Valjakka v. Netflix, Inc.

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United States District Court
Northern District of California
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
LAURI VALJAKKA,
Plaintiff,
v.
NETFLIX, INC.,
Defendant.
Case No. 22-cv-01490-JST
ORDER SETTING REASONABLE
EXPENSES AND ATTORNEY'S FEES
Re: ECF Nos. 324, 333, 342, 346, 347
The Court previously determined that Defendant Netflix, Inc. was entitled to compensatory
sanctions under Federal Rule of Civil Procedure 37(b) to compensate Netflix for the reasonable
costs it incurred because of attorney William Ramey’s noncompliance with the Court’s protective
order ECF No. 324. The Court now determines the amount of those sanctions.
I. BACKGROUND
This is a patent infringement case brought by Plaintiff Lauri Valjakka against Netflix. Id.
at 1. On July 10, 2025, the Court issued an order imposing sanctions on attorney William Ramey
and the law firm Ramey LLP, who then represented Valjakka in this matter. Id. at 1, 8. The Court
determined that Ramey had violated a stipulated protective order, ECF No. 56, by sharing with a
third-party firm called AiPi, LLC, documents designated as confidential by Netflix. ECF No. 324
at 1, 3–4. AiPi “manag[ed] third party funding for Valjakka” and retained Ramey to represent
him, but was not authorized under the protective order to view the confidential documents. Id. at
1, 4–5. The Court therefore awarded compensatory sanctions under Federal Rule of Civil
Procedure 37(b), authorized limited discovery, and ordered supplemental briefing to determine an
appropriate sanctions amount. Id. at 7–8. Netflix filed its supplemental brief regarding expenses
and fees on September 2, 2025. ECF 333. Ramey filed an opposition on September 16 and
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amended that opposition on September 23. ECF Nos. 342, 346. On September 25, 2025, Netflix
filed a reply, ECF No. 347, which the Court considers although the order granting sanctions did
not provide for one.1
II. DISCUSSION
“Federal Rule of Civil Procedure 37 authorizes the district court, in its discretion, to
impose a wide range of sanctions when a party fails to comply with the rules of discovery or with
court orders enforcing those rules.” Wyle v. R.J. Reynolds Indus., Inc., 709 F.2d 585, 589 (9th Cir.
1983). In addition, the Court must order the disobedient attorney “to pay the reasonable expenses,
including attorney’s fees, caused by the failure unless the failure was substantially justified or
other circumstances make an award of expenses unjust.” Fed. R. Civ. P. 37(b)(2)(C). Here, the
court ordered sanctions under Rule 37 “to compensate Netflix for the reasonable costs it incurred
because of Mr. Ramey’s noncompliance.” ECF No. 324 at 7.
After considering the parties’ supplemental briefing, the Court awards $95,000 to Netflix
as compensatory sanctions for Ramey’s violation of the protective order. Ramey and Ramey LLP
are jointly liable to Netflix for this amount.
A. Amount of Fees
Courts apply the “lodestar method” to determine a reasonable award of attorneys’ fees
against a party sanctioned for violating a protective order. See, e.g., Silicon Genesis Corp. v. EV
Grp. E. Thallner GmbH, No. 22-cv-04986, 2024 WL 1643677, at *1 (N.D. Cal. Apr. 15, 2024)
(citing Intel Corp. v. Terabyte Int’l, Inc., 6 F.3d 614, 622 (9th Cir. 1993)). The method
“multiplies the number of hours reasonably expended . . . by the reasonable hourly rate.” See id.
The lodestar figure is presumptively reasonable. City of Burlington v. Dague, 505 U.S. 557, 562
(1992). “In determining the appropriate number of hours to be included in a lodestar calculation,
the district court should exclude hours that are excessive, redundant, or otherwise unnecessary.”
McCown v. City of Fontana, 565 F.3d 1097, 1102 (9th Cir. 2009) (cleaned up).
“To determine the reasonable hourly rate, the Court considers the experience, skill, and
reputation of the attorneys requesting fees, as well as ‘the rate prevailing in the community for
1 Ramey has not objected to the reply brief or requested a sur-reply.
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similar work performed by attorneys of comparable skill, experience, and reputation.’” See
Silicon Genesis, 2024 WL 1643677, at *1 (quoting Schwarz v. Sec’y of Health & Hum. Servs., 73
F.3d 895, 908 (9th Cir. 1995)). Courts also recognize that “negotiation and payment of fees by
sophisticated clients are solid evidence of their reasonableness in the market.” Kilopass Tech.,
Inc. v. Sidense Corp., 82 F. Supp. 3d 1154, 1167 (N.D. Cal. 2015) (quotation omitted) (collecting
cases). Courts must articulate a cogent explanation for their fee determinations, including any
decision to award a lower amount than requested. Moreno v. City of Sacramento, 534 F.3d 1106,
1116 (9th Cir. 2008).
Netflix has produced documentation identifying over $300,000 of legal costs incurred to
investigate and mitigate the harm from Ramey’s breach of the protective order. ECF No. 332-4 at
6; ECF No. 342 at 1. It incurred these costs while 1) analyzing production materials to discover
the scope of the breach, 2) performing research to determine an appropriate response to the breach,
3) conferring with Ramey concerning the breach, 4) drafting the motion for sanctions and reply
brief, 5) deposing Ramey about the scope of the breach, and 6) researching and preparing the
supplemental brief on costs. ECF No. 333 at 3–4. Netflix requests a sanctions award of only
$95,000—less than a third of the documented total fees it incurred.
