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Category: Trial / Jury / Verdict

IP Jury Win Grows to $120M in Fees, Interest

November 1, 2023

A recent Law 360 story by Lauren Berg, “Columbia Univ.’s IP Win Grows to $600M With Fees, Interest”, reports that Columbia University and NortonLifeLock Inc. told a Virginia federal judge that the university should receive nearly $120 million in attorney fees and interest in an infringement case over anti-malware patents, bringing Columbia's total award to just over $600 million.  U.S. District Judge M. Hannah Lauck on Sept. 30 nearly tripled a jury's $185 million willful infringement verdict, bringing the total to more than $481 million, while ordering Norton — now known as Gen Digital Inc. — to pay attorney fees for its litigation misconduct.  She also held its counsel at Quinn Emanuel Urquhart & Sullivan LLP in contempt for not complying with a court order involving a witness whose testimony has been controversial.

In a stipulation, Columbia and Gen Digital agreed the university would receive nearly $20.7 million in attorney fees, $4.8 million in supplemental damages, $71 million in prejudgment interest and $22 million in post-judgment interest, among other costs, for a total award of $600 million.  However, Gen Digital has appealed the judgment to the Federal Circuit, and the parties have agreed they retain all rights, in the event that the court's final judgment is reversed, modified or vacated, according to the stipulation.  Gen Digital has also obtained a $600 million bond to stay execution of the judgment while the appeal plays out, the parties said.

The unanimous jury reached its verdict in May 2022 after three days of deliberation, following a two-week trial in the case brought by Columbia in December 2013.  The jury found that Gen Digital infringed two patents related to cybersecurity safeguards developed by Columbia's professors.  They also found that the intellectual property theft was willful, allowing the court discretion to treble the damages up to $555 million.  In her final judgment in September, Judge Lauck elected to multiply the jury's verdict by 2.6.

In a sanctions opinion unsealed earlier this month, the judge outlined years of "abhorrent litigation conduct" by Gen Digital's attorneys at Quinn Emanuel and found that when Latham & Watkins LLP took over as lead counsel for the company it likewise "impeded" the litigation.  "Norton's second lead counsel, Latham, poured fuel on the fire," the opinion stated, adding soon after that "the pattern of questionable conduct thus outlasted Quinn's direction of the litigation."

While Latham escaped sanctions, Judge Lauck cited an "extensive and unprecedented record" of "disquieting conduct of both sets of Norton's attorneys."  Quinn has represented Norton in the nearly decade-long litigation, while Latham was brought in two weeks before trial.  In just a single paragraph of her 42-page opinion, the judge ripped into Latham, stating that its attorneys "hid key communications" regarding Saudi Arabia-based expert Marc Dacier, who was central to the pretrial misconduct dispute.  Latham joined the case two weeks before trial but was still found to have acted improperly.

Defense Calls $3M Fee Request Late, “Excessive’

October 9, 2023

A recent Law 360 story by Emilie Ruscoe, “Conn. Defendants Slams $3M Atty Fee Bid as Late, ‘Excessive’”, reports that two defendants on the hook for $6.75 million in damages for duping a Delaware company into an investment scheme have pushed back against the more than $3 million in fees and expenses requested by the investor's counsel, telling a Connecticut state judge that certain fee-related filings were untimely and that other requests were made for work that didn't have to do with the state court claims.  In an objection, Dean S. Barr and Joseph E. Meehan told Judge Sheila A. Ozalis that the plaintiff's counsel shouldn't get the nearly $3.1 million in legal fees and more than $210,000 in costs it sought last month.

The fee request came after Judge Ozalis determined after a nine-day bench trial that Barr and Meehan were jointly and severally liable for costing FIH LLC of Delaware millions of dollars by fraudulently enticing investments in Foundation Capital Partners LLC.  She ruled that the two men owed $6.75 million in damages over the negligent misrepresentation and intentional fraudulent misrepresentation counts and claims arising from Connecticut's Uniform Securities Act and Unfair Trade Practices Act.

In objecting to the subsequent fee motion, Barr and Meehan said that FIH sought fees and costs for five law firms involved in its representation, but submitted affidavits describing the basis of the requests for only three of those firms, Wiggin and Dana LLP, Phillips Nizer LLP and Epstein Becker & Green PC, by the Sept. 29 deadline.  The other two firms, Cozen O'Connor and Sadis & Goldberg LLP, "are in the process of preparing affidavits to support this attorneys' fees motion," FIH said in its filing, according to the objection.  The supplemental affidavits were filed Oct. 4, the objection said.

