WhatsApp Inc. et al v. NSO Group Technologies Limited et al

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United States District Court
Northern District of California
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
WHATSAPP INC., et al.,
Plaintiffs,
v.
NSO GROUP TECHNOLOGIES
LIMITED, et al.,
Defendants.
Case No. 19-cv-07123-PJH
ORDER GRANTING MOTION FOR
ATTORNEY’S FEES, DENYING
MOTION TO SEAL
Re: Dkt. 816, 828
Before the court is plaintiffs’ motion for attorney’s fees. See Dkt. 816. Having
read the papers filed by the parties and carefully considered their arguments and relevant
authority, and good cause appearing, the court hereby rules as follows.
A. 	Legal standard
Section 502(e)(2) of the California Comprehensive Computer Data Access and
Fraud Act (“CDAFA”) states that “[i]n any action brought pursuant to this subdivision the
court may award reasonable attorney’s fees.” In “action[s] involving state law claims,”
federal courts “apply the law of the forum state to determine whether a party is entitled to
attorneys’ fees, unless it conflicts with a valid federal statute or procedural rule.” MRO
Communications, Inc. v. AT&T Co., 197 F.3d 1276, 1282 (9th Cir. 1999). State law
governs both plaintiffs’ right to fees and the method of calculating the fees. See Wilson v.
Tesla, Inc., 833 Fed. Appx. 59, 61 n.2 (quoting Mangold v. Cal. Pub. Util. Comm’n, 67
F.3d 1470, 1478 (9th Cir. 1995)).
Section 1717 of the California Civil Code also provides that “[i]n any action on a
contract, where the contract specifically provides that attorney’s fees and costs, which
are incurred to enforce that contract, shall be awarded,” the prevailing party “shall be
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entitled to reasonable attorney’s fees.”
When a party prevails on a claim governed by a statutory fee-shifting provision,
that party may also recover attorney’s fees for “work done on claims that involve a
common core of facts” or are “based on related legal theories.”
The Ninth Circuit has recognized that “the test for relatedness of claims is not
precise,” explaining that “the focus is to be on whether the unsuccessful and successful
claims arose out of the same ‘course of conduct.’” See Webb v. Sloan, 330 F.3d 1158,
1169 (9th Cir. 2003) (citing Schwarz v. Secretary of Health & Human Services, 73 F.3d
895, 903 (9th Cir. 1995)). The Webb court acknowledged that it may sometimes be
“likely that some of the work performed in connection with the unsuccessful claim also
aided the work done on the merits of the successful claim,” but emphasized that “the
focus is on whether the claims arose out of a common course of conduct.” Id.
California courts have similarly held that “[w]hen the liability issues are so
interrelated that it would have been impossible to separate them into claims for which
attorney fees are properly awarded and claims for which they are not, then allocation is
not required.” See, e.g., Akins v. Enterprise Rent-A-Car Co. of SF, 79 Cal.App.4th 1127,
1133 (2000).
B. 	Analysis
Plaintiffs argue that they are entitled to fees under either CDAFA and/or section
1717 of the California Civil Code, which provides for attorney’s fees in contract cases.
Defendants argue that CDAFA is the only basis for a fee award in this case. See
Dkt. 823 at 11-13. Defendants further argue that plaintiffs may not recover any fees for
their breach of contract claim, and that any portion of fees attributable to that claim
should not be included in any fee award. See id. at 13-15. Defendants acknowledge that
the court may forgo apportionment if “the liability issues are so interrelated that it would
have been impossible to separate them,” but argue that plaintiffs’ contract claim is not
sufficiently interrelated to their CDAFA claim. See id. at 14 (citing Akins, 79 Cal.App.4th
at 1133.
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Specifically, defendants argue that plaintiffs’ contract claim presented “numerous
issues that should be severed and isolated for purposes of the attorney fee award.” See
Dkt. 823 at 14 (internal citation omitted). In particular, defendants point to the discovery
regarding defendants’ activity reverse-engineering or decompiling Whatsapp code,
arguing that such discovery was relevant only to the contract claim and not to the CDAFA
claim. See id. at 14-15.
In the court’s view, plaintiffs’ position regarding the relatedness of their claims is
more reasonable than defendants’ position. All of plaintiffs’ claims are both legally and
factually related.
Factually, there is no question that plaintiffs’ claims “arose out of the same course
of conduct.” It was defendants’ access of plaintiffs’ technology that formed the basis of
all claims asserted in this case. Defendants argue that certain activities – such as
reverse-engineering and decompiling plaintiffs’ code – were factually distinct from the
conduct underlying the CDAFA violations and thus should be considered “unrelated” and
part of a separate “course of conduct.” The court disagrees, as defendants’ view would
run afoul of the Ninth Circuit’s guidance in Webb, which made clear that “the focus is on
whether the claims arose out of a common course of conduct” even if the claims lack
perfect overlap. At the pleadings stage of the case, the court observed that the “breach
of contract claim involves the same common nucleus of operative facts as the tort
claims,” and the subsequent proceedings have not persuaded the court to change that
view. See Dkt. 111 at 32.
