-inspection,

Cosmic be ordered to produce, at no cost to Insituform, three additional

Top Hat samples for Parnas to test in order to determine whether the Top

Hat is produced in a manner consistent with Cosmic's stated method of

manufacture. Additionally, Insituform requests that the Court reconsider

its order that Insituform pay Cosmic's expenses associated with the

retesting by Parnas. Insituform contends that the testing was only done in

order to confirm Insituform's suspicions regarding the accuracy of Cosmic's

stated method of manufacture for its Top Hats and that as a result,

Insituform should not have to bear Cosmic's expenses associated with a re­

testing of the Top Hats.

Additionally, Insituform requests that the Court order Steve

Vossmeyer to re-conduct destructive testing that he performed on a Top

Hat sample. Insituform contends that Cosmic relies on Voss meyer's

declaration testimony and destructive testing in asserting that its product

does not infringe the patents-in-suit and that Insituform and its expert are

entitled to observe Vossmeyer's testing in order to determine the veracity of

his testimony.

On March 10, 2010, Cosmic filed its response [602]. On March 15,

Insituform filed its reply [612]. In its reply brief, Insituform, for the first

time, requests that the Court modify the order regarding the site re­

inspection as follows: (1) permit Insituform to videotape the inspection

after screens obstructing irrelevant portions of the facility are put in place;

(2) allow Insituform to review computer files to see European documents

that the Court has ordered be produced as Cosmic keeps them in the

ordinary course of its business; (3) require Cosmic to produce three Top

Hats with sheets of fabric and three Top Hats without sheets of fabric; and

(4) allow Insituform to inspect all parts of the manufacturing process to

fully verify Kuebel's testimony regarding production, including verifying

how employees know whether to make Top Hats with or without sheets of

fabric. Additionally, Insituform moves to compel Cosmic to produce

forensically imaged copies of Cosmic's hard drives.

B. Discussion

1. Legal Standard

The Federal Rules of Civil Procedure do not specifically authorize

motions for reconsideration. Local Rule 7.2 provides that motions for

reconsideration are not to be filed "as a matter of routine practice," but only

when "absolutely necessary." LR 7.2E, ND Ga. A party may move for

reconsideration only when at least one of the following three elements

exists: (1) the discovery of new evidence; (2) an intervening development or

change in the controlling law; or (3) the need to correct a clear error or

manifest injustice. Preserve Endangered Areas of Cobb's History, Inc. v.

United States Army Corps of Eng'rs, 916 F. Supp. 1557, 1560 (N.D. Ga.

1995). Because reconsideration may only occur under those limited

circumstances, a motion for reconsideration "is not an opportunity for the

moving party ... to instruct the court on how the court 'could have done it

better' the first time." Id. In other words, a party "may not employ a

motion for reconsideration as a vehicle to present new arguments or

evidence that should have been raised earlier, introduce novel legal

theories, or repackage familiar arguments to test whether the Court will

change its mind." Brodgdon ex rel. Cline v. Nat'l Healthcare Corp., 103 F.

---- ---

Supp. 2d 1322, 1338 (N.D. Ga. 2000); see also Godby v. Electrolux Corp.,

Nos. 1:93-cv-0353-0DE, 1:93-cV-126-0DE, 1994 WL 470220 (N.D. Ga.

May 25, 1994) ("A motion for reconsideration should not be used to

reiterate arguments that have previously been made .... [It is an improper

use of] the motion to reconsider to ask the Court to rethink what the Court

has already thought through-rightly or wrongly.") (citations omitted); In

re Hollowell, 242 B.R. 541, 542-43 (Bankr. N.D. Ga. 1999) ("Motions for

reconsideration should not be used to relitigate issues already decided or as

a substitute for appeal. Such motions also should not be used to raise

arguments which were or could have been raised before judgment was

issued.") (citation omitted).

2. Analysis

After careful consideration, the Court will grant in part and deny in

part Insituform's motion.

