A recent Law 360 story by Bill Wichert, “ArentFox Schiff Largely Keeps $870K Fee Award in Patent Suit” reports that, a more than $870,000 fee award for ArentFox Schiff LLP in patent litigation has largely remained unchanged even though a New Jersey federal judge rejected its bid to use rates from its home base in Washington, and instead applied rates from the area around where the dispute has unfolded. After U.S. District Judge Robert B. Kugler called for a recalculation of the firm's roughly $879,724 award, U.S. Magistrate Judge Sharon A. King approved about $878,548 in fees for the firm over purported misconduct by Prakruti Products Pvt. Ltd. with respect to discovery in a suit brought by the firm's client, Sabinsa Corp.
In his Nov. 22 decision, Judge Kugler said then-U.S. Magistrate Karen M. Williams — who granted the initial award before becoming a district judge — improperly applied Washington rates without considering the rule set forth in the Third Circuit's 2005 decision in Interfaith Community v. Honeywell International, which held that fees should be calculated based on the forum of the action. On remand, Judge King rejected Sabinsa's claim that its fees bid fell under an exception to the Interfaith rule that applies to "the need for special expertise of counsel from a distant district."
Citing Interfaith, the judge said the "'record is devoid of any evidence that [Sabinsa] conducted' a search, let alone, 'a significant search for counsel [in the forum] with the ability to handle this case.'"
"The failure to submit any such evidence is Sabinsa's fatal flaw," Judge King said. "As a result, the court finds Sabinsa fails to establish that an exception to the forum-rate rule applies."
Following that rule, the judge used rates for patent litigation in the area of Philadelphia; Camden, New Jersey; and Wilmington, Delaware, as outlined in the 2020 Real Rate Report midyear update from Wolters Kluwer ELM Solutions. Prakruti had urged the judge to apply first quartile rates, but she said higher rates from the third quartile were more appropriate.
In reaching that conclusion, the judge cited "the complex and lengthy nature of the litigation, the misconduct underlying Sabinsa's right to recovery, and the successful result reached on its motion for sanctions."
Since the adjusted rate for ArentFox Schiff partner James H. Hulme is "the only rate to exceed the fee schedule's caps, only his billing rate will be reduced," the judge said. She said she "will not disturb the other attorneys' rates or fees."
The case deals with Sabinsa's claims that Prakruti infringed a patent related to curcuminoids, which are components found in turmeric rhizomes, in connection with nutritional products, court documents state.
The fee award relates to what was uncovered in a "contentious" discovery process, during which Judge Williams found that "Prakruti had withheld certain information from Sabinsa and also spoliated pertinent evidence," according to court documents. She sanctioned Prakruti with an adverse inference, finding that Sabinsa's legal efforts to prove Prakruti's misconduct warranted an award of attorney fees against Prakruti.