Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_03-cv-02177/USCOURTS-cand-3_03-cv-02177-1/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:271 Patent Infringement

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United States District Court

For the Northern District of California

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

3COM CORPORATION,

Plaintiff,

v

D-LINK SYSTEMS, INC,

Defendant,

________________________

REALTEK SEMICONDUCTOR CORP,

Intervenor

 /

 No C 03-2177 VRW

 ORDER ON 28 USC § 1927 

 SANCTIONS

On May 5, 2005, the court found that plaintiff 3Com

Corporation (3Com) had unreasonably and vexatiously multiplied the

proceedings in this case in violation of 28 USC § 1927. Doc #251

at 18-19. The parties are familiar with the court’s May 5, 2005,

order and its factual predicate and thus the court will not recount

this history here. The court directed defendant D-Link Systems,

Inc (D-Link) to file its request for attorney fees and costs

Case 3:03-cv-02177-VRW Document 266 Filed 06/06/05 Page 1 of 7
United States District Court

For the Northern District of California

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reasonably incurred in (1) preparing for and attending both

discovery proceedings before Judge Zimmerman, (2) defending against

3Com’s motion to amend its preliminary infringement contentions

(PIC) and (3) attending the March 3, 2005, hearing on 3Com’s motion

to amend its PIC. Id at 19-20. D-Link submitted its request for

attorney fees and costs on May 20, 2005. Doc #263. Based upon DLink’s memorandum and the applicable federal law, the court ORDERS

3Com to pay D-Link’s fees and costs in the amount of $128,919.47

pursuant to § 1927.

I

To determine a reasonable attorney fee award, the court

employs the lodestar method. Yahoo!, Inc v Net Games, Inc, 329 F

Supp 2d 1179, 1182 (ND Cal 2004). “Three figures are salient in a

lodestar calculation: (1) counsel’s reasonable hours, (2)

counsel’s reasonable hourly rate and (3) a multiplier thought to

compensate for various factors (including unusual skill or

experience of counsel or the ex ante risk of nonrecovery in the

litigation).” In re HPL Technologies, Inc, Securities Litigation,

2005 US Dist LEXIS 7244, *20 (ND Cal 2005) (Walker, J). Because §

1927 sanctions are not based upon the results achieved by a

prevailing party in the litigation (indeed, a losing party could

potentially receive a § 1927 award), a multiplier is irrelevant to

the calculation of the lodestar under § 1927. Accordingly, the

court need only consider D-Link’s counsel’s reasonable hours and

reasonable hourly rate in computing the lodestar.

D-Link requests compensation for 370 hours of legal

services performed in connection with (1) preparing for and

Case 3:03-cv-02177-VRW Document 266 Filed 06/06/05 Page 2 of 7
United States District Court

For the Northern District of California

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attending both discovery proceedings before Judge Zimmerman, (2)

defending against 3Com’s motion to amend its PIC, (3) attending the

March 3, 2005, hearing on the motion to amend and (4) drafting and

filing D-Link’s motion to strike 3Com’s PIC. Doc #263 (McCauley

Decl) at 2-7. Although the May 5, 2005, order listed only the

hours expended on (1)-(3) as recoverable, upon further

consideration, the court agrees with D-Link that it should be

allowed to recover for the hours expended in drafting its motion to

strike, for this motion would not have been required had 3Com

heeded Magistrate Judge Zimmerman’s discovery order and voluntarily

withdrawn its PIC. 

The court finds D-Link’s request for 370 hours

reasonable. 3Com’s obstinate refusal to recognize the error

committed in drafting the PIC forced D-Link to prepare for and

appear at two lengthy discovery hearings, draft and defend a motion

to strike, oppose a motion to amend, depose two additional

witnesses and prepare for and attend the March 3, 2005, hearing. 

Considering the complexity of the factual and legal questions

raised in these motions and depositions –- a complexity in large

measure of 3Com’s making -- as well as the quality of D-Link’s

counsel’s work, the court finds the number of expended to be

reasonable.

 The court will not, however, allow D-Link to recover for

the 68.2 hours expended in drafting its Rule 11 motion for

sanctions against 3Com (McCauley Decl at 5-6), a motion that was

never filed with the court. Unlike D-Link’s appearances at the

hearings and its filing of a motion to strike, the Rule 11 motion

was entirely voluntary and was apparently drafted to buttress DCase 3:03-cv-02177-VRW Document 266 Filed 06/06/05 Page 3 of 7
United States District Court

For the Northern District of California

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Link’s opposition to the motion to amend.

The court now turns to determining a reasonable hourly

rate. More than one methodology exists to make this determination. 

