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Category: Fee Denial

Fifth Circuit Says Fee Entitlement Needs Reconsideration

July 13, 2020

A recent Law 360 story by Michelle Casady, “5th Circ. Says $1M Atty Fee Request Needs Reconsideration” reports that the Fifth Circuit has determined that drilling data company Petrolink Services Inc. will get another chance to prove it's entitled to about $1 million in attorney fees for a lawsuit in which it beat back copyright infringement claims but was found by a jury to have unjustly enriched itself.  In an opinion, a three-judge panel agreed with Petrolink that a trial court had wrongly denied its request for fees without consideration in the lawsuit brought by competitor Digital Drilling Data Systems LLC, or Digidrill.  Digidrill accused Petrolink of hacking into its software at various oil rig sites in order to "scrape" valuable drilling data in real time.

Both companies appealed the trial court's judgment in early 2019.  After granting summary judgment dismissal on Digidrill's claims that Petrolink violated the Copyright Act and the Digital Millennium Copyright Act, the trial court denied Petrolink's request for about $1 million in attorney fees.  On appeal, Petrolink argued it was entitled to the award as the prevailing party on those claims.

Quoting the district court, the Fifth Circuit wrote that the lower court declined to award costs or fees to either side, because "both prevailed on different issues."  "It is difficult to make sense of this language in light of the fact that Petrolink only sought fees related to Digidrill's copyright and DMCA claims, on which Petrolink clearly and solely prevailed," the panel wrote.  "It matters not whether Digidrill ultimately prevailed on its state law unjust enrichment claim."  The Fifth Circuit sent the case back to the trial court for it to "properly analyze the motion" for attorney fees.

The Nation’s Top Attorney Fee Experts of 2020

June 24, 2020

NALFA, a non-profit group, is building a worldwide network of attorney fee expertise. Our network includes members, faculty, and fellows with expertise on the reasonableness of attorney fees.  We help organize and recognize qualified attorney fee experts from across the U.S. and around the globe.  Our attorney fee experts also include court adjuncts such as bankruptcy fee examiners, special fee masters, and fee dispute neutrals.

Every year, we announce the nation's top attorney fee experts.  Attorney fee experts are retained by fee-seeking or fee-challenging parties in litigation to independently prove reasonable attorney fees and expenses in court or arbitration.  The following NALFA profile quotes are based on bio, CV, case summaries and case materials submitted to and verified by us.  Here are the nation's top attorney fee experts of 2020:

"The Nation's Top Attorney Fee Expert"
John D. O'Connor
O'Connor & Associates
San Francisco, CA
"Over 30 Years of Legal Fee Audit Expertise"
Andre E. Jardini
KPC Legal Audit Services, Inc.
Glendale, CA

"The Nation's Top Bankruptcy Fee Examiner"
Robert M. Fishman
Cozen O'Connor
Chicago, IL

"Widely Respected as an Attorney Fee Expert"
Elise S. Frejka
Frejka PLLC
New York, NY
"Experienced on Analyzing Fees, Billing Entries for Fee Awards"
Robert L. Kaufman
Woodruff Spradlin & Smart
Costa Mesa, CA

"Highly Skilled on a Range of Fee and Billing Issues"
Daniel M. White
White Amundson APC
San Diego, CA
"Extensive Expertise on Attorney Fee Matters in Common Fund Litigation"
Craig W. Smith
Robbins Arroyo LLP
San Diego, CA
"Highly Experienced in Dealing with Fee Issues Arising in Complex Litigation"
Marc M. Seltzer
Susman Godfrey LLP
Los Angeles, CA

"Total Mastery in Resolving Complex Attorney Fee Disputes"
Peter K. Rosen
Los Angeles, CA
"Understands Fees, Funding, and Billing Issues in Cross Border Matters"
Glenn Newberry
Eversheds Sutherland
London, UK
"Solid Expertise with Fee and Billing Matters in Complex Litigation"
Bruce C. Fox
Obermayer Rebmann LLP
Pittsburgh, PA
"Excellent on Attorney Fee Issues in Florida"
Debra L. Feit
Stratford Law Group LLC
Fort Lauderdale, FL
"Nation's Top Scholar on Attorney Fees in Class Actions"
Brian T. Fitzpatrick
Vanderbilt Law School
Nashville, TN
"Great Leader in Analyzing Legal Bills for Insurers"
Richard Zujac
Liberty Mutual Insurance
Philadelphia, PA

Federal Circuit Reverses Fee Award in Sippy Cup IP Case

June 10, 2020

A recent Law 360 story by Tiffany Hu, “Fed. Circ. Reverses Atty Fee Award in Sippy Cup IP Case” reports that the Federal Circuit ruled that a failed patent lawsuit over spill-proof sippy cups is not exceptional enough to merit attorney fees, finding in a precedential opinion that a lower court "abused its discretion" in awarding the fees without adjudicating the issues.  In a 16-page opinion, a three-judge panel overturned a California federal judge's decision that granted Luv N' Care Ltd.'s bid for $1 million in a patent dispute against Munchkin Inc.  The lower court had deemed the case exceptional because Munchkin concealed relevant prior art during litigation, and its amended trademark claims were so weak they were abandoned.

