AECOM Technical Services, Inc. v. Flatiron AECOM, LLC

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge William J. Martínez
Civil Action No. 19-cv-2811-WJM-KAS
AECOM TECHNICAL SERVICES, INC.,
Plaintiff-Counterclaim Defendant,
v.
FLATIRON | AECOM, LLC,
Defendant-Counterclaim Plaintiff.
ORDER GRANTING FLATIRON’S MOTION FOR LIMITED DISCOVERY OF
ATS’S ATTORNEYS’ FEES AND LITIGATION COSTS
Before the Court is Defendant-Counterclaim Plaintiff Flatiron AECOM, LLC’s
(“JV” or “Flatiron”) Motion for Limited Discovery of Plaintiff-Counterclaim Defendant
AECOM Technical Services, Inc.’s (“ATS”) Attorneys’ Fees and Litigation Costs
(“Discovery Motion”) (ECF No. 482.) ATS responded in opposition (ECF No. 484), and
the JV filed a reply (ECF No. 185).
In ATS’s Motion for Attorneys’ Fees Incurred from Outset of Litigation Through
Conclusion of Trial, ATS requests that the Court award it fees in the amount of
$9,580,515. (ECF No. 457 at 12.) In ATS’s Revised Motion for Litigation Costs
Incurred From Outset of Litigation Through Conclusion of Trial, it requests that the Court
award it costs in the amount of $7,688,271. (ECF No. 468 at 15.) Rather than filing a
response to these motions, the JV moved for an extension of time to do so, which was
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granted. (ECF No. 476.) Before the JV’s June 28, 2024 deadline to respond, the JV
filed the Discovery Motion. (ECF No. 482.)
In the Discovery Motion, the JV explains that ATS informed the JV that it is “not
seeking attorneys’ fees or disbursements for its affirmative breach of contract claim but,
instead, is only seeking attorneys’ fees and litigation costs for its defense of the JV’s
claim.” (Id. at 1–2.) To that end, ATS purportedly separated bills for its affirmative
claim. (Id. at 2.) However, the JV states that it “knows that not all work related to ATS’s
Affirmative Claim has been properly segregated.” (Id.) Certain examples offered for
support include:
• 	Legal fees incurred prior to the JV filing its counterclaim on October 16, 2019,
which cannot possibly be associated (in the JV’s view) with ATS’s defense
against the JV’s counterclaim that did not exist at the time;
• 	Legal fees incurred during preparation of and the first week of trial when ATS
litigated its Affirmative Claim. This amount cannot be associated with ATS’s
defense against the JV’s counterclaim because the JV had not yet put on its
case-in-chief until the second week of trial;
• 	Legal fees associated with the depositions of Michael Keleman, Stephen
Harelson, Rob Richardson, Dustin Williams, Nick Polce, Matthew Barnes, and
Jason Brada—all of whom were deposed by ATS’s attorneys on topics related to
ATS’s Affirmative Claim and thus, cannot be associated with ATS’s defense
against the JV’s counterclaim;
• 	Litigation costs associated with ATS’s Expert David Hall’s affirmative expert
report on damages for ATS’s Affirmative Claim. This amount cannot be
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associated with ATS’s defense to the JV’s counterclaim because this reflects
Hall’s work on his affirmative report and opinions related to ATS’s Affirmative
Claim; and
• 	Block billing used throughout the litigation.
(Id. at 3–5.)
Given these and other alleged failures to separate work related to the affirmative
claim from the counterclaim, the JV argues that if ATS is not ordered to provide the
relevant documentation, the JV will be unable to compare fees and costs and assess
whether it agrees or opposes ATS’s fees and costs as reasonable. Given the foregoing,
the JV requests that the Court: require ATS to produce all withheld documentation for
attorneys’ fees and litigation costs incurred in connection with its affirmative claim;
require ATS to segregate its block billing time entries from the date the JV filed its
counterclaim (October 16, 2019) through February 29, 2024, on or
before June 21, 2024, to accurately and comprehensively distinguish between fees and
costs associated with litigating its Affirmative Claim and defending against the JV’s
counterclaim; and require ATS to provide an affidavit from its counsel that all time
related to its Affirmative Claim has been removed from what it is seeking from the JV.
(Id. at 5–6.)
In response, ATS argues that the JV’s Discovery Motion, if granted, will
essentially “result in a second major litigation” and transform this Court into “green-
eyeshade accountants.” (ECF No. 484 at 1 (citations omitted).) ATS contends that
although it did not seek fees on its affirmative claim because it “made the decision to be
a gracious victor,” it “could have under the language of the Subcontract’s fee-shifting
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provision.” (Id. at 2, 5.) Under these circumstances, ATS now encourages the Court to
award any affirmative fees and costs that may be in ATS’s requests and “reject the
premise of Flatiron’s argument for discovery into the affirmative versus defensive
allocation, since ATS is indeed entitled to both.” (Id. at 2, 8.) ATS further characterizes
the Discovery Motion as “burdensome” and “time-consuming.”
