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1 COTCHETT PITRE & MCCARTHY LLP
Mark C. Molumphy (SBN 168009)
2 Anya Thepot (SBN 318430) 4/13/2020
San Francisco Airport Office Center
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840 Malcolm Road, Suite 200
4 Burlingame, California 94010
Telephone: (650) 697-6000
5 Facsimile: (650) 697-0577
E-mail: mmolumphy@cpmlegal.com
6 athepot@cpmlegal.com
7 Lead Counsel for Plaintiffs
8 SUPERIOR COURT OF THE STATE OF CALIFORNIA
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COUNTY OF SAN MATEO
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11 IN RE INTEL CORPORATION Lead Case No. 18-CIV-00170
SHAREHOLDER DERIVATIVE
12 LITIGATION (Consolidated with Case Nos. 18-CIV-
00385 and 18-CIV-00423)
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14 PLAINTIFFS’ NOTICE OF MOTION
This Document Relates To: AND MOTION TO STRIKE AND/OR
15 TAX COSTS OF INDIVIDUAL
All Actions. DEFENDANTS AND NOMINAL
16 DEFENDANT INTEL;
17 MEMORANDUM OF POINTS AND
AUTHORITIES IN SUPPORT
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Hearing Date: June 11, 2020
19 Hearing Time: 9:00 a.m.
Assigned for all Purposes to:
20 The Hon. Richard H. DuBois, Dep’t 16
21 Date Action Filed: January 11, 2018
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PLAINTIFFS’ NTC OF MTN AND MTN TO STRIKE AND/OR TAX COSTS OF INDIVIDUAL
DEFENDANTS AND INTEL; MPA IN SUPPORT; LEAD CASE NO. 18-CIV-00170
1 NOTICE OF MOTION TO STRIKE AND/OR TAX COSTS
2 TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:
3 PLEASE TAKE NOTICE THAT on June 11, 2020 at 9:00 a.m., or as soon thereafter as the
4 matter may be heard, in the above-referenced court, before the Honorable Richard H. DuBois of the
5 California Superior Court for the County of San Mateo, located at 400 County Center, Redwood
6 City, California 94063, Plaintiffs Joseph Tola, Joanne Bicknese, Jaci Haas, and Michael Kellogg
(collectively “Plaintiffs”) will, and hereby, do move the Court pursuant to California Rule of Court
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3.1700(b)(1) for an order to strike and/or tax costs claimed by (1) Defendants Brian M. Krzanich,
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Robert H. Swan, Andy D. Bryant, Charlene Barshefsky, Aneel Bhusri, Reed E. Hundt, Omar
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Ishrak, Tsu-Jae King Liu, David S. Pottruck, Gregory D. Smith, Andrew Wilson, Frank D. Yeary,
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and David B. Yoffee (collectively “Individual Defendants”) in their Memorandum of Costs served
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on March 27, 2020 and (2) Nominal Defendant Intel Corporation (“Intel”, and collectively with the
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Individual Defendants, “Defendants”) in their Memorandum of Costs served on March 30, 2020.
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Individual Defendants’ Memorandum of Costs
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1. “Filing and Motion Fees” requested in Item Number 1 should be reduced from
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$735.00 to $0.00, on the grounds that the costs are improper and facially excessive, and the
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information contained in the Memorandum of Costs does not specify any reason why such expenses
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were reasonably necessary in this action.
18 2. “Other” Costs requested in Item Number 16 should be reduced from $39,000.00 to
19 $0.00, on the grounds that the costs are improper and facially excessive, and the information
20 contained in the Memorandum of Costs does not specify any reason why such expenses were
21 reasonably necessary in this action.
22 Intel’s Memorandum of Costs
23 3. “Other” Costs requested in Item Number 16 should be reduced from $3,000.00 to
24 $0.00, on the grounds that the costs are improper and facially excessive, and the information
25 contained in the Memorandum of Costs does not specify any reason why such expenses were
26 reasonably necessary in this action.
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PLAINTIFFS’ NTC OF MTN AND MTN TO STRIKE AND/OR TAX COSTS OF INDIVIDUAL 2
DEFENDANTS AND INTEL; MPA IN SUPPORT; LEAD CASE NO. 18-CIV-00170
1 This Motion is based on this Notice of Motion, the accompanying Memorandum of Points
2 and Authorities, the complete files and records in this action, and on such further and evidence as
3 may be presented at the hearing on this motion.
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PLAINTIFFS’ NTC OF MTN AND MTN TO STRIKE AND/OR TAX COSTS OF INDIVIDUAL 3
DEFENDANTS AND INTEL; MPA IN SUPPORT; LEAD CASE NO. 18-CIV-00170
1 MEMORANDUM OF POINTS AND AUTHORITIES
2 I. INTRODUCTION
3 This is a derivative action brough by individual shareholders of Nominal Defendant Intel
4 Corporation (“Intel”), and alleging claims against Defendants Brian M. Krzanich, Robert H. Swan,
5 Andy D. Bryant, Charlene Barshefsky, Aneel Bhusri, Reed E. Hundt, Omar Ishrak, Tsu-Jae King
6 Liu, David S. Pottruck, Gregory D. Smith, Andrew Wilson, Frank D. Yeary, and David B. Yoffee
(collectively, the “Individual Defendants”).
