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UNITED STATES BANKRUPTCY COURT

EASTERN DISTRICT OF LOUISIANA
IN RE

CHAPTER 11

CHRISTOPHER MARTIN RIDGEWAY

CASE NO. 16-10643

DEBTOR

Judge Elizabeth W. Magner,

Section A

______________________________________________________________________________
RESPONSE IN OPPOSITION TO DEBTORS OBJECTION TO THE PROOFS OF
CLAIM OF STRYKER CORPORATION AND HOWMEDICA OSTEONICS CORP.
Stryker Corporation (Stryker Corp.) and Howmedica Osteonics Corp. (Howmedica
and collectively with Stryker Corp., Stryker), by and through their attorneys, hereby submit
this response (Response) to Christopher Martin Ridgeways (Debtor) Objection (Dkt. No.
288) to Stryker Corp. and Howmedicas Proofs of Claim Nos. 14 and 15 (collectively the
Proof(s) of Claim). For the reasons stated below, the Court should overrule the Objection and
allow each Proof of Claim in the amount of $3,507,420.71 (with an additional $27,582.521 in
post-Petition interest to be separately paid under Debtors Plan), subject to the limitation that
Stryker Corp. and Howmedica are collectively entitled to a single satisfaction of their claims. In
support of this Response, Stryker respectfully states as follows:
INTRODUCTION
1.

On March 9, 2016, the United States District Court for the Western District of

Michigan (Michigan Court) entered a $745,195.00 judgment (Judgment) against Debtor

based on a jurys verdict (Jury Verdict) finding that Debtor willfully and maliciously
misappropriated Strykers trade secrets, willfully and wantonly breached his fiduciary duties to
1

Amount calculated as of December 30, 2016. Interest continues to accrued each day after
December 30, 2016, to the extent the claim is not paid in full.

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Stryker, and breached his non-compete and confidentiality agreements (Michigan Action). In
addition to the Judgment, Strykers Proof of Claim also includes nine separate categories of
unliquidated claims against Debtor stemming from the Judgment, as well as sanction awards
arising from Debtors repeated bad faith discovery violations in the Michigan Action, and totals
$3,535,003.09 as of December 30, 2016. Debtor did not post a supersedeas bond to obtain a stay
of the Judgment. Instead, Debtor commenced this bankruptcy case and later filed an appeal of
the Judgment. Debtor is currently attempting to confirm a bankruptcy plan that proposes to pay
all creditors in full while Debtor retains millions of dollars of assets for himself.
2.

Debtor now objects to Strykers Proof of Claim. In so doing, Debtor improperly

attempts to re-litigate facts decided in the Michigan Action. Debtor also raises three catchall
objections to Strykers entire Proof of Claim as follows: (a) the pending Sixth Circuit Appeal of
the Judgment must be finalized before this Court is able to adjudicate allowance of the Proof of
Claim; (b) Stryker failed to meet its burden to establish its claim; and (c) Stryker is only
entitled to a single recovery on its Proof of Claim. Finally, Debtor asserts specific objections
to certain portions of Strykers Proof of Claim as follows: (i) all post-Petition interest should be
disallowed because such amounts are prohibited under Bankruptcy Code section 502, were not
ascertainable as of the Petition Date, and were not calculated in the Proof of Claim; (ii) Stryker
insufficiently described its claims for unliquidated pre-judgment interest on attorneys fees and
costs in the Proof of Claim; (iii) the hourly rates for Strykers attorneys fees claim under the
Second Sanctions Fee Petition should be capped at $300; and (iv) Stryker is not entitled to
recover attorneys fees under Michigan State Law and the Common Core Doctrine, or in the
alternative, that the hourly rate sought by Stryker for attorney Michael D. Wexler (Wexler)

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under Michigan State Law and the Common Core Doctrine exceeds approved rates in the
Western District of Michigan and should be reduced accordingly.
3.

The table below summarizes each portion of Strykers Proof of Claim, each of

Debtors objections to same, and the portions of Strykers Proof of Claim to which Debtor is not
raising any specific objection.
Strykers Claim Components
$745,195.00 in liquidated damages
per the Judgment

$47,508.14 for unliquidated prePetition, pre-judgment interest on

the Judgment
$188.58 in unliquidated prePetition, post-judgment interest on
the Judgment
$143,535.29 in unliquidated costs
from the Michigan Action
$223,351.16 in unliquidated
attorneys fees and costs based on
the Second Sanctions Fee Petition
$2,272,369.54 in unliquidated
attorneys fees under Michigan
State Law and the Common Core
Doctrine

Debtors Catchall
Objections
i. Pending 6th Circuit
Appeal;
ii. Burden of Proof; and
iii. Single Recovery
Same

None

Same

None

Same

None

Same

i. Reasonableness of attorney fee rates to

the extent such rates exceed of $300 per
hour
i. Entitlement to attorneys fees under
Michigan State Law and Common Core
Doctrine; and
ii. Reasonableness of attorney fee rates to
the extent such rates exceed $400 per hour
i. Alleged insufficient description of claim
in the Proof of Claim

Same

$75,273.00 in unliquidated prePetition, pre- judgment interest on

all unliquidated claims for
attorneys fee and costs
$3,801.24 in unliquidated, postPetition, post-judgment interest on
the Judgment as of 12/30/16 based
on a current per diem of $13.47
$23,781.28 in unliquidated, postPetition, pre-judgment interest on
all unliquidated attorneys fees and
costs as of 12/30/16 based on a
current per diem of $85.28

Same

An unknown amount for

unliquidated, post-Petition, postjudgment interest on all attorneys
fees and costs.

Same

None

Same

i. Alleged failure to support claim and

lack of specificity.

Same

i. Section 502(b)s purported prohibition

on post-Petition interest;
ii. Alleged inability to ascertain such
amount as of Petition Date; and
iii. Alleged failure to itemize such amount
in the Proof of Claim
i. Section 502(b)s purported prohibition
on post-Petition interest;
ii. Alleged inability to ascertain such
amount as of Petition Date; and
iii. Alleged failure to itemize such amount
in the Proof of Claim

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Debtors arguments fail as a matter of law and fact. Therefore, as more fully

explained below, each of Debtors objections should be overruled and Stryker Corp.s and
Howmedicas Proofs of Claim should be allowed in the amount of $3,507,420.71 (with
$27,582.522 in post-Petition interest to be separately paid under Debtors plan); provided
however, that Stryker Corp. and Howmedica are entitled to a single recovery.
BACKGROUND
I.

Bankruptcy Case
5.

On March 23, 2016 (Petition Date), Debtor filed his voluntary petition for relief

under Chapter 11, thereby commencing the above-captioned case.

6.

On May 18, 2016, Debtor filed a Motion seeking to modify the automatic stay to

allow Debtor to continue to engage in litigation related to the issues in the Michigan Action and
the Judgment, including filing and prosecuting a Notice of Appeal from the Judgment. (see Dkt.
No. 51). On that same day, this Court, on an ex-parte basis, granted relief solely with respect to
Debtors request to file a notice of appeal from the Judgment. (see Dkt. No. 53). The Court did
not, however, expressly grant, deny, or otherwise address the remaining scope of Debtors
request for stay relief in order to continue his litigation with Stryker. Debtor has since failed to
set his stay relief motion for hearing.
7.

Shortly thereafter, Debtor filed his appeal from the Judgment, which has been

consolidated with a related appeal of Stone Surgical, LLC. Both appeals are currently pending
before the United States Court of Appeals for the Sixth Circuit as case numbers, 16-1654 and 161434 (collectively the Sixth Circuit Appeal).

Amount calculated as of December 30, 2016. Interest continues to accrued each day after
December 30, 2016, to the extent the claim is not paid in full.