ATS addresses the JV’s examples of the failure to separate the affirmative claim
from the counterclaim in its fees and costs. First, ATS argues that it knew the JV would
be filing its own breach of contract claim at some point after ATS filed its complaint, and
so ATS’s initial legal work focused on the JV’s much larger counterclaim. Next, ATS
contends that the first week of trial, while on paper dedicated to its affirmative claim,
was used “strategically, to frame the overall dispute by educating the jury about the
design-build process, why designs naturally evolve, and why material and quantity
increases do not necessarily establish a defective design. Nearly all of ATS’s
preparation and first week case-in-chief was therefore defensive.” (Id. at 9.) Third, ATS
explains that various deponents’ testimony focused on the counterclaim, though they
might have also known something about the JV’s failure to pay ATS. (Id. at 9–10.)
Fourth, ATS addresses damages expert David Hall’s work and argues that while it is
true that a “small amount of [Hall’s work] could be allocated to the affirmative matter, it
is also properly allocated to the defensive matter under the best defense is a good
offense authority . . . , and per the better interpretation of Subcontract’s fee and cost
shifting provision.” (Id. at 10 (emphasis in original).) Finally, ATS contests that it block-
billed as egregiously as the JV contends and argues that nevertheless,
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whatever the merits or problems surrounding block-billing,
they cannot be meaningfully addressed through Flatron’s
requested discovery. Asking ATS’s counsel to recreate
billing entries from years ago would be burdensome, time-
consuming, and pointless, since counsel could only make a
post hoc allocation. Plus, many of the attorneys whose time
entries Flatiron might quibble with are no longer involved in
this matter, may be at other firms, or no longer practicing
law. Subpoenaing lawyers from other law firms to provide
post hoc (and meaningless) refinements to their time
narratives written years ago would be the epitome of an
improper and unwarranted “second major litigation.”
(Id. at 11.)
Finally, ATS goes on the offensive and argues that if the Court grants the JV’s
Discovery Motion, “it should require Flatiron to produce its own fees and costs for
comparison,” specifying that “(The invoices are not necessary—just the total tallies)” to
aid the Court in comparing the parties’ fees and costs as a way to measure their
reasonableness. (Id. at 11–12 (citing Robinson v. City of Edmond, 160 F.3d 1275, 1284
(10th Cir. 1998)).) Additionally, if the Court grants the Discovery Motion, ATS asks that
the Court require the JV to pre-pay or pre-bond the estimated fees and costs that ATS
will incur in complying with the Order; ATS estimates that the amount will be
approximately $346,000 based on its average monthly burn rate through the course of
this litigation. (Id. at 13.)
The Court has thoroughly considered both parties’ positions and agrees that
discovery will help answer how much, if anything, should be deducted from ATS’s
petitions. (ECF No. 485 at 2.) While the Court has no desire to prolong this already
lengthy litigation, the Court will hold ATS to its prior representations to the JV that it
does not seek fees and costs on its affirmative claim. Moreover, the Court takes a dim
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view of ATS’s eleventh-hour approach of now arguing that the Court should award it all
of its fees and costs on the affirmative claim and the counterclaim, despite its original
representations to the Court and the JV to the contrary.
For these reasons, the Court concludes that the discovery the JV seeks is
reasonably limited in scope, and that it is entitled to this information so that it may make
informed, specific objections to the attorney fees and costs sought by ATS. The very
significant amount of fees and costs sought here also supports such a conclusion.
Accordingly, the Court ORDERS as follows:
1. 	The JV’s Motion for Limited Discovery of ATS’s Attorneys’ Fees and
Litigation Costs (ECF No. 482) is GRANTED;
2. 	The briefing deadlines set in the Order issued on May 29, 2024 (ECF No.
476) are VACATED and RESET as follows;
3. 	ATS’s deadline to respond fully and in good faith to the JV’s discovery
requests is July 22, 2024;
4. 	The JV’s deadline to file its responses to ATS’s Motion for Attorneys’ Fees
(ECF No. 457) and ATS’s Revised Motion for Litigation Costs (ECF No. 468) is August
12, 2024;
5. 	ATS’s deadline to file its replies to the JV’s responses is August 26, 2024;
and
6. 	ATS’s request that the JV be ordered to post an additional bond and
produce its own fees and costs as a means for comparison is DENIED for lack of good
cause shown. The Court will in due course evaluate ATS’s fees and costs requests and
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the JV’s forthcoming objections on their merits and determine an appropriate award.
Dated this 21 st day of June, 2024.
BY THE COURT:
______________________
William J. Martínez
Senior United States District Judge
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