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After several rounds of demurrers, the Court sustained Defendants’ demurrers without leave
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to amend. The Individual Defendants and Intel then filed separate Memoranda of Costs.
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Plaintiffs have moved to reconsider the Court’s ruling denying leave to amend. In the event
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the Court grants reconsideration and permits amendment, this motion to tax costs would be moot.
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However, if the Court denies reconsideration or leave to amend, and enters judgment, Plaintiffs
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hereby move to strike or costs certain categories of costs claimed by the Individual Defendants and
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Intel in separately filed Memoranda of Costs. As described below, the Memoranda were filed
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without any description or summary of the costs incurred, let alone explanation for why they were
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reasonably necessary in this action.
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Having failed to demonstrate that the costs are allowable or, if allowable, that they were
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reasonably necessary to this action and reasonable in amount, the Court should strike them in their
18 entirety or, in the alternative, tax them to reasonable amounts upon proper proof.
19 II. ARGUMENT
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A. Legal Standard
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The right to recover costs is statutory. Cal. Code Civ. Proc. § 1032(b); Benson v. Kwikset
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Corp. (2007) 152 Cal.App.4th 1254, 1279. Thus, absent statutory authorization, parties engaged in
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civil litigation must bear their own expenses in a lawsuit. Id.
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Under Code of Civil Procedure Section 1032(b), a prevailing party is entitled to recover
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costs “except as otherwise expressly provided by statute.” Code of Civil Procedure Section
26 1033.5(b) identifies the categories of costs that are and are not allowable. Code of Civil Procedure
27 Section 1033.5(c)(4) provides that items not specifically mentioned as allowable or prohibited “may
28 be allowed or denied in the court’s discretion.”
PLAINTIFFS’ NTC OF MTN AND MTN TO STRIKE AND/OR TAX COSTS OF INDIVIDUAL 4
DEFENDANTS AND INTEL; MPA IN SUPPORT; LEAD CASE NO. 18-CIV-00170
1 Further, Code of Civil Procedure Section 1033.5(c)(2) and (3) provide certain limits on
2 costs, even if deemed allowable. First, to recover an allowable cost, it must be “reasonably
3 necessary” to the litigation. Cal. Code Civ. Proc. § 1033.5(c)(2). Costs cannot be awarded if they
4 are “merely convenient or beneficial.” Id.; see Nelson v. Anderson (1999) 72 Cal.App.4th 111;
5 Ladas v. California State Auto. Ass’n (1993) 19 Cal.App.4th 761, 764. Second, allowable costs
6 must be reasonable in amount. Cal. Code Civ. Proc. § 1033.5(c)(3). The net effect is that the court
has the power to disallow costs, even if allowable as a matter of right, if they were not “reasonably
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necessary” and to reduce the amount of any cost item to that which is “reasonable.” Wegner,
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Fairbank & Epstein, California Practice Guide – Civil Trials and Evidence (TRG 2014) ¶ 17:112.1.
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Finally, the cost statutes are to be strictly construed and applied, and a memorandum of
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costs should be closely analyzed. See Sequoia Vacuum Systems v. Stransky (1964) 229 Cal.App.2d
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281, 289; Perko’s Enterprises, Inc., v. RRNS Enterprises (1992) 4 Cal.App.4th 238, 244. While
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supporting documentation is not required to be filed with the cost memorandum, once an item is
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properly objected to and put at issue, the burden of proof shifts to the party claiming it as cost to
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show that it is reasonable and necessary. Ladas v. California State Auto. Ass’n (1993) 19
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Cal.App.4th 761.
16 B. The Individual Defendants’ Memorandum of Costs Should be Stricken or
17 Taxed
18 On March 27, 2020, the Individual Defendants filed and served a Memorandum of Costs,
19 seeking two categories of expenses: filing fees and “other” costs. Notably, the Individual
20 Defendants did not file or serve any Memorandum of Costs Worksheet to explain requested costs.
21 Further, the amount asserted – particularly “other” costs – indicate that they are unauthorized,
22 unreasonable, and excessive under the California Code of Civil Procedure.
