Opinion ID: 147424
Heading Depth: 2
Heading Rank: 3

Heading: Vexatious Litigation

Text: We also vacate and remand the district court's decision and fee award with respect vexatious litigation. We first note that the district judge and magistrate judge expressly acknowledged that an attorney fees award on litigation misconduct alone would justify only a smaller award, and thus we must necessarily remand for a determination of fees. In addition, the district court's vexatious litigation determination appeared to depend at least in part on the holding of inequitable conduct, which we vacated. For example, the district judge reasoned, The inference is inescapable that the misguided efforts by Leviton's counsel to resist discovery on inequitable conduct arose in significant part because it was members of that firm that had engaged in such conduct. This appears to tie the analysis of Leviton's discovery intent to the court's conclusion on inequitable conduct. Thus, because we find that the inequitable conduct holding must be vacated, we must also vacate the vexatious litigation finding. In addition, we are concerned with part of the district court's analysis related to the work product doctrine. Pursuant to Rule 26(b)(3), [o]rdinarily, a party may not discover documents and tangible things that are prepared in anticipation of litigation or for trial by another party or its representative.... Fed. R. Civ. Proc. 26(b)(3). However, this is a qualified immunity and such materials may be discovered if another party shows that it has substantial need for the materials to prepare its case and cannot, without undue hardship, obtain their substantial equivalent by other means. Id. Opinion work product generally remains immune from discovery unless the requesting party demonstrated substantial need and undue hardship. See Hickman v. Taylor, 329 U.S. 495, 510, 67 S.Ct. 385, 91 L.Ed. 451 (1947) (Not even the most liberal of discovery theories can justify unwarranted inquiries into the files and mental impressions of an attorney.); Upjohn Co. v. United States, 449 U.S. 383, 401-402, 101 S.Ct. 677, 66 L.Ed.2d 584 (1981) (As Rule 26 and Hickman make clear, such work product cannot be disclosed simply on a showing of substantial need ... [A]far stronger showing of necessity and unavailability by other means would be required than is needed to justify ordinary work product.). As the magistrate judge acknowledged, exceptions to the work product privilege are very rare and exist only in extraordinary circumstances. See Chaudhry v. Gallerizzo, 174 F.3d 394, 403 (4th Cir.1999) (finding that appellant failed to present the very rare and extraordinary situation justifying disclosure of opinion work product); In re Allen, 106 F.3d 582, 607 (4th Cir.1997) ([O]pinion work product enjoys a nearly absolute immunity and can be discovered only in very rare and extraordinary circumstances.). Here, the magistrate judge appears to have found that the work product doctrine would generally apply, but that Meihao satisfied the rare substantial need and undue hardship exceptions. While the magistrate judge may have ultimately rejected Leviton's work product arguments based on these exceptions, we are not convinced that Leviton's arguments were frivolous. Leviton cannot be required to concede that Meihao satisfied the substantial need and undue hardship exceptions simply because a defense of inequitable conduct was raised. Moreover, Leviton could not possibly know in advance that the magistrate judge was mere days away from releasing an opinion granting Meihao's motion to compel. Thus, we conclude that the district court clearly erred by finding that Leviton engaged in vexatious litigation by raising frivolous work-product objections.