Opinion ID: 2403365
Heading Depth: 1
Heading Rank: 30

Heading: Contempt related fees and expenses against Lonny Bowers, Yang, Wide-Band, and DialHD

Text: On November 19, 2009, the district court issued a memorandum decision and order of contempt concluding, in pertinent part, that ClearOne ha[d] not shown by clear and convincing evidence that . . . Chiang, Versatile, . . . and David Sullivan [we]re in contempt of court, but that ClearOne ha[d] shown by clear and convincing evidence that . . . [Lonny] Bowers, . . . Yang, WideBand . . ., and third-party collaborator DialHD . . . [we]re in contempt of court for violation of the court's April 2009 Permanent Injunction and August 2009 Temporary Restraining Order for selling WideBand's Simphonix Si-400 product in the guise of DialHD's AEC4 and HD4551 products, all of which contain[ed] the Honeybee Code. JA at D22291. As part of that order, the district court ordered the contemnors to pay attorneys' fees and damages sustained by ClearOne as a result of their contemptuous behavior. . . . Id. To effectuate that order, the district court directed ClearOne to submit an affidavit and documentation of the costs and attorneys' fees, and in turn directed the magistrate judge to issue a ruling awarding those costs and fees reasonably incurred in relation to the district court's first order to show cause. Id. at D22353. The fees and costs, if reasonable and documented, the district court held, w[ould] be awarded to compensate ClearOne for its direct losses incurred in bringing the actions of the Contemnors to the attention of the court and obtaining the relief granted herein. Id. On December 21, 2009, ClearOne's counsel filed a declaration in support of an award of attorneys' fees. The declaration noted that ClearOne utilized four attorneys, one paralegal, and one law clerk from the same law firm to perform work that fell within the scope of the district court's directive. The declaration further noted that the law firm charge[d] [Clear-One] a flat percentage for internal costs of 2% of the amount of attorney fees billed, as well as the full amount of external costs. Id. at D22448. The declaration stated that, as reflected on a spreadsheet attached thereto, the total attorney fees and expenses that fell within the scope of the district court's order was $184,506.52, an amount that had been charged to, and paid by, ClearOne. Id. at D22449 On January 5, 2010, WideBand, Yang, Lonny Bowers and DialHD filed a response to ClearOne's declaration. Notably, the bulk of that response was worded in similar, if not identical, fashion to the portion of the WideBand defendants' appellate brief regarding the fee and expense issue. In particular, the response complained that the declaration and supporting documentation provided a vague, imprecise, non-contemporaneous accounting of the work that was supposedly performed by [ClearOne's] counsel. Id. at D22508. The response, in turn, argued that ClearOne's request for attorney's fees, costs and expenses . . . should be reduced by at least thirty-three percent. . . or, in the alternative, a hearing should be set, and the Defendants and Interested Parties afforded an opportunity to be heard regarding these amounts. Id. at D22510. On January 29, 2010, the magistrate judge issued a memorandum decision and order concluding that ClearOne's submission was proper in every respect and adequately documented. Id. at D22667. The magistrate judge further concluded that the WideBand defendants' attorney, Randolph Frails, had previously [been] prohibited . . . from ClearOne's protected information, and thus ClearOne's documentation [in support of its fee and expense] request was rightfully withheld from . . . Frails. . . . Id. Moreover, the magistrate judge noted that Frails failed to arrange for the WideBand defendants' local Utah counsel to sign the Undertaking attached to the [district court's] Confidentiality Order in th[e] case, which would have allowed local counsel, or any other proper representative of . . . Frails, to access, review, and respond to Clear-One's documentation. Id. Accordingly, in conclusion, the magistrate judge ordered that . . . [Lonny] Bowers, . . . Yang, WideBand . . ., and . . . DialHD . . . [we]re jointly and severally liable to ClearOne in the sum of $184,506.52. Id. at D22668.