Legally, the court also concludes that plaintiffs’ claims are sufficiently interrelated
such that apportionment is not warranted. While defendants are correct that the breach
of contract claim involved allegations of additional conduct (such as reverse-engineering
and decompiling) beyond what was directly implicated by the CDAFA claim, that
additional conduct is precisely what enabled defendants to access defendants’
information in violation of CDAFA. Thus, the authority cited by defendants, in which the
Ninth Circuit found that different claims “involved completely different legal theories and
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questions” and thus chose to apportion fees, is not applicable to the present case. See,
e.g., Entertainment Research Group, Inc. v. Genesis Creative Group, Inc., 122 F.3d
1211, 1230 (9th Cir. 1997); see also Heppler v. J.M. Peters Co., 73 Cal.App.4th 1265,
1297 (1999) (fees should be apportioned in cases involving multiple defendants with
distinct theories of relief).
Thus, both factually and legally, the court concludes that plaintiffs’ CDAFA claim is
sufficiently related to their breach of contract claim such that apportionment is not
required. The court reaches the same conclusion with respect to plaintiffs’ trespass to
chattels claim, which was dismissed at the pleadings stage. See, e.g., Akins, 79
Cal.App.4th at 1133 (“The final ground of resolution may become clear only after a series
of unsuccessful attacks. Compensation is ordinarily warranted even for those
unsuccessful attacks, to the extent that those attacks led to a successful claim.”)
Overall, the court concludes that plaintiffs have shown that they are entitled to
recovery of fees under CDAFA, and that the fees incurred in connection with their breach
of contract and trespass to chattels claims are sufficiently related under Webb and Akins.
Thus, the court does not need to address whether fees are also recoverable under Cal.
Civ. Code § 1717.
In addition to challenging plaintiffs’ entitlement to fee recovery in the first place,
defendants also challenge the amount of fees sought, arguing that they are
unreasonable. See Dkt. 823 at 15-25. Specifically, defendants argue that plaintiffs
improperly seek fees based on fixed-fee arrangements rather than the lodestar method,
and that plaintiffs did not submit sufficient information about their expended hours.
Defendants further argue that plaintiffs must be ordered to produce time records, that
plaintiffs fail to establish their hourly rates, and that the amount of expended hours and
requested fees is not reasonable.
Regarding the fixed-fee agreement, the court rejects the argument that they are
incompatible with a fee award. The court instead agrees with the view taken by Judge
Alsup in Straight Path IP Group, Inc. v. Cisco Systems, Inc., that the lodestar method is
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not “the only method,” as “the flat-billing rate remains what clients actually pay for legal
services.” 2020 WL 2539002 (N.D. Cal. May 19, 2020) (emphasis in original). Plaintiffs’
fee arrangement reflects a real-world valuation of counsel’s legal services, as they were
negotiated by plaintiffs’ two main firms before they were involved in the case. See Dkt.
816 at 24; see also Moreno v. City of Sacramento, 534 F.3d 1106, 1115 (9th Cir. 2008)
(“The district court’s function is to award fees that reflect economic conditions in the
district.”). Thus, the court concludes that the fixed-fee agreements support the
reasonableness of plaintiffs’ fee request, without any further need for detailed time
records.
Also, plaintiffs submit declarations to support the conclusion that an hourly billing
method would have resulted in a lodestar that is greater than the fees that were actually
bargained-for and paid. See Dkt. 816 at 25.
Regarding plaintiffs’ counsel’s rates, plaintiffs are correct that they have cited
multiple cases holding that rates higher than plaintiffs’ counsel’s were reasonable and
consistent with the prevailing market. See Dkt. 816 at 27. Moreover, the amounts
charged are actually lower than rates that this court has approved on similarly complex
cases, and lower than prevailing rates in this district. See, e.g., Lansmont Corp. v. SPX
Corp., 2014 WL 1267003 (N.D. Cal. Mar. 27, 2014) (“Ultimately, California law allows a
judge, having been informed of the relevant circumstances, to determine a reasonable
fee from his or her own knowledge and experience.”). The court finds no basis for
defendants’ argument that plaintiffs must submit evidence regarding prevailing rates
specifically for CFAA and CDAFA cases.
Regarding the amount of hours expended by plaintiffs’ counsel, the court
concludes that the amount of hours expended in the case was warranted given the
case’s legal and technological complexity, as well as the number of discovery-related
motions necessitated by the national security protections invoked by defendants.
Accordingly, plaintiffs’ motion for attorney’s fees (Dkt. 816) is GRANTED, and fees
are awarded in the amount of $15,914,095.
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Finally, plaintiffs have filed a motion to seal, seeking to shield certain information
about their fee arrangements with counsel. Defendants oppose the motion to seal,
arguing that attorney fee rates are typically not considered sealable. See Dkt. 830 at 2
(citing cases). The court finds defendants’ authority to be more persuasive, and DENIES
plaintiffs’ motion to seal (Dkt. 828). Plaintiffs are directed to file unredacted versions of
the documents filed provisionally under seal, no later than seven (7) days from the date
of this order.
IT IS SO ORDERED.
Dated: January 30, 2026
/s/ Phyllis J. Hamilton
PHYLLIS J. HAMILTON
United States District Judge
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