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On June 20, 2016, Stryker filed a Complaint against Debtor Objecting to

Dischargeability of Debts Pursuant to 11 U.S.C. 523(a)(4) and (a)(6) (Adversary No. 16-ap01025), seeking the entry of a judgment that its claims against Debtor are nondischargeable
pursuant to Bankruptcy Code sections 523(a)(4) and (a)(6) based on embezzlement, larceny, and
infliction of willful and malicious injuries. (see Dkt. No. 83). This action is currently stayed
pending the outcome of this litigation.
9.

On July 27, 2016, Stryker Corp. and Howmedica each timely filed their own

Proof of Claim in the amount of at least $3,432,147.71, arising out of and in connection with the
Judgment as more fully explained herein. (see Claim Nos. 14 & 15). Copies of Claim Nos. 14
and 15 (with Addenda but without exhibits) are attached hereto as Exhibit 1. The Proofs of
Claim arise from the Jury Verdict, Judgment, and other court orders finding that Debtor: (a)
willfully and maliciously misappropriated Strykers trade secrets; (b) willfully and wantonly
breached his fiduciary duties to Stryker; (c) breached his non-compete and confidentiality
agreements with Stryker; and (d) repeatedly committed bad faith discovery violations resulting in
prejudice to Stryker and the entry of two sanctions awards.3
10.

On September 22, 2016, Stryker filed a motion for relief from the automatic stay

to allow it to liquidate the remainder of its claims before the Michigan Court. This Court has
continued the Motion to January 13, 2017, for oral argument. (see Dkt. No. 282)
11.

On September 27, 2016, Debtor filed his First Amended Disclosure Statement

(Disclosure Statement) and First Amended Plan of Reorganization (Plan). (see Dkt. Nos.
233 & 234). On September 28, 2016, this Court entered an Order approving the Debtors

Additional detail regarding Debtors pervasively bad faith conduct is set forth in the Addendum
to the Proof of Claim.

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Disclosure Statement and setting a hearing for confirmation of the Plan. (see Dkt. No. 237).
Stryker filed its objection to confirmation of the Plan on October 28, 2016. (see Dkt. No. 264).
12.

The Court conducted the confirmation hearing on November 2, 2016. At the

conclusion of the hearing, the Court ordered Debtor and Stryker to each submit a supplemental
brief addressing: (a) the correct method for calculating Debtors solvency; (b) the rate of postPetition interest owed to Stryker; and (c) a calculation of Strykers claims, including postPetition interest, based on the worst case scenario for Debtor. (see Dkt. No. 269). On
November 30, 2016, Stryker filed its supplemental brief (Supp. Brief on Post-Petition Interest).
(see Dkt. No. 284, a copy of which is attached hereto as Exhibit 2). In the brief, Stryker asserts
that Debtor must pay post-Petition interest to all creditors in order to confirm his Plan. (Id., at p.
3). In compliance with this Courts request, Stryker also set forth the maximum amount owed by
Debtor under the Proof of Claim, including post-Petition interest, as of November 30, 2016.
13.

As of December 30, 2016, Strykers claim, including post-Petition interest, totals

$3,535,003.09 as set forth below:

$745,195.00 for liquidated actual damages as set forth in the March 9, 2016,
Judgment in the Michigan Action;4

$47,508.14 for unliquidated, pre-Petition, pre-judgment interest on the Judgment

as set forth in the Proof of Claim. See M.C.L 600.6013(8); see also addendum
to Proof of Claim (Addendum), Ex. N, Bratic Decl.;

$188.58 for unliquidated, pre-Petition, post-judgment interest. See 28 U.S.C.

1961. Pursuant to 28 U.S.C. 1961(a), interest at the federal judgment rate is
calculated from the date of the Treasury yield, as published by the Board of
Governors of the Federal Reserve System, for the calendar week preceding the
date of the judgment. Stryker asserts that based on 28 U.S.C. 1961(a), the
applicable rate is 0.66%. Interest is computed daily and shall be compounded
annually. See 28 U.S.C. 1961(b);

Capitalized terms not defined herein shall have the meaning ascribed to them in the Proof of

Claim.

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$143,535.29 in unliquidated costs (excluding the amount requested in the Second

Sanctions Fee Petition);

$223,351.16 in unliquidated attorneys fees and costs based on the Second

Sanctions Fee Petition;

$2,272,369.54 for unliquidated attorneys fees under Michigan State Law and the
Common Core Doctrine (excluding the amount requested in the Second Sanctions
Fee Petition);

$75,273.00 for unliquidated pre-Petition, pre-judgment interest on Strykers

unliquidated claims for attorneys fee and costs in the amount of $2,639,255.99
pursuant to Michigan State Law. M.C.L. 600.6013(8). (Interest under this
subsection is calculated on the entire amount of the money judgment, including
attorney fees and other costs.). Thus, Stryker is entitled to post-Petition interest
on these unliquidated claims pursuant to M.C.L. 600.6013 beginning on the
September 30, 2013, date of commencement of the Michigan Action through the
date of entry of a judgment liquidating same. The rate of interest is equal to 1%
plus the average interest paid at auctions of 5-year United States treasury notes
during the 6 months immediately preceding July 1 and January 1, as certified by
the state treasurer, and compounded annually, according to this section. Id. As
of the Petition Date, this rate was 1.14% equaling per diem pre-judgment interest
of $82.43 for the first year (9/30/2013 - 9/29/2014), $83.37 for the second year
(9/30/2014 - 9/29/2015), $84.32 for the third year (9/30/2015 - 9/29/2016), and
$85.28 for the fourth year (9/30/2016 - 9/29/2017);

$3,801.24 for unliquidated, post-Petition, post-Judgment interest on the Judgment

as of December 30, 2016, as explained above. The per diem interest on the
Judgment is $13.47 until March 9, 2017, when all accrued post-judgment interest
will compound into principal, resulting in a new Judgment amount of $750,111.55
and a new per diem interest of $13.56;

$23,781.28 for unliquidated, post-Petition, pre-judgment interest through

December 30, 2016 on Strykers unliquidated claims for attorneys fee and costs
in the amount of $2,639,255.99 pursuant to M.C.L. 600.6013(8) as explained
above. The per diem interest is currently $85.28 until September 30, 2017, when
interest will compound into principal; and

Stryker is entitled to an unknown amount of post-Petition, post-judgment interest

on its unliquidated claims for attorneys fees and costs from the date of entry of a
judgment liquidating same until the date of payment. See 28 U.S.C. 1961(a).
(Interest shall be allowed on any money judgment in a civil case recovered in a
district court.). The rate of interest shall be calculated from the date of the entry
of the judgment, at a rate equal to the weekly 1-year constant maturity Treasury
yield, as published by the Board of Governors of the Federal Reserve System, for
the calendar week preceding the date of the judgment and compounded annually.
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Id. For the week ending December 16, 2016, this rate was .89%.
ARGUMENT
I.

Debtor Cannot Re-Litigate The Michigan Action Before This Court.

14.

In his Objection, Debtor improperly attempts to re-litigate the facts of the

Michigan Action.5 (see i.e. Objection, p. 6). However, the Judgment remains in full force and
effect and is controlling unless and until overturned on appeal. See i.e. Recoveredge LP v.
Pentecost, 44 F.3d 1284, 1290 (5th Cir. 1995) (when an issue of ultimate fact has once been
determined by a valid and final judgment, that issue cannot again be litigated between the same
parties in any future lawsuit.); In re Eads, 417 B.R. 728, 742 (Bankr. E.D. Tex. 2009)
(recognizing that res judicata bars collateral attack); Davis v. McGrew (In re McGrew), No. 1350113, 2014 Bankr. LEXIS 2672, *24-25 (Bankr. E.D. Tex. June 18, 2014). Therefore, under
controlling Fifth Circuit precedent, issue preclusion applies and prevents Debtor from relitigating facts decided in the Michigan Action. Recoveredge LP, 44 F.3d at 1290.
II.

