If a district court is going to deny or reduce an award of attorney fees, it must provide an adequate explanation for doing so. That was the holding of the U.S. Court of Appeals for the Federal Circuit in International Rectifier Corp. v. Samsung Electronics Co., Ltd., Case No. 04-1429 (Fed. Cir. Sept. 23, 2005) (Linn, J.). The Court found the district court abused its discretion by denying a request for attorney fees and granting a reduced attorney fee award without providing a "concise but clear" explanation supporting its decision. According to the Federal Circuit, without adequate findings to substantiate the district court’s conclusions, the reviewing court cannot assess whether the district court abused its discretion in granting the fee reduction.
The case arose from a contempt proceeding initiated by International Rectifier against Samsung. International Rectifier alleged violation of a permanent injunction set forth in a consent order between the parties. In an earlier proceeding, the district court found Samsung was in contempt and was aided and abetted in the contempt by Ixys Corp. In 2004, the Federal Circuit reversed, holding that Samsung was not in contempt and that there was no evidence that Ixys aided or abetted Samsung’s alleged violation of the injunction.
Following remand, Samsung sought attorney fees, including over $1 million in fees for preparing the motion. International Rectifier opposed the request on the grounds that Samsung’s request was precluded by its alleged misconduct in conspiring to violate the injunction. International Rectifier also argued the fees were excessive. The district court agreed with International Rectifier and found the case "has been terribly over-lawyered."
On appeal of the attorney fee award, the Federal Circuit reversed, finding the district court abused its discretion in denying Ixys’s request and reducing Samsung’s request for fees. The Federal Circuit, applying Ninth Circuit and California law, found the district court failed to give the required clear and concise explanation of reasons for the fee reduction and remanded the case for a further explanation.
For essentially the same reasons the Court also found the district court erred in denying Ixys’s request for fees. In doing so, the Court rejected the argument that a party that voluntarily intervenes in an action is precluded from seeking an award of attorney fees. However, the Court denied Ixys’s request for remand of the case to a different judge. Ixys argued Judge Real’s prior characterizations of Ixys’s conduct as wrongful, and his "repeated rulings in [International Rectifier ‘s] favor" warranted reassignment. The Federal Circuit disagreed, citing the extremely high threshold for reassignment and commenting it was confident the judge could put aside "any conviction that Ixys’s conduct was somehow wrongful" in assessing the appropriate fee award.
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