In opposition to Netflix’s request, Ramey asserts that Netflix has not shown that its fees
were caused by the breach “because Ramey LLP admitted from the start what it did and never
tried to deceive [Netflix].” ECF No. 346 at 2. “[A]s Ramey LLP admitted to its acts, there was no
need for [Netflix] to incur any expense after Ramey LLP admitted that it shared the material other
than conducting the further discovery to verify no further disclosures, the deposition authorized by
the Court.” Id. Ramey then argues that invoicing $95,000 for a single deposition is “extreme”
and that a “more realistic amount” is $32,000. Id.
However, Netflix does not seek compensation for activities related to learning whether
Ramey disclosed confidential documents to AiPi. Rather, it seeks compensation for activities
relating to confirming the scope of those disclosures. See ECF No. 333 at 3–4. The Court’s prior
order was explicit that those are precisely the kinds of tasks for which Netflix is entitled to
compensation. ECF No. 324 at 6 (“Netflix . . . acted reasonably in taking steps to investigate the
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extent of the spread of its confidential information and to mitigate the spread thereof.”).
Ramey’s position also fails to acknowledge the need to compensate Netflix for the
significant costs of pursuing and securing sanctions. Sanctions serve a critical purpose in
remediating the harm from improper disclosure and deterring future violations. See Falstaff
Brewing Corp. v. Miller Brewing Co., 702 F.2d 770, 783 (9th Cir. 1983) (“Rule 37(b) sanctions
may serve either remedial and compensatory purposes or punitive and deterrent purposes.”). Just
as Ramey’s violation directly caused Netflix to investigate the scope of the breach, it also caused
Netflix to pursue sanctions to halt the violation and secure remediation. The sanctions award
should therefore include the costs of pursuing sanctions. See Harmon v. City of Santa Clara, 323
F.R.D. 617, 627 (N.D. Cal. 2018) (awarding as sanctions against the plaintiff “the attorney’s fees
and costs that the defendants reasonably incurred litigating the protective order violation”); Apple,
Inc. v. Samsung Elecs. Co., No. 5:11-CV-01846-LHK(PSG), 2014 WL 12596470, at *10 (N.D.
Cal. Jan. 29, 2014) (finding that Rule 37 required the sanctioned law firm to reimburse the harmed
parties for “all costs and fees incurred in litigating this motion and the discovery associated with
it”).
Ramey does not challenge Netflix’s attorneys’ hourly rates, which are comparable to
market rates in this district for attorneys with similar experience. Compare ECF No. 332-4 at 6
with ECF No. 333-9 at 5–9. He also does not challenge the number of hours charged, except to
assert that the total fees requested would be unreasonable for a single deposition. ECF No. 342 at
1–2. As the attorney time records attest, however, only a small portion of their time was spent on
the deposition. See, e.g., ECF No. 333-2 at 26–29, 33–34, 42–44; ECF No. 333-3 at 2–3; ECF No.
333-6 at 68–70; ECF No. 333-7 at 4–6; ECF No. 333-8 at 5–6. Netflix’s attorneys spent the
majority of their time reviewing documents produced by AiPi, corresponding with Ramey, and
preparing the sanctions litigation filings. Id. Accordingly, the Court overrules Ramey’s objection,
determines that the amount requested is reasonable, and grants Netflix’s request for a
compensatory attorney’s fees sanctions award of $95,000.
B. Ramey’s Personal Liability
Ramey requests, without supporting authority, that the Court assess fees and expenses only
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against Ramey LLP, “as William P. Ramey, III was performing services for Ramey LLP.” ECF
No. 346 at 2. Netflix opposes the request, noting that this Court’s prior order “expressly addressed
whether ‘Ramey and Ramey LLP’ are liable for fees and found that Mr. Ramey personally
violated the Protective Order.” ECF No. 347 at 2. Netflix further observes that the Court awarded
compensatory sanctions under Rule 37(b), which authorizes the Court to order “the disobedient
party, the attorney advising that party, or both” to pay the reasonable expenses caused by the
violation. Id.; see Fed. R. Civ. P. 37(b)(2)(C).
Rule 37(b) authorizes sanctions against both the individual attorney and his firm. HM
Elecs., Inc. v. R.F. Techs., Inc., No. 12CV2884-BAS-MDD, 2015 WL 4714908, at *1 (S.D. Cal.
Aug. 7, 2015), vacated in part, 171 F. Supp. 3d 1020 (S.D. Cal. 2016); see also Pascual v. Wells
Fargo Bank, N.A., No. 4:13-CV-02005-KAW, 2014 WL 582264, at *4 (N.D. Cal. Feb. 13, 2014)
(“Generally, courts may impose sanctions against an attorney personally.”). The Court finds that
Ramey LLP and Ramey personally are both liable for the sanctions amount.
CONCLUSION
The Court awards attorney’s fees of $95,000 to Netflix from Ramey and Ramey LLP as
compensatory sanctions. Ramey shall pay Netflix within 28 days of this order.
IT IS SO ORDERED.
Dated: November 19, 2025
______________________________________
JON S. TIGAR
United States District Judge
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