The first issue on which Insituform seeks clarification is the Court's

order that Cosmic is to bear all "costs" associated with Insituform's re­

inspection of Cosmic's Austrian facility. The Court apologizes for its lack of

clarity on this issue. In directing Cosmic to pay costs associated with the

re-inspection, the Court orders that Cosmic shall bear the following fees,

expenses, and costs: (1) fees for one attorney, one interpreter, and one

expert appearing on behalf of Insituform; (2) all travel and accommodation

expenses for the aforementioned Insituform representatives; and (3) all

expenses and costs associated with the depositions of Cosmic employees

taken during the site inspection.

The next issue raised by Insituform pertains to the Court's ruling that

Insituform improperly failed to disclose information about Richard Beck.

After careful consideration, the Court concludes that based on the

information before the Court, the Court was correct in concluding that

Insituform failed to properly provide sufficient information regarding

Beck's relationship with Insituform. Specifically, the Court finds that

Beck's relationship as an employee or Insituform and as a "high-level

manager" for an Insituform licensee should have been disclosed in response

to Cosmic's interrogatory nineteen. The Court notes that its conclusion is

not premised on a determination that Beck's declaration is true or false, but

instead turns on the Court's conclusion that information disclosed by

Insituform in its motion to disqualify Beck [536] indicates that Beck's

relationship with Insituform far exceeds a two-week period of employment

as disclosed in Insituform's answer to interrogatory nineteen.

However, Insituform's assertion that Cosmic never met and conferred

regarding the disputed interrogatories and never moved to compel prior to

seeking sanctions cannot be disregarded. These arguments were not raised

in the original briefing on Cosmic's motion for sanctions and thus are

generally considered improper grounds for a motion for reconsideration.

See Brodgdon, 103 F. Supp. 2d at 1338 (a party "may not employ a motion

for reconsideration as a vehicle to present new arguments or evidence that

should have been raised earlier ....") Nonetheless, the Court finds that in

light of the Court's strong policy in favor of the parties making good faith

efforts at resolving discovery disputes prior to seeking intervention from

the Court, the award of sanctions to Cosmic and against Insituform must be

vacated. Thus, Insituform's award of attorney's fees and expenses from

Cosmic will not be reduced by $7,500.

Insituform's next request is that the Court modify its order regarding

the destructive testing of the Cosmic Top Hat. The Court is unpersuaded by

Insituform's arguments as to the motives behind Parnas's testing of the Top

Hat sample and therefore will not modify its order requiring Insituform to

bear Cosmic's fees and expenses incurred in observing Parnas's repeat of

the destructive test on the Top Hat. Cosmic shall be permitted to have one

attorney and one expert present for the testing of the Top Hat sample.

Additionally, the Court will not grant Insituform's request with

respect to Steve Vossmeyer's "testing" of the Top Hat sample. Importantly,

the issues regarding the procedures pertaining to Vossmeyer's "testing"

were not raised as a part of the briefing on Insituform's motion for default

and Cosmic's motion for sanctions. Further, Insituform failed to meet and

confer on this issue prior to raising it with the Court. Thus, this matter is

improperly before the Court as a part of Insituform's motion for

reconsideration, and the Court will not grant Insituform the relief

requested.

Finally, with respect to Insituform's requests regarding additional

details regarding the site re-inspection, the Court finds that due to Feldman

Gale's motion to withdraw, Cosmic has not had an opportunity to properly

meet and confer with Insituform regarding these requests and has not had

an opportunity to respond to those issues newly raised in Insituform's reply

brief. Thus, the Court will reserve ruling on these issues until such a time

as Cosmic's counsel has had an opportunity to respond.

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II. Insituform's Submission of Attorney's Fees and

Expenses

In the February 19 Order, the Court determined that it would award

Insituform attorney's fees on the following issues on which it prevailed:

(1) the December 2008 site inspection; (2) Cosmic's response to

interrogatory twenty-one; (3) Cosmic's allegations in its motions for

sanctions regarding alleged lies by Insituform and its counsel; and (4)

Cosmic's motion to strike.