23 1. The Individual Defendants Provide No Description or Justification for
“Filing and Motion Fees”
24 The Individual Defendants’ cost bill lists one category of costs which facially corresponds
25 to categories of “allowable” costs in Section 1033.5(a), i.e., filing and motion fees. However, while
26 the Individual Defendants seek $735.00 for such fees, they provide no explanation or
27 documentation showing the basis for the calculation of fees. Plaintiffs are unable to determine
28 which, if any, of these “filing and motion fees” are proper or “reasonably necessary.” Thus, the
PLAINTIFFS’ NTC OF MTN AND MTN TO STRIKE AND/OR TAX COSTS OF INDIVIDUAL 5
DEFENDANTS AND INTEL; MPA IN SUPPORT; LEAD CASE NO. 18-CIV-00170
1 “filing and motion fees” should be taxed from $735.00 to $0.00. See Perko's Enterprises, supra, 4
2 Cal.App.4th at 242–45 (court has discretion to disallow recovery of filing fees if not reasonably
3 necessary to litigation).
4 2. The Individual Defendants Provide No Description or Justification for
“Other” Costs
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The Individual Defendants also claim $39,000.00 for “other” costs, but again provide no
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description for these costs, let alone any explanation for why they were necessarily incurred or
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reasonable in amount. Apparently, these “other” costs do not fit into the other fifteen categories of
8 costs enumerated on the cost memo. Accordingly, Plaintiffs have no information to assess whether
9 these costs represent allowable costs pursuant to Cal. Code Civ. Proc. Section 1033.5(a), whether
10 the costs are “reasonably necessary” to the litigation pursuant to Cal. Code Civ. Proc. Section
11 1033.5(c)(2), or whether they are reasonable in amount pursuant to Cal. Code Civ. Proc. Section
12 1033.5(c)(2). Without any explanation, Plaintiffs cannot know whether the claimed costs represent
13 allowable costs or improper costs. Accordingly, these costs should be stricken in their entirety.
14 C. Intel’s Memorandum of Costs Should be Stricken or Taxed
15 On March 30, 2020, Intel filed and served a Memorandum of Costs, claiming $3,000 in
16 costs under the category, “other.” However, like the Individual Defendants, Intel failed to file a
17 Memorandum of Cost Worksheet or any other document to identify or explain the basis for the
18 calculation of such costs. For the same reasons described above, Plaintiffs have no information to
19 assess whether these costs represent allowable costs pursuant to Cal. Code Civ. Proc. Section
1033.5(a), whether the costs are “reasonably necessary” to the litigation pursuant to Cal. Code Civ.
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Proc. Section 1033.5(c)(2), or whether they are reasonable in amount pursuant to Cal. Code Civ.
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Proc. Section 1033.5(c)(2).
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Accordingly, these costs should be stricken in their entirety.
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PLAINTIFFS’ NTC OF MTN AND MTN TO STRIKE AND/OR TAX COSTS OF INDIVIDUAL 6
DEFENDANTS AND INTEL; MPA IN SUPPORT; LEAD CASE NO. 18-CIV-00170
1 III. CONCLUSION
2 For the reasons stated above, the Memoranda of Costs filed by the Individual Defendants
3 and Intel should be stricken or taxed.
4 DATED: April 13, 2020 COTCHETT PITRE & McCARTHY, LLP
5 /s/ Mark C. Molumphy
MARK C. MOLUMPHY
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7 Lead Counsel for Plaintiffs
8 THE WEISER LAW FIRM, P.C.
Robert B. Weiser
9 James M. Ficaro
22 Cassatt Avenue
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Berwyn, Pennsylvania 19312
11 Telephone: (610) 225-2677
Facsimile: (610) 408-8062
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RM LAW, P.C.
13 Richard A. Maniskas
1055 Westlakes Dr., Suite 300
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Berwyn, Pennsylvania 19312
15 Telephone: (484) 324-6800
Facsimile: (484) 631-1305
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Counsel for Plaintiff Joseph Tola
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18 BOTTINI & BOTTINI, INC.
Francis A. Bottini, Jr.
19 Albert Y. Chang
Yury A. Kolesnikov
20 7817 Ivanhoe Avenue, Suite 102
La Jolla, California 92037
21 Telephone: (858) 914-2001
22 Facsimile: (858) 914-2002
23 Counsel for Plaintiff Joanne Bicknese and Jaci Haas
24 JOHNSON FISTEL, LLP
Frank J. Johnson
25 Kristen O’Connor
26 655 West Broadway, Suite 14000
San Diego, California 92101
27 Telephone: (619) 230-0063
Facsimile: (619) 255-1856
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PLAINTIFFS’ NTC OF MTN AND MTN TO STRIKE AND/OR TAX COSTS OF INDIVIDUAL 7
DEFENDANTS AND INTEL; MPA IN SUPPORT; LEAD CASE NO. 18-CIV-00170
Counsel for Plaintiff Michael Kellogg
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PLAINTIFFS’ NTC OF MTN AND MTN TO STRIKE AND/OR TAX COSTS OF INDIVIDUAL 8
DEFENDANTS AND INTEL; MPA IN SUPPORT; LEAD CASE NO. 18-CIV-00170