Debtors Catchall Objections To Strykers Proof of Claim Wholly Lack Merit

And Should Be Overruled As a Matter of Law.
15.

Debtor objects to the entirety of Strykers Proof of Claim based on the following

catchall arguments: (a) the Sixth Circuit Appeal must be finalized before this Court is able to
adjudicate allowance of the Proof of Claim; (b) Stryker failed to meet its burden to establish its
claim; and (c) Stryker is only entitled to one recovery so one of its claims must be disallowed.
Each of these objections should be overruled as a matter of law for the reasons set forth below:

For example, Debtor asserts that Stryker/Howmedica has not produced a complete, authentic
noncompete agreement bearing the signature of Debtor and that Mr. Ridgeway denied signing a noncompete agreement with Stryker/Howmedica, and denied improperly utilizing any information from
Stryker/Howmedica of a confidential nature. However, the Jury expressly found that Debtor was party
to a valid non-compete agreement with Stryker and that Debtor was liable to Stryker for breach of the
non-compete. (see Addendum, Ex. E, Jury Verdict, p. 2-3).

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A.

Strykers claims are based on the final, valid, and enforceable Judgment and
are not contingent on resolution of Debtors Sixth Circuit Appeal

16.

In his Objection, Debtor argues that the allowance process on Strykers Claims

must be made subject to the ultimate disposition of Debtors Sixth Circuit Appeal. (see
Objection, p. 16). Debtors argument misconstrues the underlying basis of Strykers Proof of
Claim. Strykers claims result and stem from a valid, final, and enforceable Judgment entered in
favor of Stryker and against the Debtor. Debtor has not sought or obtained a stay of the
Judgment pending appeal. Thus, except for application of the automatic stay, no stay applies to
the Judgment. Contrary to Debtors argument, the mere perfection of an appeal does not imperil
the enforceability of a judgment. See i.e. Strong v. Laubach, 443 F.3d 1297, 1300 (10th Cir.
2006) (recognizing that execution on judgment is permissible notwithstanding appeal unless a
stay is granted). Thus, the pendency of Debtors Sixth Circuit Appeal does not prevent the
allowance and payment of Strykers claim. In fact, Debtors Plan expressly provides that
litigation over Strykers claim will proceed notwithstanding the pendency of the Sixth Circuit
Appeal. (see Debtors Second Amended Plan, 4.9).
17.

Moreover, Bankruptcy Rule 3008 permits reconsideration of claims to the extent

the outcome of the Sixth Circuit Appeal has any bearing on Strykers Proof of Claim. Therefore,
Debtor already has a basis under which to seek reconsideration of any order allowing Strykers
Proofs of Claim in the unlikely event that the Sixth Circuit reverses the Judgment. As such,
Strykers Proof of Claim is entirely enforceable in Debtors bankruptcy case.
B.

Stryker has met its burden regarding its Proof of Claim whereas Debtor has
failed to provide any rebuttal evidence.

18.

Debtor concedes that a creditors claim is considered prima facie valid so long as

the creditor meets certain threshold evidentiary burdens set forth in the Bankruptcy Code and

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Bankruptcy Rules. (see Objection, p. 15). Stryker agrees that a validly executed and filed proof
of claim constitutes prima facie evidence of the validity and amount of the claim. Fed. R.
Bankr. P. 3001(f). Here, by virtue of correctly filing its proof of claim, Stryker is deemed to
have established a prima facie valid and enforceable claim. See In re Armstrong, 320 B.R. 97,
102 (N.D. Tex. 2005) (Sections 501 and 502 of the Bankruptcy Code and Bankruptcy Rule
3001 provide that a party correctly filing a proof of claim is deemed to have established a prima
facie case against Debtors assets.) (internal quotes and citations omitted).
19.

Further, Debtor fails to identify any supporting document he believes should have

been attached to the Proof of Claim. On the contrary, Stryker thoroughly documented its claims
in satisfaction of the Bankruptcy Rules and Bankruptcy Code. Specifically, Stryker filed the
seventeen page Addendum setting forth: (i) a narrative explanation of the basis for each
component of the Proof of Claim; (ii) the underlying calculations with respect to each calculable
component of the Proof of Claim; and (iii) the remaining contingent, unliquidated portions of
the claim. Stryker also attached more than 1,460 pages of supporting documents to the
Addendum, including the following: Ex. A - First Sanctions Award; Ex. B - Second Sanctions
Order; Ex. C - Bar Order; Ex. D - Strykers Petition for Fees and Costs Per the Second Sanctions
Order; Ex. E - Jury Verdict; Ex. F - Judgment; Ex. G - Strykers Bill of Costs; Ex. H - Case Law;
Ex. I - Case Law; Ex. J - Wexler Decl. (with invoices and itemized time detail for all requested
attorneys fees); Ex. K - Beyer Decl. (with invoices and itemized time detail for all requested
attorneys fees); Ex. L - Marsh Decl. (with invoices and itemized time detail for all requested
attorneys fees); Ex. M - Gass Decl. (with invoices and itemized time detail for all requested
attorneys fees); and Ex. N - Bratic Decl. (with certain ascertainable interest calculations).

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Further, pursuant to this Courts request, Stryker filed its Supp. Brief on Post-Petition Interest
which included updated calculations for Strykers Proof of Claim.
20.

By filing the Proof of Claim, the Addendum and the Exhibits thereto, and the

Supp. Brief on Post-Petition Interest, Stryker has clearly met its prima facie burden and, thus,
Debtor was obligated to produce evidence to rebut the claim. Simmons v. Savell (In re
Simmons), 765 F.2d 547, 552 (5th Cir. 1985) (once a proof of claim is deemed prima facie valid,
an objector must produce evidence of equal probative force defeating the proof of claim).
However, Debtor has failed to produce any evidence or valid arguments rebutting any portion of
Strykers Proof of Claim. As such, the Court should allow Strykers Proof of Claim as requested.
C.

21.

Stryker Corp. and Howmedica are each entitled to allowance of their

respective Proofs of Claim subject to a single satisfaction of their claims.
Debtor next argues that to the extent Strykers and Howmedicas claims, Claim

14 and Claim 15, may be construed to allow for duplicate recovery for the same debt, they must
be found unenforceable and disallowed pursuant to 11 U.S.C. 502(b)(1). (see Objection, p.
16). However, Stryker Corp. and Howmedica are separate entities and each obtained the
Judgment against Debtor. As such, each is entitled to allowance of its own proof of claim. See
i.e. 11 U.S.C. 501 ([a] creditor may file a proof of claim). In fact, Bankruptcy Rule
3002 expressly states that [a]n unsecured creditor must file a proof of claim for the claim
to be allowed. Further, Bankruptcy Rule 3003(c)(2) adds that in Chapter 11 cases: any
creditor who fails to [timely file a proof of claim] shall not be treated as a creditor with respect to
such claim. Instead, as Debtor later concedes, [i]t appears any amounts owed are owed
conjunctively - that Stryker and Howmedica would collectively be entitled to one, indivisible
sum. (see Objection, at p. 16). Thus, Stryker Corp. and Howmedica submit that Claims 14
and 15 should both be allowed subject to limiting language clarifying that Stryker Corp. and
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Howmedica are entitled to a single recovery. In re Mid-America Indus., Inc., 236 B.R. 640
(Bankr. N.D. Ill. 1999) (holding that separate entities hold separate claims in bankruptcy even
though the claims had been reduced to single judgment).
III.

The Components of Strykers Proof of Claim That Debtor Has Not Specifically
Objected Are Deemed Allowed Pursuant To Bankruptcy Code Section 502(a).
22.