Barr and Meehan said any fee request for Cozen O'Connor and Sadis & Goldberg LLP should be rejected because the deadline for submitting those affidavits had been "clear and unambiguous" and that no extension was either requested or granted.  "FIH had more than enough notice, time and incentive to provide documentation for these fees," Barr and Meehan said.  The defendants also asserted that the requested fees were "unreasonable and excessive" because they "inappropriately encompass" FIH's separate litigation of its securities claims in federal district court and its appeal to the Second Circuit.

Over $1 million of the fees sought arose only from the federal litigation, the defendants said, and those fees "were clearly not incurred in connection" with the litigation alleging violations of Connecticut's Uniform Securities Act.  The defendants cited the example of the fees requested for FIH's appeal of a summary judgment order in favor of the defendants, noting that the appeal explicitly did not include FIH's state law claims.

And even before its appeal, "by its own admission, the time and costs spent litigating the federal trial were unrelated to FIH's [Connecticut's Uniform Securities Act] claim brought under Connecticut state law," the defendants said.  Barr and Meehan also highlighted that FIH hadn't prevailed in the federal trial, telling the court that "its lack of success on those claims must be taken into account" in calculating fees and costs.

The defendants also argued that nothing in the fee motion or supporting filings showed that the time counsel spent on various proceedings was reasonable.  "None of the affidavits filed offer any detailed descriptions attributing time to work performed," they said.  In its fee motion, FIH said that it "should be allowed to recover the fees and costs it was forced to expend in its nearly decade-long efforts to recover the $6.75 million that it invested in Foundation Capital Partners based on Dean S. Barr and Joseph E. Meehan's lies and material omissions."  FIH referred the court to a lengthy litigation history in support of its fee requests, noting various claims against the company it brought in state court and a federal district court action that twice was appealed to the Second Circuit.

SBF Sues Insurer Over Coverage of Defense Fees and Costs

October 4, 2023

A recent Law.com story by Jane Wester, “Sam Bankman-Fried Sues Insurer to Cover Defense Costs in New York Criminal Trial, Other Litigation”, reports that indicted FTX founder Sam Bankman-Fried sued an insurance firm for assistance with his defense costs, one day before jury selection began in his fraud trial in Manhattan.  Bankman-Fried’s attorneys at Lewis & Llewellyn and Cohen & Gresser argued that the Continental Casualty Co., also known as CNA, has breached its contractual obligation to pay Bankman-Fried’s defense costs “on a current basis, without regard to whether payments may exhaust the policy limit.”

According to the complaint, Bankman-Fried’s companies held a CNA policy as a second-layer excess policy offering “a $5 million limit of liability, which attaches upon exhaustion of the $10 million in aggregate limits of the underlying insurance.”  The primary insurance policies and the first-layer excess policies have both been exhausted, according to the complaint, so Bankman-Fried is seeking reimbursement from CNA through the court after “numerous” requests for payment were unsuccessful.

The suit comes less than a year after FTX collapsed and filed for bankruptcy in November.  Bankman-Fried was arrested in the Bahamas in December at the request of U.S. officials and agreed to come to the United States to face charges; he spent approximately eight months on house arrest at his parents’ home in California before he was remanded to Brooklyn’s Metropolitan Detention Center for allegedly attempting to tamper with witnesses.

While Bankman-Fried’s current criminal trial is expected to last approximately six weeks, the insurance suit noted that that case is not the full extent of his legal troubles.  He is set to face another criminal trial for a group of severed charges in 2024 and is “further involved in more than a dozen civil and regulatory actions relating to FTX,” his attorneys noted.

His attorneys argued that CNA’s alleged breaches of the policy “have caused, and threaten to cause, substantial and irreparable harm” to Bankman-Fried, including the impairment of his defense.  They argued that Bankman-Fried has already incurred more than $75,000 in monetary damages for his efforts to obtain CNA coverage and out-of-pocket defense costs.  The suit seeks unspecified damages for CNA’s alleged breach of contract and alleged bad faith conduct, along with a declaration that CNA has a duty to pay Bankman-Fried’s defense costs “on an ongoing basis.”

Bank Whistleblower Wins $2.4M in Attorney Fees

September 29, 2023

A recent Law 360 story by James Mills, “Auditor’s Atty Wins $2.4M Fees in Bank Whistleblowing Case”, reports that an attorney representing a former BofI Federal Bank employee was mostly successful in winning more than $2.4 million in fees for work on a suit that resulted in a jury finding the employee was illegally fired from the bank, with a California federal judge applying a multiplier of 1.1 "to account for contingency risk."

