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Orthopaedic & Spine Center, LLC v. Henry

United States District Court, S.D. Ohio, Eastern Division

May 15, 2018

ORTHOPAEDIC & SPINE CENTER, LLC, Plaintiff,
v.
JIMMY M. HENRY, M.D., et al., Defendants.

          Chelsey M. Vascura, Magistrate Judge

          OPINION AND ORDER

          GEORGE C. SMITH, UNITED STATES DISTRICT COURT JUDGE

         This matter is before the Court upon the Motion for Attorney's Fees of Defendants Jimmy M. Henry, Midwest Spine and Pain Consultants, LLC, and Christina M. Hikida (“Defendants' Motion”) (Doc. 29). The motion is fully briefed and ripe for disposition. For the following reasons, the Motion is DENIED.

         I. BACKGROUND

         Plaintiff Orthopaedic & Spine Center, LLC (“OSC”) commenced this action on September 16, 2016, asserting claims against Defendants for (1) Ohio statutory misappropriation of trade secrets; (2) Ohio common law misappropriation of trade secrets; (3) violation of the Computer Fraud and Abuse Act, 18 U.S.C. § 1030, et seq. (the “CFAA”); (4) breach of Henry's employment contract with OSC; (5) breach of the duty of loyalty; and (6) conversion. (Doc. 1, Compl.). Defendants also asserted several counterclaims arising out of Henry's employment agreement and a confidentiality agreement between OSC and Hikida. (Doc. 6, Am. Answer and Countercl.).

         Shortly thereafter, Defendants moved to dismiss OSC's claims under the doctrine of forum non conveniens. (Doc. 14, Mot. to Dismiss). Defendants based their forum non conveniens arguments on a forum selection clause in Henry's employment agreement naming the Court of Common Pleas for Franklin County, Ohio as the proper forum. (Doc. 1-1, Employment Agreement § 28). On December 6, 2017, the Court entered an Order and Opinion (the “Order”) granting Defendants' motion to dismiss, finding the forum selection clause in Henry's employment agreement enforceable as to all claims by OSC against Henry (and to Defendants' counterclaims involving Henry's employment contract). (Doc. 27, Order). The Court also determined that, although the forum selection clause in Henry's employment contract did not apply to OSC's claims against Hikida and Midwest Spine and Pain Consultants, LLC (“MSPC”) (or to Defendants' remaining counterclaims), judicial economy required that all claims in the action be adjudicated in Franklin County. (Id.).

         Defendants now move for an award of attorney's fees based on the Court's determination that OSC commenced its action in the wrong court. (Doc. 29).

         II. DISCUSSION

         Defendants assert they are entitled to attorney's fees based on (1) a fee-shifting provision of Henry's employment agreement and (2) the Court's inherent authority to award attorney's fees as a sanction for bad faith conduct. The Court will consider each ground in turn.

         A. Contractual right to attorney's fees

         Defendants assert they are entitled to attorney's fees based on § 16 of Henry's employment contract with OSC, entitled “Responsibility to Bear Costs.” (Doc. 1-1, Employment Agreement). That provision governs “any dispute arising out of the interpretation or enforcement of any of the provisions of this Agreement” and states that Henry “is responsible for and must pay his own costs, expenses, and attorney's fees, ” and that OSC “shall in no event be liable for any such costs, ” unless Henry “is completely absolved of responsibility at the initial administrative or judicial level, ” in which case OSC is “liable for any costs, expenses and attorney's fees” related to the action. (Id.).

         Defendants' argument is meritless because the Court's Order can in no way be construed as completely absolving Henry of responsibility. The sole issue before the Court was whether OSC had commenced its action in the proper court, and the Court expressly stated that it was not determining the merits in dismissing OSC's claims. (Doc. 27, Order at 5) (“[A] forum non conveniens dismissal denies audience to a case on the merits; it is a determination that the merits should be adjudicated elsewhere.”) (quoting Sinochem Int'l Co. v. Malaysia Int'l Shipping Corp., 549 U.S. 422, 432 (2007)). As the Court did not consider Henry's liability, let alone absolve him of any liability, the fee-shifting provision of Henry's employment agreement is not triggered by the Order. Defendants are therefore not contractually entitled to attorney's fees.

         B. Court's inherent authority

         In the absence of a contractual or statutory provision for fee shifting, the “American Rule” generally requires litigants (even successful litigants) to bear their own attorney's fees. BDT Prod., Inc. v. Lexmark Int'l, Inc., 602 F.3d 742, 752 (6th Cir. 2010). An exception allows for an award of attorney's fees as a sanction for bad faith conduct by the opposing party under the Court's inherent authority. Id. Attorney's fees are properly awarded only if (1) the claims advanced were meritless, (2) counsel knew or should have known this, and (3) the ...


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