Once the Court disposes of Debtors catchall objections, several components of

Strykers Proof of Claim should be deemed allowed because Debtor has not objected to them.
See 11 U.S.C. 502(a); see also United States v. Moore, 376 F.3d 570, 576 (6th Cir. 2004)
(failure to raise arguments in opening memorandum or brief leads to forfeiture and waiver of
those arguments); Am. States Ins. Co. v. Bailey, 133 F.3d 363, 372 (5th Cir. 1998) (Failure to
provide any legal or factual analysis of an issue results in waiver.). Notably, Debtor does not
challenge allowance of the following:

IV.

The liquidated Judgment of $745,195.00;

Unliquidated, pre-Petition, pre-judgment interest on the Judgment of $188.58;

Unliquidated, pre-Petition, post-judgment interest on the Judgment of $47,508.14;

Unliquidated costs arising from the Michigan Action of $143,535.29; and

Unliquidated attorneys fees and costs of $200,430.16, which is the portion of the
$223,351.16 Second Sanctions Fee Petition remaining after attorney fee rates are
reduced to $300 per hour as set forth below.

Debtors Specific Objections To Components of Strykers Proof of Claim Lack

Merit And Should Be Overruled.
23.

Finally, Debtor asserts the following specific objections to certain components

of Strykers Proof of Claim: (a) Strykers request for post-Petition interest should be disallowed
because such amounts are prohibited under Bankruptcy Code section 502, were not ascertainable
as of the Petition Date, and were not calculated in the Proof of Claim; (b) Strykers description of
its claims for unliquidated pre-judgment interest on attorneys fees and costs in the Proof of
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Claim is insufficient; (c) the hourly rates for Strykers attorneys fees claim under the Second
Sanctions Fee Petition should be capped at $300; and (d) Stryker is not entitled to recover its
attorneys fees under Michigan State Law and the Common Core Doctrine, or the in the
alternative, that the hourly rate sought by Stryker for Mr. Wexler is not commensurate to
approved rates in the Western District of Michigan and should be reduced accordingly.
A.

Stryker is entitled to post-Petition interest under Debtors Plan.

24.

Debtor asserts that Stryker is not entitled to any post-Petition interest because

such interest is explicitly prohibited by law as to unsecured creditors like Stryker (see
Objection, p. 21). This is the general rule in bankruptcy. However, as set forth in great detail in
Strykers Supp. Brief on Post-Petition Interest (which is attached hereto as Exhibit 2 and
incorporated by reference as if fully set forth herein), because Debtor is solvent, Debtor must pay
Strykers claims in full with post-Petition interest at the rates set forth in otherwise applicable
non-bankruptcy law in order to satisfy Section 1129(b)s fair and equitable test and absolute
priority rule for confirmation of the Plan. Stated differently, post-Petition interest should not be
included in the allowed amount of Strykers Proof of Claim for purposes of Section 502.
Instead, the amount of Strykers claim should be calculated and allowed without post-Petition
interest. Then, pursuant to the terms of the Debtors Plan and the plan confirmation order,
Stryker should be awarded post-Petition interest on the entire allowed amount of its Proof of
Claim pursuant to Bankruptcy Code section 1129(b). See Colfin Bulls Fundings A, LLC v. Gus
A. Paloian, et al., Case No. 15-10512, Dkt. No. 22 (N.D. IL. August 24, 2016), a copy is
attached as Exhibit 3; see also 11 U.S.C. 726(a)(4) & (5) (providing for payment of all allowed
claims in full, then to the extent sufficient funds remain, payment of post-petition interest on all
allowed claims).

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Stryker is entitled to post-Petition, post-judgment interest under

Debtors Plan at the Federal Judgment Rate.

While Debtor concedes that he must pay post-Petition, post-judgment interest to

Stryker on the Judgment under his Plan (see Dkt. No. 285, Debtor Supplemental Brief, p. 5),
Debtor argues that Strykers claim for an unknown amount of post-Petition, post-judgment
interest arising from its unliquidated claims for attorneys fees and costs should be disallowed
because such amount was not sufficiently raised in Strykers Proof of Claim. (see Objection, p.
20). This argument is of no consequence for the reason set forth above - claims for post-Petition
interest must be paid under Debtors Plan, separate and apart from the claims allowance process.
Stryker timely asserted its rights with respect to same when it objected to Debtors Plan. (see
Dkt. No. 264, Plan Objection, pp. 3-4).
26.

Debtor also incorrectly argues that Strykers claim for post-Petition, post-

judgment interest is not allowable because it is contingent and unliquidated. This is clearly
incorrect based on the Bankruptcy Codes definition of a claim and because the Debtor must
pay post-Petition interest under his Plan. See 11 U.S.C. 101(5)(A) (defining claim to include
unliquidated and contingent claims); see also 11 U.S.C. 1129(b). However, Stryker agrees that
its claims for post-Petition, post-judgment interest arising from attorneys fees and costs do not
begin to accrue until under the underlying attorneys fees and costs are liquidated, either by this
Court or the Michigan Court. As set forth in Strykers Supp. Brief on Post-Petition Interest, the
appropriate rate of post-Petition, post-judgment interest is the federal judgment rate. (see Supp.
Brief on Post-Petition Interest, at pp. 9, 13 (citing 28 U.S.C. 1961(a))).

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Stryker is entitled to post-Petition, pre-judgment on its unliquidated

attorneys fees and costs claims at the rate set by Michigan State Law.

To the extent Debtors objections to post-Petition, pre-judgment interest on

unliquidated attorneys fees and costs claims arise under the Bankruptcy Code, such objections
fail for the reasons set forth above in Section IV-A(i). To the extent Debtors objections to same
arise under Michigan State Law, they fail for the reasons explained below in Section IV-B.
Finally, such post-Petition, pre-judgment interest is allowable at the rates provided for under
Michigan State Law as explained in Strykers Supp. Brief on Post-Petition Interest (a copy of
which is attached hereto as Exhibit 2 and fully incorporated herein). See i.e. In re Schoeneberg,
156 B.R. 963, 972 (Bankr. W.D. Tex. 1993) (holding in solvent debtor case that post-petition
interest is payable either at the contract rate, at the statutory rate (if a specialized statute
establishes a specialized rate of interest for a particular creditor) or, if there is no applicable
statute and no rate was contracted for, at the state judgment rate.).
B.

Strykers claims for pre-Petition, pre-judgment interest on unliquidated

attorneys fees and costs should be allowed because Stryker timely and
sufficiently set forth same in the Proof of Claim.

28.

Debtor next argues that Strykers claim for pre-judgment interest on any

attorneys fee and costs award is not preserved in, itemized in or described in Claim 14 or
Claim 15 as required by Bankruptcy Rule 3001, and thus is untimely, barred pursuant to the Bar
Order, and or [sic] is not entitled to any presumption of prima facie validity. (see Objection, p.
18). At the same time, Debtor also argues that the pre-judgment interest claim should be
disallowed because it was not capable of being liquidated at the time Stryker filed the Proof of
Claim. (Id., p. 20). These conflicting arguments lack merit.
29.

Preliminarily, the underlying basis for Strykers claim to this category of pre-

judgment interest is Strykers claim for unliquidated attorneys fees and costs, which is discussed
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in great detail in Strykers Proof of Claim. (see Addendum, pp. 4-14, & Exhibits J, K, L, & M).
In addition, Stryker expressly states in the Addendum that: Under Michigan law, Stryker is
entitled to pre-judgment interest on its damages) (see Addendum, p. 15) (citing Mich. Comp.
Laws 600.6013) (other internal citations omitted) (emphasis added). Further, Strykers
Addendum cites to the statutory basis for this claim - Mich. Comp. Laws 600.6013 - and
controlling Sixth Circuit case law interpreting the application of same in federal courts. (Id.)
(citing Perceptron, Inc. v. Sensor Adaptive Machs., Inc., 221 F.3d 913, 922 (6th Cir. 2000) (In
Michigan, prejudgment interest is not discretionary as the statute provides in relevant part that
interest on a money judgment recovered in a civil action shall be calculated . . . from the date of
filing the complaint and shall be calculated on the entire amount of the money judgment,
including attorney fees and other costs.) (citation omitted) (emphasis added)).6 Stryker even
included additional detail regarding its claim for pre-judgment interest in its Supp. Brief on PostPetition Interest. (see Supp. Brief on Post-Petition Interest, p. 13). Thus, Stryker timely asserted
this portion of the claim.
30.