Following a 40-minute hearing in February, where attorneys for both companies told the Federal Circuit that the lower court didn't make factual determinations on either issue, the panel agreed the exceptionality finding was underdeveloped.  "None of these issues was fully adjudicated before the court on the merits, and given the limited arguments [Luv N' Care and another defendant] made in support of [their] fee motion, we hold that the district court abused its discretion in granting the motion and we reverse the exceptional-case determination," U.S. Circuit Judge Raymond T. Chen wrote for the panel.

The panel said the district court failed to explain why Munchkin's arguments concerning the validity of its patent were unreasonable, and was also "led astray" by Luv N' Care's claim that Munchkin improperly maintained the lawsuit after the Patent Trial and Appeal Board launched an inter partes review of the patent and found the patent invalid.  "That Munchkin's patent was ultimately held unpatentable does not alone translate to finding its defense of the patent unreasonable," Judge Chen wrote.

Munchkin sued Luv N' Care and Admar International Inc. for trademark infringement and unfair competition in 2013.  Munchkin moved to amend the trademark claim the following year, deciding to assert a different trademark in the case, and then added a patent infringement claim to the suit in 2015.  Luv N' Care later challenged the validity of Munchkin's patent at the PTAB, which invalidated all of the challenged claims.  After the board invalidated the patent, the district court ruled in favor of Luv N' Care and deemed it the prevailing party.  The district court tacked on the cost of the PTAB proceedings to the fee award, as well as Munchkin's appeal of the PTAB decision that was affirmed by the Federal Circuit in 2017.

Third Circuit Denies Fee Request in Owens Corning Suit

May 5, 2020

A recent Law 360 story by Bill Wichert, “3rd Circ. Nixes Consumers’ Fees Bid in Owens Corning Suit” reports that the Third Circuit said consumers weren't entitled to attorney fees for scoring a circuit opinion that nixed a bankruptcy bar on class claims against Owens Corning over allegedly defective roofing shingles, with judges finding that the consumers were overselling the impact of that earlier ruling.  In a nonprecedential opinion, a circuit panel upheld a Pennsylvania federal court decision last year in a settled class action that denied the plaintiffs' fees bid for securing the Third Circuit's 2012 opinion in Wright v. Owens Corning, which revived claims related to shingles installed before the company received confirmation of its Chapter 11 plan in 2006.

The panel reasoned that U.S. District Judge Joy Flowers Conti properly rejected the consumers' application seeking fees under any of three theories, including the common fund and common benefit doctrines, both of which permit fees to lawyers "whose work substantially benefits an ascertainable class of beneficiaries," according to the opinion.  "Even if we could ascertain these plaintiffs, however, Wright benefitted them only by removing one obstacle to overcoming summary judgment — not by helping them prove their shingles were defective," the panel said in an opinion authored by U.S. Circuit Judge Thomas M. Hardiman.  "Such a 'minimal' benefit cannot support an award of fees under either the common fund or common benefit doctrine," the panel said.

At the time of Owens Corning's plan confirmation on Sept. 26, 2006 — which discharged all existing claims against the company — the so-called Frenville rule held that the validity of a claim in the bankruptcy context hinged on when a right to payment arose under applicable state law, court documents state.  The rule came from the Third Circuit's 1984 opinion in Avellino & Bienes v. M. Frenville Co. [In re M. Frenville Co.]  For claims brought under the law of a state where the so-called discovery rule applies, the Frenville rule held that the claim arose when the suing party discovers the injury, court documents state.

In its 2010 decision in JELD-WEN, Inc. v. Van Brunt [In re Grossman's Inc.] , the Third Circuit overturned Frenville, holding that "a claim arises when the claimant is exposed to the debtor's product or conduct, no matter when the claimant discovers the injury," according to the opinion.  Based on Grossman's, Judge Conti in 2011 granted summary judgment to Owens Corning in a proposed class action from plaintiffs Patricia Wright and Kevin West, who installed their shingles before the Chapter 11 plan was confirmed in 2006 but did not discover the alleged defects until 2009, court documents state.

"Because plaintiffs' claims against Owens Corning arose prior to the time the confirmation order was entered in 2006, those claims were discharged," Judge Conti said.  The following year, the Wright panel reversed that decision, finding that the Frenville rule applied to matters where reorganization plans were confirmed before Grossman's, court documents state.

On remand, Wright and West's suit was consolidated with three other actions, and the parties settled after the plaintiffs unsuccessfully sought class certification, court documents state. The plaintiffs then filed the instant motion seeking counsel fees based on Wright, but Judge Conti denied the application in February 2019.

On the plaintiffs' appeal of that ruling, they suggested that Wright revived millions of warranties and "prohibited [Owens Corning] from asserting the bankruptcy bar ab initio to avoid warranty claims," according to the opinion. That description of the 2012 ruling, however, is unfounded, the panel said.  "In Wright, we merely held that the Frenville rule applies to cases in which courts confirmed reorganization plans before Grossman's," the opinion said.  "So Wright benefitted only plaintiffs whose claims would have been discharged under Grossman's but not Frenville. That class of plaintiffs is not ascertainable, because the Frenville analysis is so fact intensive."

The panel also said Judge Conti was right to reject the application under the catalyst theory, which permits fees "if a plaintiff's litigation activity 'pressured a defendant to settle or render to a plaintiff the requested relief,'" citing the Third Circuit's 2015 opinion in Templin v. Indep. Blue Cross.  "The catalyst theory requires 'some degree of success on the merits,'" the panel said. "But as the district court concluded, plaintiffs' victory in Wright was purely procedural; it shed no light on the merits of any putative plaintiff's claim."