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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.
2
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
3
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
4
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.
5
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.
6
---- ---
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,
7
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.
8
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
9
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.
10
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
11
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
12
------..........................................
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
13
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
14
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.
15
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
16
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;
17
----------
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).
18
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.
19
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.
20
, .
IT IS SO ORDERED this 29th day of March, 2010.

C. Batten, Sr.
United States District Judge
21

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