Furthermore, because Strykers claim to pre-judgment interest is based on statute,

Stryker was not required to attach any additional documentation proving it up. See In re Jenny
Lynn Mining Co., 780 F.2d 585, 586 (6th Cir. 1986) (holding that attachment of additional
documents is not required where the claim is based on statute - and not writing - because such
statutory requirements are clear and unconditional); In re Krause, No. 07-15395, 2011 Bankr.
LEXIS 3391 (Bankr. E.D. Tenn. 2011) (additional documentation not required because claim
was based on statute rather than writing); Carlisle v. United States DOJ (In re Carlisle), 320 B.R.
796 (M.D. Pa. 2004).
6

In the Addendum, Stryker also reserved all rights and claims against the Debtor, including the
right to assert any additional such rights, as necessary. (see Addendum, pp. 16-17).

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Contradicting his prior argument, Debtor then argues that Strykers unliquidated

claim for pre-judgment interest should be disallowed because such claim is predicated on
unliquidated claims for attorneys fees and costs and therefore was not capable of itemization as
of the Petition Date and should therefore be disallowed under Michigan State Law. (see
Objection, p. 20). Aside from undercutting Debtors prior argument, this argument does not
render Strykers claim for pre-judgment interest unenforceable. In fact, Debtors Objection fails
to cite to, let alone address, the controlling law on this issue - Perceptron and Mich. Comp. Laws
600.6013. Instead, Debtor cites to Jones v. Jackson Natl Life Ins. Co., 819 F.Supp. 1382,
1383 (W.D. Mich. 1993), where the court recognized that in breach of contract cases, Michigan
State Law provides for payment of interest from the date a claim is liquidated. Here, Strykers
claims for attorneys fees arises from the Michigan Uniform Trade Secrets Act and the Second
Sanctions Order. The remainder of the cases cited by Debtor do not involve Michigan State Law
and are thus completely irrelevant. Thus, under Michigan State Law, Strykers claim is valid.
Perceptron, 221 F.3d at 922 (In Michigan, prejudgment interest is not discretionary).
32.

Nor does the Bankruptcy Code alter the application of Michigan State Law.

Under U.S. Supreme Court precedent, creditors claims are to be allowed in accordance with
otherwise applicable state law unless the Bankruptcy Code expressly provides otherwise. Butner
v. U.S., 440 U.S. 48, 54 (1979). Here, the Bankruptcy Code expressly defines claim to include
any right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated,
fixed, contingent. 11 U.S.C. 101(5)(A). Thus, this Court should overrule Debtors
objection to Strykers claims for pre-judgment interest on any attorneys fee and costs award.

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C.

Debtors objections to Strykers attorneys fees lack merit and should be

overruled.

33.

Debtors objections to Strykers unliquidated attorneys fees claims are incorrect

as a matter of law and fact. Debtor first objects to hourly attorney rates exceeding $300 with
respect to Strykers Second Sanction Fee Petition.7 Debtor also incorrectly argues that neither
Michigan State Law nor the Common Core Doctrine support an award of attorneys fees. In
the alternative, Debtor objects to the $495 hourly rate sought for Mr. Wexler under Michigan
State Law and the Common Core Doctrine, arguing that rates in excess of $400 are not
commensurate with the rates approved by courts in the Western District of Michigan.8 Each of
these arguments fails. Accordingly, the Court should award Stryker attorneys fees as requested.
(i).

34.

The applicable rates for calculating the reasonableness of Strykers

attorneys fees are the prevailing rates in the Western District of
Michigan.

The Fifth Circuit recently reiterated that in order to determine reasonable hourly

rates, courts must look to the customary local attorney fee rates for attorneys of comparable
experience and expertise. See Asarco, L.L.C. v. Jordan Hyden Womble Culbreth & Holzer, P.C.
(In re Asarco, L.L.C.), 751 F.3d 291, 297 (5th Cir. Tex. 2014) affd on other grounds Baker Botts
L.L.P. v. ASARCO LLC, 135 S. Ct. 2158 (2015). Thus, attorneys fees are to be calculated at the
prevailing market rates in the relevant community. Blum v. Stenson, 465 U.S. 886, 895 (1984).

The disputed portion of the $223,351.16 in fees sought for the Second Sanctions Fee Petition is
$22,921.00, which is the amount that the requested fees exceed $300 multiplied by the number of hours
billed under the Second Sanctions Fee Petition. (see Addendum, Exhibit D, p. 10).
8

The disputed portion of the $2,272,369.54 in fees sought under Michigan State Law and the
Common Core Doctrine is $113,686.50, which is the difference between Mr. Wexlers rate at $400 and
$495 per hour based on the hours 1,196.7 hours billed by Mr. Wexler under Michigan State Law and the
Common Core Doctrine (1,196.7 x $95 = $113,686.50). (see Addendum, p. 13).

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Here, the relevant community is the United States District Court for the Western District of
Michigan.
(ii).

35.

The hourly rates for Strykers attorneys under the Second Sanctions
Fee Petition are not subject to a $300 cap because the Michigan
District Courts prior fee award is of no precedential value.

Debtor argues that the rates sought by Stryker in the Second Sanctions Fee

Petition are unreasonable to the extent that such rates exceed $300 per hour based on a prior
Michigan Court ruling applying a lower fee. Thus, the disputed portion of the $223,351.16
sought for the Second Sanctions Fee Petition is $22,921.00, which is the amount that the
requested fees exceed $300 multiplied by the number of hours billed under the Second Sanctions
Fee Petition. (see Addendum, Exhibit D, p. 10). Debtors argument fails for two reasons.
36.

First, the circumstances under which the Michigan Court applied a rate of $300

were substantially different, based, in part, on the arguments advanced by Stryker at the time,
where it sought its full out-of-town rate and did not offer any evidence of applicable local fees.
In its first fee petition, Stryker sought recovery of fees pursuant to Fed. R. Civ. P. 37 and argued,
as an exception to the customary local fee attorney rates, the Court should consider the
necessity of employment of an out-of-town specialist to handle certain issues. (see Michigan
Action, Dkt. No. 222). By doing so, Stryker did not argue that its rates were reasonable in the
context of customary local rates. (Id.) In consideration of this argument, the Michigan Court
noted the paucity of evidence with respect to reasonable rates in the Western Michigan. (Id. at
Dkt. 284, Page ID 6227). Absent evidence of local rates commensurate with Strykers proposed
out-of-state expert rates, the Michigan Court declined to depart from the community market
rule and determined that $300 an hour was reasonable for purposes of the motion to compel.
(Id. at Dkt. No. 294). However, this ruling offers no precedential effect. See, e.g., Van

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Elslander v. Thomas Sebold & Assocs., Inc., No. 318500, 2014 WL 7442253, at *4 (Mich. Ct.
App. Dec. 30, 2014), appeal denied, 498 Mich. 866, 866 N.W.2d 439 (2015) (the law of the case
doctrine applies to a courts rulings on legal questions, binding trial courts only as to those
decisions when the same case is on remand).
37.