Billing all attorney time at a “blended” hourly rate is probably

the appropriate methodology in most lodestar calculations based on

its simplicity and promotion of efficiency. HPL Technologies, 2005

US Dist LEXIS 7244 at *24. Such blended rates (perhaps in the $200

per hour neighborhood) typically depend on “the overall billing

mix” including substantial time expended by junior attorneys with

less experience and low hourly billing rates. Id at *25. In the

present case, however, 93.8% of all attorney hours (aside from

paralegal and legal staff hours), was expended by senior attorneys

with more than thirteen years of legal experience. Indeed, Steven

Morrissett, an attorney with more than 20 years of legal

experience, billed 141.2 hours during the course of these

proceedings. McCauley Decl at 1. Moreover, it is not surprising

that senior attorneys were utilized to analyze and argue the

complex issues presented in 3Com’s and D-Link’s discovery disputes

and motion practice; these issues concerned (1) when and if certain

network interface cards were scientifically tested, (2) if errors

were made during this testing and ultimately (3) whether the

correct D-Link products were accused in the PIC. Such casecritical matters could not reasonably be delegated to junior

attorneys. 

Because of the large amount of senior attorney time

expended, the court concludes that the use of a blended hourly rate

appears insufficient to reflect the market rate for D-Link’s

counsel’s services. 

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United States District Court

For the Northern District of California

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5

In Laffey v Northwest Airlines, Inc, 572 F Supp 354 (D DC

1983), aff’d in part, rev’d in part on other grounds, 746 F2d 4 (DC

Cir 1984), the court employed a variety of hourly billing rates to

account for the various attorneys’ different levels of experience. 

The Laffey methodology is useful when an unusually large fraction

of either senior or junior attorney time is necessary, and spent,

by counsel on behalf of a client. The Laffey methodology allows

the court to reflect in the fee award the disproportion of the time

spent by senior or junior attorneys at a rate commensurate with

such attorneys’ market hourly rate. Cf HPL Technologies, 2005 US

Dist LEXIS 7244 at *25-26. The Laffey methodology, or the “Laffey

matrix,” has since become a well-established objective source for

rates that very by experience in the District of Columbia. Id at

26; see

www.usdoj.gov/usao/dc/Divisions/Civil_Division/Laffey_Matrix_4html. 

As detailed above, the large fraction of senior attorney time

utilized by D-Link leads this court to conclude that the Laffey

matrix is a good fit for the this case. 

Under the 2005 Laffey matrix, attorneys with 20 or more

years of experience bill $390/hour; attorneys with 11-19 years of

experience bill $345/hour; attorneys with 4-7 years of experience

bill $225/hour; and paralegals and law clerks bill $110/hour. 

These figures are tailored for the District of Columbia and thus

apply without adjustment to attorneys Elizabeth Niemeyer and E

Robert Yoches, both of whom reside in the District of Columbia. 

The District of Columbia, however, has a somewhat lower cost of

living than the San Francisco Bay area (in which attorneys

Morrissett and Robert McCauley reside) and thus the court will

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United States District Court

For the Northern District of California

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(126.39 - 115.98) / 115.98 = 0.08976, or about 9%.

6

adjust these figures accordingly for Morrissett and McCauley. 

The locality pay differentials within the federal courts

-- which, like law firms, employ lawyers and legal support staff --

can approximate this difference. See http://jnet.ao.dcn/

Human_Resources/Pay_Tables/2005_Pay_Tables/

Judiciary_Salary_Plan_Pay_Tables_2005.html. The WashingtonBaltimore area has a +15.98% locality pay differential; the San

Francisco-Oakland-San Jose area has a +26.39% locality pay

differential. Thus, adjusting the Laffey matrix figures upward by

approximately 9% will yield rates appropriate for the Bay area.1

Applying this adjustment to an attorney when appropriate,

the court calculates these following data:

Attorney Experience Rate

(per

hr)

Adjustment Total 

 Hours

Total

lodestar

Yoches 25 $390 n/a= $390 67.8 $26,442.00

Morrissett 20+ $390 9% = $425 141.2 $60,010.00

McCauley 13 $345 9% = $376 28.6 $10,753.80

Niemeyer 5 $225 n/a= $225 15.7 $3,532.50

Paralegals/

Law Clerks

n/a $110 9% = $120 116.7 $14,004.00

Total 370.0 $114,742.30

Accordingly, pursuant to § 1927, D-Link is entitled to

$114,742.30 in reasonable attorney fees.

II

Additionally, D-Link requests $14,177.17 in costs

reasonably incurred in (1) traveling to and attending all three

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For the Northern District of California

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hearings, (2) traveling to and conducting the Rule 30(b)(6)

deposition of 3Com and the deposition of Chadwick Jackson, (3)

obtaining transcripts of the hearings and the depositions and (4)

using courier services to deliver chamber copies of all filed

documents. Because most of the traveling in this case required

transcontinental flights from the District of Columbia to San

Francisco, the court finds these costs to be reasonable.

III

In sum, pursuant to 28 USC § 1927, the court ORDERS 3Com

to pay D-Link $128,919.47 in attorney fees and costs reasonably

incurred as a result of 3Com’s unreasonable and vexatious

multiplication of the proceedings in this case. As stated in the

court’s May 5, 2005, order, upon payment of these sanctions to DLink, 3Com may file its amended PIC.

IT IS SO ORDERED.

 

VAUGHN R WALKER

United States District Chief Judge

Case 3:03-cv-02177-VRW Document 266 Filed 06/06/05 Page 7 of 7