A recent law.com story, “In $22 Million Fee Swing, 9th Circuit Vacates Attorney Fee Award to EchoStar” reports that U.S. Court of Appeals for the Ninth Circuit reverses fee award after concluding the defendants prevailed at trial. In the case, EchoStar sued NDS, a pay-TV provider, accusing NDS of breaking EchoStar’s security codes and selling them online to pirates. A jury found that NDS had intercepted EchoStar’s satellite signal and, in doing so, committed a technical violation of federal law. The jury awarded EchoStar only $45.69 in actual damages and $1,500 in statutory damages. The damages were so small that it indicated the jury found no illicit intent behind NDS’ violation and raised a question about which side prevailed.
U.S. District Court Judge David Carter of Santa Ana determined that each side prevailed on some of EchoStar’s claims. He awarded attorney fees to both sides: about $13 million (plus costs) to EchoStar’s counsel (DLA Piper) and about $9 million (and no costs) to NDS’s lawyers at O’Melveny & Myers and Hogan Lovells. The net award was about $4 million in fees to DLA. O’Melveny lawyers filed an appeal of Carter’s fee award, claiming they were in fact the prevailing party.
The Ninth Circuit panel reversed Carter’s fee award, ordering him to enter judgment denying attorney fees and costs to EchoStar. The appellate judges also reconsidered fees to NDS’ lawyers, concluding that they were due about $18 million in fees, plus reasonable costs – about twice what Carter ordered. Instead of a net $4 million in attorney fees to DLA, EchoStar now has to pay $18 million in attorney fees to O’Melveny & Myers and Hogan Lovells, a swing of $22 million. In an unpublished opinion, the three judge panel wrote “as a matter of law, we conclude that, for the purposes of awarding attorneys’ fees and costs, NDS was the prevailing party in this litigation and that EchoStar fails to meet the legal definition of a prevailing party on any of its claims.”