Opinion ID: 211661
Heading Depth: 3
Heading Rank: 1

Heading: Samsung's Appeal

Text: 8 Samsung argues that the district court's reduced fee award was an abuse of discretion for several reasons. First, Samsung contends that it met its burden of proving that the full amount of its request was reasonable but that IR failed to present any evidence to rebut its proof. Second, Samsung argues that IR's comparison, before the district court, of its fees in the contempt proceeding to Samsung's fee request was inappropriate because IR was able to use a substantial amount of material from its separate infringement litigation against Ixys in the contempt proceeding. Finally, Samsung contends both that the district court's stated factual basis for reducing the award is legally insufficient and that the findings that the district court articulated for reducing the award are clearly erroneous. 9 IR argues that the narrow scope of the contempt proceeding before the district court and the fact that it spent less than $500,000 on the contempt proceeding both indicate the reasonableness of the district court's reduction. IR additionally argues that it pointed to specific entries that were unreasonable and that the district court has the inherent power to scrutinize fee requests even if no contrary evidence is presented. IR also argues that the facts cited by the district court for the reduction are legally sufficient and that those findings are not clearly erroneous. 10 Samsung's fee request was pursuant to an attorney fee provision in the consent judgment. The consent judgment expressly states that it is governed by federal law and California state law. Therefore, we will apply Ninth Circuit law and California state law to this question. Because we conclude that the district court did not adequately explain its reduction of Samsung's fee request, we need not reach Samsung's additional arguments. However, because the district court's fact findings are very likely to be the basis for a decision on remand, we address Samsung's arguments that the district court's fact findings are clearly erroneous. 11 The Supreme Court has made clear that although district courts have discretion in determining the amount of a fee award, [i]t remains important, however, for the district court to provide a concise but clear explanation of its reasons for the fee award. Hensley v. Eckerhart, 461 U.S. 424, 437, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983). The Ninth Circuit has explained that decisions of district courts employing percentages in cases involving large fee requests are subject to heightened scrutiny. Gates v. Deukmejian, 987 F.2d 1392, 1400 (9th Cir.1993). In Gates, the Ninth Circuit held that a district court employing a 10% reduction in a fee award based on some duplication of effort was an abuse of discretion. Id. at 1400. The court held that the district court failed to provide the concise but clear explanation of its fee reduction, despite an explanation that was more focused and clear than the district court's in this case. Based on Gates, we conclude that without such an explanation of the district court's fee reduction, we are unable to assess whether the court abused that discretion. Id. Thus, we vacate the fee award and remand for a concise but clear explanation of how the district court arrived at its fee reduction. 12 Addressing Samsung's additional argument that the district court's previous findings on the fee award are clearly erroneous, Samsung first argues that the district court's conclusion that it bore no risk in defending this lawsuit is clearly erroneous. IR counters that the district court simply meant that Samsung had no reason to be efficient in the quantity of legal effort expended on its defense because Ixys was required to reimburse it for its attorney fees in defending this action. The question the district court had to consider was whether Samsung's fee request was reasonable. Whether Samsung had an incentive to minimize costs may be probative of whether Samsung's fee request was reasonable, but such a general finding cannot substitute for specific findings of unreasonable fees. Thus, to the extent the district court meant what IR suggests that it meant, its finding is inadequate to support a fee reduction. To the extent that the district court meant that Samsung bore no risk in general, the district court's finding overlooks at least the fact that Samsung stood to lose its business relationship with Ixys. Moreover it directly conflicts with the district court's finding to the contrary in rejecting Ixys's motion for attorney fees. In rejecting Ixys's motion, the district court said, Samsung had every incentive to minimize the sanction.... Ixys Order at 3. Because Ixys was liable to Samsung for both the sanction and Samsung's attorney fees, the district court's findings that Samsung bore no risk with respect to attorney fees and yet had every incentive to minimize the sanction cannot both be correct. Samsung bore some risk for both the sanction and attorney fees because there was always at least some risk that Ixys could not or would not pay. We vacate the district court's findings to the contrary. Although Samsung's risk may have been limited, that by itself is an insufficient basis for reducing the attorney fee award. 13 Samsung additionally argues that the district court's finding that the case was terribly over-lawyered is clearly erroneous. Again, the district court failed to make any specific findings to support this conclusion. Because the basis for this finding is unclear, we vacate this finding and remand along with the fee reduction for a concise but clear explanation of any findings that the district court relies on in reducing Samsung's fee request.