On February 26, Insituform filed its submission of attorneys' fees and

expenses [581]. On March 5, Cosmic filed its response to the submission of

attorneys' fees and expenses [590] and on March 8, Cosmic filed its

amended response [595]. On March 10, Insituform filed its reply in

support of its submission of attorneys' fees and expenses [601].

As an initial matter, in its reply brief, Insituform requested

clarification from the Court regarding whether the Court was awarding

sanctions pursuant to FED. R. CIV. P. 37 or the Court's inherent powers. On

page sixty-nine of the February 19 Order, the Court indicated that it was

awarding attorney's fees and expenses pursuant to FED. R. CIV.

P.37(b)(2)(C). However, as Insituform correctly points out, the issues

raised by Cosmic in its motion for sanctions regarding Insituform's alleged


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lies did not pertain to any discovery abuse and thus any award of attorney's

fees related to this motion must be subject to the Court's inherent powers.

Thus, the Court will award attorney's fees pursuant to FED. R. Crv. P. 37 and

the Court's inherent powers.

In its submission of attorneys' fees and expenses, Insituform requests

$549,875.49 in attorney's fees and expenses. In its response, Cosmic does

not dispute that Insituform's attorney billing rates are reasonable, that the

work was actually performed, or that Insituform paid for the services.

Instead, Cosmic asserts a number of arguments that it contends require the

requested fees to be reduced.

After careful consideration, the Court finds that the majority of

Cosmic's arguments are without merit. Namely, the Court will not reduce

fees due to allegations that (1) there is a lack of a causal link between the

fees and the failure to comply; (2) descriptions of the work performed are

insufficient to permit the Court to ascertain whether the work was related

to the sanctioned offenses; (3) work would have been performed regardless

of Cosmic's sanctioned conduct; (4) work was redundant or called for

duplication of efforts; and (5) work was actually ministerial in nature.

However, the Court agrees with Cosmic's contention that certain work was

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excessive and unnecessary, and therefore will reduce Insituform's request

for fees by $73,767.52. Additionally, the Court agrees that fees associated

with work by Matthew Braunel and Nadine Herrmann in preparing for

their personal depositions as fact witnesses are not recoverable and thus

Insituform's request for fees will further be reduced by $31,959.

Based on the foregoing, the Court will award Insituform attorney's

fees and expenses in the amount of $444,148.97. Cosmic shall tender

payment to Insituform on or before May 3, 2010.

III. Feldman Gale's Emergency Motion to Withdraw

On March 12,2010, Feldman Gale, P.A., filed an emergency motion to

withdraw as counsel for Defendants Cosmic Sondermaschinenbau, GmbH

and Cosmic TopHat LLC [606]. In the motion, Feldman Gale states that an

unspecified irreconcilable difference has arisen between the firm and

Cosmic such that Feldman Gale should be permitted to withdraw and

counsel. Additionally, Feldman Gale asserts Cosmic is unable to meet its

financial obligations and that this inability to pay is sufficient justification

for Feldman Gale's motion to withdraw.

On March 16, AMerik Supplies, Inc. filed a response to the motion

[614]. In its response, AMerik states that it has no objection to the motion

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to withdraw provided that Feldman Gale's withdrawal from the case does

not delay a ruling on AMerik's motion for entry of final judgment [428].

Specifically, AMerik notes that briefing on the motion for entry of final

judgment has been completed and that Cosmic's stated reasons for

withdraw do not appear to be related to the motion. Thus, AMerik requests

that Feldman Gale's motion should be allowed, except to the extent that

Feldman Gale's representation may be required to facilitate the Court's

ruling on the motion for entry of final judgment.

On March 24, Insituform filed its response to Feldman Gale's motion.

Although Insituform asserts that Feldman Gale has provided no proof

regarding the alleged irreconcilable difference and Cosmic's inability to pay,

Insituform does not appear to object to Feldman Gale's withdrawal.