In contrast, in the Second Sanctions Fee Petition, Stryker has provided this Court

with numerous citations to opinions in which local Western District of Michigan counsel were
awarded hourly rates commensurate with the rates sought by Strykers counsel in the instant
matter. (see Addendum, Ex. D, pp. 6-7). Because Stryker did not present local rates in its initial
fee petition, the Michigan Court received no evidence that higher rates were awarded or sought
by local counsel. Strykers current petition provides such evidence and the lodestar method can
be properly applied here. See, e.g., Garber v. Shiner Enters., Inc., 06-646, 2007 U.S. Dist.
LEXIS 93889, *3 (W.D. Mich. Dec. 21, 2007) (The reasonable hourly rate in the community
may be established through proof of rates charged in the community under similar circumstances
as well as opinion evidence of reasonable rates.); see also Geier v. Sundquist, 372 F.3d 784, 791
(6th Cir. 2004) (defining the prevailing market rate as the rate that lawyers of comparable skill
and experience could reasonably expect to command within the venue of the court of record).
38.

Second, the work performed by Strykers counsel and expert witness to

investigate the second discovery dispute was far different from the first sanctions petition.
Rather, the second application was pursuant to Strykers Motion for Terminating Sanctions, not a
motion to compel, and based on forensic examination of nearly 10 of the Debtors computers,
tablets, cellular phones, and email accounts. (see Michigan Action, Dkt. Nos. 445, 447). After
succeeding on the first motion to compel and engaging in additional discovery, the Michigan
Court ordered a forensic review of Debtors electronic devices. The forensic examination,

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conducted at Strykers expense, revealed 188,185 documents Debtor withheld from discovery.
(Id., Dkt. No. 447).
39.

To support its Motion for Terminating Sanctions, Stryker submitted several

affidavits of individuals who detailed the extensive efforts related to culling, organizing, and
reviewing the results of the forensic examination, all of which was presented to the Michigan
Court. In stark contrast to the motion to compel filed with the court a year earlier, the
investigative efforts related to the discovery dispute and the presentment of the arguments related
thereto were uniquely complex and particularly difficult. Based on the vast difference in facts,
circumstances, and evidence, between the first fee petition (motion to compel) and the second
(motion for terminating sanctions), no just reason exists to apply the community market rule to
Strykers Motion for Terminating Sanctions, rather than the lodestar method. See Van Elslander,
2014 WL 7442253, at *4.
D.

Stryker is entitled to recover its attorneys fees under Michigan State Law
and the Common Core Doctrine in the requested amount.

40.

Debtor is incorrect in arguing that neither Michigan State Law nor the Common

Core Doctrine support an award of attorneys fees. Debtors objection to Mr. Wexler rate also
fails. Stryker addresses each argument in turn.
(i).

41.

The Jurys finding that Debtors misappropriation of trade secrets

was willful and malicious triggered the Michigan Uniform Trade
Secrets Acts attorneys fee provision.

Debtors argument that an award of attorneys fees under the Michigan Uniform

Trade Secrets Act (MUTSA) is discretionary and should not be awarded in this case fails as a
matter of law. Under MUTSA, attorneys fees are recoverable where there is a finding that the
misappropriation was willful and malicious. Specifically, Mich. Comp. Laws 445.1905
states: If willful and malicious misappropriation exists, the court may award reasonable
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attorneys fees to the prevailing party. The Jury found that Debtors misappropriation was
willful and malicious and no argument exists that Stryker was not the prevailing party. (see
Addendum, Ex. E, Jury Verdict).
42.

Nevertheless, Debtor argues that, based on the language of MUTSA, awarding

attorneys fees to the prevailing party is permissive rather than mandatory and should not be
awarded in this case. (Objection, p. 30). However, Debtor fails to cite a single case in which a
Michigan court did not award attorneys fees under MUTSA when a party proved willful and
malicious misappropriation. On the contrary, every reported Michigan decision on this issue
awarded attorneys fees. See, e.g., DeGussa Admixtures, Inc. v. Burnett, 277 Fed. Appx. 530,
532-534 (6th Cir. 2008); DeGussa Admixtures, Inc. v. Burnett, 471 F. Supp. 2d 848 (W.D. Mich.
2007); I/O Test, Inc. v. Smiths Aerospace, Inc., No. 1:06-CV-117, 2007 WL 1238895, at *3
(W.D. Mich. Apr. 27, 2007).
43.

Moreover, in In re Jonatzke, 478 B.R. 846, 870 (Bankr. E.D. Mich. 2012), a

Michigan Bankruptcy Court addressed similar arguments by a debtor; i.e., that fees should not be
awarded under MUTSA because they are discretionary in instances of willful and malicious
misappropriation of trade secrets. Similar to this case, in Jonatzke, the debtor had committed
discovery violations attempting to conceal his willful and malicious misappropriation of trade
secrets. Id. The Jonatzke court rejected that debtors argument and held that an award of
attorneys fees under MUTSA was more than appropriate, noting that it would not permit the
Debtor to profit from his deliberate destruction of the evidence. Id. The same reasoning holds
true here given that Debtor was twice sanctioned by the Michigan Court for discovery violations.
(see Addendum, Ex. A - First Sanctions Award; Ex. B Second Sanctions Order; Ex. C - Bar
Order, at p. 9 (stating Ridgeway had violated both his discovery obligations and the Courts

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March 18, 2015 compulsion order and Ridgeway engaged in bad faith conduct that resulted in
prejudice to Stryker.). Moreover, because Debtor is solvent, Fifth Circuit case law requires
enforcement of all of a creditors state law rights, including claims for default interest and
attorneys fees. See i.e. Premier Entmt Biloxi LLC v. U.S. Bank Natl Assoc. (In re Premier
Entm't Biloxi LLC), 445 B.R. 582, 636 (Bankr. S.D. Miss. 2010) (when a debtor is solvent,
bankruptcy courts generally will enforce the debtors contractual obligations to the extent they
are valid under applicable state law); Schoeneberg, 156 B.R. at 972. Thus, the statutory
elements have been met and Stryker should be awarded its attorneys fees under MUTSA.
(ii).

44.

Under the Common Core Doctrine, Stryker is entitled to attorneys

fees incurred in connection with non-MUTSA claims.

Debtor then objects to Strykers attorneys fees under the Common Core

Doctrine on the basis that the Common Core Doctrine only applies to civil rights cases. Debtor
further objects to Strykers non-MUTSA fees sought under the Common Core Doctrine to the
extent that Stryker cannot be reasonably separate such fees from its fees under MUTSA. These
arguments are incorrect under Fifth Circuit and Sixth Circuit case law.
45.

Under controlling case law, where a common core of facts exists, a party,

otherwise entitled to recover fees, may recover its legal fees for the entirety of the case.
Thurman v. Yellow Freight Sys., 90 F.3d 1160, 1169 (6th Cir. 1996) ([w]hen claims are based
on a common core of facts or are based on related legal theories, for the purpose of calculating
attorneys fees they should not be treated as distinct claims, and the cost of litigating the related
claims should not be reduced); Louisiana Power & Light Co. v. Kellstrom, 50 F.3d 319, 327
(5th Cir. 1995) (when claims share a common core of facts or related legal theories, a fee
applicant may claim all hours reasonably necessary to litigate those issues); DiLauria v. Twp. of

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Ann Arbor, 471 F.3d 666, 673 (6th Cir. 2006) (finding reduction of fees, where common core of
facts existed, constituted reversible error).
46.