Plaintiff Charles Matthew Erhart had sued the bank for whistleblower retaliation and wrongful termination, with the suit taking seven years to reach a jury.  After he won his case, Erhart asked the court to recover $3 million in attorney fees for an estimated 4,470 hours of work, but also requested the court enhance the fee award to a total of $7.3 million.

"The court agrees Erhart is entitled to recover fees," U.S. District Judge Cynthia Bashant wrote in the order.  "That said, some of the hours his counsel spent will not be included in the lodestar.  And the motion stumbles when it comes to justifying counsel's hourly rates.  Ultimately, the court awards $2,405,559.20 in attorneys' fees."

Erhart worked for Bank of the Internet Federal Bank, now known as Axos Bank, as an auditor for about 18 months, starting in 2014.  According to the order, when he found evidence of wrongdoing, he reported it to a federal regulator.  Soon after, he was terminated, with the bank saying he was incompetent at his job.  Erhart filed a lawsuit for whistleblower retaliation with 10 causes of action which described over a dozen instances of alleged wrongdoing. His attorney tipped off The New York Times, which wrote about Erhart's lawsuit. The bank's stock plummeted 30% and several securities class actions were filed.

The bank responded by suing Erhart, contending it was his intention to "bring down the bank." With that suit came countless motions by the bank. Over the next several years, the parties and the court whittled down all the claims to the essence of the case: Erhart's whistleblower retaliation and wrongful termination claims.

In spring 2022, the case was finally heard in a three-week trial with Erhart prevailing.  The jury found the bank violated the Sarbanes-Oxley Act, California Labor Code section 1102.5 and California public policy when it terminated Erhart.  The jury awarded him $1 million for emotional distress and harm to his reputation, and another $500,000 on a California state law defamation claim.

The jury also said Erhart was entitled to punitive damages, but was deadlocked over an amount. A second trial to determine an amount resulted in the jury saying punitive damages were not appropriate.  Erhart's estimate of 4,470 hours of attorneys work breaks down to lead counsel expending approximately 1,581 hours, associate counsel spending 2,069 hours, their paralegals working for 780 hours, and one additional attorney working 40 hours.  However, the bank argued these hours are unreasonable and asked the court to exclude 1,265 hours.

The court noted the case took seven years to get to trial and most of the hours were justifiable, but did eliminate some of the hours the bank requested. Similarly, it ruled the attorney's rates were higher than standard for San Diego and the Southern District of California.  "The prevailing rates in the Southern District of California are generally lower than the Central District of California," wrote Judge Bashant. "And it is commonplace for attorneys based in one district to solicit work in the other.  Courts nevertheless reject attorneys' attempts to cherry-pick and run with higher rates from the Central District."

Missing Word Sinks $2.65M Attorney Fee Request

September 28, 2023

A recent Law 360 story by Travis Bland, “Missing Word Sinks $2.65M Honeywell Fee Bid in Royalty Row”, reports that Honeywell lost out on $2.65 million in attorney fees following a win in a scanner royalties dispute with a Japanese competitor in part because an agreement between the two companies didn't use the word "attorney" in a provision the American company invoked to try to receive the award.  In an order, a North Carolina federal court told Honeywell that it would not be awarding the attorney fees after the company prevailed in a jury trial against OPTO Electronics Co., reasoning that while other parts of the partners' contract referenced attorney fees, the part Honeywell cited to try to recover the money only says "fees."

"That provision, drafted by sophisticated counsel, does not mention 'attorney fees' (like every other case under governing Delaware law that has awarded attorney fees under a contract)," U.S. District Judge Kenneth D. Bell wrote in his order.  Judge Bell also reasoned that the provision doesn't have the "prevailing party" language that is the "hallmark" of contracts under Delaware law for a winning litigant to force an opponent to pay attorney fees.  The provision Honeywell cited might not even apply to court actions, Judge Bell said.

Evidence in the case made it clear that Honeywell knew how to craft a contract so that attorney fees would be awarded when it won a case, but it didn't do that in the agreement with OPTO Electronics, according to Judge Bell.  OPTO Electronics was also let down by Judge Bell's order.  He punted the Japanese company's requests to throw out the jury verdict, award it a victory or, at least, to grant a new trial.

OPTO Electronics had a "full and fair opportunity to present its evidence and arguments to the jury and the court," Judge Bell said. "While OPTO's arguments were potentially persuasive and the court would have upheld a jury verdict in OPTO's favor, the court finds that there was sufficient evidence to support the jury's and the court's verdicts."  In denying the company a new trial, Judge Bell also rejected arguments that the court made an error when it did not allow certain evidence that OPTO Electronic asserted was favorable to it.