However, Insituform does request the following conditions be placed on

Feldman Gale's withdrawal:

1)Feldman Gale remains in the case until (a)(i) the site


inspection of Cosmics' Austrian facility occurs, or Oi) until
Cosmic advises the Court that it refuses to comply with Court
Ordered site inspection of its Austrian facilities ... , and (b) if
the Court deems necessary, for the limited purpose of ruling on
AMerik's motion for entry of final judgment;
2) Feldman Gale produces documents for the Court's in
camera review which documents show the nature of the
irreconcilable conflict, and also when and how the
irreconcilable conflict arose so that the Court may determine

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whether the documents are privileged; if the Court finds that
the documents are not privileged, then the Court orders that
those documents be produced to ITI's counsel and deemed
attorney's eyes only under the protective order; and
3) The Court continues to maintain jurisdiction over
Feldman Gale and its attorneys, and Feldman Gale and its
attorneys concede that such jurisdiction exists, until this action
is completely concluded through all appeals.

With respect to the third and final condition, Insituform asserts that it

suspects that Feldman Gale's irreconcilable differences with Cosmic may

pertain to its offer, on behalf of Cosmic, to allow Insituform to re-inspect

Cosmic's facilities. Insituform contends that if it turns out that Feldman

Gale lacked the authority to offer a re-inspection on behalf of Cosmic, the

Court should be aware of such facts in order to gauge "to what extent

Feldman Gale itself should be jointly and severally liable for any sanctions

imposed on Cosmic by the Court, and/or whether additional sanctions

should be imposed for the deliberate withholding of Cosmic's true

intentions ... regarding an additional site inspection."

After careful consideration, the Court finds that Feldman Gale has

substantially complied with the requirements of Local Rule 83.1(E) and

should be permitted to withdraw as counsel. Additionally, Court will not

condition Feldman Gale's withdraw as requested by Insituform.

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With respect to the first requested condition regarding the site

inspection, this condition is rendered moot given the Court's decision below

to enter a stay in this action.

With respect to the second requested condition regarding an in

camera review of communications between Cosmic and Feldman Gale

regarding the irreconcilable difference, the Court finds that such a review is

unnecessary. The Court is satisfied with Feldman Gale's representation, as

officers of this Court, that it can no longer proceed as counsel for Cosmic.

Additionally, the Court will not order Feldman Gale to produce any

attorney-client privileged communications regarding the irreconcilable

differences to Insituform.

Finally, with respect to the final requested condition that the Court

retain jurisdiction over Feldman Gale pending the complete resolution of

this case, the Court finds this condition to be unwarranted and

unnecessary. The Court's February 19 order made clear that the Court was

sanctioning Cosmic, not its attorneys, for its improper conduct during

discovery. There is nothing to suggest that Feldman Gale has been acting

outside of the scope of its authority as counsel for Cosmic, and the Court

will not retain jurisdiction over Feldman Gale due to Insituform's mere

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suspicions. Moreover, the issue of Feldman Gale's authority to offer a

re-inspection is of no moment, as the re-inspection is to occur as a result of

a Court order, not an agreement between the parties. Consequently, there

is no need for the Court to retain jurisdiction over Feldman Gale at this

time.

Thus, the Court will grant Feldman Gale's emergency motion to

withdraw as counsel for Cosmic Sondermaschinenbau, GmbH and Cosmic

TopHat LLC.

IV. Notice of Rejection of Claims within the


Patents-In-Suit by the United States Patent and
Trademark Office

On March 23, 2010, Cosmic filed notice of rejection of claims within

the patents-in-suit by the United States Patent and Trademark Office [616].

The notice pertains to a pair of non-final office action letters issued by the

USPTO on March 10, 2010.

Insituform's original complaint in this action asserts that Cosmic's

accused products infringe three patents: (1) the '341 patent, which relates to

a liner of resin absorbent material for lining a lateral passageway and an

apparatus and method for installing this liner; (2) the '114 patent, which

relates to a liner of resin absorbent material for lining a lateral passageway;

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and (3) the '832 patent, which relates to a method of lining a lateral pipe.