Contrary to Debtors assertion that the Common Core Doctrine applies only to

civil rights cases, well-established Fifth and Sixth Circuit case law has applied the Common
Core Doctrine to non-civil rights cases, including antitrust, trade secrets, and non-compete cases.
See Louisiana Power & Light Co., 50 F.3d at 327 (5th Cir. 1995) (applying Common Core
Doctrine to antitrust case); Braun v. Ultimate Jetcharters, Inc., No. 5:12CV1635, 2014 WL
3749418, at *14 (N.D. Ohio July 30, 2014), amended, No. 5:12-CV-1635, 2015 WL 1472040
(N.D. Ohio Mar. 31, 2015), aff'd sub nom. Braun v. Ultimate Jetcharters, LLC, 828 F.3d 501
(6th Cir. 2016) (awarding fees under common core doctrine for successful and unsuccessful
claims as the same factual allegations supporting the dismissed claims formed the core of
plaintiff's successful state law retaliation claim); Edwards Moving & Rigging, Inc. v. Barnhart
Crane & Rigging Co., No. 2:14-cv-02100, 2015 U.S. Dist. LEXIS 159229 (W.D. Tenn. Nov. 25,
2015) (applying Common Core Doctrine for prosecution of breach of non-compete agreement
and tortious interference claims); Hance v. Norfolk S. Ry. Co., No. 3:04-CV-160, 2007 WL
3046355, at *4 (E.D. Tenn. Oct. 16, 2007) (applying Common Core Doctrine for recovery of
fees in case involving claims under Uniformed Services Employment and Reemployment Act
USERRA); Cummings Inc. v. BP Prod. N. Am., Inc., No. 3:06-0890, 2010 WL 796825, at *1
(M.D. Tenn. Mar. 3, 2010) (claims for breach of contract and intentional interference with
business relations arose from common core of facts to support petition for attorneys fees). In
fact, the very trial judge who presided over the Michigan Action has applied the Common Core
Doctrine in another misappropriation case (which was not a civil rights case). See, e.g., Degussa
Admixtures, Inc. v. Burnett, 2007 U.S. Dist. LEXIS 25091, at *5-7 (W.D. Mich. Apr. 4, 2007)

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(awarding attorneys fees under MUTSA and fees spent on claims related to breach of contract
and interference with contract and business relationships because claims were based on a
common core of facts and involved related legal theories). Thus, Debtors assertion fails.
47.

Further, there can be no dispute that a common core of facts exists.9 This truth

is evidenced by Debtors failure to specifically identify any objectionable time entries under the
Common Core Doctrine. Indeed, each of Strykers claims was related, focusing on Debtors preand post-employment behavior and his attempts to improperly acquire business. At the heart of
those claims was Debtors willful and malicious misappropriation. Fifth and Sixth Circuit courts
repeatedly award attorneys fees on all claims where a common core of facts exists. See supra.
As a result, Stryker should recover its attorneys fees relating to all of its claims against Debtor.
48.

Additionally, as if to prove Strykers point that the Common Core Doctrine

applies in this case, Debtor argues that because Strykers fees cannot reasonably be separated
from its work on its non-MUTSA claims, Stryker should be denied recovery of its requested
fees. (see Objection, at p. 34). However, Strykers billing records are sufficiently detailed and
demonstrate that its counsels efforts were reasonably devoted to working on the case as a whole,
rather than to individual causes of action. (see Addendum, Exs. J, K, L, M). Not only that, each
of the claims Stryker pursued against Debtor sought overlapping recovery of damages, all arising
from Debtors misconduct in his breaches of post-employment restrictive covenants and
fiduciary duties, as well as his misappropriation of trade secrets. (see Addendum, Ex. E, Jury
Verdict).

Debtor also argues that in order for the Common Core Doctrine to apply in this case, Stryker was
required to plead the Common Core Doctrine in its Complaint. (see Objection, p. 35). This Court should
summarily reject this argument because none of the cite authority includes such a requirement.

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Moreover, courts have found billing records to be more than adequate to support

awards under the Common Core Doctrine where entries made by counsel were sufficient even if
the description for each entry was not explicitly detailed, McCombs v. Meijer, Inc., 395 F.3d
346, 360 (6th Cir. 2005), and where the attorney provided the court with computerized calendars
and file information indicating the dates and times of work performed. Sigley v. Kuhn, Nos. 98
3977/993531, 2000 WL 145187, at *8 (6th Cir. Jan. 31, 2000); see also Anderson v. Wilson,
357 F. Supp. 2d 991, 999 (E.D. Ky. 2005) (holding that the plaintiffs had satisfied their burden to
provide sufficiently detailed billing records where counsel provided the court with itemized
statements describing the subject matter, the attorney, the time allotment, and the charge for all
work done on Plaintiffs case).
50.

Here, Stryker carefully reviewed the time detail for its attorneys fee invoices and

painstakingly identified those entries eligible for payment under the Common Core Doctrine.
(see Addendum, Exs. J, K, L & M). This time detail, when reviewed in the context of the case as
a whole and in conjunction with the timeline of the litigation, support the finding that the
attorney hours and fees charged were actually and reasonably performed in the prosecution of the
litigation. See United Slate, Tile & Composition Roofers, Damp & Waterproof Workers Assn,
Local 307 v. G & M Roofing & Sheet Metal Co., 732 F.2d 495, 502 (6th Cir. 1984). Debtors
failure to object to a single time entry is further evidence of this. Thus, Stryker has satisfied its
burden and no just reason exists to deny its request for attorneys fees.
(iii).

51.

The hourly rates for Strykers attorneys fees under MUTSA and the
Common Core Doctrine are consistent with approved rates in the
Western District of Michigan.

Finally, Debtor objects to the $495 hour rate that Stryker seeks for Mr. Wexler

with respect to Strykers request for $2,272,369.54 in attorneys fees under MUTSA and the
Common Core Doctrine. Notably, Debtor does not object to any time entries or the requested
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hourly rates sought for attorneys D. Andrew Portinga ($400), Justin K. Beyer ($400), David J.
Gass ($368), or Robyn E. Marsh ($300) with respect to the fee request.10 Thus, Debtors
objection is limited to $113,686.50 of the attorneys fees sought by Stryker under MUTSA and
the Common Core Doctrine.11 Any objections to other attorneys rates are have been waived
under Fifth and Sixth Circuit precedent. United States v. Moore, 376 F.3d at 576 (failure to raise
arguments in opening memorandum or brief leads to forfeiture and waiver of those arguments);
Am. States Ins. Co. v. Bailey, 133 F.3d at 372 (Failure to provide any legal or factual analysis of
an issue results in waiver.).
52.

More specifically, Debtors sole argument in this regard is that Mr. Wexlers rate

is unreasonable because it is at the higher end of the spectrum for fees in the Western District of
Michigan.12 (see Objection, p. 26). Under Fifth Circuit precedent, in order to determine
reasonable hourly rates, this court must look to the customary local attorney fee rates for
attorneys of comparable experience and expertise in the Western District of Michigan. See
Asarco, 751 F.3d at 297. Stryker submits that Mr. Wexlers rate is reasonable under the

10

Strykers voluntary reductions to the rates sought for its attorneys fees in the Proof of Claim
already exceed $300,000.
11

Strykers Proof of Claim includes 1,196.7 hours for Mr. Wexler at $495 per hour based on
Michigan law and the Common Core Doctrine. (see Addendum, p. 13). Debtor does not object to the
$400 rate sought by Strykers other attorneys. Thus, Debtor objection is the difference between $400 and
$495, or $95 per hour. As such, the total amount of fees at issue is $113,686.50 ($95 x 1,196.7 hours
sought for Mr. Wexler at $495 per hour).
12

Notably, the State Bar of Michigan data, supplied by Debtor, demonstrates that Mr. Wexlers
billing rate still falls in the spectrum of acceptable rates for attorneys in the Grand Rapids, Michigan area.
(Michigan Action, Dkt. No. 222-5.)

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circumstances and is customary within the Western District of Michigan. Thus, Stryker should
be awarded a rate of $495 for Mr. Wexlers services.13
53.

