Small Award Is Not Nominal

Hubbard v. U.S., 2007 U.S. App. LEXIS 6414 (Mar. 20)

In this case brought under the Equal Access to Justice Act (EAJA), plaintiff was awarded $110,000 in attorneys’ fees even though plaintiff recovered only $400 in damages. However, the Federal Circuit rejected the argument that plaintiff was ineligible for fees because he received only “nominal damages.” Nominal damages refer to a situation where plaintiff establishes the merits of its claim but fails to establish actual damages.  Here, plaintiff did establish damages, albeit a small amount. The Federal Circuit vacated the award and remanded the case for a different reason – the failure of the trial court to consider whether the awarded was excessive in light of the results achieved. Plaintiff received only $400 despite seeking $627,000, and the “degree of success obtained” is a factor to consider in determining whether to make an adjustment to the lodestar.

                                             

Fees Mandatory Under 47 U.S.C. 605

Directv, Inc. v. Crespin, 2007 U.S. App. LEXIS 6279 (Mar. 16) 

Plaintiff procured a verdict and attorney’s fees award against defendant who received satellite transmissions in violation of 47 U.S.C. 605. On appeal, defendant advanced several arguments as to why the attorney’s fees award was inappropriate, but the Tenth Circuit swept them away because a fee award to the prevailing party under this statute is mandatory.   

Defective Removal Justifies Fees

Step Plan Services v. Koresko, 2007 U.S. App. LEXIS 6023 (Mar. 14)

Under 28 U.S.C. 1447(c), courts may award attorneys’ fees incurred as a result of a defective removal of a state case to federal court. However, such an award generally requires that the removing party clearly lacked a reasonable basis for removal. Here, the Third Circuit found a fees award appropriate where the defendant sought removal without obtaining the unanimous consent of all defendants.   

Fees For Defendant Under Section 1988 Rare

Gonzales v. Acevedo-Vila, 2007 U.S. App. LEXIS 5820 (Mar. 13)

Prevailing defendants qualify for attorney’s fees under 42 U.S.C. 1988 only where plaintiff’s suit was frivolous or in bad faith.  This First Circuit case illustrates the difficulty of meeting this standard.  The court of appeals, upholding the denial of fees, noted that it’s not enough that some of plaintiff’s claims be frivolous. If the “complaint as a whole was not frivolous,” a fee award will generally be inappropriate.   

ERISA Pre-empts State Attorney’s Fees Laws

Merryman v. Provident Life, 2007 U.S. Dist. LEXIS 17103 (Mar. 12)

This case, originally filed in Florida state court, was removed to federal court on the ground that ERISA exclusively governed plaintiff’s claims. Following removal, defendant moved to strike plaintiff’s state-based claim for attorney’s fees, arguing that ERISA’s fee provisions preempted all state claims. The District Court for the Middle District of Florida agreed, and struck the fee claim.

“Limited” Verdict Does Not Support Fees Reduction

Insinga v. Cooperative Centrale, 2007 U.S. Dist. LEXIS 17363 (Mar. 12)

Defendant sought a reduction in plaintiff’s requested attorney’s fees award, citing “limited” success because plaintiff received a verdict of $2.2 million in compensatory damages and $300,000 in punitive damages whereas he sought $11 million and $10 million respectively. The Southern District of New York rejected defendant’s argument. While a reduction is appropriate when plaintiff receives “nominal” damages, it is not appropriate simply because plaintiff’s substantial award is less than plaintiff sought.   

Court Ruling On Fees Assumes Validity Of Verdict

Minks v. Polaris, 2007 U.S. Dist. LEXIS 17862 (Mar. 14)

35 U.S.C. 285 authorizes fees to the prevailing party in a patent infringement claim only in an “exceptional case.” The Middle District for Florida found such circumstances where defendant "delayed in investigating the issue, maintained weak defenses, and engaged in half-truths.”  In response to plaintiff’s motion for fees, defendant devoted much of its argument to disputing the jury’s verdict.  However, the Court held, for the purposes of a fees assessment “the Court must assume that the jury got it right.” 

Attorney’s Fees Under ERISA

Hughes v. Legion Insurance, 2007 U.S. Dist. LEXIS 17255 (Mar. 12, 2007)

In this suit for breach of fiduciary under ERISA, the Southern District of Texas noted that Fifth Circuit law requires weighing a variety of factors to determine the propriety of a fee award pursuant to ERISA. The court found two decisive factors weighing in favor of fees: “ERISA does not provide plaintiff with a make-whole remedy . . . . [and] The constrained remedies available under ERISA Sec. 502(a)(3)(B) do little to deter other breaching fiduciaries in similar situations.”

Exceptional Case Under Lanham Act

San Francisco Oven v. Fransmart, 2007 U.S. App. LEXIS 5655 (Mar. 9)

An attorney’s fees award under the Lanham Act, 15 U.S.C. 1117(a), is appropriate only in “exceptional cases.” The Fourth Circuit held that such an award for a prevailing defendant is appropriate where, as here, because plaintiff “brought the Lanham Act claim solely to avoid a dismissal for lack of subject matter jurisdiction.   

Award For Defendant Under 42 U.S.C. 1988

Lyon v. Estrella Foothills High School, 2007 U.S. Dist. LEXIS 16211 (Mar.6)

Under 42 U.S.C. 1988, a prevailing defendant qualifies for attorney’s fees only if the lawsuit was frivolous or in bad faith. Here, the U.S. District Court for Arizona found that standard met, because “plaintiff failed to allege even nominal damages” and insisted on “disregarding settlement attempts in favor of pursuing meritless litigation.”