Cosmic has filed a counterclaim seeking, in part, declaratory judgment of

non-infringement and invalidity of both patents.

On December 16, 2008, a defendant in another pending matter,

Insituform Technologies, Inc. v. Liqui-Force Services (USA), Inc., 2:008­

cV-11916-LPZ-MJH (E.D. Mich.) C'Michigan Litigation") requested ex parte

reexamination of all claims of the '114 patent. On February 11, 2009, the

USPTO granted the request for ex parte reexamination. On March 3, 2009,

the Michigan Litigation defendant requested ex parte reexamination of

claims 1-4, 6-12, and 14-16 of the '832 patent. On May 15, 2009, the

USPTO granted the request for reexamination.

On March 10, 2010, the USPTO issued two non-final office actions

regarding the reexamination proceedings of the '114 and '832 patents. With

respect to the '114 patent, the examiner rejected all claims of that patent as

anticipated by prior art pursuant to 35 U.S.C. 102(b). Additionally, the

examiner rejected all claims of the '114 patent as obvious under 35 U.S.C.

§ 103(a). With respect to the '832 patent, the examiner found that claims 1­

4, 8-12, and 14-16 are patentable, but rejected claims 6 and 7 as anticipated

by prior art pursuant to 35 U.S.C. § 102(b).

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The decision to stay a lawsuit pending the completion of

reexamination proceedings is within the inherent discretionary power of

the district courts. Grayling Indus., Inc. v. GPAC, Inc., 19 U.S.P.Q. 2d

1872, 1873 (N.D. Ga. 1991). Given that the USPTO has preliminarily

rejected the '114 patent in its entirety and has rejected two claims in the

'832 patent, the Court finds that in order to conserve judicial resources, a

stay should be entered in this action. The Court's conclusion is particularly

motivated by the fact that much of this action could be rendered moot if the

disputed claims are ultimately declared unpatentable.

However, the stay in this action does not have any bearing on the

parties' responsibility to comply with the Court's order regarding the

deadline for Cosmic to tender payment to Insituform for attorney's fees and

expenses incurred in relation to Insituform's motion for default.

v. Conclusion

For the foregoing reasons, Insituform's motion for reconsideration,

clarification, and/or modification is GRANTED IN PART and DENIED IN

PART. Feldman Gale's emergency motion to withdraw is GRANTED.

Cosmic is hereby ORDERED to tender to Insituform $441,148.97 on or

before May 3, 2010.

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Finally, this action is hereby STAYED. The following motions to seal

are hereby GRANTED: motion for leave to file under seal Plaintiffs' motion

to disqualify Richard D. Beck as Defendants' Expert and Preclude Access to

Confidential Information [535]; motion to file under seal Plaintiffs'

response to motion for in camera review and inspection of allegedly

privileged document [540]; motion to file under seal reply brief re motion

to disqualify Richard D. Beck [564]; motion to file under seal motion for

leave to amend complaint [571]; and motion to file under seal Plaintiffs'

reply brief re cross-motion to show cause [575]. The deadlines established

by the Court's other March 29, 2010 Order regarding Feldman Gale's

emergency motion to shorten time and for direction from the Court [622]

and Bryan Cave Powell Goldstein's motion to withdraw [623] are

unaffected by the stay of this action. All other pending motions are

DENIED WITH LEAVE TO REFILE [426, 427, 428, 439, 532, 536, 541,

572]. The Clerk is DIRECTED to ADMINISTRATIVELY CLOSEl this case

pending notification from the parties that the reexamination proceedings

for the '114 and '832 patents have been completed.

1 Administratively closing a case is a docket control device used by the Court for

statistical purposes. Parties need only file a motion to reopen the case.
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, .

IT IS SO ORDERED this 29th day of March, 2010.

;Z~~IIl~/
Ti~Y C. Batten, Sr.
United States District Judge

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