As previously explained, reasonable hourly rates mean the customary local

attorney fee rates for attorneys of comparable experience and expertise. Hensley v. Eckerhart,
461 U.S. 424, 433 (1983). Here, the rate sought for Mr. Wexler is reasonable in light of the
hourly rates awarded in the Western District of Michigan. (see Michigan Action, Dkt. No. 7458, Portinga Decl. 13-16, a copy of which is attached hereto as Exhibit 4) (identifying local
rates of $500, $470, $450, and $410). Moreover, Stryker has identified the following cases in
which commensurate rates were awarded in fee petitions:

L J & S Dev., LLC v. Boars Head Provisions Co., Inc., 2013-003511-CZ at pp.
15-16 (20th Cir. Ct., Ottawa Cty., Mich. 2016) (awarding $490, $470, $455, and
$445), (a copy of which is attached to the Addendum as Exhibit H);

Brandon v. Administration Sys. Research Corp., Intl, 13-10843-NZB at p. 3

(17th Cir. Ct., Kent Cty., Mich. 2016) (awarding $485, $460, and $415);(a copy
of which is attached hereto as Exhibit 5);

Duran v. Sara Lee Corp., 1:11-cv-313-RJJ (ECF 249, Page ID. 8314) (awarding
$450/hr.) (W.D. Mich. Dkt. 748-9); (a copy of which is attached hereto as Exhibit
6);

In re Stover, 439 B.R. 683 (W.D. Mich. 2010) (awarding $450 and $400/hr.);

Koning v. United of Omaha Life Ins. Co., 13-cv-1005 (Dkt. 45) (awarding
$450/hr.); (a copy of which is attached hereto as Exhibit 7);

Worthing v Reliance Standard Life Ins. Co., 2009 U.S. Dist. LEXIS 52296 (E.D.
Mich. 2009) (awarding $400/hr.);

Crosby v. Bowater Inc. Ret. Plan, 262 F.Supp.2d 804 (2003) (vacated on other
grounds) (awarding $400/hr.);

Waldo v. Consumers Energy Co., 2012 U.S. Dist. LEXIS 45058 (W.D. Mich.
March 30, 2012) (awarding $400/hr.);

13

Debtor does not address or mention that the rate requested for Mr. Wexler is already significantly
discounted from the rate that Stryker paid Mr. Wexler, which was $590.75 per hour in 2013 and 2014 and
$631 per hour in 2015 and 2016. (see Addendum, p. 11).

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Streamline Packaging Sys. v. Vinton Packaging Grp., Inc., 2008 U.S. Dist. LEXIS
5523, at *6 (W.D. Mich. Jan. 25, 2008) (awarding $390/hr. to lead counsel in a
2008 trade secret case); and

Huizinga v. Genzink Steel Supply & Welding Co., 984 F.Supp.2d 741 (W.D.
Mich. 2013) (awarding $375/hr.).

54.

Further, Sixth Circuit courts routinely award fees sought by an experienced out-

of-town lawyer or one having extensive knowledge about a client or a particular area of law,
where such attorneys may handle a matter more efficiently. AdcockLadd v. Secretary of
Treasury, 227 F.3d 343, 350 (6th Cir. 2000); see also Graceland Fruit, Inc. v. KIC Chems., 320
Fed. Appx. 323, 329330 (6th Cir. 2008) (approving out-of-town counsels hourly rates based
on a long-standing attorney-client relationship, and because local counsel would have had to get
up to speed on the facts, increasing the fees); Hadix v. Johnson, 65 F.3d 532, 535 (6th Cir.
1995); see also Colonial Williamsburg Found. v. Kittinger Co., 38 F.3d 133, 139 (4th Cir. 1994)
(applying the Hadix test and affirming district courts award of attorneys fees for non-local
counsel because the non-local counsel had served as partys attorney for almost ten years and
had drafted the agreement in question). Here, Mr. Wexler, an out-of-state attorney, has served as
Strykers national counsel for non-compete and trade secret litigation for nearly 17 years. (see
Addendum, Ex. J, Wexler Decl. 4).
55.

Based on the decisions cited above,14 Mr. Portingas Declaration, and Debtors

failure to submit contrary evidence, Stryker met its burden and a rate of $495 should be awarded
to Stryker for work performed by Mr. Wexler.

14

This Court may take judicial notice of the rates approved by courts in the Western District of
Michigan. See Brown v. Sullivan, Case No. 85-3449, 1991 U.S. Dist. LEXIS 481, *5 (E.D. La. Jan. 17,
1991) (taking judicial notice of customary prevailing rate).

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CONCLUSION
56.

Wherefore, Stryker requests that this Court enter an order: (a) overruling

Debtors Objection to Strykers Proofs of Claim; (b) allowing each of Claim Nos. 14 and 15 in
the amount of $3,507,420.71 (with an additional $27,582.5215 in post-Petition interest to be
separately paid under Debtors Plan), subject to the limitation that Stryker Corp. and Howmedica
are collectively entitled to a single satisfaction of their claims; and (c) providing for any other
relief this Court deems fair and just.
New Orleans, Louisiana this 23rd day of December, 2016.
/s/ Cherie Dessauer Nobles
Tristan Manthey, La Bar No. 24539\
Cherie Dessauer Nobles, La. Bar No. 30476
HELLER, DRAPER, PATRICK,
HORN & DABNEY, LLC
650 Poydras Street, Suite 2500
New Orleans, Louisiana 70130-6103
Telephone: 504-299-3300
Fax: 504-299-3399
and
James B. Sowka (admitted Pro Hac Vice)
SEYFARTH SHAW LLP
131 S. Dearborn St, Suite 2400
Chicago, Illinois 60603-5577
Telephone: 312-460-5000
Fax: 312-460-7000

Counsel for Stryker Corporation and

Howmedica Osteonics, Corp.

15

Amount calculated as of December 30, 2016. Interest continues to accrued each day after
December 30, 2016, to the extent the claim is not paid in full.

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CERTIFICATE OF SERVICE
I HEREBY CERTIFY that I caused a copy of the foregoing to be served on
December 23, 2016 via Electronic Filing through the Courts electronic filing system upon the
parties listed below:

Florence Bonaccorso-Saenz on behalf of Creditor Louisiana Department of Revenue at

florence.saenz@la.gov
Robin B. Cheatham on behalf of Debtor Christopher Martin Ridgeway at
cheathamrb@arlaw.com, vicki.owens@arlaw.com; mary.cuenca@arlaw.com
Mary S. Langston on behalf of U.S. Trustee Office of the U.S. Trustee at
Mary.Langston@usdoj.gov
Arthur S. Mann, III on behalf of Creditor Ally Bank at
arthur@SundmakerFirm.com
Arthur S. Mann, III on behalf of Creditor Ford Motor Credit Company at
arthur@SundmakerFirm.com
Patrick L. McCune on behalf of Debtor Christopher Martin Ridgeway at
patrick.mccune@arlaw.com, victoria.zellers@arlaw.com
William T. McNew on behalf of Creditor JPMorgan Chase Bank, NA at
wmcnew@mkmblaw.com
Glenn K. Schreiber on behalf of Creditor I.R.S. at
glenn.schreiber@usdoj.gov, vanessa.brown@usdoj.gov, jerrilyn.dufauchard@usdoj.gov
James B Sowka on behalf of Creditor Stryker Corporation at
jsowka@seyfarth.com, crussell@seyfarth.com, chidocket@seyfarth.com
James B Sowka on behalf of Plaintiff Howmedica Osteonics Corp. at
jsowka@seyfarth.com, crussell@seyfarth.com, chidocket@seyfarth.com
Office of the U.S. Trustee at
USTPRegion05.NR.ECF@usdoj.gov
David F. Waguespack on behalf of Creditor Whitney Bank at
waguespack@carverdarden.com; docket@carverdarden.com;
plaisance@carverdarden.com
Stacy C. Wheat on behalf of Creditor M&T Bank at
bankruptcy@gra-arc.com, swheat@gra-arc.com

/s/ Cherie Dessauer Nobles

Cherie Dessauer Nobles, La. Bar No. 30476

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