Thursday, December 06, 2012

Lengthy text in rehearing denial in Highmark v. Allcare

As to "what happened" in Highmark v. Allcare:

The petitions for panel rehearing and responses were referred to the panel that heard the appeal, and thereaf- ter the petition for rehearing en banc and the response were referred to the circuit judges who are authorized to request a poll of whether to rehear the appeal en banc. A poll was requested, taken, and failed.

The issue

We all agree that the ultimate decision to award enhanced damages and attorneys’ fees (once the predicate tests have been satisfied) is committed to the district court’s discretion, and that the district court’s findings on the bad faith component are subject to review for clear error. See Highmark, Inc. v. Allcare Health Mgmt. Sys., Inc., 687 F.3d 1300, 1310 (Fed. Cir. 2012). The dissents also seem to agree that the objective reasonableness determination should be made by the court, not the jury. The question on which we divide is whether that determination should be subject to de novo review, as this court held in Bard, and as this panel (following Bard) held here. See Bard Peripheral Vascular, Inc. v. W.L. Gore & Assocs., Inc., 682 F.3d 1003, 1005 (Fed. Cir. 2012).

Some discussion:

That such legal questions invoke de novo review is clear. Our cases based the objective reasonableness standard directly on the Supreme Court’s decision in PRE, 508 U.S. at 60-63. PRE held that litigation could not be sanctioned unless a suit was objectively baseless, and objective baselessness requires a probable cause determination. Id. at 62. PRE also held that “[w]here, as here, there is no dispute over the predicate facts of the underlying legal proceeding, a court may decide probable cause as a matter of law.” Id. at 63. Under PRE, the reasonableness of a legal position in the context of a probable cause determination is itself a question of law, as the Supreme Court has recently confirmed. See Scott v. Harris, 550 U.S. 372, 381 n.8 (2007) (once the relevant facts are determined and inferences drawn “in favor of the nonmoving party to the extent supportable by the record, the reasonableness of Scott’s actions . . . is a pure question of law”); see also Stewart v. Sonneborn, 98 U.S. 187, 194 (1878) (“[P]robable cause is a question of law in a very important sense . . . . Whether the circumstances alleged to show it probable are true, and existed, is a matter of fact; but whether, supposing them to be true, they amount to a probable cause, is a question of law.”) (internal quota- tion marks omitted). Judge Moore’s suggestion that PRE did not decide what it explicitly decided is not well taken.


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