Friday, January 06, 2017

CAFC addresses sanctions in Walker v. Health International from D. Colorado

The outcome:

Andre Walker appeals from the final judgment of the
United States District Court for the District of Colorado
awarding sanctions for Walker’s vexatious actions in
continuing to litigate after the parties settled all claims.
ECF No. 1921 (Apr. 27, 2015 final judgment awarding
attorneys’ fees as sanctions).2 Defendants Health International
Corporation, HSN Inc., and HSN Interactive
LLC (collectively, “HSN”) claim that Walker’s appeal is
itself frivolous and move for an award of damages and
double costs under Federal Rule of Appellate Procedure
38. App. Dkt. 57. We affirm the district court’s judgment.
Additionally, we find Walker’s appeal to be frivolous, both
as filed and as argued, and grant HSN’s motion for sanctions.

Initially, Walker was the plaintiff-patentee:

Andre Walker filed suit against various defendants on
December 14, 2012 alleging infringement of U.S. Patent
No. 7,090,627. Through discovery and motions, the case
evolved until only HSN remained in the case.

Of the law,

The Supreme Court has recognized the federal courts’
inherent, equitable power to “award attorneys’ fees when
the interests of justice so require.” Hall v. Cole, 412 U.S.
1, 5 (1973).
In the Tenth Circuit, a district
court may equitably award attorney’s fees when “the
opponent in litigation has acted in bad faith, vexatiously,
wantonly, or for oppressive reasons.” Ryan v. Hatfield,
578 F.2d 275, 277 (10th Cir. 1978) (quotation marks and
citation omitted). “[T]he trial court has discretion and
will be reversed only in circumstances which do not show
a reasonable ground for the conclusion that vexatiousness
existed.” Id.

Walker first argues that the district court erred in
awarding fees without “findings of subjective bad faith”
and therefore must be reversed “due to the lack of factual
support for the [district] court’s conclusions.” Walker Br.
11. This argument mischaracterizes clear authority.
Federal courts may award damages under their equitable
powers when litigants have acted “in bad faith, vexatiously,
wantonly, or for oppressive reasons.” Hall, 412 U.S. at
5 (emphasis added). The district court made detailed
findings that Walker’s actions after the settlement were
“vexatious” and sufficient for awarding fees. Walker, 2014
WL 3819487, at *3.

Walker next argues that the district court lacked authority
to strike his Objection to the award of attorneys’
fees as untimely because “motions, briefs, memoranda,
objections or affidavits may not be attacked by a motion to
strike.” Walker Br. 14–15 (citing 2-12 Moore’s Federal
Practice - Civil § 12.37 (2015)). Even if Rule 12(f) motions
are not appropriate means to attack filings other than
pleadings, which we need not resolve, it does not logically
follow that the district court lacked authority to deny
Walker’s Objection.

Of waiver:

Walker also raises new arguments in his Reply
amounting to baseless accusations against opposing
counsel. Walker argues that HSN’s counsel violated
Colorado Rule of Professional Conduct 1.3 by failing to
immediately notify him that HSN had tendered the
settlement payment to its counsel. Reply Br. 22. Walker
failed to raise this argument in his opening brief, so it is
waived. See Becton Dickinson & Co. v. C.R. Bard, Inc.,
922 F.2d 792, 800 (Fed. Cir. 1990) (“[A]n issue not raised
by an appellant in its opening brief . . . is waived.”). But
we address the argument to illustrate Walker’s bent to
mischaracterize clear authority and to draw illogical
conclusions from the law and facts.

Of frivolous appeals:

This court has long disdained the filing of frivolous
appeals. “The filing of and proceeding with clearly frivolous
appeals constitutes an unnecessary and unjustifiable
burden on already overcrowded courts, diminishes the
opportunity for careful, unpressured consideration of
nonfrivolous appeals, and delays access to the courts of
persons with truly deserving causes.” Asberry v. U.S.
Postal Serv., 692 F.2d 1378, 1382 (Fed. Cir. 1982). Frivolous
appeals waste both the public resources supplied to
this court and the resources of prevailing litigants that
must defend such frivolous actions.
We do not treat such misconduct lightly for good reason.
“Where a party blindly disregards long established
authority and raises arguments with no factual foundation,
. . . the judicial process has not been used, but
abused, and sanctions under Rule 38 are warranted.”
Octocom Sys., Inc. v. Hous. Comput. Servs., Inc., 918 F.2d
937, 943 (Fed. Cir. 1990). Attempts to mislead the court
in a frivolous appeal further compound the wasted resources
because the court and opposition are forced to
devote extra resources to sorting through half-truths and
misused legal authority in an appeal that never should
have been filed in the first place. “Sanctions are awarded
to compensate the victimized party for the burden of
continued litigation in what long ago [was] a settled
matter, as well as to discourage frivolous appeals which
unnecessarily clog our docket.” Mor-Flo Indus., 948 F.2d
at 1582.
In keeping with this court’s longstanding policy of enforcing
Rule 38 vigorously, we exercise our discretion to
impose sanctions in the full amount of HSN’s request. See
Practice Note to Fed. R. App. P. 38 in Fed. Cir. Rules. We
find that the unopposed fees and costs HSN requests are
reasonable. See Mor-Flo Indus., 948 F.2d at 1582 (“Judges
have experience in determining what are reasonable
hours and reasonable fees for the work lawyers perform
and may rely on that experience to set an award.”).
Because of Walker’s misconduct in arguing the appeal,
“we consider the attorney who wrote and signed the briefs
to be equally responsible.” Id. We therefore hold Walker’s
counsel jointly and severally liable for the damages
we assess.


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